Los Angeles, CA (PRWEB) September 24, 2014
Well cementing services have a buyer power score of 2.6, which indicates that buyers have somewhat limited negotiating power with suppliers. Factors eroding buyer power include a difficult market structure and negative pricing trends. The score is kept from falling further due to relatively low market risks. According to market research firm IBISWorld, most suppliers are large global corporations with very stable financials and low risks of bankruptcy. Supply chain risks are also fairly low because cement is readily available worldwide.
Market share concentration is very high among well cementing service suppliers, with major leaders like Baker Hughes Inc., Halliburton Co., Schlumberger Ltd. and Weathorford International. Product specialization is also fairly high because well cementing is a very complex process that needs to be customized for every drill site. High market share concentration and product specialization are negative for buyers because it limits the number of suppliers that can provide well cementing services. According to IBISWorld, in the three years to 2014, the number of suppliers and the level of market share concentration have not changed significantly. A lack of substitutes further reduces the buyer's options when seeking out a suitable provider to ensure the structural integrity of oil and gas wells. As a result, buyers might have little choice but to accept the supplier's prices and agree to their demands.
Pricing trends are also unfavorable for buyers. Oil and gas is used by almost every sector of the economy, which results in fairly steady demand. Oil production has been steady, and electric power consumption is increasing. In addition, oil and gas prices are at all-time highs, which gives suppliers an incentive to build new wells to generate profit. Consequently, prices are expected to accelerate in the three years to 2017. For more information, visit IBISWorld’s Well Cementing Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
Well cementing is an essential part of the oil and gas well construction process; it is typically the last part of the process before pumping equipment is installed. Well cementing ensures the structural integrity of the well, prevents oil and gas from leaking into the ground and isolates different underground layers. Well cementing results in a cement sheath that holds the casing (the pipe through which oil or gas will flow) against the walls of the wellbore (the hole that is drilled for the well). This report discusses the cement, chemicals and services used with on-shore well cementing. The report excludes cement and cementing services used in commercial buildings as well as offshore products and services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement 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.