Drilling chemicals serve a critical role in drilling and pumping throughout the entire oil and gas production process. Drilling chemicals aid in drilling, cementing, fracturing, and production by increasing drilling efficiency, decreasing labor and repair costs, and protecting the drilling equipment. They improve production rates, reduce corrosion and scale, disintegrate drilling fluids, and help suspend cuttings in the drilling fluid.
The global drilling chemicals market is estimated to be valued at US$ 13370.38 Mn in 2023 and is expected to exhibit a CAGR of 7.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Enhanced oil recovery (EOR) presents a major market opportunity for drilling chemicals. EOR is crucial for maximizing oil extraction from fields facing decline in production. Drilling chemicals play a vital role in EOR techniques such as polymer flooding, surfactant-polymer flooding, and alkaline-surfactant-polymer flooding by improving sweep efficiency and enhancing mobility of the displacing fluid. Rising focus on increasing declining oil field production through EOR techniques is driving demand for specialized drilling chemicals. Improved solutions from key players for applications in EOR are expected to boost the drilling chemicals market size over the forecast period.
Porter's Analysis
Threat of new entrants: The drilling chemicals market requires high capital investments and technical expertise which poses significant barriers for new companies. Additionally, existing players have established distribution networks and supply chain reducing threat of new entrants.
Bargaining power of buyers: Presence of numerous buyers and providers in the drilling chemicals market limits buyer power. Commoditization of products also reduces buyer power.
Bargaining power of suppliers: Due to availability of substitutes and not highly differentiated products, supplier power is relatively low in the drilling chemicals market. However, suppliers of generic chemicals not specific to drilling have some influence over prices.
Threat of new substitutes: Threat of substitutes is moderate as the core purpose of drilling cannot be replaced. However, certain drilling chemicals have substitutes which could impact company market shares over the long run.
Competitive rivalry: The global drilling chemicals market is consolidated with top players accounting for major market share. However, the market remains highly competitive due to consistent need of drilling chemicals from oil & gas industry.
SWOT Analysis
Strengths: Established production facilities and global presence of key players. Drilling chemicals are essential for exploration and production activities.
Weaknesses: Fluctuating raw material costs affect profitability. Stringent environment regulations regarding disposal of drilling waste increases compliance costs.
Opportunities: Increasing exploration & production (E&P) activities, especially in deepwater and unconventional reserves, provide opportunities for advanced drilling solutions.
Threats: Volatility in crude oil prices hampers E&P budgets and drilling schedules. Strict environment norms in some countries.
Key Takeaways
The Global Drilling Chemicals Market Size is expected to witness high growth with increasing deepwater and offshore E&P activities globally. The global drilling chemicals market is estimated to be valued at US$ 13370.38 Mn in 2023 and is expected to exhibit a CAGR of 7.7% over the forecast period 2023 to 2030.
Regional analysis: North America accounted for around 30% market share in 2023 led by increasing drilling of oil and shale gas reserves especially in the US. The Permian Basin is a key production region driving regional demand. The market in Europe, Middle East, and Africa is expected to grow moderately supported by mature oilfields in the North Sea and new discoveries offshore Africa.
Key players: Key players operating in the drilling chemicals market are ADM, Bayer AG, BASF SE, PT Darya-Varia Laboratoria Tbk, Citra Nusa Insan Cemerlang PT, Sido Muncul PT, The Tempo Group, Pfizer Inc., Nature€TMs Sunshine Products, Inc., Amway, and Glanbia PLC.
For More Insights, Read: https://www.newswirestats.com/drilling-chemicals-market-demand-growth-and-regional-outlook-by-2030/
