The Industrial Internet of Things (IIoT) is the future of the oil and gas industry. As the Internet of Things’ (IoT) network of devices, sensors and software brings about change in consumers’ daily lives, industry is lagging behind. Recently, the oil and gas industry has been facing challenges, largely attributed to the antiquated and inefficient approach that many companies take to maintain assets and collect data.
Below are five different ways IIoT will revolutionize the oil and gas industry:
- Improved Operational Efficiency
According to RigZone, the oil and gas industry will face losses in the next couple of years as Baby Boomer workers begin to retire and less people with industry expertise can assume the vacant roles. Big data analysis and remote visibility will help companies better manage their assets and use their findings to optimize production. Leveraging the capabilities of IIoT can reduce troubleshooting time from days to minutes, which leaves more time to spend on other operational aspects of the business.
- 2. Revenue
The industry has a major impact on the global GDP: according to Oxford Economics, industry-wide adoption of IIoT could increase global GDP by as much as 0.8 percent – $816 billion – in the next decade. With lower oil prices being the new normal, profit margins have tightened. Oil and gas companies must take this opportunity to invest in innovative technologies instead of conducting knee-jerk cost cutting. The financial gains of cost reduction and saved time will be invaluable as the industry becomes even more competitive.
- Real-Time Data
Big data is not new to oil and gas companies: data is crucial to the success of this industry. Efficiency and accuracy is more valued in the oil and gas industry than almost any other industry. Small improvements in efficiency can make a notable economic difference. Profit in the oil and gas industry is dependent on prompt and accurate production data. With IIoT integration, oil production can be captured in real-time through embedded sensors, while data communications systems will enable companies to gather information from assets anywhere in the world. For example, after comparing real-time down-hole drilling data with data from production of nearby wells, companies can adapt their drilling strategies to maximize production. According to Bain & Company, this level of visibility can help oil and gas companies improve production by 6% to 8%. Additionally, the shift to data generation via the cloud allows for expansion of the number of possible transactions that can occur all the way down the supply chain. The key here is that companies need a well-built IIoT platform to help them convert massive amounts of data into useful information.
- Less Safety Risk
Safety is perhaps the largest industry concern, both internally and externally. IIoT can minimize risk taken by identifying potential issues before they become actual safety hazards. Remote troubleshooting means more constant and efficient regulation of oil rigs. New regulations are making methane plume sensing mandatory for safety – the perfect time for companies to roll in IIoT strategy as they install sensors and monitors. Fully leveraged IIoT integration also means less travel and potentially dangerous work for personnel.
- Environmental Footprint
From increased efficiency to lessened safety risk and reduced travel, IIoT adoption can significantly reduce the environmental impact of the oil and gas industry. Using less energy, avoiding oil spills and other accidents, and emitting less carbon are significant issues that show why oil and gas need to pay attention to IIoT. IIoT also allows for clearer monitoring of energy and resource usage.
IIoT and the integration of connected devices in oil and gas will touch nearly every leg of the oil and gas supply chain, from operations to customer engagement. It’s an opportunity for rapid change in a legacy industry – and a chance for oil and gas to compete in a commoditized world.
Written by Lauren Belisle - Brightline Strategies