Chemicals for Unconventional Oil & Gas Development Market Forecast 2014 2024

Chemicals for Unconventional Oil & Gas
Development Market Forecast 2014-2024
Fracturing Fluid Additives for Shale Gas, Shale (Tight)
Oil, Tight Gas & CBM
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Contents
1. Report Overview
1.1 Overview: Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid Additives): Market
Forecast 2014-2024
1.2 Market Segmentation: Chemicals Used For Unconventional Oil & Gas Development (Fracturing Fluid Additives):
Market Forecast 2014-2024
1.3 Market Definition: Chemicals Used For Unconventional Oil & Gas Development (Fracturing Fluid Additives):
Market Forecast 2014-2024
1.4 Why You Should Read This Report
1.5 How This Report Delivers
1.6 Key Questions Answered by This Analytical Report Include:
1.7 Who is This Report For?
1.8 Methodology
1.9 Frequently Asked Questions (FAQ)
1.10 Associated Visiongain Reports
1.11 About Visiongain
2. Introduction
2.1 What are Unconventional Oil & Gas Developments?
2.2 Definition of Unconventional Oil & Gas Reserves
2.3 Chemicals Used in the Exploitation of Unconventional Oil & Gas Formations
2.4 Types of Hydraulic Fracturing
2.5 History of Unconventional Oil & Gas Development
3. Global Market for Chemicals Used for Unconventional Oil & Gas
Development (Fracturing Fluid Additives) 2014-2024
3.1 Demand Side Dynamics
3.1.1 Unconventional Gas Development Dynamics
3.1.2 Shale Gas
3.1.2.1 How Extensive Are Shale Gas Resources?
3.1.3 Tight Gas
3.1.4 Coalbed Methane
3.1.5 Shale (Tight) Oil Development Dynamics
3.2 Supply-Side Dynamics

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Contents
4. Chemicals Used for Unconventional Oil & Gas Development
(Fracturing Fluid Additives): Chemical Grouping/Type Submarkets 2014-
2024
4.1 Market Sizing
4.2 Gelling Agent Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.3 Surfactant Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.3.1 Other Uses of Surfactants within the Oil & Gas Industry
4.4 Clay Stabiliser Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.5 Acid Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.5.1 Environmental Considerations
4.5.2 Supply Side Volatility and Price Regime Spike
4.6 Biocide Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.7 Breaker Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.8 pH Adjusting Agent Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.9 Iron Control Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.10 Scale Inhibitor Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.11 Crosslinker Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.12 Corrosion Inhibitor Used for Unconventional Oil & Gas Development: Submarket 2014-2024
4.13 Friction Reducer Used for Unconventional Oil & Gas Development: Submarket 2014-2024
5. Regional and National Markets for Chemicals Used for
Unconventional Oil & Gas Development (Fracturing Fluid Additives)
2014-2024
5.1 Americas Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid Additives)
2014-2024
5.1.1 US Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid
Additives) 2014-2024
5.1.1.1 General Supply & Demand Dynamics and Their Impact on Unconventional Oil & Gas
Development Expenditure
5.1.1.2 Overall Drivers & Restraints for Unconventional E&P CAPEX in the US
5.1.1.3 Outlook for Shale Gas Expenditure
5.1.1.3.1 What are the Economics of Shale Gas Drilling and Completion in North
America?

