Global Downhole Electronics Market: Snapshot

The global downhole electronics market is prognosticated to bolster its growth on the back of a rising demand in the oil and gas production and exploration sector. Downhole electronics are engaged in bottom hole assemblies (BHAs) for completion and workover activities of wells. Such types of tools are expected to be employed for a range of applications including well measurements, fracturing, logging, drilling, well bottom communication, cementing, casing, and fishing. One of the critical driving factors of the market could be the increasing demand for tools that are capable of giving an optimal performance in high temperature and pressure conditions. Amongst the prime applications of downhole electronics could be well intervention.

The global downhole electronics market could be marked by the advent of innovative and novel technologies. However, this could raise the risk of failure in the market on account of the relatively new nature of the innovations introduced. Nevertheless, technological updates and upgrades on the part of downhole electronics are anticipated to change the scenario for players introducing new offerings in the market. As a result, companies could improve their market share and penetration in the coming years despite the risks. Handling tools, downhole control systems, drilling, impurity control, and flow and pressure control are predicted to be among the regularly used downhole electronics.

The supply of specialized tools for exploration of ultradeep offshore resources could augment in future as the focus shifts from deep and shallow water drilling of oil and gas resources.

Downhole electronics tools are widely used in oilfield operations and during oil and gas exploration activities. Downhole electronics comprises various tools and equipment that have the ability to withstand the extreme mechanical, geological, and thermal stresses of the demanding applications during oil and gas operations. Most of the time, there are drilling applications where usual electronic tools are not able to withstand the demanding and stringent requirements. Major companies operating in the market are emphasizing on innovation to materialize their idea, by the enhancement of downhole electronics to cope with prevalent issues such as implementation of the processing function in robust/limited hardware, small physical shape to fit optimally into the mechanical housing, package protection in order to get it running downhole, and rugged design to withstand extreme pressure, temperature, and vibration conditions. This emphasis by the major players is a key factor driving the downhole electronics market.

The high temperature of the downhole applications presents a significant challenge to electronics components and most resistor technologies. Temperature soaring above 275 degree Celsius is critical and even above the melting point of some solders. Consequently, the thin-film resistors get oxidized and wirewound devices witness major shift in values. Therefore, thick-layered resistors are being employed for seismic oil exploration as well as for downhole applications.

Many end-user industries are calling for electronics that can functional reliably in harsh conditions of extreme temperature. The oil & gas industry is a prominent end-user industry of high temperature electronics. The operating temperature increases proportionally to the depth of the well during oil and gas exploration. Typically, the geothermal gradient is 25 degree Celsius / Km; however, in some cases, it is greater. In recent years, drilling operations have maxed out at a temperature range of 150-175 deg Celsius; however, declining reserves and advances in technology have fostered the industry to drill deeper, particularly in the region with a higher geothermal gradient. Temperature in these cases exceeds 200 deg Celsius with pressure greater than 25 kpsi. In such harsh environment, active cooling is impractical and passive cooling techniques are ineffective. All these factors along with the recovering oil & gas industry, particularly in North America, are estimated to augment the demand for downhole electronics in the near future.

In terms of type, the downhole electronics market can be segmented into electronic pressure and temperature sensing tools, electronic production logging tools, samplers, flow meters, and others. In terms of application, the downhole electronics market can be segmented into as drilling, completion, well intervention, formation & evaluation, and oil & gas production.

In terms of regional demand, Asia Pacific was the leading region for the downhole electronics market due to increasing downhole drilling activities in the year 2016. This is driven by the increasing demand for reliable MWD (Measurement while drilling) and formation-evaluation-measurement-while-drilling (FEMWD, also known as logging-while-drilling or LWD) tools, particularly in Southeast Asia, where downhole temperatures reach as high as 200 deg Celsius. North America on account of increase in exploration activities have led to the widespread use of downhole electronics and is expected to witness significant growth over the years.

The downhole electronics industry presents a significant challenge to electronics manufacturers & designers to develop ever shrinking and increasingly complex electronics to work at extreme temperatures. Key players operating in the global downhole electronics market include Schlumberger Ltd., Weatherford International Ltd., and Kuster, a Probe Company.

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.

2. Insights and Tools

The various insights in the study are based on elaborate cycles of primary and secondary research the analysts engage with during the course of research. The analysts and expert advisors at TMR adopt industry-wide, quantitative customer insights tools and market projection methodologies to arrive at results, which makes them reliable. The study not just offers estimations and projections, but also an uncluttered evaluation of these figures on the market dynamics. These insights merge data-driven research framework with qualitative consultations for business owners, CXOs, policy makers, and investors. The insights will also help their customers overcome their fears.

3. Actionable Results

The findings presented in this study by TMR are an indispensable guide for meeting all business priorities, including mission-critical ones. The results when implemented have shown tangible benefits to business stakeholders and industry entities to boost their performance. The results are tailored to fit the individual strategic framework. The study also illustrates some of the recent case studies on solving various problems by companies they faced in their consolidation journey.

4. Strategic Frameworks

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?

Note: Although care has been taken to maintain the highest levels of accuracy in TMR’s reports, recent market/vendor-specific changes may take time to reflect in the analysis.

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