Global oilfield chemical market showing high growth
Enormous growth opportunities exist for manufacturers in the global oilfield chemical market that develop customized product formulations and offer strong technical support according to a report by Frost & Sullivan.
Frost & Sullivan’s analysis of the global oilfield chemical market reveals the development of innovative, advanced oilfield chemicals that are eco-friendly have paved the way for increased application use, premium prices, and market growth. The discovery of new oil and gas fields across different regions along with shale gas and enhanced oil recovery (EOR) expansion activities will further augment growth prospects. Frost & Sullivan forecasts the global oilfield chemical market to account for $33.94 billion by 2025, with a compound annual growth rate (CAGR) of 5.1% between 2018 and 2025.
“Rapid growth and investment by global and regional oilfield service companies, as a result of exploration and production participants augmenting their business in high-growth economies of China, India, Brazil, Mexico, and Southeast Asia, will fuel an uptick in oilfield service activities and volume demand for oilfield and EOR chemicals,” said Ganesh Dabholkar, senior analyst, chemicals & materials in infrastructure & mobility.
The market is currently in a growth stage and presents extensive opportunities for oilfield chemical manufacturers. However, to compete effectively, Dabholkar recommended participants engage in high-level research & development to introduce tailor-made, cost-effective, eco-friendly produce formulations that will work in extremely challenging operational environments such as complex rock formations. Participants should also try to mirror leaders such as Arkema and Solvay SA. Further growth opportunities manufacturers can take advantage of include:
- Offering highly customized pre- and after-sales technical services to help customers achieve maximum operational efficiency and effectiveness.
- Expanding organically (through manufacturing and/or distribution facility expansions in specific high-growth markets) to cater to the rising local demand and augment volume sales.
- Establishing strategic mergers and/or acquisitions to develop their business, either through a quick development of the product portfolio or by leveraging an established manufacturing or distribution facility base of the acquired company.
- Oilfield service companies focusing on backward integration to develop their own portfolio of oilfield chemicals that would cater to their captive requirements. This would aid profitability and supply chain capabilities.
“One of the biggest challenges facing the oilfield chemical industry is a slowdown in oil and gas production due to prolonged rig maintenance work. This has an adverse effect on the extent of oilfield services activities and impacts demand for oilfield chemicals,” Dabholkar said. “Furthermore, economic turmoil in some countries has also curtailed investment in oilfield services and, in turn, the demand for oilfield chemicals.”
Frost & Sullivan’s recent analysis, global oilfield chemicals market, forecast to 2025, analyzes major market drivers and restraints, end-industry growth trends, technology trends, and market trends. Application segments covered include drilling fluids, workover and completion fluids, production chemicals, cementing chemicals, well stimulation chemicals, and enhanced oil recovery chemicals. The key end-use industries are oilfield service companies and drilling contractors.
Frost & Sullivan
– Edited from a Frost & Sullivan press release by CFE Media.