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Overview


& Gas Machinery Manufacturing industry (IBISWorld report 33313) to grow at an annualized rate of 1.4% and total an estimated $31.3 billion in the five years to 2019.


Oil & Gas Developments Te evolution of oil & gas machinery and equipment in


the past five years has included a substantial expansion of hydraulic fracturing and horizontal drilling technology. Both hydraulic fracturing and horizontal drilling have been around for decades, but improvements in technology have made these techniques more commercially viable and effective. Upstream oil & gas companies use these techniques to access natural gas resources in low-permeable shale rock deposits, and these upstream operators have been gradually demanding high value-added machinery and equipment to minimize costs and maximize well productivity. IBISWorld expects that oil & gas field machinery, rotary oil & gas field drilling machinery and other oil & gas field drilling machinery will account for an estimated 71.4% of the Mining, Oil & Gas Machinery Manu- facturing industry’s revenue. Tis high level of industry share is expected to persist in the five years to 2019. International trade also plays an important role for


manufacturers of oil & gas extraction technology. IBISWorld anticipates that exports will account for an estimated 42.4% of industry revenue in 2014, and this percentage is expected to decline only marginally in the five years to 2019. Countries such as Canada, which are expected to constitute an estimated


12 Energy Manufacturing 2014


6.2% of total exports, demand high-quality machinery to extract unconventional resources, such as those located in Al- berta’s Athabasca Wabiskaw oil sands. Tese large deposits in Alberta contain the vast majority of Canada’s oil reserves, and this region is expected to demand the greatest majority of US exports to Canada. Companies that operate in this region use machinery to perform in-situ extraction techniques, which entails injecting steam into underground deposits to soſten bitumen and pump the resource to the surface. Steam-assisted gravity drainage and cyclic steam stimulation are the two most popular in-situ extraction techniques, and both require high-quality pump and steaming machinery, as well as tubular goods to extract unconventional resources. IBISWorld expects that this type of machinery will expand its share of industry revenue in the five years to 2019, as more companies seek unconventional resource development. In the US, hydraulic fracturing and horizontal drilling


equipment have been in high demand from upstream gas producers. Tese techniques are closely related, and compa- nies that provide hydraulic fracturing and horizontal drilling solutions have been experiencing elevated demand for their services and products. Te Energy Information Administra- tion (EIA) expects that shale natural gas will grow from 16.0% of total supply in 2009 to an estimated 49.0% of total supply in 2035. Hydraulic fracturing is the process of tapping into low permeable shale deposits, and it is one of many steps in the extraction process. Machinery manufacturers can supply


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