Growth seen for oil field spending in 2004

Oct. 19, 2004
On the strength of robust oil and natural gas prices, 2004 will be a record year for spending on oil field equipment and services, according to Spears and Associates Inc., a Tulsa market research company.

By OGJ editors

HOUSTON, Oct. 19 -- On the strength of robust oil and natural gas prices, 2004 will be a record year for spending on oil field equipment and services, according to Spears and Associates Inc., a Tulsa market research company.

Worldwide spending on equipment and services is expected to increase to $110 billion in 2004 from $103 billion in 2003, Spears said.

The conclusion comes in its annual Oilfield Market Report, which estimates sales for 200 public and private oilfield equipment and service companies worldwide.

The strongest gains are in categories for oil country tubular goods, inspections, and drillbits, each of which is expected to grow more than 20% this year. Soaring steel prices contribute to the increases.

Out of 33 market segments, spending is expected to increase by 10-20% in 18 during 2004, including land contract drilling, pressure pumping services, directional drilling, completion equipment, and artificial lift.

Several market segments will decline this year, including offshore contract drilling, offshore construction, rig equipment, and supply vessels. One factor in the declines is improved drilling efficiencies delivered by rotary steerable drilling technologies (RST) and fixed cutter bits. Spears estimates that 10 million ft of hole will be drilled with RST in 2004.

Another decline factor is that some producers cut spending on offshore projects, Spears said.