Petroleum services companies' expansion to benefit oil and gas sector
January 05 2021 06:09 PM
Saad al-Kuwari
Saad al-Kuwari

By Saad al-Kuwari

· Expansion of petroleum services companies supports competition and the oil and gas sector in future
· Expanding the competition circle will provide services to oil and gas and petrochemical companies at the lowest costs and boost revenues
· Localising the local manufacturing of petroleum equipment and tasks necessary for oil and gas activities and future projects

With the complexity of the oil, gas and petrochemical production process, the gas-to-liquids industry, and the numerous transformational industries, companies in this sector vary between producing, transporting and distributing, and supporting production, transportation, storage, export and marketing operations.

Some companies may perform more than one job at the same time, and I mean here national oil and gas companies and global producers.

What are oil and gas services?

Oil and gas services are a supportive part of oil companies, and these multiple services include maintenance of oil and gas wells, completion, production, warehouses, supply, factory maintenance, logistical support services on both land and sea, air and sea transportation, food, hospitals, technical and engineering consultations, training and development, and others.

If we address, for example, the "oil and gas field services market", it provides services for the manufacture, repair and maintenance of equipment used in oil or gas extraction, transportation and storage of products such as oil, refining services, petroleum derivatives, petrochemical complexes or mining, and exporting them through export ports.

The global oilfield services and production market is expected to reach $177bn in 2025 from $135.1bn in 2020, and grow at a compound annual growth rate of 4% and these tasks or services such as seismic testing, transportation services, and directional services for drilling rigs.

Horizontal well construction, production and completion services are generally what most people usually think of when an oilfield services company comes to mind.

However, the range of products and services under the oil and gas services umbrella is broad and includes several technology-based services that are vital to successful field operations.

These services include energy source identification, energy data management, drilling and formation assessment, geosciences, and others.

How does the oil and gas industry operate?

The oil and gas industry is one of the largest sectors in the world by dollar value, and generates estimated revenues of $3.5tn annually.

Oil, as well as gas, is important to the global economic framework, especially for the largest oil and gas producers in the world and with the increasing demand for oil and gas in the world during the past few decades and this is driven by many factors that include the increase in global economic activities.

Investors looking to enter the oil and gas industry in its various aspects can be overwhelmed by the complex terminology and unique metrics used throughout the sector. Therefore, this article is designed to help you understand the fundamentals of companies operating in the oil and gas sector by explaining the basic concepts and measurement criteria.

What do oil and gas service companies do?

You may ask or wonder what oil and gas service companies do. The truth is that they do a lot, and they provide a lot of services to support exploration, production, refining, liquefaction, transportation, storage and export activities for oil and gas.

For example, they build drilling rigs, design pipelines, provide engineering services, and carry out construction, technical and technical work that ranges from mechanical and electrical to supplying goods.

You will also find other service companies providing services such as hospitality or food and security services, transportation, logistics, sea and air transportation, engineering and technical consulting, and more.

Most of these companies involved in providing petroleum services were established in their modern form in the late 1990s through a combination of factors dating back to the low oil prices in the late 1990s and the massive mergers of BP-Amoco in 1998 and ExxonMobil in 1999.

The oil and gas services sector is a global industry with billions of dollars, and the petroleum sector is a diversified sector, so the expansion of petroleum services companies and the opening of the market to the private sector or through partnership with foreign companies operating in Qatar ensures the creation of a state of equal competition that guarantees the best offers and supports the local economy.

The oil, gas and petrochemical industry will face great technical and technical challenges, so the sector always needs the help of international companies to implement its strategy under the system of developed and comprehensive technical services.

In most cases, contracting with external sources may lead to increased operator risks, delay in implementation, and even poor contract pricing, and therefore the presence of national companies that guarantee delivery as planned and fair pricing for service contracts.

In Qatar, there are a very small number of national or joint stock companies, and the private sector lacks these service companies specialised in the oil and energy sector.

The only Qatari shareholder company in this respect – Gulf International Company – provides services in drilling, insurance, food, and air transport.

Creating future investment opportunities and support for petroleum services in the energy, gas, petroleum and industry sectors, and developing an integrated and comprehensive strategy that attaches increasing importance to deepening and localising the local manufacturing of petroleum equipment and tasks necessary for oil and gas activities because it represents a safety component and increases the ability to rely locally on the manufacture of petroleum equipment as well as reducing imports while adhering to international standards, as well as providing the largest amount of oil, gas and petrochemical companies' needs in the local market and optimising the utilisation of our hydrocarbon resources.

* Saad Abdulla al-Kuwari is an expert in oil and gas and is exploring the future of energy.

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