Description

The global spacer fluid market was valued at USD 257.1 million in 2021 and is projected to reach USD 382.2 million by 2030, growing at a CAGR of 5.1% from 2022 to 2030. In cementing operations, a spacer fluid is used to separate the drilling fluid from the cement physically. Because special-purpose liquids are prone to contamination, they are separated by a compatible spacer fluid. The most commonly used spacer is water. On the other hand, chemicals are frequently added to improve the performance of a particular operation. During cementing operations, spacers are typically used to separate mud from cement and switch mud types.

The demand for spacer fluid is projected to expand due to the drilling methods changes. Investments in drilling, production, and exploration, technological advancements in cementing operations for well and water drilling-based drilling fluid environments, and ongoing oil and gas activities worldwide are the major factors driving the growth of the spacer fluid market.

COVID-19 Impact on the Global Spacer Fluid Market

Some major countries suffering the COVID-19 crises include Germany, France, Italy, Spain, the UK, Norway, and others. Due to the coronavirus outbreak, many industries have been shut down due to a lack of raw material availability and disruptions in the supply chain. As a result of the worldwide lockdown, onshore and offshore drilling activities have been suspended, resulting in lower demand for spacer fluid.

Manufacturing of oil and gas and other products came to a halt worldwide due to a lack of raw materials, labor shortages, and other factors. The spacer fluid market is expected to be hampered due to this. The growth of various end-use industries will be influenced by demand-supply gaps, price volatility, and changing government policy. The COVID-19 pandemic has outrun any headwind regarding its immediate and long-term impact on industry and consumers. Due to the economic constraints imposed by the COVID-19 pandemic, the world economy of spacer fluid industries has been rapidly slowing.

Owing to the COVID-19, the market witnessed a significant dip due to the closure of several rigs; however, the market is witnessing strong growth in the next couple of years as the situation continues to ease down in the country.

Global Spacer Fluid Market Dynamics

Drivers: Shift in the method of drilling

There has been a rapid shift in the drilling methodologies in the past few years. Manufacturers have preferred horizontal/ lateral drilling over vertical drilling in recent days. Horizontal directional drilling (HDD) is one of the most specialized methods for installing underground conduits while causing the least environmental damage. Furthermore, the fact that HDD techniques provide more precision than vertical maneuvering methods is expected to boost the market growth during the projection period. As a result, the total space of the drilling area has been increased. These changes have increased the demand for spacer fluids in recent years.

Restraints: Volatility in prices of crude oil affect the drilling fluids consumption

The global use of spacer fluids is being driven by increased investments in offshore oil and gas exploration and production. The upstream of the oil and gas industry is expected to increase crude oil output volume. As a result, the market for spacer fluids is booming.

Since the beginning of 2018, the global price of crude oil has been steadily rising, and offshore and onshore exploration and production activities have expanded rapidly. Demand for drilling fluids is projected to rise in areas such as the North Sea in Norway and Bakken field in the U.S. As per the International Energy Agency, approximately 65,176 wells were drilled in 2017. This has increased the demand for spacer fluids. New government approvals for drilling operations worldwide are driving up demand for spacer fluids in both onshore and offshore operations.

Opportunities: India to witness increased demand

India is one of the most significant contributors to global non-OECD petroleum consumption growth. Despite India's growing preference for renewables, the government is still determined to lower its oil and gas import dependency by 10% by 2022. The government has approved foreign direct investment and a new hydrocarbon exploration and licensing policy.

In addition, the Indian government's decision to raise the natural gas price for undeveloped discoveries in difficult-to-access areas like undeveloped deepwater, ultra-deepwater, and high temperature-high pressure areas and recent regulatory improvements are expected to boost exploration and development activities in the country during the forecast period. As the spacer fluids market depends majorly on exploration & production activities, India offers an optimal growth opportunity for the global spacer fluids players during the forecast period.

Scope of the Spacer Fluid

The study categorizes the spacer fluid market based on application and type at the regional and global levels.

