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Digital Oil Rigs: Introduction

  • Oil rig is a large structure of equipment that is used for the purpose of drilling deep holes in the earth’s subsurface in order to extract crude oil. Dependence on the manual process can lead to performance inconsistency and variance in oil rig operations.
  • Thus, digital oil rig is an innovative step aimed to get data driven operational support and curb drilling inefficiencies
  • The oil & gas industry is implementing IoT (Internet of Things) solutions across the value chain to enhance resource management and operational efficiency, enable faster decision making, and control & reduce operational costs
  • Industrial IoT is enabling implementation of advanced energy production and distribution technology, management, and services, while leveraging existing investments in infrastructure and operations

Key Drivers and Restraints of Digital Oil Rigs

  • Volatility in crude oil prices is a major driver of the global digital oil rigs market. Demand & supply scenario and geopolitical instability has driven oil prices in the past. Decline in oil prices is a result of low demand and high supply of crude oil. For instance, increase in crude oil output from the U.S. along with geopolitical issues among OPEC (Organization of the Petroleum Exporting Countries) countries, Iran, Russia, and the U.S. led to a decline in crude oil prices from US$ 110 per barrel to US$ 26 per barrel in early 2014.
  • Low prices of crude oil result in high losses for the crude oil industry, as their exploration and production requires high CAPEX and OPEX investment, which is recovered if minimum oil prices are US$ 50 per barrel or above. However, these prices have driven the industry to optimize its resources. This has resulted in the adoption of IoT (Internet of Things) in the industry in all its operations to provide real-time data for analysis and data modelling for faster decision-making and optimum utilization of resources. Thus, volatility in oil prices is expected to fuel the adoption and implementation of digital oil rigs during the forecast period.
  • Process and environment safety is also a key driver of the global digital oil rigs market during the forecast period. Processes in oil & gas drilling are critical; a small human error can lead to loss of property and life, along with damage to the environment. For instance, the British Petroleum oil spill in the Gulf of Mexico caused damage to the equipment and the marine ecosystem. Oil companies have to pay huge compensation and penalties for any such accidents, which not only effect their profitability, but also deteriorate their creditability. However, adoption of digital oil rigs can help avert these situations by eliminating the human factor in the process, resulting in safer and low-cost operations. Furthermore, IoT (Internet of Things) improves a company’s creditability.
  • Many countries in the world are shifting their focus from fossil fuel to renewable energy sources to lower the detrimental effects of global warming. Thus, less consumption of fossil fuels is expected to hamper the global digital oil rigs market.

COVID-19 Impact Analysis on Global Digital Oil Rigs Market

  • Governments of several countries across the globe have imposed stringent lockdowns to limit the spread of the coronavirus. Movement of individuals and economic activities, related to goods and services, have come to a halt because of lockdowns. Supply could not adjust to the drop in consumption. This resulted in considerable buildup of crude oil in storage. Low prices and unprecedented drop in demand has created difficulties for the downstream sector in regions with unfavorable production economies. This unprecedented situation hampered the investment in oil & gas industry, thereby adversely affecting the global digital oil rigs market.   

Digital Oil Rigs Market: Segmentation

  • The global digital oil rigs market can be segmented based on solution, type of oil rig, and application
  • In terms of solution, the global digital oil rigs market can be segregated into hardware, software, and services
  • In terms of type of oil rig, the global digital oil rigs market can be classified  into jack-up rigs, semi-submersible platforms, drillships, and others
  • In terms of application, the global digital oil rigs market can be bifurcated into onshore and offshore. The onshore segment is anticipated to expand at a faster pace, as onshore drilling entails lower operating cost as compared to offshore drilling.

