New technological advancements in the oil & gas industry; increased return on investment in the oil & gas industry; and the growing need for maximizing production potential from mature wells in key geographical regions such as Asia Pacific, Europe, and North America are likely to drive the oilfield technology. Europe is estimated to be the largest market from 2019 to 2026 and is expected to see a high demand for oilfield technology due to the increasing need from oil & gas operators to scale up production from mature wells, and digital transformation and automation are emerging trends in the oil & gas industry.
The global oilfield technology industry size is expected to grow from an estimated USD 24.3 billion in 2021 to USD 32.0 billion by 2026, at a CAGR of 5.6%, during the forecast period. The key drivers for the oilfield technology include new technological advancements in the oil & gas industry; increased return on investment in the oil & gas industry; and a growing need for maximizing production potential from mature wells.
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The production optimization segment by process is estimated to be the largest market for oilfield technology, from 2021 to 2026. The growth of the wired segment is driven by the need to improve production efficiency. The market for the production optimization segment in the Middle East is expected to grow at the highest CAGR during the forecast period. The implementation of oilfield technology has become an essential tool for operators to sustain their business margins. Companies are leveraging advanced simulation and analytic tools to derive their production allocation through a well-gathering network and process conditions in their surface facilities. Production allocation not only allows proper production recording and planning but also helps uncover production potential in existing assets with improved insight.
The onshore segment is estimated to account for the largest share of the oilfield technology in 2020, and this trend is expected to continue during the forecast period. The increasing number of onshore oil & gas and mature fields is expected to drive the oilfield technology. Developed regions such as Europe and North America have witnessed a technology-driven revolution, which focuses on efficiency enhancements, reduction in nonproductive drilling activity time, and improvements in health, safety, and environment (HSE) aspects during drilling.
Europe is expected to be the largest region in oilfield technology.
Europe accounted for the largest share of global oilfield technology in 2020. The scope of the European market includes the UK, Norway, Russia, and the Rest of Europe. The Rest of Europe includes Denmark, Italy, and Germany, among others. According to the International Energy Agency, the total crude oil produced by the region in 2019 was 17.1 million barrels per day, which declined by 0.05% as compared to 2018. Moreover, new explorations and field development activities are increasing, thus increasing the opportunities for developing new fields digitally.
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Moreover, Europe is a leading region for offshore activities as the oil operators and oilfield service (OFS) providers are targeting the new fields and reserves from the UK and Norwegian continental shelf. For instance, Equinor, a Norwegian oil upstream operator, explored oil in the Johan Sverdrup field, which was under development, and started production in 2019. In the Johan Sverdrup, Equinor awarded a contract to Alcatel Submarine for reservoir management. Such projects create a strong market for oilfield technology in Europe. As per the BP Statistical Review 2020, Russia and Norway held approximately 72.2% of the total oil reserves in the European region in 2019. As per the EIA, countries such as Russia, France, Ukraine, and Poland have considerable shale gas resources, and further development of these reserves in these countries is expected to drive the growth of oilfield technology in the region. According to Baker Hughes’ Worldwide Rig Count report for March 2019, the rig count in the European region had observed consistent growth over the last six months. This growth trend creates opportunities for the digitalization of more oil fields in the region. Also, the rising Brent prices and the demand for the Brent basket are driving the digitalization of oil fields in Europe. Digitalization helps in creating an accurate analysis of the data, thus decreasing the time of production from the wells.
The key players in Oilfield Technology include companies such as Halliburton (US), Schlumberger (US), Baker Hughes (US), Weatherford International (US), and NOV (US).
