Hydraulic Fracturing Market

[256 Pages Report] The global hydraulic fracturing market is estimated to grow from USD 52.1 billion in 2023 to USD 74.4 billion by 2028; it is expected to record a CAGR of 7.4% during the forecast period. Recently regions have witnessed that crude oil prices are gaining momentum again. The upstream companies are optimistic about the long-term recovery of oil and natural gas, thereby leading to a surge in demand for hydraulic fracturing services.

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Hydraulic Fracturing Market Dynamics

Driver: Growing demand for hydraulic fracturing technology with increasing requirement for energy

According to the IEA, global energy demand is set to increase by 5.4% in 2021, despite a decline of 4% in 2020 owing to the COVID-19 crisis. By 2026, global oil consumption is projected to reach 104.1 mb/d. This would represent an increase of 4.4 mb/d from the 2019 level. Oil demand in 2025 is expected to be 2.5 mb/d lower than 2020, according to a report by IEA. In addition, Asia Pacific is expected to be the largest consumer of oil and gas in the next decade. The region is witnessing a rapid increase in demand for oil and gas in recent years attributed to the growing population, increased per capita income, urbanization, and growth in the number of petrochemical refineries. The region, on average, accounted for about two-thirds of the global oil and gas demand between 2011 and 2019.

The increasing supply-demand gap for primary energy sources is one of the leading factors driving the growth of the hydraulic fracturing market, as the demand for oil and gas is constantly growing, and the production capacities of the related reserves are limited. Unconventional gas accounts for 44% of total natural gas production, out of which shale gas represents 28% of unconventional gas sources. While Eastern Europe, Eurasia (including Russia), and the Middle East are estimated to hold 61% of conventional gas, these regions account for only 16.6% of unconventional gas; all the other regions have a larger proportion of conventional gas as compared with unconventional gas. Due to this distribution, the development of unconventional gas reserves will create a shift in the global energy supply. As onshore and shallow water fields are depleting, oil companies are focusing on deepwater and unconventional reserves, where hydraulic fracturing is expected to be an ideal technique for exploration and production.

Restraint: Local ban and suspensions on hydraulic fracturing

Various landowners or residents belonging to shale-rich areas have expressed their opposition to extracting hydrocarbons using hydraulic fracturing, citing potential environmental impacts. As a result, the process has come under international scrutiny. A few countries, including France, which has significant shale reserves, have banned fracturing. Moreover, the government of California has initiated a regulatory action to end the issuance of new permits for hydraulic fracturing (fracking) by January 2024. Additionally, the California Air Resources Board (CARB) is aiming to phase out oil extraction across the state by 2045.

Hydraulic fracturing is primarily regulated by state oil and natural gas commissions and agencies. Some states have already adopted, and others are considering, new or stricter regulations pertaining to permitting, disclosure, or well construction for fracking comapnies operations. Certain states are even contemplating banning high-volume hydraulic fracturing altogether. Apart from state laws, local land-use restrictions can also restrict drilling or hydraulic fracturing activities. Municipalities may establish ordinances aiming to either prohibit fracking entirely or regulate the time, location, and method of these processes within their jurisdictions. In addition, the federal government can limit hydraulic fracturing activities on federal lands through permitting. In Australia, the Tasmanian government extended its moratorium on fracking from 2020 to 2025. In Western Australia, 98% of the land is protected from fracking due to strict regulations, including those that prohibit fracking within two kilometers of public drinking water sources, towns, and national parks. A few countries, such as Bulgaria and Germany, have extended moratoriums on fracking.

Opportunities: Capability of foams of providing waterless fracking

Foams, with their advantageous qualities like high viscosity and low liquid content, have extensive applications in various processes within the petroleum industry. They offer a viable alternative to traditional fracturing methods by consuming less water, thus addressing environmental concerns associated with fracturing operations. Fracturing constitutes a significant portion (about 89%) of the total water usage in well drilling, creating an opportunity for companies to integrate waterless fracking solutions into their offerings and gain a larger market share. Foams are prepared by dispersing a large internal volume (55–95%) through the liquid phase under a typical formation temperature of 90°F (32.2°C). The internal phase normally contains N2 or CO2 gases.

Challenges: Disruptions in hydraulic fracturing operations and demand shock

The propagation of the COVID-19 pandemic has slowed down the growth of various industries. The outbreak of the pandemic led to a significant reduction in oil and gas demand due to widespread global lockdowns. As of May 28, 2020, 212 countries were affected, resulting in decreased transportation and related activities. The International Energy Agency (IEA) reported that geopolitical events increased the supply of low-priced oil while demand declined due to the pandemic, causing oil prices to collapse in March 2020. These factors negatively impacted the demand for oil, natural gas, and hydraulic fracturing services and products, leading to price fluctuations in the oil market. The government's measures to contain the virus further affected the global oil and gas industry. As of December 31, 2019, West Texas Intermediate’s (WTI) oil price was USD 61.1, and by March 23, 2020, it was USD 23.4, a decline of more than 60.0%. As of April 2020, OPEC and other oil-producing countries had agreed to reduce oil production by 10 million bpd, which is about 23.0% of their production levels.