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Contents
5.1.1.4 How Significant is the Shift from ‘Dry Gas’ to Liquids-Rich Plays?
5.1.1.5 Outlook for Expenditure on Tight Gas in the US
5.1.1.5.1 Regional Distribution of Tight Gas Assets and CAPEX Focus
5.1.1.5.2 US Tight Gas Economics
5.1.1.6 Outlook for Expenditure on Shale and Tight Oil Development
5.1.2 Canadian Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid
5.1.2.1 Factors Driving and Restraining Unconventional Oil & Gas Development in Canada
5.1.2.2 Key Factors for Investment Growth
5.1.3 Argentinean Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing
Fluid Additives) 2014-2024
5.1.3.1 Factors Driving and Restraining Unconventional Oil & Gas Development in Argentina
5.1.3.2 Shale Formation Drilling
5.1.3.3 Key Factors for Investment Growth
5.1.3.4 Tight Gas E&P Activity in Argentina
5.1.4 Rest of Americas Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing
5.1.4.1 Brazilian Market Outlook for Chemicals Used in Unconventional Oil and Gas
Development
5.1.4.2 Chilean Market Outlook for Chemicals Used in Unconventional Oil and Gas Development
5.1.4.3 Colombian Market Outlook for Chemicals Used in Unconventional Oil and Gas
Development
5.1.4.3.1 Companies Active in Colombian Shale Oil Development
5.1.4.3.2 What Will Drive Investment in the Colombian Shale Oil Industry
5.1.4.4 Mexican Market Outlook for Chemicals Used in Unconventional Oil and Gas
Development
5.1.4.4.1 Mexican Unconventional Resources
5.1.4.4.2 Barriers to Unconventional Mexican Unconventional Oil & Gas Development
5.2 Asian Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid Additives)
2014-2024
5.2.1 Chinese Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid
5.2.1.1 Drivers of Expenditure on Unconventional Oil and Gas Development in China
5.2.1.2 Restraints on Expenditure on Unconventional Oil & Gas Development in China
5.2.2 Rest of Asia Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid

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Contents
5.2.2.1 India’s Expanding CBM Industry
5.2.2.2 Unconventional Gas Development in Pakistan
5.2.2.2.1 Tight Gas in Pakistan
5.2.2.3 Natural Gas Pricing in India
5.2.2.4 Distances from Existing Infrastructure
5.2.2.5 Infancy of Unconventional Oil and Gas Industries
5.2.2.6 Economic and Political Instability
5.3 European Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid Additives)
2014-2024
5.3.1 How Will European Gas Pricing Affect Unconventional Gas Development in Europe?
5.3.2 Polish Prospects for Chemical Sales to the Unconventional Oil & Gas Industry
5.3.3 UK Prospects for Chemical Sales to the Unconventional Oil & Gas Industry
5.3.4 Ukraine Prospects for Chemical Sales to the Unconventional Oil & Gas Industry
5.3.5 Other European Unconventional Gas Prospects and Potential Demand Markets for Chemicals
5.3.5.1 Dutch Unconventional Gas Outlook
5.3.5.2 German Unconventional Gas Outlook
5.3.5.3 Hungarian Unconventional Gas Outlook
5.3.5.4 North Sea Unconventional Gas Outlook
5.3.5.5 Slovenian Unconventional Gas Outlook
5.3.5.6 Turkish Unconventional Gas Outlook
5.4 Russian Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid Additives)
2014-2024
5.4.1 Shale (Tight) Oil Development in Russia and its Impact on Chemicals Expenditure
5.4.2 Limiting Factors upon Expenditure on Chemicals for Unconventional Oil & Gas Development
5.5 Rest of the World (RoW) Market for Chemicals Used for Unconventional Oil & Gas Development (Fracturing
5.5.1 Outlook for Expenditure on Chemicals for Unconventional Oil & Gas Development in Australia
5.5.1.1 East Asian LNG Demand
5.5.1.2 Cooper Basin Unconventional Oil and Gas Development
5.5.1.3 Coalbed Methane
5.5.1.4 Shale (Tight) Oil Prospects
5.5.1.5 Tight Gas in Perth Basin (West Coast Market
5.5.1.6 High Cost of Domestic Gas
5.5.1.7 How Does Supply Chain Orientation Affect Market Development
5.5.1.8 Summary of Drivers & Restraints on Australian Unconventional Oil & Gas Development
5.5.2 Omani Tight Gas Development

