European ACS market to reach US$1.9bn in 2016

The automation and control solutions (ACS) market in the European oil and gas industries is expected to reach US$1904 million in 2016, according to new analysis from Frost & Sullivan. In the next 3-4 years, the ACS market will witness moderate growth, with the demand for oil and gas boosting investments in upstream and midstream oil and gas segments, resulting in greater demand for ACS.

The Frost & Sullivan report, Automation and Control Solutions Market in the European Oil & Gas Industries, found that the market earned revenues of $1556.6 million in 2011.

“With an extremely volatile geopolitical landscape in the Middle East and North Africa, the European oil and gas industry is expected to witness greater investments in greenfield projects over the forecast period,” said Frost & Sullivan senior research analyst Karthik Sundaram.

“Although European oil and gas reserves are restricted to the North Sea basin, new upstream exploration and investments in on-shore fields are expected to meet growing energy needs. Such trends will offer significant growth potential for ACS.”

The need for improved asset utilisation and reduced downtime will also drive market growth, the Frost report said. As Europe has limited sources of crude oil and natural gas, it will be imperative for end users to invest in advanced ACS that can maximise process output and limit wastage.

Disasters like the Deepwater horizon spill and the Gulf of Mexico incident are influencing the regulatory landscape and will encourage end-user investment in ACS, and especially safety systems, Frost & Sullivan predicts.

“European Commission regulatory initiatives have been aimed at enforcing exclusive safety standards and regulations governing all segments of the oil and gas industry,” said Sundaram.

“In effect, the emphasis on the highest levels of process safety will persuade end users to adopt and implement high-end safety systems and safety programmable logic controllers (PLCs) in their oil and gas installations.”

The report concedes that economic uncertainty may dampen new investments and delay project orders, affecting revenue margins and profitability in the short term.

“However, overall automation needs in the oil and gas domain are expected to be high, and an early resolution of the Euro zone crisis is likely to promote investments and, subsequently, aid the long-term growth of the ACS market,” concluded Sundaram.

For more information on the Frost & Sullivan report, click here.