The world’s growing population, and rapid industrialization are fuelling a proportional increase in the global oil and gas demand. This demand has led to an increase in oil explorations and production around the world. Oil country tubular goods are a vital part of both oil exploration and production. Oil country tubular goods, or OCTG in short, refers to pipelines and other tubular products such as drill pipes, tubing and pipe casings that the petroleum industry uses.
With oil beginning to be used as a political weapon these days, many of the world’s developed and developing economies are trying to achieve oil independence. This has resulted in oil production and exploration not being limited to just a few traditional players anymore. There is also the problem of many of the old wells starting to dry out, in addition to the added concern of environmental safety on the older wells. Both oil companies and governments are therefore pushing for oil exploration into new regions around the world.
Advances in drilling and extraction technology has led to an increase in the use of horizontal drilling and fracking for oil and gas exploration and extraction. This had led to the “shale boom” in the US. This is a success story that many other countries are trying to replicate. China for example is estimated to have the largest technically recoverable shale gas reserve in the world. China is planning to tap into this reserve to reduce its dependence on coal. This increasing interest in shale gas production has brought up the demand for OCTGs in Asia.
Oil country tubular goods can be of welded or seamless construction. Seamless tubes are used when the drilling and production encounters high pressure and hostile environments. Welded pipes are used when high strength is not required. The manufacturing costs of seamless tubes are currently much higher than that of welded ones. Corrosion is another major factor affecting OCTG. Selection of proper material for OCTG for each kind of environment is important in regulating the overall cost of the drilling and production processes as well as ensuring integrity of the well.
Although factors like high initial investment and lack of skilled labour have always been hindrances to the development of all branches of the oil and gas industry, the push of increasing energy demand is making oil and gas exploration and production more and more attractive to investment. The intense competition among petroleum producers is also serving as an impetus to increasing drilling activity around the world. The current trend of the petroleum industry is pushing up the demand for OCTG worldwide.
The Asia-Pacific region is one of increasing oil and gas exploration. The increasing interest in shale gas in China is one of the main drivers for the OCTG market in this region. Drilling projects are in progress in Southeast Asia and Australia. India is a major region having a number of unexplored sedimentary basins, where the prospect of finding oil is good. The ongoing drilling projects in this region and the prospects in countries like India makes the Asia Pacific market for OCTG very attractive.