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Contents
5.5.3 Saudi Arabian Shale Gas
5.5.4 Focus on Tight Gas and CBM in RoW
5.5.5 Other Factors Affecting Unconventional Oil & Gas Development in the RoW
6. Barriers to Entry Analysis for Chemicals Used for Unconventional Oil
& Gas Development (Fracturing Fluid Additives)
7. PEST Analysis of Chemicals Used for Unconventional Oil & Gas
Development (Fracturing Fluid Additives)
8. Expert Opinion
8.1 Chemplex Advanced Materials
8.1.1 Chemplex Advanced Materials
8.1.2 Chemplex Advanced Materials: Competitors
8.1.3 Operational Reach
8.1.4 Consumption Trends in the Fracturing Fluid Chemicals Industry
8.1.5 Pump Maintenance and Fracture Fluid Composition
8.1.6 Market Expansion Outside of the US
8.1.7 Plateau of Fracturing in the US
8.1.8 Emerging and Marginal Plays
8.1.9 The Biggest Challenges Affecting the Fracturing Fluid Chemicals Industry
8.1.10 Where Do You Think Your Industry Will Be in Five Years Time?
8.1.11 Any Game-Changers in the Supply of Chemicals to the Unconventional Oil & Gas Industry?
8.1.12 Acid Usage in Unconventional Oil & Gas Fracturing
9. Leading Companies within the Market for Chemicals Used for
Unconventional Oil & Gas Development (Fracturing Fluid Additives)
9.1 Prominent Chemical Solution Suppliers for Unconventional Oil & Gas Development
9.1.1 Chemplex Advanced Materials (Solvay Chemicals)
9.1.2 Chem Rock Technologies
9.1.3 IOC (Independence Oilfield Chemicals)

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Contents
9.1.4 Newpark Resources
9.1.5 Rockwater Energy Solutions
9.1.6 Tetra Chemicals
9.1.7 Other Prominent Suppliers of Chemicals for Unconventional Oil & Gas Development
9.2 Oilfield Service Companies
9.2.1 Baker Hughes
9.2.2 Halliburton
9.2.3 Schlumberger
9.2.4 Weatherford
9.3 Leading Multi-National Chemicals Supplying Chemicals for Unconventional Oil & Gas Development
10. Conclusions & Recommendations
10.1 Outlook for Chemicals Used for Unconventional Oil & Gas Development (Fracturing Fluid Additives)
10.2 Key Findings

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Chemicals For Unconventional Oil & Gas Development
Market Forecast 2014-2024: Fracturing Fluid Additives
for Shale Gas, Shale (Tight) Oil, Tight Gas & CBM
2014 2019 2024
Visiongain forecasts that expenditure on chemicals for unconventional oil and gas development in
the Rest of Americas region will grow rapidly over the forecast period from a very low start point of
$36.6m in 2014. The market grows at a CAGR of 35.3% between 2014 and 2019 and 25.7%
between 2019 and 2024 (overall CAGR for 2014-2024 is 30.4%). Constitutional reform in Mexico,
along with primary energy shortages in other nations across the Americas, drive investment in
unconventional sources and enable the market share to expand from 0.6% in 2014 to 1.6% by
2019 and 4.5% by 2024. Expenditure is forecast to be $165.7m by 2019 and $519.7m by 2024.
In addition to the below markets of Brazil, Chile, Colombia and Mexico, it is worth noting that
Venezuela is exploring for tight gas in the Lago de Maracaibo basin in a joint venture between
PDVSA and Petrowayuu; prospectiveness currently remains unclear.
5.1.4.1 Brazilian Market Outlook for Chemicals Used in Unconventional
Oil and Gas Development
Tight gas resources are the most likely to require hydraulic fracturing in Brazil during the forecast
period. Tenders for shale blocks were received in December 2013 by a range of companies, but
the prospectiveness within the next 10 years remains unclear.
Shell, Petra Energia SA and Imetame Energia are developing tight gas in Brazil from the Sao
Francisco play. 12 of 14 pilot production wells it drilled over the past few years have yielded
0.6%
1.6% 4.5%
Source: Visiongain 2014
Figure 5.32 Market Share Forecast 2014, 2019, 2024 (%) for Expenditure on
Chemicals for Unconventional Oil and Gas Development in the Rest of the Americas

