IoT Applications in the Oil and Gas Industry

Almost every article written about the Oil and Gas (O&G) industry claims we may not see $100-per barrel oil for years, if at all. Combine this uncertainty in price with downstream O&G companies (those who process, sell, and distribute oil-based products) who no longer benefit from just competitive prices alone and have to compete for customers who are increasingly searching for an enhanced digital experience. These issues go a long way toward promoting the adoption of these IoT applications in the oil and gas industry.

According to McKinsey, IoT has a total potential economic impact of $3.9T to $11.1T by the year 2025. With a potential economic impact of $930B from mining and O&G companies within the next ten years, it’s no surprise that the O&G industry is interested in leveraging IoT. 

For the O&G industry, the advantages of oil and gas IoT applications lie in creating value through an integrated deployment strategy. IoT will allow the industry to digitize, optimize, and automate processes that were previously unconnected to save time, money, and increase safety. Below, we'll discuss how IoT can add value and be applied to the O&G sector.

Remote Services

Typically, oil isn't found in easily accessible areas. With safety and regulation issues rising, extraction sites in remote locations, and the increasing price of equipment maintenance, IoT allows O&G companies to be available at all hours to manage issues ranging from spills to emergency shutdowns, and remote field operations. The speed at which an issue can be identified and addressed in the field is significantly slower without the adoption of connected monitoring devices.

The upstream industry (the initial discovery and extraction of oil) loses billions of dollars every year due to non-productive time (NPT). IoT could be used to reduce NPT by using near-real-time data to predict breakdowns and schedule preventive maintenance. For example, massive amounts of reservoir data can be integrated with near-real-time field data to plan the placement of wells and flow rates. Accidents can be prevented. Processes can be optimized.

Predictive and Preventive Maintenance

The majority of O&G facilities need to be monitored on a regular basis. This is possible through remote services that allow facilities to react to problems through predictive maintenance. With tank levels’ pressure and flow rates monitored daily along with various other controls, these machines are not exempt from wear and tear and often need regular service.

Predictive maintenance is performed based on the current condition of a piece of equipment. For example, if a coil is running too hot, its failure is imminent and requires a technician to diagnose the cause. Predictive maintenance allows O&G companies to leverage the remote monitoring of equipment through sensors to make important decisions about whether or not something needs to be shut down, fixed, replaced, etc. Sensors that collect data send companies an alert when machines need to be maintained, preventing expensive equipment failure, wasted money, and manpower.

Although predictive maintenance is important, by utilizing IoT and creating a maintenance strategy, O&G operators have the ability to track deterioration of parts and equipment with the increased possibility of diagnosing a problem remotely through preventive maintenance. The collection of data is typically fed to the cloud, providing management and access to the most current data from the field. This data can prevent an entire operation from failing or shutting down.

The investment in predictive and preventive maintenance alone pushes O&G companies ahead of the curve by building predictive models companies can rely on for optimized execution.

Health and Safety

O&G sites aren’t typically found next to your local grocery store. The majority can be found in dangerous and remote locations that are not conducive to the health and safety of workers nor the planet. Reservoirs can be submerged to depths of up to 3,000 meters offshore and rigs may be far offshore, sitting near faultlines where dangerous circumstances could happen at any time.

According to the Centers for Disease Control (CDC), between January 2015 and January 2017, O&G extraction workers were involved in 602 incidents, 481 hospitalizations, and 166 amputations. Hazardous working environments, oil rigs, and gas plants will benefit from IoT connections that allow remote monitoring of operations no longer requiring individuals to travel to sites without first knowing what and where a problem has occurred and whether or not it’s a safe working environment.

This allows companies better to predict when equipment needs maintenance, to track spare parts on rigs, to know whether contract workers at a refinery are certified to be in certain areas and to determine the exact number of people to evacuate when an incident occurs.

For example, connected sensors can monitor for and detect for leakages or be incorporated into a worker’s clothing as a smart wearable. Remote sensors and drones are reducing the need for O&G workers to physically monitor equipment and autonomous robotic drilling allows for complete removal of humans from the drill floor, robotic moving platforms are in the process of being developed for shale wells and remotely controlled trucks are on their way to becoming a reality in transporting oil and gas.

As you can imagine, accidents can be very costly. By deploying IoT-enabled safety measures O&G companies will not only keep their employees safe but benefit from a decrease in corporate liability and an increase in profit.

