The global oilfield chemical market is expected to reach $33.94 billion by 2025, with a steady compound annual growth rate (CAGR) of 5.1 per cent between 2018 and 2025, according to a recent market analysis by Frost & Sullivan, a research and consulting firm.
The latest analysis, ‘Global Oilfield Chemicals Market, Forecast to 2025’, reveals that the development of innovative, advanced oilfield chemicals that have superior performance characteristics and are eco-friendly have paved the way for increased application use, premium prices, and market growth.
The discovery of new oil and gas fields across different regions along with shale gas and enhanced oil recovery (EOR) expansion activities will further augment growth prospects, stated Frost & Sullivan in its report.
Ganesh Dabholkar, senior analyst, chemicals and materials in infrastructure and mobility, said: "Rapid growth and investment by global and regional oilfield service companies, as a result of exploration and production participants augmenting their business in high-growth economies of China, India, Brazil, Mexico, and Southeast Asia, will fuel an uptick in oilfield service activities and volume demand for oilfield and enhanced oil recovery (EOR) chemicals."
The market is currently in a growth stage and presents extensive opportunities for oilfield chemical manufacturers. However, to compete effectively, Dabholkar recommends participants engage in high-level research and development to introduce tailor-made, cost-effective, eco-friendly produce formulations that will work in extremely challenging operational environments such as complex rock formations.
Further growth opportunities manufacturers can take advantage of include:
• Offering highly customised pre- and after-sales technical services to help customers achieve maximum operational efficiency and effectiveness.
• Expanding organically (through manufacturing and/or distribution facility expansions in specific high-growth markets) to cater to the rising local demand and augment volume sales.
• Establishing strategic mergers and/or acquisitions to develop their business, either through a quick development of the product portfolio or by leveraging an established manufacturing or distribution facility base of the acquired company.
• Oilfield service companies focusing on backward integration to develop their own portfolio of oilfield chemicals that would cater to their captive requirements. This would aid profitability and supply chain capabilities.
Dabholkar said: "One of the biggest challenges facing the oilfield chemical industry is a slowdown in oil and gas production due to prolonged rig maintenance work. This has an adverse effect on the extent of oilfield services activities and impacts demand for oilfield chemicals."
“Furthermore, economic turmoil in some countries has also curtailed investment in oilfield services and, in turn, the demand for oilfield chemicals,” he added.-TradeArabia News Service