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

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

The Middle-East enhanced oil recovery market is expected to grow with a CAGR of around 6% during the forecast period. The COVID-19 pandemic had an impact on the market with crashed oil demand and resultantly low oil prices. The crude prices went down to around USD22 per barrel in the region, which created hurdles for the upcoming upstream projects. The Middle-East enhanced oil recovery (EOR) market is expected to thrive in the coming years due to many maturing fields in the region, and the increasing oil prices in the recent picture. However, sometimes heavy oil resources found in the Middle-East region are in tough carbonate reservoirs, which creates a fracture network. All the EOR techniques fail to get the oil output as the steam bypasses the oil, which is a major challenge for the market.

Key Highlights

• The Gas Injection segment is expected to witness significant growth during the forecast period due to the highest rate of oil recovery with the method.
• The technological developments by foreign players in the EOR field create ample opportunities for the market. As an example, a company is currently researching on Next Generation CO2 EOR method, which enhances the economic performance and applicability of the CO2 injection technique.
• Oman is expected to dominate the market due to the dwindling "easy oil extraction" in the last decade.

Key Market TrendsGas Injection Expected to Witness Significant Growth

• Gas injection EOR technique refers to the injection of gases like natural gas, carbon dioxide, and nitrogen to push additional oil to the wellbore. Some gases even lower the viscosity of oil by getting dissolved into it and increasing the flow rate. The technique has been developed to the greatest extent in the region, which has increased its oil recovery rates and reduced the overall costs as well.
• The oil production in the Middle-East region was recorded as 27,664 thousand barrels per day in the year 2020. The production levels rose in a staggered manner and many times faced plummeted figures too. Thus, the producers moved to EOR projects for many maturing fields. In the scenario of volatile oil prices, cheaper and high-yielding techniques like gas injection have to be at the topmost priority.
• In UAE, too, a number of EOR projects have been planned for the evolving scene. For example, in March 2022, ADNOC awarded a USD227 million contract to a UAE-based Robstone company for an EOR project to be executed at its Bab onshore field. It was noted that the company would use the project's CO2 injection method and advanced polymers.
• The CO2 injection method is the most highlighted technique in the region these days due to the CCUS (Carbon Capture Utilization and Storage) advantage. The carbon dioxide released from the thermal power plants is captured to be used for various other applications like the EOR gas injection process. It addresses the GHG emissions issue as well for the region. For example, in December 2021, Mitsubishi Corporation disclosed that they have plans to install a CCUS facility at the Ibri gas power plant in Oman. The CO2 captured will be transported to the oil fields in the country.
• All such developments are expected to give a boost to the Gas Injection segment growth in the near future.

Oman Expected to Dominate the Market

• Among all the Middle-East countries, Oman had the most aggressive application of EOR methods in the oil and gas upstream projects in the recent past. The blurred production of easy oil from the maturing fields has been the primary reason for the EOR technology application. The oil production reached its peak level in the country long back in time.
• Oman's crude oil production growth dwindled in the last five years and did not show remarkable growth, with around 951 thousand barrels per day of output. This prompted the oil industry to shift to new EOR projects.
• For instance, in the third quarter of 2021, Petroleum Development Oman (PDO), the state-owned oil company of Oman, started the production from Yibal Khuff oil and gas field, with around 21,900 bpd production capacity. The field is also expected to produce 6.1 million cubic meters of gas per day. The company has planned to utilize gas production for EOR projects in the coming years.
• The presence of PDO in the country adds a feather in the cap for the EOR industry, as the company is a global leader in the EOR business. It has set a target of around 700,000 bpd of crude output by 2024, with the current status as 616,000 bpd, which can accelerate the requirement of EOR methods to achieve the goal, as many fields are maturing at this stage. Further, many CCUS projects are also taking place in the country, which will support the CO2 injection method of oil recovery.
• Such kind of developments is likely to make Oman the fastest growing country in the EOR industry.

Competitive Landscape

The Middle-East Enhanced Oil Recovery market is moderately fragmanted. Some of the key players include Petroleum Development Oman, Abu Dhabi National Oil Company (ADNOC), BP Plc, Dubai Petroleum Co, and SGS SA.

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