Oilfield Stimulation Chemicals Market Frontiers Exploring Sustainable Horizons
Oilfield stimulation chemicals are used to enhance oil and gas extraction from unconventional reservoirs such as shale formations. These chemicals help in increasing the permeability of the target formation by cracking or etching the rock and opening up existing pores and cracks. The commonly used stimulation chemicals include acids, biocides, breakers, scale inhibitors, and others which play a vital role in increasing production from mature fields.
The oilfield stimulation chemicals market is estimated to be valued at US$ 4.27 Bn in 2023 and is expected to exhibit a CAGR of 3.3% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights
Market key trends: One of the key trends spurring growth in the oilfield stimulation chemicals market is increasing shale gas activities across regions. Shale gas formations produce more with sophisticated stimulation techniques such as hydraulic fracturing which requires a considerable amount of stimulation chemicals. As per the International Energy Agency, the share of natural gas from shale and tight resources has increased by over 600% from 2000 to 2018. A surge in activities around shale exploration and production will augment the demand for stimulation chemicals over the forecast period. Moreover, the shifting focus towards increasing production from mature oilfields through redevelopment and enhanced oil recovery techniques will further support market growth.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the oilfield stimulation chemicals market is moderate. High initial capital investment requirements, the need for specialized R&D capabilities and economies of scale pose barriers for new players.
Bargaining power of buyers: The bargaining power of buyers in the oilfield stimulation chemicals market is high. The presence of many regional and global players provides buyers with significant bargaining power over prices.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as key raw materials for stimulation chemicals like acids, hydrochloric acid are commoditized and available from numerous suppliers globally.
Threat of new substitutes: The threat of new substitutes is low as oilfield stimulation chemicals have few substitutes for maximizing oil and gas production from reservoirs.
Competitive rivalry: High as major players compete on product qualities, technical expertise, prices and production capacities.
SWOT Analysis
Strength: Large production capacities, wide geographical presence and diverse product portfolios give major players competitive advantage.
Weakness: Volatility in oil prices affects investments in exploration and production activities impacting demand. Stringent environmental regulations raise production costs.
Opportunity: Increasing shale gas and tight oil production drives demand. Growth in offshore E&P activities opens new revenue avenues.
Threats: Substitution threat from renewable energy sources poses long-term challenges. Geopolitical risks in major oil and gas regions affect business environment.
Key Takeaways
The global Oilfield Stimulation Chemicals Market is expected to witness high growth, exhibiting CAGR of 3.3% over the forecast period, due to increasing exploration & production (E&P) activities worldwide. North America dominates the market currently owing to ongoing shale oil & gas activities in the US. However, the Middle East & Africa is expected to witness the fastest growth through 2030 due to large hydrocarbon reserves and increasing investments in the region.
Regional analysis: The Middle East & Africa region is projected to witness the highest CAGR of around 4.5% during the forecast period, driven by the ongoing drilling activities and growing investments in exploration projects, especially by national oil companies. Countries like Saudi Arabia, UAE and Algeria are expected to remain hotspots.
Key players operating in the oilfield stimulation chemicals market are Baker Hughes, Schlumberger, Halliburton, BASF SE, Huntsman Corporation, Croda International Plc, AkzoNobel, The Dow Chemical Company, DuPont de Nemours, Inc., and Solvay.
