The global artificial lift systems market was valued at $8.1 billion in 2018 and is anticipated to expand at a compound annual growth rate (CAGR) of 5 percent during the forecast period of 2019 to 2027, according to a study from Transparency Market Research.
The rise in the number of mature fields and aging oil and gas wells is estimated to boost the demand for artificial lift systems during the forecast period. Oil and gas production has increased in aging fields across the globe. As a result, the production output of these fields is gradually decreasing, owing to the decline in reservoir pressure. In addition, the artificial lift systems market in Middle East and Africa is likely to expand at a substantial pace in the near future, led by the increase in number of mature fields in the region.
Artificial lift systems are deployed in these fields to ramp up the production output. These systems not only help increase reservoir production, but also improve the recovery rate of crude oil and natural gas from these reservoirs.
Investment growth in the upstream oil and gas sector is also anticipated to drive the demand for artificial lift systems during the forecast period. Increase in investments in the upstream oil and gas sector enables discovery of new fields and drilling of new wells to exploit underlying reserves. However, currently, more than 90 percent of oil and gas fields require artificial lift systems for production. Thus, increase in investments in the upstream oil and gas sector is estimated to boost the demand for artificial lift systems in the near future.
However, volatility in prices of oil and rise in shift toward environmentally friendly technologies, such as electric vehicles, are likely to restrain the artificial lift systems market during the forecast period. Volatility in oil prices can significantly affect investments in the upstream sector of the industry. This, in turn, is projected to hamper the demand for artificial lift systems.
Shares of the Artificial Lift Systems Market
In terms of component, the hardware segment accounted for a prominent share of the artificial lift systems market in 2018, due to the high cost of hardware components in artificial lift systems, along with rising demand for artificial lift systems in mature oil and gas fields. Based on system, the electrical submersible pumping (ESP) segment held a major share of the artificial lift systems market in 2018. This can be attributed to the high demand for ESP systems due to lower operational costs and flexibility in production output.
North America Dominates Artificial Lift Systems Market
North America was the prominent region of the global artificial lift systems market in 2018. The region is anticipated to maintain its dominance during the forecast period. This can be attributed to the high demand for artificial lift systems, especially in the U.S., due to the increase in production of shale oil and gas in the region. Growth in investments in unconventional resource exploration and production and rise in number of aging fields in Middle East and Africa are driving the demand for artificial lift systems in the region.
Competition Landscape
The global artificial lift systems market is led by multinational players operating across the globe. Increase in adoption of automation and software in artificial lift systems; large number of technological collaborations; and significant capital investment are some of the key features of the global artificial lift systems market.
Improving Digital Oilfield Operations
There is a growing need to improve digital oilfield operations in the artificial lift systems market. Fortunately, new technologies are making it possible for manufacturers to meet specific requirements of stakeholders in the oil and gas industry.
Since stakeholders in the oil and gas industry are constantly looking for options to optimize production costs, companies in the market for artificial lift systems are introducing business intelligence and analytics software. As such, software component segment of the artificial lift systems market is expected to reach a value of $2.6 billion by the end of 2027. Hence, companies in the market for artificial lift systems are collaborating with software engineers to develop advanced software systems.
Stakeholders in the oil and gas industry are increasingly benefitting from advanced business-intelligence software, since such software not only offer data on virtual flowmeters (VFMs), but also provide information across all inputs in an oilfield. Such operational practices are helping stakeholders to achieve high productivity levels.