|By the year 2025, IoT will have a total “potential economic impact” of $3.9 trillion to $11.1 trillion, as found by McKinsey & Company. / Photo by: Vasin Leenanuruksa via 123rf|
Articles written about the oil and gas industry claim “we may not see $100-per barrel for oil for years,” according to Shannon Lee of IoT for All, a website dedicated to publishing content about the IoT industry. Moreover, uncertainties in price with downstream oil and gas firms have to compete for customers, who are desperately looking for an “enhanced digital experience.” The competition will be stiff since oil and gas companies cannot solely rely on competitive prices.
By the year 2025, IoT will have a total “potential economic impact” of $3.9 trillion to a whopping $11.1 trillion, as found by McKinsey & Company, an American worldwide management firm. Within one decade, oil and gas companies and mining have a potential economic impact of $930 billion. Hence, it’s not surprising for the oil and gas industry to leverage IoT. IoT allows the industry to optimize, digitize, and automate processes. Such processes enable the oil and gas industry to enhance safety and save time and costs.
Naveen Joshi of business news platform Forbes wrote that the majority of oil and gas production takes place in extreme environments, which have very few communication networks. Hence, monitoring temperatures, pressure levels, and the like become more costly and more difficult. There also concerns about the rising costs of equipment maintenance, as well as safety and regulation issues. IoT can overcome these hurdles, providing oil and gas facilities an efficient monitoring system.
For instance, more monitoring points can be connected using Low-Powered Wide Area Network (LPWAN), which is an inexpensive solution for offshore oil and gas remote monitoring. Further, it is also possible to connect multiple leak detectors to oil wells within a large area. The detectors then send data to a central point in real-time. The data can be utilized to remotely monitor the drilling and oil extraction process.
On the other hand, IoT enables oil and gas firms to be available “at all hours” to manage and address issues such as spills, emergency shutdowns, and remote field operations. Without the help of IoT, identifying and resolving the aforementioned issues will be significantly slower.
For example, the upstream industry— known as the initial discovery and extraction of oil— loses billions of dollars each year due to non-productive time (NPT). IoT helps reduce NPT by leveraging near real-time data to anticipate breakdowns and schedule preventive maintenance. To demonstrate, volumes of reservoir data can be combined with near real-time field data plan the placement of wells and flow rates. Accidents and processes can be prevented and optimized, respectively.
|IoT enables oil and gas firms to be available “at all hours” to manage and address issues such as spills, emergency shutdowns, and remote field operations. / Photo by: artitcom via 123rf|
Health and Safety
As mentioned earlier, oil and gas sites are commonly found in dangerous areas, which can be hazardous to the employees. Reservoirs, for example, can be submerged to depths of up to 3,000 meters. Rigs may also be stationed near faultlines, where unforeseen and perilous circumstances may take place anytime.
Hence, IoT solutions can remotely monitor equipment and operations. That means employees do not have to go to the site in person without prior knowledge of the issue at hand. Connected sensors and image vision helps present an accurate picture of the situation, allowing employees to decide and determine the safest course of action. Aside from detecting and monitoring leakages, these sensors can also be integrated into an employee’s clothing as a smart wearable.
Accidents in oil and gas sites are expensive and may even tarnish the company’s reputation. By leveraging IoT solutions, oil and gas companies can minimize the occurrence of accidents and provide their workers with a safe environment. They can also benefit from reduced insurance and corporate liability.
Utility companies and large refineries process up to 1.1B data points and 1TB of raw data each day, respectively. Hence, drawing insights from the data or even storing data into the cloud could be challenging. Oil and gas companies can resort to data virtualization, which is designed to integrate data sources in real-time “into one logical database for users.”
This makes it unnecessary for companies to physically store data in one centralized location. Oil and gas companies can just retrieve and manipulate the data without worrying where it is located or formatted.
Supply Chain Management
Oil and gas companies commonly encounter problems related to inventory planning and optimization. IoT networks can help workers implement plans and schedules in the supply chain process. Sensors installed in refineries track blends of crude oil in transit. Sensors can also determine where the barrels are stored. Not only is the data from the sensors valuable for making intelligent operation and production decisions, but it will also promote transparency and authenticity.
Oil and gas firms are becoming more competitive these days. Hence, organizations try to formulate strategies to maximize efficiency and boost profits. If they focus on short-term cost-cutting measures, it would be detrimental to the company’s long-term success. Therefore, it is recommended for oil and gas firms to invest in IoT to slash operating costs, improve the demand and supply predictions, and streamline operations.
Adopting IoT will help improve the oil and gas industry’s day-to-day operations and enhance the safety of its workers. It is important for companies to have an edge over their rivals. One way to gain the upper hand is by investing in IoT solutions.