LONDON--(BUSINESS WIRE)--The global crude oil flow improvers (COFI) market is expected to grow at a CAGR of more than 5% during the period 2018-2022, according to a new market research study by Technavio.
The report presents a comprehensive research of the global COFI market by application (extraction, refinery, and transportation) and by product type (paraffin inhibitors, asphaltene inhibitors, scale inhibitors, drag reducing agents, and hydrate inhibitors). The report also determines the geographic breakdown of the market in terms of detailed analysis and impact, which includes key geographies such as APAC, the Americas, and EMEA.
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Market driver: shift from shallow to deepwater exploration
Most of the offshore production is mainly concentrated on shallow waters because of the low cost and technical challenges. Advances in drilling technology, floating production, dynamic positioning equipment, and drilling units have made deepwater exploration a viable option. The exhaustion of some of the shallow offshore resources has pushed vendors to explore and produce oil and gas from deepwater and ultra-deepwater (at depths of 1,500 meters or more) resources.
According to a senior analyst at Technavio for specialty chemicals research, “The increasing oil exploration in deepwater and ultra-deepwater is expected to drive the demand for crude oil flow improvers. Low temperatures and high pressure on the offshore locations can lead to the precipitation of waxes, hydrates, and asphaltenes. Crude oil flow improvers enhance the flow assurance of crude oil and help in increasing the production capacity.”
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Market trend: refracturing of old crude oil wells
Refracturing of shale wells is a topical issue as operators can use latest technologies on old wells, thereby increasing the production without incurring costs on new wells. The functions of old or underperforming wells are stopped, and hydraulic simulation is applied for completion. The application of hydraulic simulation in horizontal shale wells is in the initial phase. In 2015, the number of horizontal wells re-fracked in the US was almost less than 1% of the total number of horizontal wells. Refracturing can lead to an increase in the demand for crude oil flow improvers during the forecast period. In 2016 there were over 50,000 existing wells in the US, which can also be fracked.
Market challenge: stringent regulations and policies
The constant push from regulatory authorities such as the Environmental Protection Agency (EPA) and Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) is likely to limit onshore and offshore activities, thereby hampering the growth of the global COFI market. The EPA amended new regulations in the Oil and Gas Extraction Effluent Guidelines and Standards (40 CFR Part 435) in 2016. The regulation contains strict guidelines and policies for wastewater discharges from production, field exploration, drilling, production, well treatment, and well completion activities.
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