Oil Drilling Automation Makes Oil Drilling Much Easier
The Oil Drilling Automation market is expected to grow at a compound annual growth rate of 10.14% over the analyzed period to reach a market size of US$689.301 million in 2027. The market stood at US$350.683 million in 2020. Oil drilling automation refers to the automation of sub-processes of operational and downhole activities required for oil drilling. In other words, it is the integration of surface and downhole measurements using modernised machinery, systems, and predictive models to improve operational efficiency in a cost-effective and efficient manner. During the drilling process, there are increasing demands for safety and efficiency. As a result, these tools and equipment provide enhanced safety and efficiency through the use of predictive tools and models. Drilling automation is becoming more popular as it aids in the optimization of surface activities. A combined system with a comprehensive understanding of the subsurface and its interactions with surface drilling systems is required for this.
Application of oil drilling automation:
The oil drilling automation market has been segmented by application into onshore and offshore. An onshore drilling rig is driven deep into the earth to reach fossil fuels, whereas an offshore drilling rig drills beneath the seabed. Oil platforms are used for offshore drilling. An oil company uses drilling equipment to drill deep into the earth during offshore drilling. currently, onshore oil production is outpacing offshore drilling and makes up a larger portion of global oil production, the onshore segment is anticipated to hold a sizable share of the market.
Hardware and software offerings
Based on offerings, the oil drilling automation is divided into hardware and software. Low Voltage Drilling automation necessitates the use of hardware such as variable frequency drives (VFD) or alternating current (AC) systems. Software offerings include the creation of tools that allow for quick and accurate calculation via a friendly and dependable interface. They are fully compatible with cutting-edge technology and adapt to a wide range of programmable logic controllers (PLCs) via different communication protocols. Given the significantly high costs, the hardware segment is expected to hold a decent market share throughout the forecast period. Growing investments in automation technology will help this segment grow even more over the next five years. Because of their cost-effectiveness and safety, automation solutions are expected to see significant market growth during the forecast period.
A substantial increase in exploration activities
The market for oil drilling automation is primarily driven by a significant increase in exploration activities as a result of increased demand, which is expected to be one of the primary factors that will supplement the demand for automation solutions in oil fields. The processes and methods involved in locating potential sites for oil drilling and extraction are referred to as oil exploration. Surface signs such as natural oil seeps were used by early oil explorers, but advances in science and technology have made oil exploration more efficient. Geological surveys are carried out in a variety of ways, ranging from testing subsoil for onshore exploration to seismic imaging for offshore exploration. Energy companies compete for access to mineral rights granted by governments by entering into a concession agreement, which states that any discovered oil is the property of the producers, or a production-sharing agreement, which states that the government retains ownership and participation rights. Exploration is a high-risk, high-cost endeavour that primarily involves corporate funds. An unsuccessful exploration, such as one involving seismic studies and drilling a dry well, can cost anywhere from $5 million to $20 million per exploration site, and in some cases much more. When an exploration site is successful and oil and gas extraction is profitable, exploration costs are recovered and are significantly lower than other production costs.
Rapid growth in the production of oil
Rapid growth in oil production in recent years has fueled the growth of the oil drilling automation market. Multiple complexities are involved in the extraction. As a result, vendors have begun to offer advanced automated drilling equipment with improved designs. Some companies, such as RigMinder and Schlumberger, specialise in automated drilling solutions for shale oil and gas extraction. Furthermore, the use of drilling automation solutions in offshore oil projects is growing. This is due to the fact that automated drilling solutions improve operational efficiency in harsh mid- and deep-water oil drilling environments.
High Upfront Costs
The initial requirements and time required to install both hardware and software solutions are relatively high. Because they have been operating without them for many years, the firms are hesitant to adopt these solutions. Maintenance and operating costs are also calculated to ensure that they remain operational at all times. Furthermore, the costs associated with the software used to add to the cost burden of the end-user who uses them, stifling market growth.
Regional and Geographical Insights:
On a Geographical note, The North American region is expected to hold a significant share of the market due to the region’s reputation for being an early adopter of technology, as well as the presence of world-class infrastructure in the oil and gas industry.
During the forecast period, the Asia-Pacific region is expected to grow rapidly. The presence of the world’s fastest-growing economies, such as India and China, along with increasing expenditure in these countries’ oil exploration sectors, supports the oil drilling market growth in the APAC region throughout the forecast period. According to the International Energy Agency, Asian crude oil imports are expected to nearly double to nearly 27 million barrels per day by 2026, necessitating record levels of both Middle Eastern crude oil exports and Atlantic Basin production to close the gap.
