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Global O&G automation and control market to hit $8.7bn.

THE global oil and gas automation and control systems market will reach a value of $8.63 billion in 2013, with safety and optimisation of oil and gas processes driving expenditure in the market, says a report.

According to a Visiongain report, the global oil and gas automation and control systems market is forecast to record moderate and continuous growth over the next decade, as oil, gas and power companies try to increase productivity, reduce costs and improve their safety standards. Automation and control systems are used throughout the industry from oil and gas field operations, to production and processing plants, and distribution and retailing of petroleum products. Integrated monitoring and control systems raise efficiency, speed and performance of companies' operations.

The lead analyst of the oil and gas automation and control systems market 2013-2023 report comments that "Oil and gas industry leaders are investing in automation and control systems to ensure that their facilities are running at maximum efficiency and at the highest safety standards. Such a move is becoming evermore critical with narrowing margins in the downstream industry driving operational improvements, while increasingly challenging environments in the upstream oil and gas industry demand the highest safety and monitoring standards."

Meanwhile, the Middle East's aspiration for economic diversification and energy efficiency has created a wider market for centrifugal and compressors market, says a report.

Frost & Sullivan says rapid advancements in compressor technology have opened up substantial opportunities for the compressors market in the Middle East. Demand for new equipment will continue as facilities install new compressors with either high-speed direct-drive or variable frequency drive solutions to gain better energy efficiency. The Middle East's burgeoning infrastructure demands are prompting the development of more roads, railways, ports and water pipelines. These projects, in turn, have expanded the market for various industrial-grade compressors such as centrifugal and positive displacement compressors.

New analysis from Frost & Sullivan's The Middle East centrifugal and positive displacement compressors market, finds that the centrifugal compressors market earned revenues of over $868.6 million in 2011 and estimates this to reach $1,312.1 million in 2016; while the positive displacement compressors market earned revenues of $450.5 in 2011 million, and is estimated to reach $669.5 million in 2016. The end-user segments covered in this research include oil and gas, petrochemicals, chemicals and fertilisers, power generation and desalination, water and wastewater treatment plants and associated facilities, metals and mining (steel and aluminium) and cement.

"The region's burgeoning population has led to rapid and diversified industrialisation and infrastructure growth. The subsequent introduction of several non-oil and gas based projects, besides continued investment in the oil and gas industry is heightening the demand for centrifugal compressors. Escalating energy requirements have necessitated the construction of gas-fired plants that need centrifugal compressors for their process applications. In addition, Saudi Arabia being the largest Middle East market, offers further scope for centrifugal compressor manufacturers as it is focusing on diversifying its industries to reduce dependence on oil and gas revenues and create employment opportunities. Growth in non-oil and gas-based projects such as petrochemicals, power, desalination, water and wastewater, infrastructure, metals and mining will raise the demand for positive displacement compressors," says Frost & Sullivan analyst for industrial automation and process control practice.

Increasing industrial investments in Iran and Iraq will further ensure substantial market growth. The cement sector will also contribute significantly to the positive displacement compressor market's revenues, as the widening gap between supply and demand in this sector will lead to both greenfield and brownfield investments, boosting the demand for positive displacement compressors. Increasing aluminum and steel production, for which large volumes of oxygen are required, too will increase the sales of compressors.

However, while older compressor technologies remain popular, end users are reluctant to adopt new equipment due to concerns regarding product reliability and operability in local conditions. End users are wary of migrating to the next level of technology due to apprehensions regarding product reliability and operability in local conditions. As a result they prefer to continue operations with the older compressor technologies which are less efficient.

Reduced demand for oil and gas from key export markets such as the US and China owing to the weak global economy has also slowed down market investments. Volatile raw material prices affect manufacturers' profit margins. The Middle East's economy is also under huge stress from the declining demand for oil from its major export destination, Europe. The Middle East survived the rough patch and achieved its targeted growth by increasing oil prices, but there is a discernible drop in investments in the oil and gas industry, which affects the positive displacement compressors market.

"To boost revenues, suppliers must establish a strong local presence and sales and service setup. Compressor suppliers need to foster healthy relations with their end users to ensure the latter is aware of new technologies and their benefits, especially of energy efficiency. Further, they can leverage diverse forums to interact with clients and familiarise them with their products," notes the Frost & Sullivan analyst. "Timely and high-quality services are key in this market and hence, providing robust sales and services set-up as well as having local presence are crucial," he adds.

Spreading awareness on the benefits of new technology through internet-based forums and periodic meetings, along with increased engagement between suppliers and end users through symposiums, will enhance customer loyalty and enable market expansion, the report adds.

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Publication:Oil & Gas News
Geographic Code:70MID
Date:Apr 29, 2013
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