Oil Drilling Automation Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Application (Offshore, Onshore), By Offering (Hardware, Software), And By Geography - Forecasts From 2022 To 2027

Published:  Jun 2022 Report Code: KSI061613855 Pages: 120

The oil drilling automation market is evaluated at US$350.683 million for the year 2020, growing at a CAGR of 10.14% reaching a market size of US$689.301 million by the year 2027.

Oil drilling automation refers to the automation of sub-processes of operational as well as downhole activities that are necessary for the drilling of oil. In other words, it refers to the integration of surface and downhole measurements with the help of modernized machinery, and systems as well as predictive models to improve operational efficiency in a cost-efficient and effective manner. There are growing requirements for safety as well as efficiency during the drilling process. Therefore, these tools and equipment further offer enhanced safety and efficiency with the help of predictive tools and models. Automation of drilling is being increasingly adopted due to the fact that it also helps to optimize surface activities. For this, a combined system is required with a comprehensive understanding of the subsurface and its interactions with the drilling systems that operate under surface drilling.

The market for oil drilling automation is primarily driven by the fact that there has been a significant increase in exploration activities owing to the increased demand, which is anticipated to be one of the prime factors that are expected to supplement the demand for automation solutions in oil fields. Furthermore, the increasing focus on the development of new oil fields with reduced risks and enhanced safety and efficiency is a major factor that is playing a significant role in shaping the market growth throughout the course of the next five years. Additionally, the up-gradation of the existing infrastructure in the oil fields coupled with the growing penetration of automation processes across several industry verticals is further bolstering the oil drilling automation market growth throughout the forecast period.

However, the market may be restrained by the fact that the initial upfront costs of these solutions are further leading to a reluctance in the adoption of these solutions. Also, the risk of security coupled with the volatile nature of the oil industry is some of the additional factors that are projected to inhibit the market growth. Furthermore, the outbreak of COVID-19 is considered to be a major factor that is expected to hamper the market growth during the short run due to the fact that in many parts of the world, capital expenditure spending on oil and gas has been negatively impacted due to the economic crisis. Also, the halt in industrial manufacturing further led to a decline in energy demand as well, which further led to a decline in production.

High Upfront Costs

The initial requirements and the time consumed for the installation of both hardware and software solutions are comparatively high. This makes the firms reluctant towards the adoption of these solutions since they have been operating without them for many years. Also, the maintenance, as well as running costs, are also added up to keep them working constantly. Moreover, costs associated with the software used also add up to the cost burden of the end-user who uses them, thus restraining the market growth. Though these solutions often offer operational efficiency, they also add to the operating costs as workers with special skill sets are also required to read and analyze the predictive models and data which are generated. Many times, maintenance costs might exceed the revenue generated, hampering the growth of the market. Furthermore, any breakdown or downtime in the system or machinery may further lead to an increase in the overall cost burden of the company. Furthermore, any machinery breakdown or downtime further leads to an increase in the burden of cost for the company. The systems used for these solutions are quite complex, which further requires sophisticated instrumentation to ensure that adequate service is delivered. Thus, a highly complex process coupled with heavy initial capital requirements for the automation of the oil drilling process has led to a limited number of players in the industry who are venturing into the market, leading to restricted product options and limited market growth during the given period.

The outbreak of COVID-19

The recent outbreak of the novel coronavirus disease is projected to hamper the market growth to some extent during the short run. The major factors responsible for the slump in the market growth include the reduction in capital expenditure due to the global crisis caused by the coronavirus disease.

The graph above represents the investment spending in oil and gas upstream that showed a constant increase after the year 2016 and a sharp decline in 2020. Also, a significant decrease in oil demand and prices was observed as transportation as well as several industrial sectors were not operating. This resulted in an increase in supply, causing operations in the oil sector to be temporarily halted in many parts of the world. Also, the economic crisis in many countries of the world has further led to a decline in production output as economies aren’t able to support ongoing operations due to the build-up of oil stocks, further saturating the storage capabilities in some parts of the world.

Onshore to account for a sizable share By application, the segmentation of the oil drilling automation market has been done into onshore and offshore. The onshore segment is projected to hold a considerable share in the market owing to the fact that onshore oil production dominates offshore drilling and accounts for a larger share of oil production at the global level. Also, the increased spending on onshore oil exploration is a key factor supporting the onshore oil drilling automation market growth in the coming five years. For example, the Oil and Natural Gas Corporation of India announced an investment worth3,500 crores in an onshore oil exploration project in Assam in December 2020. However, the offshore segment is expected to witness promising growth in the near future.

