Substantial Geophysical Data Requirements Fuel Geophysical Services Market
The global energy industry is constantly evolving, oil and gas being among the key pillars. The global oil and gas industry has been a high-risk, high-investment area, and globally, nearly more than four billion metric tons of oil is produced every year. During the initial phase of exploration and production (E&P), oil and gas companies require a large amount of analytical data - seismic, magnetic, gravity, and electromagnetic - produced by different oilfield service (OFS) companies. OFS companies offer onshore and offshore services such as drilling and seismic testing to oil E&P companies. Apart from oil and gas industry participants, the metal and mineral mining companies often require geophysical services for identifying potential sites/reserves. The huge dependence of oil and gas, and mineral and mining companies on geophysical data prior to drilling primarily drives the global geophysical services market.
Year-on-year Increase in Geophysical Services Expenditure Favour Market Growth
Increasing investment in mining and exploration remains the key factor responsible for rise in the demand for geophysical services across the globe. Rising demand for precious metals such as gold, platinum, titanium, and silver is expected to drive the demand for geophysical services in the near future. The oil and gas industry has been emphasizing onshore areas owing to commercial viability of the existing proven onshore oil reserves at a price lower than offshore oil reserves. Increasing exploration of shale gas reserves in the US has been a key factor responsible for the rise in investments in geophysical services in the country. The oil and gas industry requires seismic services and analytical data from geophysical service providers. Thus, rise in exploration activities in developed countries such as the US is expected to drive the global geophysical services market during the forecast period.
Year-on-year increase in demand for energy, followed by rise in mining exploration budgets, is expected to benefit the overall demand for geophysical services. The geophysical services market entails high capital investments along with high risk driven by unpredictable environmental conditions. Experience and skills pertaining to geophysics are required to operate in the geophysical services market. Furthermore, growing concerns regarding carbon emission through the usage of fossil fuel has surged investments in the renewable energy sector. These factors are likely to hamper the demand for geophysical services.
Oil and Gas Industry to Remain Dominant End User of Geophysical Services
Mineral and mining, and oil and gas industries held significant shares in the geophysical services market in 2020. Upstream constitutes more than 80% share of the global geophysical services market, registering dominance in the global market. From the perspective of geophysical-based data acquisition, multi-client seismic data is more cost-effective and has the potential to offer high profit margins as it can be sold to different companies for several times. Companies providing geophysical services are also engaged in various multi-client data acquisition projects to increase their profit margins. End-use companies prefer multi-client geophysical/seismic data reports due to lower investment involved, which is boosting the geophysical services market, especially in the seismic technology segment.
Land-based geophysical serveys play a vital role in the exploration of various minerals, hydrocarbon sources, and oil and gas reserves. These surveys also help with the understanding of the geophysical conditions of the ground surface and sub-surface. Aerial-based surveys capture images by using fixed-wing aircrafts and helicopters. Apart from oil and gas, and mining industries, water exploration, agriculture, and environment are the key consumer industries of geophysical data. In order to attain water and food security, water exploration and agriculture sectors have started more focused exploration of geophysical services. In developing countries such as India, the minimum daily requirement of a person is 200 litres of water for domestic use, which points to the massive scope for the growth of geophysical services market.
The US Reigns Supreme in Geophysical Services Market
North America is a highly attractive region in the global geophysical services market owing to the rise in explorations related to shale gas in the region. Various market players have been constantly conducting geophysical surveys in the US and Canada for the past two years. Whereas, the market in Asia Pacific is anticipated to witness significant growth owing to the increase in mineral, oil, and gas exploration activities within the region.
The European market for geophysical services is led by Russia, the key producer of natural gas in Europe. The demand for geophysical services in the upstream oil and gas industry in Russia is likely to increase during the forecast period. Russia is rich in mineral resources, which has accounted for the year-on-year increase in the region’s mining exploration budget. This is likely to benefit the demand for geophysical services in the next few years. In Asia Pacific, China leads the geophysical services market. Besides oil and gas, and mineral and mining industries, water exploration, agriculture, and environmental assessment sectors are beginning to utilise geophysical services. Civil works across China are also raising demand for geophysical services.
Global Geophysical Services Market: Competitive Landscape
The geophysical services market is consolidated with a few major players operating across the globe. New players are emerging, with promising customised offerings. Price, accuracy, and industry experience play a key role in enabling the companies to bag new contracts. Key offerings such as geophysical service packages that include multi-client geophysical data libraries vary from one service provider to other. Some of the key players in the geophysical services market include Fugro, Compagnie Générale de Géophysique (CGG), TGS, Spectrum Geophysics, Atlas Geophysics Pty Ltd., DMT, Phoenix Geophysics, EON Geosciences Inc., GSSI Geophysical Survey Systems, Inc., Sander Geophysics Limited (SGL), and MPX Geophysics Ltd.