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The market dynamics of the fracking chemicals industry are characterized by a complex interplay of various factors that influence supply, demand, and overall market trends. Fracking, short for hydraulic fracturing, has become a widely used method for extracting oil and natural gas from unconventional reservoirs. As a result, the demand for fracking chemicals has surged, creating a dynamic market environment. One of the key drivers of this market is the global energy demand, which continues to rise, compelling the oil and gas industry to explore and exploit unconventional resources. The increasing adoption of fracking as a viable extraction method has significantly contributed to the growth of the fracking chemicals market.
Moreover, regulatory frameworks play a crucial role in shaping the market dynamics. Governments around the world are grappling with the environmental concerns associated with fracking, leading to the implementation of stringent regulations. This has a direct impact on the type and quantity of chemicals used in the process. Market players in the fracking chemicals industry need to stay abreast of evolving regulations to ensure compliance and adapt their product offerings accordingly. The continuous evolution of environmental policies and the public's increasing awareness of environmental issues further contribute to the volatility of the market.
In addition to regulatory factors, the economic landscape plays a pivotal role in shaping market dynamics. The oil and gas industry is inherently cyclical, influenced by factors such as geopolitical events, global economic conditions, and oil price fluctuations. These variables directly impact investment decisions and exploration activities, consequently affecting the demand for fracking chemicals. Economic downturns can lead to a reduction in exploration budgets, impacting the overall market for fracking chemicals.
Technological advancements also significantly influence the fracking chemicals market. Ongoing research and development efforts aim to enhance the efficiency and environmental sustainability of fracking operations. Innovations in chemical formulations that reduce environmental impact, water usage, and overall operational costs gain traction in the market. Market participants need to invest in research and development to stay competitive and meet the evolving needs of the industry.
Furthermore, the market dynamics are shaped by the competitive landscape. The fracking chemicals market is characterized by the presence of several key players, each vying for market share. Mergers, acquisitions, and strategic partnerships are common strategies employed by companies to strengthen their position in the market. Additionally, the emergence of new entrants and the potential for disruptive technologies further intensify competition.
Geographical factors also contribute to the market dynamics, as the demand for fracking chemicals varies across regions. Regions with abundant shale resources and favorable economic conditions witness higher demand for fracking chemicals. The availability and cost of raw materials also play a role in determining the market dynamics in different regions.
Fracking Chemicals Market Highlights:
Fracking Chemicals Market Overview
The fracking chemicals market is expected to register a CAGR of 6.54% during the forecast period, 2021-2030. Fracking chemicals are the chemicals used in drilling operations along with water and sand to increase the extraction efficiency of hydrocarbons. The composition of the fracking fluid (fracking chemicals, water, and sand mixture) varies with each industry player depending on the availability of water in the manufacturing facility and regulations instructed by local as well as state governments. The hydraulic fluid can be water-based, oil-based, or foam-based. The fracking chemicals help to increase the extraction of oil and natural gas per well by hydraulic fracturing of the rocks by pressurization, thereby reducing the total number of wells needed to extract resources. Fracking chemicals also allow the commercialization of low permeability reservoirs in which oil and gas are not easily found for extraction. Fracking chemicals perform several functions such as a carrier, solvent, biocides, scale inhibitor, friction reducer, additive, corrosion inhibitor, and non-ionic surfactants. Rising demand for oil & gas across the globe owing to the growing fuel & energy demand on account of expanding population is the major growth driver to the global fracking chemicals market. Additionally, shifting trend toward horizontal drilling owing to its systemic mechanism to recover the unusual shale reserves with hydraulic fracturing technology is also contributing to the growth of the fracking chemicals market. Besides this, the continued development of unconventional sources of oil and gas in order to ensure energy security and to lessen dependence on foreign oil imports in many countries are also propelling the growth of the product market significantly. However, many fracking chemicals are identified as toxic and possess high VOC content by the US Environmental Protection Agency (EPA), which may restrict market growth during the forecast period. Moreover, various companies are investing in R&D and are striving toward the development of eco-friendly fracking chemicals. For instance, Halliburton Company has initiated the production of bio-based drill muds from guar gum to expand its product portfolio and meet the stringent regulations by the US EPA against the use of toxic fracking chemicals. Furthermore, non-toxic drilling fluids are developed, such as foam-based fluid (FBF), as an alternative to toxic oil-based fluid (OBF), which is difficult to remove from the drill hole. These research & development activities are expected to exhibit intense growth opportunities to the players operating in the global fracking chemicals market during the forecast period. Global Fracking Chemicals Market Share in 2017, by Type
Source: MRFR Analysis Market Segmentation The global fracking chemicals market has been segmented by type, fluid type, and region. On the basis of the function, the global fracking chemicals market has been segmented into the gelling agent, friction reducer, corrosion inhibitor, biocide, surfactant, scale inhibitor, clay stabilizer, cross-linkers, pH adjusting agent, iron control agent, and others. By fluid type, the global fracking chemical market has been categorized into water-based, oil-based, and foam-based.
