Oilfield Chemical Demand to Reach $13.6 Billion in 2015

Demand for formulated oilfield chemical products in the US is forecast to advance 8.3 percent annually through 2015 to $13.6 billion.  After a period of weakness beginning in late 2008 and lasting through much of 2009, the market returned to form, thanks to rising oil prices and ongoing efforts to develop shale formations in different parts of the US.  Although gas prices remain low by historical standards (and much lower than oil prices in relative terms), the expectation of eventual price increases -- and the immense promise of shale gas production -- has motivated producers to step up investments in high levels of oilfield drilling and stimulation activities to maximize output from existing wells and develop new resources.  Expanding oil and gas production from an increasingly mature resources base will require heightened levels of industry activity, which will drive future growth in oilfield chemical demand.  These and other trends, including market share and product segmentation, are presented in Oilfield Chemicals, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.  

The market potential for raw materials used in the formulation of oilfield chemical products is based most fundamentally on the outlook for the finished products in which they are used.  As a result, raw materials such as natural gums, polymers, acids and surfactants used in stimulation fluids are likely to register the fastest growth, driven by continued expansion of well stimulation technologies, fueled in part by sustained growth in shale development.  In contrast, gases and other products used in enhanced oil recovery (EOR) materials are likely to post less impressive, though still considerable, advances. 

Stimulation chemicals are expected to register the fastest growth among the major product categories.  Demand will be driven by the need to maximize oil output from existing wells in established fields, as many of the largest existing fields are considered mature.  Finally, stimulation techniques are used at the time of well completion in nearly all new wells, which will provide further stimulus to growth as new wells are completed.  Environmental concerns will continue to spur demand for new formulations designed to eliminate or minimize the potential effects on groundwater supplies. 

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.