Understanding Impact of COVID-19 on Oil Well Cement Market

February 23, 2021

Oil well cement plays pivot role in the oil & gas industry. It is used to provide zonal isolation, prevent corrosion of casings, and hold and support casings in the oil well.
Oil well cement is used for cementing operation in the drilling of oil wells under high pressure and temperature. Oil well cement primarily consists of pozzolanic or Portland cement with organic retarder to enhance the setting time of the cement.
Oil well cement is employed for cementing offshore oil and onshore oil wells. The strength of the oil well cement depends on various factors such as slurry design and the use of additives.

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Energy consumption has been increasing significantly since the last few years. Rise in demand for energy across the globe is leading to the depletion of conventional resources. This is encouraging oil & gas operators to increasingly invest in exploration & production of unconventional reserves. In turn, this is anticipated to drive the global oil well cement market during the forecast period.
Rise in investments in development of oil & gas reserves in deep & ultra-deep water locations owing to the increase in number of aging oilfield in onshore locations is expected to propel the global oil well cement market in the near future. Growth in demand for crude oil in the downstream sector for processing crude oil into high value added petroleum products such as, gasoline, diesel, naphtha and LPG is a key factor boosting investment in development of oil & gas reserves in offshore locations. However, volatility in prices of crude oil may hamper the global oil well cement market.

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Governments of various countries have enforced nationwide lockdowns as a part of precautionary measures to limit the spread of coronavirus. As a result, transportation and manufacturing activities have declined significantly. Many outbound sailings have been cancelled due to the shortage of manpower. Decline in transportation & manufacturing activities has hampered the demand for crude oil. This has adversely impacted the production output of crude oil. Demand for oil cement is directly linked with the production activity of crude oil, as oil well cement is used for cementing operation in drilling of oil wells. Thus, decrease in supply of crude oil has adversely affected the demand for oil well cement.

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Based on application, the global oil well cement market can be segmented into offshore and onshore. The offshore segment is anticipated to witness considerable growth in the near future due to increase in the number of marginal fields in onshore locations and availability of oil and gas reserves in deep water.

In terms of region, the global oil well cement market can be divided into Middle East & Africa, Latin America, Asia Pacific, Europe, and North America
The oil well cement market in North America is expected to expand at a rapid pace during the forecast period. Growth of the market can be ascribed to ongoing investments in drilling of unconventional resources such as shale gas and tight gas in the region.
The oil well cement market in Europe is projected to expand during the forecast period due to increase in efforts to reduce dependence on import of fossil fuel by increasing investment in exploration & production of oil & gas resources in offshore locations, primarily in Norway and the Netherlands
The market in Asia Pacific is anticipated to expand at a fast-paced CAGR during the forecast period due to rise in demand for crude oil as feedstock material in the refining sector for the production of petroleum products. Asia Pacific accounted for 34.7% of the global oil refining capacity of 100 million barrels per day in 2018.
The oil well cement market in Latin America and Middle East & Africa is projected to expand at a sluggish pace during the forecast period