Exploration and Production (E&P) Software Market Size, Share & Trends Analysis Report By Deployment Type (On-Premise Software, Cloud-Based Software), By Software Type (Risk Management Mapping, Reservoir Characterization, Seismic Amplitude Analysis, Portfolio Aggregation, Performance Tracking, Drilling, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The exploration and production software market was valued at USD 7.6 billion in 2022. It is estimated to reach USD 24.13 billion by 2031, growing at a CAGR of 13.7% during the forecast period (2023–2031).

Exploration & production entails the process of searching for and extracting oil and natural gases underwater or underground. Software solutions designed especially for upstream processes in the oil and gas industry are referred to as E&P software. E&P software programs help oil and gas companies better analyze geographical data for more accurate modeling and production planning.

The demand for exploration and production (E&P) software has been rising with the growth of the oil and gas industry. Technological advancement in the oil & gas industry and increasing use of oilfield equipment drive demand for E&P software. Recently, there has been a shift from conventional gas to unconventional resources. This emerging trend of unconventional resources necessitates using advanced technology and software to extract gases, which has been driving the demand for exploration and production software. Advanced E&P software technology helps the oil and gas industry reduce its carbon footprint.

On the flip side, political vulnerabilities and fluctuating oil and gas prices hamper the growth of the oil and gas market and, subsequently, the exploration and production (E&P) software market.

Market Dynamics

What are the factors driving the exploration and production software market growth?

Technological Developments

Digitalization in the oil & gas industry is driving the expansion of the exploration and production software market. The oil and gas industry is undergoing a transformation by adopting data-driven solutions to improve performance, increase efficiency, and reduce costs. Using artificial lift technologies, digitalization, and the connectivity of smart devices present an opportunity for oil and gas companies to increase productivity for safer operation, asset integrity, and sustainable resource treatment. To optimize core operational activities such as production, safety, maintenance, and asset management, oil and gas firms are investing in technologies such as automation, IoT, and big data analytics. It is about delving deeper into IT-enabled capabilities to discover new value and using it to automate difficult and repetitive tasks and store, visualize, and analyze data to make smarter decisions. This increasing digitalization in the oil and gas industry is driving the expansion of the exploration and production software market.

What are the factors restraining the exploration and production software market growth?

E&P software market growth is anticipated to be hindered by a lack of skills in the workforce, as workers find it difficult to adopt newly introduced technologies. Consequently, companies will need to train their existing workforce on the new software. In addition, a lack of security and the possibility of sensitive data leaking from data-driven cloud-based software is anticipated to impede the adoption of new technologies, which is anticipated to impede market growth over the forecast period. Nevertheless, with increasing investments in technologies such as IoT, Big data, and automation, the market is anticipated to expand and counteract restraining factors over the forecast period.

What are the future opportunities for the exploration and production software market?

Seismic Processing and Imaging Solution

The seismic processing and imaging solution integrates the different processes, providing an absolute subsurface study and monitoring data in a single location to save money and time, thereby creating significant market expansion opportunities over the forecast period. In addition, the advanced seismic processing and imaging solution offers a highly efficient parallel framework and infrastructure for cluster optimization, which is anticipated to boost market growth over the forecast period and provide lucrative opportunities for the industry.

Regional Analysis

On the basis of region, the global exploration and production software market has been segmented into North America, Europe, Asia Pacific, and LAMEA.

North America is projected to dominate the E&P software market throughout the forecast period due to new oil and gas exploration activities and technological advancements. Large-scale offshore drilling activity in the Gulf of Mexico, which is one of the major users of E&P software, is a key factor contributing to market growth in the region. For instance, Jaguar, a Mexico City-based independent oil and gas company, utilizes Emerson's software and services for exploration and production (E&P) to maximize the value of its onshore assets and projects. Jaguar utilizes E&P software solutions for seismic and well data analysis, multi-survey seismic and geologic interpretation, petrophysical analysis, and subsurface modeling to improve performance, increase operational certainty, and facilitate efficient asset management. In addition, rising demand for cost-efficient & safe E&P techniques is another key factor driving market growth in North America.

