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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.
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 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.).
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.