Enhanced Oil Recovery (EOR) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The enhanced oil recovery (EOR) market is expected to register a CAGR of more than 2% during the forecast period of 2022 – 2027. The COVID-19 pandemic has severely affected the shale and heavy oil market, which accounts for a large usage of the EOR techniques. Factors such as the increasing number of maturing oil fields and improving technologies to introduce better oil recovery techniques are likely to drive the EOR market during the forecast period. However, the high volatility of crude oil prices is expected to restrain the growth of the market in the coming years.

Key Highlights

• Gas injection technique is expected to be the largest segment for the EOR market during the forecast period, with CO2 injection increasing globally, representing a major share of total oil production from EOR and its positive impact on environmental issues.
• The discovery of new oil and gas fields, particularly in new markets such as Africa and South America, is expected to create ample opportunities in the near future.
• Asia-Pacific is expected to witness significant growth, owing to the increasing investments in the upstream sector by several governments and aging oil and gas fields which demand enhanced oil recovery techniques.

Key Market Trends

Gas Injection Technique to Dominate the Market

• Gas injection offers advantages, such as reduction of oil viscosity and added pressure in the reservoir for oil production. With an increasing focus on unconventional gas production across the world, the demand for gas injection-based EOR techniques is expected to increase during the forecast period.
• In 2019, the United States government proposed a legislation to promote the carbon capture improvement act. According to this act, the government is expected to promote collaboration between the oil and gas industry and the power plants along with industrial plant operators for the carbon sequestration process. Moreover, the oil and gas operators are expected to help the other industries in carbon sequestration, which can be used by the former for CO2 injection.
• In 2020, the United States Geological Survey (USGS) has developed a new assessment method to estimate how much oil and gas could be produced by injecting carbon dioxide into petroleum reservoirs. Using carbon dioxide enhanced oil recovery techniques could increase the amount of oil and gas that can be produced in the United States.
• The United States and Canada are expected to further ramp up production from their unconventional reserves during the forecast period, which would, in turn, supplement the demand for gas injection-based EOR in North America. Moreover, the International Energy Agency (IEA) estimated that the systematic application of all available EOR technologies could unlock approximately 300 billion barrels of recoverable oil.
• Hence, based on the above-mentioned factors, gas injection segment is expected to maintain a significant share in the EOR market during the forecast period.

Asia-Pacific to Witness Significant Growth

• With its increasing demand for oil and gas from major countries such as China and India, Asia-Pacific is propelling the need for EOR in their mature fields to sustain the oil and gas production targets, which is anticipated to drive the demand for EOR services.
• As of 2019, there were approximately 30 EOR projects in the Asia-Pacific region, of which approximately 58% were categorized under the chemical and CO2 miscible injection types, with China leading the chemical injection segment of the market studied.
• The producing oilfields of India are continually aging, with the average recovery factor remaining continuously below the global average. As a part of the broader 'Energy Security' program, the government has set a goal to reduce 10% of crude oil imports by 2022, with EOR emerging as an answer for the same.
• State-run company ONGC of India has announced its plans to invest INR 57,825 crore on 28 EOR projects, while Cairn India plans to spend INR 37,000 crore to ramp up production using EOR. Such similar investments by the oil and gas operators and the government is expected to significantly attract international EOR players in India during the forecast period.
• As of December 2021, Daqing Oilfield, controlled by the China National Petroleum Corporation in northeast China's Heilongjiang Province, has become the world's largest tertiary oil recovery (enhanced oil recovery) production base. The annual crude oil output via tertiary recovery of Daqing Oilfield has exceeded 10 million tonnes for 20 consecutive years, bringing its cumulative total production to 286 million tonnes.
• Hence, based on the above-mentioned factors, Asia-Pacific is expected to witness significant growth in global EOR market during the forecast period.

Competitive Landscape

The enhanced oil recovery (EOR) market is moderately fragmented. The key players in the market include Chevron Corporation, Halliburton Company, Schlumberger Limited, TotalEnergies SE, and Baker Hughes Company.

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