Hydraulic Fracturing Market Ecosystem

In this market, prominent companies stand out as well-established and financially stable providers of hydraulic fracturing products and services. With years of experience, these companies boast a diverse product portfolio, cutting-edge technologies, and robust global sales and marketing networks. Their proven track record in the industry positions them as reliable and trusted partners for customers seeking hydraulic fracturing solutions. These companies have demonstrated their ability to adapt to market dynamics and consistently deliver high-quality products and services, making them leaders in meeting the demands of the oil and gas sector. Prominent companies in this market include Halliburton (US), Schlumberger (US), Liberty Oilfield Services LLC (US), Baker Hughes (US), and NexTier Oilfield Solutions (US).

The sliding sleeve segment, by technology, is expected to be the second-largest market during the forecast period.

This report segments the hydraulic fracturing market report based on technology into different types: plug & perf and sliding sleeve. The sliding sleeve segment is expected to be the second-largest market during the forecast period. Sliding sleeve technology is a critical component in hydraulic fracturing operations. It allows operators to selectively open or close downhole ports in the wellbore, facilitating precise and controlled fracturing stages. This innovation enhances efficiency, reduces costs, and optimizes the overall effectiveness of hydraulic fracturing processes.

By application, tight oil is expected to be the second fastest growing during the forecast period.

This report segments the hydraulic fracturing market based on application into three segments: shale gas, tight oil, and tight gas. Hydraulic fracturing is the key technique for extracting tight oil, which can be further processed into gasoline, diesel, and jet fuels. The surge in tight oil production is driven by a combination of horizontal drilling and hydraulic fracturing. Technological advancements have significantly improved the profitability and economic feasibility of recovering tight oil from its resource base.

“North America: The largest in the hydraulic fracturing market.”

North America is expected to be the largest region in the hydraulic fracturing market between 2023–2028, followed by the Asia Pacific and Latin America. North America has been leading the hydraulic fracturing market. Unconventional gas production in North America is responsible for high growth in the sector, giving opportunities to oilfield companies for fracturing in this region. Growing environmental concerns have raised the importance of natural gas, which, in turn, has increased the demand for hydraulic fracturing. Hydraulic fracturing plays a vital role in increasing a well’s productivity.

Key Market Players

The hydraulic fracturing market is dominated by a few major players that have a wide regional presence. The major players in the market include Halliburton (US), Schlumberger (US), Liberty Oilfield Services LLC (US), Baker Hughes (US), and NexTier Oilfield Solutions (US). Between 2018 and 2023, Strategies such as contracts, agreements, acquisitions, and expansions are followed by these companies to capture a larger share of the hydraulic fracturing market.

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Scope of the Report

This research report categorizes the hydraulic fracturing market by design, industry, capacity, voltage, Application, and Region.

On the basis of by Well Type:

• Horizontal
• Vertical

On the basis of by Technology:

• Plug & Perf
• Sliding Sleeve

On the basis of by Application:

• Shale Gas
• Tight Oil
• Tight Gas

On the basis of Region:

• North America
• Latin America
• Europe
• Asia Pacific
• Middle East & Africa

Recent Developments

• In June 2023, NexTier Oilfield Solutions and Patterson-UTI Energy, Inc. announced that they have entered into a definitive merger agreement to combine in an all-stock merger of equals transaction. The combined company will be an industry-leading drilling and completions services provider with operations in the most active major U.S. basins.
• In January 2023, ProFrac Holding Corp. acquired REV Energy Holdings, LLC ("REV"), a privately owned pressure pumping service provider with operations in the Eagle Ford and Rockies. ProFrac paid $140 million for REV. The acquisition will expand ProFrac's presence in both South Texas and the Rockies.
• In January 2022, ProFrac acquired Producers Services Holdings LLC, an pressure pumping services company serving Appalachia and the Mid-Continent.  ProFrac bought Producers for about $35 million in total transaction value, according to the terms of the arrangement.
• In December 2022, ProPetro Holding Corp. signed an agreement with a top independent Permian operator to use ProPetro's first electric-powered hydraulic fracturing fleet ("e-fleet"). ProPetro will provide committed services for three years following the delivery of the e-fleet under the terms of the agreement.

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