Oil & Gas Field Services in the US Industry Market Research Report Now Available from IBISWorld

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Revenue growth for this industry is prone to bursts of progress due to the often unpredictable nature of oil and gas extraction. Industry activity will expand consistently during the next five years, though this growth will be constrained in response to the reimposed moratorium on new offshore oil leases on the US East Coast and eastern Gulf of Mexico. For these reasons, industry research firm IBISWorld has added a report on the Oil and Gas Field Services industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Solid demand will prevail, but a moratorium on some offshore oil leases will constrain growth

The Oil and Gas Field Services industry generates 94.0% of its revenue from providing services to the Oil Drilling and Gas Extraction industry (IBISWorld report 21111) and the remainder from services to the mining sector. Services to oil and gas producers can range from drilling new wells to cementing up depleted ones. As a result, the industry is heavily affected by fluctuations in crude oil and natural gas prices, since these fuels drive demand for drilling and related services, says IBISWorld industry analyst Brian Bueno. Rising oil and gas prices typically lead to increased demand for industry services, especially if the market view is that higher prices will persist. The number of oil and gas drilling contracts rises with prices as previously unprofitable sites become more attractive to producers. Higher demand for contract drilling services increases the amount of time a drilling rig is likely to be operational (i.e. its utilization) and pushes up the day rates that drillers can charge.
Industry revenue is expected to grow 9.6% to $126.6 billion in 2012 as continued high oil prices increase demand for new drilling activities and better credit conditions allow customers to resume funding halted projects. In 2009, revenue plunged 26.1%: the economic crisis cut demand for oil and gas, decreasing prices and slashing demand for drilling activities. Despite the steep drop, overall industry revenue is estimated to grow at an annualized rate of 9.7% over the five years to 2012, with high prices and demand from extractors dominating most of the period, continues Bueno. The Oil and Gas Field Services industry does not export or face import competition because its services, whether provided by local or overseas firms, relate to the domestic industry. Nevertheless, major industry firms sustain substantial interests internationally and have increasingly sought to expand operations abroad. Currently, the industry's 9,980 firms employ an estimated 355,557 people in the United States. The industry has a low level of concentration. The four largest firms are the Halliburton Company, Nabors Industries Ltd, Patterson-UTI Energy Inc. and Helmerich & Payne Inc. The industry is mostly made up of smaller firms with very small shares of industry revenue. Concentration is particularly low in the industry sector that supplies support services for land oil drilling and gas extraction. Conversely, concentration is higher in the sector supplying support services for offshore oil and gas extraction because these services require greater capital and have higher barriers to entry. Firms employing the greatest number of people have the largest rig fleets and operating capacities in the industry, thereby giving them greater market share. Nevertheless, the industry primarily comprises small firms that employ few people, leading to low concentration.
There has been some industry consolidation over the past five years, but concentration remains low, especially as new firms continue to enter the industry. Over the five years to 2012, the number of industry operators has increased at an annualized rate of 0.3% to 9,980, despite a 4.3% drop in 2009. Solid demand conditions for oil and gas field services are expected to prevail over the next five years as economies continue to recover and oil and natural gas prices rise. However, the reimposed moratorium (as of December 2010) on new offshore oil leases on the East Coast and the eastern Gulf of Mexico will slightly offset revenue gains stemming from increasing crude oil prices. Consequently, industry revenue is forecast to grow over the five years to 2017. For more information, visit IBISWorld’s Oil and Gas Field Services in the US industry report page.

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IBISWorld industry Report Key Topics


Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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