DRILLING CHEMICALS MARKET ANALYSIS

Market Size and Trends:

The Drilling Chemicals market is estimated to be valued at USD 14,140.5 Mn in 2024 and is expected to reach USD 20,844.4 Mn by 2031, exhibiting a compound annual growth rate (CAGR) of 5.7 % from 2024 to 2031.

Drilling chemicals are majorly used in processes such as oil & gas exploration, metal & mineral extraction, coal seam gas drilling, and bore well drilling. Drilling chemicals are useful in terms of cooling and lubrication of drilling equipment, maintaining the pressure, removing cuttings from bore wells, and providing support and stabilizing the bore well area. Drilling chemicals are widely used to aid in drilling boreholes into the earth’s crust.

Severe environmental conditions such as desert topography, extreme high and low temperatures, and dry environment necessitate the deployment of various types of drilling chemicals either as a cooling agent or as a lubricant for oil field drilling processes. Among applications, the onshore drilling segment holds a dominant position in the market.

Figure 1. Global Drilling Chemicals Market Value Share (%), By Fluid Type, 2024

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Drivers

Investments in onshore and offshore oil and gas drilling have grown substantially in various parts of the world to extract fossil fuels. Enormous demand for fossil fuels in energy generation is thus a key driver for drilling chemicals market.

Strides made in the strategic production of shale oil and gas in some parts of the world are propelling the expansion of avenues in the drilling chemicals market. Several specialty chemicals in shale gas extraction have steadily been used in various hydraulic fracturing methods.

The COVID-19 outbreak impacted the drilling chemicals market negatively. The market witnessed a sharp decline in demand for drilling chemicals from various industries. Due to the lockdown and shutdown of production factories, the COVID-19 pandemic had a negative impact on market demand. The oil & gas sector has been severely affected due to the COVID-19 outbreak as it resulted in lockdown, which impacted numerous end-use industries owing to disruptions in vendor operations and supply chain. The production facilities have faced major disruptions. Closures of borders and export bans have led to a fluctuation in raw material prices and supplies.

Figure 2. Global Drilling Chemicals Market Value Share (%), By Region, 2024

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Market Restraints

Impact of drilling chemicals on the environment

Drilling operations require drilling fluids that contain additive chemicals injected through the drill string. These chemicals, when mixed with stone cuttings, from residues, which when discharge result in detrimental effects on the surrounding ecosystem. The contaminants from this residue get mixed with groundwater and make the groundwater toxic. This causes serious water and soil pollution and disturbs the natural habitat of various organisms. Biodegradable chemicals are costly thus resulting in limited adoption. Various governments around the world have imposed severe regulations on the usage and discharge of drilling fluids to control pollution.

Market Trends

Chemicals with lower exposure toxicity, reduced flammability or flashpoint, greater biodegradability, lower bioaccumulation, and sustainability in both application and production are examples of green solutions in the chemicals fields.

Key Developments:

• In January 2024, Schlumberger (SLB) and Nabors Industries announced a collaboration to enhance the adoption of drilling automation solutions in the oil and gas industry. This partnership aims to leverage advanced technologies to improve drilling efficiency, safety, and overall operational performance.
• In 2022, Ingevity Corporation announced its plans to introduce a new line of bio-based oilfield products at the American Association of Drilling Engineers (AADE) 2022 Fluids Conference and Exhibition. This event provided a platform for Ingevity to showcase its innovative solutions, which are designed to offer environment-friendly alternatives for the oil and gas industry.
• In 2022, Castrol, a leading global lubricant brand, launched a new hydraulic control fluid designed to meet the evolving needs of the oil and gas industry. This product is formulated to provide enhanced performance, reliability, and safety in hydraulic systems used in drilling and production operations.
• In November 2022, NanoMalaysia Berhad unveiled its latest innovation in the oil and gas sector - the drilling fluid loss additive named Synergy 10AS Nano. This product launch marked the culmination of a rigorous four-year testing and development phase, showcasing NanoMalaysia's dedication to research and technological advancement.

*Definition: Drilling chemicals, also known as drilling fluids or muds, are specialized substances used in the process of drilling oil and gas wells. These chemicals are designed to perform various functions to ensure the safe and efficient drilling of a well. Drilling fluids serve multiple purposes during the drilling operation. They help to cool and lubricate the drill bit, remove drill cuttings from the wellbore, control formation pressures, prevent wellbore instability, and facilitate the efficient and effective drilling of a well.

Competitive Section

Major players operating in the global drilling chemicals market include Anchor Drilling Fluids Inc., MB Holding Company LLC, Tetra Technologies Inc., International Drilling Fluids and Engineering Services (Idec) Ltd., Canadian Energy Services Inc., Weatherford International Ltd., Global Fluids & Chemical Co., Baker Hughes, Newpark Drilling Fluids LLC., Diamoco Group, M-I SWACO, Schlumberger, Oren Hydrocarbons, and Halliburton.

Market Segmentation:

•  Fluid Type Insights (Revenue, USD Mn & KT, 2019 - 2031)
  • Oil-based Fluids
  • Water-based Fluids
  • Synthetic-based Drilling Fluids
  • Others
•  Chemicals Insights (Revenue, USD Mn & KT, 2019 - 2031)
  • Dispersants & Deflocculants
  • Clean Up Chemicals
  • Shale Stabilizers
  • Drilling Mud Defoamers and Foaming Agents
  • Drilling Mud Lubricants
  • Drilling Mud Surfactants
  • Spotting Fluids
  • Fluid Loss Control Additives
  • Loss Circulation Material
  • Others
•  Application Insights (Revenue, USD Mn & KT, 2019 - 2031)
  • Onshore
  • Offshore
• Regional Insights (Revenue, USD Mn & KT, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Baker Hughes Company
  • Halliburton
  • Schlumberger Limited
  • Weatherford 
  • Diamoco Group
  • Royal Dutch Shell Plc
  • Solvay S.A.
  • The Egyptian Mud Engineering & Chemicals Company
  • Kemira Oyj
  • BASF SE
  • Clariant
  • ChampionX
  • Lubrizol Corporation
  • Stepan Company
  • Nouryon
  • Albermarle Corporation
  • Pure Chemicals Co.
  • Ennor Muds & Chemicals
  • Core Drilling Chemicals
  • S.R. Chemical