Digital Oilfields Holds Huge Potential to Revolutionize the Oil Extracting Process. North America to Witness the Highest Growth.
Digital Oilfields market is expected to exceed the market valuation of more than US$ 39 billion by 2027 expanding at a reasonable CAGR of around 6% during the forecast period (2021-2027). Use of technology can boost the performance across the entire upstream oil and gas value chain using optimization and automation. Optimization involves the use of all relevant data to inform better decisions at a certain regular frequency. The more the optimization, the more data one can get and the faster the crunching, which requires sensors to collect data, more bandwidth and more computing capacity. Automation involves using automatic or semi-automatic machines instead of individuals to drill, inspect, and maintain equipment in high-risk operating environments offshore or on site of drilling and production. Automation technologies help drive down the cost of oil per barrel. Around US$ 250 billion to the global GDP by 2030 of value can be saved can be saved with the help of automation in addition to the potential greenhouse gas reduction and greater operational resilience.
Even though oil and gas companies lead other industries in deploying new technologies across functions and geographies, all industries can see the limit to moderate success in bringing a long-term product mind set to technological implementations and in increasing the overall speed of the project delivery. In a survey across industries, it was found out that in more than half of the companies, ¼ of their IT spend was controlled or managed outside the IT function and ¾ of the companies do not encourage IT spend that is controlled or managed outside the IT function. The tolerance of this is much less within oil and gas.
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The largest oil and gas demand shock in history was created because of the Covid-19 pandemic. Its repercussions are likely to extend through a future supply shock as oil and gas companies curtail their spending on upstream operations. Even though over the past year, the upstream investments have declined sharply and is expected to do so again in 2021, the ongoing demand for oil and gas will make an increase necessary in the coming future. If sufficient investments are not made, the reduction in the oil and gas supply can lead to a greater market volatility and higher prices, which in turn will slow the global economic recovery and jeopardizing energy security and international goals. In 2020, the oil and gas companies have cut their capex by a combined 34%, which is slightly more than the initial 28% reduction after the price decline which started in 2014. Occidental Petroleum Corporation (Oxy) based in Texas experienced the greatest reduction in their capital expenditures in 2020 out of all large oil and gas producers in the world. The coronavirus pandemic caused Oxy to reduce their 2020 capex by 48.1% down to US$ 2.7 billion from the US$ 5.2 billion that was planned at the beginning of the year.
Based on Process, the Digital Oilfield market is segmented into Production Optimization, Drilling Optimization, Reservoir Optimization, Safety Management, and Others. Amongst Process, the Production Optimization segment of the market was valued at US$ XX billion in 2020 and is likely to reach US$ XX billion by 2027 growing at a CAGR of XX% from 2021-2027. The major problem with production in those different functions wok in silos which leads to unplanned deferments, reduced operational efficiency and unconnected workers across the production lifecycle. This provokes the need for an integrated and well-packaged solution which encompasses the entire field development lifecycle.
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Based on Application, the Digital Oilfield market is segmented into Onshore and Offshore. Amongst application, Onshore segment accounted for a market valuation of US$ XX billion in 2020 and is expected to reach US$ XX billion by the year 2027, at a CAGR of XX% over the analyzed period. Increase of onshore oilfields in regions like North America and Europe are witnessing a technology-driven revolution which focuses on the efficiency enhancements, reduction in non-productive drilling activity time and improvements in health, safety and environment (HSE) aspects during drilling. As per the Baker Hughes’ International Rig Count in 2018, the average number of onshore operating rotary rigs, globally was 1,972 compared to 220 offshore rigs during the same year.
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Based on Service, the Digital Oilfield market is segmented into Instrumentation & Automation and Information Technology. Instrumentation & Automation is further sub segmented into Security Systems, Smart Wells, Wireless Systems, Distributed Control Systems and SCADA. Information Technology is further sub segmented into Software, Computer Equipment & Application Hardware, IT Outsourcing Services, and Others. Amongst Service, the Instrumentation and Automation segment of the market was valued at US$ XX billion in 2020 and is likely to reach US$ XX billion by 2027 growing at a CAGR of XX% from 2021-2027. Instrumentation and Automation equipment are responsible for communication and surveillance of data for both onshore and offshore fields. According to estimates, process equipment on a typical offshore platform generates one to two terabytes per day. Only around 1% of that data is used in decision making.
Based on Technology, the Digital Oilfield market is segmented into IoT, Advance Analytics, Robotics, Cloud Computing, Mobility and Others. Amongst Technology, the IoT segment of the market was valued at US$ XX billion in 2020 and is likely to reach US$ XX billion by 2027 growing at a CAGR of XX% from 2021-2027. Internet of Things (IoT) in digital oilfields involves a network of physical objects that are connected to the internet. From wearable devices, equipment, vehicles, buildings to just about anything can be embedded with electronics, sensors, softwares and network connectivity. According to analysts’ digital oilfield technologies will bring a 25% increase to the present value of the deployed assets if data can be efficiently collected and made useful for informing decisions and driving operations.
Additionally, the report provides detailed initiatives that are being taken in the field of Digital Oilfields, globally. The report provides a detailed analysis of regions including North America (the U.S, Canada, and Rest of North America), Europe (Germany, France, Spain, Italy, UK, and Rest of Europe), Asia-Pacific (China, Japan, India, Australia, and Rest of Asia-Pacific), and the Rest of the World. North America dominated the market in 2020, with XX% share.
Weatherford International, NOV, ABB, Emerson, Rockwell Automation, Siemens, Honeywell International, CGG, Kongsberg, and Digi International are some of the prominent players operating in the Digital Oilfields market. Several M&As along with partnerships have been undertaken by these players to make Digital Oilfields as cost-effective and as widely available as possible.
Digital Oilfields Market Segmentation
Market Insight, by Process
- Production Optimization
- Drilling Optimization
- Reservoir Optimization
- Safety Management
Market Insight, by Application
Market Insight, by Service
- Instrumentation & Automation
- Security Systems
- Smart Wells
- Wireless Systems
- Distributed Control Systems
- Information Technology
- Computer Equipment & Application Hardware
- IT Outsourcing Services
Market Insight, by Technology
- Advance Analytics
- Cloud Computing
Market Insight, by Region
- North America Digital Oilfields Market
- United States
- Rest of North America
- Europe Digital Oilfields Market
- United Kingdom
- Rest of Europe
- Asia-Pacific Digital Oilfields Market
- Rest of Asia-Pacific
- Rest of World Digital Oilfields Market
Top Company Profiles
- Weatherford International
- Rockwell Automation
- Honeywell International
- Digi International