ARC Sees Oil & Gas Sector Investing in Automation

According to a new ARC Advisory Group study, an increase in demand over the long term will continue to drive significant growth in capital investments and automation expenditures in the global oil & gas industry. With access to only a minority percentage of proven reserves, integrated oil companies must attempt to replace their reserves in remote areas that are much less hospitable and more dangerous — both environmentally and politically. This is driving huge expenditures in large, complex, and difficult capital projects in the production segment.

According to estimates, demand for petroleum products will increase substantially as the economies in developing regions improve and per capita energy consumption increases. Today’s production and processing capacities struggle to keep ahead of the demand curve and both upstream and midstream facilities will need to be expanded. New sources, such as tar sands, shale oil, and coal-to-liquid gas, will require new midstream and production facilities to be developed, increasing demand for automation systems and field devices.

ARC also predicts that the highest growth rates will occur in Asia and Latin America. Asia’s share of sales will reach 25 percent, and while expenditures in Latin America will nearly double over the forecast period, the region will still remain a relatively small portion of the overall market. Despite the strong growth in developing regions, the Middle East, home to the world’s largest conventional oil and gas deposits, will grow at average rates. North America’s upstream business, because it relies on non-conventional projects such as the Canadian Tar Sands, will trail the market.