Oil and gas industry has been facing several challenges over the last few years. Decreasing oil prices have reduced the cash flows and have forced companies to examine their exploration and production strategy. Oil and gas companies are also undergoing a major challenge on how to use digital solutions to address the fluctuation in the demand and pricing. Though oil and gas companies have been slow to adopt new technologies, they also recognize that to compete in the digital era they should transform their business models, processes, and IT operations.
Read Report Overview: IoT in Oil and Gas Market
Fortunately, for the companies IoT as an area of technology includes the possibility for companies to overcome these challenges. Access to real time information across remote locations is one of major demands of oil and gas companies, which is now being achieved with the help of Internet of Things (IoT) sensor data, which brings extraordinary insight into process performance.
The IoT in oil and gas market includes a wide array of solutions, such as sensing, communication, cloud and edge computing, and data management. Sensing systems encompass a broad range of systems including different sensors, GPS devices, and Radio Frequency Identification (RFID). Addition of sensing and navigation capabilities makes it even more promising. Site-specific exploration and production and variable rate application are two of the major applications of IoT based solutions; and sensing and navigation components are two of the most critical contributors for its execution.
Internet of Things (IoT), which integrates sensing, communication and analytics dimensions has shown improvement as the core technologies have enhanced. The possibility of IoT technologies in the oil and gas industry lies in helping the oil and gas companies create new asset information about the elements of their businesses. The three main advantages that the deployment of IoT in the oil and gas industry will bring to the industry are improved reliability, enhanced business operations and added value in the business. Each of the industry stream (Upstream, Midstream, and Downstream) can be benefitted from the use of IoT in the above-mentioned categories. Upstream companies which deals in the exploration and production of the oil and gas can gain operational insights by analyzing huge set of data. Midstream companies which deals in the transportation such as pipelines and storage will be benefited by building a data enabled infrastructure, which will further enhance the business considerably. Downstream companies dealing with the petroleum products, refiners and retailers will witness new opportunities of revenue generation, expanding their presence across the supply chain and targeting digital consumers with the help of IoT.
Deployment of IoT solutions does not inevitably create economic value, to do so companies should link IoT technology deployment, with specific business priorities, which can be described using three categories of increasing scope. First, companies focus to minimize the risks to health, safety, and environment by reducing disturbances. Secondly, the companies focuses on to improve the cost and capital efficiency of operations by increasing productivity and optimizing the supply chain. Lastly the companies should focus on to explore new sources of revenue and competitive advantage that transform the business by creating new value in the business.
Rising Demand of Sensing Solutions Fuelling the Market Growth
The IoT in oil and gas market encompasses a wide array of solutions such as sensing, communication, cloud and edge computing, and data management. Sensing systems encompass a broad range of systems including different sensors, GPS devices, and Radio Frequency Identification (RFID). Addition of sensing and navigation capabilities makes it even more promising. Site-specific monitoring and preventive maintenance are two of the major applications of IoT based solutions; and sensing and navigation components are two of the most critical contributors for its execution.
North America-Frontrunner in IoT in Oil and Gas Market
The trends of the IoT in oil and gas market vary across different geographical regions. The IoT in oil and gas market holds a prominent share in various countries of North America, Europe, Asia-Pacific (APAC), and Rest-of-the-World (RoW). North America is at the forefront of the global IoT in oil and gas market, with high market penetration rate in the U.S., Mexico, and others, which are expected to display robust market growth in the coming five years.
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Competitive Landscape
The IoT in oil and gas market ecosystem comprises established oil and gas original equipment manufacturers (OEMs), technology vendors, and solutions and services providers. The rising interest in Internet of Things (IoT) amongst the companies, such as Cisco Systems, GE Digital, Microsoft Corporation and IBM, has been a major trend in the market. The IoT in oil and gas market comprises major companies providing solutions, platform, automation system and others. This varied range of market participants provides opportunities to other players who are willing to bear the high risks involved in the industry. Moreover, players including oil and gas giants, such as Royal Dutch Shell, Schlumberger, Engie and Equinor, among others are also focusing on incorporating data analytics and IoT based systems in their product offerings. The major IoT technology vendors are CISCO Systems Inc., IBM, Intel, C3IoT, Microsoft, ABB Ltd., and General Electric Company, among others. The competitive landscape for the IoT in oil and gas market demonstrates an inclination toward the companies that are adopting strategies such as partnerships, collaborations and joint ventures along with new product launches and development for introducing new technologies and enhance their existing product portfolio. The majority of the companies are launching new products actively to enhance their presence, while the relatively less adoptive strategies comprise mergers and acquisitions. Moreover, major players operating in this industry are focusing on business expansion and contracts to maintain a strong hold on the market. Successful expansion among the companies across the value chain of the IoT in oil and gas industry can be seen as a major strategic move.