Well Intervention Market

According to a survey by Halliburton, one of the leading players in the well intervention market, mature fields account for about 70.0% of the global oil & gas production, with many in the secondary or tertiary production phases. The average recovery factor is 70.0% for gas and 35.0% for oil. However, the recovery rates may decline further due to geological characteristics, resource constraints, or operational inefficiencies of old technologies. A mature field is distinguished by a decline in overall production after primary recovery efforts or when easily accessible hydrocarbons are recovered. These wells are far from being a decaying resource, as they are likely to cater to the rising demand for energy in the future. The major difficulty with the mature fields is that their oil production is uneconomical, or the operator faces technological limitations in recovering oil reserves.

In the US, New York and Maryland have banned hydraulic fracturing due to various concerns related to health and environmental degradation, such as air and water contamination. Ohio reported 77 minor earthquakes in a month, predominantly caused by hydraulic fracturing activities in 2014. Besides, France, Bulgaria, Romania, Ireland, South Africa, the Czech Republic, Denmark, Germany, the UK, and Scotland have banned hydraulic fracturing activities. These factors are expected to hamper the growth of the oil & gas service industry in the long term. The government regulations related to the oil & gas field developments have become strict, and regulatory authorities have re-evaluated the drilling procedures intending to prevent future oil spill incidents. Various oil spills, such as the Torrey Canyon in 1967, the Amoco Cadiz in 1978, the Piper Alpha 1988 disaster in the North Sea, the Exxon Valdez 1989, the Prestige oil spill in 2002 in the Bay of Biscay, and the Montara incident 2009, have highlighted the devastating impacts of exploration and drilling activities on the human and marine ecosystem. For instance, in May 2024, an oil spill occurred in Galveston Bay, Texas, US, following a barge collision with a bridge pillar, leading to concerns over environmental damage. The barge struck a column of the bridge connecting Galveston and Pelican Island, causing oil leakage into the bay. The collision resulted in a partial bridge collapse, exacerbating the situation and raising questions about safety measures for maritime transportation in the area.

Players operating in the oil & gas industry are focusing on making discoveries as some of the existing fields may create challenges in producing hydrocarbons at an economical rate and require plug and abandonment. Major oil & gas companies have made extensive discoveries in the onshore and offshore regions. As per the news by OilPrice in April 2024, oil & gas discoveries for 2023 fell to a record low of 5 billion barrels of oil equivalent while exploration costs rose close to twofold. Of these, 60% of the 5-billion-barrel total was new oil discoveries; the remaining was gas discoveries. As for geographical distribution, the biggest portion of discoveries in 2023 were made in Asia, at 32%, with Latin America second, accounting for 21% of all new oil & gas discoveries. Europe and Africa held third place, with a share of 11% each.

Oil & gas reserves are finite resources that are depleting as production activities constantly increase. Thus, the upstream operators have increased their focus on challenging geographic conditions such as high-pressure, high-temperature (HPHT) wells. The commercial viability of uneconomic gas reserves and the use of thermal recovery techniques have increased the requirement for operations in HPHT wells in the Gulf of Mexico Kvitebjørn, Kristin and Huldra fields, and the North Sea, among other regions. However, the drilling of HPHT exploratory wells involves high-risk and cost-intensive operations, which is expected to be a challenge for well intervention service providers.