Software to show healthy growth

By offering, the market has been classified into hardware and software. The hardware segment is expected to hold a decent market share throughout the forecast period, primarily due to the considerable high costs. The growing investments in automation technology will further support the growth of this segment during the course of the next five years. The software segment is projected to witness significant market growth during the forecast period due to the growth in demand for automation solutions due to their cost-effectiveness and safety. The software consists of systems that convert the collected information into meaningful data. Also, growing investments by major market players in the adoption of advanced automation solutions further show the potential for the market to grow in the coming years and thereby propelling the business growth opportunities for the market players over the next five years. For example, in June 2020, British Petroleum, one of the worlds leading oil and gas companies based out of London, announced the implementation of a NOVOS™ platform, downhole drilling dynamics tools, drilling apps, and wired drill pipe in BP Alaska as a part of the automation package offered by National Oilwell Varco. The company aims to achieve the potential of this technology and move a step closer to drilling automation.

North America will have a sizable share. Geographically, the market has been distributed in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. The North American region is expected to hold a considerable share in the market due to the fact that the region boasts of being the early adopter of technology coupled with the presence of a world-class infrastructure across the oil and gas industry. The Asia-Pacific region is expected to witness promising growth during the forecast period. The presence of the world’s fastest-growing economies such as India and China, among others, coupled with the increasing expenditure in the oil exploration sectors in these countries, further supports the oil drilling market growth in the APAC region throughout the forecast period.

Key developments

As a consequence of the rising demand for oil and increased exploration activities in regions across the globe, the oil drilling automation market has gone up significantly. Additionally, the increased employee safety in automated oil drills has also driven its demand.

According to a release by the Journal of Petrol Technology, Nabors Industries, an international rig contractor, had completed the drilling of the first of three wells for ExxonMobil in the Permian Basin, claiming to be the "world's first completely automated land rig." The Pace®R801 had finished the first well on an ExxonMobil pad on the 18th of October and was commencing with the lateral on the second well of the three-well pad. The prolonged test will progress to the next pad when the third is completed.

 As reported by Schlumberger in May 2021, Schlumberger and NOV Inc. established a partnership to help oil and gas operators and drilling contractors embrace automated drilling technologies faster. Customers will be able to use Schlumberger surface and downhole drilling automation solutions in conjunction with NOV's rig automation platform to achieve better well construction results.

Intellilift has formed a joint venture with Transocean, a deepwater rig contractor, to commercialize products and services based on a digital well-building solution that is presently under development, as reported in a release by the Journal of Petrol Technology in October 2021. Inteliwell is a project aimed at integrating digital solutions for good building, drilling control, and real-time data monitoring. Intellilift has already digitized and enabled enhanced automation and remote-controlled operations for onboard offshore vessels and drilling rigs. Intellilift will benefit from Transocean's worldwide reach and well-building knowledge through this joint venture, expediting the implementation of this rig automation technology.

Competitive Insights

Prominent/major key market players in the oil drilling automation market include ABB, Emerson Electric Co., Huisman Equipment B.V., and Sekal AS, among others. The players in the oil drilling automation market are implementing various growth strategies to gain a competitive advantage over their competitors in this market. Major market players in the market have been covered along with their relative competitive positions and strategies. The report also mentions recent deals and investments of different market players over the last few years. The company profiles section details the business overview, financial performance (public companies) for the past few years, key products and services being offered, along with the recent deals and investments of these important players in the oil drilling automation market.

