IoT Use Cases in Oil & Gas: Transformative Applications

Sep 27, 2021

Energy and Resources | 11 min READ

The global IoT in the oil & gas market is slated to touch $43.48 billion by 2024 at a CAGR of 21.86% from 2019 to 2024. IoT deployment has been transforming the oil & gas sector because of its inherent advantages of offering access to real-time information across remote locations, making the operations efficient and safer for employees. The rapid penetration of IoT in O&G has enhanced operational productivity by minimizing manual labor.

Michael Foote

Sales Director

Energy & Utilities, Europe

Birlasoft

What Is IoT in the Oil and Gas Industry?

In the competitive world of the Oil and Gas Industry, the companies strive to be cost-effective and still stay profitable and sustainable. The Internet of things in Oil & Gas industry is a network of physical objects with remote sensors, machine learning, and the cloud that are deployed in the upstream, midstream, and downstream operations for seamless collection of data, processing, and leveraging that data to streamline and simplify processes and supply-chain visibility, and drawing insights from that data for faster and effective decision making.

It enables the opportunity for increased productivity and optimization while monitoring the equipment using real-time data. The safety and security in extraction and delivery of valuable resources increase dramatically due to IoT solutions to automate the processes, hugely eliminating human error. This approach also helps boost production productivity by 6-8% by using the accompanied data analytics.

IoT Oil and Gas Use Cases

Implementation of digital technology like IoT potentially increases the revenue by up to 1.2%, which is highly impressive. The more progressive companies are shifting their focus from IoT smart things like sensors and other devices to curating daring approaches for using the data provided through these devices to create more intelligent business models driving their companies to new heights.

Predictive Maintenance in Oil and Gas Industry
Workforce Productivity
Optimizing Logistics In Oil And Gas Industry
Operations Risk & Intelligence
Inventory Management in Oil and Gas Industry
Production Optimization
Pipeline Leak Detection
IoT Controller and Gateway for Oil Refinery
Virtual Rig Monitoring
Remote Site Monitoring
Real-time Shipment Tracking
Mobile Field Enablement
Pipeline Health Monitoring
Refinery Automation
Tank Monitoring
Digital Twin In Oil and Gas Industry
Seismic Oil Exploration
Carbon Emission Control
Hazard Management and Worker Safety

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#1 Predictive Maintenance in Oil and Gas Industry

Asset inspection in the oil & gas industry presents accurate day-to-day operational processes insights and also assists companies in maintaining updated status information for efficient and secure operations. When attached to oil and gas machinery, IoT devices predict when they require maintenance, so the repairs can be scheduled long before their breakdowns to prevent long downtimes and ensure the safety of the employees.

Predictive Asset Maintenance has drastically reduced the need for unplanned downtime while decreased operations and maintenance costs. Smart machine learning algorithms can analyze big data to perform predictive and preventive maintenance on expensive equipment. Besides, smart sensors retrofitted on hundreds of different assets report critical operational variables that help examine abnormal conditions, which may fail. This permits operators to assign timely inspection and maintenance staff before any mishap to minimize production downtime and optimize asset uses.

#2 Workforce Productivity

IoT in the oil & gas industry intends to bridge communication gaps between those working in the field and those working at office locations, enhancing overall safety and workforce productivity. Installation of IoT devices like sensors, drones, and robots enables safety in gathering data and eliminates the need for on-site employees for smooth operation.

IoT and big data work together for energy management and external assistance for physical tasks to guide and optimize equipment usage. IoT technology enables the workers in the oilfields to stay connected and work more effectively.

#3 Optimizing Logistics In Oil And Gas Industry

Enhanced connectivity using IoT devices can drastically renovate end-to-end logistics and the supply chain with improved demand management, transparent material tracking, and more efficient logistics operations. If transparent tracking and proactive management of material and equipment are in place, material costs will reduce by 10%. IoT makes it possible to monitor the areas that are difficult to monitor due to the oil exploration sites' hazardous locations and hazardous conditions without any human intervention.

#4 Operations Risk & Intelligence

Drilling takes up most of the expense in oil and gas production, taking 20-30% of the total cost of production. Implementation of IoT devices increases operational productivity while optimizing water, chemicals, and sand usage. The optimized efforts in intelligence develop a higher yield in labor and time-effective manner. Research shows that advanced analytics can ideally cut down the operation time in half.

