Automation Shipments to the Oil & Gas Industry to Reach US$12 Billion

The worldwide automation market for the Oil & Gas industry is expected to grow at a compounded annual growth rate (CAGR) of 6.7% over the next five years. The market was $8.7 billion in 2005 and is forecasted to be over $12.0 billion in 2010, according to a new ARC Advisory Group study.

Driven by continued strong demand and record high oil prices, the Oil & Gas and Refining industries are expected to make robust capital expenditures in automation technology. “As the industry works to find new reserves, build new capacity, and upgrade its existing infrastructure, it will look to automation technology to help optimize its production processes to maximize profits,” according to ARC Analyst Allen Avery, the principal author of ARC’s “Oil & Gas Industry Automation Worldwide Outlook”.

ARC expects that oil companies will divert most of their automation investments upstream, putting more than 80 percent of their capital into exploration and extraction infrastructure. While most of the major oil and natural gas deposits have already been developed, the new oil and gas deposits found through intensified exploration activities tend to be smaller. The result is a greater number of geographically-dispersed reservoirs, each requiring its own drilling gear and a full complement of automation equipment for each site.

The Asia Pacific region will see the strongest growth, as countries like China and India seek access to oil and gas to fuel their growing economies. Oil and gas companies in North America will also make significant automation investments as they upgrade aging facilities and further develop projects such as the Canadian tar sands and shale deposits in the Rockies, sites that offer great potential but require more complex processes and technologies to extract and process oil.

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