IIoT in Oil and Gas: The Real Power It Can Provide

By Tim Shea

ARC had the opportunity to attend the 2nd IoT in Oil and Gas event held in Houston a few weeks ago and was treated to a plethora of great presentations and IIoT related companies exhibiting some of their innovative solutions that can, and are, impacting oil & gas operations for the better. There will likely be more follow on blogs in the coming weeks highlighting some of the most noteworthy presentations and discussion points imparted that owner operators, independent E&P firms and related stakeholders should be aware of and consider in their tactical and strategic initiatives if they want to realize operational excellence.

Dave Lafferty, President of Scientific Technical Services (and an ARC Associate), emceed the event and kicked off with opening remarks and great introductory presentation titled “IoT in Oil and Gas – What is It? Lafferty presented his theme, and we concur, that the oil & gas industry is on the cusp of a major revolutionary point and that IIoT is represents a whole new approach moving away from the control centric systems to ubiquitous connected devices feeding enterprise systems of the future. IIoT enabled solutions will enable companies to acquire, communicate, store, analyze and share data and turn it into actionable information for more effective decision-making.

Lafferty set forth to define what IIoT is, and what IIoT is not. The five 5 key pieces of IoT required include:

  1. Sensors – With Embedded Intelligence, Storage and Processing Power
  2. Networks – For Sensors Networks, Mobility and Backhaul
  3. Big Data – With Data Repositories and Data Aggregation
  4. Analytics – Descriptive, Diagnostic, Predictive and Prescriptive
  5. Visualization – Data Presentation, HMIs, Smartphones, Tablets


IoT Industrial IoT
Number of sensors = Billions Number of sensors = Millions
Cost of sensor = $5 or less going rapidly lower Cost of sensor = $1,000 -> $100
Installation = none required Installation = some -> none
Configuration = none Configuration = some -> none
Distribution = a handful to a dozen in one location –millions of sites Distribution = few dozens to thousands in one location –thousands of sites
Connects to the general Internet Connects over wireless sensor networks and fit for purpose backhaul networks
Designed for consumer market Designed for industrial use –more rugged and accurate
Ecological or monetary consequences of errors or hacking are low Ecological or monetary consequences of errors or hacking are high

Some of the key business drivers pulling IIoT in Oil & Gas include:Data have moved beyond the operators

  • Integrity monitoring – wellhead monitoring, equipment health, corrosion monitoring
  • Integrity mitigation system monitoring (chemical treatment, cathodic protection)
  • Users demanding results orientated pricing (Service as a Product)
  • Pay for pounds of thrust – not A jet engine
  • Readings per months
  • Area of Operation
  • Unconventional fields are huge

Monitoring Is different than control

  • Much larger and diverse user base
  • Less latency dependent and lower sampling rates
  • Requires lower price points
  • Requires more efficient M2M protocols (e.g. MQTT)
  • OEMs
  • Improved Mean Time to Repair (MTTR)
  • Incremental reoccurring revenue producing products
  • Time to Market
  • Fast pace of unconventional wells cannot wait on infrastructure
  • Great Crew Change
  • New work force expects a connected world (Millennials)
  • Must be easy to use as an iPhone

Lafferty highlighted some of the barriers to IIoT including:

  • High entry costs by using conventional methods for additional monitoring
  • Solutions implemented as silos
  • Stranded data
  • Non-uniformed Implementations
  • Incomplete network coverage
  • Viewed as an infrastructure problem
  • Large amount of IIoT hype

Potential Value of IIoTBetter visibility of operations resulting in:

  • Improved production
  • Improved integrity and safety
  • Reduced unplanned downtime
  • Reduced labor
  • Reduced energy costs

IIoT Sweet Spots in the Oil Field

  • Annulus pressures monitoring
  • Production chemicals optimization’
  • Corrosion monitoring
  • Gas monitoring
  • OEM equipment monitoring

ARC will be detailing more of Lafferty’s presentation in an upcoming Insight report which will also highlight some of the other interesting and informative presentations which provided a great deal of food for thought. The IoT in Oil and Gas event provided lots of interesting information, food for thought, and lively discussion that just confirmed ARC’s strong belief that IIoT-enabled solutions are and will continue to play an impactful role in helping oil & gas companies move on their journey to operational excellence.

Reprinted with permission,
original blog was posted here

About ARC Advisory Group ( Founded in 1986, ARC Advisory Group is a Boston based leading technology research and advisory firm for industry and infrastructure.

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