Growing E&P activities for extracting hydrocarbons from unconventional reserves particularly shale basins has been major factor driving global hydraulic fracturing market growth over the last few years. Increasing demand for primary energy and fuel for transportation, household and power generation has been responsible for growth in demand for oil & gas over the last few years. Oil & gas industry participants have been witnessing declining production rates from conventional reserves. This might create an imbalance in the demand supply chain. In order to cope up with the growing demand for fossil fuels the E&P companies have shifted their focus to develop the unconventional oil & gas reserves. This shift towards development of unconventional hydrocarbon reserves is expected to boost the market growth.
Along with benefits, hydraulic fracturing has certain environmental and health risks associated with it. The market growth may be restrained by stringent environmental regulations by organizations such as REACH and EPA. Moratoriums by local organizations and bans on the use technology by regional agencies of France, U.S., Bulgaria and Romania, may have a negative impact on the market growth over the next few years. Development of shale basins in China and Russia coupled with increasing spending on R&D for developing technologies which use less water for fracking is expected to provide future opportunities for market players over the next six years.
Technological l Insights
Plug & Perf is the largest technology segment for hydraulic fracturing market accounting for over 85% of the total market revenues in 2013.The technology is used to extract oil & gas from cased holes. Sliding sleeve is relatively new technology in this market and is applicable for openhole wellbores as well as natural fractured formations. These technologies are used either in conjunction, industrially referred as ‘hybrid frac’ or separately depending on required fracture quality, formation type and coast involved. Sliding sleeves technique is comparatively les time consuming and more effective. Plug & Perf is a more developed and acknowledged technology for ease of accessibility in horizontal wells creating a high quality fracture. Development of waterless fracturing methods and use of gas fracturing techniques may provide hydraulic fracturing market participants future opportunities.
Major materials employed for hydraulic fracturing are proppants and other chemicals. Proppants accounted for over 22% of the total materials employed. They are utilized for keeping the induced fractures open alloying easy flow of fluids between the formation and the wellbore. Sand, resin coated sand and ceramics are used as proppants for fracturing purpose. Sand owing to its easy and cheap availability has the largest market. Increasing oil & gas production standards have restrained the use of sand as a proppant owing to sand production.
Ceramic materials have also significant market shares but are expected to lose some of its market shares to resin coated sand proppants.
The market finds application in extraction of oil & gas in conventional hydrocarbon reserves as well as for unconventional reserves which include shale basins, tight reserves and CBM. Hydraulic fracturing market demand from shale gas has the largest share in terms of market revenues. Initial development of shale gas reserves especially in U.S. and Canada has boosted the market demand growth for this application. Shale gas is expected to have the fastest growth rates over the next six years. Hydraulic fracturing market demand for tight oil & CBM applications is anticipated to have stagnant growth rates over the forecast period.
North America was the largest regional market and accounted for over 88% of the total market revenues in 2013. Development of unconventional resources of oil & gas coupled with government support for developing shale and tight reserves has been the major factor responsible for hydraulic fracturing market growth in this region. Asia Pacific market is anticipated to project the maximum growth rates owing to vast availability of unconventional hydrocarbon reserved in China and Indonesia.
Research Support Specialist, USA