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Oil, Gas, Petrochemical Industry News
News Release from: ARC Advisory Group | Subject: Report on Oil and Gas
Edited by the Processingtalk Editorial
Team on 02 November 2006
Automation market in the Oil and Gas
industry
The worldwide automation market for the Oil and Gas industry is expected to grow at a compounded annual growth rate (CAGR) of 6.7% over the next five years, to reach over US$12Bn in 2010
The worldwide automation market in the Oil and 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
This article was originally published on Processingtalk on 21 Nov 2003 at 8.00am (UK)
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Driven by continued strong demand and record high oil prices, the Oil and 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 optimise its production processes to maximize profits," according to ARC Analyst Allen Avery, the principal author of the ARC "Oil and 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.
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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.
In addition, the cost to extract this new oil has gone up significantly, rising roughly 40% between 2000 and 2005.
Operators of mature oil fields are looking to enhanced recovery methods such as directional drilling to maintain output levels.
Automation suppliers are in a unique position to help oil companies to minimise extraction costs and maximise output.
The drive to collect and process information from across the supply chain to improve production and business processes has caused information technology to become pervasive across all aspects of the production and distribution of oil and gas.
The line between production systems and business systems is blurring, and at many organizations the IT department is taking the lead in decisions about how technology is deployed in the field, traditionally the domain of construction and process engineers.
Many suppliers have taken notice, and formed new partnerships and joint ventures (Schlumberger and Infosys, for example) to be able to work with both the operations and IT departments at user companies.
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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