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Oilfield Communications Market

Market Insights on Oilfield Communications covering sales outlook, demand forecast & up-to-date key trends

Oilfield Communications Market : Global Industry Analysis 2016 - 2020 and Opportunity Assessment 2021 - 2031

Oilfield Communications Market Overview

Oilfield communications are defined as the technology used to gather data and information from field sites and transmit it through communication networks, as required by the oil and gas industry. These communication systems support oil and gas businesses that require sophisticated technology for tracking, reporting and automation.

In addition, oilfield communications need an effective and reliable wireless network that can operate over lengthy distances and under rough weather. Oilfield communications systems and techniques supports various apps and provides lightning broadband speeds that eventually enhance the cost-effective operating effectiveness and security of oilfield activities.

Emergence of cyber security, video conferencing and cloud services have increased the need for fast and reliable communication infrastructure on sites, thus driving the growth of oilfield communications market.

Increasing Implementation of Cloud-based Services Boosting the Growth of Oilfield Communications Market

With the rising adoption of cloud-based services, oil companies are compelled to use oilfield communications. This keeps their offshore sites connected with the inshore site about production statistics, which helps in better supply chain management.

For various oil companies, the smooth flow of materials is very crucialas their profitability majorly depends upon the turnover and reduced downtime. Moreover, technologies such as RFID, intelligent sensors, and programmable automation controllers have already removed some less-responsive manual processes.

Integrating these technologies more closely with workflows can reduce non-productive time, safety risks and environmental impact. At the same time, automated monitoring and control means that companies have a highly accurate picture of production, optimize refining operations, anticipate problems before they arise, and vitally, improve safety.

These features are estimated to contribute significantly towards the growth of oilfield communications market in the future.

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What are the Key Trends Impacting Growth of the Oilfield Communications Market?

The oil and gas sector has a relatively long history with digital technologies, notably in upstream, and significant potential remains for digitalization to enhance operations.Despite rising costs and declining revenues, oil and gas companies continue to invest in enhanced technologies for oilfield communications solutions.

These technical solutions tend touplift the oil companies facing rising costs and shrinking margins by curbing manpower requirements and reducing project schedules. IoT integration, cloud computing, fleet management solutions, and automation, are becoming more efficient and crucialin the oilfield communications market.

The digitalization of oilfield communications helps reduce human errors and enablesmonitoring real-time data,thereby creating revenue opportunities for oilfield communicationsvendors in the long run.

The oil and gas industry has finally entered the world of automation and digital process control. For instance, Norway-based Robotic Drilling Systems AS and Siemens have teamed up to develop a drill floor solution comprising robotic technology for fully unmanned oil and gas drill floor operations.

5G Technology is Projected to drive the Oilfield Communications Market towards Digitalization

Although an uncertainty still reigns concerning the 5G adoption plans, however, for oil & gas players,it is already speculated that 5G would become a real competitive advantage in the near future. Rapid adoption of wireless 4G communication network and the implementation of 5G standards in industrial activitiesis expected to bring more significant opportunities for deploying 5G networks in the oil & gas industry.

Agility and efficiency in oil exploration & production (E&P) activities are becoming aninevitable requirement, and this is encouraging ambitious digital initiatives in the oil E&P activities, thus further boosting the growth of oilfield communication market.

Nikhil Kaitwade
Principal Consultant
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What are the Key Challenges that may Restrain Growth of the Oilfield Communications Market?

Oil is a finite resource which is not going to last forever. Also, the prices of oil has been unstable, over the years owing to changes in demand and supply and geopolitical events. The ratio of oil reserve is to production stood at 50:7 by the end of 2015. Thisindicates that at current production rate, the oil will last for approximately 51 years.

Therefore, geoscientists are continuously working on exploring unexplored reserves and finding new sources of oil. On the other hand,scientists are also working overtime to explore alternate energy resources. With the viral outbreak spreading in more countries, as global demand is weakening, the oil prices are dropping impulsively.

If thesituation worsens for yet another year, it would severely hurt the oil & gas exporting countries such as all of the OPEC+ members, leaving a negative impact on the oilfield communications market in the future.

