Category description

Hydraulic Pumping systems use fluid (water or light oil), injected from surface facilities, to provide lifting force down-hole. There are two types of hydraulic pumps, a reciprocating pump and a jet pump. Reciprocating pumps use power fluid to operate the pump down-hole, by driving a piston inside the pump. Jet pump principle is similar to a jet engine or pressure washer. Pressurized fluid is injected to the pump and through a small nozzle where the power fluid becomes pressurized and high velocity fluid, it will mix with the reservoir fluid. Under high pressure the mixture would travel to the surface. Jet pumps are used more frequently than reciprocating pumps.

Jet pumps used at the depth of up to 17,000 feet and have a wide producing range between 100 B/D  to 10,000 B/D. Jet pumps can be circulated in and out of the well, hence removing the requirements of a wire-line unit or any other deployment method. In some instances slick-line may be required, though.


Pros

Easy lifting of heavy  / viscous crude

Life-cycle cost is lower than ESP and Rod pumps

Highly efficient handling range of production profiles 

No moving parts, less maintenance and breakdown down-hole

Cons

Low solids tolerance

Fire hazard when light oil is used as a power fluid

Fairly high upfront cost & High maintenance cost of surface power-fluid- systems 

Dual strings of tubing required in some instances


In general, the Jet Pump system consists of:

  • Down-hole jet pump
  • Surface power fluid system, including power source ( prime mover)
  • Surface Pump

Jet pumps have always been underutilized and attracted very little interest. However, shale boom in North America brought more interest from companies with a number of new technologies coming to the market.

Supply & Demand Dynamics

More than 75% of wells worldwide use artificial lift. Depletion rate and maturing of the oilfield is the major driver for using artificial lift technologies.  The segment is expected to witness the growth rate of almost 9% CAGR till 2023 (source: GM Insights). North America holds almost half of the market and will continue to be the dominant place. A number of artificial lift suppliers are actively expanding their presence globally with more R&D hubs manufacturing plant and services centers.

While the conventional production require artificial lift at a later stage during production, unconventional fields use artificial lift very early, due to fast decline in production. According to Frost & Sullivan, by 2025, 92% of the wells will require artificial lift.  

Globally, Jet Pump systems represent around 2 % of the population, but circa 10% in non-rod pumping. Utilization of Jet Pumps systems are spread across the world, with no particular market concentration.  

External Scanning



 
New Entrants is Medium
  • Moderate CAPEX required 
  • Many  Players
  • Battle for market share
  • Increased demand attracts suppliers and redirects their focus


 
Supplier power is Medium
  • Many providers
  • Some Product differentiation
  • Can solve customer problem
Competitive Rivalry
  • Competitive environment
  • Technology is available to many players
  • Battle for market share
  • Some product differentiation


 


Buyer Power is Medium
  • Many providers
  • Spend is small
    Other industries are demand driver
  • Can be critical to buyer revenue
 
Substitution
 
  • Too costly for buyer
  • Requires  trials and cost benefit analysis 
 


Portfolio Positioning



  • ROUTINE 

High
Low
High

Cost & Price Analysis

Price Analysis

Gas Lift systems represent a fairly low market share globally. Coupled with medium R&D costs and small market, the pricing of Gas Lift equipment (valves, mandrels etc) has always been driven by an opportunistic approach and top-bottom pricing, with high premiums charged. In the long run, the prices for Gas Lift systems will not exhibit high volatility and might be driven by commodity prices and demand for pumps in non Oil & Gas sectors. 


Cost Analysis 

There are two major cost drivers for Jet Pump systems:

  1. Non Oil & Gas industries, such as Mining, Construction, Fish, Food, Paper, Marine, Sewage and many more
  2. Pump components- such as steel  and electrical 


As with any other down-hole steel products, depending on the design and application, the costs of Jet Pumps may vary by 3 times due to the selection of materials and processes. High temperature and high H2S wells affect material selection, thus costs.

Acquisition price of Jet Pumps is primarily influenced by:


Total Cost of Ownership

The total cost model shall include the costs of:

  • Acquisition
  • Installation
  • Operation & maintenance, including energy costs
  • Change-out / Work-over
  • Down time