PRODUCTION CHEMICALS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Production Chemicals Market Size and Trends

The production chemicals market is estimated to be valued at USD 7.44 Bn in 2024 and is expected to reach USD 11.34 Bn by 2031, growing at a compound annual growth rate (CAGR) of 6.2% from 2024 to 2031.

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The production chemicals market is expected to witness significant growth over the forecast period. Rise in oil & gas exploration and production activities is expected to drive the demand for production chemicals. Growing demand from water-treatment plants and refineries is also expected to support the market growth. Further, the increasing demand for energy efficient production processes is projected to boost the consumption of production chemicals. Enhanced oil recovery applications utilizing production chemicals will further augment market expansion through 2031. However, volatility in crude oil prices and stringent regulations regarding environmental safety are factors that can hamper the market growth.

 Increasing oil and gas production activities

The demand for production chemicals is closely linked to the level of oil and gas production and exploration activities globally. For instance, according to the Oil & Natural Gas Corporation (ONGC), in India, crude oil production was 1,788.92 TMT in 2020 which is 1.24% higher than in 2019. Over the past few years, there has been a significant rise in investments made by major oil companies as well as national oil companies towards boosting their oil and gas output. Several new large-scale upstream projects are currently underway across all major oil and gas producing regions such as North America, Middle East, Asia Pacific, and Africa. These projects involve the extensive drilling of both onshore and offshore oil and gas wells, which will significantly drive the consumption of a variety of production chemicals. Driven by the continuously rising energy demand worldwide coupled with high oil prices in the past, many upstream companies have aggressively embarked upon enhancing their overall recovery rates from mature oilfields through various improved oil recovery techniques such as hydraulic fracturing, acidizing, cementing etc. This has resulted in growing need for specialty production chemicals that are specifically designed for well stimulation and remediation applications. At the same time, national governments and energy companies across nations are also investing heavily in unlocking unconventional resources such as shale gas, tight gas and oil sands through advanced drilling and production methods. All these factors are expected to substantially boost the application of production chemicals in the coming years.

Environmental sustainability has become a major priority for regulatory authorities as well as oilfield service providers globally in the past few years. There is growing emphasis on minimizing the ecological and climate change impacts of oil and gas operations through various means such as reduced water usage, lower emission levels, and efficient recycling/disposal of waste streams. This has translated into increasingly stringent environmental regulations being enforced for production chemicals across major markets. As a result, end users are now focused on employing 'eco-friendly' and 'green' substitute products which pose minimal hazardous risks and can aid in achieving sustainability goals.