Oilfield Biocides Market

The growth of the global oilfield biocides market is mainly driven by the growth of the oil and gas industry due to increasing energy demand mainly in India and China on account of rapid industrialization. The increasing investment in exploration and production of unconventional resources due to rising concern regarding depleting conventional resources is likely to increase the adoption of hydraulic fracturing technology in the oil and gas industry. The surge in the use of hydraulic fracturing has resulted in increased demand for water, which is derived from rivers, lakes, ponds, and recovered from previous fracturing treatments, which is expected to fuel the demand for oilfield biocides.

The increasing oil & gas production and extraction activities in the developing countries of Asia-Pacific and the Middle East & Africa is likely to create lucrative opportunities for the players operating in the global oilfield biocides market.

However, increasing preference for renewable energy sources to reduce greenhouse gas emissions is expected to hamper the global market growth in the coming years.

Biocides are used in all the stages of oilfield development, including initial drilling of wells, production of oil and gas, and in all the aspects of maintenance of the oilfield, including storage of oil and natural gas in geological conditions (in salt caverns or depleted reservoirs). The presence of microorganisms in the oilfield negatively impacts the drilling operations by degrading petroleum hydrocarbons and increasing the oil density, sulfur content, and viscosity, which results in disruption in oil extraction and processing technology. This has resulted in increased demand for oilfield biocides in the oil and gas industry. Thus, the growth of the oil and gas industry is expected to be the major factor driving the demand for biocides and the growth of the global market.

The crude oil prices declined in 2014 and affected the growth of the oil and gas industry due to various factors such as rapid production growth in the US; global demand slowdown, particularly in Europe and China; strengthening US dollar; and continuous production by OPEC to support global oil prices. But with the slight recovery in crude oil prices owing to a reduction in production of crude oil by OPEC and rising global demand, the oil and gas industry has witnessed significant growth in the recent years. The growth of the oil and gas industry is mainly driven by an increase in energy demand mainly in India and China on account of rapidly expanding industrialization. According to OPEC, oil and gas collectively are expected to continue to cater to more than half of the global energy needs by 2040. The growth of the end-use industries including automotive, aerospace, and petrochemicals is likely to support the growth of the oil and gas industry despite shifting focus towards renewable energy sources. The global production of unconventional oil increased from 1 million cubic meters to around 3 million cubic meters in 2017, and that of natural gas increased from 4.3 billion cubic meters in 2014 to nearly 11 billion cubic meters in 2017.

Additionally, the major players operating in the global oilfield biocides market are emphasizing on strengthening their oilfield business. In November 2015, BASF proposed to reorganize its oilfield and mining solutions business to develop innovative and sustainable products to cater to the global demand and optimize yield. Also, steps taken by the US government in 2018 to open all the US coastal waters for oil drilling is likely to drive the growth of the oil & gas industry and consequently the demand for oilfield biocides in North America.

The increasing oil & gas production and extraction activities in the developing countries of Asia-Pacific and the Middle East & Africa such as India, China, Thailand, Malaysia, Indonesia, Kuwait, Saudi Arabia, and Iran on account of the rising demand for petroleum products, fuel, and energy in numerous applications is likely to drive the growth of the oil and gas industry and thus, the demand for oilfield biocides. For instance, in 2017, the Indonesian Husky-CNOOC Madura Limited, a subsidiary of CNOOC Limited, started operations in the BD field for gas production. The company aims at producing 100 million standard cubic feet of gas per day (MMSCFD) and 7,000 barrels of condensate per day from the BD field.

CNOOC Limited started production at the Weizhou 12-2 oil field Phase II project in the Beibu Gulf in the South China Sea, which produces 6,400 oil barrels per day and is likely to expand production capacity to 11,800 barrels per day by the end of 2019. Moreover, the international players operating in the oilfield services industry, e.g., Baker Hughes, are also emphasizing on starting new projects in Asia-Pacific.

In the Middle East, the oil, gas and petrochemical projects worth USD 211 billion are under execution and projects worth USD 242 billion are in the various stages of pre-execution in countries including Saudi Arabia, Kuwait, Iran, UAE, Iraq, Algeria, Egypt, and Oman. Among the total projects under execution in the region, Saudi Arabia has around 80 active oil & gas contracts under execution, including nine projects worth USD 1 billion and the two largest projects, which are USD 16 billion Jizan refinery project and USD 6.5 billion Fadhili gas plant. Some of the other major projects under execution are USD 24 billion Clean Fuels Project, under Kuwait Integrated Petrochemical Industries Company and USD 20 billion New Refinery Project, under Kuwait National Petroleum Company.

The expanding automotive and transportation industry on account of the rising per capita disposable income and increasing international trade has increased the demand for fuel, which is likely to result in increased investment in oil exploration activities and thus, drive the demand for oilfield biocides.

Technological advancements and rising investments in infrastructure are also expected to increase the oilfield drilling activities and thus, create significant opportunities for the players operating in the global oilfield biocides market

The growing use of renewable energy sources such solar, wind, geothermal, biomass, and hydropower energy as an alternative to traditional fossil fuels such as oil and coal is expected to hamper the growth of the global oilfield biocides market. The increasing environmental regulations to reduce carbon emissions is driving the demand for renewable energy sources primarily in the developed markets. In 2017, in the US, around 17% of the total electricity was generated from renewable energy. The consumption of biofuels and other nonhydroelectric renewable energy sources doubled from 2000 to 2017 owing to environmental regulations and incentives provided by the government to use renewable energy. Additionally, emission reduction targets set by the EU has increased the demand for renewable energy sources in Europe. For instance, the EU intends to reduce greenhouse gas emissions by 40% and increase the percentage of renewable energy sources to 27 in its total energy mix.

Furthermore, increased investment in solar and hydropower plants in the developing nations is also likely to hamper the global market growth. For instance, the Asian Infrastructure Investment Bank (AIIB) has established various renewable energy projects such as a solar power plant in Egypt and a coal replacement project in China as part of its lean, clean, and green motto under the Paris Agreement. Besides, the use of hydropower sources is increasing to meet the rising demand for green energy sources in both developing and developed countries.