Similarly, deploying semi-automated field operations reduces personnel risk while reducing the cost of onboarding employees.

#5 Inventory Management in Oil and Gas Industry

With the information collected by IoT sensors, refineries can be notified about the types of oil that have been delivered. This allows companies to make important manufacturing, inventory, and operational decisions. IoT and advanced connectivity can offer real-time inventory management, which helps curate a more streamlined supply chain in the oil & gas industry.

In addition to other devices like Radio Frequency ID chips, GPS, and smart devices, IoT devices can boost inventory tracking with precise location monitoring and more efficient storage and distribution. The amount of big data captured with these devices makes the machine learning algorithm more accurate in error-free processes and reducing waste. This happens in real-time, which decreases loss and equipment damage by constant tracking.

IoT in Oil & Gas Industry: 19 Transformational Use Cases to Watch Out For

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#6 Production Optimization

IoT deployment in oil & gas production helps increase throughput and reduce the energy consumed and emissions produced in the process. System-wide real-time production control is empowered by advanced analytics that optimizes and adjusts processes with the help of IoT sensor-driven algorithms.

IoT enables the company to take remote control of the production process and reduce the labor required physically in production. As the IoT devices and sensors feed more data to the algorithm, it gets smarter enabling higher production efficiency, eliminating the high possibility of human error.

#7 Pipeline Leak Detection

The most prominent cause of leakage is corrosion, and monitoring the pipelines is vital as it affects production. Previously the focus was more on the building and developing the pipeline, and the inspection happened once in a while. A real-time alert system and leakage detection are set to be cost-effective and ensure a safer environment.

IoT leverages sensor technology to monitor pressure, gas flow, compressor environments, concentration, temperature, and other variables to predict a leak. With the alert system deployed, immediate action is taken to prevent the leakage.

#8 IoT Controller and Gateway for Oil Refinery

To collect data from assets, machines, or any equipment in a refinery, physical telemetry devices such as sensors, meters, gateways, etc., can be mounted on them. The data, such as oil level measurements from tanks, parametric information from machines, energy consumption readings, or fuel availability in tank farms, is then used to track performance or get notifications about any discrepancy in the refining process.

Refineries are better positioned to make intelligent decisions and improve their processes and overall efficiency by evaluating data gathered over time.

#9 Virtual Rig Monitoring

Recent development in IoT connectivity, Low Power Wide Area Networks (LPWAN), is a game-changer for the oil and gas industry. An LPWAN satellite hybrid architecture is a cost-effective and robust approach to monitor and manage the rig actively. Real-time tracking of the rig structures provides important data like strain, vibration, and crack sounds, allowing dependable integrity calculation to foresee any damage.

#10 Remote Site Monitoring

For field workers to optimize efficacy and security, upstream oil and gas production needs continuous monitoring of the functioning of various equipment and parameters. Implementation of the remote site monitoring allows the maintenance teams to be less reactive. The safety of the workers is ensured as they are taken away from the potentially hazardous work environment.

Not only does IoT deployment help with the replacement of skilled labor with cost-efficient solutions, but it also attracts more recruitment as employees can work in comfortable environments rather than traveling to offshore locations regularly.

#11 Real-time Shipment Tracking

Enhanced connectivity can transform end-to-end logistics and the supply chain with improved demand management, transparent material tracking, and more efficient logistics operations in the oil & gas industry, which is made possible through IoT.

Real-time shipment tracking equips O&G companies to track where the shipment is at the exact given time to monitor transfer accuracy between supply chain partners. This allows accurate scheduling and reduces the risk of loss while identifying any delays and bottlenecks in the supply chain.

GPS IoT devices are attached to containers or parts of the shipment to provide accurate real-time updates. For instance, one oil & gas company deployed an extendable web application allowing cross-functional users to interact and track materials moving along the supply chain. Transparent tracking and proactive management of material and equipment reduced materials costs by about 10%. If deployed at scale, the new value to the industry could be $30 billion, or a 2 to 3% drop in the cost per barrel of oil equivalent (BOE).

