Upstream Services Market Size, Share, and Industry Analysis By Type (Rental Equipment, Field Operation, and Analytical Service), By Service (Geophysical, Drilling, Production, and Others), By Application (Onshore and Offshore), and Regional Forecast till 2032

The global upstream services market is the backbone of the oil & gas industry. With the rise in technology in services and software used in the industry, the growth of the upstream services market is promising. These services include inspection, repair and maintenance, sampling, decommissioning, remotely operated vehicle (ROV), subsea support, riser, flow line (SURF), and well stimulation.

• After declining in 2020, upstream investment was estimated to have increased by 11% in 2022 and another 7% growth in 2023. Investment in oil and gas is expected to continue by 2024.

Upstream Services Market Driver

Increase in Shell Gas Extraction to Augment the Demand for Upstream Services

Shale gas is often formed in rock formations that do not flow into reservoirs due to low permeability. Advances in technology, such as directional drilling, have made it possible to improve wind tunnel production.

• Arrow Energy, a 50:50 joint venture between British oil giant Shell and Chinese state-owned PetroChina, is on track to begin development of the Surat Gas Project (SGP) in Queensland, Australia, by the end of 2024. SGP A is a development in the world that markets the coal gas reserves of Surat Pere Basin, which is about 5 trillion cubic feet of gas. During peak production, Surat Unit 2 will produce approximately 22,400 barrels of oil equivalent per day - 130 million feet per day of gas.

Upstream Services Market Restraint

Lack of Government Funds in the Oil & Gas industry May Hamper the Market Growth

The Paris Agreement was signed in 2016 and it impacts upstream oil and gas sectors as it would not receive financial assistance from the World Bank. Therefore, environmental concerns are expected to affect the industry for a long time. As government agencies mainly influence world politics, this has been a significant barrier to upstream services market growth for a long time.

Upstream Services Market Opportunity

New Exploration Activities in Developing Countries to Drive the Demand for Upstream Services

The demand for energy and natural resources has increased. Therefore, large quantities of oil and gas must be drilled. The upstream service industry requires increasing technology, more exploration, and lower production costs. To moderate this rise in demand, many countries are exploring the offshore oil & gas sector. Further, the upstream service industry must invest in technology to reduce time, cost, and environmental damage.

• Britain's joint venture partner in the Falklands' first oil and gas development believes the project is advanced, with a final investment decision on the cards for 2024. The Sjøløve project may be extensive and a starting point for developing other oil reserves in the North Falkland basin, which is very well estimated for proven resources of 791 million barrels of oil.

Segmentation

Key Insights

The report covers the following key insights:

• Key Emerging Trends – For Major Countries


• Latest Technological Advancement


• Insight on Regulatory Landscape


• Porters Five Forces Analysis


• Impact of COVID-19 on the Market 

Analysis by Type

Based on type, the market is divided into rental equipment, field operation, and analytical service.

The analytical services of upstream market have high prospects in terms of growth in the upstream services market. Analytical services comprise modeling, production optimization, data integration and management, environmental impact assessment, economic analysis, and others. The need for product innovation in these categories is an ongoing process that gives the segment new opportunities in many types of upstream services in the global industry.

Analysis by Service

Based on service, the market is subdivided into geophysical, drilling, production, and others.

Drilling service provides the equipment and expertise for drilling wells, including rotary and directional drills. All the services in drilling are related to well design, casing, completion, construction, and others, which are critical parts of the upstream services market. The after-market for drilling is also expanding in terms of maintenance and new exploration on the same site. Therefore, the drilling segment is rapidly expanding.

Analysis by Application 

Based on application, the market is subdivided into onshore and offshore.

The offshore application is a new prospect for the upstream services market. The offshore upstream services in the oil & gas sector focus on exploring and producing hydrocarbons from beneath the sea. Conducting 2D & 3D seismic studies using specialized vessels to identify potential reserves, mapping seabed geology to assess resource potential, and others, are involved in the offshore application.

