Enhanced Oil Recovery Market Size, Share & Industry Analysis, By Technology (Thermal Injection, Gas Injection, and Chemical Injection), By Application (Onshore and Offshore), and Regional Forecast, 2024-2032

The global enhanced oil recovery market size was valued at USD 15.77 billion in 2019 and is projected to reach USD 31.75 billion by 2032, exhibiting a CAGR of 7.69% during the forecast period. Increasing demand for oil and gas, technological advancements in the oil and gas industry, and government initiatives to support enhanced oil recovery market growth. Also the increasing adoption of enhanced oil recovery techniques in developing economies are contributing to growth of industry. North America dominated the enhanced oil recovery industry with a share of 36.27% in 2019.

The modern production technique presents several economic and technological benefits in extracting oil from reservoirs. Traditionally, primary and secondary methods have been used to target mobile oil in the reservoir, and tertiary method, or enhanced oil recovery (EOR), targets immobile oil, which cannot be produced due to capillary and viscous forces. The technology has grown over the years towards ultimate oil recovery instead of immediate oil recovery. Moreover, many countries are increasing domestic production through technological advancement which likely to strengthen the market. However, the recent nCovid-19 outbreak weakens the demand for oil and threatens the growth of the oil and gas industry. For instance, IEA predicted in March 2020 that the global oil demand set to drop for the first time since 2009 due to the spread of the coronavirus across the world.

MARKET TRENDS

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Rising Demand for Energy Security to Bolster the Market

Hydrocarbons are essential for the economic progress of any nation in the world. However, the availability of limited reserves increases the cost of energy, requiring  exponential investment in imports of oil by oil-deficient countries. Thus, many countries across the globe are adopting advanced technologies  to enhance domestic production to meet the demand for oil, which is driving the enhanced oil recovery market trends. This will not only reduce the outflow of foreign exchange as a result of  oil imports but also empowers the nation through energy security.

Gradual Shift towards Optimizing Oil Recovery from Reservoirs Boost the Market

The practice of EOR enables the extraction of a substantial amount of immobile oil and reduces the cost of drilling new wells. Several companies in the United States are deploying the EOR method to meet the national production targets. Government entities around the world are emphasizing on the ultimate recovery of oil to mitigate the environmental damage due to new drilling. Moreover, a growing number of mature wells is likely to boost the demand for advance technologies for the extraction of oil and substantially raise this market value.

MARKET DRIVERS

Unbounded Demand for Oil to Provide Impetus to Market

The exponential consumption of oil across different industry verticals such as transportation, shipping, power, manufacturing, and others has increased the demand for petroleum products. Operators are embracing different advanced methods to meet the growing requisition of oil. EOR offers the ultimate recovery of oil from the reservoir, which increases the overall production. Also, it optimizes the production cost by avoiding drilling a new well, which is projected to drive the market.

Rising Capital Expenditure by National Oil Companies Likely to Inflate Opportunities

National oil companies are reviving strategies for increasing the domestic production of oil by investing in advanced technologies. For instance, Indian conglomerates ONGC and IOC signed a pact in 2019 for the injection of CO2 into a well to enhance the production of oil. Furthermore,  Petroleum Development  Oman (PDO) is also planning to expand its production in the forthcoming years. Hence, growing investment by national oil companies and government assistance to increase domestic oil production to provide impetus to the EOR market size.

MARKET RESTRAINT

High Capital Investment and Economic Slowdown Puts  Growth on Backfoot

Enhanced oil recovery around the world has predominantly relied on government incentives or innovative  investment strategies  owing to the high cost of technology. The technique is inherently complex compared to conventional methods. Deployment of EOR requires highly skilled professionals, stepwise implementation and integration of R&D, commitment, and risk-bearing capacity, which challenges the growth of the market. Currently, the world is undergoing a critical economic crisis due to the exponential spread of the nCovid-19 pandemic. All the businesses across the globe have hit a virtual standstill, which weakens the demand for oil and petroleum products. Fearing the ongoing economic crisis, most oil and gas companies are planning significant capital and operational expenditure cuts, putting the market on the back foot.

