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North American Electrical Equipment Market for Oil and Gas
Frost & Sullivan, Feb 2011, Pages: 66
This study is a part of four part series that provides market analyzes on electrical equipment by energy equipment. The objective of this study is to provide a detailed analysis of the North American electrical equipment market for oil & gas applications. This study specifically takes a look electrical equipment used for upstream, midstream, and downstream oil and gas applications. This includes both medium and low voltage electrical equipment. Electrical equipment includes metal clad, distribution transformers, motor control centers, and low voltage switchgear. The study also contains market share analysis, market drivers, market restraints, and market challenges
This research service titled North American Electrical Equipment Market for Oil and Gas provides an in-depth analysis of the market drivers and restraints, industry trends, and competitive environment in addition to the challenges and issues faced by market participants. In this research, Frost & Sullivan's expert analysts thoroughly examine the upstream, midstream, and downstream market.
Market Overview
Energy Security Issues Rev up Demand in the North American Electrical Equipment Market for Oil and Gas
Growing demand for energy is driving the North American electrical equipment market for oil and gas. During 2008, the United States produced 10 percent of the world's petroleum and consumed 23 percent of the same, according to the U.S. Energy Information Administration (EIA). The United States imports 57 percent of the petroleum it consumes. With the upswing in demand for petroleum, new natural gas power generation plants are being constructed. Energy demand accelerates the construction of pipelines, which in turn creates demand for electrical infrastructure in the midstream sector. “The heavy impact of the economic downturn on the CAPEX of oil and gas companies is expected to ease up after 2012 as spending increases due to booming energy demand ,” notes the analyst of this research service. “This forecasted growth in demand will spawn investments in capital spending for new and retrofit equipment.”
Currently, onshore oil fields are mature and experiencing a decline in production. More technically complex fields in deep water or in the Arctic remain the key targets for global producers. Other major participants target smaller fields or more complex horizontal wells. The oil sands in Canada are estimated to hold between 1.7 trillion and 2.5 trillion barrels of nonconventional oil, making this a lucrative region. As demand grows, increased oil prices will influence investments and growth in the Canadian oil sands. All these activities require advanced technology, where the U.S. oil industry excels. Production from oil sands will drive investments for new electrical equipment installations.
Enhanced safety and reliability is the key challenge facing the North American oil and gas industry. An arc flash could result in a fire accident, which is not acceptable for the oil and gas industry standards. In the upstream oil and gas segment, the U.S. Government is preparing for more offshore regulations after the recent Gulf of Mexico disaster. Although companies are allowed to resume drilling, tougher restrictions and regulations are being placed. Additionally, the refinery segment controls 83 percent of the top 10 companies' refining capacities. Ongoing safety regulations will have a direct affect on electrical equipment sales. Until the regulations are implemented, the companies might withhold from upgrading or installing electrical equipment. On the other hand, uncertainty about new regulations to restore competitiveness in the refinery market may limit construction of new refineries. Currently, refining companies are expanding their capacities with no plans for constructing new refineries. This will limit sales of electrical equipment.
The degree of competition in the North American electrical equipment market for oil and gas is moderate. Most major participants have a global footprint and established market relationships with oil and gas companies. Direct sales, technological expertise, and the ability to offer complete solutions are key competitive factors for supporting oil and gas companies.
Technologies
The following technologies are covered in this research:
- Transformers
- Switchgear
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