The Latin America, Middle East & Africa region is pegged to be the fastest growing market for exploration and production software. New zones have emerged, and significant oil and gas discoveries have been made in countries such as Nigeria, Angola, Algeria, and Libya. In light of this, various junior players backed by powerful investment funds are entering the market. Oil production in Latin America is dominated by Brazil, Mexico, Argentina, Colombia, and Venezuela. These countries account for the majority of the region's total output and are also international powerhouses, ranking among the world's leading oil producers. In the Middle East, offshore exploration expenditures and investments are anticipated to increase significantly in the coming months and years. Saudi Arabia, Iran, Iraq, the United Arab Emirates, Kuwait, and Qatar have been major players for some time, and their investments and upcoming projects are expected to maintain this status for many years to come.

The Asia Pacific E&P software market is witnessing sound growth with regulatory improvements and developments. For instance, governments of developing economies have decided to increase the prices of natural gas from undeveloped discoveries in hard-to-access areas such as undeveloped deep water, ultra-deep water, and high-temperature-high-pressure areas. These factors spur exploration and development activities in the region, which in turn drives E&P software market growth. The substantial economic expansion of the Asia-Pacific region and the electricity demand has fueled the growth of offshore oil and gas exploration and production. China, Malaysia, and India were the three countries with the largest proven oil reserves in the region. There is a need for reliable geological data, and there are always concerns regarding changing legal and regulatory systems, corporate governance standards at the country's state oil companies, and the experience of government officials with such projects.

The Europe E&P software market is experiencing healthy growth, backed by government initiatives that aim to support the region’s oil & gas industry. Several European nations, including Austria, Finland, Poland, Slovakia, and Hungary, import 50 and 100 percent of their oil and gas from Russia. Europe's reliance on Russian oil and gas poses a potentially existential threat in light of Russia's recent invasion of Ukraine. While the European Commission has outlined three primary strategies for reducing Russia's energy reliance - energy efficiency, renewables, and diversification - many nations have opted for reviving fossil fuel projects. Romania is the largest producer of crude oil among EU members and has proven offshore gas reserves. These reserves were locked until April. The governing party, however, agreed to alter the offshore law and allowed investors to exploit the reserves. Norway has been the second most important gas supplier for the EU. After the invasion of Ukraine, Norway pledged to assist the European Union in reducing its reliance on Russian gas. To replace gas from Russia, the Norwegian government authorized a production increase.

Segmental Analysis

The global exploration and production software market can be segmented on the basis of deployment type and software type.

On the basis of deployment, the market can be segmented into on-premise software and cloud-based software.

On-premise Software

On-premise segment pertains to solutions installed and run on the user's own servers and infrastructure, rather than being hosted in the cloud, in the E&P software market. On-premise E&P software provides organizations with greater control over their data and systems, having high customization capabilities to meet specific operational needs. This type of deployment is very popular among companies that have very high requirements concerning data security or those located in countries with an underdeveloped infrastructure for supporting cloud-based technologies. On-premise solutions mostly require more upfront investments in hardware and software but can also provide long-term cost benefits accruing from tailored functionality and integration with existing systems. With the E&P industry changing at lightning speed with evolving technology, the demand for on-premise solutions will be high for the foreseeable future due to their handling capacity for complex data processing and integration tasks at the heart of effective exploration and production activities.

Cloud-Based Software

The growth of the E&P software market has been huge in respect of cloud-based software due to its ability to provide scalable and flexible solutions that would have the potential to meet the constantly changing needs of the oil and gas industry. Cloud-based E&P software offers companies the capability to store large amounts of data and analyse it in real time, thus greatly improving operational efficiency and the efficiency of the decision-making processes. It allows one to access key data and applications from anywhere in a way that supports remote collaboration for distributed teams. The on-premises infrastructure is drastically limited, thereby saving money upfront on capital expenditures and reducing operational costs. A cloud-based approach will further enhance the security of the data while promoting compliance regarding backups, with robust solutions provided for disaster recovery options. With increasing digital transformation strategies across industries, the demand for cloud-based E&P software is rising due to its cost effectivity, scalability, and growth in the need for advanced analytics and data management capabilities.

On the basis of By Software Type, the market can be segmented into Risk Management Mapping, Reservoir Characterization,  Seismic Amplitude Analysis and Risk Management Mapping.

It aims to target different risk scenarios occurring in exploration and production-related activities. There are identificatory, assistive, and mitigative software solutions for prospectively occurring risks from the entire lifecycle of E&P activities under this very category. Most of the Risk Management Mapping software is usually embedded with advanced analytics, predictive modelling, and real-time data monitoring to project the overall view of potential risks related to geological uncertainties, operational hazards, and regulatory compliance issues. Such tools will help oil and gas companies in decision-making, resource allocation, and safety. The more complex the industry becomes, with its additional regulatory pressures, the greater the demand for sophisticated risk management solutions, which will fuel further innovation and investment in this segment.

