Oilfield Chemicals By Freedonia Group Inc

1. Oilfield Chemicals
Freedonia Group Inc
Report Highlight

2. US demand to remain strong through 2017
US demand for oilfield chemicals is expected to remain strong through 2017 following double digit
annual growth in recent years. Newer technologies such as multistage hydraulic fracturing and
horizontal drilling have allowed development of shale gas and tight oil plays, resulting in a
significant improvement in the country’s oil and gas outlook. Following decades of declines, oil
production has begun to increase again. Natural gas is abundant and prices are low, spurring
changes across the entire US manufacturing sector. However, rapid growth has also led to problems
with product shortages, rising material costs, and concerns about water use. In addition, other
environmental concerns remain, and the oilfield chemical industry will be called upon to provide
high performance products with an increasing level of environmental friendliness.
Demand high for chemicals used in hydraulic fracturing
Chemicals used in hydraulic fracturing have become the largest segment of the US market. The
boom in fracturing activity is expected to persist, with both the number of fractured wells and the
average volume of fluids per well continuing to increase. Of the chemicals used in fracturing, guar
gum has presented unique challenges to the industry due to a severe price shock in 2012. Helping
to offset the oilfield chemical industry’s reliance on this commodity will be the rising use of
slickwater fracturing as well as efforts to find alternative polymers that can match guar’s
performance. Growth is expected to be above average for “green” fracturing products. This will
benefit new formulations that use advanced, biodegradable chemicals in place of conventional high
volume products such as biocides and surfactants.

3. Drilling activity to fuel US demand
Drilling activity is expected to remain elevated in the US through coming years, driving healthy
demand for drilling and completion fluids and the chemicals they contain. The ability to increase
drilling efficiency and reduce rig time, improve well productivity through reduction of formation
damage, and better the environmental profile and disposal requirements of these fluids will all be
of significant concern. As the performance of water-based drilling fluids continues to improve, they
will see increasing use even in difficult drilling conditions such as the Haynesville Shale, where oil-
based muds have been the preferred choice. However, demand for oil-based muds will remain
healthy for the foreseeable future. Offshore drilling, which is expected to rebound going forward,
will support strong demand for both synthetic drilling fluids and high density completion brines.
Other chemicals important in oilfield applications -- such as cementing chemicals, production
chemicals, and enhanced oil recovery (EOR) products -- will also see healthy growth. Field
production of oil and gas in the US is expected to continue climbing, while the amount of water and
other undesirable contaminants rises as well. Both factors will necessitate greater use of
production chemicals including biocides, demulsifiers, and corrosion and scale inhibitors. The
mature nature of most large oilfields in the US and continued high oil prices will support the use of
EOR practices. Additionally, interest is increasing in the use of carbon dioxide EOR as a method of
carbon sequestration.

4. About the Publisher
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The Freedonia Group is a leading international industrial research company
publishing more than 100 studies annually. Since 1985 we have provided
research to customers ranging in size from global conglomerates to one-person
consulting firms. More than 90% of the industrial companies in the Fortune
500 use Freedonia Group research to help with their strategic planning. Each
study includes product and market analyses and forecasts, in-depth discussions
of important industry trends, market share information and profiles of the
leading industry players.

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