Due to plummeting oil prices in recent months, exploratory activity has been growing at a slower rate, curbing rising demand for seismic data processing services
Los Angeles, CA (PRWEB) April 08, 2015
Seismic data processing services have a buyer power score of 3.3 out of 5, indicating a moderately favorable environment for buyers. While the increasing recent price trend, low availability of substitutes and high market share concentration hinder buyer power, low price volatility, slow projected price growth and moderate switching costs give buyers some negotiation leverage, says IBISWorld analyst Scott Winters. Additionally, high competition among service providers compels them to vie for contracts by bolstering their reputations and offering economical prices, enhancing buyer power.
Due to significant growth in the US energy sector, particularly in oil drilling and gas extraction, demand for seismic data processing services has been on the rise despite the recent dip in oil prices. Seismic data processing is a necessary step in seismic surveying, which is a crucial part of oil and gas exploratory activity. As a result, prices for oilfield support services, such as seismic data processing, have been trending upward, reducing buyer power. In addition, the availability of qualified service providers is limited by the specialized nature of seismic data processing, continues Winters. Major vendors include Halliburton Company, Schlumberger Ltd. and China Oilfield Services Limited. High and rising market share concentration further reduces buyers' supplier options. As a result, buyers may have to negotiate with companies that have a great deal of control over the market. Nevertheless, buyers are encouraged to elicit multiple bids and take advantage of the high competition among service providers when possible.
Other factors that improve buyer power include low price volatility and the slower projected rate of price growth during the next three years. These trends allow buyers to enter agreements without risking sudden price spikes, improving their ability to budget for their seismic data processing needs. Moderate switching costs, meanwhile, make it easier for buyers to change service providers when budgetary or processing requirements are not being met; this is especially important for buyers with limited need for value-added services and contract customization. However, buyers can seek bundled purchases to elicit deeper discounts and streamline their supply sources. For more information, visit IBISWorld’s Seismic Data Processing Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of seismic data processing services. Providers of seismic data processing services specialize in data preprocessing, depth imaging, land processing, marine processing and other services. This report excludes geophysical 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.