LONDON, Dec. 23, 2013 /PRNewswire/ -- The growing demand for customised systems for critical oil and gas applications is brightening the prospects of the European power conversion market in the oil and gas industry. Escalating energy costs, exploration of new oil and gas fields also fuel the uptake of power conversion solutions in the region.
New analysis from Frost & Sullivan (http://www.motors.frost.com), European Power Conversion Market in Oil and Gas Industry, finds that the market earned revenues of $908.7 million in 2012 and estimates this to reach $1,151.9 million in 2017. The research covers electric drives and electric motors, with the latter cornering 78.9 percent of the market share. However, electric drives have the higher growth rates due to their high-tech, energy-saving functions and ability to decrease downtime costs through control and efficient rotating assets. They have also demonstrated an ability to reduce the costs of upstream, midstream and downstream activities.
"Oil and gas plants in Europe are increasingly adopting energy-efficient electric drives and motors to cut down on energy consumption, optimize performance, improve productivity, and boost profits," said Frost & Sullivan Industrial Automation & Process Control Research Analyst Maryna Osipova. "In particular, alternating current electric drives and motors are widely employed, even in intelligent control solutions, as they perform well under rough conditions."
However, uptake will be affected by price pressures in the market. Since electric drives and motors from most power conversion product vendors have more or less the same characteristics and functions, oil and gas companies opt for the most cost-effective option. Suppliers are responding to this trend by reducing prices to remain competitive, thus lowering market revenues.
In addition, the lack of financial resources due to the recent economic slowdown has compelled oil and gas companies in Europe to temporarily shelve some projects, shrinking the potential demand for power conversion systems.
"To overcome these challenges, power conversion product manufacturers should forge solid relationships with oil and gas companies to ensure product customisation as well as flexibility in the purchasing process," advised Osipova. "A wide geographical presence, strong brand image, and well-designed customer service strategy too will be crucial to catalyse the growth of the European power conversion market in the oil and gas industry."
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