This study analyzes the world oilfield chemical industry. It presents historical demand data for the years 2001, 2006 and 2011, and forecasts for 2016 and 2021 by product (e.g., drilling fluids, stimulation and enhanced oil recovery chemicals, production chemicals, completion and workover fluids), world region and major country.The study also considers market environment factors, details industry structure, evaluates company market share and profiles industry participants.
Global demand to reach $28 billion in 2016
World demand for oilfield chemicals is expected to reach $28 billion in 2016 as high oil prices and the increasing demand for energy stimulate new development, especially in unconventional and offshore fields. Nearly all types of chemicals will post healthy advances, but the best opportunities will continue to be in drilling fluids and stimulation chemicals. The usage of horizontal drilling and hydraulic fracturing in the development of shale plays in the US and Canada has been a driving force in sales of fracturing fluids and high-tech drilling fluids, although whether North America’s success in shale development can be duplicated elsewhere remains to be seen. However, while shale is still purely a North American phenomenon, the development of offshore fields is taking off all around the world. This will continue to fuel demand for all types of chemicals, as costs for offshore wells are significantly higher than for onshore wells. These and other factors are driving demand in the world’s major oilfield chemical growth markets, especially Brazil, India, Africa, China, Russia, Saudi Arabia, and a number of other Asian countries. In addition, while slowing, growth will continue to be favorable in the large North American market.
Shale plays to boost oilbased drilling fluid demand
The development of unconventional and offshore fields has led to significant changes in the drilling fluid market. Demand for highly engineered oil-based fluids has been boosted by use in the more challenging shale plays while synthetic and oil fluids are also often used in offshore and deep well situations.
While water-based fluids continue to dominate in volume terms due to their low cost, ease of use and good environmental record, the market is more evenly split in terms of market value and nonaqueous fluids have been gaining market share in recent years. Nevertheless, fluid
suppliers continue to develop improved water-based muds and these products will sustain high demand for water-based fluids in the future.
US, Canada, Russia, China dominate global demand
At present, well stimulation chemical demand is heavily concentrated in four countries: the US, Russia, Canada and China. Demand in the US alone accounts for a majority of the market due to its large number of mature wells and rapid growth in the use of horizontal drilling and multistage fracturing. As oilfields elsewhere continue to mature, stimulation techniques will become more attractive options for oil and gas producers in other countries, especially Mexico, Argentina, and Australia. Additionally, economical development of shale formations virtually necessitates hydraulic fracturing, which will boost demand in the countries seeking to produce from these shales, such as China and India.
North America is expected to remain the largest market. The US and Canada, with older and more developed oilfields, offer a much larger market for chemicals designed to maintain output levels in areas of diminishing well flows. Growth in Brazil will be among the fastest in the world, due to substantial oil production gains and increased activity in deeper offshore fields, such as the pre-salt formations in the Atlantic Ocean.
China will remain the largest market in the Asia/Pacific region, due to its large number of wells and its compelling need to raise its domestic energy supply through techniques such as hydraulic fracturing. The Africa/Mideast region, which accounts for over 45 percent of global oil production, is a smaller market for oilfield chemicals than its huge energy output might suggest. Even so, oilfield chemical demand in the region is expected to grow.
Profiles global industry players such as Baker Hughes, Champion Technologies, Halliburton, M-I SWACO, Nalco, and Newpark Drilling Fluids
This study analyzes world demand for formulated oilfield chemicals, defined as drilling fluids, stimulation and enhanced oil recovery (EOR) chemicals, production chemicals (e.g., demulsifiers, corrosion inhibitors, etc.), completion and workover fluids, and cement and cement additives. Excluded from the scope of the study are oilfield services, and, as a result, the market data presented in this study may differ from other estimates that utilize different
definitions and encompass additional or different products. Note that demand figures include cement, which is often not included in oilfield chemical statistics, and exclude gases such as those used in EOR operations and proppants used in well stimulation activity.
Historical data (2001, 2006, and 2011) and forecasts for 2016 and 2021 are provided for sales of oilfield chemicals at the aggregate level on a countryby- country basis, valued in millions of current US dollars, including inflation. The term “demand” refers to “apparent consumption,” and is defined as shipments (also referred to variously as “production,” “output,” or “supply”) from a country's indigenous manufacturing facilities plus imports minus
exports. It is used interchangeably with the terms “market,” “sales,” and “consumption.”
A potential source of statistical discrepancy in the historical series for sales is the conversion from national currencies to a common currency, in this case the US dollar. Every effort has been made to adjust compiled data to form a consistent pattern for comparing the various national oilfield chemical industries and markets.
A variety of primary and secondary sources were utilized in the compilation of this report. These include government statistical agencies, trade associations, industry experts, financial sources and oilfield chemical company sources. Also consulted were trade periodicals and publications, corporate annual reports, product catalogs, and other company information.
Data on world oilfield chemical demand are derived from differing sources and developed from statistical relationships. As a result, variations are commonplace in this type of international reporting, and, consequently, data presented in this study are historically consistent but may differ from other sources. Variances may occur because of definitional differences, undistributed exports, inventory accumulation, and goods-in-transit, among other reasons. To reduce the impact of such discrepancies, total world oilfield chemical imports and exports have been assumed to balance in any given year.
In addition, major global manufacturers of oilfield chemicals are identified and profiled, and the key competitive variables are discussed. The report is framed within the world oilfield chemical industry’s economic, technological, and market environments, and thus environmental variables affecting oilfield chemicals supply/demand patterns -- especially crude oil production -- are emphasized. World oilfield chemical market share and revenue by company data presented in the “Industry Structure” section are estimated based on consultation with multiple sources. In addition, tabular details may not always add to totals due to rounding.