Over the last decade, the oil and gas industry has been facing a number of challenges, including decreasing oil prices, reducing cash flows, and the difficulty in adopting digital solutions for addressing the fluctuation of pricing and demand in the market. Further, the increasing demand for clean energy and sustainability is also affecting the growth of the market. The Internet of Things (IoT) technology offers solutions to the industry that can help overcome these challenges. One of the major requirements of oil and gas companies is the access to real time information across remote locations which is made possible with the use of IoT sensor data technology.
With the use of IoT in oil and gas industry, immense benefits can be witnessed in the form of added value in the business, enhanced business operations and improved reliability. Also, companies present in the industry can achieve operational excellence by developing data driven IoT integrated strategies, as these strategies can help save huge costs with the help of preventive maintenance application.
According to a recent market intelligence report published by BIS Research, titled ‘Global IoT in Oil and Gas Market – Analysis and Focus (2018 – 2023)’, the market is estimated at $13.35 billion in the year 2018 and is projected to reach $39.40 billion by 2023. The market is expected to grow at a CAGR of 24.17%, during the forecast period from 2018 to 2023. Owing to the factors such as requirement of increased operational efficiency, lack of skilled labor, and the increasing cyberattacks in the oil and gas sector necessitating the use of IoT technology in the industry, are expected to drive the growth of the market. On the other hand, old and obsolete communication setup and issues related to privacy & security are the major factors challenging the growth of the market.
Additionally, there are immense opportunities for the key players present in the market including opportunities in IoT analytics market; IoT based smart automation, such as drones being used in oil and gas industry; and introduction of next-generation sensors, edge computing in oil and gas industry. Further, based on the report published, the IoT in oil and gas market has been segmented on the basis of solutions, applications, industry stream, and region. These segments of the market are further categorized into sub-segments. The solutions segment of the market is sub-segmented into sensing, communications, cloud & edge computing, and data management. The sub-segment that dominated the market in 2018 is the sensing sub-segment and it is expected to contribute the maximum revenue in 2023 as well.
Based on the segmentation by application, the sub-segments of the market are fleet & asset management, preventive maintenance, pipeline monitoring, security management, safety management, and others. Among all, the preventive management sub-segment is expected to grow at a maximum CAGR of 26.69%. In context with the segmentation of the market on the basis of region, North America dominated the market in terms of revenue contribution in 2018. The insights mentioned in the market intelligence report by BIS Research, indicate that the region of Asia-Pacific is expected to grow at a maximum CAGR during the forecast period i.e. from 2018 to 2023. The growing urban population size and the increasing penetration of the advance technologies, emerging economies, such as India, Malaysia, Singapore, and China, among others presents immense scope for the development of the market.