Pace of Oil & Gas Exploration in Sub-Saharan Africa Ignites the Market for Automation and Control Solutions
Frost & Sullivan finds that prospecting of previously unexploited oil and gas resources, particularly in East Africa, boosts ACS spending
Capital spending on automation and control systems (ACS) within the sub-Saharan oil and gas industry is set to increase exponentially. The rising focus on process optimisation, discovery of new reserves, and expansion of the regional infrastructure is anticipated to generate fresh opportunities for equipment suppliers.
New analysis from Frost & Sullivan, Automation and Control Solutions in Sub-Saharan Africa’s Oil and Gas Industry—An Analysis of 3 Leading Countries, finds that the market earned revenues of $151.8 million in 2013 and estimates this to reach $273.9 million in 2019. The study covers the product segments of distributed control systems (DCS), supervisory control and data acquisition (SCADA), safety instrumented solutions (SIS), programmable logic controllers (PLC), human-machine interface (HMI) software and terminals, and manufacturing execution systems (MES), across the countries of Nigeria, Uganda and Kenya.
For more information on this research, please visit: http://corpcom.frost.com/forms/AFR_PR_SJames_MA58-10_08Sept_2014.
The falling prices of gas and technological advancements in gas-generated power herald the ascendance of gas as a key source of energy in sub-Saharan Africa (SSA). The emergence of new industry techniques such as ‘fracking’ has further accelerated the supply of gas across the region, which translates to much higher spending on ACS.
At a global level, and within SSA, there has been greater urgency among end-user businesses to find new tools to decrease the rate of depletion and improve efficiency in oil and gas operations. This bodes well for the ACS market, as automation services are required to facilitate efficient production, effective transportation, and operational safety.
“Upstream oil and gas end users are looking for integrated software tools to improve yields at exploration sites and efficiencies in production and transmission,” said Frost & Sullivan Industrial Automation & Process Control Research Analyst Tom Harris. “With the region seeking to bridge the gap between crude oil production and refining activities, there will be a large market for ACS, especially in the segments of DCS and MES.”
Other key drivers include: increased interest in unconventional fossil fuel resources, development of regional pipeline and storage infrastructure, and the move toward commercial production. East Africa, in particular, offers significant opportunities for ACS suppliers, due to its relatively small installed base, and the anticipated commencement of a number of projects before the end of 2018. As countries, like Kenya and Uganda, start to move away from exploration-driven oil industries toward commercial production, the market can expect a spate of investments in new automation equipment installations.
However, the ACS market growth is pegged back to some extent by the shortage of skilled labour, poor legislative frameworks, insufficient capital resources and weak after-sales support, as well as the conservative attitude of the oil and gas industry towards ACS products.
“If ACS suppliers develop better quality support networks for the region’s oil and gas industry, the intensifying focus on operational efficiency, harnessing unconventional resources, and controlling distributed assets can be leveraged for deeper and wider market penetration,” noted Harris.
Automation and Control Solutions in Sub-Saharan Africa’s Oil and Gas Industry—An Analysis of 3 Leading Countries is part of the Industrial Automation & Process Control (http://www.industrialautomation.frost.com) Growth Partnership Service program. Frost & Sullivan’s related studies include: Global Industrial Bearings and Couplings Market, Internet of Things (IoT)—Challenges and Impediments, Growth Trends and Dynamics for Automation in the US Chemicals Market, Global Motor Control Centres Market, and Chinese Industrial Valves and Actuators Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.