IHS: Process safety service demand in oil downturn

Did you know that by 2019, there will be greater demand for process safety system services than hardware in the oil and gas industry?


Did you know that by 2019, there will be greater demand for process safety system services than hardware in the oil and gas industry? Courtesy: IHS TechnologyIn 2014, the majority of process safety system revenues in the upstream market sector were made up from hardware sales; however, with faster growth projected to 2019, services are expected to be allocated the largest amount of spend from 2017.

Whilst there have been reductions in investment in the sector since the oil price fall in 2014, the continued strong demand for services represents good opportunities for automation vendors:

Awareness of safety

Responsiveness to plant safety requirements has increased in recent years, largely driven by high-profile safety-related incidents, and awareness of the international safety standards IEC 61508 and IEC 61511. The standards emphasize the importance of adopting a systematic approach to managing risk through implementation of the safety lifecycle and, as part of that, the importance of process safety system services (from identifying hazards, through Layer of Protection Analysis, to periodic testing) to continuously ensure that safety is maintained and risk is managed.

Growth of brownfield investment

The oil price fall in 2014 has shifted producers’ focus from increasing output to increasing efficiency. While it is quite clear that this negatively impacts process safety system hardware sales, it is not necessarily the case for services. Instead, what is more apparent is a change in the mix of services demanded by end-users as they focus more on optimising and upgrading existing facilities. This can result in more expertise and funding (which were limited due to more profitable greenfield commitments) assigned to making improvements and meeting the latest standards. As producers assess the profitability of their operations and seek to maximise productivity of existing wells, many will find the need for improved efficiency of plants and facilities. This will boost demand for services that help streamline production, and better position producers in the current environment of low oil prices.

- Andrew Orbinson is market analyst in machinery at IHS Technology. IHS Technology is a CFE Media content partner. Edited by Joy Chang, digital project manager, CFE Media. jchang@cfemedia.com

Anonymous , 11/06/15 11:49 AM:

100% agreement , however country safety regulator need to institutionalize .
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Additive manufacturing benefits; HMI and sensor tips; System integrator advice; Innovations from the industry
Robotic safety, collaboration, standards; DCS migration tips; IT/OT convergence; 2017 Control Engineering Salary and Career Survey
Integrated mobility; Artificial intelligence; Predictive motion control; Sensors and control system inputs; Asset Management; Cybersecurity
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This article collection contains several articles on how automation and controls are helping human-machine interface (HMI) hardware and software advance.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Future of oil and gas projects; Reservoir models; The importance of SCADA to oil and gas
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me