Electrical Submersible Pump Cables Market Detailed Study Analysis with Forecast by 2023
The presence of a large pool of equally-placed participants, such as Schlumberger, Weatherford, and Baker Hughes, determines the degree of competition in the global electrical submersible pump (ESP) cables market, finds Transparency Market Research in a recent study.
At present, the market is fragmented and the degree of competition is likely to shift from medium to high over the next few years. To withstand this rivalry, leading participants are increasingly engaging in vertical integration; technological innovation and product differentiation although remains the key determinants of their competence.
Going forward, mergers, acquisitions, and strategic alliances are likely to emerge as the most preferred strategy among players looking to expand their reach and strengthen their presence across the world.
Depleting Oil Reserves Compel Producers to Dig Deep, Drive Demand for ESP Cables
Oil drilling and exploration companies are digging out oil wells in order to enhance oil production. The rapid depletion as well as maturation of oil reserves has compelled these producers to drill deep, increasing the depth of oil wells, which has resulted into deeper pump setting, driving the demand for ESP cables required to supply the electricity from the transformer to pump motor.
Apart from this, the growing demand for ESP is also an important factor, driving the growth of this market, as it is directly proportional to the demand for ESP cables.
Decline in Oil Price to Limit Deployment of ESP Cables
“Although several factors point towards a thriving future for ESP cables, the recent decline in oil prices may limit their application due to a rapid decrease in offshore exploration and production expenditure over the years to come,” says an analyst at TMR. The limited employability of these cables in shale gas fields is also expected to hamper the market’s growth in the long run.
ESP cable manufacturers, however, are projected to gain rewarding opportunities in the forthcoming years due to the increasing number of oil sands projects set to commence very soon across the world.
Demand for ESP Cables to Remain High in Europe
Europe has been leading the global market for ESP cables since its inception. In 2014, the region generated a revenue of US$1.9 bn, accounting for a share of nearly 60% in the global market. Analysts expect it to remain dominant over the forthcoming years. However, the Middle East and Africa is expected to present the most promising opportunities for these cables in the near future, registering the fastest CAGR of 8.70% between 2015 and 2023.
In 2014, the onshore segment emerged as the key site for the application of ESP cables and is projected to remain leading in the years to come. Based on technology, EPDM (synthetic rubber) cables will continue to witness the strongest demand over the next few years.
On the whole, the worldwide ESP cables market is likely to present an opportunity worth US$4.5 bn by 2023, increasing from US$3.0 bn in 2014 at a CAGR of 4.70% between 2015 and 2023. During the same period, the production volume of ESP cables is likely to expand at a CAGR of 4.40%, globally.