Industry Analysis & Industry Trends
In 2012, the Oil and Gas Drilling Support Services industry is expected to generate $34.9 billion. Over the past five years, revenue has been growing at an annualized rate of 10.6% per year. With rising labor costs and raw material prices, industry profit is estimated at 2.5% of revenue in 2012 – although low, profit has recovered significantly from losses in 2009 due to the global recession.
A major feature of this industry is the existing oligopoly among the three state-owned oil companies, China National Petroleum Corporation (CNPC), China Petrochemical Corporation (Sinopec) and China National Offshore Oil Corporation (CNOOC). In 2012, their combined market share is estimated to be 92.6% of industry revenue.... purchase to read more
Industry Report - Starting a New Business Chapter
Large capital investment
A large capital investment is required to establish operations in this industry. Firms need to invest heavily in large-scale equipment, such as land-based and offshore drilling rigs of various sizes. The industry also requires substantial working capital. Service companies should be able to fund activities until day-rate or progress payments (in the case of a lump-sum contract) are made.
Companies with good reputations established through successful projects in the past, are more likely to succeed. This is particularly true for obtaining contracts related to ongoing well maintenance.
Oil and gas drilling support service activities have high requirements for technologies... purchase to read more