Global Construction Services Market Outlook for Oil & Gas Industry - Analysis of Growth, Trends and Forecasts (2018 - 2023)
The construction services play an important role in the life cycle of crude oil, right from exploration to the end-user markets. From accessing the demand in the end-user markets to fulfilling it by developing new infrastructure, the construction services go hand in hand with the upstream, midstream, and downstream sectors. Since the oil price crisis in 2014, the upstream and midstream industries have experienced massive spending cuts, in turn, affecting construction services market in the oil & gas industry negatively. The downstream industry has had a variable effect depending on the region.
Oil Price Recovery and Growing Demand for Oil
Due to the oil price recovery during 2016-2017, the oil & gas expenditure experienced a growth of about 25% during the said period. The oil & gas demand is consistently increasing and is expected to witness a growth of about 2.5% during the forecast period. The current producing fields are reaching their maturity. Hence, in order to meet the oil & gas demand, the oil & gas industry’s expenditure is expected to increase on exploration for new fields, as well as on enhanced oil recovery projects, to increase recovery from the producing fields. Due to the growing oil production and increasing demand for downstream products, the midstream and downstream industry infrastructure expenditures are expected to register substantial growth in the next five years. Growing investments in upstream, midstream, and downstream oil & gas industry are expected to drive the market during the forecast period.
North America to Lead the Market
North America, which holds the largest share of the global oil & gas production, is the market leader for construction services in the oil & gas industry. This region is expected to register a substantial growth during the forecast period, owing to growing oil & gas activities in the United States, Canada, and Mexico. The United States is experiencing a substantial growth in oil & gas activities owing to increasing production from the Permian Basin of Texas and the Gulf of Mexico. The US oil production is expected to be further driven by the government policy to open almost all the US water for exploration and production activities. Canada, with stability in oil prices, is expected to experience increasing investments in the oil & gas industry, allowing private players to explore some of its most prominent oil sand reserves. New oil & gas construction projects are expected to start in Mexico due to the requirement of infrastructural development activities in the oil & gas industry. Hence, growing oil & gas industry activities in the United States, Canada, and Mexico are expected to drive the market in North America during the forecast period.
Growing Investments in Saudi Arabia
In order to maintain the dominance in the oil & gas sector, Saudi Arabia is investing heavily in the upstream industry to upscale the oil & gas production. Moreover, this country has also heavily invested in midstream and downstream infrastructure, in order to process the produced oil & gas. The country is moving from oil consumption toward gas consumption, in order to reduce the domestic consumption of, and, in turn, improve the export of, crude oil. As a result, the midstream and downstream industries in the country are going through a restructuring. Hence, growing investment in the upstream and downstream sectors, and restructuring of midstream and downstream sectors are expected to drive the construction services market in oil & gas in the country.
Notable Developments in the Market