Global Oil Country Tubular Goods Market (OCTG) Outlook to 2028

The market for Oil Country Tubular Goods is expected to witness a rapid growth during the forecast period due to growing production and exploration, especially in North America. Among all the major regions, North America emerges as the largest market.
 

The growing production of oil and gas owing to the advanced technologies such as directional drilling coupled with an increase in CapEx for oil and gas upstream for 2019 is the primary driver for the market. According to IEA, the global upstream CapEx for oil and gas is set to increase by 4% in 2019. Stronger global drilling activity, primarily in the US, Russia and China, is contributing to the increased demand for OCTG. 
 

Seamless OCTG is gaining popularity due to its use in a more harsh drilling environment, such as sour services, shale gas, ultra-deepwater and horizontal/directional drilling, which requires more heat-treated products. In 2019, the significant oil and gas reserve discoveries were in the offshore sector with over half being deep-water finds making high surge demand for seamless OCTG. Around 90% of OCTG consumption in the Gulf Cooperation Council region is seamless pipes as major operator companies such as Saudi Aramco, Qatar’s RasGas, the UAE’s Adnoc and British Petroleum in this region are increasing drilling in sour gas fields.
 

The rising production of oil and gas in areas such as Russia, the US, and the Middle East has surged the demand for oil country tubular goods (OCTG). So, the OCTG leading companies are expanding its geographical presence by acquisitions and mergers to capture the growing market. For instance, in January 2020, Tenaris completed its previously announced acquisition of IPSCO Tubulars, Inc., a U.S. manufacturer of steel pipe from PAO TMK. The acquisition will enhance Tenaris’s position and local manufacturing presence in the US market, extending its product offering and expanding its service footprint.
 

The global Oil Country Tubular Goods market is segmented on the manufacturing process and connection grade. The market is segmented by the manufacturing process into seamless and Welded. By connection grade, it is segmented into API, semi-premium and premium. Further, the market for Oil Country Tubular Goods is segmented by geography into North America, Europe, Asia Pacific, South America, and Middle-East & Africa. North America holds the major market due to the growing production of oil and gas owing to shale reserves taping through advance technologies in hydraulic fracturing and horizontal drilling. and in 2019, the US surpasses Saudi Arabia in oil and gas production and is foreseen to lead in the following period. The rise in US production for oil and gas has surged a moderate increase in the number of operating rigs from the down in 2016. 

Some of the prominent players in the Oil Country Tubular Goods market are Tenaris, US Steel Tubular Products, Nippon Steel and Sumitomo, ArcelorMittal, TMK, Vallourec, TATA Steel, ILJIN Steel Co, TPCO Enterprise, Inc., and JFE Tubic Corporation.
 

In January 2020, Tenaris S.A. completed its previously announced acquisition of IPSCO Tubulars, Inc., a U.S. manufacturer of steel pipe, from PAO TMK. The acquisition price was determined on a cash-free, debt-free basis, and the final amount paid in cash, following contractual adjustments, was US$1,067 million (including approximately US$220 million in working capital). In connection with the closing of the transaction, the parties entered into a 6-year master distribution agreement whereby, beginning on January 2, 2020, Tenaris will be the exclusive distributor of TMK’s OCTG and line pipe products in the United States and Canada.
 

In December 2019, ArcelorMittal (“AM”) and NIPPON STEEL CORPORATION (“Nippon Steel”) completed the joint acquisition of Essar Steel India Limited (“ESIL”) on December 16, 2019, which was implemented by the joint venture of AM and Nippon Steel. ESIL will start anew as ArcelorMittal Nippon Steel India (“AM/NS India”).