South and Central America Oil Field Services Market - Growth, Trends, and Forecasts (2020 - 2025)

The South and Central America oil field services market is expected to grow at a CAGR of more than 2% during the forecast period of 2020-2025. Factor such as an increasing number of offshore operations in the region is likely to drive the South and Central America oil field services market. However, fluctuations in the oil prices are expected to restrain the South and Central America oil field services market.

• Drilling Services segment due to a reduction in drilling prices by 40% is likely to see significant growth in the South and Central America oil field services market.
• Shale oil and gas reserves discovered in Mexico its exploitation is expected to create several opportunities for the South and Central America oil field services market in the future.
• Brazil, due to its several ongoing and upcoming deep-water activities, is likely to see a significant growth South and Central America oil field services market during the forecast period.

Key Market Trends

Drilling Services Expected to see Significant Market Growth

• After the 2014 oil crisis, there is a significant reduction in the prices of drilling rigs. Many companies reduced the cost of drilling by 40% to 50%, which attracted the investors. As the oil prices saw a significant recovery in 2018, the rig count of the countries in the region also saw substantial growth, which directly affects oil field services in the region.
• In 2019, the average rig count of South and Central America, both onshore and offshore, was 190 units, which was higher than the average rig count of 2018, 189 units.
• In April 2019, Exxon Mobil Corporation won three blocks in offshore Argentina. The blocks are in the Malvinas basin, approximately 200 miles (320 kilometers) offshore Tierra del Fuego and include MLO-113, MLO-117 and MLO-118. Equinor ASA in 2019 won five blocks in offshore Argentina for the exploration and production of oil and gas. Both of the company’s vision in the country is to expand their business and explore more opportunities, which is expected to be beneficial for the oil field services market in the region.
• In February 2020, Eni S.p.A, an Italian company exploring offshore Mexico, announced its discovery at Saasken block in Sureste Basin in the Gulf of Mexico. From preliminary exploration, the block contains 200 to 300 million barrels of oil and can produce up to 10000 barrels per day.
• Therefore, owing to the above points, drilling services are expected to see significant growth in the South and Central America oil field services market during the forecast period.

Brazil Expected to See Significant Market Growth

• Brazil, due to its various deep-water and ultra-deep-water activities in the Atlantic Ocean, is expected to hold a significant market share. After the oil prices fell in 2014, many countries in South and Central America shifted towards onshore projects. But it turned out that the return investment period of onshore projects is much higher than offshore projects, i.e., 5-6 years. So, Brazil started deep-water and ultra-deep-water explorations and production, which are more profitable, having a return investment period of 5 to 6 years and are likely to drive the Latin America offshore support vessels market in the forecast period.
• In 2019, Petrobras awarded two drillship contracts to Transocean ultra-deepwater drillships, the Ocean Rig Corcovado and Ocean Rig Mykonos, with a 629-day contract and 550-day contract, respectively. The rigs started work in Brazil in November 2019, and the contracts include priced options for 680 days and 815 days, respectively.
• In 2019, Petróleo Brasileiro S.A. (Petrobras) awarded MODEC to install the fifth Floating, Production, and Storage Offshore (FPSO) Unit in Buzios field for its development and production of the area.
• Equinor ASA, a Norwegian oil major, is in the second phase of the development of its Peregrino Oil field in Brazil offshore. Equinor is expecting to invest USD 3.5 billion on the project, which will start production by the end of 2020. After completion of this project, the company is expected to require various production services in the oil field.
• Hence, owing to the above points, Brazil is likely going to see significant growth in the South and Central America oil field services market during the forecast period.

Competitive Landscape

The Brazil oil field services market is moderately fragmented. Some of key players in this market include Schlumberger NV, Transocean LTD, Weatherford International plc, Halliburton Company, and TechnipFMC PLC.

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