Post on 07-Mar-2018
Oil Field ChemicalsOil Field Chemicals
A Boom Industry?
Ray Will, Director, IHS Chemical20-21June, 2012Houston, Texas USA
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• The IHS U.S. Well Database is the largest and mostcomprehensive, with 3.5 million+ current and historic wellrecords, back to 1859.
• As many as 1,000 data elements and narrative commentsto inform E&P evaluations.
IHS Well Database
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to inform E&P evaluations.
• Data experts work directly in the field with more than 2,000contacts to bring well data before state reports are filedand data that some states never obtain.
• Includes Hydraulic Fracturing data: propping agent type &quantity
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Private Consulting
• IHS Chemical leverages its proprietary data coupled withprimary research and analysis to find solutions to clientneeds in:
• Market research
• Process evaluations
• Benchmarking studies
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• Benchmarking studies
• Competitive evaluations
• Feasibility studies
• Master Plan studies
• Intellectual property litigation support
• Business interruption cause and cost analysis
• Many others
What are Oil Field Chemicals?
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1) Drilling Fluids: Chemical formulations to lubricate thedrill bit, control formation pressure and remove formationcuttings. May be water or oil based. Workover andcompletion fluids are used when operating in producing
Oil Field Chemicals—Categories & Functions
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completion fluids are used when operating in producingformations.
2) Cementing: Chemical additives used to cement steelpipes or casing to the sides of the borehole.
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3) Stimulation: Commonly used stimulation techniques are1) acidizing and 2) fracturing. Oil and natural gasstimulation differs-- natural gas wells require stimulationroughly twice as often as oil wells.
Oil Field Chemicals—Categories & Functions
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roughly twice as often as oil wells.
4) Production: Products are used at all stages, from oilproduction at the well bore to the delivery of crude to therefinery. Treatment of oil produced by enhanced recoverytechniques is also considered part of this category.
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1) Drilling Fluids— Components
Minerals Includes, but not limited to:
pH Control YES Lime, calcium chloride,potassium chloride, sodiumchloride, sodium carbonate &bicarbonate
Base Oils No
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Dispersants No
Emulsifiers No
Filtrate Reducers YES Lignite
Flocculants YESSalt/brine, hydrated lime,gypsum, soda ash
Foaming Agents No
Lost CirculationMaterials
YESVarious fiber, flake & granularmaterials
1) Drilling Fluids— Components(cont.)
Minerals Includes, but not limitedto:
Lubricants/Pipe-Freeing Agents
YES Graphite
Shale ControlInhibitors
YES
Calcium sulfate,potassium chloride,sodium silicate, lime, air
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InhibitorsYES
sodium silicate, lime, airblown asphalt
Synthetic fluids No
Viscosifiers YES Bentonite, attapulgiteclays
Weighting Agents YESBarite, hematite, ilmenite,calcium carbonate,calcium chloride
2) Cementing— Components
Minerals Includes, but not limitedto:
Accelerators YESCalcium chloride, sodiumchloride, sodium sulfate,sodium silicate
Dispersants YES Sodium chloride
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Fluid-Loss Additives No
Lost CirculationMaterials
YESGilsonite, perlite, mica,bentonite, silicates
Retarders YES Borax
Weighting Materials YES
Hematite, barite, sand,ilmenite, bentonite,attapulgite, pozzolan,gilsonite, silicates
3) Stimulation— Components
Minerals Includes, but not limitedto:
Acids No
Breakers No
Corrosion Inhibitors No
Silica flour, calcium
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Fluid Loss Additives YESSilica flour, calciumcarbonate
Gelling Agents No
Iron ControlAdditives
No
3) Stimulation— Components (cont.)
Minerals Includes, but not limitedto:
Sand, sintered bauxite,
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Proppants YESSand, sintered bauxite,resin-coated sand, alumina(and others)
Surfactants No
Viscosifiers No
4) Oil Production— Components
Minerals Includes, but not limitedto:
Corrosion Control No
Demulsification No
Drag Reduction No
Foam Control No
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Foam Control No
Gas Well WaterRemoval
No
Hydrate Control No
Hydrogen SulfideControl
YES Zinc & iron oxides
MicrobiologicalControl
No
4) Oil Production— Components(cont.)
Minerals Includes, but not limitedto:
Scale Control No
Water Clarifiers YES Ferric chloride
Water InjectionYES Sodium sulfite
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Water InjectionChemicals
YES Sodium sulfite
Wax &AsphalteneControl
No
The Market for Oil Field Chemicals
•Most of the growth is inFracturing and Stimulation
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•The largest geographic regionis the U.S.
Hydraulic Fracturing & Acidizing are theFastest Growing Segments
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The Market for Oil Field Chemicals
Global Oil Field Chemicals Segments--2010
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Drilling Fluid35%
Cementing9%
Acidizing10%
Fracturing18%
Oil Production28%
$15.7Billion
The Market for Oil Field Chemicals
North America52%Africa
Middle East7%
Asia Pacific7%
Global Oil Field Chemicals Markets--2010
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52%
LatinAmerica
11%
Europe7%
CIS8%
Africa8%
$15.7Billion
The Market for Oil Field Chemicals
15000
20000
25000
U.S. Dry Natural Gas ProductionBillions ofCubic Feet
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0
5000
10000
1930
1932
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Hydraulic fracturing hasincreased U.S. naturalgas production to recordlevels.
Crude Oil and Natural Gas Prices HaveDiverged
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60
80
100
120
140
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0
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1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Crude Oil, US Refiners’ Acquisition Price (Left scale, US$/barrel)
Natural Gas, Henry Hub (Right scale, US$/million Btu)
•• Fundamentals have supported oil pricesFundamentals have supported oil pricesin the nearin the near--termterm
•• “Iran risk premium” has pushed up oil“Iran risk premium” has pushed up oiland gasoline pricesand gasoline prices
Oil Prices – The Current Opportunity
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and gasoline pricesand gasoline prices
•• NonNon--conventional sources will limit oilconventional sources will limit oilprice increases in mediumprice increases in medium--termterm
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•• Current gas storage isCurrent gas storage isfilledfilled
North American Drilling Activity HasRefocused on Oil Instead of Natural Gas
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filledfilled
•• And oil prices remain highAnd oil prices remain high
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Opportunities for Hydraulic Fracturing
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•• Oil Field Chemicals willOil Field Chemicals willbenefit from Hydraulicbenefit from HydraulicFracturing growthFracturing growthoutside of the U.S.outside of the U.S.
•• PromisingPromising
Conclusion: Oil Field Chemicals Are a GrowthOpportunity in the Changing Energy Picture
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•• PromisingPromisingdevelopments indevelopments inAlgeria, Canada, China,Algeria, Canada, China,PolandPoland
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Ray WillIHS Chemicalray.will@ihs.com
Thank You
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ray.will@ihs.com
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