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The digital transformation market in the oil and gas industry is estimated to grow at a CAGR of 16.56% between 2022 and 2027. The size of the market is forecast to increase by USD 58.66 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.
This report extensively covers market segmentation by sector (downstream, upstream, and midstream), technology (IoT, E&P software, big data, cloud computing, and others), and geography (APAC, North America, Middle East and Africa, Europe, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Technavio categorizes the global digital transformation market in oil and gas industry as a part of the global internet services and infrastructure market within the global IT services market. The super parent global IT services market cover companies offering IT consulting and system integration services, application services, electronic data processing services, business process outsourcing services, infrastructure services, and Internet services. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The rise in investments and partnerships is notably driving the market growth, although factors such as the lack of skilled labor may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Digital Transformation Market In The Oil And Gas Industry Driver
The rise in investments and partnerships is the key factor driving the global digital transformation market in the oil and gas industry growth. Competition among incumbent vendors in the global market for transformation in the oil and gas industry is fierce. That is why vendors in the market choose to partner and collaborate with other vendors such as infrastructure, software, technology, and platform providers. Such collaborations and partnerships help vendors with product development, geographic expansion, and access to technical expertise. Additionally, major players in the market are finding other vendors to explore new opportunities and areas for their products and services.
For instance, In October 2021, Emerson Electric Co. announced a multi-year agreement with BayoTech, to accelerate the delivery of hydrogen around the world. The company will provide advanced software, automation technologies, and products to enable BayoTech to build hundreds of hydrogen units. The rise in the number of partnerships and growing investments by other vendors in the market are expected to result in several product-level innovations and increase the demand for transformation solutions in the oil and gas industry during the forecast period.
Significant Digital Transformation Market In The Oil And Gas Industry Trend
The use of digital twin technology is the primary trend in the global digital transformation market in the oil and gas industry growth. Digital twin technology is designed to transform the upstream segment of the oil and gas industry by creating a digital replica of the actual oilfield on a computer to measure the performance of the reservoir based on IoT. Building a digital twin for a site in the oil and gas industry first involves the creation of a 3D model. This model provides a 3D visualization of exploration sites using a single, integrated source of real-time information. This digital copy is then shared across operations and updated automatically in real-time with current data to optimize maintenance and operational activities.
Moreover, the digital twin also provides real-time visibility of each individual oil rig condition and performance by combining IoT and on-rig asset management data. With the increasing demand for digital twin technology, several vendors have started offering digital twin solutions, such as data smart asset solutions and ANSYS simulation tools to provide real-time data. Thus, a digital twin framework utilizes massive amounts of data to offer a model-focused approach to increase operational excellence and is, thus, projected to drive the market in the oil and gas industry during the forecast period.
Major Digital Transformation Market In The Oil And Gas Industry Challenge
Lack of skilled labor is a major challenge to the global digital transformation market in the oil and gas industry growth. The skills gap in the oil and gas industry is a significant issue for hiring managers and other decision-makers in the industry. Individuals responsible for hiring decisions struggle to complete projects within set budgets. Some companies in the oil and gas sector offer significant in-house training programs for mentoring and professional development.
However, data management will remain a prime challenge for enterprises within the oil and gas sector because of the increasing volumes of data. Therefore, the need to recruit skilled talent with experience in managing IoT devices, implementing analytics, and knowledge of cloud-based solutions, is growing in the industry to control and understand the data generated.
Key Digital Transformation Market In The Oil And Gas Industry Customer Landscape
The 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
Vendors 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.
sap.com - The company offers digital transformations for maximizing profitable decision-making, mitigating commodity risk, and managing capital.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the downstream segment will be significant during the forecast period. The midstream sector delivers raw materials to the downstream industry after the upstream industry explores and produces them. In the downstream sector, the finished goods are processed and supplied to end users. The closer an oil and gas industry is to supply clients with finished goods, the further downstream it is considered. The downstream oil and gas industry also provides final goods to retailers. Diesel, gasoline, natural gas, and so forth are sourced directly from downstream oil and gas industries.
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The downstream segment was valued at USD 12.78 billion in 2017 and continue to grow by 2021. Improving business processes is required for the downstream oil and gas industry to effectively execute a digital transformation framework. Improved usage of maintenance and technical resources might boost workforce productivity. 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 global digital transformation market in the oil and gas industry during the forecast period.
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North America is estimated to contribute 37% 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. China, Indonesia, Malaysia, and India are some of the major producers of oil and gas in APAC. 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. Thus, the increase in oil and gas exploration activities and the need to evaluate potential oil fields are driving oil and gas companies in APAC to adopt advanced technologies. Furthermore, increasing investments by oil and gas companies in advanced technologies to secure long-term profitable growth will drive the growth of the digital transformation market in the oil and gas industry in APAC during the forecast period.
The COVID-19 outbreaking in 2020 triggered a global economic recession and resulted in massive disruptions of industrial operations across the region, owing to the implementation of stringent lockdowns and other restrictions. However, in 2021, due to the large-scale vaccination drives carried out by the government of several countries, various business and industrial activities resumed, such as construction and manufacturing activities. With this, there has been an increase in demand in the oil and gas industry. Such factors will increase the market growth of the regional digital transformation market in the oil and gas industry remains positive during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by Sector (Downstream, Upstream, and Midstream), Technology (IoT, E&P software, Big data, Cloud computing, and Others), and Geography (APAC, North America, Middle East and Africa, Europe, and South America).
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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 |
195 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 16.56% |
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Market growth 2023-2027 |
USD 58.66 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
15.33 |
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Regional analysis |
APAC, North America, Middle East and Africa, Europe, and South America |
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Performing market contribution |
North America at 37% |
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Key countries |
US, Saudi Arabia, China, India, and Russia |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Accenture Plc, Amazon.com Inc., AVEVA Group Plc, Bluware Corp., Emerson Electric Co, 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., and TIBCO Software Inc. |
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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 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. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Sector
7 Market Segmentation by Technology
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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