Processing Magazine

Global oil and gas industry relies on automation for growth

March 4, 2013

Oil and gas companies outside the Unites States have had to take radical measures to remain competitive in a constantly changing market that seems to be currently favoring U.S. businesses. That is why companies from Southeast Asia, Australia and New Zealand have been looking for ways to meet rising energy needs, while at the same time attempting to cut operating costs and improve efficiency.

Among the different approaches adopted by the multiple companies in the oil and gas industry there is one that emerges as the most common in their search for efficiency and cost-effectiveness: automation. According to a recent analysis by Frost & Sullivan, as a number of oil and gas-based projects are on the agenda in Southeast Asian countries, Australia and New Zealand, the trend toward automation and software solutions is likely to continue and drive growth in demand for such products.

Frost & Sullivan estimated that the automation and software solutions market for the oil and gas industry in those geographical regions is expected to reach $447.8 million in 2018, up from $282.1 million in 2011. Analysts from the company noted that automation solution providers have played a significant role in growth of the market, thanks to low-cost manufacturing facilities in developing markets that have enabled them to create a global supply chain network.

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Frost & Sullivan Research Analyst Vineeth Purushotham commented that the demand for energy efficiency in emerging countries such as Indonesia, Thailand and Malaysia has driven oil and gas companies to embrace new technology. Distributed control systems enjoy the highest popularity among oil and gas companies in Southeast Asia, Australia and New Zealand, he added.

Typically, companies from the oil and gas sector tend to rely on one solution provider only to meet all their needs for automation, the report found. For this reason, automation providers look to offer specialized one-stop solutions and try to expand their portfolio by mergers and acquisitions, which in turn boosts competition.

According to Frost & Sullivan, automation vendors have to tackle other challenges, such as integration of up-to-date information technologies and advanced control systems into their automation platform. This problem is aggravated by the lack of skilled staff with sufficient IT proficiency, especially in developing economies, which is also a major obstacle in installation and maintenance of systems.

Purushotham noted that oil and gas companies are in need of personnel skilled in both control systems knowledge and IT. He highlighted the crucial role that training plays for growth and expansion and pointed out that businesses need to establish industry-related educational and training courses.

The report also revealed that there is potential for additional revenues to be generated by oil and gas companies by utilizing manufacturing execution systems that can optimize use of resources and improve plant efficiency and productivity.