Middle East Drilling Fluid Market Size Share and Trend Analysis By Product (Oil-Based, Synthetic, Water-Based), By Application (Onshore Oil & Gas, Offshore Oil & Gas) And Segment Forecasts To 2022

Report Overview

The Middle East drilling fluid market size was valued at USD 1,450.0 million in 2014. Growing concern about collapsing boreholes, spill containment, and handling solid wastes is expected to drive product demand over the forecast period. The development of advanced drilling fluid chemicals, particularly for wells requiring horizontal drilling, is anticipated to create immense opportunities for the market.

Oil-based fluids (OBF), toxic, and cuttings from drilling mud must be disposed of at approved onshore locations. There are various environmental regulations in the Middle East that have to be followed by oil & gas exploration & production (E&P) companies in onshore and offshore locations. These regulations are established to monitor E&P operations and minimize the impact on the environment.

Growing safety, environmental, and health concerns regarding the disposal of cuttings and mud discharge are anticipated to hinder market growth over the forecast period. Growing environmental concerns regarding the harmful effects of using OBF are leading to the increasing adoption of water-based fluid (WBF). Owing to its biodegradability characteristics, synthetic-based drilling fluid (SBF) is expected to gain significance over the forecast period.

A large number of ongoing operations in major oilfields such as Ghawar, Safaniya, Khurais, and Shaybah are expected to play a key role in oil & gas industry growth in the region. Growing demand for air conditioning and other industrial cooling equipment is expected to drive electricity demand in the region. Growing concern about collapsing boreholes, spill containment, and handling solid wastes is expected to drive drilling fluid demand over the forecast period in Saudi Arabia.

Moreover growing E&P activities in offshore basins, particularly in the Persian Gulf, is anticipated to drive demand over the forecast period. Rising concern towards the environmental impact of oil & gas operations is anticipated to drive WBF demand over the forecast period. High product demand may be attributed to the low toxicity of this product.

Product insights

Drilling fluid serves various functions including removing cuttings from the wellbore, controlling formation pressures, lubricating and cooling the drill bit and maintaining wellbore stability. WBF was the largest product segment accounting for over 46% of market revenue share in 2014. The rising focus on improving the inhibitive and thermal performance of water-based systems to compete with non-aqueous used in challenging and harsh environments is anticipated to drive product demand over the next seven years. Moreover, WBF is cost-effective and has lower environmental impacts on the discharged cuttings and mud.

OBF segment is expected to grow at a CAGR of over 4.0% from 2015 to 2022. Owing to its enhanced lubricity, oil-based are expected to gain significance over the forecast period. Owing to increasing demand for higher thermal stability, and lesser corrosion of drilling tools, OBF is expected to gain significance over the forecast period.

Owing to its low toxicity, low bioaccumulation potential, and lower fluid loss than other product segments, SBF is expected to gain significance over the forecast period. Growing concern about downhole losses and maintenance costs in deepwater projects has urged oil & gas companies to move towards efficient drilling fluids that also adhere to environmental regulations.

Application insights

Drilling fluid lubricates industrial equipment and reduces corrosion in reactive formations. Increasing oil E&P activities to fulfill growing energy needs is anticipated to drive product demand over the forecast period. The onshore application segment was the largest application segment of the market, accounting for over 70% of the market share in 2014. Growing demand for crude oil and natural gas in Saudi Arabia, UAE, and neighboring countries in the Asia Pacific and Europe are expected to drive onshore projects over the long term.

The offshore segment is expected to witness high growth over the forecast period growing demand for the product in deepwater, harsh environments, and remote locations are expected to drive product demand over the forecast period. Recent developments in offshore activities such as contract signature and increasing oil production in various regions including Qatar and Iran is expected to drive offshore E&P in the Middle East over the next seven years.

Moreover, the growing demand for increasing production rates, efficiency, and mitigating gas-related capital expenditures is expected to drive drilling fluids demand in offshore activity, over the long term. The growing number of ongoing projects in the Middle East and Africa including, the Maydan Mahzam and Bul Hanine fields are expected to drive product demand over the forecast period.

Regional insights

Saudi Arabia is the largest regional market in the Middle East, owing to the increasing demand for transportation fuels and power generation sectors. A Large number of ongoing operations in major oilfields such as Ghawar, Safaniya, Khurais, and Shaybah are expected to play a key role in oil & gas industry growth in the region. The rising number of rig counts in the region coupled with a growing number of deepwater discoveries in the Persian Gulf and the Red Sea is anticipated to drive the market over the forecast period.

Qatar is anticipated to witness the highest growth in this market over the forecast period. Ongoing developments in the oil & gas industry such as new contracts and investments to sustain annual production levels are expected to drive oil & gas E&P activity in the region over the next seven years. Moreover, Qatar has witnessed large-scale projects in natural gas development and exports for downstream industries that utilize it as a feedstock. The presence of megaprojects including Total, Shell, ExxonMobil, and ConocoPhillips is expected to drive the LNG sector in the region. Deploying advanced techniques such as enhanced oil recovery (EOR) for oil exploration activity in fields including Al-Shaheen, Bu Hanine, Dukhan, and Idd al-Shargi is expected to drive the market in the coming years.

Key Companies & Market Share Insights

Major companies operating in the Middle East drilling fluid market include Baker Hughes, Halliburton, Schlumberger, and Weatherford. These companies are involved in manufacturing and utilizing the products in their E&P activities worldwide. Companies such as Newpark Resources, Anchor Drilling fluid, Catalyst LLC, Petrochem Performance Chemicals, EMEC, and Diamoco Group are integrated companies and are involved in raw material production and manufacturing, and distribution.

Middle East Drilling Fluid Market Report Scope

Segments Covered in the report

This report forecasts revenue and revenue growth at regional (Middle East) & country levels and provides an analysis of the industry trends in each of the sub-segments from 2012 to 2022. For this study, Grand View Research has segmented the Middle East drilling fluids market on the basis of product, and application.

• Product Outlook (Revenue, USD Million; 2012 - 2022)

  • Oil-based fluid (OBF)

  • Synthetic drilling fluid (SBF)

  • Water-based drilling fluid (WBF)

  • Others

• Application Outlook (Revenue, USD Million; 2012 - 2022)

  • Onshore oil & gas

  • Offshore oil & gas

• Middle East Outlook (Revenue, USD Million; 2012 - 2022)

  • UAE

  • Saudi Arabia

  • Qatar

  • Kuwait

  • Rest of Middle East