Produced Water Treatment Market to Reach US$ 216.5 Bn by 2035 – Tackling Oil & Gas Waste Challenges

The global produced water treatment market was valued at US$ 136.0 Bn in 2024 and is projected to grow at a CAGR of 4.4% from 2025 to 2035, reaching an estimated US$ 216.5 Bn by 2035. Produced water, a byproduct of oil and gas extraction, typically contains hydrocarbons, heavy metals, high salinity, radioactive materials, and chemical additives, making it one of the largest waste streams generated in the industry.

The rising need for environmental compliance, water reuse, and cost reduction in disposal is fueling the adoption of advanced treatment technologies. Treated produced water can be repurposed for industrial applications, agriculture, hydraulic fracturing, and steam generation, significantly reducing dependence on freshwater resources.

Analysts’ Viewpoint on Market Scenario

Analysts expect steady growth in the market, driven by:

Environmental Regulations – Governments and regulatory bodies worldwide are enforcing strict discharge standards. Non-compliance leads to hefty penalties, pushing oil and gas operators to invest in efficient treatment technologies.

Water Scarcity – With water stress intensifying globally, reusing treated produced water for irrigation, aquifer recharge, or industrial cooling is gaining traction.

Oil & Gas Expansion – The increase in exploration of unconventional reserves such as shale gas, tight oil, and deep-water projects is contributing to higher volumes of produced water, necessitating advanced treatment.

The oil and gas industry remains the largest end-user, accounting for the majority of market demand. Produced water treatment not only ensures regulatory compliance but also helps optimize field development by reducing liquid waste injection volumes and enabling water reuse for enhanced oil recovery (EOR).

Key Market Drivers

1. Water Scarcity and Sustainable Water Use

Global freshwater demand is rising due to urbanization, industrialization, and population growth. Produced water treatment helps alleviate this crisis by reducing freshwater withdrawals.

Reuse Potential – Treated water can support industrial cooling, agriculture, and aquifer recharge, decreasing reliance on freshwater bodies.

Advanced Technologies – Methods such as reverse osmosis, nanofiltration, ultrafiltration, and advanced oxidation processes are being deployed to ensure high-quality treated water suitable for reuse.

Operational Benefits – By reducing freshwater procurement costs and limiting reliance on strained aquifers, oil and gas companies can maintain productivity in water-stressed regions.

2. Ongoing Investments in Oil & Gas Exploration

Global energy demand continues to rise, particularly in emerging economies. This has driven significant investments in exploration and production (E&P), especially in unconventional reserves where water-to-hydrocarbon ratios are higher.

Unconventional Reservoirs – Shale gas and tight oil operations generate greater volumes of produced water, intensifying treatment requirements.

Technological Innovations – Techniques such as hydraulic fracturing and horizontal drilling have expanded resource accessibility but have also increased produced water volumes.

Regulatory Compliance – Stringent discharge rules in regions such as North America, the Middle East, and Europe are accelerating demand for advanced water management solutions.

3. Growing Regulatory Pressure

Environmental agencies are mandating safe disposal or reuse of produced water to prevent contamination of ecosystems. Compliance has become central to oil and gas operations, making investment in advanced treatment systems essential.

Market Segmentation

By Treatment Type

Chemical Treatment – Widely used for neutralization, coagulation, and precipitation of contaminants.

Membrane Treatment (Reverse Osmosis, Nanofiltration, Ultrafiltration) – Popular for high-efficiency separation of salts and dissolved solids.

Biological Treatment – Effective for degrading organic contaminants.

Physical Treatment – Includes gravity separators, hydrocyclones, and coalescing filters.

Combined Systems – Integration of chemical, biological, and physical methods for efficiency.

By Source

Onshore – Accounts for a major share due to extensive land-based oil and gas operations.

Offshore – Growing steadily with deep-water exploration projects.

By End-use

Oil & Gas (Dominant Segment) – Major consumer due to large produced water volumes.

Industrial – Adoption increasing in power plants and manufacturing sectors.

Power Generation – Thermal power plants exploring produced water reuse.

Others – Agriculture and aquifer recharge applications emerging.

Regional Insights

Middle East & Africa (MEA) – Market Leader with 43.4% Share

The MEA region dominates the global produced water treatment market due to:

Large-scale oil and gas production in Saudi Arabia, UAE, Kuwait, and Nigeria.

Arid conditions necessitating water reuse.

Mature oil fields generating higher water volumes as they age.

Government initiatives prioritizing sustainable water management.

North America

Strong growth driven by shale gas and tight oil exploration in the U.S. and Canada. Strict regulations and advanced technologies make North America a key innovation hub.

Asia Pacific

Expected to witness significant expansion, supported by increasing energy demand in China, India, and ASEAN countries. Rising water scarcity in Asia is accelerating investments in water reuse technologies.

Europe & Latin America

Europe benefits from strict EU water directives, while Latin America, particularly Brazil and Venezuela, is witnessing rising demand from offshore oil fields.

Competitive Landscape

The produced water treatment market is highly competitive, with global and regional players focusing on innovation, cost-effectiveness, and sustainability.

Veolia – Offers a wide portfolio of water treatment technologies including membrane filtration and evaporation systems for upstream oil and gas.

Schlumberger Limited – Provides integrated water management solutions with advanced monitoring and optimization.

Siemens Energy AG, Halliburton, CETCO Energy Services, TechnipFMC, Ovivo, Pentair, Enviro-Tech Systems, and Produced Water Solutions are other key participants.

Strategic collaborations, mergers, and technology developments are common growth strategies.

Market Developments

August 2024 – Austrian start-up Heliovis launched a solar-powered water treatment project in Oman, converting saline, oil-contaminated produced water into freshwater.

September 2023 – Cannon Artes delivered a large-scale treatment package for the West Qurna-2 oil field in Iraq, capable of handling 200,000 bpd of produced water.

March 2023 – Saudi Aramco initiated the Zuluf water treatment project with a capacity of 185,000 m³/day, reinforcing the trend of large-scale produced water recycling.

Future Outlook

The produced water treatment market is set for steady growth through 2035, with expansion anchored by:

Technological Advancements – Innovations in membrane processes, zero-liquid discharge (ZLD) systems, and digital monitoring will enhance efficiency.

Shift Toward Reuse – Industries and governments will emphasize circular water economies, making treated produced water a valuable resource.

Regional Opportunities – Rapid oil and gas expansion in MEA, Asia Pacific, and Latin America will generate substantial opportunities for market players.

Conclusion

The produced water treatment market plays a crucial role in ensuring sustainable oil and gas operations, reducing reliance on freshwater, and meeting environmental standards. With the global market set to reach US$ 216.5 Bn by 2035, investments in innovative treatment technologies and sustainable water reuse practices will shape the industry’s future