Bloomberg News

Fracking Market to Grow 19% to $37 Billion Worldwide in 2012

January 20, 2012

(Updates with comment from Spears in fourth paragraph, company rankings in sixth paragraph.)

Jan. 19 (Bloomberg) -- The worldwide market for hydraulic fracturing is expected to expand 19 percent this year to a record $37 billion, one-third the pace of expansion in 2011, said Spears & Associates Inc.

In North America, which accounted for 87 percent of the fracking market last year, spending on the technique used to extract oil and natural gas from shale will top $30 billion in 2012, according to a slide presentation from Tulsa, Oklahoma- based Spears. The company advises about 400 oil producers, hedge funds, equipment providers and manufacturers on energy-industry trends.

The global fracking market grew by 63 percent in 2011 to $31 billion, Spears said. Fracking is the practice of pumping millions of gallons of high-pressure water, chemicals and sand underground to crack fissures in the rock so oil and gas can flow.

“Fracturing has grown at a rate much faster than drilling because frack intensity -- the number of stages fracked per new well -- is rising,” Spears said in the slides prepared for a joint conference call scheduled for today with analysts from Credit Suisse Holdings USA Inc.

In the U.S., horizontal drilling, the precursor to most fracking activity, is expected to rise to almost 19,000 new wells this year, breaking 2011’s record of 16,000, according to Spears.

Regional Markets

Four companies -- Halliburton Co., Schlumberger Ltd., Baker Hughes Inc.’s BJ Services unit and Frac Tech Services LLC -- provided more than half the North American fracking services last year, Spears said. Halliburton was at the top of the group with 18 percent of the horsepower, followed by Schlumberger with 13 percent, BJ Services with 12 percent and Frac Tech with 11 percent.

The mid-continent region that includes Oklahoma dominated the North American fracking market last year with $5 billion in sales, Spears said. Canada was second-largest with $4 billion in orders, followed by south Texas and the East Texas/Northern Louisiana region, which each accounted for $3.5 billion in fracking work.

The Rocky Mountains region, which includes the Bakken shale that underlies North Dakota and Montana, generated $3 billion in fracking sales, Spears said. The eastern U.S., which includes the Marcellus and Utica shale formations, amounted to $2 billion in fracking work last year.

--Editors: Jessica Resnick-Ault, Will Wade

To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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