Enhanced oil recovery (EOR) methods are being widely adopted by oil and gas producers worldwide for their existing and newly explored wells. In addition, new technologies are being developed to improve the efficiency of the technique. The GCC is one of the more mature oil extractors and has a good number of older oil wells. To extract the proven reserves, oil producing companies are pushing the use of EOR in existing oil wells.
In addition, a number of new methods are being developed in the market, such as chemical EOR to reduce the cost of oil recovery.
“The EOR market is ramping up due to ageing oil fields,” senior officials at Halliburton tell the magazine. “For example, between 2007 and 2011, it grew from $56bn to $125bn. Recent estimates indicate that, as oil consumption grows, while there are fewer reserves and discoveries, EOR may take a significant share of the oil market. It has to be considered that a mere 1% recovery increase could yield a two-year oil supply, and EOR may increase recovery factor 5 to 15% over secondary recovery.”
Experts at Baker Hughes, another US-based oilfield services company, predict the total available market for EOR globally to be around $5bn.
The GCC is expected to show the highest growth rate in the global EOR market. This is mainly attributed to the growing number of oil reserves that exist in the Middle East. More than 8bn barrels of oil are expected to remain performing primary and secondary operations on Gulf’s offshore reservoirs. Such factors are driving demand for new EOR installations in GCC and, as a result – and also due to environmental strategies – the GCC is developing EOR techniques that are renewable or bio-based, such as solar-powered thermal EOR.
One of the key strategies of the GCC EOR market is to develop patented technologies. For instance, Gulf Energy LLC developed its microbial EOR system with the water scarcity in GCC in mind.
Companies are also involved in expansion through the exploration of new fields. With the emergence of the GCC market, it is expected that affiliated markets like technology services, maintenance services, and consulting services, will also grow. Market participants are also expanding their business in the service model.International players like BP, Cenovus Energy, Anadarko Petroleum Corporation, Chevron, ConocoPhillips, Lukoil, ExxonMobil, Petronas, Statoil ASA, and Royal Dutch Shell are key market participants in the GCC EOR market.
Estimates suggest that the EOR market is projected to grow at a compound annual growth rate (CAGR) of 24%. It is tipped to be one of the fastest-growing segments within the global oil and gas market.
The EOR market is highly fragmented, owing to the huge energy demand and changing technologies. Major companies rely on regional and local distributors to increase their share, as well as their geographical presence in the market. The major developments in the EOR market are agreements, contracts, joint ventures, and partnerships. The application requirements for EOR, and the operating conditions, are continually changing, making it essential for manufacturers and service providers to invest in research and development [R&D] to come up with innovative solutions.
Companies are adopting inorganic growth strategies, such as acquisitions, to cope with the increasing demand for EOR technology in key emerging markets. These strategies have helped companies to create a large customer and partner base in key markets.
From a global perspective, the EOR market is expected to reach $283bn by 2020, according to a study by Grand View Research. Growing global energy demand is expected to remain a key driving factor for the global EOR market. The rising number of mature oil wells, particularly in the Middle East and Latin America, coupled with high productivity yields associated with EOR techniques, are also expected to have a positive impact on market growth over the next four years. Long lead-time and volatile crude oil prices are expected to remain key challenges.
Thermal EOR has so far been the most dominant technology, accounting for nearly 50% of total market volume in 2013. Growing demand for high hydrocarbon recovery in low permeability and mature reserves, in addition to technological advances, are expected to drive growth in this segment. Thermal EOR technologies are expected to lose some of their share to other high-growth technologies like chemical and gas injection techniques over the forecast period, however.
Chemical EOR is estimated to gain market share over the next few years, particularly in Asia Pacific and the Middle East. New techniques are expected to drive the chemical EOR market over the forecast period.