#12 Mobile Field Enablement

It's a well-known fact that working in oil fields poses a high safety threat to employees, and for the same reason, oil & gas majors are looking out for options to provide a safe working environment to their employees. IoT is one such tool that enhances safety while also offering real-time insights into plant operations. With devices such as wirelessly connected ruggedized tablets, employees can get real-time access to information to perform simple or complex operational tasks in the field irrespective of location.

Remote expert applications also aid the on-site field engineers for training and improved worker productivity. Offering near real-time visibility into assets and personnel at the workplace can significantly improve employees' health and safety.

#13 Pipeline Health Monitoring

IoT sensor data is vital in improving future engineering and construction practices to optimize the service life of a pipeline by assisting in analyzing and understanding pipeline behaviors under different external conditions such as structural loads, weather changes, soil characteristics, moisture, and pH levels. Additionally, sensor data validates the reliability of older pipes being in service for decades to ensure continued safe operations.

To identify the possibility of potential crack initiation and growth alongside delamination, ultrasonic and acoustic sensors report abnormal sound waves. Magnetic sensors also help in detecting a change in pipeline wall thickness due to corrosion.

#14 Refinery Automation

IoT can be used to analyze factors like pipe thickness, flow rate, pipe pressure, amongst other things. Instead of putting manual labor, these devices can be put to use to get a real-time measure. The most significant advantage of using IoT devices is creating customized algorithms to get the desired result.

Keeping in mind the big data and IoT sensors, one can instruct automation to increase efficacy. This process makes monitoring so much easier and convenient because employees are required to step in only due to a rare external error. Else, the entire process is automated for the optimum result and minimum damage.

#15 Tank Monitoring

Remote tank monitoring for industrial liquids and other hazardous substances can be done regularly using IoT devices without any on-site workforce. IoT devices can also measure water pressure, oil well monitoring, and so on. Such solutions are customized according to the enterprise to make customization and accuracy possible.

This requires compact, highly accurate sensors, a control unit, and a remote tank monitoring system that includes collecting and analyzing data provided. This extends the working life of machinery as well as reduces maintenance costs considerably.

#16 Digital Twin In Oil and Gas Industry

Digital twins conduct asset simulation dry runs to optimize oil & gas asset value, such as improving tradeoffs between operating and capital expenditure. A digital replica of an asset being constructed gives the ability to drill down virtually to obtain reports and gather knowledge about the status of each component from design. Information is fed real-time to the dashboard, which analyses the data with past data.

This increases project speed and quality while improving the design. Similarly, digital twins for assets improve maintenance operations by predicting potential issues and formulating a repair plan. This can also compare performances with other assets.

#17 Seismic Oil Exploration

Individual IoT sensors can be sent for exploration connected by fiber optic cables to map subsurface drilling sites to discover new drilling locations that give maximum yield. When connected to the Internet, these seismic sensors send the readings onto a server that maps an image of the potential site.

A machine-learning algorithm then analyzes it to select the best drilling site. This technique reduces the time required for site selection and increases both new and current drilling rig productivity.

#18 Carbon Emission Control

IoT solutions in oil and gas industries prove useful to the environment because the higher the efficiency of the plant, the lesser the carbon emissions generated. For example, leak detection makes sure that no harmful substance is released into the environment. Thus, one must carry out their moral responsibility by minimizing the carbon emission as much as possible by efficiently working and managing the plant.

#19 Hazard Management and Worker Safety

One of the critical motives driving IoT adoption in the oil and gas industry is reducing the risk of accidents and ensuring safety. Installing these devices void the need for employees to be present in hazardous conditions to ensure proper running. This technology enables them to work remotely and monitor mostly automated operations. In unlikely emergencies, an immediate trigger for counteractions is deployed to safeguard workers and prevent disasters.

The global oil & gas industry revenue in 2020 stood at around $1.47 trillion even after registering a 40% decline year-on-year due to COVID-19. Investment in IoT will result in ensuring a sustainable and efficient business with high quality and safety standards.

Over the years, IoT has transformed the industry with proven benefits such as better visibility and control over production processes, a high level of security, business optimization based on big data, etc. It's time now for oil & gas companies to figure out relevant iot oil and gas use cases, begin their IoT journey, and reap its benefits.

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