Oilfield Chemicals Market Size, Share & Industry Analysis, By Chemical Type (Demulsifiers, Corrosion Inhibitors, Water Clarifiers, Biocides, Scale Inhibitors, Paraffin Inhibitors, Hydrogen Sulfide Scavengers, Gas Well Foamers, and Others), By Application (Drilling, Cement, Stimulation, and Production), and Regional Forecast, 2024-2032

The global oilfield chemicals market size was valued at USD 19.25 billion in 2023 and is projected to grow from USD 20.60 billion in 2024 to USD 36.06 billion by 2032, exhibiting a CAGR of 7.2% during the forecast period. North America dominated the oilfield chemicals market with a market share of 55.58% in 2023. Moreover, the oilfield chemicals market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 12.52 billion by 2032, driven by rising oil production levels and exploration initiatives, particularly in shale gas and deep-water drilling sectors.

The oil chemicals are used in exploration and drilling of oil & gas to improve the productivity and efficiency of the oil drilling process. Increasing product demand in various petroleum operations such as well stimulation, drilling, cementing, production, hydraulic fracturing, and enhanced oil recovery is likely to boost the oilfield chemicals market growth. Rapid rise in oil production and exploration activities increases the demand for various drilling projects.

Drilling fluids are another important class of chemicals employed predominantly in the exploration phase. Drilling fluids perform various tasks, including applying hydrostatic pressure to prevent formation fluids from entering wells and maintaining the temperature and cleanliness of the drill bit to maximize penetration level.

The global COVID-19 pandemic has been unprecedented and staggering, with oilfield chemicals experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Although the global petroleum industry has recovered from the major demand shock created by pandemic, there is still a high degree of uncertainty owing to the emergence of new, more contagious virus variants. On the supply side, increased uncertainty has put producers in a dilemma, leading to investment choices that may result in either too much idle capacity or insufficient oil to meet demand.

Oilfield Chemicals Market Trends

Rising Use of Eco-friendly Oilfield Chemicals to Propel Market Growth 

Chemicals with lower exposure toxicity, reduced flammability or flashpoint, greater biodegradability, lower bioaccumulation, and sustainability in both application and production are examples of green solutions in the oil fields. Amid rising environmental concerns, manufacturers are adopting and developing new products that are cleaner and less damaging to the environment. For example, Nouryon, one of the key players, launched a new product category of demulsifiers that offers oil producers a more suitable option to separate crude oil from combination of natural gas and water. The discovery of new oil and gas resources in various locations, as well as the increase in shale gas and enhanced oil recovery (EOR) activities, are likely to improve growth prospects. Rapid growth and investment by global and regional oilfield service companies will fuel an increase in oilfield service activities and volume demand for these chemicals as exploration and production participants expand their operations in high-growth economies such as China, India, Brazil, Mexico, and Southeast Asia. More chemical producers are anticipated to develop oilfield chemicals that are sustainable and environmentally friendly as governments' increased focus on clean energy results in tougher legislation.

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Oilfield Chemicals Market Growth Factors

Petrochemicals to Surge Global Oil Demand to Offer Market Growth Opportunities

A major share of petrochemicals produced across the globe is consumed to produce plastics such as polyethylene, polypropylene, and polystyrene, among others. Demand for these plastics has significantly increased over the past few decades, especially in major end-use industries such as plastic packaging for food and other commercial products. This rising trend is likely to continue during the forecast period, especially in developing countries of Asia Pacific, Latin America, and Africa. Plastics extend the shelf life of food, reducing food waste while their low weight reduces fuel consumption when transporting goods. It offers several such immediate economic benefits and can assist in resource optimization, which is critical in the growth of emerging economies. Due to the increase in demand for petrochemical products, petrochemicals are expected to be the dominant contributor to oil consumption during the forecast period. Major oil-producing countries are aware of this trend and are establishing petrochemical complexes to capitalize on the cheap raw materials accessible to them. As people's purchasing power and standard of life improve in emerging economies, demand for petrochemicals is expected to rise in parallel. As a result, the market will benefit and expand.

