Following a period of sensational growth powered by record high energy prices and fervent oilfield activity, the market for oilfield chemicals is expected to return to a period of relative normalcy. Demand is projected to increase 5.7 percent annually to more than $20 billion in 2012, driven by continuing growth in oil and gas production, and high levels of rotary drilling rigs in use and of wells drilled. Forecasts are based on the expectation that prices will remain well below the record levels seen in 2008 (about $140 per barrel in July), which will restrain growth to some extent. 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 research firm.
Latin America offers the best prospects through 2012. The region is home to a number of countries, such as Brazil and Bolivia, that have begun to more fully develop their oil and gas resources. This will boost demand for oilfield chemicals, as will efforts on the part of the Venezuelan and Argentine governments to increase drilling and other oilfield activity in an attempt to sustain production levels in mature fields. The Asia/Pacific region will also offer above average growth -- in part due to relative newcomers among major oil and gas producers such as some of the former Soviet republics, and to more established producing nations, such as Indonesia and Malaysia, attempting to counter declines in output. China, the largest market in the region, will experience strong growth due to the greater use of enhanced oil recovery and well stimulation techniques to satisfy rapidly growing domestic energy requirements.
North America will remain by far the largest regional outlet for oilfield chemicals, accounting for nearly 60 percent of demand in 2012, despite accounting for less than 20 percent of oil production and less than 25 percent of natural gas production. All three North American countries are significant markets for oilfield chemicals. The US is easily the largest market, due to the large number of rigs and wells used to maximize production from generally mature fields. Growth in Canada will result from continuing efforts to develop the immense oil sands areas in Alberta, and Mexico’s traditionally underfunded national oil company should benefit from recent legislative action that is likely to spur greater foreign investment. The Africa/Mideast region, which accounted for more than 40 percent of global oil production in 2007, is a smaller market for oilfield chemicals than its enormous energy output might suggest.
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.