Asset Tracking and Monitoring

With the O&G industry under constant pressure to improve safety and operational results and to produce significant returns, asset tracking, and equipment monitoring have become the fastest-growing wireless sensor network oil and gas IoT applications. Due to oil's dramatic price volatility, companies are spending more time analyzing their investments and internal operations to see where reductions or changes can take place while still maintaining the business and maximizing asset utilization.

Asset management is one of the core areas in the industry that can significantly influence operational performance. Operation productivity can be improved by optimizing production and making production more predictable through enterprise asset management (EAM).

With asset tracking, assets are integrated into one unit to enable companies to digitally transform their operations and monitor multiple wells or sites simultaneously. For instance, a single pump failure can cost a company as much as $300,000 and a lost day of production.

IoT sensors can monitor key pipeline equipment more accurately and cheaply. It can allow companies to survey potential drilling sites and point out the exact location for a pump and filter replacement refining the process and provide greater insight. Additionally, the use of sensors permits oil companies to monitor a large number of processes along with inventory and oil and gas shipments.

These tracking sensors provide useful information so that the companies can identify the number of supplies in inventories. If an item is missing, an IoT system can be used to track shipments with the exact location of each oil and gas asset.

Probably most important is the advantage of having near-real-time updates with the help of GPS, satellite, cellular, and other connectivity solutions. With sites across the globe, O&G companies are able to connect all of their field equipment with on-shore equipment to track all high-quality assets through IoT. Asset management allows companies to improve performance and deploy infrastructures with a maximized output.

By incorporating EAM into their processes, O&G companies can take advantage of applications that help optimize the use of assets and give employees a condensed view of everything from day-to-day operations, production performance, maintenance plans, inventory, and more. With an increase in the amount of information and data collected, whoever is in charge of an oil field or gas plant will have complete insight into how operations are running usually from a mobile device and/or application.

Data Management

The increase in disruptive technology and accessible data has forced O&G companies to begin the digital transformation necessary to bring themselves up to speed with newly-connected technologies. With millions of connected devices, a mountain of data will be collected by O&G companies allowing them to apply safe, efficient, and effective practices that will ultimately allow them to transform. However, one of the greatest challenges for O&G companies is integrating data as it relates to data quality and the ability to take said data and analyze it in real-time with operational benefits.

Utility companies can process up to 1.1B data points per day with large refineries generating 1TB of raw data per day. This creates a challenge for companies in how to get insights from their data when their equipment is potentially operating remotely with limited network connectivity or high bandwidth costs that prohibit sending data to the cloud.

Energy companies are constantly collecting data from various sites and in different formats, making it difficult to copy all the data to one centralized point to be processed and analyzed. Data virtualization takes varying sets of data sources and integrates them into one logical database for users. Because data sources don’t have to be stored locally, data virtualization benefits anyone collecting data from several distributed sources (sensors, video cameras, third-party influencers, etc.).

Designed to integrate data in real-time, data virtualization makes it so it unnecessary to physically store data in one centralized location. This integration-on-demand concept provides instant access to data whenever someone needs it. Companies can retrieve and manipulate data without needing to know where the data is physically located or formatted.

With time-sensitive data coming from platform production and drilling platforms in the field, the most common way for offshore oil platforms to transmit data is through a satellite connection that would take more than 12 days to move only one day’s worth of data to a central location.

As we all know, data isn’t useful unless it can be analyzed and applied. O&G companies can incorporate edge computing into their processes to analyze critical data as it is collected and apply any insights that have been found into improving production efficiency, accuracy, and reduce risk.

Data management and analytics from the oilfields, pipelines, refineries, and other energy sites, are crucial to the success of the O&G industry. Data plays a significant role in improvements, such as increasing uptime and recovery rates, making better decisions, and enhancing refining capacity.

The Future of Oil and Gas IoT Applications 

The adoption of oil and gas IoT applications will allow the sector to improve its operational efficiency, take care of needs in near-real-time, and allow for business growth. As a segmented industry with various streams, O&G would benefit from a seamless framework in which IoT applications and deployments are closely monitored across the ecosystem that comprises upstream, midstream, and downstream players. As one of the most asset-intensive industries attributing to the economy, the O&G industry will benefit astronomically from the adoption of asset tracking solutions and predictive maintenance. Those applications may even become a necessity for maintaining a competitive edge in the global O&G marketplace.