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The global hydraulic fracturing market size was USD 11.74 billion in 2020 and is projected to grow from USD 15.31 billion in 2021 to USD 28.93 billion in 2028 at a CAGR of 9.5% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with hydraulic fracturing witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the market exhibited a decline of -51.5% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth returning to pre-pandemic levels once the pandemic is over.
Hydraulic fracturing is a well stimulation technique wherein bedrock formations are fractured using a pressurized liquid for easy extraction of oil & gas reserves. 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. This factor is due to the increasing demand for advanced technology, tools, and equipment layout to increase the exploration and production activities in onshore and offshore areas. Exploration activities in high potential conventional and unconventional hydrocarbon reserves in various formations are projected to augment the industry's growth.
Volatility in oil prices, reduction in the cost of oilfield services, and increasing production output are the key pillars that 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 enables operators to save millions of dollars. The rising demand for oil & gas from offshore assets and increasing production and exploration of oil & gas is anticipated to drive the market growth during the projected period.
Volatility in Oil Prices and Recovery of Oil & Gas Industry to Fuel Growth
The ongoing outbreak of the COVID-19 pandemic has impacted the oil & gas industry significantly across the globe. As a result, various oil & gas companies worldwide have to shut down their manufacturing facilities and services as countries are implementing stringent lockdown measures to deal with the pandemic. For instance, In April 2020, Aker Solutions has laid off 650 employees in the UK and Norway, and 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 the market owing to the imposition of lockdown restrictions on transportation, industrial, and commercial operations. A pause in upcoming production and exploration projects is also expected to negatively affect industries. COVID-19 had severely impacted the oil prices which are projected to be volatile in upcoming years. The companies across regions have also delayed major oil & gas projects due to the pandemic. 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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Increasing Production & Exploration of Unconventional Gas Reserves Driving the Market Growth
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 hydraulically fractured. and 95% of the good drilling operations are hydraulically fractured. Hence, the growing adoption of the fracturing process for exploration and production of shale gas formation, coalbed methane, and tight sands expected to drives the market in the upcoming years.
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, and others. 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 US is significantly investing in exploring a substantial amount of unconventional hydrocarbons by the application of fracturing. It is used in the exploration of natural gas reservoirs such as coal bed, shale gas, and tight sand. Moreover, unless natural fractures are present, almost all tight sand reservoirs require fracturing to release gas.
Enormous Potential of Untapped Reserves to Propel Demand for Hydraulic Fracturing
Unconventional gas reserves provide enough amount of energy reserves to cater to the growing demand for energy and high potential in exploration and production of shale and tight gas. The U.S. Geological Survey (USGS) had introduced unconventional or tight reserves in a part of the productive Permian oil and gas basin that connects Western Texas and Southeastern New Mexico. Approximately one-third of the U.S. crude oil currently is gained from the Permian, which makes it 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 the development of more reliable, secure, and advanced methods for the acquisition of extensive amounts of oil and gas is projected to fuel the demand for global market.
Growing Focus Towards Enhancing Productivity from Existing Oil & Gas Wells Will Boost 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% of natural gas wells drilling will require fracturing in the coming years. Furthermore, Total, a worldwide integrated oil and gas firm, is bolstering its efforts to boost oil and gas output by filing 200 patents per year to advance fracturing technology, which aids in production expansion. Hence, the growing focus on the enhancement of productivity from existing oil wells shall drive the global market in the projected period.
Stringent Regulations for Environmental Protection Along with Growing Trend for Renewable Energy Restraints Market Growth
Stringent regulations and safety standards specified by national governments and regulatory bodies, which include the Environmental Protection Agency (EPA) and Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH), have posed a challenge to the growth of this market. Increasing awareness about environmental protection in developing and developed economies had hindered the market growth. The growing trend for the adoption of 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 regional, which include France, Russia, and Bulgaria against fracturing and increasing adoption of renewable energy are estimated to restrain the hydraulic fracturing market growth.
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Potential to Extract Multiple Hydrocarbon Reserves from Horizontal Well to Dominate Market Share
Based on the good type, this market is segmented into the horizontal well and vertical well.
The horizontal well type segment is estimated to hold the largest portion of the market share during the upcoming years 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, thus avoiding unnecessary drilling. Horizontal wells not only reduce the overall production cost but also helps mitigate rising carbon emissions.
A vertical well is a drilling technique that involves drilling vertically into the ground to access an underground reserve of oil or natural gas. Drilling wells vertically is a more traditional method of oil extraction than directional drilling, which is more modern.
Reliability in Operation of Plug & Perf Technology to Shape Industry Outlook
Based on technology, the 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, 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 the early development stage and requires considerable research and development, which will ensure the stable growth of the plug & perf technology in the global market
Increasing Investment in Onshore Exploration Activities Fuel 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 manual handling of multiple equipment types is often very risky and challenging, which, in turn, drives the offshore segment.
The market has been analyzed across seven key regions, namely, the U.S., Canada, Argentina, Russia, China, Australia, and the Rest of the World.
The U.S. accounted for a 77.7% share of the market in 2020. The U.S. is one of the prominent and leading countries, which holds huge potential for shale gas, tight gas reserves, oil and natural gas production. The combination of industry standards, effective state, best practices, and supportive federal regulation is protecting communities and the environment. In addition, these regulations will fuel natural gas production, which makes the U.S. lead the market share. Therefore, upcoming developments and continuous investments in unconventional gas extraction are accelerating the market growth in the U.S.
Oil & gas players in China undertake initiatives to invest in unlocking natural gas from the shale rock formation, which in turn brings the application 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 fracturing techniques to explore a large number of energy reserves, such as Canada, Argentina, Russia, Australia, China, the 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 fracking activities.
The global outlook of market is severely hampered by several community-based issues such as lack of political willpower, 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 Focus on Technological Advancement to Shape Industry Outlook
The global hydraulic fracturing market is fragmented and has witnessed high competition from several regional and global participants. Currently, Halliburton is one of the largest oil & gas service companies in the world, and through its advanced services, it continues to dominate the global market. The company continues to focus on providing world-class services to its customers worldwide.
Additionally, other major players include Schlumberger, Baker Hughes, Weatherford, FTS International, ProPetro Holding Corp, Basic Energy Services, US Well Services, among others. Key players across the industry are continuously striving to introduce a highly efficient portfolio with environmental effects and easy integration features, which are shaping the competitive landscape of the market.
An Infographic Representation of Hydraulic Fracturing Market
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The global hydraulic fracturing market research report presents a comprehensive assessment of the industry by offering market statistics, valuable insights, facts, industry-related information, and historical data. Several methodologies and approaches have been adopted to make meaningful assumptions and views to formulate the market research report. Furthermore, the report covers a detailed analysis and information as per market segments, including well type, technology, application, and regions, helping our readers to get a comprehensive overview of the global industry.
Value (USD Billion)
By Well Type; By Technology; By Application; and By Region
By Well Type
Fortune Business Insights mentions that the global hydraulic fracturing market size was USD 11.74 billion in 2020 and is projected to reach USD 28.93 billion by 2028.
In 2020, North America hydraulic fracturing market stood at USD 9.12 billion.
The hydraulic fracturing market is projected to exhibit CAGR of 9.5% during the forecast period (2021-2028).
By well type, the horizontal well segment is anticipated to hold a significant share
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 is predicted to dominate the market share in 2020.
Hydraulic fracturing 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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