Increasing need of MRO services for oil & gas refineries spurs 3.3% growth
London, England – The increasing demand for processed fuels has placed maintenance repair overhaul (MRO) services under the spotlight. At the same time, the spiralling costs of MRO resources are constricting the margins of its service...
London, England – The increasing demand for processed fuels has placed maintenance repair overhaul (MRO) services under the spotlight. At the same time, the spiralling costs of MRO resources are constricting the margins of its service providers. China, India, Brazil and the Middle East are expected to be MRO hotspots as their refinery capacities are expanding in line with their ambition to become regional refinery hubs.
Recent analysis from Frost & Sullivan (http://www.energy.frost.com), Global Oil & Gas Refinery MRO Services Market, finds that global refinery turnaround maintenance services earned revenue of $2.30 billion in 2012. This is expected to grow at a compound annual growth rate of 3.3% to reach $2.71 billion in 2017 due to increasing refinery capacity and complexity.
“China, India, and Japan are expected to be the fastest growing markets in Asia,” said Frost & Sullivan energy and environmental research analyst Ashay Abbhi. “Their geographical proximity to oil-producing nations and inexpensive resources make them ideal for refining, consequently boosting the oil and gas refinery MRO services market.”
Apart from the growing demand for fuel and the subsequent capacity expansions, the MRO services market will get a leg up from stringent environmental and quality regulations. Refining is one of the most regulated industries and these rules translate to more MRO dollars.
Furthermore, as most of the current refineries are aging, they require higher maintenance, which creates greater opportunities for maintenance service providers.
However, refineries’ dwindling profits are causing them to defer facility maintenance, especially during periods of peak demand or high oil prices. As a result, MRO contractors’ margins too have been shrinking due to the escalating costs of resources and equipment used for turnaround maintenance.
In such a situation, MRO service providers will do well to invest in newer technology that requires low-cost resources. They also need to spread awareness among refiners about losses incurred due to unplanned outage caused by delayed maintenance.
“The increasing demand for maintenance of refineries will open up the market to more companies with core engineering competency,” noted Abbhi. “This environment will foster forward integration by engineering, procurement and construction (EPC) companies into the maintenance services sector.”
Overall, inexpensive, innovative, and time-saving methods of maintenance and emerging regional refinery nerve centres will give a huge boost to the prospects of the global oil & gas refinery MRO services market.
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