Adoption of Oilfield Analytics Gradually Rising as Oil and Gas Companies Seek Performance Optimisation
Growing investments in process automation, remote instrumentation, and the Internet of Things (IoT) in retail, manufacturing and financial services have paved the way for transformation of the oil and gas industry. The industry is experiencing a turning point and has made massive investments in IT and IoT. With digital oilfield spreading its roots wider, companies are now looking forward to a data-driven approach through a connected environment. Oilfield analytics is gaining strong ground as oil and gas companies increasingly seek real-time actionable insights for performance optimisation of equipment and prediction of potential operational failures in future.
As an increasing number of oil and gas companies look for operational intelligence of oilfield analytics to eventually achieve minimum downtime, the demand for oilfield analytics will be on the rise. Although several oil and gas companies across the globe are adopting oilfield analytics services, widespread adoption still has a long way to go. With constantly improving technology and increasing integration of large-scale data, even small- and medium-scale players in the oil and gas industry would be drawn to adopt oilfield analytics services.
High Productivity and Operational Stability to Fuel Adoption; High Initial Investment to Hinder Market Growth
Declining crude oil and natural gas prices create the need for making oil and gas operations more economically viable. Crude oil prices started to decline since the mid-2014 and were the lowest at around US$ 30/barrel. Natural gas prices have also declined considerably over the recent past. This price drop has significantly reduced the profit margins of exploration and production (E&P) companies in the oil and gas industry. Other companies involved in the upstream, midstream, and downstream operations have also experienced falling margins. Thus, companies in the oil and gas industry are showing more interest in optimisation of operations at reduced capital and operating costs.
Extraction and production from unconventional oil and gas wells have increased significantly in the recent years. Shale (tight) oil and gas, oil sands, and subsea oil and gas are the examples of oil and gas from unconventional resources. Oil and gas companies have tools to predict the performance of conventional oil and gas wells. Oilfield analytics services assist in effectual drilling and production of oil and gas from unconventional wells, and further aid in minimising operating costs and risks associated with unconventional oil and gas resources. Thus, increasing E&P activities in unconventional resources of oil and gas are expected to boost the adoption of oilfield analytics services during the forecast period. Although high capital investments remain a longstanding challenge to adoption, more companies are now willing to invest a premium to be able to achieve real-time monitoring of operations, maximum output, safety, and risk management through oilfield analytics.
Preference for Oilfield Analytics Greater in Upstream Oil and Gas Business
Hardware and software packages form an essential part of oilfield analytics. For offshore oil and gas E&P activities, companies utilise advanced analytics and submersible platforms to optimize production settings and raise output. In case of midstream and downstream business, organisations utilise operational data and analytics to optimise production and reserves recovery efforts, as well as promote intra-organisational collaboration. Upstream application of oilfield analytics services includes asset maintenance, E&P optimisation, risk and H&SE management, drilling optimisation, and finance commissioning assessment. Midstream application of oilfield analytics services includes transportation optimisation (vessels and ships), supply chain management, pipeline risk assessment, and storage optimisation. Downstream application of oilfield analytics services includes refining and separation processes optimisation, liquefaction and regasification assessment, demand and supply optimisation, trade optimisation, price optimisation, risk management, personnel safety assessment, market analysis, and marketing and sales assessment.
The US Leads in Terms of Supply and Demand for Analytics in Oil and Gas Industry
The oilfield analytics market in North America is driven by the US, one of the largest consumers of oilfield analytics services across the globe, and the leading provider. Adoption by companies based out of Canada and Mexico is also expected to increase during the forecast period. In North America, increasing activities in shale gas and unconventional oil production have further boosted consumption of oilfield analytics services in upstream application. The oil and gas production in Europe is limited except in countries such as the UK, Norway, Russia, and the Commonwealth of Independent States (CIS). Most of the oil and gas consumed in Europe is imported from other regions or from Russia, and other countries. In Europe, the regulatory framework restricting fossil fuel consumption has been pushing the expanse of renewable energy resources, which is likely to be impeding the growth of the region’s oilfield analytics market. In the Middle East & Africa, countries such as Saudi Arabia, UAE, Kuwait, Oman, Iran, Qatar, Nigeria, and South Africa have already started availing oilfield analytics services.
Global Oilfield Analytics Market: Competitive Landscape
The oilfield analytics market is a fragmented market with a few major players operating across the globe. Design, technology, engineering of systems, aftersales, and relevant experience are the key differentiating factors. Innovations and streamlining of operations continue to dominate the market. Some of the key players in the global oilfield analytics market include Microsoft Corporation, Oracle Corporation, IBM Analytics, SAP SE, Accenture, SAS Institute Inc., Deloitte Development LLC., KPMG International Cooperative, Teradata Corporation, Capgemini S.A, Hitachi Data Systems Corporation, Cognizant Technology Solution Corporation, and TIBCO Software Inc.