Industry Insights, Market Size, CAGR, High-Level Analysis: Digital Oilfield Market
The global digital oilfield market size was valued at USD 29.11 billion in 2018 and is anticipated to record a 4.7% CAGR from 2019 to 2025. Rising oil and gas exploration and production activities and growing focus on operational efficiency resulting in reduced OPEX will drive market demand. The integration of smart technology and digitalization has raised concerns over protection of sensitive data and reduction of potential cyber threats.
Increasing share of unconventional oil and gas reserves, coupled with declining production for existing wells, is driving demand for digitization in oilfields. In addition, digital oilfield technologies provide remote monitoring and automated operations from a centralized location, thereby reducing the overall operational cost.
The U.S. market for digital oilfields was valued at USD 6.73 billion in 2018. Rising shale gas production and increasing refining capacity are among the prominent factors driving the market across the country. In addition, rising unconventional reserves in major oil basins, including Permian Basin, MidCon, Williston, and Eagle Ford, are anticipated to positively influence industry growth.
The major digital oilfield services identified are predictive maintenance, field productivity, fleet management, and production asset optimization. These services offer better efficiency and higher recovery rate while keeping the extraction and other operational costs at the same or lower level.
Growing adoption of IoT and automation software such as Supervisory Control and Data Acquisition (SCADA) will majorly propel industry growth. Key industry SCADA suppliers such as Baker Hughes, which provides the InForce surface control system, are likely to accelerate production and reduce total operational cost. The system includes well monitoring instrumentation, intelligent well completion technologies, and chemical automation products. Factors such as budgetary constraints, existence of organizational barriers, and shortage of necessary talent are likely to impact the adoption of digital oilfield technologies.
Companies are focusing on developing technologically advanced techniques to provide more efficient digital oilfield solutions in the upstream, midstream, and downstream segments. For instance, Siemens designed a data-based digital oilfield solution called SmartPump to lower the major cost of pumping stations. The pump can move customer oil, gas, and NGL products through pipelines by optimizing flow rates, load management, and maximizing overall pump-system efficiency.
Type Insights of Digital Oilfield Market
The upstream application segment occupied a dominant market share of 43.5% in 2018 owing to the digitalization of major upstream processes, including exploration, drilling, well completion, and production. The real-time operation centers enable the provision of operational efficiency through IT services and instrumentation and automation, which is expected to drive the market growth.
The real-time connectivity and machine-to-machine interface at remote oil sands facilities allow troubleshooting and routine operations to be overseen by centralized head office experts, thereby driving usage. Availability of advanced solutions such as reservoir monitoring control and reservoir characterization, along with advanced equipment like actuating devices, smart alarms, and sensors, is likely to bolster industry growth.
The midstream segment is expected to grow at a CAGR of 4.6% during the forecast timeframe. The growth can be credited to midstream companies focused on optimizing performance, revenue-generating capacity, and throughput of their large capital assets. Predictive maintenance technology applied to pipelines and storage facilities is likely to enhance segments growth.
The downstream application segment was valued at USD 10.84 billion in 2018. Factors such as growing refining capacity across North America and Asia Pacific, coupled with technological advancements such as digitally intelligent refineries, is expected to present a strong growth landscape over the coming years.
Service Insights of Digital Oilfield Market
IT services accounted for 64.7% of the global digital oilfield market in 2018. The dominance of the segment can be attributed to increased IT spending by major oil and gas players to improvise their asset management solutions and business processes. In addition, growing focus to develop advanced IT strategies will complement the segments growth.
Ongoing industry collaborations between digital oilfield technology providers and IT service operators will enhance the deployment of IoT device across reservoir monitoring, smart wells, and drilling sites. This is expected to result in efficient gathering of real-time data and performance optimization of operations from upstream sector to downstream sector. This can lead to adoption of digital oilfields in the coming years.
The instrumentation and automation service segment will emerge as the fastest-growing segment over the forecast period, exhibiting a CAGR of 5.8%. Rising requirement to monitor continuously running operations, coupled with development of advanced data collection and interpretation systems, will drive demand for digital oilfields.
Increased use of advanced sensors and automation software such as SCADA has resulted in improved SOR, optimized production, and enhanced asset reliability. Growing investments in cloud technology, artificial intelligence, and machine learning will further enhance the penetration rate of digital oilfields over the coming years.
Regional Insights of Digital Oilfield Market
The market in North America was valued at USD 8.94 billion in 2018, wherein U.S. was the major contributor to the regional revenue generation. The regional growth can primarily be attributed to the presence of major digital oilfield technology service providers such as Halliburton, Schlumberger, and Rockwell Automation. Companies are investing in R&D activities, which results in easy access to digital oilfield technologies.
Technology penetration across the U.S. is expected to be higher owing to a sharp increase of 16.6% in the countrys oil production in 2018. Higher production leads to enhanced digitalization across the upstream sector in the form of wellhead automation, automated drilling, advanced analytics on production data, predictive maintenance, and others.
Europe emerged as the second fastest-growing region after North America and is expected to exhibit a CAGR of 5.0% over the forecast period. Increasing number of new development projects in North Sea fields, including Johan Sverdrup field, Johan Castberg Field, and Mariner Heavy Oil Field, is expected to bolster the regional market growth.
The Asia Pacific market for digital oilfields was valued at USD 5.75 billion in 2018. High investment in IoT and analytics, coupled with a robust downstream sector across China and India is expected to drive the regional growth. These two countries accounted for over 50% of the market revenue in 2018. National strategies in China, such as ˜Industry 4.0 and ˜Special Project on Intelligent Equipment Manufacturing, will boost adoption of digital oilfield technologies such as intelligent refineries in the downstream refining segment.
Market Share Insights of Digital Oilfield Market
Key industry participants are focused on several strategic initiatives such as product launches, partnerships and collaborations, and mergers and acquisitions to improve their position in the market. In August 2019, Halliburton introduced DecisionSpace® 365 an E&P cloud application that includes scalable earth modeling, real-time control -edge, data foundation, and full-scale asset simulation. These cloud applications help operators improve reservoir characterization, reduce exploration risk, and boost drilling efficiency.
Moreover, technology providers are partnering with industrial automation and IT service providers to streamline their operations and assist in maximizing consumer investment. For instance, in February 2019, Rockwell Automation entered into a joint venture agreement with Schlumberger Limited to form Sensia, a fully integrated digital oilfield automation solution provider.
Major market players in the market include Halliburton, Weatherford, Schlumberger Limited, Baker Hughes, Rockwell Automation, ABB, National Oil Varco, Siemens, Larsen & Toubro Infotech Limited, and Accenture.
Segmentations, Sub Segmentations, CAGR, & High-Level Analysis overview of Digital Oilfield Market Research Report
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For this study, this market research report has segmented the global digital oilfield market report on the basis of application, service, and region:
Application Type Outlook (Revenue, USD Billion, 2019 - 2030)
Service Outlook (Revenue, USD Billion, 2019 - 2030)
- IT Services
- Instrumentation and Automation