Abstract
Growth in oil and gas production to spur gains
World demand for oilfield chemicals is expected to reach $20 billion in 2012.
Growth will decelerate from the 2002- 2007 period, but there will still be
ample opportunities in most regions. A number of factors are expected to
contribute to these gains. Oil and natural gas production is expected to
continue to increase, especially in Latin America, Asia and Africa. Rig counts
and drilling activity should also be favorable, as oil prices remain above
historical levels (though down significantly from records set in 2008).
Additionally, producers are becoming increasingly reliant on unconventional
sources of oil and natural gas -- such as Canadian oil sands and very deep
offshore waters -- and are placing wells in more difficult conditions, which
will further stimulate chemical demand.
Stimulation chemicals to lead advances
Although drilling fluids will remain by far the largest product category, well
stimulation chemicals will register the fastest growth. At present, well
stimulation chemical demand is heavily concentrated in four countries: the US,
Russia, Canada and China. Demand in the US alone accounts for more than half
of the global well stimulation market. Over the past decade, Russia has
registered exceptionally rapid growth in demand for well stimulation
materials, in the process becoming the second largest market in the world --
though still well behind the United States.
North America to remain largest regional market
Although oil and gas production is expected to grow more rapidly in other
regions of the world, the North American market is expected to remain the
largest market. The US and Canada, with older and more developed oilfields,
offer a much larger market for chemicals designed to maintain output levels in
areas of diminishing well flows. Not surprisingly, these factors contribute to
North America' s position as the leading regional market for well stimulation
chemicals, the fastest-growing product type. In contrast, Africa and the
Mideast are much less intensive users of oilfield chemicals, as extraction of
oil and gas are relatively easy in that part of the world. However, increased
growth in oil and gas production in Latin America, Africa and Asia will
contribute to above average growth for oilfield chemicals in these regions.
Other regions present challenges, opportunities
The Africa/Mideast region, which accounts for more than 40 percent of global
oil production, is a smaller market for oilfield chemicals than its enormous
energy output might suggest. Even so, oilfield chemical demand in the region
is expected to grow based on increased natural gas production in many
previously underdeveloped areas (e.g., Libya, Algeria), and a greater share of
oilfield activity taking place in more demanding environments off the coasts
of Nigeria, Angola and other nations in West Africa. Europe, the region in
which oilfield chemical demand is expected to expand most slowly, will offer
something of a mixed bag. Demand in Norway and the United Kingdom is expected
to grow at a rate well below the regional average, due to a lack of expansion
of drilling activity and diminishing output from the North Sea. In contrast,
growth in Russia will be strong due to sustained production growth and efforts
to remediate wells that were not properly managed in the past.
Study coverage
This new Freedonia industry study, World Oilfield Chemicals presents
historical demand data (1997, 2002, 2007) plus forecasts for 2012 and 2017 by
product, world region and major country. The study also evaluates market share
and profiles 39 industry players.
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