Enhanced Oil Recovery Market

Market Overview

The enhanced oil recovery market size was valued at USD 37.56 billion in 2021 and is expected to expand to reach USD 71.71 billion in 2030 at a compound annual growth rate (CAGR) of 7.45% from 2022 to 2030.

Enhanced oil recovery, often known as EOR, refers to the process of extracting crude oil from an oil field using chemical, thermal, or physical methods when the oil cannot be retrieved by any other method. The EOR approach is referred to as tertiary recovery since it is utilised only in situations in which the primary or the secondary none of recovery procedures are fruitful. Enhanced oil recovery may be accomplished by the utilisation of a variety of methods, some of which include gas injection, microbiological injection, and thermal injection.

The utilisation of tertiary recovery in the manufacturing of liquid hydrocarbons via the application of a variety of processes is expected to be a primary driver of market expansion during the upcoming time period. Due to the progressive rise in the construction of offshore wells in deep and ultra-deep seas such as the Gulf of Mexico, North Sea, and the South China Sea, it is anticipated that the use of enhanced oil recovery technologies in offshore basins would drive the growth of the market. However, the majority of the traditional onshore basins in nations such as Saudi Arabia, China, and Russia have been suffering diminishing production rates. These countries include Russia, China, and Saudi Arabia. Because of this, it is anticipated that in the next years there will be an increase in the requirement for EOR techniques in order to satisfy the high demand for the extraction of the remaining recoverable hydrocarbons.

Market Dynamics

Global Enhanced Oil Recovery Market Drivers

Rising oilfield output from mature fields

Due to the growing demand for oil and gas, businesses are resolute in their efforts to boost output from existing fields that have reached their peak production potential. According to the findings of a study conducted by Halliburton, about 70% of the world's oil and gas output comes from mature fields. As a result, these businesses are presently concentrating their efforts on boosting recovery and prolonging the life of mature fields through the application of EOR technology. As a result, they are exceeding production levels, which will increase the need for enhanced oil recovery market demand.

Energy security is in greater demand, which will support the market

It is impossible for any country in the world to make significant economic headway without hydrocarbons. However, the availability of restricted reserves drives up the price of energy, necessitating oil-deficient nations to make massive investments in the importation of oil in order to meet their demand. As a result, several nations all over the world are embracing cutting-edge technologies in order to boost their domestic oil output and better satisfy the need for oil. This is one of the factors that is driving the trends in the enhanced oil recovery market. In addition to lowering the amount of foreign currency lost as a consequence of oil imports, this will also make the country more self-sufficient by improving its energy security.

Oil will continue to be in high demand, boosting the market

The demand for petroleum products has expanded as a direct result of the exponential growth in oil consumption across a variety of various business verticals, including transportation, shipping, power generation, manufacturing, and others. To fulfil the ever-increasing demand for oil, operators are turning to a variety of cutting-edge production techniques. EOR allows for the maximum recovery of oil from the reservoir, which ultimately results in an increase in output as a whole. Additionally, it reduces the overall cost of production by preventing the drilling of a new well, which is can be the primary driver of the market.

Global Enhanced Oil Recovery Market Restraints

High Capital Expenditures and a Slowing Economy Put Growth on the Back Foot

Because of the high cost of technology, enhanced oil recovery efforts all over the world have depended almost exclusively on financial incentives provided by governments or on creative investment techniques. In comparison to more traditional approaches, this strategy is intrinsically more complicated. The deployment of OR calls for specialists with a high level of expertise, a methodical implementation and integration of R&D, a commitment, and the capacity to take risks, all of which provide barriers to the expansion of the industry. The rapid development of the nCovid-19 pandemic has contributed to the severe economic crisis that the globe is experiencing at the present time. The economy of the entire world has almost ground to a halt, which has a negative impact on the demand for oil and other items derived from petroleum. The majority of oil and gas businesses are making plans to significantly reduce their capital and operational expenditures out of fear of the continued economic crisis, which is putting the market on the defensive.

Global Enhanced Oil Recovery Market Opportunity

Concentrate on producing heavy oil

The depletion of conventional light oil and gas reservoirs has opened up the possibility of conducting a large-scale commercial exploration of heavy oil deposits. Significant heavy oil deposits are available in Canada, Venezuela, Mexico, China, and Colombia. The production of heavy oil is mostly concentrated in Canada and Venezuela, which are both important players in this worldwide industry. Therefore, EOR technologies are utilised in order to raise the amount of heavy oil production. The production of heavy oil can be increased by the utilisation of thermal EOR. Therefore, operations in products that aim to increase oil output generate the potential for the market for better oil recovery.

The National Oil Companies' Increasing Capital Spending Is Likely to Increase Opportunities

By making investments in more cutting-edge technology, national oil corporations are resurrecting tactics that might lead to an increase in the amount of oil produced domestically. For example, in 2019, the Indian corporations ONGC and IOC inked a contract for the injection of carbon dioxide (CO2) into a well in order to increase the amount of oil that was produced. In addition, Petroleum Development Oman, generally known as PDO, is making preparations to raise the amount of oil it produces in the years to come. As a result, increasing investments from national oil corporations as well as aid from the government to boost domestic oil production would offer a boost to the overall size of the OR market.

