There is hardly any business sector other than the oil & gas industry with unpredictability galore, including the intensifying competition, highly informed consumers, and economic disruptions. In doing so, innovations in artificial lift systems are paying off for oil companies to provide increased reliability, endurance in harsh environments, and optimized performance. Fortune Business Insights states the market for artificial lift system was valued at around USD 8.4 billion in 2018 and will reach USD 13 billion by 2026 at a CAGR of approximately 5.32% during the forecast period.
In retrospect, artificial lift has been marked by a host of innovations. Evolution in the product line has led to developments in artificial lift. The equipment is primarily used in the oil & gas sector to bolster oil production. At the time when momentum continues to shift in the energy landscape, oil & gas operators are exploring ways to reduce capital expenditure (CAPEX) and boost operational efficiency.
Some of the underlying questions that often arise in stakeholders’ minds are:
- Will the oil & gas companies keep up with the changing business dynamics?
- Which consumer base will have a notable impact?
- How will the industry overcome challenges emanating from the COVID-19 pandemic?
In a bid to unlock an asset’s true value, streamlining of operations and management of production operation could hold the key. With advanced production applications, new records of performance are unraveling opportunities in electrical submersible pump technology.
Electric Submersible Pump: A Compelling Trend
Developments in manufacturing and design have made electric submersible pumps (ESP) resilient in critical downhole environments. It could help boost gas-handling capability and make them withstand abrasives and solids.
Oil companies have upped investments in ESP to detect problems as they develop. Tracking downhole pumps can help operators recognize deviations and prompt action to enhance production and augment pump life. Besides, operators have also furthered investments in pump vibration sensors to protect the pump from mechanical damage and vibration. With developments in sensor technology, oil & gas operators are expected to fine-tune the performance of the reservoir, pump, and well.
Considering that vibration is attributed to reduced pump life, oil companies are expected to check pump vibration damage by monitoring ESP performance indicators.
The Middle Eastern countries are expected to be the cash cows as oilfields mature and the demand for artificial lift systems continues to soar. The region is poised to inject funds into the ESP technology against the backdrop of fully automated operation and a high turndown rate.
Offshore Wells: Untapped Opportunities
Leading companies are exploring growth potentials in offshore wells that will be pivotal to keep up with future energy demands. With notable trends, stakeholders expect the market forecast for artificial lift systems to remain strong in the ensuing period. According to the IEA, around 25% of oil & gas supply is produced offshore, especially in the Gulf of Mexico, the Middle East, the Caspian Sea, the North Sea, and Brazil.
The offshore oil & gas sector is transitioning towards a lower price world. The costs of several offshore oil & gas projects have dipped as stakeholders strive to boost their viability in a lower-price environment. The IEA asserts that CAPEX in the U.S. Gulf of Mexico and the Norwegian offshore has come down to USD 25-40/barrel from $60-80/barrel. Digitalization is touted as the frontier in offshore operation to foster efficiency and reduce costs.
In a world where oil consumption continues to grow unabated, investments in offshore resources remain strong. In a similar breath, the prospects of artificial lifts also remain robust.
Artificial Intelligence (AI) and Machine Learning (ML): The Next Big Thing
With Industry 4.0 techniques foraying into the global landscape, AI and ML have become a vital proposition to predict future events based on historical incidents. ML could help augment return of investment (RoI) by helping optimize production from the lift system. In doing so, the Internet of Things (IoT) has the innate ability to assist operators in making systematic decisions.
Popular artificial lift methods, such as gas lift, electrical submersible pump, and sucker road pump, are likely to be the primary recipients of the advanced technology. With real-time detection of potential operational failures, operators could streamline decisions through AI, ML, and IoT to negate huge production loss with minimal operational expenses.
COVID-19 Pandemic: Suggesting a New Normal for Oil Markets?
The market for artificial lift systems witnessed an onslaught from the COVID-19 outbreak, leading to an unprecedented collapse in 2020. A palpable inclination toward low-carbon future has spurred a downward shift in expectation for oil demand.
Coronavirus and its variants, including Delta and Omicron, have forced rapid changes in behavior. From reductions in business air travel to investments in a sustainable recovery. Meanwhile, long-term drivers will continue to remain a pillar of growth. The IEA predicts that global oil consumption to touch 104.1 mb/d by 2026. Amid the absence of bullish policy action, global oil production may need to surge 10.2 mb/d by 2026.
Conclusion: The Roadmap
The global oil industry has potentially rebounded from the pandemic and stakeholders could. Redefine their economic roadmap for an artificial lift to achieve business objectives. Production could be increased from mature fields to expedite the demand for the equipment. Increased exploration of unconventional resources, infusion of funds into exploration and production. Activities, and shale discoveries will help the industry surmount prevailing challenges.