Cementing Equipment & Services

Cementing services are required to hold well casing in place and prevent any fluid movement from the reservoir to the wellbore. It also provides zonal isolation and provides seals when required. Cement is made through a process of mixing water, oil well cement (API cement, Portland cement) and chemicals to produce cement slurry. This slurry is pumped into the wellbore through the casing and fills the space between the casing and the wellbore (open-hole area below casing). 

A plug (cementing plug or wiper plug) is inserted in casing, before cement pumping operation starts. As the slurry progresses though casing, the plug travels ahead of cement slurry, providing sealing and removes any debris or particles from casing. This is required to ensure that cement slurry is not mixed with other well fluids and free of any contamination. Specialized equipment located at the bottom of the casing (float collar and float shoe) allows cement slurry to go out of the casing and fill the gap between the casing and the wellbore. These tools also stop drilling fluids to travel to back into the casing. Once the cement slurry is hardened (thickening time), a cementing job is considered to be completed and all the tools are removed. Hardening time depends on a number of well parameters and drilling requirements. Various chemicals used during cementing operations, allowing engineers to design cement slurry with required hardening time. 

Cementing operations are divided into primary cementing/zonal cementing and secondary cementing. The major objective of the primary cementing is to hold casing in place. Zonal isolation is required and designed to control liquids flow between zones in a well, seal off a zone with lost circulation, reduce/prevent penetration of water to the well.  Primary cementing is used during drilling a new well. Secondary cementing, or squeeze job, is used to rectify any problems with the primary cementing job or deal with cementing issues that were caused during production, damaged casing, perforated section, plug & abandon a well and help to achieve better well stimulation jobs by effective confinement. 

Preparing the right cement slurry and achieving required physical properties are of very high importance to ensure that the primary cementing job is done well and well integrity is maintained.  If the cement hardening time was not calculated correctly and the required physical properties of cement slurry are not achieved, a well may collapse inwards, causing massive damage and significant costs, after which, the well may be abandoned. Cement slurry is prepared and mixed at the surface (on a drilling rig) and then pumped to the well by powerful cementing pumps. In onshore applications, specialized trucks are used to mix and pump cement slurry. 

Chemicals or additives used to prepare cement slurry to include accelerators - shortening the time for the cement to harden - and retarders - increasing cement hardening time. Other chemicals change the density of cement, compressive strength and flow abilities. Additives called extenders are used to achieve higher volumetric of cement, so less cement is used. Antifoam agents are used to dealing with foaming. For deep wells, high pressure and high temperature, high H2S wells and CO2-resistant cement systems, other special chemicals are used to prepare cement slurry.

Depending on the formation and well characteristics, the design of cement slurry and placement techniques plays one of the central roles. The quality of oil well cement and additives can have a tremendous impact, both on well's integrity and costs of cementing services. Frequent laboratory tests of additives and cement slurry itself are required to ensure that actual parameters match the designed characteristics of the cement slurry. 

On average, primary cementing services constitute around 5% of the well cost. Secondary cementing can result in an incremental increase of up to 20% of the well cost. 

Demand

Demand for cementing services is directly driven by drilling, well intervention and plug & abandonment activities around the world.  North America is the largest market for well cementing services, followed by Asia Pacific. The Middle East is one of the smallest segments, accounting for less than 5% of the market. Onshore cementing services represent more than 85% of the sub-category, although offshore cementing represents the largest growth area.

Primary cementing is in higher demand when compared to secondary cementing services. The boom of shale oil and gas drilling has had tremendous impact on demand for cementing services, due to the number of wells required to drill to develop such resources. 

The Middle East will continue generating strong demand for cementing services due increasing activities in re-development and well intervention operations, due to the age of wells. 

Although drilling rig activities is the closest indicator of the demand for cementing services, well total depth would require more cementing slurry. Hence, a combination of rig activities and well depth is the key demand indicators.  

Supply

The supply of cementing services is composed of equipment, personnel, and materials. Materials, cement, and additives, represents the biggest supply risk and volatility. Global cement production has been dominated by China, accounting for more than 50% of the global output followed by India, USA, and Brazil. The Middle East's combined cement production capacity represents less than 5% of global capacity. Saudi Arabia and UAE are major producers of cement in the region. For the past several years, the capacity utilization of cement production has been less than 70%. Historically, global capacity has never reached full utilization. The highest utilization rate of 90% was achieved in 2008. It can be anticipated that break-even utilisation levels are circa 75% with producer gaining significant pricing power at 80% to 85% utilization.

Coupled with the demand for cementing services in the oil and gas industry, and the fact that more than 80% of global cement production is used by non-oil and gas industries, secure and stable supply oil well cement may become at risk for some.

When it comes to cement additives, more than 70% of cement additives used in the oil & gas industry is unique and not used by other industries. Hence, proprietary additives produced by major well-cementing companies are critical to well-cementing services, in particular, high H2S, HT/HP wells, and deep water. Yet, there is a number of chemical manufacturers who produce standard additives for the service companies and able to serve the marketplace outside their traditional customers (cementing companies).