Frost Radar™: Oil and Gas Automation, 2024

Frost Radar™: Oil and Gas Automation, 2024

Investments in oil and gas (O&G) automation declined in 2020 and 2021 as demand dried up because of the COVID-19 pandemic. From 2021 onward, the market began gradually stabilizing and recovering, with high levels of growth starting in 2022.

Industry 4.0 is driving the demand for new technology investments and has transformed the O&G value chain by increasing connectivity, simplifying operational maintenance, and emphasizing safety. Automation applications that will have the biggest effects on market growth are robotics for remote site inspection, the internet of things (IoT) for facility monitoring, and artificial intelligence (AI) for predictive maintenance. Because they will be the main enablers of full automation, robotic technologies will not realize their full potential for several years. AI and IoT, on the other hand, will function as complementary technologies to start the shift toward gradual automation rather than as means of fully automating operations.

The market for conventional operational technologies is mature and thus will experience slower growth as attention shifts to more innovative technologies such as AI and robotics. O&G companies have traditionally displayed a conservative approach to adopting new technologies—especially when compared with more progressive industries such as technology or manufacturing —because of their highly regulated and safety-critical environments in which any technological failure or malfunction could have severe repercussions. As a result, the industry has relied on established technologies such as distributed control systems, programmable logic controllers, and other environmental management systems to automate processes while ensuring operational safety. By the beginning of the next decade, however, these technologies will experience rapid displacement. AI is becoming an increasingly important technology in the O&G industry—particularly in North America. Major O&G companies are deploying AI-based technologies to automate complex decision-making processes and achieve higher levels of autonomy in their operations.

IoT technologies are gaining traction, particularly as a supplement to sensors or other OT systems, but obstacles include data security and privacy concerns, interoperability issues, and infrastructure costs. By the end of the decade, O&G companies will have developed the necessary infrastructure capacity to increase their use.

Robotics technologies show tremendous potential for achieving full automation in several O&G operations, but companies are not fully embracing them yet because of the high implementation costs and concerns about safety and reliability in hazardous environments. The deployment of robotic systems can be a drawn-out and complicated process since they require a substantial investment in infrastructure and specific training for staff, but it will inevitably increase in tandem with the demand for automation.

Frost & Sullivan analyzes numerous companies in an industry. Those selected for further analysis based on their leadership or other distinctions are benchmarked across 10 Growth and Innovation criteria to reveal their position on the Frost Radar™. This publication presents competitive profiles of each company on the Frost Radar™ considering their strengths and the opportunities that best fit those strengths.