• Kazakhstan has stepped up efforts to secure investment from the Middle East in the country's oil and gas sector. The latest projects include the Kashagan project led by Eni in the Caspian Sea, the largest project in the country, and Tengiz and Karachagank, one of the three leading projects in the country. According to the Kazakh government, UCC will invest in two projects to support oilfield expansion plans at Eni's Kashagan oil development in the Caspian Sea.

Regional Analysis

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Based on region, the market has been studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

In North America, upstream drilling services are popular among others. Providing drilling rigs and crew for both onshore & offshore applications, including advanced technologies for horizontal and direction drilling, is keeping the market growth at a high rate.

• The Canadian Association of Petroleum Producers (CAPP) predicts that the country's capital expenditure in the upstream oil & natural gas sector will reach USD 30 billion by 2024.

In Europe, many countries are conducting seismic surveys and geological mapping to identify potential reserves in the region, such as the North Sea and the Mediterranean. Norway and the U.K. have overcome challenges and attracted the opportunity to achieve essential milestones due to a large increase in investment in the North Sea, such as success in exploration and production. Oil and natural gas production from this region provides important resources for Europe and other parts of the world through energy transfer.

• Investments in Norway's oil and gas industry are expected to reach a record USD 20 billion in 2024. At that time, several key projects were approved in recent years and released by the temporary tax government, which was introduced to incentivize spending on the Norwegian continental shelf.

Growth of the offshore drilling market in the Asia Pacific region is driving the market growth. National oil companies in Asia are expected to contribute significantly to a 7% increase in global oil and gas production by 2024, the International Energy Agency (IEA) said in a report.

• The IEA predicts that it will reach USD 570 billion by 2024, the same level as in 2023. Further, it will reach USD 3 trillion in 2024. According to the report, about USD 2 trillion will go toward clean technology, including renewable energy, electric vehicles, nuclear power, grids, storage, low-carbon fuels, efficiency improvements, and heat pumps.

Latin America has significant opportunities in the upstream services market in countries such as Mexico and Brazil. According to an industry expert, about 60% of Mexico's resources are still untapped. The total amount of property found in the country is approx. 113 billion barrels equivalent (boe), of which 67.6 billion barrels are located in 528 illegal zones in many offshore and offshore banks.

Middle East & Africa has huge market potential for the upstream services market as it established the oil & gas industry with worldwide capital investment availability.

• In September 2024, OQEP was one of the largest holders of Oman's reserves and had increased its daily production nearly 14 times since its formation in 2009 to 249,000 barrels oe/d by 2023. OQ Exploration and Production (OQEP), Oman's oil and gas exploration investment company (E&P), will pursue an initial public offering (IPO) of up to 25% of shares this year. HSBC, Natixis, OIB, and Sohar International will jointly coordinate the deal with Sohar International as the main client.

Key Players Covered

The global upstream services market is concentrated with the presence of a large number of groups and service manufacturers.

The report includes the profiles of the following key players:

• GE Oil & Gas (U.S.)


• Schlumberger (U.S.)  


• Halliburton (U.S.)


• Weir Oil and Gas (U.K.)


• Baker Hughes (U.S.)


• National Oilwell Varco (U.S.)


• Emerson (U.S.)


• Suadi Aramco (Suadi Arabia)


• Abu Dhabi Oilfield Services (UAE)


• Protiviti (U.S.)     


• Oceaneering (U.S.)


• China Oilfield Services (China)


• Rockwell Automation (U.S.)


• Oil States Industries (U.K.)


• Ensco Plc (U.K.)

Key Industry Developments

• In May 2024, the Nigerian National Petroleum Company Energy Services Limited and Schlumberger signed a technical cooperation agreement to strengthen upstream operations. The agreement is part of strategic reforms aimed at opening up opportunities in the country's oil and gas industry.


• In April 2024, Baker Hughes won a contract to supply gas technology equipment for work on the third phase of Saudi Aramco's Main Gas System (MGS) project. Although new oilfield projects in Saudi Arabia have been delayed following a government order to halt the expansion of the country's oil production capacity, Aramco's developments is likely to accelerate over the following years.