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The Digital Transformation in the Oil and Gas Market size is estimated to grow at a CAGR of 16.73% between 2023 and 2028. The market size is forecast to increase by USD 68.64 billion. The growth of the market depends on several factors, including the rise in investments and partnerships, the rising pressure to improve operational efficiency, and the growing need for advanced technologies in exploration activities. Digital transformation is the process of using digital technologies to revamp business processes to meet changing business and market needs. The integration of new and advanced technologies into upstream, midstream, and downstream areas of business allows oil and gas organizations to optimize operations, increase workforce productivity, ensure production efficiency, and reduce costs. To capitalize on the opportunities offered by digital transformation, oil and gas organizations collaborate with technology providers to either deploy or develop new technologies based on business requirements. Organizations in the oil and gas industry can adopt various technologies, such as artificial intelligence (AI), machine learning (ML), IoT, augmented reality (AR), virtual reality (VR), and high-performance computing (HPC), to enhance operational efficiency and reduce the time-to-market.
The report offers extensive research analysis on the Digital Transformation in the Oil and Gas Market, with a categorization based on Technology, including IoT, E&P software, big data, cloud computing, and others. It further segments the market by Sector, encompassing downstream, upstream, and midstream. Additionally, the report provides Region segmentation, covering APAC, Europe, North America, the Middle East and Africa, and South America. Market size, historical data (2018-2022), and future projections are presented in terms of value (in USD billion) for all the mentioned segments.
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One of the key factors driving the digital transformation market in the oil and gas industry growth is the growing need for advanced technologies in exploration activities. The constantly rising demand for energy products is fuelling the need to increase exploration activities in the oil and gas industry. In addition, advanced technologies, such as AI and big data solutions, can enable and improve oil and gas exploration and production.
Moreover, the process of exploration requires the analysis of huge volumes of data, such as seismic data, equipment data, and environmental data, to detect new reserves of oil and gas. In addition, oil and gas producers need to consider various factors, such as costs, environmental impact, and occupational safety during drilling activities in oil and gas exploration. Hence, such factors are positively impacting the market. Therefore, it is expected to drive the market growth during the forecast period.
A key factor shaping the digital transformation market in the oil and gas industry growth is the rise in edge computing. Edge computing can be referred to as the practice of processing data at the closest point of data origin instead of processing it in a centralized data warehouse. In addition, the deployment of data processing techniques at remote locations will benefit companies involved in oil and gas exploration.
Moreover, the high volumes of data generated are increasing the need to implement edge computing solutions to run operations efficiently in oil and gas operations. For example, oil and gas companies are integrating edge computing with AI in IIoT applications to offer real-time operational intelligence directly to the people in the oilfield. Furthermore, the implementation of edge computing in IIoT allows the remote connection of offshore rigs, compression stations, and pipelines and enables smart rigs to process data and communication in real time. Hence, such factors are driving the market growth during the forecast period.
Lack of skilled labor is one of the key challenges hindering the digital transformation market in the oil and gas industry market growth. Several oil and gas producers are increasingly emphasizing ways to integrate advanced technologies, including AI, ML, IoT solutions, and big data analytics, to increase their return on investments. In addition, big data has gained momentum owing to increasing awareness about data-driven solutions.
However, the conversion of huge datasets into actionable insights using big data analytics solutions needs technology and expertise in analytics. In addition, identifying the relevant data that needs to be stored and processed is also a major challenge that professionals face in data processing. Hence, such factors are negatively impacting the market. Therefore, it is expected to hinder the market growth during the forecast period.
The IoT segment is estimated to witness significant growth during the forecast period. The production and distribution of oil and gas are carried out in some of the most remote and harshest conditions on the earth. In addition, disparities in oil and gas demand and supply, as well as the volatility in global energy prices, increase the economic pressure on oil and gas industry participants. Hence, oil and gas companies are increasingly focusing on improving and extending the value of their existing assets while simultaneously searching for new reserves.
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The IoT segment was the largest segment and was valued at USD 13.82 billion in 2018. Moreover, the increasing need for transparency in operations and tighter controls on production and distribution are driving oil and gas operators to adopt wireless IoT technology to enhance and optimize the production and distribution chain. In addition, the implementation of IoT is projected to transform the oil and gas industry at a rapid pace. Hence, such factors are fuelling the growth of this segment which in turn drives the market growth during the forecast period.
The advantages of AI in the downstream sector segment will increase the market growth. In the downstream segment, the finished goods are processed and supplied to end users. This segment also provides final goods to retailers. Moreover, diesel, gasoline, natural gas, and so forth are sourced directly from downstream oil and gas industries. In addition, the downstream oil and gas industry digitalization is less developed than in other industries. Improving business processes is required for the downstream oil and gas industry to effectively execute a digital transformation framework. Therefore, improved usage of maintenance and technical resources might boost workforce productivity. Furthermore, basic digital support solutions, such as digital twins and AI-based simulations, can help the industry by lowering maintenance costs, increasing employee productivity, decreasing industrial downtime, and further fueling the growth of the global digital transformation market in the oil and gas industry during the forecast period.
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APAC is estimated to contribute 38% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The demand for oil and gas products in APAC is constantly increasing, which is fuelling oil and gas companies in the region to expand their production capacities. The oil and gas companies in the region are making huge investments in analytical technologies to increase their production capacities to meet the growing demand for oil and gas products worldwide. In addition, China, Indonesia, Malaysia, and India are some of the major producers of oil and gas in APAC. Moreover, oil and gas companies in the region are investing in advanced technologies, such as AI and big data analytics, to enhance their productivity and reduce operational costs. Hence, such factors are driving the market growth in APAC during the forecast period.
The digital transformation market in the oil and gas industry report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Digital Transformation Market in the Oil and Gas Industry Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Accenture Plc: The company offers digital transformation in oil and gas solutions such as digital twin, intelligent digital platform, and industry 4.0 reference architecture.
Amazon.com Inc: The company offers digital transformation in oil and gas solutions such as OSDU, connected field work, and production monitoring and surveillance.
Computer Modelling Group Ltd: The company offers digital transformation in oil and gas solutions such as Aveva PI system. In this software, tools specifically designed to manage and analyze information, make it easier for operators to draw insights from their data quickly and effectively.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The digital transformation market in the oil and gas industry report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028.
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Digital Transformation Market In The Oil And Gas Industry Scope |
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Report Coverage |
Details |
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Page number |
197 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 16.73% |
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Market Growth 2024-2028 |
USD 68.64 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
16.17 |
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Regional analysis |
APAC, North America, Middle East and Africa, Europe, and South America |
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Performing market contribution |
APAC at 38% |
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Key countries |
US, Saudi Arabia, China, India, and Russia |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Accenture Plc, Amazon.com Inc., Computer Modelling Group Ltd., General Electric Co., Halliburton Co., Informatica Inc., Intel Corp., International Business Machines Corp., Microsoft Corp., NVIDIA Corp., Oracle Corp., Rockwell Automation Inc., SAP SE, Siemens AG, Sierra Wireless Inc., Tata Consultancy Services Ltd., Teradata Corp., TIBCO Software Inc., AVEVA Group Plc, and Emerson Electric Co. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Technology
7 Market Segmentation by Sector
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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