S10 ORME 6 2016 - Equipment Rental & IT_Layout 1 19/08/2016 09:00 Page 41
Equipment rental unlocks new
avenues for growth Canadian Energy Equipment Manufacturing FZE production manager Shawn Dunbar speaks to Oil Review Middle East about the growing prospects of the rental equipment industry in the Middle East. ITH THE DOWNTURN in the oil and gas industry, cutting costs and maximising revenues have become the top priorities for companies in the sector. Upstream oil and gas companies are feeling the brunt of low oil and gas prices and one way they are now dealing with the push to cut costs is equipment rental. Recent market surveys show that integrated oil and gas companies in the Middle East have reduced their investment in equipment manufacture as renting oilfield equipment is a cheaper option. Renting equipment enables companies to reduce the overall capital cost for the operator and also passes the liability for performance to the equipment provider. This has encouraged various oilfield operators in the Middle East to opt for rental equipment for oilfield operations. “The down turn in the oil and gas economy has affected the rental market drastically. The cost of new equipment for a lot of users is not in the budget. Rentals
The oilfield equipment rental market in the Middle East is expected to grow at a rate of 12.43 per cent annually in the period 2014-2019. (Photo: supakitmod/Fotolia)
offer the customer a cheaper temporary way to complete the job,” said Shawn Dunbar, production manager at Canadian Energy Equipment Manufacturing FZE (CEEMFZE), one of the leading providers of oilfield rental equipment in the Middle East. Speaking about the demand for rental equipment, Dunbar noted that the company has seen a rise in the rental market throughout 2015 and 2016 and that its rental equipment request for quotation (RFQ) is consistent for many end users in the GCC.
The Middle Eastern market
CEEMFZE production manager Shawn Dunbar said that there has been a rise in the rental market throughout 2015 and 2016
A report on the rental equipment industry by Research and Markets titled “Oilfield Equipment Rental Market in the Middle East 2015-2019” predicts that the oilfield equipment rental market in the Middle East will grow at a compound annual growth rate (CAGR) of 12.43 per cent in terms of revenue over the period 2014-2019. . The rental facility has also reduced the entry barrier and exit barriers in the industry, by providing a more feasible option for new comers than buying costly equipment. Dunbar pointed out that the market in the Middle East has a lot of potential. He said, “At CEEM we see the rental market a lot
higher in the GCC than other markets we are involved in.” He noted that mud pumps, mud tanks, hydraulic power units, 1502 pump iron and DNV baskets were some of the equipment that the company was focussing on.
The down turn in the oil and gas economy has affected the rental market drastically.” Future projections Discussing challenges faced by the industry, Dunbar said, “The main challenges we have faced thus far is equipment set up/modifications to meet certain contract specifications. Renting long term as well is a difficult challenge as most contracts are short term.” He is, however, confident about the future of the industry. “We feel that the rental industry is going to continue to rise as the economy is still in a down turn,” Dunbar stressed. n Issue 6 2016