Oilfield Production Is Up, As Are Prices!
When oil prices rise, those in the resource extraction business get to work increasing their operational efficiencies, investing in new equipment, and seeking new opportunities to drill for natural gas or oil. One of the most critical aspects of effectively drilling for natural resources is using the right equipment. Today’s energy market is seeing incredible demand for oilfield equipment. Literally billions of dollars of parts, accessories, rigs, and tools are in play across the continent – and there is still pent-up demand for more! Domestic oil production has risen over 30% in the past five years, effectively upping the need for oilfield equipment by a similar amount.
What Type Of Equipment Is Needed Most?
Increased levels of drilling activity cause a decrease in the service life of the average oilfield implement. For example, drill bits, drill pipe, and drilling related equipment are designed to last a certain number of operating hours. Given proper care, the average drill bit might partially complete a wellbore hole. Changing a bit is a process that can take a day or more, so having spare parts around is vital to minimizing downtime. Drill pipe is also needed as more wells are bored across the world. Many wells are now being dug deeper than in recent years, so it is important to have extra lengths of this heavy, bulky item on hand.
Other pieces of energy equipment, like compressors, mud pumps, vacuum trucks, and water tanks are vital to the continued safe operation of the drilling platform. Some of these support pieces are specifically tailored to the oil and gas industry, so manufacturers have had to increase production levels to keep up with the incredible demand. This increased demand has also spurned a shift in the need for used equipment. More and more drilling crews are purchasing used equipment to satisfy the demand of increased resource production, while also saving money in the process.
Who Is Driving This Increase In Equipment Demand?
Oil production isn’t on the rise everywhere. Iran is on pace to produce a million fewer barrels of oil per day, based on several factors. The production in the Middle East is still dominated by Saudi Arabia, though Iraq is poised to see a one million barrel per day increase over the next few years. The majority of the increase in oil and gas production comes from activities in North and South America. American and Canadian oil companies are extracting crude at an unbelievable rate, while demand has stayed relatively flat over the past few years. This has led to a huge drop in North American oil imports, and has caused oil-rich nations in the Middle East to seek other outlets for their resources. Asia has been one of the biggest importers of oil from the Middle East since US and Canadian production increased. With the demand for oilfield equipment so robust, those in the industry should consider the costs associated with updating or replacing their oilfield equipment now. The time to increase production capacity is here, and incredible results can be achieved by initiating a timely investment in quality new or used equipment.