Digital oilfield is a concept that encompasses streamlining of data from distant wells and the processing, integration, and analysis of data in a number of physical environments. Technological innovation has been a prime mover in the development of digital oilfields. However, a vital component of its success is reliant on an understanding of the concept and process and ensuring that people using this are well-trained.
The global digital oilfield market was valued at over USD 26.0 billion in 2019. The market witnessed a decline during the pandemic period and therefore reached a valuation of around USD 20.0 billion in 2020. However, post-pandemic, it is projected to display a compound annual growth rate of over 7% from 2021 to 2026. At this rate, the market is estimated to reach a valuation of over USD 30.0 billion.
The pandemic has adversely affected several industries including the oil & gas industry globally. In order to curb the rising number of cases, governments across countries have issued either a partial or full lockdown. This has coerced various companies to halt operations and/or shut down their manufacturing facilities. COVID-19 has also led to the suspension or delay of major oil and gas projects. Hence, on an overall basis, the impact of COVID-19 on the digital oilfield market has been negative.
Technological developments in the market:
The growing exploration and production activities across the globe are propelling the oil & gas sector. The demand for advanced technologies required for the optimization and management of various operations will have a positive impact on the market. Moreover, rising oil & gas production will demand the use of digital technologies for real-time monitoring and automated operations. This, in turn, is projected to drive the digital oilfield market.
Increasing focus on improvement in existing tools:
Digital oilfield technologies have benefitted major players in the form of improved asset tracking, optimized capital investments as well as reduced operational risks. These benefits are anticipated to positively influence the demand for digital oilfield technologies and thereby improve the market.
Introduction of various technologies into the digital oilfield market:
In the oil & gas sector, IoT or the Internet of Things enhances the ability to collect, process, and analyze data with the help of sensors and other analytical tools. The data thus received assists in the maintenance, planning and operation optimization. Therefore, the benefit that may arise as a result of technologies such as IoT, AI, seismic imaging, and ML may push the digital oilfield market forward.
Lack of skill:
Even though digital technologies provide for the collection of real-time data and permit its analysis, the operator must have adequate knowledge regarding the collection, analysis and must target the right data in order to make effective decisions. This lack of skill may restrict the market growth.
The oil and gas market procures its components from several vendors depending upon the requirements. As a result, there are no standardized products which creates the issue of connectivity of one system with the other. This is a major restraining factor for the digital oilfield market.
The digital oilfield market is segmented based on process type into production, reservoir and digital optimization, and others. Of these, the production optimization process led and is projected to dominate the market throughout the forecast period. This can be attributed to the fact that the adoption of real-time techniques for production optimization enhances oil recovery and reduces non-productive time.
The reservoir optimization process is estimated to register substantial growth due to the rising utilization to assess normal and complex reservoirs with higher accuracy. Furthermore, precise reservoir data helps to analyze actual wellbore behavior and reduce damage rates.
Segmented into services, software, and hardware, the software segment is expected to grow due to the advancement in technology and the development of storage solutions. The hardware segment is anticipated to witness a rise owing to the growing R&D activities to build hardware equipment including SCADA. As a consequence of the investments by oilfield operators, the hardware segment is all set to lead the digital oilfield market.
Among the onshore and offshore applications, the former segment captured the majority of the market share and is estimated to witness the highest growth rate during the forecast period. The increasing production activities, need to curb non-productive time and the complexity in deepwater drilling is fuelling the demand for digital oilfield technologies.
North America is expected to dominate the digital oilfield market and grow at a rate of over 7% throughout the forecast period. Increasing oilfield discoveries and domestic production will augment the market in the region. The presence of well-established such as Baker Hughes, Halliburton, Schlumberger and many more as well as their efforts to develop new technologies in the region will drive the regional market forward.
Europe is anticipated to capture the second-largest market share and register a significant growth rate over the forecast period. Growing demand for digitization from the oil & gas sector due to increasing onshore and offshore activities across the region will augment the digital oilfield market. U.K. and Norway hold a huge potential for the production and development of hydrocarbons while the large investment from E&P operations in Russia will shape the regional market growth.
The Middle East and Africa are untapped regions that contain a massive capacity for hydrocarbon development. Countries such as U.A.E., Saudi Arabia, Kuwait, Bahrain and others are members of OPEC and therefore, the adoption of digital oilfield technologies in the region is expected to grow at a high rate.
The growth in the Asia – Pacific region is largely driven by the rising energy need to suffice the demand from the industrial, commercial and automotive sectors. A sudden increase in E&P activities in Thailand, Malaysia and Myanmar coupled with oil reserve discoveries in South East Asia will propel the digital oilfield market in the region.
The key players operating in the digital oilfield market are:
The research report analyses the ecosystem of the digital oilfield market and categorizes it to forecast the revenues and analyze the trends in each of the following below-mentioned market segments.
By Process Type:
By Solutions Type
Priyanka has been writing chemicals & material market research reports for the last 12 years. A post-graduate, her specialization is in the chemicals sector. Preparing end-to-end reports covering minute details for market insights, competitive intelligence and trend analysis in the CMFE sector.