When crude oil prices dropped below $40 per barrel in December 2015, the oil and gas (O&G) industry was already reeling from a dizzying plunge that had started a year earlier. Industry pundits believe lower prices are here to stay, and the usual approach—cutting costs—is no longer enough to stay profitable. In this challenging business environment, O&G producers are looking for smarter ways to monitor expensive capital assets and use data to improve efficiency, drive better performance, enable innovation and keep fuel flowing.
The search for new value is driving an explosion in IoT technology investment in the O&G industry. IoT integrates machine-to-machine connections, smart sensors and big data analytics, resulting in benefits like increased active rig time, a better-connected supply chain, reduced cost inflation, and fewer delays in new projects.
Here are 5 real-world use cases of IoT technology in the O&G industry:
Pipeline and Refinery Monitoring
A single pump failure can cost as much as $300,000 a day in lost production. Using IoT to monitor more key points and pipeline equipment more accurately, at less cost, just makes sense. Data analytics can identify new areas of performance improvement, survey potential drilling sites, and pinpoint exactly when pump and filter replacement will begin to affect performance. And by providing greater insight about the flow, the refinery can be run at higher capacity.
Internal data generated by large integrated oil and gas companies is estimated to exceed 1.5 terabytes a day. Being able to harness and use that data increases the efficiency of workflow, supply chain and people management. Sensors relay data to the cloud, where it can be stored and sent to analysts who can assess current operations. Added visibility and insight allow oil and gas companies to seamlessly connect massive operations.
The typical survey of a potential drilling site involves monitoring more than one million readings of seismic waves. These readings help oil producers find new hydrocarbon deposits, determine new spots for drilling and even find ways to optimize already-operational rigs. Using robots and sensors to quickly analyze surface and subterranean environments of potential drilling sites could save millions of dollars.
Not only does IoT offer the opportunity to automate thousands of wells spread across regions, it can monitor multiple pieces of equipment per well. Fuel leaks and theft cost the industry millions in losses each year. Monitoring equipment with sensors and video cameras results in data that can precisely pinpoint anomalies in the drilling process. Efficient maintenance can help avoid unscheduled shutdowns, which cost producers and refiners billions per year in operating costs.
Engineers can use IoT to map changes in reservoirs over time to determine whether alterations are needed in lifting methods, to improve pump performance, and to better predict a field’s production capacity. It can also influence where and how companies deploy their expensive infrastructures and improve their ability to find maximum outputs.
By spending smarter on IoT technologies, O&G companies are reaping bottom-line results in global productivity and competitiveness, and drilling into new forms of value they never imagined.
Follow us on Twitter and LinkedIn for future updates.