WORLD WELL STIMULATION MATERIALS to 2012 (Industry forecasts for 2012 & 2017)

Abstract

Global demand for well stimulation materials is expected to register double-digit annual growth through 2012. Growth will slow from the frantic pace of the past few years, which was prompted by record high oil and gas prices. However, advances will be sustained by expanded efforts to maintain productivity in maturing oil and gas fields, both in the large and well-established well stimulation markets such as the US and Canada, but also in areas that have not been traditional outlets for well stimulation, such as Latin America. Producing nations around the world are increasingly turning to hydraulic fracturing and other stimulation techniques to reduce dependence on imports (e.g., the US), increase export opportunities (e.g., Russia, Venezuela, Mexico) or to supply increasing domestic appetites for oil and gas (e.g., China and a host of developing countries in Africa, the Middle East and Asia).

Proppants are expected to remain the largest product category. Inexpensive sand proppants will continue to be replaced with more expensive engineered proppants -- such as ceramic and coated sands -- to meet the strength requirements for deeper wells with higher pressures.

Ceramic proppants already occupy a prominent market position in Russia and China. However, sand proppants will continue to dominate the market in volume terms due to their low cost and performance in less stressful environments, such as in shallow gas wells.

Finally, new lighter weight proppants, such as those based on plastic resins, will find greater usage in specialized applications.

Growth for gelling agents will be driven by the increased use of higher priced gelling agents such as micropolymer and polymer-free gelling agents, which are particularly well-suited to tight sands formations and other low permeability geophysical structures. These formations, which are highly susceptible to damage from gelled polymer residues, are expected to become an increasingly important source of natural gas during the forecast period.

Nitrogen and carbon dioxide are the dominant gases in well stimulation. Nitrogen is used in fracturing operations in more sensitive formations, such as coal beds and seams, where unconventional techniques are used more frequently -- especially in the US and Canada. Carbon dioxide is finding increasing use as the primary constituent of fracturing fluids. Liquid carbon dioxide can carry proppant without the aid of gelling agents or additives.

Study coverage

This new Freedonia industry study, World Well Stimulation Materials, provides historical demand data (1997, 2002, 2007) as well as forecasts to 2012 and 2017 by product type for four key markets (the United States, Russia, Canada and China) and in other regions. This study also examines the market environment, presents company market share data and profiles 39 industry competitors.

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Freedonia' s methods involve:

• Establishing consistent economic and market forecasts
• Using input/output ratios, flow charts and other economic methods to quantify data
• Employing in-house analysts who meet stringent quality standards
• Interviewing key industry participants, experts and end users
• Researching a proprietary database that includes trade publications, government reports and corporate literature