Digital Oil Rigs Market: Regional Segmentation

  • In terms of region, the global digital oil rigs market can be split into Middle East & Africa, Latin America, Asia Pacific, Europe, and North America
  • According to Rystad Energy, well service spending is expected to rise to US$ 54 Bn in 2021 from US$ 50 Bn in 2020 in North America. Thus, North America is expected to lead the global digital oil rigs market during the forecast period. Growth of the digital oil rigs market in North America can also be ascribed to the increase in investment in IoT (Internet of Things) in the region, especially in the U.S.
  • According to the Oil and Gas Journal, well intervention in Middle East & Africa is anticipated to rise at a faster pace, with around 10,000 active offshore wells on oil fields with average well age of 16-21 years compared to average well age of 10-15 years in other regions. Thus, growth of the oil & gas industry and rise in investment in digital oilfields are anticipated to drive the digital oil rigs market in the region during the forecast period.

Key Players Operating in Global Market:

  • Schlumberger Limited
  • Honeywell
  • Baker Hughes Company
  • KCA Deutag
  • Nabors Industries Ltd.
  • NOV Inc.
  • Weatherford
  • Stena Drilling Ltd
  • Seadrill Limited
  • Pegasystems Inc.

Global Digital Oil Rigs Market: Research Scope

Global Digital Oil Rigs Market, by Solution

  • Hardware
  • Software
  • Services

Global Digital Oil Rigs Market, by Type of Oil Rig

  • Jack-up Rigs
  • Semi-submersible Platforms
  • Drillships
  • Others

Global Digital Oil Rigs Market, by Application

  • Onshore
  • Offshore

Global Digital Oil Rigs Market, by Region

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • France
    • U.K.
    • Italy
    • Spain
    • Russia & CIS
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • ASEAN
    • Rest of Asia Pacific
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America
  • Middle East & Africa
    • GCC
    • South Africa
    • Rest of Middle East & Africa

This study by TMR is all-encompassing framework of the dynamics of the market. It mainly comprises critical assessment of consumers' or customers' journeys, current and emerging avenues, and strategic framework to enable CXOs take effective decisions.

Our key underpinning is the 4-Quadrant Framework EIRS that offers detailed visualization of four elements:

  • Customer Experience Maps
  • Insights and Tools based on data-driven research
  • Actionable Results to meet all the business priorities
  • Strategic Frameworks to boost the growth journey

The study strives to evaluate the current and future growth prospects, untapped avenues, factors shaping their revenue potential, and demand and consumption patterns in the global market by breaking it into region-wise assessment.

The following regional segments are covered comprehensively:

  • North America
  • Asia Pacific
  • Europe
  • Latin America
  • The Middle East and Africa

The EIRS quadrant framework in the report sums up our wide spectrum of data-driven research and advisory for CXOs to help them make better decisions for their businesses and stay as leaders.

Below is a snapshot of these quadrants.

1. Customer Experience Map

The study offers an in-depth assessment of various customers’ journeys pertinent to the market and its segments. It offers various customer impressions about the products and service use. The analysis takes a closer look at their pain points and fears across various customer touchpoints. The consultation and business intelligence solutions will help interested stakeholders, including CXOs, define customer experience maps tailored to their needs. This will help them aim at boosting customer engagement with their brands.

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The study equips businesses and anyone interested in the market to frame broad strategic frameworks. This has become more important than ever, given the current uncertainty due to COVID-19. The study deliberates on consultations to overcome various such past disruptions and foresees new ones to boost the preparedness. The frameworks help businesses plan their strategic alignments for recovery from such disruptive trends. Further, analysts at TMR helps you break down the complex scenario and bring resiliency in uncertain times.

The report sheds light on various aspects and answers pertinent questions on the market. Some of the important ones are:

1. What can be the best investment choices for venturing into new product and service lines?

2. What value propositions should businesses aim at while making new research and development funding?

3. Which regulations will be most helpful for stakeholders to boost their supply chain network?

4. Which regions might see the demand maturing in certain segments in near future?

5. What are the some of the best cost optimization strategies with vendors that some well-entrenched players have gained success with?

6. Which are the key perspectives that the C-suite are leveraging to move businesses to new growth trajectory?

7. Which government regulations might challenge the status of key regional markets?

8. How will the emerging political and economic scenario affect opportunities in key growth areas?

9. What are some of the value-grab opportunities in various segments?

10. What will be the barrier to entry for new players in the market?

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Digital Oil Rigs Market

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