Offshore AUV and ROV Market

Market Overview

The global offshore AUV and ROV market size was valued at USD 2,313.9 million in 2022. It is estimated to reach USD 4,221.91 million by 2031, growing at a CAGR of 6.91% during the forecast period (2023–2031). There is an increase in offshore oil and gas exploration activities owing to global surging energy demand. This is expected to be the primary driver for the global offshore AUV and ROV market. In addition, the world is moving towards a sustainable approach, which increases the demand for renewable energy. Subsequently, there has been a surge in offshore renewable technology projects, thereby creating opportunities for market growth.

The autonomous underwater vehicle (AUV) is a self-propelled, unmanned, untethered underwater vehicle that performs basic tasks with minimal or no human supervision. AUVs are frequently employed as survey platforms to map the seafloor or characterize the tested water's physical, chemical, or biological properties. AUVs are designed for underwater travel and can carry a variety of payloads, including cameras, sonar, bottom profilers, multibeam echo sounders, and others.

On the other hand, remotely operated vehicles (ROVs) are underwater robots utilized in science, offshore energy industries, entertainment, and the military. They are easily maneuverable through water and are connected to the ship by a network of cables that transmit electrical signals between the ROV and the operator. The majority of ROVs are equipped with a camera and lighting. They are also outfitted with supplementary equipment to expand their capabilities, such as magnetometers, sonars, a still camera, water samplers, instruments, and a manipulator that aids in measuring light penetration, water clarity, temperature, and depth.

Market Dynamics

Global Offshore AUV and ROV Market Drivers:

Increasing Offshore Oil and Gas Exploration Activities

The global energy demand is expected to increase by 5% by 2030, with oil and natural gas contributing to approximately half the need. In order to meet the rising demand, the uptake rate of new offshore upstream projects is expected to increase in the coming years. Oil and gas operators worldwide are looking to increase the uptake of new projects to capitalize on the current 'lower for longer' oil prices scenario, which is expected to increase the demand for AUVs and ROVs in offshore exploration, production, and decommissioning activities.

In March 2022, BP Plc, a prominent British oil and gas corporation, successfully secured the rights to explore two offshore exploration blocks in Indonesia: Agung I and Agung II. This achievement was attained through their participation in Indonesia's second round of the 2021 Oil and Gas Working Area (WK) Bid Round. These blocks are relatively unexplored and are anticipated to have substantial resource potential.

Safety and Risk Mitigation

Offshore operations are often associated with elevated hazards and challenging settings. Autonomous Underwater Vehicles (AUVs) and Remotely Operated Vehicles (ROVs) provide safer alternatives to human divers for activities including the inspection of underwater facilities, pipelines, and structures. These vehicles can operate in hazardous settings, mitigating possible hazards to individuals and enhancing safety in offshore operations. These many aspects contribute to the expansion of the industry.

Global Offshore AUV and ROV Market Restraint:

Ban on Offshore Exploration and Production Activities in Multiple Regions 

Many countries worldwide have decreased or banned offshore exploration and production activities, owing to climate change and pollution, and are shifting fossil fuel subsidies into renewable energy subsidies. European countries are at the forefront of banning further exploration and production activities in all the regions. According to a proposal for the bloc's new Arctic strategy in October 2021, the European Union proposed banning all exploration activities in the Arctic to protect a region severely impacted by climate change. With more countries increasing their focus on climate change and banning offshore exploration activities, the market for ROVs and AUVs will slow down in the forecast period.

Global Offshore AUV and ROV Market Opportunities:

Growing Offshore Renewable Technologies

There has been a significant increase in energy demand over the past decade and a constant rise in awareness about global warming, opening opportunities for renewable technologies. Installation of marine renewable energy structures, like offshore wind turbines and navigational hydrokinetic devices, requires various visualization and monitoring equipment to survey the seafloor for initial installation appropriately, cable lay, post-installation monitoring, and maintenance tasks.

