CLEVELAND, Feb. 4, 2020 /PRNewswire/ -- A new Freedonia Group study forecasts US demand for oilfield chemicals to total $14.4 billion in 2023, driven by rising drilling activity and increased well lengths. These trends are leading to greater consumption of chemicals per well, causing the projected demand growth for oilfield chemicals to outpace that of drilling and production activity. Additionally:
- The prevalence of unconventional drilling will buoy demand.
- Increasing environmental concern and pressure from regulators will shape the product mix in favor of higher-value, more environmentally friendly alternatives.
Dominance of Unconventional Drilling to Continue
The drilling of unconventional plays is expected to continue to dominate drilling activity through 2023, and the higher costs and greater level of complexity associated with unconventional oil and gas wells will require higher performance oilfield chemicals, further driving value demand growth.
However, growth will not be as rapid as during the 2008-2018 period due in part to oil and gas prices remaining below peaks reached earlier in the decade. Uncertainty surrounding oil prices could also discourage the drilling of more complex wells, which typically utilize larger volumes of oilfield chemicals.
Environmental Concerns Increasing Demand for Higher-Value, Eco-Friendly Alternatives
While recently proposed fracking bans are unlikely to affect near-term prospects, a number of regulations have been introduced that seek to limit the potentially harmful environmental impact of the oil and gas industry, with these regulations ranging from curbing the use of environmentally harmful chemicals to guidelines regarding water management issues and the appropriate disposal of hazardous wastes:
- These concerns will continue to drive development and use of higher value products as the industry attempts to forestall formal regulation by embracing more environmentally friendly alternatives, including biodegradable shale inhibitors and less toxic biocides.
- This will in turn boost oilfield chemical demand due to the higher price of these chemicals compared to the products they are replacing.
Want to Learn More?
Oilfield Chemicals is now available from The Freedonia Group. Analyzing the US market for oilfield chemicals, the study presents historical demand data by application and product type for 2008, 2013, and 2018 and forecasts for 2023 in current dollars, with selected data in volume terms in pounds. In addition, a comprehensive corporate analysis including market share by select industry participant, competitive strategies, and merger and acquisition activity is provided. Key trends in drilling technologies and methods are also highlighted.
About The Freedonia Group – The Freedonia Group, a division of MarketResearch.com, is a leading international industrial research company publishing more than 100 studies annually. Since 1985 we have provided research to customers ranging in size from global conglomerates to one-person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedonia Group research to help with their strategic planning. Each study includes product and market analyses and forecasts, in-depth discussions of important industry trends, and market share information. Studies can be purchased at www.freedoniagroup.com and are also available on www.marketresearch.com and www.profound.com.
SOURCE The Freedonia Group