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INSIGHTS

Security threats keep investments high in oil and gas

Security threats keep investments high in oil and gas
Oil and gas prices may fluctuate but security remains a top priority for companies in this industry. As security threats continue to increase in number, complexity and scope, companies are seeking out and investing more heavily in solutions that can protect their property and staff.
In February of this year, the price of oil per barrel reached a 12-year low in the U.S., dipping below US$27. Despite prices coming back up to around $50, it is still half of what it was two years ago in 2014 when the price per barrel was around $100.

Regional Ups and Downs
Earlier this year, the U.S. Energy Information Administration reported that Russia, Saudi Arabia, the U.S., Iraq and China were the top five producers of crude oil in the world, respectively, in the first three months of 2016.

In terms of security investment, Russell Ost, Vertical Market Manager for Global Oil and Gas at Pelco by Schneider Electric noted that this is in line with the market share that they’ve found to be true. “As more oil and gas stockpiles are added, oil production companies in these regions will continue to invest more heavily in security infrastructure and make capital investments that will protect the money spent on developing a facility in a particular location, as well as the people needed to work in such locations,” he said. Ost also pointed out that state-run countries have been hit hardest by declining oil prices.

Security investment growth in Central Asia, Africa and Latin America — regions where terrorist threats targeting the oil and gas sectors, especially pipelines, have risen sharply. Also, according to MarketsandMarkets, North America is expected to have the largest market share in oil and gas security.

Low commodity prices in North America have created both challenges and opportunities for companies like Osprey, who focuses primarily on the North American oil and gas market. “Many customers have cut capital budgets significantly, making it more difficult to initiate large-scale rollouts of Osprey’s cloud-based visual monitoring solution,” said Jeremy Bernard, Director of Marketing and Business Development at Osprey Informatics. “However, the industry downturn has also created opportunities in two areas. Firstly, there appears to be an increase in oilfield theft, creating demand for economical visual security solutions. Secondly, customers are looking to create operational savings by using technologies such as Osprey’s for managing more assets with fewer people.”

Oil and Gas Security Market
“While overall oil production has slowed, the demand for oil and gas production has continued to increase, and with this growth comes the demand for producers to safeguard investments at production facilities across the globe,” said Ost. “This means the security industry is poised to see more investment made in security solutions and business organization resources that will meet the needs of regulatory committees and security officials charged with protecting people and assets in a facility.”

In fact, the oil and gas security and service market size is forecast to grow from US$26.3 billion in 2015 to $33.9 billion by 2020, at an estimated CAGR of 5.2 percent from 2015 to 2020, according to a report by MarketsandMarkets.


Amit Mattatia, President and CEO of Opgal Optronic Industries noted, “Even when the oil and gas industry is experiencing a downturn, security remains high on the agenda due to increased threats, especially in emerging markets, from terrorism, piracy and sabotage. It’s always important for the oil and gas companies to ensure a strong security budget is maintained during this period.”

In fact, the oil and gas security and service market size is forecast to grow from $26.3 billion in 2015 to $33.9 billion by 2020, at an estimated CAGR of 5.2 percent from 2015 to 2020, according to a report by MarketsandMarkets; this includes both physical and network security.

Adapting to Change
As oil prices remain uncertain, security companies must also adapt to keep competitive and relevant. By developing better subject-matter expertise, companies like Pelco are ensuring they stay competitive.

“Rather than simply marketing to a certain vertical market, Pelco has made significant changes to the structure of the organization to shift resources toward the business development, product technology and business knowledge of the oil and gas sector by our entire organization, which poises Pelco to truly answer the challenges that face this particular vertical market,” Ost said. “Leveraging the entire team (globally) including sales, marketing, product management, engineering, product support and leveraging third-party suppliers for integrations allow us to enhance the performance and usability of a system by the end-user security team. We have found that oil and gas truly is a global target market for our business, so this is something that we have carried out organizationally across the globe.”

Companies such as Opgal have extended their product range in order to give their customers a greater choice of solutions. “We at Opgal have extended our range of ultra-high sensitivity long-range thermal camera systems, that combine high definition day cameras,” Mattatia said. The company has developed an open thermal camera that allows any software analytics to run at the edge. “Opgal is collaborating with leading software providers to dedicate solutions for protecting oil and gas facilities.”


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Comments ( 1 )
  • Rosemary
    2017/08/23 15:28
  • great