Production chemicals are substances that help improve oil and gas recovery from reservoirs during drilling, cementing, and well operations by suspending drill cuttings, controlling corrosion and scale formation, gelling fluids for pressure control, and decreasing friction in the pipe. They play an important role in extraction and production by increasing operational efficiency and maximizing recovery of hydrocarbons. The rising activity in mature oilfields along with growing EOR techniques is driving the demand for production chemicals that can help maintain well productivity and control formation damage. EOR methods like polymer flooding and surfactant flooding extensively use production chemicals.
The Global Production Chemicals Market is estimated to be valued at US$ 7.44 Bn in 2024 and is expected to exhibit a CAGR of 6.2% over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in the Production Chemicals are ASF SE, Clariant, Halliburton, Ecolab, Schlumberger Limited., Akzo Nobel N.V., Baker Hughes, Croda International Plc, Dow, The Lubrizol Corporation, Stepan Company, Kemira, NALCO India., Solvay, Huntsman International LLC, Chemcon Speciality Chemicals Ltd., Universal Oil Field Chemical Pvt.Ltd, Imperial Oilfield Chemicals Private Limited, REDA Oilfield, and Indian Oil. Several mergers and acquisitions have been observed in the past five years with major players focusing on expanding their production chemical portfolios and global footprint.
The demand for Production Chemicals Market Share is witnessing significant growth due to revitalization of mature oilfields by national oil companies. Mature oilfields account for about 70% of global oil production and have lower recoveries of 5-15% of original oil-in-place. Rejuvenating these fields remains a key priority for oil producers.
Technological advancements are improving the efficiency and effectiveness of production chemicals through new formulations, self-degrading chemicals, and combinational treatments. Smart digitalization technologies are enabling real-time optimization of chemical programs for maximum oil recovery based on field conditions.
Market Trends
Water-based chemical systems: Strict environmental norms are increasing the use of water-based drilling and fracturing fluids over oil-based and synthetic-based fluids. This is driving development of more effective and recyclable water-soluble production chemical formulations.
Bio-based and degradable chemicals: Growing focus on minimizing environmental footprint is prompting manufacturers to develop bio-based and rapidly degradable production chemical alternatives to conventional petrochemical-derived polymers and surfactants.
Market Opportunities
Mature oilfields revitalization: Most mature oilfields have significant untapped reserves that can be recovered through specialized EOR techniques relying extensively on tailor-made production chemicals. This offers huge opportunities for production chemical providers.
Shale gas and tight oil production: Unconventional resources like shale gas and tight oil have complex geology requiring sophisticated chemical formulations for stimulation, drilling, fracturing and long-term production. New chemical solutions continue to emerge for these reservoirs.
Impact of COVID-19 on Production Chemicals Market
The outbreak of COVID-19 has significantly impacted the production chemicals market in a negative way. Various lockdown and restrictions imposed by governments have disrupted the supply chains and halted manufacturing operations. This resulted in a decline in demand from end-use industries like oil & gas and construction during 2020 and 2021. However, with gradual relaxations and resumption of economic activities since 2022, the market is showing signs of recovery. Still, uncertainties around new COVID variants and global economic conditions continue to pose challenges.
Geographically, North America holds the largest share of the production chemicals market in terms of value. The region is among the top producers and exporters of crude oil globally. The significant presence of leading market players and strong infrastructure to support oil & gas exploration and production activities have boosted market growth. However, during the pandemic, North America witnessed a downturn due to lockdowns and decline in industrial output. Now major economies like the U.S. are making efforts towards pandemic management and economic rebound, which will help revive regional market demand going ahead.
On the other hand, Asia Pacific is projected to be the fastest-growing region for production chemicals market during the forecast period. Rapid urbanization and industrialization in countries such as China and India are driving large-scale infrastructure projects and energy demand in the region. Additionally, Asia Pacific holds considerable reserves of shale gas that are being tapped, boosting consumption of production and completion chemicals in the oil & gas sector. Despite the initial difficulties due to COVID-19 disruptions, the long-term outlook remains positive underpinned by ongoing regional economic development activities.
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