OILFIELD CHEMICALS MARKET ANALYSIS

Chemical components that are majorly used in oil & gas extraction operations are called as oilfield chemicals. Oilfield chemicals find applications in cementing, enhanced oil recovery, drilling fluids, well stimulation, production chemicals, and workover & completion.

Global oilfield chemicals market was valued at US$ 68,855.3 Million in 2021 in terms of revenue, exhibiting a CAGR of 5.9% during the forecast period (2022 to 2030).

Drivers

Rise in oil production and exploration activities are growing the demand for global oilfield chemicals market. Rapid expansion of shale oil & gas drilling & production and growth in deep-water & ultra-deep-water drilling projects is further expected to boost the market demand for oilfield chemicals. According to India Brand Equity Foundation (IBEF), Oil and Natural Gas Corporation (ONGC) is expected to invest US$ 2.73 Million on drilling oil and gas wells in 2019. As the country looks to cut reliance on oil imports by 10 per cent, it is expected that foreign investors will have opportunities to invest in petroleum and natural gas projects worth US$ 300 Million in India by 2022. Therefore, significant increase in oil and gas exploration project is expected to drive the demand for oilfield chemicals during the forecast period.

Chemicals from the oilfield are used in the water treatment process. The current water supply must meet rising needs as the population grows. As a result, the chemical industry employs novel water treatment techniques to make water suitable for end-use applications such as industrial, cooking, irrigation, and drinking. According to a report published by U.S.-Saudi Business Council in January 2021, Saudi Arabia has set a goal of using treated wastewater 100% of the time by 2025, with roughly 4 million m3 per day of treated wastewater expected to be available by 2030. As a result, an increase in the number of water treatment projects is predicted to raise demand for oilfield chemicals during the forecast period.

Among region, North America is expected to dominate the global market during the forecast period. This is attributed to the increase in oil & gas operations through the development of hydraulic fracturing and drilling processes. In addition, technological advance and rise in the drilling activities are expected to increase the regional market growth during the forecast period. The growing exploration and production of shale gas in the U.S. is expected to increase oil-based chemicals. For instance, according to a report by U.S. energy information administration report in 2021, U.S. dry natural gas production in 2020 was about 33.5 trillion cubic feet (Tcf), which was about 10% greater than the U.S. total natural gas consumption.

Figure 1. Global Oilfield Chemicals Market Value Share (%), By Region, 2021

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Market Restraints

Increasing environmental concerns and price fluctuation of crude oil are expected to hamper the market growth of oilfield chemicals. In order to process oil, gas, and water gathered from reservoirs, a number of chemicals are used. This treated water contains a number of chemicals that, when released, can harm vegetation and fauna. Furthermore, emergence of eco-friendly oilfield chemicals is expected to provide substantial growth opportunities in near future.

Market Trends

Rising use of eco-friendly oilfield chemicals is the key trend in the global oilfield chemicals market. 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 oilfield. Amid rising environmental concerns manufacturers are adopting and developing new products that are cleaner and less damaging to the environment.

Figure 2. Global Oilfield Chemicals Market Value Share (%), By Application, 2021

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• Among applications, upstream applications holds accounted for the largest market share in the global oilfield chemicals market in 2021. According to a report by U.S. Energy Information Administration report in June 2022, North Dakota has almost 3% of U.S. natural gas reserves, and in 2021 the state accounted for 2% of U.S. natural gas gross withdrawals. Since OPEC's agreement, oil and gas operators will be shifting from running minimum number of rigs to incremental increases throughout 2017, so long as oil prices remain above US$ 50 per barrel.

Recent Developments

• In April 2021, BASF a German multinational chemical company announced the collaboration with Omya, a global producer of industrial minerals and distributer of specialty chemicals. The collaboration work for the advancement and commercialization of BasoSphere hollow glass microspheres for cementing application in the oil and gas industry. The BasoSphere hollow glass microspheres are applied in the oil and gas industry as lightweight material for the cementing of boreholes.
• In October 2021, Clariant's Oil and Mining Services business has opened its new, state-of-the-art Eagle Ford Technology, Sales & Operations Center near San Antonio, Texas. Clariant Oil Services is the supplier of specialty oilfield production chemicals and services to the oil and gas industry. The facility is positioned to improve response time and cater to local customer needs, ensuring a long-term commitment to a strategic and growth-orientated oilfield services market in North America.
• On March 8, 2022, Saudi Arabia’s Industrialization and Energy Services Company (TAQA) announced to acquire 25% stake in OPT Petroleum Technologies Company Limited. OPT Petroleum Technology Limited is an oilfield chemicals company which provides specialty chemicals for well construction and stimulation. The acquisition with OPT petroleum Technology Limited will help TAQA to expand its product portfolio in specialty chemicals and cement capabilities in oilfield chemicals market.

Competitive Section

Major players operating in the global oilfield chemicals market include Baker Hughes Inc., Halliburton, Schlumberger Ltd., Weatherford International Ltd, Diamoco Group, Royal Dutch Shell Plc, Solvay S.A, BASF, Chevron Phillips Chemical Company LLC., The Lubrizol Corporation, Clariant Specialty Chemicals, and Croda International Plc