About the Report
The global oil and gas industry was a major victim of the COVID-19 pandemic due to a drastic slump in energy demand. Such was the impact of the pandemic on the oil industry that benchmark Brent crude oil prices plummeted to a historic low of under US$ 20 per barrel in April, 2020.
This led to most major oil producing countries such as Saudi Arabia, Russia, Iraq, UAE, etc. resorting to production cuts to stabilise global crude prices. These production cuts still continue. The net result of this downturn for the market was a reduction in demand for produced water treatment systems.
However, the situation is now changing with several major economies opening up and the demand for fossil fuels incrementally increasing. Oil prices have also consequently reached their pre-pandemic levels and it is only a matter of time before major oil producers withdraw their production cuts.
A similar trend is being observed in natural gas well. Furthermore, energy security has once again occupied centre-stage since energy security is viewed as vital for countries to recover from their Covid-19 induced economic slump. As a result, sales of produced water treatment systems are also expected to rapidly pick up in the near future.
In previous years, environmental concerns and governmental regulations had led the demand for produced water treatment systems. While these factors will continue to influence market trends, the pandemic has also accelerated certain geo-economic shifts that impact the market.
Two such key shifts are attempts by oil and gas rich countries in the Middle East and Africa to diversify their economies, and increase in production by developed countries like the USA and those in Europe to reduce their energy dependency. As a results, certain key shifts are expected to take place in the regional demand for produced water treatment systems.
Key Research Findings
- The global produced water treatment systems market size in 2018 was ~US$ 6 Bn.
- The demand for water treatment systems is expected to grow at a CAGR of ~6% during the forecast period of 2019-2029.
- Upsurge in the demand from the oil and gas industry, and stringent government regulations has been recently driving the sales of produced water treatment systems.
- Collectively, South Asia Pacific and East Asia are likely to account for half of the revenue shares in the produced water treatment systems industry by the end of 2029.
- South Asia Pacific, attributing to the strong presence of the oil & gas industry, is expected to continue to be a prominent regional market for produced water treatment systems manufacturers.
- The offshore reinjection segment is expected to remain a prominent application area to invest in, for major players involved in produced water treatment systems.
- The oil & gas industry has witnessed significant growth over the recent past, and rapid oil & gas exploration activities has been particularly noteworthy.
- Noteworthy application potential of produced water treatment systems has been identified in the offshore reinjection category.
Key Factors Shaping Demand for Produced Water Treatment Systems
A Paradigm Shift to ‘Advances in Water Treatment Technologies’
The oil & gas industry has been accelerating its shift to technologies that tend to reduce almost every toxic effluent from water, such as induced gas flotation, compact flotation unit, nutshell filtration, and coalescers being one of the most sought-after type of technologies.
With regulatory norms tightening in terms of hydrocarbons and other toxic content found in produced water, manufacturers ought to focus on innovative solutions, such as produced water treatment systems that allow elimination of toxic chemicals from water, making it ideal for disposal or reuse purposes.
With rising oilfields globally and increasing oil extraction activities relating to onshore and offshore reserves, especially in emerging regions such as MEA and South Asia Pacific, produced water treatment systems are set to witness an upsurge in the demand over the upcoming years.
Stringent Government Regulations towards Water Conservation
The increasing demand for eco-friendly (chemical free) produced water treatment technologies is, in turn, expected to drive the growth of the market. Moreover, stringent government regulations related to the impact of untreated produced water on environment and reinjection policies in the oil & gas sector, are estimated to boost the sales of produced water treatment systems.
Agencies such as European Water Association (Europe), India Water Works Association (India), and Environmental Protection Agency (U.S.), among several other government authorities, are proactively engaged in framing policies and regulations related to the water treatment for disposal or reuse purpose.
For instance, in the U.S., EPA (Environmental Protection Agency) has made it mandatory for industries to treat water before it is disposed out of the facility. Specifications pertaining to maximum permissible contamination levels have been framed in this regard.
Market Research Methodology - Perfected through Years of Diligence
A key factor for our unrivaled market research accuracy is our expert- and data-driven research methodologies. We combine an eclectic mix of experience, analytics, machine learning, and data science to develop research methodologies that result in a multi-dimensional, yet realistic analysis of a market.
Growing Remote Operations in the Oil and Gas Industry
Key players in the oil and gas industry in North America and Europe are entering into remote areas for exploration, drilling, and production activities. Key oil and gas operators in these regions are acquiring contracts for such remote sites.
Thus, more drilling operations and oil & gas exploration activities would occur generating a large amount of produced water, which is directly driving the adoption of produced water treatment systems. The U.S. oil and gas operators are moving towards Alaska and other sites for offshore reinjection applications, which is expected to drive the produced water treatment market in the near future.
Acquisitions, Collaborations, and Partnerships to Penetrate into Overseas Market
By the end of 2018, oil prices have gained its momentum to reach more than US $65 per barrel. This has shown the opportunity for manufacturers and end users of various industrial products. The rise in oil price has generated a linear trend towards new orders and contracts irrespective of end-use industries.
