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The global hydraulic fracturing market size was USD 28.13 billion in 2019 and is projected to reach USD 37.51 billion by 2027, exhibiting a CAGR of 8.8% during the forecast period.
The growing demand for oil, gas, and other petroleum products from the developing economies, coupled with increasing efforts to reduce the production cost of oil & gas, will escalate the market growth. Oilfield service plays a significant role in the upstream service industry, especially in offshore assets. The demand for drilling, completion, fracturing, and workover services holds the major share in the global market owing to the increasing demand for advanced technology, tools, and equipment to increase the exploration and production activities in both onshore and offshore areas. Exploring activities in high potential conventional and unconventional hydrocarbon reserves in various formations are projected to augment the industry growth further.
Volatility in oil prices, reduction in the cost of oilfield services, and increasing the production output are the key pillars which primarily contribute to the growth of this market. Moreover, the range of customized packages offered by major upstream service companies participating in oilfield services covers results in saving millions of dollars to the operators. The rising demand for oil & gas from offshore assets and increasing production and exploration of oil & gas is anticipated to drive the hydraulic fracturing market growth during the projected period
Volatility in Oil Prices And Recovery of Oil & Gas Industry amid COVID-19 to Hinder Growth
The ongoing outbreak of the COVID-19 pandemic has impacted the oil & gas industry significantly across the globe. As a result of the current scenario, various oil & gas companies worldwide have had to shut down their manufacturing facilities and services as countries are stringently implementing lockdown measures to deal with the pandemic. For instance, Aker Solutions has laid off 650 employees in the UK and Norway, and a further notice has been issued for temporary layoffs of up to 6,000 in Norway. As per the International Energy Agency, oil demand has decreased by 29 million barrels per day (bpd) in April 2020 and by 23.1 million bpd in the second quarter of 2020.
Amid this pandemic, many industries across the globe, such as automotive, aviation, power, manufacturing, and transportation, are experiencing a negative impact on their business. Manufacturing activities are generally considered essential owing to their role in many industries such as construction and power and have, therefore, been mostly exempted from the lockdown measures. The spread of Covid-19 holds a significant threat to this market owing to lockdown in transportation, industrial, and commercial operations, and a pause in upcoming production and exploration projects. COVID-19 had severely impacted the oil prices which is projected to be volatile in coming years. The companies across regions have also delayed the major oil & gas projects due to COVID-19. Furthermore, it has also impacted crude oil prices, production activities, well drilling, and the supply chain of oil and gas substantially.
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Growing Focus toward Enhancing Productivity from Existing Oil & Gas Wells Will Boost the Market
Countries in North America are consistently focusing on increasing the productivity of crude oil from the existing oil wells by deploying cutting-edge technologies for exploring shale and other tight-rock formations in the present reserves. As per the American Petroleum Institute, up to 95 percent of natural gas wells drilling will require hydraulic fracturing in the coming years. Additionally, Total, multinational integrated oil, and gas company is strengthening to increase its oil & gas production by filling 200 patents every year for advancing fracturing technology which helps to augment the production. Hence, a growing focus for increasing the productivity from existing oil wells drives the demand for this market in the projected period.
Increasing Production & Exploration of Unconventional Reserves to Fuel the Market
Over the years, oil & gas have been extensively used in power generation, manufacturing goods, transportation, and other end-use industries. However, the significant demand for conventional fuel on account of urbanization, globalization, and increasing energy demand is estimated to hold potential opportunities for investment in the production and exploration of oil & gas reserves. Offshore hydrocarbons are proven to be one of the most efficient and reliable sources of energy, which enables investment by key giant players in the oil & gas industry. As per EIA data, 4 million wells had been drilled in the US, out of which 2 million wells have been drilled hydraulic fractured, with 95% of the well drilling operations being hydraulically fractured. Hence, the growing adoption of hydraulic fracturing for exploration and production of shale gas formation, coalbed methane, and tight sands drives this market in the projected period.
Increasing Exploration of Unconventional Gas to Drive Growth
The global energy outlook is on the edge of a revolution owing to the exploration of unconventional gases such as shale gas, tight gas, coal bed methane gas, etc. In addition, the exponential demand for conventional fuels on account of globalization, urbanization, and massive economic development is set to dampen the demand-supply ratio. The United States is significantly investing in exploring a substantial amount of unconventional hydrocarbons by the application. It is used in exploring natural gas reservoirs such as coladbed, shale gas, and tight sand. Moreover, unless natural fractures are present, almost all tight sand reservoirs require hydraulic fracturing to release gas.
Enormous Potential Of Untapped Reserves to Propel Demand for Hydraulic Fracturing
Unconventional gas reserves provide enough energy reserves to cater to the growing demand for energy owing to high potential in exploration and production of shale and tight gas. The United States Geological Survey (USGS) had introduced unconventional or tight reserves in a part of the prolific Permian oil and gas basin that straddles Western Texas and Southeastern New Mexico. Approximately one third of the United States crude already comes from the Permian, which makes the largest shale-oil producing region in the country. Several countries are in a transitional phase to fully develop the exploration and production of unconventional gas, which would help create energy security and jobs. Hence, the trending shift towards developing a more reliable, secure, and advanced method to acquire an extensive amount of oil and gas is projected to fuel the demand for hydraulic fracturing.
