(Source: Rystad Energy – Image: Frack operation in the Permian Basin/Lorne Matalon)

Rystad Energy expects the global market for oil and gas contractors to rise to a peak of $1 trillion in 2025 and remain at high levels for several years thereafter. Helped by strong growth in the midstream part of the industry to liquefy, transport, and re-gasify natural gas, overall oil and gas spending will stay above $920 billion annually on average for the 2022-2028 period.

Despite the risk that another downturn cycle in oil and gas may occur after 2025, oilfield service suppliers should be able to balance out the downturn by branching out into other parts of the wider energy market – and in so doing, expanding the overall target market for contractors. The key for suppliers is to continue chasing obvious opportunities within geothermal energy, hydrogen, offshore wind, and carbon capture, utilization and storage.

Together with oilfield services, this expansion into other energy areas could provide a $1 trillion market for suppliers by 2025, which could be sustained for several years after that. Breaking down the various service segments among the oil and gas suppliers reveals that all segments will grow in nominal terms, led by suppliers targeting equipment and materials and those providing operations and maintenance services.