Oil Drilling Automation Market Scope:

Report Metric Details
 Market size value in 2020  US$350.683 million
 Market size value in 2027  US$689.301 million
 Growth Rate  CAGR of 10.14% from 2020 to 2027
 Base year  2020
 Forecast period  2022–2027
 Forecast Unit (Value)  USD Million
 Segments covered  Application, Offering, And Geography
 Regions covered  North America, South America, Europe, Middle East and Africa, Asia Pacific
 Companies covered Huisman Equipment B.V., Sekal AS, Drillform Technical Services Ltd., National-Oilwell Varco, Inc., Rigarm Inc., Automated Rig Technologies Ltd., Nabors Industries Ltd., ABB, Emerson Electric Co., Honeywell International Inc.
 Customization scope  Free report customization with purchase

 

Market Segmentation

  • By Application
    • Offshore
    • Onshore
  • By Offering
    • Hardware
    • Software
  • By Geography
    • North America
      • USA
      • Canada
      • Mexico
    • South America
      • Brazil
      • Argentina
      • Others
    • Europe
      • Germany
      • France
      • UK
      • Italy
      • Others
    • Middle East and Africa
      • Saudi Arabia
      • UAE
      • Others
    • Asia Pacific
      • China
      • India
      • Japan
      • South Korea
      • Taiwan
      • Thailand
      • Indonesia
      • Others

Frequently Asked Questions (FAQs)

Q1. What will be the oil drilling automation market size by 2027?
A1. The oil drilling automation market is projected to reach a total market size of US$689.301 million by 2027.


Q2. What are the growth prospects for the oil drilling automation market?
A2. The global oil drilling automation market is projected to grow at a CAGR of 10.14% over the forecast period.


Q3. What is the size of the global oil drilling automation market?
A3. Oil Drilling Automation Market is evaluated at US$350.683 in 2020.


Q4. Which region holds the largest market share in the oil drilling automation market?
A4. The North American region is expected to hold a considerable share in the oil drilling automation market due to the fact that the region boasts about being the early adopter of technology coupled with the presence of a world-class infrastructure across the oil and gas industry.


Q5. What factors are anticipated to drive the oil drilling automation market growth?
A5. The oil drilling automation market is primarily driven by the fact there has been a significant increase in exploration activities owing to the increased demand, which is anticipated to be one of the prime factors that are expected to supplement the demand for automation solutions in oil fields.

1. Introduction
1.1. Market Definition
1.2. Market Segmentation

2. Research Methodology
2.1. Research Data
2.2. Assumptions

3. Executive Summary
3.1. Research Highlights

4. Market Dynamics
4.1. Market Drivers
4.2. Market Restraints
4.3. Porters Five Forces Analysis
4.3.1. Bargaining Power of Suppliers
4.3.2. Bargaining Power of Buyers
4.3.3. Threat of New Entrants
4.3.4. Threat of Substitutes
4.3.5. Competitive Rivalry in the Industry
4.4. Industry Value Chain Analysis

5. Oil Drilling Automation Market Analysis, by Application
5.1. Introduction
5.2. Offshore
5.3. Onshore

6. Oil Drilling Automation Market Analysis, by Offering
6.1. Introduction
6.2. Hardware
6.3. Software

7. Oil Drilling Automation Market Analysis, by Geography
7.1. Introduction
7.2. North America
7.2.1. US
7.2.2. Canada
7.2.3. Mexico
7.3.    South America
7.3.1. Brazil
7.3.2. Argentina
7.3.3. Others
7.4.    Europe
7.4.1. Germany
7.4.2. France
7.4.3. UK
7.4.4. Italy
7.4.5. Others
7.5.    Middle East and Africa
7.5.1. Saudi Arabia
7.5.2. UAE
7.5.3. Others
7.6.    Asia Pacific
7.6.1. China
7.6.2. India
7.6.3. Japan
7.6.4. South Korea
7.6.5. Taiwan
7.6.6. Thailand
7.6.7. Indonesia
7.6.8. Others

8. Competitive Environment and Analysis
8.1. Major Players and Strategy Analysis
8.2. Emerging Players and Market Lucrativeness
8.3. Mergers, Acquisitions, Agreements, and Collaborations
8.4. Vendor Competitiveness Matrix

9. Company Profiles 
9.1. Huisman Equipment B.V.
9.2. Sekal AS
9.3. Drillform Technical Services Ltd.
9.4. NOV Inc.
9.5. Rigarm Inc.
9.6. Automated Rig Technologies Ltd.
9.7. Nabors Industries Ltd.
9.8. ABB
9.9. Emerson Electric Co.
9.10. Honeywell International Inc.

Huisman Equipment B.V.

Sekal AS

Drillform Technical Services Ltd.

NOV Inc.

Rigarm Inc.

Automated Rig Technologies Ltd.

Nabors Industries Ltd.

ABB

Emerson Electric Co.

Honeywell International Inc.

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