IoT is having a tremendous impact on all verticals including the Oil and Gas industry. According to McKinsey, IoT will have a total potential economic impact of $3.9T to $11.1T by the year 2025. Oil and Gas and mining is expected to bite out a chunk of that total with an estimated economic impact of $930B within the next 10 years. Looking at these figures, the oil and gas industry should be gliding down the path of IoT. Gliding may be a too advantageous word to use but the oil and gas industry certainly has recognized the importance and necessity of utilizing and deploying IoT Initiatives.
Ranking of the global top Oil & Gas companies in 2019, based on Revenue (in billion U.S. dollars)
The values are based on the 2019 Financial Times Equity list of the leading global companies. U.S. oil and gas company, ExxonMobil was ranked fifth that year, with a total 2018 revenue of some 275.5 billion U.S. dollars.
Some Challenges facing the Oil & Gas industry:
Ø Crude Oil Cost
Ø Equipment Reliability
Ø Inspections / Safety
Ø Spill control / Environment
According to a research study by Kimberlite, 1% of unplanned downtime — or 3.65 downtime days per year — can cost organizations $5.037 million each year. Averages to over 27 days of downtime each year, which equates to an annual loss of $38 million.
Monitoring every facet of your IoT assets and devices is vital to overcoming the challenges facing the Oil and Gas industry.
Some methodologies include:
Ø Remote Monitoring and Tracking. Used for pipelines, process plants, vessels, tank farms and aircraft. Pipelines and plant sites are often in a hostile environment where the climate cannot be controlled. A remote system with satellite or cellular communications provides real-time alerts no matter the location. If there is a leak or malfunction in a system, this is communicated right away so the problem can be fixed. This helps ensure the safety of the workers as well as addresses any major issues before they happen; maximizing the pipelines while making sure the environment is safe.
Ø Equipment Maintenance. Sensors detect and schedule maintenance of any equipment before it breaks down. Alerts can be set up to detect changes in temperature, overheating or low battery. Additionally, replacing antiquated equipment is vital for the industry to prosper and survive in the everchanging IoT landscape.
Ø Vessel Asset Management. With IoT applications, all devices and equipment can be tracked in real-time. If there is an operational or environmental hazard the system can track down the asset, analyze the risk detected associated with the data so the issue can be resolved.
Ø Security and Risk. Cyber security is one of the immediate dangers that can affect automated processes. According to Deloitte, the oil and gas industry has focused on protecting corporate rather than operations programs and data. The reason for this is operational systems are complex. IT experts as well as engineers are needed to evaluate and implement cyber security measures within their operational systems to decrease risk of attacks.
Ø Environment Safety. Spills are one of the major challenges in the industry. Making quick, educated decisions in these hazardous situations is of utmost importance.