Regional Analysis

In 2021, North America held a dominant position in the market and was responsible for a revenue share that was greater than 35.0%. The United States of America is the primary driving force behind the expansion of the regional market. This expansion may be ascribed to the existence in the nation of a number of unconventional oil and gas resources as well as matured fields, both of which need innovative extraction methods in order to increase output from wells that are already in operation. In addition, prominent oil and gas exploration firms in Canada are currently employing EOR technology in order to effectively recover oil from fields in their operations.

It is anticipated that increasing the amount of government support for EOR projects would further commercialise the technology. These activities aim to both expand the applicability of EOR across conventional and unconventional reservoirs while simultaneously reducing the technical risk associated with enhanced oil recovery.

It is predicted that the Asia Pacific region would have the biggest growth over the course of the projection period, with China holding the largest share of the market throughout the region. It is predicted that the rising demand for oil and gas from key nations such as China and India, together with the growing deployment of EOR in ageing wells to achieve production requirements, would help to support market demand in the Asia Pacific region.

Oman held a dominant position in the market for the Middle East and Africa in 2021, and it will continue to hold this position throughout the period of forecasting. However, new EOR projects are anticipated to become operational in countries such as Saudi Arabia, the United Arab Emirates, Qatar, and Kuwait during the forecast period. Therefore, the growth of the market in the region during the forecast period is projected to be boosted.

Segmental Analysis

The global enhanced oil recovery market share has been classified based on technology, application, and regions.

On the Basis of Technology

In 2021, the thermal category had the biggest market share, accounting for more than 35.0% of total sales. The technique involves applying heat to oil wells in order to reduce the viscosity of the oil and increase the oil's mobility ratio. The majority of the time, it is utilised in shallow wells that contain substances of a greater viscosity, such as heavy oil and tar sand. The United States of America, Canada, Oman, and Russia are some of the countries that are currently making use of this technology.

The process known as CO2 injection works to recover crude oil by injecting CO2 into the rock pores. Since CO2 is miscible with crude oil and is far less expensive than other similarly miscible fluids that are utilised for these purposes, it is the fluid of choice for EOR applications because of its low cost and high level of miscibility. Additionally, this approach offers relatively significant advantages to the environment, which will drive the demand for CO2 injection technology in the market during the period of time covered by the projection.

In addition, stringent government regulations regarding emission reduction from the activities of the oil industry are resulting in an improved adoption of CCS technology. This technology allows for the carbon that is released from refineries to be captured and injected into depleting oilfields as part of the EOR process.

The Chemical EOR technique involves the use of polymers and surfactants, both of which are injected into the oil well. This lowers the interfacial pressure and increases the flooded viscosity, which ultimately results in an increase in the oil amount that can be extracted from the well. Several nations, including China, Russia, Colombia, and Canada, are now making use of EOR technology that is chemically based.

On the Basis of Application

Due to the widespread presence of onshore exploration and production projects all over the world in 2021, the onshore sector captured more than 90% of the total revenue. This gave it the greatest market share. In the future, lower conventional extraction costs for onshore oilfields, in comparison to offshore oilfields, will lead to growth in the onshore application segment. This growth will be a result of lower onshore conventional extraction costs. EOR techniques are being used in traditional onshore basins, which has led to a decline in production levels in China, Russia, and Saudi Arabia. During the time under consideration, it is anticipated that the growth of the segment would be favourably influenced by these variables.

The continuous development of the existing offshore wells is likely to be the primary driver of the offshore segment during the course of the projection period. In addition, oil industry operators such as BP, Statoil, and Repsol are investigating the technological and financial viability of EOR in offshore oil fields.

On the other hand, the offshore oil industry would see slow development as a result of expensive capital investments and operational expenses, in addition to the impact of the pandemic. The expansion of the offshore oil business is going to be hampered by these circumstances, which will make it more difficult. However, the continuous technological improvements in the offshore sector are predicted to increase the growth of the offshore segment in the forecast year. This is because of the fact that the offshore segment is located offshore.

Recent Developments

• In ICAD II, TechnipFMC inaugurated a surface international facility in September 2019. The investment's purpose was to help ADNOC improve its operations in Abu Dhabi. With its cutting-edge machinery in the drilling, completion, production, and pressure control divisions, the new facility offered a wide spectrum of TechnipFMC offerings.
• BP stated in November 2018 that it would use LoSal enhanced oil recovery technology for the first time offshore to its Clair Ridge project in the West of Shetland area, off the coast of the UK. A 28.6% stake in the Clair field is owned by BP.
• A contract to combine their respective oil and gas industries into a joint venture, to be known as Wintershall DEA, was recently signed by BASF and Letter One in September 2018.
• Cairn Oil & Gas, Vedanta Limited granted Baker Hughes Company a contract in August 2018 to build 300 new wells and implement a chemical EOR programme with the goal of increasing output from the Rajasthan region.