Report Highlights
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Tempered by the ongoing global economic recovery, between 2009 and 2014 the world market for enhanced oil recovery (EOR) technologies is expected to increase by a factor of 3.5, from $4.7 billion to $16.3 billion, a compound annual growth rate (CAGR) of 28.4%.
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The most extensive growth, in terms of total dollars, will occur in the North American market. This region was valued at $3.3 billion in 2009 and is expected to increase at a compound annual growth rate (CAGR) of 26% to reach $10.3 billion in 2014.
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South America will experience the highest compound annual growth rate (CAGR) of 374%, increasing in value from $1 million in 2009 to $2.4 billion in 2014.
INTRODUCTION
STUDY GOALS AND OBJECTIVES
BCC’s goal in conducting this study was to assess and describe the current status and assess the potential growth of the worldwide enhanced oil recovery (EOR) industry and the market for associated EOR technologies. More specifically, the study included the following objectives: (1) summarize existing EOR technologies and promising emerging technologies that are under development; (2) evaluate the existing EOR industry, focusing on the manufacturers and providers of major components for viable EOR technologies; and (3) assess market potential for EOR technologies over a 5-year period from 2009 through 2014.
REASONS FOR DOING THIS STUDY
Continually rising global demand for petroleum has resulted in the escalation of its price during this decade and placed significant pressure upon the global oil industry to increase production. (The term “oil” is hereafter used nearly exclusively within this study when referring to petroleum.) Faced with the challenge of increasing supply, the global oil industry relies upon the discovery of new oil reserves and production from developed, drilled reserves. Enhanced oil recovery (EOR) technologies are becoming increasingly significant to global oil supply by increasing or reviving oil production at reserves or oilfields depleted of more easily recoverable oil through primary or secondary oil-recovery methods and technologies. In other instances, EOR technologies have allowed the global oil industry to produce oil from alternative reserves—such as oil sands or oil shale—through field operations previously thought to be technologically infeasible or economically unviable. EOR technologies are widely considered vital to maintaining the role of oil as a continued, reliable source of energy in the global economy.
EOR technologies are also promoted by the global oil industry and publicly as means to addressing key points of energy policy held by nations and political organizations worldwide. Some of these technologies first found widespread commercial application during the energy crises of the 1970s when regional and national oil supplies worldwide were severely disrupted due to their reliance upon oil imports. Concerns over regional and national energy security and energy independence persist in many nations and global markets due to perceived geopolitical threats to the continued supply of imported oil. Capable of bolstering oil production from reserves unrecoverable through primary or secondary oil recovery methods and technologies, EOR technologies can contribute to a country’s efforts to reduce its dependence upon oil imports and thus achieve greater energy independence.
Climate change and control of greenhouse gas (GHG) emissions—particularly carbon dioxide (CO2)—also represent key issues for contemporary global and national energy policy that can be addressed through the application or increased utilization of EOR technologies. The increasingly worldwide prevalence of regulation designed to minimize or otherwise mitigate the emission of GHGs has presented an opportunity to the global oil industry to boost oil production at select fields by sequestering or otherwise injecting CO2 into underground oil reservoirs. The sequestration of CO2 captured from industrial, petrochemical, or power generation sources represents a convergence of industry efforts to increase oil production from existing assets while mitigating the effects of fossil fuels to global climate change.
Current market conditions and recent advances in EOR technologies, including industry understanding regarding their effective application, are principally responsible for the renewed industry involvement in enhanced oil recovery. Additional costs associated with the services and infrastructure required for EOR technologies may limit their application; however, currently high oil prices globally (unprecedented in exception to oil prices during the 1970s) have minimized the significance of these added costs and greatly increased the economic viability of EOR technologies. Further growth in the market for EOR technologies is anticipated due to their technological maturity, strong representation from a variety of service providers and product suppliers in the global oil industry, extensive industry experience in the application of EOR technologies, and the technologies’ proven efficacy in increasing oil production at oilfields worldwide.
INTENDED AUDIENCE
This study reviews EOR technologies, along with relevant market and production information, technological descriptions and issues, applications, and market factors and potential, and gives an overview of supporting incentives and regulations in major worldwide markets. This study will be of interest to current and potential manufacturers and suppliers of EOR technologies as well as entrepreneurs and entrepreneurial companies interested in entering or expanding into the EOR technology sector. It will also be of interest to corporate planners and strategists, companies involved in the recovery and production of oil, EOR services providers, EOR rental equipment providers, fossil fuel energy advocacy groups, and other public- and private-sector interest groups and market analysts.
SCOPE OF REPORT AND METHODOLOGY
The scope of this investigation includes the major viable EOR technologies that are currently being implemented in the oil industry. These EOR technologies are implemented to recover crude oil from reservoirs after primary and secondary recovery methods have ceased to be productive enough to continue normal field operation economically. In some cases, the EOR technologies considered in this report may also be applied immediately following initial well drilling. These applications are common for fields where primary and secondary recovery technologies are incapable of producing adequate oil in any phase of oilfield operation.