SEGMENTATION

By Technology Analysis

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Economical Cost of the Technology to Aid the Thermal Injection Method

The thermal injection method is one of the most well-established and widely adopted technologies  across the world for enhanced oil recovery. The method is suitable for heavy, viscous crude oil and involves the introduction of thermal energy into the reservoir to raise the temperature of the oil and reduce its viscosity. Natural gas is primarily used to generate thermal energy. However, in recent years, solar EOR has been  gaining popularity over its environmental advantages.

Similarly, the gas injection method is extensively used to increase oil mobility in the reservoir. CO2-EOR is one of the fastest-growing techniques used in many countries to increase oil production. Carbon capture and sequestration method underpin environment by arresting carbon emission which can be used to enhance recovery of oil. Chemical EOR is mainly used to produce more oil by injecting water-soluble surfactant and polymers.

By Application Analysis

Exponential Investment to Bolster the Growth of the Onshore Segment

Onshore wells presents several advantages over offshore such as availability of resources, economical cost of production, established technology, reservoir understanding, and others. Hence, a substantial share of global oil is produced from land-based wells. Most of the EOR deployed around the world encompasses onshore wells. The implementation of onshore EOR is economical as compared to offshore. However, growing investment in discovering untapped hydrocarbon reserves is likely to provide lucrative opportunities in the offshore segment.

REGIONAL ANALYSIS

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The coronavirus pandemic  has put the global economy on the backfoot and is threatening the lives and livelihoods of millions of people. The global economic conditions are worsening  due to the sudden spread of the coronavirus. Oil and gas companies are taking serious steps such as cuts in operational and capital expenditure to handle the situation. Thus, the hydrocarbon industry is going through a tough phase. The EOR market is mainly concentrated in North America owing to the extensive adoption of the technique in the United States. The US Department of Energy (DoE)  is working with several companies to implement  EOR projects to increase production. Moreover, the United States offers several incentives such as US section 45Q tax credit to provide a tax reduction of USD 35/tCO2 for 12 years for CO2 stored in EOR operations, which aid its dominance of this market share. In the midst of the pandemic outbreak, US crude oil price falls to a 17-year low, putting the future of hydrocarbon industry in the dark.

Asia-Pacific stood behind North America in generating maximum revenue for the global EOR market. The exponential demand for oil is owing to the presence of electronics, automotive, and manufacturing industries in China, which is driving the market. The Chinese national oil companies are pushing several projects to increase domestic production to reduce  foreign dependence for oil. Similarly, India and Southeast Asian countries are implementing EOR projects to increase the domestic production which boost the market in the Asia Pacific.

In Europe, the market is mainly concentrated in Russia, which plays a crucial role in shaping the hydrocarbon industry. Russian companies are aiming to increase the production for cost competitiveness in the international market. Also, the UK, Germany, and other European countries are observing slight growth, which strengthens the overall market in Europe. Latin America comprises some of the largest producers of hydrocarbon in the world. EOR is mostly implemented in Brazil and Venezuela to increase oil production. The Middle East and Africa demonstrated slight growth due to the slow adoption of technology. Coronavirus epidemic crumbled the crude oil prices and demand, threatening the economies of oil-rich nations. The upshot of the regional analysis is the market will rebound once the lockdown across the world is over. However, it will take a considerable time to put the market in a profitable condition.

