The global oil and gas separation equipment market was valued at USD 8.58 billion in 2023. It is estimated to reach USD 11.79 billion by 2032, growing at a CAGR of 3.6% during the forecast period (2024–2032). The world has witnessed a rapid rise in energy demand in recent years, subsequently increasing the demand for oil and gas, increasing production, and driving the global oil and gas separation equipment market. Moreover, the redevelopment of matured oilfields further boosts the adoption of oil and gas separation equipment, as these wells produce a high amount of water and gas alongside the oil. This is expected to create opportunities for the market players operating in this market.
Oil and gas separation equipment is the equipment and procedures employed to separate crude oil, natural gas, and water from oil wells. The separation process plays a vital role in producing hydrocarbons, as crude oil and natural gas frequently contain contaminants and water that must be eliminated before refining or transportation. The separation equipment generally comprises diverse components specifically engineered to segregate the distinct oil, gas, and water phases.
Oil and gas separation equipment is necessary in the upstream and gas sectors, where crude oil and natural gas are recovered from underground reserves. Superior extraction quality is ensured by efficient segregation, which also reduces environmental impact by limiting pollutants and impurities released into the environment.
Rising Demand for Oil and Gas
The global energy consumption is steadily increasing due to the rising population, urbanization, and industrialization. Consequently, there is a growing need for oil and gas extraction, which is driving the use of separation equipment to improve production processes and meet market requirements. Research Nester predicts global gas demand will rise by 140 billion cubic meters from 2021 to 2025. The International Energy Agency (IEA) forecasts that global oil demand will reach 101.7 million barrels per day (mb/d) by 2023, indicating a 2.3 mb/d rise compared to the preceding year. Hence, the significant need for oil and gas, coupled with heightened production, is expected to drive the growth of the global market.
Energy Transition and Environmental Concerns
The global market is experiencing a substantial shift towards energy transition and addressing environmental concerns. This transition is driven by the growing demand for cleaner energy sources and stricter regulations to decrease greenhouse gas emissions and minimize environmental impact. As a result, there is an increasing focus on developing more efficient and environmentally friendly separation technologies, such as advanced filtration and membrane systems, to enhance the efficiency and sustainability of oil and gas processes.
Fluctuating Oil Prices
Oil prices are defined by a complex combination of factors such as worldwide demand, geopolitical conflicts, choices made by OPEC (Organization of the Petroleum Exporting Countries), and economic circumstances. Volatility in oil prices can generate market uncertainty, prompting oil and gas corporations to defer or abandon investment choices. Moreover, the volatility in oil and gas prices can directly affect the demand for oil and gas separation equipment, as corporations may choose to postpone projects or decrease their capital investment until prices become more stable. This is expected to restrict the market growth.
Global Oil and Gas Separation Equipment Market Opportunities:
Redevelopment of Mature Oil Wells
Mature fields refer to sites where oil output has been experiencing a decline. These fields had reached the point where they could no longer produce anymore. Even though new discoveries and developments frequently garner attention, these fields are regarded as the "backbone" of the industry. Likewise, nearly 60% of the daily global oil production is derived from mature fields. As oil wells mature, they frequently yield an increased ratio of water and gas in addition to the oil. Operators need separation equipment to correctly separate these components in order to extract oil. This increases demand for separation equipment, including separators, treaters, and skimmers.
Moreover, the utilization of mature oil wells and reservoir engineering technology has made the extraction of fully developed oil fields more appealing. Hence, many companies prioritize formulating novel approaches to redeveloping oil fields in light of profitability concerns and the imperative to sustain their oil production levels. For instance, in May 2019, KBR, Inc., a U.S.-based engineering and construction business, agreed with Cepsa, a Spanish oil and gas firm, and Sonatrach, an Algerian government-owned company, to revitalize oil fields situated in the Hassi Messaoud region of Algeria. These factors are expected to create opportunities for the growth of the market.
| Study Period | 2020-2032 | CAGR | 3.6% |
| Historical Period | 2020-2022 | Forecast Period | 2024-2032 |
| Base Year | 2023 | Base Year Market Size | USD 8.58 billion |
| Forecast Year | 2032 | Forecast Year Market Size | USD 11.79 billion |
| Largest Market | North America | Fastest Growing Market |
Based on region, the global oil and gas separation equipment market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
North America is the most significant global oil and gas separation equipment market shareholder and is expected to expand substantially during the forecast period. North America maintains market dominance due to its significant oil and gas deposits in the United States and Canada. The need for oil fields in North America is increasing due to the rising number of mature fields and increased energy consumption. North America's oil and gas industry has made substantial investments in onshore and offshore deposits in recent years. Moreover, increasing CBM and shale gas production in the region strengthens the oil and gas sector. According to Statista, shale gas and tight oil production in the United States is projected to rise to approximately 35 trillion cubic feet by 2050, compared to 26.91 trillion cubic feet in 2022.