Regional Analysis
The global fracking chemicals market has been segmented into five regions, namely Asia-Pacific, North America, Europe, Latin America, and the Middle East and Africa. North America accounted for the largest share of the global fracking chemicals market in 2018 and is expected to show significant growth during the forecast period. The presence of a developed drilling industry due to major shale gas revolution in the US is majorly contributing to the demand for fracking chemicals in the region. Furthermore, advanced technology available to drill and recover oil & gas from unconventional resources is also boosting the market growth at an exponential rate. Europe is another major market for fracking chemicals due to growing offshore oilfield activities in the North Sea for exploring newer reserves. Furthermore, the high rate of deployment of the mud-cap drilling technique in the region is also likely to create new growth opportunities for the fracking chemical companies in the next five years. The market in Asia-Pacific is expected to register the highest CAGR during the forecast period. Rapid industrialization & urbanization in emerging economies of the region have vastly increased the demand for fuel and energy and thus, positively influencing the oilfield industry. The majority of oil & gas exploration and production activities are centered in China, Indonesia, South Korea, Australia, and India. The Middle East & Africa is expected to showcase increasing demand for fracking chemicals during the forecast period due to the high concentration of oilfield reserves and established oil & gas industries in the region. Latin America held the least share of the global fracking chemicals market in 2018 and is also expected to show sluggish growth during the forecast period due to the lesser number of oil & gas reserves in the region.
Key Players
Some of the major players operating in the global fracking chemicals market are AkzoNobel N.V. (The Netherlands), Ashland Inc. (US), Baker Hughes Incorporated (US), Halliburton. (US), Schlumberger Limited (US), BASF SE (Germany), Chevron Phillips Chemical Company (US), Clariant International AG (Switzerland), DowDuPont (US), Albemarle Corporation. (US), FTS International Inc. (US), Calfrac Well Services Ltd. (Canada), and EOG Resources, Inc. (US).
Recent Development
October 2021- Liberty Oilfield Services Inc., a Denver-based company, has announced the completion of acquiring a prominent supplier of proppant delivery equipment, software, and logistics solutions, PropX. The company reported a 12% in third-quarter revenue this year. Liberty becomes the send-largest provider of natural gas & oil producers with fracking and well-completion services, with this deal worth USD90 million. The deal comprised of USD5 million in cash and the other 5.8 million shares of Liberty’s common stock having net valued of over USD76.5 million based on a 30-day average closing share price of USD13.08. PropX, established in 2016, is a prominent supplier of last-mile proppant delivery solutions, including logistics software and proppant handling equipment across the North American region. The company offers advanced eco-friendly technology coupled with benefits such as canceling out emissions, reducing noise, driving logistics efficiency, wellsite proppant handling equipment, and better dry and wet sand containers. April 2021- California is set to ban new oil fracking by 2024 under an executive order that Gov. Gavin Newsom, announced that with small fanfare following months of confusing mixed messages.The order came as a shock to the oil firms in the state but a narrow victory for environmentalists, who have been forcing Newsom to do more to combat fossil fuels, pollutions, and climate change pollution in disadvantaged communities. Intended Audience
- Fracking chemicals manufacturers
- Traders and distributors of fracking chemicals
- Research and development institutes
- Potential investors
- Raw material suppliers
- Nationalized laboratory
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