The global market for oilfield process chemicals reached nearly $7.4 billion in 2013. This market is expected to grow to $7.7 billion in 2014 and nearly $9.7 billion in 2019, with a compound annual growth rate (CAGR) of 4.6%.
Oilfield process chemicals support the exploration and processing of crude oil and natural gas in the field. Various factors influence the demand for oilfield process chemicals. The world's energy needs are increasing as emerging economies such as China, India, Latin America and Africa develop their capabilities and raise the living standards of their populations. Crude oil and natural gas are critical to the energy supply chain. For this reason, many nations are looking to be self-sufficient in energy generation across the supply chain, resulting in a drive to secure feedstocks they can control. They do not want to rely on imports from nations that may have differing political agendas or ideals that are in conflict with theirs, or are located in regions of unrest and instability that could threaten the supply of key raw materials. In addition, most of the easy-to-extract oil in locations that can be easily accessed and supported has been recovered.
All of this generates a demand for energy companies to uncover rich sources of future fuel, leading to operations that drill deeper into the Earth's substructure, explore deeper waters offshore and increase the exploitation of unconventional sources of oil and gas. In addition, companies are attempting to maximize the amount of oil and gas that can be extracted from existing reservoirs by increasing the deployment of secondary and tertiary methods of recovery. This appetite for oil and gas leads to an increased market for chemicals which enable the above activities to take place.
This study was conducted to determine the future of the oilfield process chemicals industry on a worldwide scale. The forecast demand and production of oil will have a direct impact on the need for oilfield process chemicals. This study estimates the five-year forecast for the oilfield process chemicals industry from 2014 through 2019.
During this period, new oil and gas discoveries efforts to reduce environmental impact, and the drive for energy self-sufficiency will support the growth of the industry moving forward. Based on this information, BCC forecasts the oilfield process chemicals industry will grow at a compound annual growth rate (CAGR) of 4.6% over the next five years. This estimate is based on projections in the oil drilling, exploration and production sectors. It does not include the value of services and other products offered by oilfield process chemical companies. Values have been confirmed with industry sources and industry experts.
This report is an update of an earlier (2011) BCC Research study of the oilfield process chemicals industry. Exploration and production have rebounded from the lows of the 2008 and 2009 recession and, lead by North American shale assets, oil sands and the Gulf of Mexico's deepwater resources, the last three years have been a dynamic period for the oil and gas industry. As the industry moves into 2014, investments in the energy renaissance are shifting from the upstream sector to midstream infrastructure, refinery operations and petrochemical facilities.
In view of these trends, BCC Research has decided that this is an appropriate time to revise the 2011 report in order to provide readers with an up-to-date understanding of the value and structure of the global oilfield process chemicals industry. Chemical manufacturing sales, a $7.4 billion industry, experienced rapid gains during the early part of this century, with growth rates of over 10% year on year. The challenges associated with deeper drilling and coping with hotter and higher pressure environments, as well as the drive to recycle and reuse material, means the usage of specialty chemicals will only increase.
This study will review the chemicals that are consumed in the exploration, drilling, and production of oil and gas globally. It will highlight growing and contracting segments, technological challenges that the industry is facing, and possible solutions to those challenges.
The information was obtained using standard research techniques of primary and secondary research, including but not limited to: library resources, the Internet, company quarterly and annual reports, published material, and discussions with industry experts and active players.
The scope of this study includes only the chemicals used in the upstream part of the oilfield processes and market sizes that have been calculated at the manufacturing level rather than at the oilfield service sales level. In many cases, what material is in scope and what is out of scope is clear cut, and materials that are classified as minerals have been excluded. Where it is not so clear (as in the case of insoluble salts or the usage of material produced on-site) judgment has been made by the analysts based on discussions with industry experts. Chemicals in scope have been categorized in three different ways: by process application, by type, and by chemical function. Both past and current market performance of oilfield process chemicals is assessed. Projected sales for the industry as a whole are forecast by application, type and function and the market is assessed on a worldwide scale. Impacts on the oil and gas industry are explained and the potential effects of political issues, environmental legislation and energy policies are also considered.
The authors of the original report on which this update is based are John Joseph Harkin and Ronald van Rossum. John Joseph Harkin, Ph.D. is a chemist from the University of Manchester, U.K. He has 20 years of experience providing business insight to a range of companies in the chemical industry and related industries. The majority of his industrial career was spent in global business development within a specialty firm active in many industries including the oilfield chemical industry.
Ronald van Rossum has more than 24 years of experience providing information management services to the chemical industry. For 10 years, he was a global information manager, delivering a wide range of services to a global specialty company. He is an expert information researcher and speaks several languages.
The analyst responsible for updating the report is Andrew McWilliams, a partner in 43rd Parallel LLC, a Boston-based international technology and marketing consulting firm.
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