Enhanced Oil Recovery Market To Hit Value .1 Billion By 2027

Posted by Mrudula Anil Karmarkar on February 2nd, 2021

The global enhanced oil recovery market size is expected to reach USD 62.1 billion by 2027, escalating at a CAGR of 3.7% over the forecast period, according to a new report by Grand View Research, Inc. A growing number of ageing wells witnessing declining production rates coupled with rising government investment in research and development activities is likely to drive the market over the forecast period.

COVID-19 will have a severe impact on the oil & gas industry as global oil demand is expected to decline in 2020. The demand for crude oil is anticipated to drop for the first time since 2009 due to reduced industrial activity and transport. With public transportation curbed significantly to contain the outbreak, gasoline prices are also expected to continue the downward spiral. Enhanced oil recovery being a tertiary recovery method is expensive as compared to conventional technologies. Therefore, the collapse in oil prices is expected to negatively affect the growth of the market in the near future. The updated report will account for COVID-19 as a key market contributor.

Increasing technological advancements are enabling E&P companies to revive old wells and thus attain optimum production. This trend is estimated to positively influence industry growth. The increasing number of mature wells and investments in R&D activities for new technology development by various market players to improve the oil recovery process will result in the growth of the industry.

Industry participants enter into several strategic collaborations, such as mergers & acquisitions and joint ventures, to expand their foothold across various regional markets and develop economic technologies. The technologies used in enhanced oil recovery (EOR) are mostly in-housed by the companies. To further reduce the overall operational costs, market players procure raw materials, such as nitrogen, carbon dioxide, polymer, and others, from small-scale regional companies.

The COVID-19 pandemic has severely disrupted the oil & gas market with drastically plummeting oil prices resulting in delayed drilling projects. Moreover, the demand for crude oil is anticipated to drop further due to reduced industrial activity and transport. These factors are expected to negatively affect market growth in the near future.

Enhanced Oil Recovery Market Report Highlights

• The thermal technology segment occupied the largest market share in 2020. Thermal technology lowers the oil viscosity and increases its mobility ratio, thereby enhancing the oil recovery process
• CO2 injection technology is anticipated to be the fastest-growing segment over the forecast period as it helps reduce carbon emissions by utilizing those emissions for refineries and coal-based power plants
• Onshore application segment occupied the largest market share in 2020 owing to the presence of onshore exploration and production projects across the world along with lower conventional extraction costs for onshore oilfields
• North America led the global market in 2020 owing to the presence of a large number of existing and new EOR projects under operation across the region in the U.S. and Canada
• Asia Pacific is expected to witness the fastest growth rate over the forecast period owing to the rise in EOR activities in countries, such as China, Malaysia, Indonesia, and India

The U.S. market is anticipated to witness significant growth on account of the growing exploration of unconventional oil and gas resources. Furthermore, government funding aimed at commercializing the EOR technology is anticipated to positively influence the industry landscape. For instance, the U.S. Department of Energy (DoE) provides funding to private companies and universities for research purposes for advancements in EOR technologies.

Furthermore, the number of CO2 injection-based EOR projects started from 2017 to 2020 in the U.S., which resulted in a dominating share of CO2 injection technology over other available technology in the country. For instance, oil production in the Permian Basin has shown a significant rise in oil production with the use of CO2-EOR technology. These developments are expected to boost the growth of the EOR market in the U.S. in the forecast period.

Falling crude oil prices are expected to have a negative impact on the oil & gas industry and may restrain the market growth over the forecast period. The COVID-19 pandemic has led to a drastic drop in the oil prices in 2020. This resulted in reductions in planned capital expenditure and implementation of cost-cutting actions by oil companies across the globe, which is expected to hinder the market growth.

However, rising concerns regarding carbon emissions have resulted in enhanced demand for the Carbon Capture and Storage (CCS) market, which has emerged as a viable solution to limit carbon emissions. These factors are expected to positively impact the market as captured carbon in CCS projects is usually utilized by the oil & gas companies for CO2 injection EOR technology.

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The market is highly competitive and moderately consolidated with the presence of multinational companies. The oil & gas exploration companies procure raw materials, such as a polymer, carbon dioxide, nitrogen, and others, from specialized vendors. The technologies used in EOR are usually in-housed by the oil & gas exploration companies. Market players are venturing towards extracting oil from existing reserves to maximize their production targets. Moreover, increasing investments in R&D activities to develop cost-effective oil recovery technology is expected to further fuel industry growth. Some of the prominent players in the enhanced oil recovery market include:

• ExxonMobil Corporation
• BP plc
• Royal Dutch Shell plc
• Total SA
• Chevron Corporation

Grand View Research has segmented the global enhanced oil recovery market on the basis of technology, application:

EOR Technology Outlook (Volume, Million bbl; Revenue, USD Million, 2016 - 2027)

• Thermal
• CO2 Injection
• Chemical
• Others

EOR Application Outlook (Volume, Million bbl; Revenue, USD Million, 2016 - 2027)

• Onshore
• Offshore

About Grand View Research

Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.

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