Key end-use industries that are targeted are oil and gas, chemical and petrochemical, and power generation industries. Asia Pacific is the prominent region that is driving new orders and contracts related to the produced water treatment systems. For instance,
- In May 2019, Schlumberger announced its strategic collaboration with TGS-NOPEC Geophysical Co., for ocean-bottom node projects for multiple clients in the U.S. and Gulf of Mexico, to develop high quality products for clients under its geophysical services segment.
- In April 2019, Aker Solutions signed an agreement with Fsubsea, to develop FASTsubsea, for faster oil recovery in an environment friendly manner.
Market Structure Analysis
- The global produced water treatment systems market represents a fairly consolidated competition landscape, where a majority of key players maintain their strategic focus on the development of solid distribution partnerships and joint ventures, targeting a firmer global footprint.
- The market has been relatively moderate in size, which remains a key factor for its dynamic competitive nature.
- Prominent manufacturers of produced water treatment systems are currently prioritizing R&D and new product launches to resonate with the growing adoption of chemical free systems in North America, Europe, and China.
- Portfolio extension is also identified to remain as one of the key developmental strategies adopted by manufacturers of produced water treatment systems.
- For a stronger foothold in target markets, produced water treatment system manufacturers are anticipated to continue to rely on inorganic strategies, such as mergers and acquisitions.
- Profound understanding of the market trends and preferential shifts of end-use segments across several regions are likely to create a bottleneck for prominent players, looking forward to untapped opportunities growth of produced water treatment systems.
Credible Addition to Oil & Gas Exploration
Advancements in oil & gas industry have always been parallel to development of water treatment infrastructure. Effective management of produced water became a significant part of the oil & gas business, considering its potential to be a source of fresh water, in addition to stringent legislations put in place for unchecked discharge of produced water in the environment.
Petroleum, a major source of energy and revenue for many countries, is produced with large volumes of waste, with wastewater comprising over 80% of the liquid waste. With ever-increasing water demand and more stringent environmental limits, produced water treatment systems gained increasing momentum over the years, to release clean water, store energy, and recover valuable materials from the produced water with minimal impact on the environment. This has also led to considerable increase in consumption of water treatment chemicals across the globe.
As handling of produced water becomes critical in petroleum exploration and production operations, Future Market Insights (FMI), in its new study, analyzes the current technologies for the management of produced water and their growth prospects. The study also brings to fore credible insights on produced water treatment systems that can assist the stakeholders in well-informed decision-making.
Cost-effective Technologies Remain Key to Future Management
Intensification in exploration activities, both offshore and onshore, has worked in tandem with development of various produced water treatment systems. With the world population and the demand for freshwater on the increase, market players are constantly exploring new technologies that can significantly reduce energy consumption and bring down the relatively high cost of existing systems.
Considering the lack of public acceptability for produced water as a source of clean water, market stakeholders are paying attention on incorporating non-chemical methods in produced water treatment, including the use of filters, polymer membranes, membrane chemicals and reverse osmosis.
Produced water treatment systems continue to garner significant traction, in the view of increasing stringent government regulations related to impact of untreated produced water on the environment and reinjection policies in the oil & gas sector. However, complying with the regulatory norms has been creating several challenges for the manufacturers, such as relatively high cost of equipment for tertiary systems as compared to primary and secondary systems.
Opportunities Abound in MEA’s Thriving Onshore Activities
The majority of the global oil production has historically stemmed from the large oil field in Middle East, while countries in North America are increasingly playing an important role in the oil production. Market players remained focused on exploring opportunities in these regions, on the account of hefty investments in the development of unconventional resources, resulting in significant increases in produced water volumes.
As leading oil & gas companies continue to acquire contracts for drilling operations and exploration activities in remote areas, a large amount of produced water would be generated. Therefore, the market players should be looking at a period of sustained demand.
Incisive Outlook on Market Trends and Opportunities
As governments as well as environmental groups have raised many concerns about the discharge and reuse of produced water, market vendors will need to redefine their strategies, producing analytical methods and performance data of chemical formulations that enter the market. Constant restrictions on disposal of produced water lined with scarce water resources across the globe are further likely to provide opportunities in advanced treatment technologies.
While technologies such as coalescing plate separation for onshore and cyclonic de-oiling and de-sanding for offshore locations continue to influence business strategies, manufacturers are rigorously investing in R&D activities on combination of two or more technologies.
The market players are further experimenting cost-effective technologies such as electrochemistry-driven treatment to achieve zero pollutant discharge and reduction in energy consumption that could lead to the production of clean water. With regulatory norms tightening in terms of hydrocarbons and toxic chemical constituents found in the produced water, market players will also need to focus on innovative, eco-friendly solutions for future management.
The Road Ahead
In addition to new drilling and exploration activities, implementation of enhanced oil recovery projects, especially in Middle East, will continue to provide potential growth prospects for sales of produced water treatment systems. Key market players are likely to benefit from strategic collaborations or partnerships with companies operating in global energy industry for multi-client projects across different geographies.
Sensing the growing demand and limited availability of fresh water, market stakeholders are planning to establish new produced water treatment and recycling facilities in Middle East and North American countries. Development and launch of application-specific, tailored product offerings and systems will further continue to influence the growth strategies of the market players.
By Capacity (thsnd bl/day)
- Less than 100
- 100 to 500
- Above 500
- On Shore
- Off Shore
- North America
- Latin America
- East Asia
- South Asia Pacific
- Middle East and Africa