Valued at $37 billion this year, up 12% from last year, US oilfield water management remains the highest and fastest growing segment within the oilfield. Water spending in the Permian Basin alone is estimated at $13.3 billion, with logistics expected to make up 60% of spending in 2019. From a financial perspective, there has never been a more lucrative time to invest in or operate in this market.
Why is so much capital going into this space?
Where is the market going from a technical point of view as water cuts keep increasing?
What has really changed?
Markets have evolved and company structures have changed dramatically in recent months. Public companies have been splitting off and starting midstream companies; Wall Street has been pushing E&Ps to reduce debt and risk attached to non-productive assets - resulting in the recent wave of water midstream deals. Private equity capital that once went into drilling and completions has been shifted to water midstream. Between January and August this year, there have been more than $2.5 billion of water-related mergers, acquisitions, private equity investments and other deals in the oilfield.
While regulations, produced water volumes and logistics vary from one shale play to another, and one area might have greater bearing on cost in one region at any given time, the industry is in agreement that it is going to take all the skills in aggregate to manage the overall water management challenge and bring down costs, looking at everything from treatment to handling to storage. Figuring out this balance is critical.
But, the amount of water produced per well is rising year-on-year, and there are new concerns on the technical and engineering side of water treatment, recycling, disposal and transfer. With profitability remaining a prerequisite and cost-cutting still priority number one, and oilfield water management is going to play a vital part in achieving these business imperatives.
Recognizing the changing pace and priorities of the oilfield water marketplace, Oilfield Water USA > Invest & Manage 2020 Houston Chapter sees big picture strategy development and technical water management converging, as the industry reaches a point where technical engineers have to become business persons, looking at both tactical as well as technical activities in the field. Complete details of presentations, discussions, dialogues and tech demos released soon.
Join us in Houston in March to learn from and interact with the largest group of water management stakeholders – compare notes, expand your horizons and understand how water management will play out in 2020.
Alishba Jan - MD, ShaleUSA Conferences