Sliding Sleeves Market

Market Overview

The sliding sleeves market size is projected to grow at an exponential rate on account of its rising application in the drilling industry. Sliding sleeves are proven to be an ideal solution for upstream oil and gas companies, striving to reduce the overall well construction costs and increase asset recovery. They are also considered as an optimal alternative to plug and play the type of well completions.

Globally, oil and gas industries account for more than 65% of the world’s energy supply, and the number is projected to double in the coming years. An increasing number of exploration activities, both in onshore and offshore oilfields, provide an impetus to the market growth. Similarly, the development of unconventional hydrocarbon reserves and technological advancements drive market growth.

Market Dynamics

Favorable Government Regulations to Drive the Market Growth

Globally, the domestic demand for oil and gas has increased drastically in the last few years on account of rising production activities. Governments across the globe are heavily investing in the oil and gas industries and formulating favorable regulations and fewer trade barriers for international companies. For instance, in May 2020, the Chinese government permitted foreign firms with net assets of USD 43 million and above to participate in the oil and gas exploration, further driving the market growth. 

Innovation in the Drilling Techniques Boost the Market Growth

Globally, the prominent market players are performing extensive research in the sliding sleeve to capitalize on the rising opportunities from the emerging economies. The development of horizontal fracturing techniques and vertical drilling with reinventions in sliding sleeve provide an impetus to the market growth. The development of sliding sleeves integrated with advanced technology provides operational efficiency and enables exploration of a large number of treatable zones. For instance, the introduction of Elect monobrone sliding sleeve from Halliburton allows the operator to access a larger amount of unexplored reservoir and deliver enhanced efficiency in hydrulaic fracturing operations. The use of electronic systems has automated most of the sliding sleeve operations, which in turn, is encouraging further technical innovations in the sliding sleeves.

Regulatory Landscape

Ongoing concerns regarding the environmental impact associated with oil extraction drilling activities have led various governments to implement stringent norms for the disposal of waster water. For instance, OSPAR Commission prevents and eliminates pollution by prohibiting the discharge of oil spills and leakages from offshore oil and gas activities into the marine eco-system. In order to meet the requirements of the regulations, the companies are compelled to use sliding sleeves in their operations. Around 248 number of wells have been drilled in Norway under the emission and discharge measures covered by OSPAR regulations. Additionally, the regulations laid by the Canadian Association of Petroleum Producers (CAPP) for offshore activities in the North American region is further prompting the use of sliding sleeves in the coming future. Sliding sleeves are suitable in regions where governmental regulations prohibit commingling production fluids.

Regional Analysis

The U.S. to be the Leading Contributor to North America’s Sliding Sleeves Market Growth

North America dominates the sliding sleeve market, strongly supported by the shale revolution. The shale revolution in the U.S. helped the region to boost it’s oil & gas productivity as it enabled exploration activities even from tight oil formations. Today, more than 35% of U.S. crude oil production is from the unexplored and tight formations which were not possible earlier. The new production capacity not only lowered U.S.’s dependence for oil imports but also helped in boosting economic growth by creating employment and large exports in terms of volume. As per the Energy Information Administration (EIA), in December 2014, the U.S. shale oil production stood at 5.23m barrels per day. In December 2018, the production figure rose to over 8m barrels per day. In the U.S., the oil and gas industries contributed about 1.6% to the country’s GDP in 2011. The U.S., Canada, and Mexico are leading contributors to regional market growth.

Increasing government investments in oil and gas extraction to lower the dependence on other countries drives market growth. The U.S. Dept. of Energy has invested around USD 44.5 million for R&D activities for the development of advanced technologies. The investment for exploration of unconventional oil and gas resources is thus expected to boost the sliding sleeves demand.  

Increasing Collaboration Activities to Drive the Middle East’s Market Growth

The Middle East is projected to witness lucrative growth in the sliding sleeves market on account of rapid developments in offshore activities in the region. In order to maintain the global position for oil and gas production, there have been huge investments in a wide range of oil and gas extraction projects, further driving the offshore exploration and production activities in the region. The regional market is largely driven by the rising collaboration activities among leading market players. In March 2017, China National Offshore Oil Corporation (CNOOC) signed a one-year term crude oil supply contract with Aramco for the Huizhou refining projects.

Rising Energy Demand to Drive Asia-Pacific’s Sliding Sleeves Market Growth

In Asia-Pacific, rapid industrialization and urbanization are subsequently driving the energy demand in the region. The region is backed by the presence of several untapped oil reserves and rising oil field exploration activities. The regional market’s most prominent driver is the rising number of oil and gas projects in 2019. The oil and gas projects are stated below;

Segmental Analysis

Oil and Gas Industry: The Leading Contributor to the Onshore Exploration Segment

The onshore segment holds the highest market share on account of surging onshore activities across the globe. Rising energy demand from global industries and increasing drilling activities boost the segment growth. The oil and gas companies, exploring deeper and remote reservoirs under harsh geographical environments, drive the segment growth.

The availability of technologically advanced machinery is predicted to shift the oil production from onshore to deep water, further rising the demand for sliding sleeves. Globally, over 70% of the oil is produced through onshore sites. Thus, tapping the world’s largest offshore resources will be vital to meet future energy demand, changing market dynamics for offshore oil and gas exploration activities. Furthermore, the policy support and technology development are promising heavy cost reductions for the next wave of offshore projects, further driving the demand for sliding sleeves. The below info-graph depicts the offshore oil and gas production for the year 2016.