Installation and operation of EOR technologies can include various products and components such as injection pumps, wellheads, specialized well tubing, chemical feeder systems, air separation units, gas compressors, blowers, steam generators, specialized storage vessels, and various other equipment and facilities. Other important products of an EOR technology include oil recovery media such as surfactants, polymers, alkali chemicals, liquid nitrogen, and CO2. Although steam and onsite-compressed atmospheric nitrogen are also important oil recovery media, they are not considered EOR technology products within this report as they are supplied at minimal or no direct cost, unlike CO2 or specialized injection chemicals that are supplied to an EOR operation.
The market analysis provided in this report is based on a variety of data sources. These include the most recent government, industry, and academic data regarding the amount of oil in place that could potentially be extracted via EOR, combined with a supplemental evaluation of major EOR projects that have been announced, or that are currently being proposed. Therefore, this report combines “top-down” and “bottom-up” approaches to provide a realistic, robust, and accurate assessment of this complex market.
Emerging EOR technologies anticipated to be commercially viable within the next 5 years are summarized, but are not included in the market assessment of this report. BCC analyzes each major viable EOR technology, determines its current market status, examines its impact on future markets, and presents forecasts of growth over the next 5 years. Technological issues, including the latest trends, are assessed and discussed, as are the current and likely regulatory environments in support of this industry.
BCC analyzes the industry on a worldwide basis in terms of its manufacturing and the deployment of its technologies or products. BCC examines government roles in support of EOR technologies worldwide, including regulatory support, government requirements, and promotional incentives for various EOR technologies as relevant and available. BCC provides a review of the most relevant EOR technologies, discusses recent trends in capacity installation and unit sales, and provides industry overviews and market assessments for each EOR technology.
WORLDWIDE MARKETS
The following table provides a review of the major worldwide markets that were assessed in support of this study.
TABLE A
LIST OF GLOBAL MARKETS CONSIDERED IN THIS STUDY
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Market
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Countries/Regions Included
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North America
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United States, Canada, Mexico
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South America
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Venezuela, Trinidad & Tobago, Argentina, Columbia, Brazil
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Europe
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European Union, Norway, Turkey, Russia
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Asia
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Oman, Saudi Arabia, United Arab Emirates, Kuwait, Syria, Iran, Egypt, Pakistan, India, Kazakhstan, China, Indonesia, Malaysia
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Source: BCC Research
METHODOLOGY
Background information, including reviews of each EOR technology and its implementation status, was collected from government and industry sources. Specific citations and references are provided as needed to support this study, and website links to government and industry studies, white papers, and other relevant information are provided whenever available.
BCC’s research of present and historic market trends was conducted primarily via phone interviews and internet research, relying on personal interviews and available governmental data. Provided internal company data and annual documentation of sales relevant to a particular EOR technology were also reviewed in order to prepare market assessments. Based on the results of our surveys and research, BCC analyzed the potential applications for each technology, and forecast remaining 2009 sales and sales through 2014.
Market sizes and installed capacity figures were calculated based upon data obtained from surveyed parties. Additionally, when available, the data provided in this report were compared with other industry data to ensure relevance, applicability, and accuracy.
TABLE B
RESEARCH INFORMATION SOURCES
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Portion of BCC Report
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Information Source
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Primary or Secondary
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Review of industrial and utility scale solar
thermal technologies and products
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Scientific, government, and industry research
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Secondary
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Regulatory support for solar thermal energy
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Government documents
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Primary and secondary
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Industry structure and market overview
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Industry interviews
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Primary
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Major companies and company profiles
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Industry interviews
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Primary
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Market assessment and projections
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Industry interviews, government documents, BCC Research calculations
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Primary
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Source: BCC Research
INFORMATION SOURCES
Both primary and secondary research methods were used in preparing this report. BCC surveyed more than 70 companies to obtain the data for this study. Included were manufacturers of EOR technologies, distributors of EOR technologies, and companies involved with the deployment of EOR technologies and field facilities. BCC also spoke with users of these technologies in a variety of locales worldwide. Additionally, BCC compiled data from current financial and trade information, industry associations, and government sources.
ANALYST CREDENTIALS
Robert Eckard has more than a decade of experience working in the energy and environmental industries. Currently pursuing a PhD in water and energy resources at the University of California at Davis, Robert also runs a small industry research and technical consulting company, with an emphasis on energy/water/environmental sectors. Robert has provided economic analysis market assessments, environmental analysis, and technical water and energy reports to state and local governments, other consultants, and private companies and individuals throughout the U.S., Australia, and Singapore. He also works as a subcontractor under the U.S. Department of Energy, providing analysis in support of fossil fuel extraction and refining for petroleum fuels, coal, and natural gas. Previously, he has produced reports for BCC Research on the global markets for residential and commercial solar thermal (ST) technologies, industrial and utility scale ST technologies, distributed generation (DG) technologies, and energy-efficiency (EE) technologies.
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DISCLAIMER
The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal, or accounting advice; nor should it serve as a corporate policy guide, laboratory manual, or an endorsement of any product, as much of the information is speculative in nature. The author assumes no responsibility for any loss or damage that might result from reliance on the reported information or its use.
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