Abstract
Recovery expected for US oilfield chemicals by 2013
Demand for oilfield chemicals in the US is expected to surpass $10 billion in
2013. The market is currently in the midst of a slump, the result of declining
oilfield activity brought on by precipitous drops in oil and natural gas
pricing and weakness in the global economy. However, oil prices are expected
to recover fairly quickly, reigniting rig activity and boosting demand for
drilling fluids, stimulation chemicals and other product types. While natural
gas prices are expected to rebound more slowly, the oilfield chemical market
is projected to spring out of the 2009-2010 trough and once again register
healthy gains.
Challenges abound for domestic producers
The era of easy oil production in the US has been gone for decades. Since
1970, domestic crude oil output has generally fallen due to depleting
reservoirs, environmental restrictions and a lack of investment. The natural
gas situation is more critical. With limited ability to import natural gas,
the country will remain reliant on maintaining production levels from an
increasingly mature resource base. Although improved technologies have boosted
initial well flows, they have also substantially accelerated depletion rates,
forcing producers to drill more wells just to keep natural gas output at
existing levels. In both the oil and gas sectors, these limitations are
driving producers toward higher-cost projects in difficult operating
environments, such as the deepwater fields of the Gulf of Mexico and
unconventional coalbed methane and shale fields.
Oilfield chemicals instrumental in addressing these challenges
Overcoming these significant difficulties will require continued high levels
of oilfield activity. Even with the sharp decline in US oilfield activity
through the first half of 2009, the US accounts for about half of the global
rig count, despite producing less than ten percent of the world' s oil and less
than 20 percent of the world' s natural gas. As the global economy recovers
from the current downturn, oil and gas demand rebounds and prices begin to
climb again, oilfield activity will similarly rebound. The rebound in rig
counts, the continued growth of well stimulation techniques and the ongoing
push into deepwater drilling and production will provide a wide range of
opportunities for the suppliers of both formulated oilfield chemicals and
their raw materials. The fastest among these gains for formulated products
will be from stimulation chemicals. Such increases will also drive gains for
the raw materials such as barite, surfactants and polymers needed to formulate
all oilfield chemicals, although drilling fluids will lag the overall average
for much of the forecast period.
Study coverage
Oilfield Chemicals, a new Freedonia study, assesses the upstream environment
of the US oil and gas industry, including projections assessing future levels
of oilfield activity and the affects of emerging trends. This study provides
historical data as well as forecasts (2013 and 2018) for formulated products
and for raw materials. The study also evaluates company market share and
profiles 42 oilfield chemical suppliers.
| 
View Cart