Stringent Regulations for Environmental Protection Along with Growing Trend for Renewable Energy Restraints The Market Growth
Stringent regulations and safety standards specified by national governments and regulatory bodies, which includes the Environmental Protection Agency (EPA) and Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH), have posed a challenge to the growth of this market. Increasing awareness about protecting the environment in developing as well as developed economies had hindered the market growth. The growing trend for adopting renewable energy as a clean source of energy is likely to hamper the hydrocarbon industry. As per IEA data, it is estimated to have a renewable production of 196.1 GW by 2021 from 190.9 GW in 2019, across the globe. Regulatory bans from several regions, which include France, Russia, and Bulgaria against hydraulic fracturing and increasing adoption of renewable energy are estimated to restraint the market growth in the coming period.
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Potential to Extract Multiple Hydrocarbon Reserves From Horizontal Well to Dominate Market Share
Based on the well type, this market is segmented into horizontal and vertical. The horizontal well type segment is estimated to hold the largest portion of the market share over the forecast period as it has been used widely for the last couple of decades due to its advantageous features. Multiple hydrocarbon reserves can be explored and extracted from a single wellhead through horizontal drilling, resulting in the avoidance of unnecessary drilling. Horizontal wells not only reduce the overall production cost but also helps to mitigate the rising carbon emissions.
Reliability in Operation of Plug & Perf Technology is Growing Preference to Shape Industry Outlook
Based on technology, this market is segmented into Plug & Perf and Sliding Sleeve. The Plug & Perf segment is estimated to have a significant growth in the industry as it is the most commonly used technology in this field due to ease of operation and competitive cost. It delivers a higher performance of well for production and cuts down the production cost. The sliding sleeve sub-segment is still in early development stage and requires considerable research and development, which will ensure the stable growth of the plug & perf technology in the global market, as per the hydraulic fracturing market forecast.
Increasing Investment In Onshore Exploration Activities Fuel’s The Onshore Segment
Based on application, the global market is broadly categorized into onshore and offshore. The onshore segment is projected to lead the market growth owing to the accessibility of large capacity reservoirs on land in conventional and unconventional reserves. In addition, oil discoveries and production from mature fields, including shale reserves, will positively escalate the segment-market dynamics.
The offshore application segment is also anticipated to witness considerable growth owing to complex production, drilling, and completion techniques. The growing need to handle multiple types of equipment, which is very risky and challenging when operated manually, drives the offshore segment.
Geographically, the global market has been studied across the seven major regions of the U.S., Canada, Argentina, Russia, China, Australia, and Rest of the World. The U.S. is one of the prominent and leading countries, which holds huge potential for natural gas, shale gas, tight gas reserves, and oil production, driving the application of hydraulic fracturing. The combination of industry standards, effective state, best practices, and supportive federal regulation is protecting communities and the environment. In addition, it will fuel the production of natural gas, which makes the U.S. lead the hydraulic fracturing market share. Therefore, upcoming developments and continuous investments in the extraction of unconventional gas are accelerating market growth in the U.S.
Oil & gas players in China are making initiatives to invest in unlocking natural gas from the shale rock formation, which in turn brings the application of hydraulic type of fracturing for exploration of reserves. The government has committed the domestic national oil companies (NOCs) to increase domestic production and foreign participation in the exploration and production (E&P) industry, which signifies an increase in production and investments.
Several countries have been using hydraulic fracturing to explore a large number of energy reserves, such as Canada, Argentina, Russia, Australia, China, UAE, and Brazil. This technique is largely used in the U.S. followed by Canada and the other remaining countries. The policies, rules, regulations, and government initiatives in these countries are well-structured to support energy security, which in turn supports the fracking activities.
The global outlook is severely hampered by several community-based issues such as lack of political will power, agitations against the hydrocarbon industry, opposition from people, and more. Fracking can be made available in banned countries only by integrating the government bodies with locals through awareness programs.
Key Players to Focus on Technological Advancements in Drilling Operations
Various regional and international players are consistently working upon developing advanced technologies and featured services for application in the oil & gas industry. Major companies are focused on undergoing different mergers & acquisitions, product development, and joint ventures to strengthen their position in a competitive environment. Several companies across the globe are providing hydraulic fracturing services. Halliburton is one of the largest oilfield services companies in the world, and through its advanced services, it continues to dominate the global market for oilfield services. The company continues to focus on providing world-class services to its customers worldwide.
An Infographic Representation of Hydraulic Fracturing Market
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Increasing production and exploration of unconventional gas, rising demand for oil & gas, and growing shift of energy transition for adopting gas as a fuel are major factors driving the growth of the market. Along with this, the hydraulic fracturing market report provides an elaborative analysis of the global market dynamics and competitive landscape. Various key insights presented in the report are the price trend analysis, recent industry developments in the global market, such as mergers & acquisitions, the regulatory scenario in crucial countries, macro, and microeconomic factors, SWOT analysis, and key retail industry trends and forecast, competitive landscape and company profiles.
Value (USD Billion)
By Well Type
Fortune Business Insights says that the global market size was USD 28.13 billion in 2019 and is projected to reach USD 37.51 billion by 2027.
Growing at a CAGR of 8.8%, the market will exhibit steady growth in the forecast period (2020-2027).
In 2019, the United States market value stood at USD 21.86 billion.
The horizontal segment is anticipated to be the leading segment in this market during the forecast period.
Increasing production and exploration of unconventional gas reserves and the growing energy transition toward adopting gas as a fuel are the key factors responsible for the growth of the market.
Halliburton, Baker Hughes, Schlumberger, Weatherford, FTS International, BJ Services, and Cudd Energy Services are the key players operating in the global market.
The United States dominated the market share in 2019.
This is a well stimulation technique that involves the fracturing of bedrock formations by a pressurized liquid. It allows the exploration of inaccessible hydrocarbon reserves and provides an abundant source of unconventional gas energy.
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