Renewed Growth Of The OCTG Market In The Middle East

1 min read

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.

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 Middle East holds some of the largest oil reserves in the world, and is also home to some of the largest oil producers in the world. This is therefore a region of constant oil exploration. The market for OCTG has always been good in the Middle East. The main hindrances to the petroleum industry in general is the political atmosphere of this region. The constant turmoil in this region has been discouraging to many oil companies. But again, in view of the recent lifting of the sanctions against Iran, the oil and gas exploration and production industries of this region is expected to see another major surge.

Mordor Intelligence

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