June 18, 2024
Production Chemicals Market

Production Chemicals Market is Estimated to Witness High Growth Owing to Rising Production from Conventional and Unconventional Reservoirs

The production chemicals market encompasses various chemicals used during exploration and production of oil and gas from conventional and unconventional reservoirs. Production chemicals are specially engineered chemicals used at various stages of oil & gas production to enhance production, maximize recovery and optimize cost. Some key types of production chemicals include demulsifiers, corrosion inhibitors, scale inhibitors, asphaltene inhibitors, biocides, scavengers, etc. With increasing focus on unconventional oil & gas reserves such as shale gas and oil sands in recent years, demand for production chemicals have witnessed a significant rise owing to the complex chemistry involved in extracting oil & gas from such reservoirs.

The Global production chemicals market is estimated to be valued at US$ 7.44 Bn in 2024 and is expected to exhibit a CAGR of 6.2% over the forecast period 2024 To 2031.

Key Takeaways

Key players: Key players operating in the production chemicals market areASF SE, Clariant, Halliburton, Ecolab, Schlumberger Limited., Akzo Nobel N.V., Baker Hughes, Croda International Plc, Dow, The Lubrizol Corporation, Stepan Company, Kemira, NALCO India., Solvay, Huntsman International LLC, Chemcon Speciality Chemicals Ltd., Universal Oil Field Chemical Pvt.Ltd, Imperial Oilfield Chemicals Private Limited, REDA Oilfield, and Indian Oil.

Key opportunities: Increasing exploration and production activities in regions such as Asia Pacific, Middle East & Africa which are anticipated to offer opportunities for Production Chemicals Market Share. Rapid growth in shale gas production especially in North America is likely to propel demand.

Global expansion: Key players are focusing on expanding their production facilities and distribution network in high growth regions to cater to increasing demand. Manufacturers are also investing in research & development to develop novel production chemicals suitable for extraction from complex reservoirs.

Market drivers:

Rising production from conventional and unconventional reservoirs is driving demand for specialized production chemicals to enhance oil recovery. Increasing difficulty in extracting oil & gas from mature fields has necessitated the use of production chemicals to maximize productivity. Growing consumption of oil & gas globally due to lack of alternate fuels is a major factor augmenting the production chemicals market.

PEST Analysis

Political: The production chemicals market is impacted by government regulations on the use and disposal of chemicals, especially in the oil and gas industry. Strict environmental laws can increase compliance costs for companies.
Economic: Factors such as global GDP growth, crude oil prices, economic conditions impact capital spending of end-use industries which in turn influence demand for production chemicals. Higher oil prices make production of shale and offshore reserves economically viable.
Social: Population growth and rising incomes increase global energy demand. Social awareness about environmental protection and sustainable production prompt companies to develop eco-friendly chemical solutions.
Technological: advances in extraction techniques for unconventional reserves boost chemical consumption. Investments in research facilitate development of chemicals that improve productivity while lowering health, safety and environmental risks.

The Asia Pacific region accounts for the largest share of the global production chemicals market in terms of value, led by China and India. These countries witness considerable oil and gas and petrochemical production activities which drives chemical consumption. North America including the United States is another major regional market fueled by shale gas drilling and refining operations. Regarding growth rate, the Middle East and Africa region is projected to experience the fastest expansion during the forecast period supported by rising crude oil extraction from the countries in this market region. The production from oilfields such as Ghawar in Saudi Arabia and others in Iraq are expected to strengthen the demand for production chemicals in the MEA region.

The oil and production activities in the countries of Latin America particularly Brazil, Venezuela, Argentina and Mexico contribute to higher sales of production chemicals in the Latin America region in terms of value. However, the economic downturn in Brazil and Venezuela in the recent past has impacted the regional market growth temporarily. Now with an improvement in macroeconomic conditions, the demand pattern in Latin America for production chemicals is estimated to recover.

*Note:
1. Source: Coherent Market Insights, Public Source, Desk Research
2. We have leveraged AI tools to mine information and compile it