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20m for an 8,000ft depth well with four to five laterals. Supply chain orientation and the availability
of equipment are central to the difficulty. This is why the MOU with Halliburton will be encouraging
for investors in San Leon.
San Leon is looking to commercialise its tight gas sandstone assets in Poland, which are estimated
at 422bcf. A commercialisation of three current exploratory developments – to bring 12bcf online
at a commercially viable rate – is presently being planned. Given ExxonMobil’s withdrawal from
Poland in 2012 and the movement toward hub pricing, a reduction in CAPEX and OPEX per well
must be achieved by the company before any programme conducted independently of other
companies can take place. The MOU with Halliburton is a step toward such a programme because
it will enable access to wholesale prices for product such as proppant, which can represent
approximately 10% of the well cost – depending on type and proppant mix.
Well costs must be reduced and supply chains established before the tight gas industry establishes
itself in Poland. Otherwise, EURs on each well must be pushing 9.0bcf in order to justify drilling
and completion costs of in excess of $13.0m.
Other active companies in Polish tight gas include FX Energy.
5.3.3 UK Prospects for Chemical Sales to the Unconventional Oil & Gas
Industry
There is the potential for the UK to contribute to chemicals sales via the hydraulic fracturing of
CBM and shale gas resources. Neither unconventional resource has achieved a commercial level
of production, with Dart Energy’s CBM development in Airth, Scotland, appearing to be the most
prospective for commerciality. It announced in January 2013 that it had operated a pilot production
well successfully and continuously on a controlled basis for three months. Peak rates for the well
were 800,000 cubic feet per day.
The UK government is demonstrating a determination to assist shale gas development with a
range of tax incentives. This political will is important for the likes of Cuadrilla Resources, who
have claimed that approximately 200tcf of gas is in place in its Bowland license area. Total S.A.
was the first IOC to enter the shale gas arena in the UK in January 2014, buying into exploration
licenses and offering capital for a drilling carry. The big number in terms of shale gas potential –
being reported at the beginning of 2014 – is that there is potential gas in place of 1,300 trillion
cubic metres.

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6. Barriers to Entry Analysis for Chemicals Used for
Unconventional Oil & Gas Development (Fracturing Fluid
Additives)
Figure 6.1 above visualises the barriers to entry experienced by companies wishing to sell
chemicals for use in unconventional oil and gas development by each regional/national market
forecast within this chapter against the CAGR that they will experience. The size of the bubble
represents relative market size. The easiest place to market chemicals is the US because of its
highly developed distribution network and mature hydraulic fracturing industry. However, lower
prices and an established industry also benefits China and place a downward pressure on
aggregate chemicals pricing within that market space. In Argentina, however, the regulatory
environment is likely to further slow development.
Anti-dumping legislation in many countries, but mostly notably the US and Europe, does act as a
barrier to production in countries such as China seeking to undercut pricing levels of domestic
manufacturers of certain chemicals.
On the other hand, intellectual property issues and difficult to comprehend frameworks of
engagement make sales of chemicals by external producers into China – in addition to the barrier
of the very low cost chemicals industry within the nation – even more difficult.
-10.0 0.0 10.0 20.0 30.0 40.0 50.0
BarrierstoEntry
CAGR %
Low
High
US
RoW
Canada
China
Argentina
Rest of
Asia
Europe
Russia
Rest of
Americas
Figure 6.1 Barriers to Entry vs. National Market Size vs. CAGR% 2014-2024 ($m,
CAGR%)

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9. Leading Suppliers of Chemicals Used for
Unconventional Oil & Gas Development (Fracturing Fluid
Additives)
There are three main types of company supplying for unconventional oil and gas development.
The leading suppliers in each of these areas is identified below, which are inevitably US-centric
because of the dominance of the unconventional oil and gas industry in America, are categorised
in the below Table 9.1.
Leading Oilfield
Service Companies
Baker Hughes
Halliburton (Baroid)
Schlumberger (M-I
Swaco)
Weatherford
Leading Global
Chemicals Companies
Ashland Inc.
Azko Nobel
BASF
Brenntag
Solvay
Dow
DuPont
Kemira
SNF
Solvay
Univar
Industry Specific
Suppliers of Chemicals
for Unconventional Oil
& Gas Development
Chemplex Advanced
Materials
Chem Rock
Technologies
Independence
Oilfield Chemicals
Newpark Resources
Rockwater Energy
Solutions
Tetra Chemicals
Other Prominent
Suppliers of
Chemicals for
Unconventional Oil
& Gas
Development
Table 9.1 Leading Suppliers of Chemicals for Unconventional Oil & Gas
Development

Chemicals for Unconventional Oil & Gas Development Market Forecast 2014 2024

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