KEY INDUSTRY PLAYERS

Growing Energy Security Concerns to Aid New Entrants in the Market

Government entities across the world are emphasizing on mitigating carbon footprint through technological advancement. Enhanced oil recovery (EOR) is a highly coveted technology, which aids to recover a substantial amount of oil  not recovered  through the primary and secondary methods. American companies constitute a larger share in the market on account of the extensive adoption of EOR in North America. The technology not only helps to achieve the production targets but also saves capital cost in drilling new wells. In the last century, EOR gained momentum across the world to meet the growing demand for hydrocarbons and reduce capital expenditure on new projects. Companies are extensively researching in attaining higher efficiency with minimal costs to attract operators. In addition to this,  growing concerns of environmental damage due to exponential drilling activities are likely to provide profitable opportunities to the new entrants in the market, according to the enhanced oil recovery market study.

List of Key Companies Profiled:

• Chevron (United States)


• Oxy (United States)


• BP (United Kingdom)


• Husky Energy (Canada)


• ConocoPhillips (United States)


• China National Petroleum Corporation (China)


• China Petrochemical Corporation (China)


• Cairn Oil & Gas (India)


• Lukoil (Russia)


• Petrobras (Brazil)


• Ecopetrol (Colombia)


• Petroleum Development  Oman (Oman)

KEY INDUSTRY DEVELOPMENTS:

• In July 2021, Petrofac has secured work for the Ithaca Energy Captain field worth around USD 17 million. The project is expected to recover around 40 million barrels of oil equivalent and will be responsible for the commissioning, fabrication, and construction of the new topsides development, providing onshore and offshore works.


• In July 2021, Sinopec started one of china’s largest carbon capture, utilization, and storage (CCUS) project. The company is planning to execute 24 CO2  EOR projects involving the reinjection of carbon dioxide to a targeted zone with a total of 25 million tonnes of oil in place. Sinopec further plans to reinject 10.68 million tonnes of carbon dioxide over the next 15 years and is anticipated to enhance the total oil production by around 22 million barrels.


• In May 2021, Talos Energy has announced to drill the Tornado Attic well with Seadrill’s West Neptune drillship in the deepwater Gulf of Mexico. The company projects that the Tornado Attic well is set to enhance its waterflood enhanced oil recovery project in the Tornado field and it anticipates effectively increase the productivity by around 25 to 35 million barrels oil equivalent (mboe) from the field.


• In May 2021, Energy service firm TechnipFMC declared a contract for the Captain enhanced oil recovery (EOR) project with Ithaca Energy in the North Sea, U.K. TechnipFMC is selected to fabricate, manufacture, and deploy subsea equipment such as umbilicals, water injection flexible flowline, rigid riser caisson, and other related equipment.

FUTURE OUTLOOK

The crumbling global economy on account of the spread of epidemic coronavirus will set back the growth of  businesses across the world. The hydrocarbon industry plays a crucial role in shaping the economy of the world and is currently facing serious threats due to economic slowdown. However, the market will certainly bounce back to its path of progress once the pandemic is contained. Enhanced oil recovery (EOR) is a modern production technique used to access oil reserves beyond the secondary method. Furthermore, many countries are aggressively attempting to increase domestic production to mitigate imports of oil. Also, in the  carbon dioxide (CO2) EOR method is gaining  popularity on account of environmental concerns. This method assists in reducing carbon emission through carbon sequestration and storage, and there are incentives to sequester CO2. Therefore, EOR is a cost effective method to enhance the production of hydrocarbon to meet the growing demand.

REPORT COVERAGE

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The enhanced oil recovery market report offers an elaborative analysis of numerous factors affecting this market, globally. These include opportunities, growth drivers, threats, key developments, and restraints. In addition to this, it further helps in analyzing, segmenting, and defining the market based on different segments such as casing type and application. It strategically analyzes several strategies such as product innovations, mergers, alliances, joint ventures, and acquisitions adopted by players in the industry. The comprehensive reports also provides a detailed qualitative analysis on the impacts of COVID-19 outbreak on the growth of the oil & gas industry.

Besides this, the report provides a comprehensive analysis of market dynamics, emerging trends, and the competitive landscape of the enhanced oil recovery industry. Key insights offered in the report are the adoption trends of residential industry analysis by individual segments, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, Porter’s five forces analysis, and key industry trends.

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