Internet of Things Technologies Could Transform Oil, Gas Industry

The global oil and gas industry’s hunt for hydrocarbons in increasingly remote, extreme environments and its focus on safety and efficiency as it faces a shortage of expertise is driving the need for Internet of Things solutions within the industry.

The Internet of Things – where objects, people and animals have unique identifiers and can transfer data over a network without requiring human-to-human or human-to computer interaction – has evolved from the convergence of wireless technologies, micro-electromechanical systems and the Internet. In the Internet of Things, a thing can be a person with a heart monitor implant, a car with built-in sensors that alert drivers to low tire pressure – or any natural or manmade object that can be assigned an IP address and able to transfer data over a network.

The shift from human input generating data – such as credit card transactions at a gas station pump – to data generated between machines, is greatly expanding the number of possible transactions that can occur. Presently, there are at least 10 billion unique devices currently connected, according to technology analysis firm Gartner. By 2020, Gartner expects the Internet of Things will have more than 50 billion devices.

The number of machine to machine (M2M) communications devices, which are a subset and major component of the Internet of Things, also is expected to grow. Originally used for automation and instrumentation (SCADA), M2M communication technologies allow devices to use fixed and wireless networks to communicate with one another, said Frank Weber, director of cybersecurity for the energy sector with NSS Labs, in an interview with Rigzone.

The number of devices with cellular or satellite connectivity deployed in oil and gas applications around the world was 423,000 at the end of 2013, according to Berg insight, an analyst firm focused on the M2M market. Berg estimates that number will rise by 21.4 percent to 1.12 million by 2018. At the end of this forecast period, the mix between cellular and satellite-based M2M devices will be around 781,000 cellular units and 244,000 satellite communication units.

Examples of transactions in the M2M world include a wireless sensor on a pump in an oil well, and devices such as cell phones mixed with human and machine-generated responses. In retail, radio-frequency identification, shipping and cell networks, machines are recording and reporting on what other machines are doing, which increases the amount of data being generated. This includes smart homes and power distribution grids, said Weber.

Internet of Things solutions are important for the oil and gas industry in that it allows oil and gas companies to manage and gather data from operations in remote environments while eliminating the need for workers in these environments. Already facing a challenge in qualified skilled labor, the global oil and gas industry faces losing even more of its workforce as Baby Boomer-aged workers begin to retire in the next few years.


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Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at


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