Engaging in such activities can present challenges attributed to the presence of unstable conditions, such as high tides or strong ocean currents, in the vicinity of these facilities. Therefore, systems like AUVs and ROVs are useful in such situations and offer scalable, modular solutions and the required data. The wind energy industry is witnessing an increasing trend toward offshore wind farm installations. The new global offshore wind power accounted for over 6 GW of capacity in 2020. Therefore, rising offshore wind power installations create significant opportunities for the market.

Regional Analysis

Based on region, the global offshore AUV and ROV market is bifurcated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

The Middle East and Africa Dominate the Global Market

The Middle East and Africa is the most significant global offshore AUV and ROV market shareholder and is expected to expand substantially during the forecast period. The Middle East and Africa is one of the major regions of proven oil and gas field reserves worldwide. With rapidly soaring global energy needs, offshore oil production has become an attractive energy source. Therefore, countries with major regional players focus on exploring offshore oil and gas fields. For instance, in 2022, Abu Dhabi National Oil Company (ADNOC) initiated a bidding process for an engineering, construction, procurement, and installation contract to develop its massive offshore Lower Zakum oil field. The development of the field includes several services, such as the construction of infrastructure, subsea pipelines, subsea systems, etc., which require ROV and AUV for installation and monitoring.

Furthermore, more than 77 and 27 approved upstream projects in the Middle East and Africa for 2021-2025, respectively. Most of these projects are offshore field projects requiring ROV and AUV for various services. This, in turn, is expected to drive the market during the forecast period.

North America is expected to be one of the largest markets for offshore AUVs and ROVs during the forecast period due to the high level of industrialization and investments in research and development. As the United States has invested heavily in the defense sector and the R&D of AUVs and ROVs, other related offshore sectors, like shipping, oil and gas, and renewable energy, have profited immensely from the technological advancements in the market studied. As a result, the region is at the forefront of AUV and ROV technology. In addition, AUV and ROV manufacturers in the region export their products globally. As the United States invested heavily in expanding its oil and gas production capacity, the Gulf of Mexico has evolved into a global hotspot for AUV and ROV demand. In February 2021, Mexico committed to investing USD 1.2 billion in developing two new offshore fields. Such large investments in the offshore sector are expected to drive the offshore AUV and ROV market in Mexico during the forecast period.

Europe is also a major market for offshore AUV and ROV services due to its highly developed offshore oil and gas and wind energy sector. The demand for offshore AUV and ROV services is concentrated in the North and Mediterranean Seas. As Europe moves away from fossil fuels and increases its renewable energy capacity, countries view the region and wind resources as critical to their energy security strategies. Due to this, most countries are inviting bids from developers for large-scale offshore wind power plant projects. For instance, in February 2022, Norway announced its first auction plans for offshore wind. The tender is scheduled for the second half of 2022 and aims to develop 1.5 GW offshore wind capacity. In addition, in December 2021, Denmark awarded RWE Renewables GmbH a contract for developing the 1 GW Thor offshore wind project, the largest in the country. These factors are driving regional market growth.

The Asia-Pacific region is also a significant offshore ROV and AUV services market. The region is one of the fastest-growing markets globally. Major economies such as China, India, and ASEAN countries invest heavily in sectors such as defense, offshore oil and gas, and wind energy. Therefore, the demand for offshore ROV and AUV services will rise during the forecast period. China is one of the leading energy importers and consumers globally, and the country has been investing heavily in its defense capabilities. The Chinese navy has invested heavily in ROV and AUV technology to develop reconnaissance capabilities, especially in the South China Sea. In December 2020, fishermen off the coast of Indonesia discovered a Chinese underwater drone/ROV in Indonesian territorial waters. As China tries to assert its military dominance over the South China Sea region and beyond, the demand for offshore ROV and AUV services will rise over the forecast period.

Segmental Analysis

The global offshore AUV and ROV market is segmented by vehicle type, vehicle class, end-user application, and activity.

Based on vehicle type, the global offshore AUV and ROV market is divided into AUV and OV. 

