Critical communications spending in oil & gas to exceed $1 billion by 2019
In a recently published market report, Critical Communications in Oil & Gas – 2015, IHS indicates the global market for critical communications technologies in the oil and gas industry will reach over $1 billion by 2019. IHS defines critical communications as an integration of: licensed mobile radio (LMR) terminals, LMR infrastructure, LMR accessories, command & control room technologies and services, and broadband LTE hardware and devices.
The oil and gas sector has unique requirements for communications equipment. Locations are often remote, temperatures may be extreme, and there is constant exposure to hazardous environments. Additionally, billions in operations are at stake every day. For this reason, oil & gas companies place serious weight on evaluation of communications suppliers and the technologies they provide.
The market will fluctuate between 2015 and 2019, as revenues are heavily dependent on capex spending and oil & gas projects. 2014 and 2015 have been tough years for the critical communications market in the oil & gas sector especially with the oil price decline, and investment in this sector continues to vary over the forecast period. However, a strong rebound is forecast for 2017 and beyond as capex picks up and stalled projects are restarted.
Many oil and gas facilities will be in need of more modern communications technologies as upgrades to these technologies were pushed out to save costs. Increasing numbers of projects are expected in the Americas and Asia, which will continue to drive the global market significantly. Other trends such as the transition to digital protocols, broadband network deployments, and leasing equipment are changing the marketplace as well.