Likewise, the expanding offshore exploration and production (E&P) operations and the initiation of new exploratory activities in the Bakken oilfield are anticipated to drive market expansion over the next five years. Based on the BP statistics evaluation, oil consumption in the United States increased by 721 million barrels per day in 2017 compared to 2016. This is expected to increase the demand for oil and gas separation equipment.
Furthermore, the market participants could profit from the profitable growth potential by investing more in North America's oil and gas sector. For example, the Canadian Association of Petroleum Producers predicted a substantial 41% increase in oil sand production from 2019 to 2035. Similarly, in September 2019, Shell, a prominent oil and gas corporation, made a substantial investment of USD 13 billion in Canada's liquefied natural gas project. Also, in November 2018, prominent American companies intended to allocate USD 2.4 billion towards investments in Equatorial Guinea's oil and gas sector. These companies are scheduled to commence drilling about 11 wells. These advancements stimulate the expansion of the regional market.
The Asia-Pacific region is growing significantly due to increasing exploration and production (E&P) operations in China, India, Indonesia, Taiwan, Malaysia, and Vietnam. Regional governments are actively endeavoring to discover untapped oil and gas deposits by offering financial assistance through tax incentives and foreign direct investment (FDI), focusing on India and China. For instance, India allocated a total of USD 118 billion towards the exploration of oil and gas and the enhancement of natural gas infrastructure to fulfill its requirements. China has also relaxed restrictions on foreign investment in conventional oil and gas upstream to encourage resource development.
Moreover, numerous governments and oil companies are focusing on new oil exploration and drilling operations in this region to gain a competitive edge over their competitors and fulfill the increasing global need for oil. For instance, in November 2018, PetroChina, a Chinese oil and gas business, intended to augment oil output in the northwest Xinjiang region by 2021. This expansion will take place in a freshly discovered oilfield. In addition, Sinopec and PetroChina, two prominent oil companies in China, have collaborated to investigate and extract crude oil in the western regions of China to enhance domestic production. Therefore, the factors above contribute to the growth of the market.
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Based on product, the global oil and gas separation equipment market is divided into two-phase separators, three-phase separators, scrubbers, and others.
The three-phase separators segment dominates the global market. The three-phase separators segment holds dominance in the oil and gas separation equipment market due to its extensive utilization in various essential processes for treating oil, gas, and water within the separation unit. Three-phase separators provide benefits compared to two-phase separators regarding optimal pressure and effective liquid sealing. In addition, three-phase separators provide the rapid and precise separation and quantification of oil, gas, and water. The market expansion is expected to be driven by the increasing output from oil and gas wells and government initiatives in water treatment. The increasing extraction of coal bed methane (CBM) and shale gas is also expected to boost demand.
Based on end-users, the global oil and gas separation equipment market is segmented onshore, offshore, refineries, and others.
The oil and gas separation equipment is essential in offshore fields to effectively recover hydrocarbons from reservoirs beneath the seabed. Offshore crude oil frequently contains substantial quantities of water and salt. Separation equipment facilitates the extraction of these impurities from the oil, rendering it appropriate for transportation and refining purposes. Dehydration and desalting units are commonly incorporated into the separation process to guarantee the purity of the produced oil.
Oil and natural gas will meet over half of the world's energy needs by 2030, when energy demand is expected to increase by 5% globally. The anticipated surge in demand will lead to a higher adoption rate of new offshore upstream projects in the upcoming years. Moreover, global oil and gas companies are seeking to expand the implementation of new projects to take advantage of the prolonged period of low oil prices. This is anticipated to drive up the demand for offshore oil and gas separation equipment.
The emergence of the COVID-19 pandemic prompted the imposition of strict lockdown in most countries, causing delays in the import and export of gelatin-based plasma expanders. COVID-19 has the potential to impact the global economy in three ways, i.e., directly affecting production and demand, causing supply chain and market disruption, and facing a financial impact on businesses and financial markets.
