Fracking Chemicals Market

Fracking Chemicals Market Size (2024-2029):

The global fracking chemicals market was worth US$ 26.86 billion in 2023 and is anticipated to reach a valuation of US$ 44.14 billion by 2029 and is predicted to register a CAGR of 6.5% during 2024-2029.

Market Drivers:

The increasing demand for energy is driving the growth of the global fracking chemicals market. These fluids are used in hydraulic fracking. So, it is directly connected with energy consumption. There is a growing dependency on unconventional sources. Sophisticated techniques, such as hydraulic fracking for tight oil and shale gas, are used to extract these resources. This is due to a reduction in conventional resources. Hence, the market for fracking fluids and chemicals expanded. 

The growing oil and gas extraction operations are another factor propelling the growth of the fracking chemicals market. These large energy deposits in rocks have raised exploration and production activities. Thus, a steady supply is required for fracking process reservoir stimulation. The need will grow upwards as countries discover more shale gas and oil. Thus, it will provide more sales opportunities for companies for new drilling projects. 

Technological advancements will further propel the global fracking chemical market. Multi-stage hydraulic fracking and horizontal drilling have increased extraction productivity and efficiency. These technologies optimize hydrocarbon recovery through exact deposit location.

Additionally, the increasing electricity and fuel demand in production and domestic industry is also boosting the market growth rate. 

Market Restraints:

Multiple environmental concerns are decreasing the market value of fracking chemicals. Regulatory hurdles, investor pressure, and negative public perception are some of the issues. Strict laws regarding chemical use and waste disposal increased operational costs. This also caused project delays. Moreover, investors are reluctant to invest in these companies due to growing ESG (Environmental, Social, and Governance) concerns. Furthermore, the public issue of water contamination and methane leaks has severely affected the environment. For instance, the water in Ogale (Nigeria) is so contaminated with oil and poisonous that it is brown in color and foul-smelling.

Market Opportunities:

Green fracking will further expand the fracking chemicals market. Also, the development of plant-based or biodegradable materials can address environmental problems and open new prospects. To enhance horizontal well fracking, data collection and diagnosis are the top priorities at the wellhead. For example, Seismos created near-field connectivity, a new diagnostic to measure the quality of the link between the reservoir and wellbore. It is essential for the flow of oil into a horizontal well. 

Sealed Wellbore Pressure Monitoring system is emphasizing the demand for fracking chemicals. Pressure gauges capture minute variations in pressure with liquid under pressure. It separates and gets separated from another well to be fracked along its length.

Near-well strain from fiber optic cable is expected to elevate the market size. The optic cable is protected by a metal sheath and is used to detect reflections caused by the expansion of a cable during oil production. It allows for a better understanding of fracture geometry.

Market Challenges:

Volatile oil and gas prices are a major challenge to the growth of the global fracking chemicals market. The demand decreased because of budgetary constraints caused by fluctuations in oil and gas prices. Supply chain disruption is another factor limiting the market growth. Oil prices decreased from 94 dollars per barrel in September to 78 dollars in December. It reversed all gains from Q3 in 2023 as per the average. 

The growing popularity of renewable resources is also derailing the market growth. Renewable energy sources are posing a long-term challenge to oil and gas demand. It indirectly affects the fracking chemicals market.   

FRACKING CHEMICALS MARKET REPORT COVERAGE:

Market Segment Analysis:

Fracking Chemicals Market – By Function Type:

• Biocides
• Corrosion Inhibitors
• Friction Reducers
• Gelling Agents
• Scale Dissolvers
• Cross-Linkers
• Others

The gelling agent segment dominates with a sizeable share of the fracking chemicals market. It increases the fractures and injection of viscosity fracturing chemicals. A gelling agent is used to thicken the water. Also, it efficiently transports and distributes within cracks. Thus enhancing their effectiveness in maintaining their openness. Additionally, the market will expand further because companies and suppliers are developing green chemicals. This is done to make fracking eco-friendly. These substances maximize the well's productivity and make it safer for the environment. 

