How IoT Is Changing the Oil and Gas Industry

Apr 11, 2019 | Insights

Over the past few years, the Internet of Things (IoT) has transformed the way nearly every industry transmits, collects and uses data — and the oil and gas industry is no exception.

Energy companies who’ve invested in this new technology are enjoying cost savings, better-streamlined processes, more accurate forecasts for demands and other crucial advantages. And that’s likely why global IoT in the oil and gas market is expected to reach nearly $40 billion by 2023, according to a report from BIS Research.

In other words, while implementing new tech requires time and capital, investing in industrial IoT can offer a tremendous ROI. To help you make a case for building a more connected environment — and prepare for this unstoppable industry transition — here’s what you need to know.

What is the Internet of Things, Exactly?

IoT is a term used to describe an ever-expanding network of internet-connected devices and systems that can communicate data in real time, without human involvement.

A good example of IoT is “smart” home devices, like thermostats that communicate energy usage data to your mobile phone through an app, or light bulbs that automatically adjust brightness levels depending on the time of day.

In the oil and gas industry, IoT takes the form of sensors that monitor inventory levels and pump performance, and allow you to automate various tasks — such as dispatching trucks when an onshore tank needs to be emptied.

What Advantages Does IoT Offer Oil and Gas?

IoT is rapidly altering the way energy companies perform. Here are five changes you can expect when integrating IoT into your organization.

1. Increased Revenue

In recent years, reduced oil prices have increased competition between oil and gas companies — and many organizations are seeking strategies to help tighten margins and improve their bottom line. But focusing solely on short-term cost-cutting measures could stifle long-term business success.

Investing in IoT will ensure companies are more strategic in their cost reduction by helping pinpoint inefficiencies, improve the accuracy of demand predictions and streamline expensive processes.

2. Enhanced Operational Efficiency

In the oil and gas industry, equipment fails can range from frustration to downright disastrous. And as the downtime grows, so does your financial loss. And the looming talent shortage only serves to compound this challenge.

However, IoT is well-poised to overcome these obstacles. By installing a network of sensors, professionals will enjoy greater visibility into equipment performance without having to send teams into the field. Oil producers can quickly repair or replace equipment at the first sign of trouble, thereby reducing or eliminating unplanned outages.

3. Improved Decision-Making

As a technology professional in the energy industry, you’ve always used data to inform your decisions — and your senior leadership team’s ability to make the right calls and drive success depends on the quality of the information they receive.

Instead of relying on estimations and best guesses to inform your drilling strategy, IoT gives you access to a constant transmission of real-time data — especially when you pair your sensor network with a reliable IIoT (industrial internet of things) platform.

Having access to these advanced analytics could help oil and gas organizations quickly advance production and outpace competitors.

4. Reduced Safety Hazards

Oil rig workers face a variety of risks — many of which can be deadly. While industry regulations serve to promote greater worker safety, a lack of insight into oil rig issues means those on the field still deal with a variety of hazards.

IoT allows you to troubleshoot issues remotely, improve proactive maintenance processes and helps companies avoid sending workers to perform dangerous work. In other words, implementing IoT can, quite literally, save lives.

5. Decreases Environmental Impact

It’s no secret oil drilling and production has significant environmental consequences, and many energy companies are seeking solutions to reduce their footprint.

Leveraging IoT allows oil and gas companies to decrease the risks of oil spills, reduce carbon emissions and increase efficiencies to help curb energy usage — all of which can help limit the industry’s negative environmental impact.

The Internet of Things is quickly advancing, and rapidly altering the way oil and gas companies collect and manage information. Investing in an IoT solution now will not only ensure you’re prepared for the future tech trends, but also help you improve your bottom line, increase worker safety and stay ahead of your competitors.