Research PREVIEW forConvergence Impact on Oilfield Services—Disrupting a $250 Billion Market

Convergence Drives A New Era Of Opportunities Amidst Fragmented Oil

Field Services Ecosystem

Mega Trends to Micro Booms

To distil Micro Boom from Mega Trends, industry transformations through convergence filters of P.A.C.E are examined.

Analyzing growth opportunities through convergence filters—Actionable Strategic Insights

Source: Frost & Sullivan

Convergence of Mega Trends P.A.C.E of change drives growth opportunities.

Source: Frost & Sullivan

Key Highlights

Oilfield services enable operators to shift from ‘chasing barrels’ to ‘chasing efficiency’.

The next generation of oilfield services will witness unparalleled Information and Communications Technology (ICT) convergence, making digital service platform services imperative.

Original equipment manufacturers (OEMs) and original design manufacturers (ODMs) are transforming their traditional business models to sell digital service performance instead of equipment.

The rising need for efficiency is driving automation companies to add analytics and digital services to their portfolios.

Cognitive virtual assistants, leveraging technologies such as artificial intelligence (AI) and machine learning (ML), are entering oilfield services.

Source: Frost & Sullivan analysis.

Source: Chevron; Frost & Sullivan

Use Case: Chevron Monitoring Performance by Predictive Maintenance

Instead of waiting for an equipment to fail, the MPSC provides intuitive insights through predictive analytics.

Chevron’s MPSC uses analytical models to prevent shutdowns, indicating a trend of core companies increasingly converging with the ICT and analytics space.

Connected Oilfield Services Market: Chevron MPSC, Global, 2015

Remote Oilfield

Remote Oilfield

The MPSC comprises Equipment Decision Support Centers that provide: Remote Equipment Condition Monitoring Performance Evaluations Optimization Analysis

Challenge: Identification of non-performing equipment results in

unplanned shutdowns and delays. Machinery and Power Support Center

Refinery

Outcome: Identification of abnormal performance measures Preventive Maintenance Enabled Downtime Reduced Unplanned Shutdown Avoided Work Order Coupling Allowed Need for Additional Spare Parts Identified

Solution: Chevron’s Machinery and Power Support Center (MPSC) leverages predictive analytics to monitor machine performance.

Arrival of AI & ML in Oilfield Services—Timely & Disruptive Existing ICT processes set to collapse, disrupt, and transform into the next-gen cognitive capabilities.

Connected Oilfield Services Market: Benefits of AI/ML in O&G Industry, Global, 2015

Machines improve their performances in certain tasks by learning from previous experiences.

Several layers of neural networks learn from

available data and improve accuracy with

repeated trainings.

Layers of processing units learn from the

outputs of the previous units, corresponding to different abstractions.

AI enables natural and artificial systems to exhibit intelligent behavior, construct and formulate hypothesis, automatically analyze data, and learn from experiences to improve performance

without manual programming.

Machine Learning Neural Networks Deep Learning

AI, ML, and virtual assistants find applications through the O&G value chain, creating cost and time efficiencies while reducing human error drastically.

Source: Frost & Sullivan

Executive Summary — CEO’s Perspective

2What are the hot growth opportunities, outcomes, and impacts on efficiencies driven by connected oilfields?

3 What is the impact of innovation in platform adoption in connected OFS?

4As cost pressures build, what are the emerging business models in the OFS market?

1What are the top pressure points plaguing the oilfield services (OFS) market?

Source: Frost & Sullivan analysis.

5What are the key advanced technologies being adopted by operators to cope with ‘lower for longer’ oil price scenario?

The Full Analysis Features the Following Content

Section Slide Number

Executive Summary 3

Mega Trends to Micro Booms—Definitions and Tie-ins 11

Introduction—Scope and Segmentation 15

First Base—Business Issues 19

• Business Issue: Inefficiencies Exposing Pressure Points 21

Second Base—Growth Opportunities 31

Growth Opportunities: Demand for Responsive and Connected Oilfield Services 33

Third Base—Strategy and Insights 53

• Strategy and Insight 1: Connected Platform Solution 55

• Strategy and Insight 2: 50% OEM Revenue from Services 68

• Strategy and Insight 3: Capital and Asset Inefficiency Drive Portfolio Transformation 76

• Strategy and Insight 4: Emergence of Cognitive Virtual Asset Platforms 88

Top Recommendations 107

Appendix 110

Key Questions the Analysis Answers

What are the key advanced technologies, such as Artificial Intelligence (AI) and neural networks, being adopted by operators to cope with ‘lower for longer’ oil price scenario?

How low oil prices have rendered a considerable number of assets unutilized, highlighting poor asset management as a pressure point of the industry?

What are the hot growth opportunities, outcomes, and impacts on efficiencies driven by connected oilfields?

Why should companies move from traditionally analogous to increasingly digital oilfields?

What kind of partnerships &new emerging business models are driving oilfield efficiencies?

What are some of the operator use-cases in deploying advanced technologies in oilfield services market?

Source: Frost & Sullivan analysis.

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