Perforating Gun Market

Market Overview

The global perforating gun market size was valued at USD 970 million in 2021. It is estimated to reach an expected value of USD 1,650 million by 2030, growing at a CAGR of 5.9% during the forecast period (2022–2030).

A perforating gun is a tool used to punch holes in the casing or liner of oil and gas wells before production. These perforations allow oil and gas to flow into the wellbore. These weapons are lowered into the wells and activated to hold several explosive charges. As the explosives blow holes in the reservoir walls, channels form via which the reservoir fluid flows into the wellbore and is eventually evacuated for processing.

This technology is frequently utilized because it offers more significant economic benefits than traditional methods, decreases pollutants, and improves operational safety and efficiency. The demand for perforating guns is increasing due to the expanding number of industries worldwide. The perforating gun is used in many processes, from drilling holes and forming channels in various materials to making holes for fasteners to blasting rock and concrete. 

Market Dynamics

Market Drivers

Increasing Exploration and Production of Unconventional Oil & Gas Resources 

The perforating gun market is driven by increasing exploration and production of unconventional oil and gas resources, high asset yield, and growing demand for shale oil and gas. The need for unconventional oil and gas is expected to result in the drilling of new wells. With the recent increase in production and exploration of unconventional oil and gas resources, there has been an increase in demand for perforating guns. They are needed to create new wells with deep directional drilling methods. 

There have been many changes in the oil and gas industry since its founding. The methods, modes, and materials have changed dramatically. Given the maturing conventional oil and gas reserves, an urgent need can be theorized, which is well addressed by resources substituting the rising demand. The discovery of unconventional oil and gas resources for energy has helped meet the requirements for clean and efficient sources. Unconventional oil and gas resources don't find their way into traditional formations, thus requiring specialized extraction or production techniques.

Rising Shale Perspective and Technological Advances in Perforating Gun Systems

A perforating gun is an innovative tool used in the mining industry that shoots a slug of water, high-pressure steam, or other propelling fluids to make holes in the ground. This process can extract minerals from underground geology, such as coal and oil. There are many types of perforating guns for different applications, such as coal and oil, and they have a range of uses in the industry. The growth factor of perforating guns includes rising shale prospective in perforating gun systems.

The use of perforation guns is on the rise with the emergence of hydraulic fracturing, a procedure that has grown extensively in recent years. Hydraulic fracturing or "fracking" (i.e., drilling a hole deep into the Earth and injecting fluid at high pressure to break up and release hydrocarbons) has affected oil & gas production in the United States and Canada. A perforating gun is an essential tool for today's mining industry. With the help of technology, the growth factor in this field has seen a rise in perforating guns. 

Market Restraint

Decline in Capital Expenditure by Oilfield Operators

The decline in capital expenditure by oilfield operators is one factor restraining the market growth. Oilfield operators are focusing on reducing the capital expenditure on perforating guns and choosing technologies that require less or no capital expenditure. The primary factor restraining the growth of the perforating guns market is the lack of awareness of the said market by both product and service providers. The other factors keeping the perforating guns market from growing are the lack of support from the government, the lack of government funding, the lack of R&D in the field of perforating guns, and the lack of standardization of the perforating guns.

Market Opportunities

Growth in Oilfield Discoveries

Given the increased oilfield activity, there is a significant opportunity in the market for perforating guns. In the past few years, there has been much activity in discovering and developing oilfields, especially in the United States. However, the perforating and stimulation market remains a niche market. The perforating guns are pivotal in this technology, making a profitable opportunity for the market.

Perforating guns are used to insert casing and tubing into a concrete wall for well and oilfield applications. Earlier, this was done manually by drilling holes in the concrete and inserting the pipes. Today, it is done with perforating guns. This gun is used to punch a hole in the concrete long enough for the pipes to be inserted in. The gun also has a casing-perforating option that allows the gun to be used to insert casings in the well. These guns are vital for drilling in oil wells.

Regional Analysis

Region-wise, the global perforating gun market is segmented into North America, Asia-Pacific, Europe, and LAMEA.

The Dominance of Europe over Others

Europe is the largest shareholder and is expected to grow at a CAGR of 5.7% during the forecast period. This is attributed to the financial support by the governments to manufacturers and distributors. The future of the perforating gun industry in Europe looks bright. The European Union has initiated measures to assist manufacturers and distributors of perforating guns with R&D, innovation, and technology. The world's leading companies are focusing on manufacturing high-quality products for ongoing projects to maintain their lead.

North America is the second-largest region and is estimated to reach USD 410 million by 2030, growing at a CAGR of 6.4%. The North American market will grow due to the oil, gas, and mining industry. Manufacturers are looking for an increase in production; therefore, there has been a shift towards more automated equipment. The demand for these guns will contribute to the growth of this market in the region. North America is the major contributor to the perforating guns in the global market. This is due to the robust demand for these guns across diverse end-use industries, such as automotive, oil and gas, and construction, which leads to high demand in the market.

