Market Overview:
Oilfield stimulation chemicals are used to enhance oil recovery from reservoirs during drilling and completion operations. These chemicals help in the cleaning and acidizing of oil wells.
Market Dynamics:
Rising exploration and production activities globally are expected to drive the growth of the oilfield stimulation chemicals market during the forecast period. Development of unconventional oil and gas reserves require stimulating reservoirs using chemicals in order to enhance oil and gas recovery. Furthermore, aging oilfields require re-stimulation and enhancement techniques using stimulation chemicals to boost production. According to the IEA, global oil demand is estimated to reach pre-pandemic levels by 2023 with projections of continued growth through 2030, further propelling the demand for oilfield stimulation chemicals. In addition, the increasing complexity of oil reservoirs has led EP companies to use advanced stimulation techniques and customized chemical formulations for improving productivity. This is positively impacting the market growth.
Oilfield Stimulation Chemicals Market Drivers and Restrainst
Increasing Global Oil Demand Driving Need for More Unconventional Oil Production
The demand for oil and gas continues to rise across the globe driven by increasing industrialization and urbanization in developing nations like India and China. At the same time, more easily accessible conventional reserves are being depleted necessitating more production from harder-to-extract unconventional reserves like tight oil and shale gas which requires stimulation chemicals. This growing need for unconventional oil and gas to meet demand is a key driver boosting the oilfield stimulation chemicals market.
Rising Shale Gas Exploration and Production Augmenting Demand for Stimulation Chemicals
With technological advances like hydraulic fracturing and horizontal drilling, shale gas production has grown multi-fold in countries like the US and Canada in the last decade. Other nations are also pursuing shale gas reserves to diversify their energy mix. This increased focus on shale gas exploration and production around the world directly impacts the oilfield stimulation chemicals consumption positively.
Stringent Environmental Regulations Hindering Market Growth
While stimulation chemicals help boost productivity from oil and gas wells, some components of these chemicals can potentially pollute the air and groundwater if not handled properly. Consequently, regulations around the use, transportation and disposal of stimulation chemicals, especially hydraulic fracturing fluids, have become stricter in regions like the US and Europe in recent years to minimize environmental footprint. This poses a challenge for the oilfield stimulation chemicals industry.
Opportunity: Growing Oil and Gas Operations in Asia-Pacific Opening New Avenues
Asia-Pacific currently holds some of the largest proved reserves of oil and gas globally but production is still less than potential. Several countries like India, China, Indonesia are investing heavily in developing their upstream oil and gas infrastructure which includes stepping up unconventional production. This rapid expansion of Asia-Pacific's oilfield operations opens attractive opportunities for stimulation chemicals suppliers to tap into the fast-growing regional market.
Trend: Shift Towards Environmentally Friendly, "Green" Stimulation Chemicals formulations
With environmental protection gaining more importance, oilfield service companies and operators are collaborating with stimulation chemical manufacturers to develop alternatives to toxic and hazardous components traditionally used. This involves investigating safer base fluid options and additives that can reduce water, air and land footprint of operations. The trend towards more sustainable, "green" chemical systems matching economic and ecological objectives is gathering strong momentum in the stimulation chemicals industry.
