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Why IoT in Oil and Gas has the potential to Refuel the Industry

The Internet of Things or IoT is a network of smart sensors and analysis tools that enhance ongoing production processes by leveraging data. This revolutionary technology constitutes the present and shall dictate the future of the Oil and Gas Industry. The Internet of Things as a concept is always linked with sensors. The effective utilization of these sensors has ensured the introduction of real-time data analysis in the industry, and this has restructured the entirety of how the industry functions. With the onset of IoT in Oil and Gas, operators can collect important information from connected equipment to maximize productivity and profit: distributors can get accurate information on the level of containers and use this data to optimize the replacement and refilling of tanks to prevent shortages.

IOT in Oil and Gas

Need to implement IoT in Oil and Gas Industry

In its latest information technology report, Gartner has revealed that

53 percent of oil and gas companies have failed to implement IoT technology, and are not planning to do so.

This is a massive issue for the oil and gas industry, with billions of dollars’ worth of revenue stuck in uncommunicative plants. With the majority of companies yet to jump on the bandwagon, the real changes in IoT will occur in two places: with those companies at the forefront of the Fourth Industrial Revolution, and with those yet to be persuaded to commit to it. The Internet of Things (IoT) is the future of the oil and gas industry. This industry has been facing many challenges especially due to the recent drop in fuel prices (globally): largely attributed to the antiquated and inefficient approach that many companies take to maintain assets and collect data. The amicable implication of the concept of IoT in oil and gas industry, would massively increase efficiency and bolster the Return of Investment (RoI). Right from increasing efficiency, to eliminating downtime error and finally reducing Non-Productive Time or NPT, which happens to be one of the most extraneous sources of financial losses in the Oil and Gas Industry; IoT adds a lot of definite value to the industry. Amidst this backdrop, the relevance of IIOT companies has increased multifold.

Now, IoT has varying implications and benefits depending upon the part of the industry that we deal with. Explained below:


This sector loses out on billions of dollars every year due to Non-Productive Time (NPT); the requisite solution to this is: the implementation of IoT to plan shutdowns, minimize downtime and improve safety records for the refineries. A lot of deadly accidents take place while any task is carried out under this sector, these can be prevented by IoTs implementation; as it will help substitute manpower and also pre-empt any such situations beforehand.

Other opportunities for IoT in the Upstream sector:

Asset Tracking, Vehicle Monitoring, Remote Video, Machine Monitoring, Site Monitoring, Wellhead Monitoring, Security/Access Sensors, Lone Worker Tracking, Rig Monitoring and Tank Monitoring.


This sector deals with its everlasting issue of transporting variable volumes and grades of products from multiple locations to new-end user markets, and connecting pipeline networks, sensors, leak detection, alarms and emergency shutdowns to interact seamlessly.

IoT’s Solution: With the use of IoT, analysis and interpretation in real-time would significantly reduce some of the major risks that this sector of the industry deals with.

Other opportunities for IoT in this sector: Task Farm Monitoring, Field Crew Monitoring, Remote Video, Pipeline Monitoring, Terminal Access Control, Asset Tracking, Flow Meter Connectivity, Pipeline Monitoring, WellHead Monitoring and Cargo Shipping Monitoring.


Two of the main issues that this sector faces are: Refinery shutdowns, handling various grades of crude oil, and changing environmental regulations are pushing gross refining margins down to a bare minimum. Now, how can IoT be implemented to curb these? With the use of IoT, refineries can plan their shutdowns, minimize their downtime, and improve their safety records.

IOT in Oil and Gas

IIoT Oil and Gas: The Advantages

We’ve already seen the extent to which IoT in oil and gas can unlock revenue trapped in badly-utilized data, and ensure that efficiency increases by multi-folds. According to McKinsey, the total value that could be released in the next five years if all O&G companies make efforts to employ IoT is somewhere between four and 11 trillion US dollars. And this will just reinstate the revenue potential that is present in the industry. But trapped.

Oft-overlooked, HS&E i.e. Health, Safety and Environment can cause marginal financial losses to any organization – not counting the enormous human price of serious breaches of health and safety. Oil and gas is frequently referred to as the most “dangerous” industry to work in, and the remote nature of so many sites only exacerbates the risk to life. You can never expect a vouch for a guarantee for your life if you work in an oilfield. One major benefit of the IoT in oil and gas is that condition-based predictive maintenance or CBM functions can completely negate costly, high-risk inspection journeys –by simulating any and every sort of situation that might be a possibility in the operations pertaining to Oil and Gas. With hundreds of incidents around extraction sites every year, minimizing the human element as much as possible protects workers, those responsible for them, and the company coffers. Coupling the concepts of IoT and Condition Based Predictive Maintenance can change the fortunes of the industry, whilst saving money, time and most importantly: human lives.

The Bottom Line

IOT in Oil and Gas

Many of the greatest risks to both life and profits in oil and gas are time-dependent, but IoT can be used to form a system which is comparatively safer and can ensure more financial returns. The adoption of IoT in oil and gas will improve business efficiency, safety, CAPEX and OPEX. It’s an inevitable transformation – and it’s about time the Oil and Gas industry started endowing this technology and saved itself from getting left behind.

(The views and opinions expressed in this article do not necessarily reflect the views of Energy Dais.)


Shayantan Shivam Chakraborty

Currently pursuing a Bachelors in Petroleum Engineering, Shayantan is an ardent reader by day and a passionate writer by the night. He wishes to contribute to the academia, by emanating his comprehension of the Energy industry.

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Shayantan Shivam Chakraborty

Currently pursuing a Bachelors in Petroleum Engineering, Shayantan is an ardent reader by day and a passionate writer by the night. He wishes to contribute to the academia, by emanating his comprehension of the Energy industry.

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