Drilling fluids demand increases annually through 2021
Demand for drilling fluids is projected to rise 11 per cent per year to 1.45 billion gallons in 2021. A recovery in drilling activity and the rising average fluid use per well will drive growth. Drilling fluids, also called drilling muds, are used to cool and lubricate the drill bit and carry the drill cuttings out of the well to the surface. In oil and gas drilling, fluids must contend with challenges such as reactive or unstable rock layers, geothermal heat, highly pressured formation fluids, and long boreholes. These and other trends are presented in Drilling Fluids & Chemicals Market in the US, a new study from The Freedonia Group, a Cleveland-based industry research firm.
A key trend in growth of the drilling fluids market is the amount used per well. Between 2006 and 2014, when drilling fluid demand peaked, fluid demand per well more than doubled. This was due to a dramatic shift toward unconventional drilling rather than conventional vertical drilling, as unconventional wells are much longer and so require more drilling fluid. Going forward, average fluid per well will continue to rise, but at a slower rate, as unconventional drilling already occupies a large share of drilling activity. However, increasing lateral lengths will continue to boost the average fluid used per well.
Recovery in drilling activity and drilling fluid consumption will be uneven across the United States, since some regions are more economically attractive than others. Increases in drilling fluid demand of over 10 per cent per year are expected in Texas, Oklahoma, the Gulf of Mexico, and Louisiana due to strong drilling activity. Texas will continue to account for about half of total demand as investment in Permian Basin drilling surges.
For more information on this and related studies, visit www.freedoniagroup.com.