By Application Outlook (Sales/Revenue, USD Million, 2017-2030)

• Onshore
• Offshore

By Type Outlook (Sales/Revenue, USD Million, 2017-2030)

• Water-based drilling fluid environment
• Oil-based drilling fluid environment

By Region Outlook (Sales/Revenue, USD Million, 2017-2030)

• North America (US, Canada, Mexico)
• South America (Brazil, Argentina, Colombia, Peru, Rest of Latin America)
• Europe (Germany, Italy, France, UK, Spain, Poland, Russia, Slovenia, Slovakia, Hungary, Czech Republic, Belgium, the Netherlands, Norway, Sweden, Denmark, Rest of Europe)
• Asia Pacific (China, Japan, India, South Korea, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, Cambodia, the Philippines, Singapore, Australia & New Zealand, Rest of Asia Pacific)
• The Middle East & Africa (Saudi Arabia, UAE, South Africa, Northern Africa, Rest of MEA)

The onshore segment is projected to account for the largest market share, by application

The spacer fluid market is segmented into onshore and offshore based on application. In 2021, The onshore segment dominated the spacer fluid market and was projected to remain the fastest-growing segment. Onshore oil & gas production consists of setting up an oil rig on the land, drilling deep under the earth's surface. It can be set in a few hours, and the case of a mobile rig, in a few hours. After the setup, the well is prepared for drilling and completion before starting oil recovery. More than 70% of the global crude oil is recovered from onshore oilfields. As the maximum amount of crude oil is being extracted from onshore, the spacer fluid market demand is anticipated to grow in the forecasted time frame.

Rapid growth in the demand for crude oil has led to increased onshore drilling activities. Hence, oil & gas operators have shifted their attention from offshore oilfields towards onshore oilfields. This has increased demand for drilling and completion fluids such as clear brine fluids. The onshore drilling, shales are readily available, and equipment can easily be transported from one site to another site with the help of skids and various other resources that make drilling sites mobile and flexible, which helps in reducing the installation and shipping costs, which would otherwise be much higher for an offshore project.

Asia Pacific accounts for the highest CAGR during the forecast period

Region-wise, the spacer fluid market is segmented into North America, Asia-Pacific, Europe, South America, and the Middle East & Africa. Globally, Asia Pacific is estimated to hold the highest CAGR of 5.8% in the global spacer fluid market during the forecast period. Asia-Pacific comprises China, Japan, India, South Korea, and the Rest of Asia-Pacific. This region is estimated to have the fastest growth rate and highest potential for spacer fluid among all regions globally. APAC is among the fastest-growing regions due to countries such as India, China, and Japan.

Concerns over drilling fluids' environmental impact, along with stringent government regulations, is a major stumbling block to the market's expansion. The development of improved drilling fluid chemicals and a focus on deep and ultra-deepwater reserves are two significant aspects that will drive market expansion. With the growth in exploration operations in the region due to the increasing demand for energy with an increasing population, the Asia-Pacific region has a great opportunity for the spacer fluids market to flourish.

Key Market Players

The spacer fluid market is consolidated in nature with few players such as AubinGroup, BASF SE, Chevron Phillips Chemical Company, Baker Hughes Incorporated, Croda International PLC, Halliburton, M&DIndustries of LA Inc., Schlumberger Limited., Impact Fluid Solutions, and Trican Well Service Ltd., holds a significant share of the market. These players have been adopting various strategies to gain higher shares or retain leading positions in the market. Joint venture and partnership is the player's most adopted strategy, including Baker Hughes Incorporated.

Recent Developments

• In March 2021, Baker Hughes Company entered into a joint venture with Akastor ASA to combine Baker Hughes’ Subsea Drilling Systems (SDS) business with Akastor’s MHWirth AS to provide an extensive portfolio of global full-service offshore drilling equipment.
• In October 2018, Baker Hughes Company (then BHGE) partnered with Abu Dhabi National Oil Company (ADNOC) to transform ADNOC Drilling into a fully integrated drilling and well construction business and establish Baker Hughes’ presence in the UAE.

Key Issues Addressed

• What is the market size by various segmentation of the spacer fluid by region and its respective countries?
• What are the customer buying behavior, key takeaways, and Porter's five forces of the spacer fluid market?
• What are the key opportunities and trends for manufacturers involved in the spacer fluid supply chain?
• What are the market's fundamental dynamics (drivers, restraints, opportunities, and challenges)?
• What and how are regulations, schemes, patents, and policies impacting the market's growth?
• What are the upcoming technological solutions influencing market trends? How will existing companies adapt to the new change in technology?
• The market player positioning, top winning strategies by years, company product developments, and launches will be?
• How has COVID-19 impacted the demand and sales of spacer fluid in the global market? Also, the expected BPS drop or rise count of the market and market predicted recovery period.
• Detailed analysis of the competitors and their latest launch, and what are the prominent startups introduced in the target market? Also, detailed company profiling of 25+ leading and prominent companies in the market.