The presence of a large pool of equally-placed participants, such as Schlumberger, Weatherford, and Baker Hughes, determines the degree of competition in the global electrical submersible pump (ESP) cables market, finds Transparency Market Research in a recent study.
At present, the market is fragmented and the degree of competition is likely to shift from medium to high over the next few years. To withstand this rivalry, leading participants are increasingly engaging in vertical integration; technological innovation and product differentiation although remains the key determinants of their competence.
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Going forward, mergers, acquisitions, and strategic alliances are likely to emerge as the most preferred strategy among players looking to expand their reach and strengthen their presence across the world.
Depleting Oil Reserves Compel Producers to Dig Deep, Drive Demand for ESP Cables
Oil drilling and exploration companies are digging out oil wells in order to enhance oil production. The rapid depletion as well as maturation of oil reserves has compelled these producers to drill deep, increasing the depth of oil wells, which has resulted into deeper pump setting, driving the demand for ESP cables required to supply the electricity from the transformer to pump motor.
Apart from this, the growing demand for ESP is also an important factor, driving the growth of this market, as it is directly proportional to the demand for ESP cables.
Decline in Oil Price to Limit Deployment of ESP Cables
“Although several factors point towards a thriving future for ESP cables, the recent decline in oil prices may limit their application due to a rapid decrease in offshore exploration and production expenditure over the years to come,” says an analyst at TMR. The limited employability of these cables in shale gas fields is also expected to hamper the market’s growth in the long run.
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Hitachi Metals Ltd., Borets Co. LLC, GE Oil & Gas, Kerite, Schlumberger Ltd., Prysmian Group, Halliburton Co., Weatherford Int., and General Cable Corp. are the leading players in the global ESP cables market.