Market Trends of Fracking Chemicals Industry
This section covers the major market trends shaping the Fracking Chemicals Market according to our research experts:
Horizontal or Directional Segment Expected to Witness Significant Growth
Horizontal drilling is a technique in which drilling is done at an at least 80 degrees angular direction to the vertical wellbore. The technique involves hydraulic fracturing to extract oil or gas deposits, a process in which fracking fluid is injected at high pressure toward difficult rock formations. The process is generally carried out in the case of unconventional petroleum resources.
The process became a widely used technique, particularly after the US shale gas boom, when hydraulic fracturing became an indispensable part of gas extraction from tight unconventional resources. The shale gas production in the United States reached 26,139 billion cubic feet in 2020, an increase of around 70% over the last five years.
Furthermore, in other parts of the world too, unconventional petroleum production is expected to get a spike over the coming years. For example, in January 2022, CNOOC, China's veteran oil and gas industry player, announced plans to increase domestic unconventional oil and gas production in 2022. The domestic sources include three unconventional coal bed methane and tight gas projects, with a total peak output of 18,100 boe/d or 3.05 Mcm/day.
In November 2021, Saudi Aramco announced the commencement of the development of the Jafurah unconventional gas field, the largest non-associated gas field in Saudi Arabia with shale gas resources. The field is expected to commence production in 2025, with 200 million standard cubic feet per day (scfd).
Owing to such developments, the horizontal drilling segment is expected to get major opportunities in the near future.
North America Expected to Dominate the Market
The North American region is likely to continue as the largest market in the fracking chemicals industry due to the increased demand for crude oil and LNG, which is ultimately likely to be reflected in a high rate of petroleum production in the United States and Canada.
In the United States, tight oil production accounted for a significant share of the overall crude production in 2020, specifically from the prominent unconventional oil and gas players like Eagle Ford, Spraberry, Bakken, Wolfcamp, Woodford, etc. According to the US Energy Information Administration, crude oil production is expected to reach record-high levels in the country by 2023, reaching a forecast of 12.6 million barrels per day (b/d). The Permian Basin, which has a significant share of unconventional resources, is expected to steer the overall US crude oil production growth.
Furthermore, the US government invested around USD 20 billion annually toward boosting the value of new oil and gas projects in the last two decades, which increased companies' expected profits during the shale booms in the Bakken Formation, Haynesville Shale and Appalachian, Eagle Ford, and Permian Basins. Such initiatives by the government are expected to attract more private investments for production.
In January 2022, the Canadian Association of Petroleum Producers (CAPP) forecast a 22% increase in natural gas and oil investment in 2022 due to the increased global demand for oil and gas. The growth in oil sands investment (unconventional) in Canada is forecast to increase by around 33% to USD 11.6 billion in 2022 as compared to USD 8.7 billion in 2021.
Such developments are likely to make the region the largest market for the fracking chemicals industry.
