Boost expected for oil and gas automation and control solutions
23 November 2012
The automation and control solutions (ACS) market in the European oil and gas industries will witness moderate growth over the next three to four years, according to analysis from Frost & Sullivan.
The demand for oil and gas is expected to boost investments in upstream and mid-stream oil and gas segments which, in turn, will result in greater demand for ACS.
“With an extremely volatile geopolitical landscape in the Middle East and North Africa, the European oil and gas industry is expected to witness greater investments in greenfield projects over the forecast period,” explained Karthik Sundaram, Frost & Sullivan Senior Research Analyst. “Although European oil and gas reserves are restricted to the North Sea basin, new upstream exploration and investments in on-shore fields are expected to meet growing energy needs. Such trends will offer significant growth potential for ACS.”
Another key factor driving market growth will be the need for improved asset utilisation and reduced downtime. Europe has limited sources of crude oil and natural gas, so it will be necessary for end-users to invest in advanced ACS to maximise process output and limit wastage.
Major accidents in oil and gas installations have highlighted the need for process safety in this sector and these accidents are now influencing the regulatory landscape and will encourage end-user investments in ACS, especially, safety systems. “European Commission regulatory initiatives have been aimed at enforcing exclusive safety standards and regulations governing all segments of the oil and gas industry,” explained Sundaram. “In effect, the emphasis on the highest levels of process safety will persuade end-users to adopt and implement high-end safety systems and safety programmable logic controllers (PLCs) in their oil and gas installations.”
While these are positive trends, major market participants concede that the current economic uncertainty has the potential to dampen new investments and delay project orders, affecting revenue margins and profitability in the short-term.
“However, overall automation needs in the oil and gas domain are expected to be high, and an early resolution of the Euro zone crisis is likely to promote investments and, subsequently, aid the long-term growth of the ACS market,” concluded Sundaram.
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