Artificial Lift System Market Trends

Market Driver - Growing Global Energy Demand, Industrialization, and Urbanization

According to reports, the world total primary energy demand is projected to increase over 25% between 2018 and 2040. Major economies including United States, China and India have shown sharp increase in their energy consumption levels to support strong economic growth. Developing regions in Asia Pacific and Middle East & Africa have emerged as major hotspots of rising oil and gas demand on back of fast-paced industrialization.

Increased manufacturing activities and road transportation have also contributed to surging demand for liquid fuels. As conventional reservoirs nearing maturity, oil producers are increasingly relying on artificial lift systems to recover higher volumes from legacy oilfields and maximize output over lifetime of assets.

With average well depth and complexity increasing considerably, artificial lift systems have become necessity rather than choice to extract more reserves from reservoirs and prolong production plateaus. Multilaterals, long horizontals, and high pressure/high temperature projects present unique challenges which artificial lift solutions have helped operators overcome. This will drive growth of the artificial lift system market.

Market Driver - Technological Advancements in Artificial Lift Systems

The artificial lift system market has witnessed noteworthy innovations to make equipment more efficient, reliable and compatible with dynamic well requirements. Advanced systems integrating automation, control functionality, and data analytics are helping operators effectively manage production and reduce downtime. Developments in sensor technology, materials science, software controls and manufacturing have expanded applicability of artificial lift solutions to diverse well profiles.

Predictive analytics, condition monitoring, and remote monitoring systems are enabling condition-based maintenance to maximize ESP run life. For plunger lift systems, digital controllers equipped with data acquisition capabilities precisely regulate injections for consistent well production. Surface stress analyzers and dynamometers aid continuous enhancement of progressive cavity pumps performance in abrasive applications.

Such advancements are enhancing productivity and reducing total operating costs for oil producers. It is enabling cost-effective development of resources from smaller, more complicated reservoirs. The technological edge is expected to further drive penetration in artificial lift system market for optimizing recovery from mature oilfields across globe.

Market Challenge - High Initial Investment Costs and Maintenance Expenses for Artificial Lift Systems

One of the key challenges faced by the artificial lift system market is the high initial investment costs and maintenance expenses associated with these systems. Artificial lift systems such as rod lift, progressive cavity pumps, gas lift, and electrical submersible pumps require large up-front capital expenditures to purchase, install, and set up.

In addition to high capital costs, artificial lift systems also involve high operating and maintenance expenses over the lifespan of the oil wells. Periodic replacement of parts and components adds to the total cost of ownership. With fluctuating oil prices in recent years, finding the necessary CAPEX and OPEX funding has become more difficult for many producers.

The expenses of installation, operation, and maintenance discourage the adoption of artificial lift systems, particularly for older wells with lower production rates. This challenge of high costs impacts the growth and revenue prospects of players in the artificial lift system market.

Market Opportunity - Increased Oil Exploration in Offshore Reserves for Artificial Lift System Market

One major opportunity for the artificial lift system market is increased oil exploration and production activities in offshore reserves. With onshore reserves maturing and depleting in many regions, oil companies are investing heavily in tapping offshore oil fields.

However, offshore wells often encounter difficulties such as thicker crude viscosities and higher reservoir pressures that diminish natural well flow. This boosts the need to use artificial lift systems in order to extract crude economically from offshore locations.

Technologies such as subsea pumps and compressors are increasingly being utilized to efficiently handle offshore fields. The extensive development of offshore reserves worldwide thereby provides a massive growth avenue for demand of artificial lift systems in the coming years.

As more new offshore fields come online, investment in artificial lift equipment tailored for subsea usage is likely to witness tremendous growth. This presents players in the artificial lift system market with substantial opportunities for expansion into the offshore oil production sector.