REPORT SCOPE
INTRODUCTION
STUDY GOALS AND OBJECTIVES
Oilfield process chemicals support the exploration and processing of oil and natural gas in the field. Various factors influence the demand for oilfield process chemicals. The world’s demand for energy is increasing as emerging economies such as China, India, Latin America and Africa develop their capabilities and raise the living standards and conditions of their populations. Crude oil and natural gas are critical feedstocks in the energy supply chain. For this reason, many nations are looking to be self-sufficient in energy generation across the supply chain, resulting in the drive to secure feedstocks that they control and not be reliant on imports from nations that may have differing political agendas or ideals that are in conflict with theirs, or are located in regions that are a hot bed of unrest and instability, threatening the supply of these key energy raw material. In addition, all the easy-to-extract oil in locations that can be easily accessed and supported have been located, thus the need to explore more isolated and harsher environments is required.
All of this generates a demand for oil companies to increase exploration activities to uncover rich sources of future fuel, leading to operations that are drilling deeper into the Earth’s substructure, moving further out to sea into deeper waters (offshore), increasing the exploitation of unconventional sources of oil, and setting up in remote and isolated areas. In addition, companies are looking to maximize the amount of oil and gas that can be extracted from existing reservoirs by increasing the deployment of secondary and tertiary methods of recovery. This appetite for oil and gas leads to an increased demand for, and sale of chemicals that enables the above activities to take place.
This study was conducted to determine the future of the oilfield process chemicals industry on a worldwide scale. The forecast demand and production of oil will have a direct impact on the demand for oilfield process chemicals. This study estimates the 5-year forecast for the oilfield process chemicals industry from 2010 through 2015.
In recent years, the industry has been affected by a credit crunch, resulting in a significant drop in the number of explorations and new drilling expeditions undertaken. Coupled with the biggest oil spilled in U.S. industry off the Gulf of Mexico, oil and gas companies are in the spotlight. However, new oil discoveries, technology advancements enabling companies to reduce the environmental impacts of their operations, and the drive for energy self-sufficiency will support the growth of the industry moving forward. Based on this information, BCC forecasts the oilfield process chemicals industry will grow at a compound annual growth rate (CAGR) of 5.7% over the next 5 years. This estimation is based on projections in the oil drilling, exploration, and production sectors. This study does not include the value of services and other products offered by oilfield process chemical companies. Values have been confirmed with industry sources and industry experts.
REASONS FOR DOING THE STUDY
The purpose of doing this study is to provide market research on the worldwide value of the oilfield process chemicals industry. This $5.8 billion industry, at the manufacturers’ levels of sales, experienced rapid growth during the early part of this century, with growth rates of over 10% year on year. However, the rate of growth slowed down significantly and then fell away as the industry was impacted by the worldwide recession and the lack of available funds on the money markets. The challenges associated with drilling deeper, the need for chemicals to cope with hotter and high pressure environments, and the drive in the recycling and reusing of material means the usage of specialty chemicals will increase as the industry recovers from the downturn.
This study will review the chemicals that are consumed in the exploration, drilling, and production of oil and gas globally. It will highlight chemicals that are growing, segments that are contracting, technology challenges that the industry is facing, and possible solutions and remedies to those challenges.
The information was obtained using standard research techniques of primary and secondary research including but not limited to library resources, the Internet, company quarterly and annual reports, published material, and discussions with industry experts and active players.
INTENDED AUDIENCE
This study will be of interest to chemical companies that manufacture specialty chemicals because it will identify segments that should experience high growth and highlight the challenges that multifunctional and specialty chemicals could overcome. The study will also be of interest to oil field service companies and oil field companies that are active in the industry. It will also be of interest to university and research groups looking to exploit technology that has been developed in another industry that may have applications in this industry. Finally, the study will be of interest to any company or investment firm looking at possible acquisitions or additions to their portfolio in the field of oilfield process chemicals.
SCOPE OF REPORT
The scope of this study includes only the chemicals used in the upstream part of the oilfield processes and market sizes that have been calculated at the manufacturing level rather than at the oilfield service sales level. In many cases, what material is in scope and what is out of scope is clear cut, material that is classified as mineral has been excluded. Where it is not so clear, as in the case of insoluble salts or the usage of material produced on-site, judgment has been made by the analysts based on discussions with industry experts. Chemicals in scope have been categorized in three different ways: process application, by type, and by chemical function. The oilfield process chemicals’ current market is assessed, along with past market performance. Projected sales for the industry as a whole are forecasted by application, type, and function. The market is assessed on a worldwide scale. Impacts of the oil and gas industry are explained. The potential effects of political, environmental legislation, and energy policies are also considered.
METHODOLOGY
Both primary and secondary research methodologies were used in preparing this market research report. BCC evaluates each market by application, type, and function. To make projections for the future of the oilfield process chemicals market, the oil and gas industry was reviewed in terms of exploration, drilling, and production.
This was accomplished by evaluating the industry’s forecast for exploration and production into the future and recent oil reserve discoveries. Also taken into account were historical relationships between oilfield process chemicals and oil and gas production. Energy Information Administration demand projections were also taken into account. Political situations were considered as was both current and pending environmental legislation. Information directly related to the oilfield process chemicals industry was also analyzed.
Company annual reports were assessed and sales values were confirmed with reliable sources. Company market shares were also confirmed and cross-referenced. The chemicals focused on for this report are those qualifying for the functions listed.
INFORMATION SOURCES
Numerous information sources contributed to this study, including interviews with industry experts, research databases, technical abstracts, commerce publications, government sources, financial and trade information, library resources, and the Internet.
ANALYST CREDENTIALS
John Joe Harkin is a PhD chemist who graduated from the University of Manchester, United Kingdom. He has 20 years of experience providing business insight to a range of companies in the chemical and related industries. The majority of his industrial career was supporting business development activities on a global basis within a specialty firm that was active in many industries including the oilfield chemical industry.
Ronald van Rossum has more than 24 years of experience providing information management services to the chemical industry. For 10 years, he was a global information manager, delivering a wide range of services to a global specialty company. He is an expert information searcher and speaks several languages.
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DISCLAIMER
The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal, or accounting advice; nor should it serve as a corporate policy guide, laboratory manual, or an endorsement of any product, as much of the information is speculative in nature. The authors assume no responsibility for any loss or damage that might result from reliance on the reported information or its use.
