Digital oilfield market to sustain well in the low oil price scenario
Integrating instrumentation and IT solutions to optimise oilfield operations and maximise efficiencies
The ongoing oil price crisis has limited operators from developing new fields and drilling operations. Mature oilfields have become the center of focus for most of the operators, in regions with high production costs, to survive the industry slump.
Data acquisition and analytics are not enough unless whole workflow is optimized. The digital oilfield is often misinterpreted as a core IT project, but it is more about collaborating IT solutions with the automation techniques to significantly reduce the response time. Data acquisition and analytics are not enough unless whole workflow is optimized. This would enable better field management.
Moreover, data analytics in these fields is as important as providing the data to the relevant decision maker so that there is minimum lag or delay in critical decisions. This reduces the down time for the production activities thereby enhancing the profits.
Better control and monitoring capabilities
Adoption of digital oilfield solutions result in higher production levels with better control and monitoring capabilities of the oilfield operators. These will also enable operators to predict production levels and result in maximum returns on investments. According to a research study published recently by Markets and Markets, market growth for DOF solutions in the Middle East is expected to be the quickest, at a CAGR of 5.37% from 2015 to 2019. With lower production cost advantages, the region is expected to have more number of DOF implementations than any other region.
South America and Africa are in the initial stages of intelligent field development, and have higher oil production costs with most of their E& P activities limited to offshore fields. The demand for DOF solutions is therefore comparatively low from them.
The DOF market is expected to reach USD 30.78 billion by 2020. This is majorly driven by the demand for production optimization solutions. Currently, due to oil prices below USD 50/ barrel, there is a price war between regions to increase their market share, resulting in large amount of fiscal oil in the market.
Therefore, the demand for production optimization is increasing in this slow growth scenario. Other processes such as drilling optimization and reservoir optimization are likely to foresee higher growth after the stabilization of the oil prices which is expected to happen post 2018. Having oil price near to USD 80/ barrel is likely to augment the growth and secure the declining CAPEX for field development.
Regional market overview for the digital oilfield