The value of oilfield water sourcing, logistics, recycling and disposal was estimated at $33.6 billion in 2018, according to a report by industry analysts at IHS Markit.

Keeping pace with rapidly increasing shale oil development, the water management market is projected to grow at a 3.9 percent compound average growth rate through 2023, the firm reported.

The lion’s share of all U.S. oilfield water spending in 2018 was in the Permian Basin at an estimated $12.2 billion. Within the water sourcingto-disposal cycle, the logistics segment, including transport, disposal and transfer, drove two-thirds of all spending.

The report projects water reuse and recycling spending will increase by 15.9 percent CAGR by 2023.

Oil companies are increasingly integrating water management into their business strategies, whether internal or through an oilfield service provider. An increase in water management mergers, acquisitions and partnership deals that was seen in 2018 is expected to continue apace this year, IHS Markit concluded.