What is OCTG and global OCTG market outlook

What is the meaning of OCTG?

For the oil and gas industry exploration and production activities, Oil country tubular goods (OCTG) are hollow steel products, which is circular cross-section. OCTG can be produced as seamless or welded tubes and pipes. As the capital investment to manufacture seamless OCTG is ten to twenty times higher than the investment required to manufacture welded OCTG, so appropriate selection of OCTG can reduce the risk of great opportunities to minimize risk, and save cost.

OCTG Market

Due to high exploration and production activities, growth in the proven shale reserves and escalating investments from the oil and gas operators, the demand of OCTG is higher and higher. This trend will continue to rise because of the current surge in offshore activities and shale reserve exploratory activities. The global OCTG market is thereby expected to grow to approximately $59 billion by 2019 and the growth rate of CAGR will exceed 7% from 2014 to 2019.

The OCTG market is divided into six regions, namely North America, South America, Europe, Africa, Asia-Pacific, and the Middle East. According to major countries in the region, the OCTG market can be further subdivided. Geographically, Asia-Pacific and North America are the largest markets which have grown rapidly in the past decade. In Asia-Pacific, China is the largest market which will continue to dominate the OCTG industry. North America follows the Asia-Pacific market with U.S, being the most influential player due to activities in abundant shale reserves. These regions are likely to continue to dominate in the future. The South-American market will witness the highest growth rate; Europe and Africa will also develop with a decent CAGR.

Outlook of OCTG market

The key factors driving the OCTG market is the increasing global demand for oil and gas, growth in crude oil prices, economic growth and lack of alternative sources of energy. Some noteworthy development of this industry include global rig count growth, increasing global E&P spending, and the seamless pipe industry, among others.

Oil country tubular goods are essential in the mining period of the oil and gas. Globally, with the increasing exploration and production activities and the new unconventional resource area have become the main driving force for the growth of OCTG market. As competition continues to intensify, more and more companies are beginning to pay more attention to environmental safety. So the market will witness the high growth rate of premium product type such as OCTG.

These factors contribute to the growth and development of OCTG products:

• Over the past years, bourgeoisie population and globalization develop vigorously, which is the reason why oil, gas and energy demand is growing faster than expected.
• Technological innovation and rapid economic expansion are a number of other important factors in developing country, which has been guiding the needs of energy.
• The increase of investment and exploration in oil and gas further promotes the oil and gas industry.