IHS chemical company's latest research report shows that 2014 hydraulic fracturing activity worldwide continues to grow, chemicals associated with consumption closer to $ 8.6 billion, the United States and Canada reached $ 8 billion, compared to about 94%. led by the 2014 global oilfield chemicals market increased from $ 25 billion in 2010 and the value is only $ 16 billion. Chemical company head of inorganic chemicals and mining products IHS Stefan Schlag pointed out that in the past 5 years, an unprecedented growth in the oilfield chemicals market, mainly due to the North American shale oil and gas resource development and production of fast-moving effect. The next few years, oil field chemicals demand will continue to grow, but due to the fall in crude oil prices inhibit the action of shale drilling new wells, its growth will slow significantly.

Drilling activity clearly inhibited

Oilfield chemicals is usually divided into drilling chemicals, cement and stimulate the production of such chemicals as well as oil production chemicals in three categories. Drilling chemicals are mainly used to lubricate the bit, control pressure and removal of drilling cuttings, these chemicals can be either oil-based or water-based chemicals, depending on the geological structures; cementing chemicals mainly used for fixing steel pipe or casing and the borehole wall; oil production delivery of chemicals used in the drilling hole of oil to refineries in the process at all stages.

Report says crude oil prices slump in the 2015-2019 period the grim Outlook for global demand for oil field chemicals. Low oil prices have slowed exploration drilling activities, especially non-conventional and more complex deepwater oil projects. Higher production cost of these projects, under the current oil prices are not economical.

IHS chemical company expects to hydraulic fracturing technology is the most widely used in the North American market in 2015, cementing and stimulation of production activity will be reduced by 15%, drilling activities will also be reduced, thus seriously affecting demand for drilling and cementing chemicals. In recent years, strong growth is mainly driven by global demand for oilfield chemicals in hydraulic fracturing oil and gas wells, which compared well with conventional well, mining more difficult, you need to use more chemicals and higher oil costs. Market participants said that if the price falls below $ 70~75 a barrel, then many hydraulic fracturing wells will be in red.

Mining activities are not affected

Schlag believes that low oil prices will not have a greater impact on oil field chemicals sales. Reason is that global demand for oil will continue to grow, so the actual oil production will continue to grow.

KeyBanc capital markets Director of chemicals and plastics business. Whiting have a similar view: "the fall in oil prices, drilling and cementing chemicals or greater magnitude drop in demand, but oil demand chemicals will remain relatively stable, but growth will be moderate, primarily will reduce the number of new wells. "

Whiting said that once the oil and gas wells in the exploitation phase, owners don't want cuts in output and production wells tend to remain stable, so prices rise and fall periodically for oil drilling chemicals far less impact on drilling, cementing and stimulation effects on the yield of such chemicals. Hydraulic fracturing wells in particular decline in the yield curve was considered very quickly, most of the oil production wells of this type are output in the years after production, this means that even if the new wells into production, the existing oil production growth is unlikely to slow.

Management calls for product innovation

Researchers said that the health, safety and environment (HSE) is still the key factor constraining the oilfield chemicals used, especially on land, this effect is more pronounced, have led to the North American and Western European Governments to study the new regulations. Recently, the North American and Western European Governments have realized the environmental problems caused by hydraulic fracturing, under the new management is taking shape, including a call for the oil and gas companies to disclose the chemicals used in hydraulic fracturing fluids. Requires the disclosure of such information will lead to more environmentally friendly chemicals are used.

Ashland is responsible for Global Marketing Director Melinda Burn of oil field chemicals business said that compared with the past, current drilling environments are becoming more extreme, drilling environment need to be addressed in the pH value and contents of salt range even more. 3 main directions of development of oilfield chemicals are: lower costs, better compatibility, and reduce impact on the environment. Market participants said the current drilling deeper and deeper, as the drilling depth increased, rising temperature and pressure at the bottom, the drilling mud formula put forward higher requirements. Current drilling mud formula is more complex, containing bio-polymer, corrosion and scale inhibitor and lubricant.