This opportunity entails developing the value chain for the production of perforating guns to serve the KSA and GCC oil and gas industry.
The overall demand for perforating guns in KSA has been growing, estimated at 32,000 ft in 2016. Driven by a strong oil and gas outlook, the demand is forecasted to increase at an annual growth rate of ~5.1% to reach 44,682 ft units by 2022. Currently, KSA demand for perforating guns is addressed fully through imports, presenting a great opportunity for investors to localize production.
Beyond the KSA market, investors in Saudi have the opportunity to tap into the large regional markets in the GCC which is expected to witness strong growth fueled by oil and gas production, expected to increase from 36,820 ft in 2017 to 46,234 ft by 2022. The majority of the market for perforating guns is made up of hollow carrier guns with different size varieties including: 2 7/8”, 3 1/8”, 3 1/2", and 4 1/2".
In addition to an increasing market demand, Saudi has cost advantages on labor, land and logistics, and also provides various general funding and other government support incentives that investors can take advantage of.
This opportunity focuses on establishing a fabrication shop to fabricate the hollow carriers and charge tubes for perforating guns. Manufacturing of perforating guns has high potential for localization across the value chain, from design and input materials to production and lifecycle management. Opportunities across the value chain include:
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