Competitive Landscape

Key players such as

  • Alcatel Lucent SA
  • Huawei Technologies Co. Ltd.
  • Siemens AG
  • Speedcast International Limited
  • Rad Data Communications Inc.
  • Ceragon Networks Ltd.
  • ABB Ltd.
  • Rignet Inc.
  • Inmarsat PLC
  • Commscope Inc.
  • Airspan Networks Inc.
  • Hughes Network Systems LLC
  • Commtel Networks Pvt. Ltd.
  • Tait Communications
  • Baker Hughes Incorporated

among others, are actively involved in offering oilfield communication solutions across various regions. 

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What strategies are the Key Players adopting for Increasing their Market Share in the Oilfield Communications Market?

The oilfield communications market has a few major players who provide the entire spectrum of solutions.The manufacturers involved in the production of oilfield communications are carrying out different expansion strategies for increasing their market share in the global oilfield communications market.

The above-mentioned players rely on multiple expansion strategies to deepen penetration across lucrative markets. These strategies include product launches, collaborations with key players, partnerships, acquisitions and strengthening of regional and global distribution networks.

Why is North America a Big Market for Oilfield Communications?

Geographically, North America is expected to dominate the oilfield communications market driven by higher demand and usage of these technologies in large oilfields and offshore sites.Moreover, with swiftly rising production and exploration activities and newfound shale resources, the region is expected to emerge as one of the largest markets for global oilfield communications, over the forecast period.

In June 2019, the US Energy Information Administration Statistics stated that the annual crude oil production in the U.S. had reached 11.0 million barrels per day in 2018 and is likely to further escalate by 1.4 million BPD and 0.9 million BPD in 2019 and 2020 respectively, with average production nearing to 13.3 million BPD in 2020.

Europe and Middle East Projected to be the Fastest Growing Regions in the Global Oilfield Communications Market

Middle East and Africa (MEA) is expected to encounter a fastest growth during the forecast period, while Europe is expected to acquire a significant market share in the global oilfield communications market, after North America.This growth can be recognized by numerous exploration activities and rising number of oil refineries across the region.

Furthermore, MEA region have several rigs, refineries,and exploration sitesusingconventional control systems spread across different countries that would further enhance the growth of the oilfield communications market.

Moreover, Middle East oilfield communications market which has manufacturing costs far beneath the present prevailing oil prices has been highly investing in the digital oilfield market to increase their crude recovery rate.

Also, Europe market is observing incremental growth and is considerably showcasing an increase in the implementation of oilfield communications technology which is expected to positively impact the industry growth over the next few years.

What is the Repercussion of the Covid-19 Pandemic on the Growth of the Oilfield Communications Market?

COVID-19 pandemic has majorly impacted the global economy and global supply chain and has also recorded decline in various sector, due to which the oilfield communications market is witnessing decline.The COVID-19 pandemic has contracted the growth of the oil and gas industry.

Moreover, the global spread of this pandemic has brought down the demand and price of oil. The International Energy Agency (IEA) reported that oil demand would decrease by 23.1 million barrels per day in the second quarter of 2020. Overall 212 countries were impacted, and many governments had ordered nationwide lockdowns.

This has resulted in a considerable decline in transportation and related activities, which has impacted the demand for oil and gas.

Furthermore, the oil & gas industry is also facing a crisis due to an oil price war. As a result,businesses engaged in offering oilfield communications solutions and services are likely to witness a major decline in their growth for a short span of time.

The pandemic might result in established companies changing their business models and diversifying their businesses, local players facing liquidity crisis situations, and companies experiencing the shortage of skilled workforce when the market rebounds due to layoffs during the lockdown.

Therefore, businesses in various verticals are planning to deploy a diverse array of oilfield communications solutions to carry out assessments and track and improve brain health. With the growing focus on mental health and the ability of oilfield communications solutions to be leveraged virtually, the market is expected to witness significant growth.

Key Segments of Oilfield Communications Market Covered in the Report

By Communication Network:

  • Microwave Communication Network
  • Cellular Communication Network
  • Fiber Optic Based Communication Network
  • Others

By Solutions:

  • Pipeline Supervisory Control and Data Acquisition
  • Asset Performance Communications
  • Oilfield to Control Center Data Communication
  • Others

By Field Site:

  • On-shore Communication
  • Off-shore Communication

Based on the Region

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa
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Nikhil Kaitwade
Principal Consultant
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Oilfield Communications Market