World Demand for Oilfield Chemicals to Reach $28 Billion in 2016

World demand for oilfield chemicals is expected to increase 8.9 percent per year to $28 billion in 2016 as high oil prices and increasing demand for energy spur new development, especially in unconventional and offshore fields.  Nearly all types of chemicals will post healthy advances, but the best opportunities will be in drilling fluids and stimulation chemicals.  These and other trends, including market share and product segmentation, are presented in World Oilfield Chemicals, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.  

At present, well stimulation chemical demand is concentrated in four countries: the US, China, Canada, and Russia.  Demand in the US is by far the largest due to its large number of mature wells and rapid growth in the use of horizontal drilling and multistage fracturing.  As oilfields elsewhere mature, stimulation techniques will become more attractive options for oil and gas producers in other countries, especially in Mexico, Argentina, and Australia.  Economical development of shale formations virtually necessitates hydraulic fracturing, which will boost demand in the countries seeking to develop these shales, such as China and India.

North America is expected to remain the largest market for oilfield chemicals by a wide margin.  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 the fastest in the world, due to substantial oil production gains and increased activity in deeper offshore fields.

China will remain the largest market in Asia, due to its large number of wells and its need to increase its domestic energy supply.  The Africa/Mideast region, which accounts for more than 45 percent of global oil production, is a smaller market for oilfield chemicals than its energy output might suggest.  Even so, oilfield chemical demand in the region will grow based on increased natural gas production in previously underdeveloped areas and sustained growth in large producers such as Saudi Arabia and Nigeria.  Europe, the slowest growing region for oilfield chemicals, will see strong advances in Russia and a few smaller producing nations, and slower gains in Norway and the UK due to diminishing North Sea output.  However, growing interest in shale development and other unconventional settings could serve to boost European oilfield chemical demand going forward. 

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.