Date: January 05, 2021
OIL & GAS EPC MARKET GROWTH, TRENDS AND FORECASTS (2021 - 2026)
The market is segmented by Sector (Upstream, Midstream, Downstream), and Geography (North America (United States, Canada, and Rest of North America), Europe (Russia, United Kingdom, Norway, and Rest of Europe), Asia-Pacific (Australia, China, India, Indonesia, and Rest of Asia-Pacific), South America (Brazil, Argentina, and Rest of South America), and Middle-East and Africa(Saudi Arabia, Qatar, Egypt, and Rest of Middle-East and Africa))
- The market for oil & gas EPC is expected to grow at a CAGR of more than 5.35% during the forecast period of 2020 – 2025. Major factors driving the market studied are the declining operating costs of oil & gas fields, expansion in the downstream sector, increasing demand for LNG infrastructure, among others. However, surge in the transportation of oil and gas via. the alternate mode of transportation is likely to reduce the investments in the development of pipeline infrastructure, which is anticipated to restrain the market for oil and gas EPC in coming years.
- The upstream sector accounted for more than half of the market share, in 2018, and is expected to dominate the oil and gas EPC market during the forecast period. In 2018, the number of FIDs (for reserves of volume more than 25 million boe, excluding shale/tight) in the upstream sector increased by more than 80% compared to 2016.
- Factors, such as technological improvements and increasing viability of deepwater and ultra-deepwater projects, several new markets, such as Gabon, Senegal, Guyana, Trinidad & Tobago, Egypt, and the Mexican side of the Gulf of Mexico are actively promoting the development of deepwater and ultra-deepwater reserves. This, in turn, is expected to create significant opportunities for the operating countries in the near future.
- Expansion of downstream infrastructure, in Asia-Pacific, is expected to result in a significant demand for EPC services in the coming years. China and India are expected to add a large refining capacity in the coming years.
North America Region to Dominate the Market
- With the increasing number of oil & gas projects in countries such as the United States, Canada, and Mexico, the region is likely to witness robust growth in the coming years. The United States is one of the largest producers of crude oil and natural gas, accounting for around 14.1% and 20.0% of the global production, respectively, in 2018. The production surged in 2017, mainly due to robust drilling in its shale reserves, led by the Permian Basin.
- United States has one of the largest, technically-recoverable shale gas reserves and the second-largest tight oil reserves in the world. The technological developments in hydraulic fracturing and low breakeven prices have supported the upstream oil and gas activity in the onshore region, resulting in high demand for EPC companies.
- Canada is one of the largest producers of oil and gas in the world. The oil and gas industry plays an important role in the country’s economy. Oil sands remain its primary source of hydrocarbon production, comprising over 90% of the country's total oil reserves. As per the Canadian Association of Petroleum Producers (CAPP), the oil production in the country is expected to reach 5.4 billion bbl/d in 2030, and oil sands are expected to account for 70.7% of the total production.
- The aforementioned factors are contributing to the increasing demand for oil & gas EPC services in the region during the forecast period.