Led by increasing oil and gas exploration and production activities, the offshore lubricants market is anticipated to retain its momentum in the next few years. Due to increasing demand for energy and depleting onshore reserves, oil and gas companies are investing significantly in offshore oil and gas reserves. This would boost drilling activities and generate demand for offshore rigs and FPSOs. This, in turn, is likely to increase demand for offshore lubricants globally. Growth in offshore drilling activities across the world is expected to boost the market for offshore lubricants in the next few years.
Lubricant is one of the indispensable elements required for the smooth and efficient functioning of machineries. Lubricants perform various functions such as reduce wear and tear, remove friction and act as coolant. Use of appropriate lubricant increases the lifespan of a machine. Moreover, lubricants help improve the efficiency of a process. Lubricants used in offshore rigs and FPSOs are expected to perform under extreme conditions. Lubricants reduce the maintenance time, thereby saving the cost of production. A variety of lubricants is available for different machines. These include engine oil, gear oil, grease, hydraulic oil, compressor oil and turbine oil. Each type of lubricant is used in various applications and in different parts. Engine oil is used to lubricate engines, while hydraulic oil provides lubrication as well as transfers power through the hydraulic system. Equipment that are part of offshore rigs and FPSOs include cranes, hydraulic lifts, diesel engines, compressors, traveling blocks, hydraulic boost pumps and propeller shafts.
Engine oil was the dominant application segment in the offshore lubricants market in 2013. Offshore rigs and FPSOs are located far from the land without any connectivity from the grid lines. These use diesel engines to generate electricity and power the machinery onboard. There are approximately four to six diesel engines on every offshore rig and FPSO. These engines operate continuously and consume engine oil. This increases demand for engine oil, thereby driving the growth of the market. Gear oil and hydraulic oil are the other offshore lubricants consumed in large volumes.
Strict environmental regulations promote the use of environmentally acceptable lubricants (EALs). The U.S. has mandated the use of EALs in its waters for machines functioning below the surface of water. The golden triangle constituting the Gulf of Mexico (GOM), Brazil and West Africa is one of the lucrative markets for offshore lubricants. It provides higher scope for drilling activities compared to other regions in the world. The golden triangle is rich in deep and ultra deepwater oil reserves, which have attracted high investments from large oil and gas MNCs. These investments would result in drilling of large number of wells during the forecast period. This would increase the demand for offshore lubricants in the region. Most FPSOs are expected to operate in the region.
Logistics is an important factor for the offshore oil and gas industry. A delay in the supply of lubricants can halt operations, resulting in financial and time loss. Key players in the offshore lubricants market include Total S.A., Royal Dutch Shell plc, BP plc, Chevron Corporation, ExxonMobil Corporation, Sinopec Limited, Gulf Oil Marine Limited and Lukoil Oil Company. These companies supply lubricants to various ports across the world for usage in offshore rigs and FPSOs. This ensures that the operations are not hampered.