RESTRAINING FACTORS

Transitioning to Renewable Energy to Hamper Market Growth 

Governments around the world are expected to take more aggressive measures to accelerate the transition to renewable energy during the forecast period. As a result of the pandemic and the subsequent drastic changes it caused to the oil and gas industry, a rising number of countries have started to focus on the potential of long-term recovery as a means of accelerating progress toward a low-carbon future.

Further fuel efficiency improvements, considerably higher electric vehicle penetration, and new rules to limit oil consumption in the power sector are anticipated to reduce overall oil demand during the forecast period since the fuel sector is the primary demand generator. These factors are expected to reduce demand for crude oil, thereby hampering the industry growth.

Oilfield Chemicals Market Segmentation Analysis

By Chemical Type Analysis

Demulsifiers Segment to Dominate Market Due to its Ability to Separate Oil and Water in Drilling Process

Based on chemical type, the market is segmented into demulsifiers, corrosion inhibitors, water clarifiers, biocides, scale inhibitors, paraffin inhibitors, hydrogen sulfide scavengers, gas well foamers, and others.

The demulsifiers segment is expected to dominate the market in the forthcoming years and grow at a CAGR of 8%. Demulsifiers are used to separate water and oil from the oil field. They create changes in oil density and make separation easier by reducing corrosion of the pipelines. Thereby resulting in a reduction in the overall equipment maintenance cost.  Factors that may be incorporated in the extensive application of water separation and oil from the crude water-oil emulsions, thus reducing the chances of adultery in the oil produced.

Corrosion inhibitors is the fastest growing segment during the forecast period. Corrosion inhibitors are applied to prevent metal equipment from corrosion damage when the metal surface is exposed to corrosive gases such as carbon dioxide, oxygen, and hydrogen sulfide.

By Application Analysis

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Drilling Segment to Hold Major Share Due to Increasing Global Demand for Oil and Gas

On the basis of application, the oilfield chemicals market is segmented into drilling, cement, stimulation, and production.

The drilling application segment dominated the market share in 2023 and may continue its dominance during the forecast period. The increase in oil gas operations through the development of hydraulic fracturing and drilling processes shall drive the industry growth. In the drilling segment, these chemicals stabilize temperatures and prevent contaminated products from entering the drilling fluid system. They are also additives to the drilling fluid used to maintain hydrostatic pressure and to clear the wellbore from cutting. In addition, technological advances and the rise in drilling activities are expected to increase the product demand.

The use of oil field chemicals in the cement industry is a critical component of oil and gas drilling operations. These chemicals are designed to improve the quality, strength, and durability of concrete, which is used in a variety of applications, including wellbore cementing, casing, and cementing plugs. Fluid loss additives serve to prevent the loss of water from the cement mix as it sets and hardens, mitigating the risk of cracking and shrinkage. Retarders and accelerators, on the other hand, help extend or speed up the setting time of the cement, depending on the application's requirements. The use of oil field chemicals in the cement industry has revolutionized oil and gas drilling operations, improving well integrity, reducing costs, and enhancing the safety and efficiency of the drilling process.

REGIONAL INSIGHTS

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The market in North America is expected to dominate the global oilfield chemicals market during the forecast period. This is attributed to the increase in oil gas operations through the development of hydraulic fracturing and drilling processes. In addition, technological advances and rise in drilling activities are expected to increase the regional growth during the forecast period. The growing exploration and production of shale gas in the U.S. is expected to increase oil-based chemicals.

The oilfield chemicals market in Asia Pacific may witness the highest growth rate in terms of value during the forecast period. Increase in consumption and demand for shale gas from various industries, rapid urbanization, and population growth in the region are attributed to industry growth. The regional market growth is mainly attributed to rising exploration activities in India, Mainland China, South China Sea, and Southeast Asian countries. The growing demand for crude oil and petroleum and huge investment in the energy sector to develop the economy is leading the Asia Pacific region.

