Chemical Enhanced Oil Recovery (EOR) Market Expected to Reach $1.4 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Chemical Enhanced Oil Recovery (EOR) Market," The chemical enhanced oil recovery (EOR) market size was valued at $0.9 billion in 2021, and is chemical enhanced oil recovery (EOR) industry estimated to reach $1.4 billion by 2031, growing at a CAGR of 4.6% from 2022 to 2031.

Chemically enhanced oil recovery is one of the major EOR methods that reduces the residual oil saturation by lowering water-oil interfacial tension utilizing surfactant & alkaline and increasing the volumetric sweep efficiency by reducing the water-oil mobility ratio through polymer-based chemicals.

Enhanced oil recovery (EOR) technology enhances oil production from mature and aged oil fields by almost 10 to 20% when compared to conventional oil extraction methods. This technology enables the extraction of immobile oil and reduces the cost of drilling new wells. Several oil-producing companies across the globe are deploying this technology to meet national production targets and oil demand. In addition, surge in number of mature wells is likely to boost the demand for advanced technologies for the extraction of oil and lead to a surge in market growth. These positive factors boost the growth of the chemical enhanced oil recovery (EOR) market.

The U.S. Department of Energy's Office of Fossil Energy selected five projects to receive $40 million in federal funding for cost-shared research and development projects under the funding opportunity announcement in 2019. Petroleum companies and scientists look to the EOR for its potential to prolong the life of wells in proven or portable oil fields.

In addition, the increase in the policies to improve the matured wells production through unconventional methods such as chemically enhanced oil recovery in the territorial boundaries will provide many opportunities for the chemical enhanced oil recovery (EOR) market during this forecast period. However, the technology is inherently complex and requires highly skilled professionals, stepwise implementation and integration of R&D commitment, and risk-bearing capacity, which challenges the growth of the market.

The global chemical enhanced oil recovery (EOR) market analysis is segmented into the origin, type, technique, and application. By origin, the market is divided into petro-based, bio-based, and water-based. By type, it is classified into water-soluble polymers, surfactants, polymer gels, biopolymers, and alkaline chemicals. By technique, it is categorized into polymer flooding, surfactant polymer flooding, alkali surfactant polymer flooding, alkali co-solvent polymer flooding, and low-tension gas flooding. By application, it is bifurcated into offshore, and onshore. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA

On the basis of origin, the water-based segment emerged as the global leader by acquiring more than half of the chemical enhanced oil recovery (EOR) market share in 2021 and is anticipated to continue this trend during the forecast period. Water-based chemical-enhanced oil recovery consists of water-soluble polymers, surfactants, and alkaline chemicals. Crude oil is a major source of raw materials for synthetic polymers. Some polymers, primarily water-soluble ones, are sequentially used in various oil production stages, particularly in the so-called enhanced oil recovery (EOR) or tertiary oil recovery processes, to maintain a steady supply of energy.

On the basis of type, the alkaline chemicals segment emerged as the global leader by acquiring approximately half of the chemical enhanced oil recovery (EOR) market share in 2021 and is anticipated to continue this trend during the forecast period. Alkaline chemicals are the chemicals that neutralize acids. Alkalis are the hydroxides of alkali and alkaline earth metals and ammonia solutions. Apart from ammonia, the most common alkalis are derived from sodium (caustic soda), potassium (caustic potash), and calcium (slaked lime). Alkalis used in alkaline-related EOR include sodium hydroxide, sodium carbonate, sodium orthosilicate, sodium tripolyphosphate, sodium metaborate, ammonium hydroxide, and ammonium carbonate.

On the basis of technique, the surfactant polymer flooding segment emerged as the global leader by acquiring more than 1/3rd of the chemical enhanced oil recovery (EOR) market share in 2021 and is anticipated to continue this trend during the forecast period. Surfactant/polymer EOR flooding involves the flow of fluids in a two-phase (aqueous and oleous), multi-component (water, salt, polymer, surfactant, and petroleum) system. Surfactant flooding is an important technique used in enhanced oil recovery to reduce the amount of oil in the pore space of matrix rock. Surfactants are injected to mobilize residual oil by lowering the interfacial tension between oil and water and/or by the wettability alteration from oil-wet to water-wet.

On the basis of application, the onshore segment emerged as the largest market share in 2021 which accounted for approximately 3/4th of global market share and is anticipated to continue this trend during the forecast period. Onshore, when used for hydrocarbons, refers to an oil, natural gas, or condensate field that is under the land or to activities or operations carried out about such a field. Most of the mature fields available in the world are onshore fields where chemically enhanced oil recovery can be utilized.

Region-wise, North America accounted for the largest market share in 2021, and Asia-Pacific is projected to grow at a CAGR during the forecast period. The demand for chemical EOR technologies in North America is driven by the growth in unconventional resources in the Gulf of Mexico and shale reserves in the U.S.

The Asia-Pacific region has a large population-based demand for oil and gas, leading to the utilization of enhanced oil recovery methods to extract untapped oil resources. This is projected to provide lucrative opportunities for the growth of the chemical enhanced oil recovery (EOR) market.

Key players in the chemical-enhanced oil recovery industry include Exxon Mobil Corporation, BP p.l.c., China Petroleum & Chemical Corporation, Roya Dutch Shell plc, BASF SE, Praxair Technology Inc., Chevron Corporation, Baker Hughes Inc., PJSC Lukoil Oil Company, and Petroleo Brasileiro S.A. These players have adopted various strategies to gain a higher share or retain leading positions in the market.

Key Findings of the Study

• On the basis of origin, the water-based segment emerged as the global leader by acquiring more than half of the chemical enhanced oil recovery (EOR) market share in 2021 and is anticipated to continue this trend during the forecast period.
• On the basis of type, the alkaline chemicals segment emerged as the global leader by acquiring approximately half of the chemical enhanced oil recovery (EOR) market share in 2021 and is anticipated to continue this trend during the forecast period.
• On the basis of technique, the surfactant polymer flooding segment emerged as the global leader by acquiring more than 1/3rd of the chemical enhanced oil recovery (EOR) market share in 2021 and is anticipated to continue this trend during the forecast period.
• On the basis of application, the onshore segment emerged as the largest market share in 2021 which accounted for approximately 3/4th of global market share and is anticipated to continue this trend during the forecast period.
• On the basis of region, North America is the major consumer of chemical enhanced oil recovery (EOR) among other regions. It accounted for approximately 2/5th of the global market share in 2021.

Impact Of COVID-19 On The Global Chemical Enhanced Oil Recovery (EOR) Market

COVID-19 is an infectious disease that originated in the Hubei province of Wuhan city in China in late December 2019. It had spread to 213 countries around the globe, with the World Health Organization declaring it a public health emergency on March 11, 2020. The oil & gas industry has been negatively affected by the pandemic as most countries have imposed lockdown restrictions, leading to a decline in the sales of oil and gas. The pandemic has also severely affected the shale and heavy oil industry, which accounts for large usage of enhanced oil recovery techniques.

Despite the setbacks, the chemical enhanced oil recovery (EOR) market has shown a surge in growth due to the decline in oil resources and increased awareness of the environment. This has had a significant positive impact on the development of the market.