The ROV segment owns the highest market share and is expected to grow substantially during the forecast period. Remotely-operated underwater vehicles (ROVs) are robots that conduct underwater functions on behalf of the crew that operates from the surf ce. ROVs are incredibly complex and serve various industries, including search and rescue, military, aquaculture, recreation, discovery, oil and gas, offshore energy, submerged infrastructure, shipping, etc. In addition, major factors boosting the market include the increasing number of offshore oil and gas production operations, the growing offshore wind power industry, and the rising number of offshore oil and gas decommissioning activities. In February 2022, the United Arab Emirates state-owned company, Abu Dhabi National Oil Company (ADNOC), introduced remote-operated vehicles for easier underwater safety inspections.

Similarly, ADNOC stated that ROVs reduce human exposure to underwater hull inspection activities. The company expects to reduce operating costs by up to 68% and eliminate some of the additional support vessels.

Based on vehicle class, the global offshore AUV and ROV market is segmented into work-class vehicles and observatory-class vehicles. 

The light work-class vehicle is a remotely operated vehicle (ROV). It is generally below 50 HP and can support several manipulators. This type of ROV allows a maximum working depth of 2,000 met rs. Lately, there has been an increasing trend to manufacture materials like polyethylene in an environmentally friendly way. Light work-class ROVs weigh less than 100 kg and may be deployed from smaller surface vessels. In some cases, they can be deployed with only two operators operating from a jetty or a small boat, although some inspection-class ROVs require a launch and recovery system (LARS). These vehicles are also usually used for minor acts, such as intervention with small tools and surveying, primarily using image processing software. Light work-class vehicles are used for wellhead monitoring, riser inspection and cleaning, pipeline survey, mooring inspection, and offshore wind platform inspection.

Based on the end-user application, the global offshore AUV and ROV market is bifurcated into oil and gas, defense, research, and other end-user applications. 

The oil and gas segment is the largest contributor to the market and is predicted to expand substantially over the forecast period. Over the past few years, autonomous underwater vehicles (AUVs) and remotely operated vehicles (ROV) have evolved from emerging technology with niche uses to extensive applications in the oil and gas sector. AUVs and ROVs are used for positioning and guidance for sub-sea infrastructure construction, monitoring, and survey missions. Major factors driving the demand for AUVs and ROVs in the oil and gas industry include flexibility in launch and recovery, depth capability, navigation capabilities, and data logging capabilities.

Artificial intelligence technology has developed substantially in recent years. Companies operating in the AUV and ROV industries have been integrating these technologies into their products to enhance the value generated for end users. For instance, in March 2022, Kongsberg Gruppen ASA announced the introduction of a new and upgraded version of the Hugin AUV with innovative technology with innovative technologies, including 3D sensing, trajectory planning, and collision avoidance systems.

Based on activity, the global offshore AUV and ROV market is bifurcated into drilling and development, construction, inspection, repair and maintenance, decommissioning, and other activities.

Decommissioning involves plugging the hole in the seabed surface and safely disposing of the equipment used in offshore oil exploration and products. The decommissioning market is developing rapidly in the petroleum business, with major potential risks. It is a source of major liability for counties, operators, contractors, and the public and must be managed cost-effectively. Many companies have introduced AUVs and ROVs for their decommissioning services. In addition, many operators are adopting the technology as such equipment reduces the risks of spillage and other incidents. For instance, in December 2021, Dubai-based Environment Quality Services announced that it had deployed the Saab Seaeye Falcon ROV to the decommissioning program offshore Ang la. The ROV is expected to provide visual inspection services for the site.

Recent Developments

• April 2023- Voyis Imaging Inc., a developer of subsea optical inspection technologies, introduced a new product line called Discovery Vision Systems, which it claims will advance ROV vision systems and bring a new level of situational awareness to ROV operations by delivering high-resolution video and real-time 3D perception for piloting, inspection, and autonomy applications.
• August 2023- Rubin Design Bureau unveiled its new conceptual autonomous underwater vehicle (AUV) Argus design at the Army 2023 defense exhibition. Argus is intended for various tasks that support offshore field exploration and development.