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The Europe oilfield chemicals market size is expected to witness a significant growth rate during the forecast period. The growth is attributed to increased shale gas production and exploration along with growing demand for petroleum-based fuel from the automotive or transportation industry. According to the CEIC Data, in December 2019, the crude oil production in Germany was reported at 7.836 Barrel/Day. These factors may drive regional industry growth.

Latin America and the Middle East & Africa are rapidly growing markets. These markets are mainly attributed to increasing oil exploration and drilling activities to meet the global demand for natural gas and crude oil. Few companies are looking into domestic manufacturing in Saudi Arabia on account of the country’s strategic location and proximity to other OPEC countries.

List of Key Companies in Oilfield Chemicals Market

Novel Product Innovation and Acquisition Remains the Key Market Strategies by the Companies

The key oilfield chemical companies operating in the industry are Nouryon, Ashland, BASF SE, Dow and Chevron Phillips Chemical Company LLC., and others. Most of the players have been present in the industry and have large production capacities for a very long time. Companies are collaborating, acquiring, and introducing new products to gain a competitive edge in the value chain.

Several other companies, such as Halliburton, Huntsman International LLC., Baker Hughes, Solvay, Schlumberger Limited, Innospec, The Lubrizol Corporation, Kemira, and Flotek Industries, Inc. (Texas, U.S.), are active participants in the market.

LIST OF KEY COMPANIES PROFILED:

• Halliburton (U.S.)


• Solvay (Belgium)


• NALCO (U.K.)


• BASF SE (Germany)


• The Lubrizol Corporation (U.S.)


• Albemarle Corporation (U.S.)


• Kemira (Finland)


• Clariant (Switzerland)


• Dow (U.S.)


• Stepan Company (U.S.)


• Croda International Plc (U.K.)


• Pon Pure Chemicals Group (India)

KEY INDUSTRY DEVELOPMENTS:

• May 2021 – Schlumberger and NOV collaborated to increase the adoption of automated drilling solutions by drilling contractors and oil & gas operators. The strategic partnership will improve safety, enable automation of manual workflows, and improve drilling operations efficiency.


• November 2020 -The Industrialization and Energy Services Company (TAQA) expanded its oilfield chemicals capabilities by acquiring 25% stake in OPT Petroleum Technologies Company Limited.


• March 2022 - Clariant's catalysts business secured three new contracts from China's Lihuayi Group for its upcoming petrochemical production units. The agreements included three high-performance catalysts for the production of ethylene, styrene, and propylene.


• January 2022 - BASF signed a joint development agreement with China BlueChemical and Wuhuan Engineering to improve the low-carbon development and utilization of marine gas resources extracted from the South China Sea. BASF will use its expertise in catalyst development to improve the process’ energy and carbon efficiency beyond the existing commercial catalyst and process technology. The partnership aims to promote lower-carbon development and utilization of marine gas resources and achieve an economically competitive and environmentally friendly commercial process.


• September 2022 - Clariant Oil Services, a leading provider of chemical solutions, launched the D3 PROGRAM to help the oil & gas industry become more sustainable. The program has three parts: Decarb, Densify, and Detox. The goal of the D3 PROGRAM is to help operators reduce carbon emissions and enhance safety while continuing their operations without disruptions. By leveraging new technologies and environmentally friendly materials, Clariant is helping the industry become more sustainable.

REPORT COVERAGE

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The global oilfield chemicals market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, sources, products, and applications. Also, the report offers insights into market trends and highlights vital industry developments. This report provides historical estimates & revenue forecasts at global, regional, and country levels and analyzes the industry's latest market dynamics and opportunities. In addition to the factors mentioned above, the report encompasses various factors contributing to the market's growth in recent years.

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