Fracking Chemicals Market – By Fluid Type:

• Water-based
• Oil-based
• Foam-based
• Others

The water-based segment has the largest share under this category of the fracking chemical market. This is due to their cost-effectiveness, widespread availability, and suitability for shallow and medium-depth wells. Oil-based fluids account for an estimated share of 20 percent. They offer specific advantages for deeper wells and formations requiring higher temperatures and pressures. But they raise environmental concerns and are generally more expensive. Additionally, foam-based fluids have a niche market share of 5 percent. It is increasingly utilized due to its efficacy in controlling fluid flow and preventing water loss in specific formations.

Fracking Chemicals Market – By Well Type:

• Vertical 
• Horizontal or Directional

The horizontal or directional segment is expected to grow significantly in the forecast period. Increased productivity, improved reservoir drainage, environmental benefits, and technological advancements are driving the growth of the market. Horizontal wells access more targeted shale formation than vertical wells. It results in higher oil and gas production from each well. Moreover, it enables the precise placement of fracking fluids and proppants within the reservoir, which enhances stimulation and fracture effectiveness. Thus improving production efficiency.

Market Regional Analysis:

• North America
• Europe
• Asia-pacific
• Middle-east and Africa
• Latin America

North America holds the maximum share of the global fracking chemicals market due to the rising demand for LNG and crude oil. It will likely be reflected in high rates of petroleum production in the US and Canada. The region is expected to remain the largest market for fracking chemicals. In the last 20 years, the US government has invested about 20 billion dollars yearly to increase the value of new oil and gas projects. This has raised the profits of companies in the shale booms in the Appalachian, Permian, Bakken, and Haynesville Shales. More private production investments are anticipated because of these government measures.

Europe is the second largest market after North America and is anticipated to propel further. It is heavily dependent on imported oil and gas. This has led to the exploration of shale gas in Poland, Romania, and other parts of Europe. Exploration in these countries is driving growth in specific segments of the fracking chemicals market. Moreover, research and development efforts are underway to develop more environmentally friendly and sustainable fracking fluids and proppants. Additionally, environmental concerns, water contamination, and seismic activity linked to fracking have caused public opposition in various European nations. 

Asia Pacific remains at an early stage of development with significant variations across different countries. Australia and Vietnam present high potential for companies in the market. Australia holds substantial shale gas reserves and is currently doing fracking projects in the Cooper Basin. It holds the top position as the largest market for fracking chemicals in the region. Moreover, Vietnam is promoting the exploration of shale gas potential and has granted permits for exploration activities. The market will expand in the future due to the present low demand.

Latin America holds potential and is estimated to propel in the coming years. Its diverse shale oil and gas resources necessitate a fine fracking chemical approach with customized formulas for different formations and well types. The political climate in Latin America can be unpredictable, which influences regulatory frameworks and project approvals. Countries like Argentina are navigating economic challenges and opportunities, while Colombia is showing progress through stricter regulations and community engagement. Market players must identify and capitalize on regional strengths to succeed.

The Middle East and Africa is expected to flourish during the forecast period. The United Arab Emirates is actively engaged in shale gas exploration and development in the Emirate of Abu Dhabi. Also, Oman started exploratory research and trial programs and would expand in the future. Moreover, the development of ecologically friendly fracturing technologies may help solve environmental issues and open new market niches.

Impact of COVID-19 on the Fracking Chemicals Market:

COVID-19 has significantly affected the fracking chemicals market share. It caused strong socio-economic impacts worldwide. The franking chemicals market sector has been severely affected by lockdowns and economic restrictions. As per the International Energy Agency, the power demand declined globally due to lockdowns. And usage fell by up to 20 percent monthly during the lockdown period. Moreover, crude oil prices decreased in the spring of 2020.

Market Key Players:

1. Halliburton (U.S.)
2. Schlumberger (U.S.)
3. Baker Hughes (U.S.)
4. DuPont (U.S.)
5. AkzoNobel (Netherlands)
6. BASF (Germany)
7. Ashland (U.S)

Market Recent Developments:

• In December 2023, ExxonMobil announced the merger with Pioneer Natural Resources. The merger is an all-stock deal valued at 59 billion dollars or 253 dollars a share.
• In January 2024, the governor of New Mexico recommended a 500-million-dollar budget for treating wastewater from hydraulic fracturing. The goal is to protect fresh water. It will be done by recycling the industrial water. Improve investments by hydrogen fuel and microchip companies.