The hydraulic fracturing market is expected to register a CAGR of greater than 8.55% during the forecast period of 2021 - 2026 and reach USD 61.45 billion, in 2026 up from USD 35.46 billion in 2019. The COVID-19 pandemic has severely affected the shale oil and gas market, which is among the largest sector where the different techniques of hydraulic fracturing are used. Many of the riskier assets are expected to be delayed or abandoned, as the consumption of oil and gas is expected to take time to recover to their original levels. Factors, such as technological advancements with the introduction of better techniques, are likely to drive the hydraulic fracturing market during the forecast period. However, the volatility in crude oil prices is expected to restrain the growth of the hydraulic fracturing market in the coming years.
- The foam-based segment is expected to witness significant growth due to its increasing usage and rising demand in global oil and gas operations.
- The advancement in hydraulic fracturing techniques and the increasing viability of vertical integration are expected to act as an opportunity for the market.
- North America being among the largest producers of oil and gas, coupled with a significant number of oil and gas upstream projects that require hydraulic fracturing, is expected to dominate the market during the forecast period.
Key Market Trends
Foam-Based Fluid Segment to Witness Significant Growth
- For water-sensitive formations and environments where water is scarce, foams have long been considered one of the best fracturing fluids. In particular, foams are believed to be an appropriate means for fracturing shale gas reservoirs.
- Foam-based fluids require lower (or no) water consumption and cause less damage in water-sensitive formations, and there is less liquid to recover and handle after the fracturing process. Many environmentalists, especially in the United States, have argued for cleaner methods of fracturing, which is possible through the use of foam-based fracturing. Further advancement in this technology may aid the growth of the market while also preventing environmental damage.
- Additionally, foam-based fluid has also found niche application in coalbed fracturing in Canada on dry coalbeds, where any water introduced into the formation damages the cleats.
- Although this technique has been tested in a few shale plays worldwide, most studies have been performed in the United States and Canada. Therefore, the foam fracturing technique is still comparatively novel for other countries around the world.
- The most common application for high-quality foams is in water-sensitive gas-bearing formations, typically an under-saturated gas reservoir, where water blockage is a major concern. Foams are beneficial when used for liquids-rich gas wells, such as in the Alberta Deep Basin, and work in certain oil-bearing formations, such as the Cardium. Lastly, in areas where water is in short supply or hard to source, foams can present a very obvious advantage.
- Therefore, the increasing demand for foam-based fluids is expected to drive the market during the forecast period.
North America to Dominate the Market
- North America is one of the major producers of crude oil and natural gas globally. The hydraulic fracturing market is expected to be driven forward by new well drilling and by the expanding producing well base.
- In the United States, the hydraulic fracturing market is primarily driven by increased drilling activities, new offshore projects, and redevelopment of matured fields. The production from Marcellus/Utica shale and new oil wells is expected to account for most of the growth in gas production.
- The biggest increase in activity is expected from Canada's main crude oil and gas producing region, Alberta, in the coming years. Consequently, the hydraulic fracturing market is estimated to grow at a moderate pace in Canada.
- In January 2021, Reliance Industries Ltd agreed to sell its entire stake in certain upstream assets in the Marcellus shale gas asset in south-western Pennsylvania in the United States for USD 250 million amid weakness in the global hydrocarbon market. The assets, controlled by RIL's wholly-owned unit Reliance Marcellus LLC and operated by affiliates of EQT Corporation, a United States-based energy company engaged in hydrocarbon exploration and pipeline transport, are to be sold to Northern Oil and Gas (NOG) Inc. The shock caused by COVID-19 has caused many smaller investors in the shale region to delay or abandon the projects in the industry.
- The shale oil production in the United States increased, by 13.87%, from 7.956 million barrels per day (mbpd) in 2019 to 6.986 mbpd in 2018. The shale oil production may increase further due to new wells being drilled across the country.
- Hence, North America is expected to dominate the market due to the overwhelming production of shale on the continent and further increase in the investment in the sector.
The hydraulic fracturing market is moderately fragmented. Some of the major companies include Schlumberger Limited, Baker Hughes Co., Basic Energy Services, NexTier Oilfield Solutions Inc., and Calfrac Well Services Ltd.
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