Reservoir Characterization

Reservoir characterization in the E&P software market is a vital component in optimizing the exploration and management of oil and gas reservoirs. This kind of software is oriented toward analysing and modelling the properties of reservoirs to enhance their understanding and performance prediction. Reservoir characterization tools are applied by geoscientists and engineers with an objective of integrating geological, geophysical, and petrophysical data to build up accurate models of a reservoir. These models are critical for correct decisions in drilling, production planning, and resource management. Most often, such advanced reservoir characterization software comes with 3D visualization, simulation capabilities, and data analytics. All of these provide information that would be crucial to enable the user to make decisions for optimizing recovery rates and reducing operational risks.

Seismic Amplitude Analysis

Seismic Amplitude Analysis is intended to mean tools and technologies licensed to analyse seismic data to discover potential hydrocarbon-bearing reservoirs. This type of software is very critical in the oil and gas industry, especially in the process of interpreting seismic amplitude variations that may indicate, to geophysicists and geologists, the presence of oil and gas. Seismic Amplitude Analysis software finds applications in Exploration and Production to maximize the identification of resources, characterization of reservoirs, and improve the chances of success related to drilling. Demand for better efficiency in exploration processes, increasing complexity of reservoir geology, and the trend of industry shift towards Exploration Risk and Cost Reduction are the major growth drivers of this software market. Advanced seismic amplitude analysis solutions are therefore very much in a growth phase, with increased demand coming from energy companies seeking new reserves and better recovery rates.

Performance Tracking

The "Performance Tracking" section of the E&P Software Market refers to those that monitor, analyse, and optimize the performance of exploration and production in oil and gas activities. Such tools are important in running an operation, offering efficiency and real-time data analytics that give insights into equipment performance, rate of production, and many more metrics. The software reduces the level of downtime, optimizes resource use, and enhances the process of decision-making through detailed performance metrics and predictive analytics. Given that most oil and gas companies are currently focusing on operational efficiency and cost reduction, demand for performance tracking software may increase. This segment is going to become very significant as companies seek to use data in leveraging productivity and minimizing operational risks.

Drilling

The "Drilling" segment in the Exploration and Production Software Market refers to software solutions designed to optimize the planning, execution, and management of drilling operations within the oil and gas industry. The tools provide critical capabilities related to well planning, real-time analytics during drilling processes, management of wellbore stability, and optimization of drilling. Drilling software aids companies in designing more effective drilling programs, reducing non-productive time, and minimizing drilling risks by integrating geological, geophysical, and engineering data. With a search for effective and accurate drilling, more so in complex and challenging environments, the market demand is kept always at its feet. As the industry continues to promote cost efficiency and operational safety, this leads to increases in adoption of advanced drilling software, all bound to make major improvements in accuracy, speed, and overall performance for drilling activities.

Impact of covid-19

The pandemic had caused a lockdown in almost all the countries across the world backed up by strict government regulations such as social distancing and quarantine. A severe effect of the lockdown was observed on the economy of various countries which further canceled certain construction projects temporarily or permanently.

Further, immediate long-term effects were seen in the supply chain and the deployment of smart solutions required in the smart buildings. However, the ease offered and the multiple benefits of the smart building solutions are anticipated to increase the deployments during the time.

Recent Developments

• March 2022- Halliburton Company and Landmark Graphics Corporation, a wholly-owned subsidiary of Halliburton, announced that they had completed the acquisition of PGS Data Management. The addition of PGSDM's PetroBank solutions expands Landmark Graphics' technology management solutions and services portfolio. PetroBank solutions are the market leader for efficient internet-enabled storage, browsing, and retrieval of vast quantities of quality-controlled exploration and production (E&P) data and information.
• October 2021- Schlumberger and AVEVA have announced an agreement to integrate edge, AI, and cloud solutions to assist oil and gas producers to optimize production. The companies will collaborate to streamline how energy operators acquire, process, and act upon field data for improved website performance. The initial emphasis of the collaboration includes linking edge systems to applications in the DELFI cognitive E&P environment in order to optimize equipment management.