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This study analyzes the US oilfield chemical industry. It presents historical demand data for 2002, 2007, and 2012, and forecasts for 2017 and 2022 by application (e.g., drilling fluids, completion and workover fluids, stimulation fluids, production chemicals, cement) and product (e.g., specialty chemicals, commodity chemicals, polymers, gases). The study also presents formulated fluid demand, considers market environment factors, reviews technology, evaluates company market share, and profiles industry players.
US demand to remain strong through 2017
US demand for oilfield chemicals is expected to remain strong through 2017 following double digit annual growth in recent years. Newer technologies such as multistage hydraulic fracturing and horizontal drilling have allowed development of shale gas and tight oil plays, resulting in a significant improvement in the country’s oil and gas outlook. Following decades of declines, oil production has begun to increase again. Natural gas is abundant and prices are low, spurring changes across the entire US manufacturing sector. However, rapid growth has also led to problems with product shortages, rising material costs, and concerns about water use. In addition, other environmental concerns remain, and the oilfield chemical industry will be called upon to provide high performance products with an increasing level of environmental friendliness.
Demand high for chemicals used in hydraulic fracturing
Chemicals used in hydraulic fracturing have become the largest segment of the US market. The boom in fracturing activity is expected to persist, with both the number of fractured wells and the average volume of fluids per well continuing to increase. Of the chemicals used in fracturing, guar gum has presented unique challenges to the industry due to a severe price shock in 2012. Helping to offset the oilfield chemical industry’s reliance on this commodity will be the rising use of slickwater fracturing as well as efforts to find alternative polymers that can match guar’s performance. Growth is expected to be above average for “green” fracturing products. This will benefit new formulations that use advanced, biodegradable chemicals in place of conventional high volume products such as biocides and surfactants.
Drilling activity to fuel US demand
Drilling activity is expected to remain elevated in the US through coming years, driving healthy demand for drilling and completion fluids and the chemicals they contain. The ability to increase drilling efficiency and reduce rig time, improve well productivity through reduction of formation damage, and better the environmental profile and disposal requirements of these fluids will all be of significant concern. As the performance of water-based drilling fluids continues to improve, they will see increasing use even in difficult drilling conditions such as the Haynesville Shale, where oil-based muds have been the preferred choice. However, demand for oil-based muds will remain healthy for the foreseeable future. Offshore drilling, which is expected to rebound going forward, will support strong demand for both synthetic drilling fluids and high density completion brines.
Other chemicals important in oilfield applications — such as cementing chemicals, production chemicals, and enhanced oil recovery (EOR) products — will also see healthy growth. Field production of oil and gas in the US is expected to continue climbing, while the amount of water and other undesirable contaminants rises as well. Both factors will necessitate greater use of production chemicals including biocides, demulsifiers, and corrosion and scale inhibitors. The mature nature of most large oilfields in the US and continued high oil prices will support the use of EOR practices. Additionally, interest is increasing in the use of carbon dioxide EOR as a method of carbon sequestration.
Profiles for over 35 US Industry players Such as Baker Hughes,Halliburton,Schlumberger and Weatherford
This study analyzes US demand for oilfield chemicals, including additives used in drilling fluids, stimulation fluids, cement slurries, and completion and workover fluids, as well as production chemicals and enhanced oil recovery products. In addition, demand for formulated oilfield fluids (e.g., drilling fluids) is also examined. 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. Because certain products (e.g., fracturing fluids) are not typically sold outside of an arrangement for their use, values as presented are intended to reflect the market value of the components and formulation, and may not be equal to the amount invoiced or recorded as revenue.
Fracturing fluids are defined to exclude proppants, which are also excluded from the study’s scope. Note that demand figures in this study include merchant market gases such as carbon dioxide and nitrogen (but not natural gas or propane) used in fracturing fluids and enhanced oil recovery operations. Demand is measured at the manufacturers’ level, and effort has been made to estimate the demand for formulated products (other than formulated fluids) on the basis of their active ingredients, excluding the value and volume of water, solvents, and carriers when those components are not a necessary ingredient.
Historical data (2002, 2007, and 2012) and forecasts for 2017 and 2022 are provided for sales of oilfield chemicals at the aggregate level, valued in millions of current US dollars, including inflation. Volume demand is also presented for selected chemical types. The term “demand” refers to “apparent consumption,” and is defined as shipments (also referred to variously as “production,” “output,” or “supply”) from domestic manufacturing facilities plus imports, minus exports. It is used interchangeably with the terms “market,” “sales,” and “consumption.”
In addition, major US manufacturers of formulated oilfield fluids and chemicals are identified and profiled, and the key competitive variables are discussed. The entire report is framed within the US oilfield chemical industry’s economic, technological, and market environments, and thus variables affecting oilfield chemical supply and demand patterns — especially crude oil and natural gas exploration and production activity — are emphasized. Unless otherwise noted, the term “production” of crude oil includes both lease condensate and natural gas plant liquids, while “field production” excludes natural gas plant liquids.