Asia-Pacific is the fastest-growing region for perforating guns due to the increasing demand for perforating tools. Asia-Pacific has a large population and a growing need for industrial development, especially in countries such as China and India. Energy demand in Asia-Pacific is anticipated to increase as countries, especially China and India, look to explore and drill for oil and gas. Demand for perforating guns is driven by the growing demand for oil in Asia-Pacific. With planned exploration and production in Asia-Pacific, the need for perforating guns is anticipated to increase. Perforating guns create holes in the ground to extract oil and gas.

Segmental Analysis

The global perforating gun market share has been categorized into components, types, applications, and regions. 

On the Basis of Component

Component-wise, the global perforating gun market is segmented into Gun Housing, Shaped Charge, Detonator Cord, Detonator, and Others.

Gun Housing accounts for the highest market share and is estimated to grow at a CAGR of 5.9% during the forecast period. Gun housing is primarily used as a component of the perforating gun. It contains a series of parts that help the gun function properly. The gun housing series of features is used to direct air and oil flow to the perforating gun. The gun housing of a perforating gun protects the gun from the elements and allows the gun to be portable. Since it covers the gun from the other aspects and will enable it to be portable, such a factor contributes to the segment growth.

The Shaped Charge is expected to grow with the highest CAGR. A shaped charge is a hollow cone, cone, or cylinder containing an explosive charge of a suitable material, such as dynamite or plastic explosive. It is detonated when used with a perforating gun, which has a lining of a ductile material that will direct the explosive force into a narrow jet. The explosive charge exerts an enormous penetrating force on the material to perforate it and form a jet of molten and highly pressurized material that can penetrate armor. 

On the Basis of Type

Type-wise, the perforating gun market is segmented into Through Tubing Hollow Carrier Gun System, Wireline Conveyed Casing Gun System, Through Tubing Exposed Gun System, and Tubing Conveyed the Perforation System.

Through Tubing Hollow Carrier Gun System accounts for the highest market share and is estimated to grow at a CAGR of 6% during the forecast period. Through tubing hollow carrier gun system is used explicitly with automated magazine welding machines and perforating guns. It is used to transport and feed tubing and other cylindrical objects. This device has a set of rollers that allow the hollow carrier and the parts to be flexed to fit the dimensions. The gun system can also connect with different devices and hollow carriers depending on the manufacturer's needs. 

Wireline Conveyed Casing Gun System is the second-largest segment. A wireline conveyed casing gun system is used to perforate the casing during drilling an oil well. The system comprises a casing gun, Wireline, conveyor or clamp, perforating tool, and a connection. The casing gun, a part that gets shot down the wellbore, releases the perforating device attached to the Wireline that carries the perforating tool up and down. The conveyor and clamp work together to allow the Wireline to move the perforating tool.

On the Basis of Application

Application-wise, the perforating gun market is segmented into Onshore and Offshore.

The Onshore segment accounts for the highest market share and is estimated to grow at a CAGR of 5.8% during the forecast period. Onshore usage of perforating guns is a highly advanced tool used in the oil and gas industry to create connection points for the oil wells. It is a tool for onshore oil industries because it eliminates transporting staff further out to sea. It is a highly effective tool used in the oil and gas industry.

Offshore is the second-largest segment. Perforating guns are used to create holes in a material through perforating process. Offshore usage of perforating guns can be done with the help of two latest methods, offshore perforating and nearshore perforating. Perforating guns are precision engineered with all the latest technology, protecting workers and materials and ensuring the safety and quality of the final product.

Recent Developments

• June 2022 - Baker Hughes and Petrosafe, a subsidiary of the Egyptian General Petroleum Corporation (EGPC), announced a contract that will mark the first deployment of Baker Hughes' flare.IQ technology in refinery operations in Egypt to help reduce emissions from oil and gas flaring operations. 
• May 2022 - With the introduction of the Nexus OnCore Compact Control System, Nexus Controls, a subsidiary of Baker Hughes, increased the portfolio of Nexus OnCoreTM Control Systems. This new system offers the digital toolbox and sophisticated diagnostic capabilities of a distributed control system (DCS). It is small enough to be installed in confined spaces previously occupied by programmable logic controllers (PLCs). It does this by enhancing efficiency, improving asset understanding, and operationally optimizing controls typically used in more extensive facilities.
• May 2022 - Baker Hughes, an energy technology company, launched a new subsea wellhead technology, the MS-2 Annulus Seal, to save substantial operational rig costs by helping lower overall wellhead installation costs due to reduced rig trips. The new integrated sealing solution launched and exhibited at the 2022 Offshore Technology Conference in Houston has already been adopted by multiple customers in North and South America.