Insights - Energy Dais

Towards Connected Future with Internet of Things in Oil and Gas Industry

The transformation is expected to occur in the coming future in the oil and gas industry through IoT. Our trillion dollar oil and gas industry is set to drift to a smarter and more efficient tomorrow. With platforms like Restrata being used by the companies, it would be safe to say that the industry has been one of the early adopters of IoT. The arrival of the Internet of Things in Oil and Gas industry has provided an effective medium to counter challenges of extracting and transporting oil and gas by being competitive all this while.

With the application of IoT, the concerns regarding data analytics across the industry are a thing of the past now. Companies have started investing heavily in IoT and are shifting towards smart Oil and Gas monitoring methods to keep up with this drastically changing industry landscape. Further,  IIoT oil and gas is helping them ramp up production and is providing assistance in predictive maintenance. 

The right time to invest in IoT is NOW

Smart oil and gas will be a long-evolving process. And IoT cannot dramatically change the industry overnight. This is why the companies should start investing in it from today. And if done at the right time, this wireless technology will put oil and gas companies at a unique advantage. The aspects which will be most affected by this technology are:

  • Monitoring of Oilfields
  • Wellhead Monitoring
  • Pipeline Monitoring
  • Refinery monitoring
  • Supply Chain Management
  • Cargo Shipping

Internet of Things in Oil and Gas industry will not only optimize operations but also cut down on waste and emissions. It will also cater a safer working environment. Investment in IoT and its successful implementation has been initiated by the top energy majors. Here’s a brief overview of the potential of the Internet of Things in Oil and Gas Industry. 

Investment in IoT by O&G Companies

In 2025, IoT will have a potential economic impact of $3.9 Tn-$11.1 Tn. – McKinsey Global Institute 

Gartner in one of its reports predicted that IoT will drive a global economic value-add of $1.9 Tn in 2020. Realising that significant potential value can be gained from this revolutionary technology, oil and gas companies have now started to assimilate how they can benefit from it. The start towards a connected future requires a lot of investment in the present. And a report by CBInsights on investment on Internet of Things in Oil and Gas industry gives us a clear picture of how ready the corporates of the industry are to adopt this new technology.

The key takeaways of the reports are:

  • Engie, the second most active investor on the Internet of Things in oil and gas, was the first company to invest in this technology. In 2015, it made a $115M Series D investment to Sigfox. Sigfox is a cellular connectivity provider for IoT and M2M.  
  • In 2016, Total Energy Ventures International supported seismic data acquisition company, Wireless Seismic and smart energy distribution software company AutoGrid Systems.
  • MAANA, an IoT analytics platform was financed by Chevron Technology Ventures, Saudi Aramco Energy Ventures, and Shell Technology Ventures in a $26M Series B.
  • The popularity of Internet of Things in Oil and Gas Industry is evident from the recent participation from Castrol innoVentures (BP) and Schlumberger Technology Investments to raise $60M Series B for Peleton Technology. It is a connected and automated vehicle technology company.
  • Foghorn Systems raised a $30M Series B from Saudi Aramco Energy Ventures. Foghorn is an edge computing platform for industrial and commercial IoT applications.  
Internet of Things in Oil and Gas Industry
Source: Link Labs

The report highlights significant investment in IoT by O&G companies which is majorly to increase efficiency and improve asset utilisation. Ageing assets and shortage of skilled labour from the past few years have been the primary drivers of inefficiency. With the arrival of the Internet of Things in Oil and Gas industry, the companies are eagerly looking forward to data-driven decision making and a safer working environment.

Amidst all the investments in IoT and the projected picture of a better future, what matters the most at the moment is the result. Result of how IoT is transforming the very basic operations of the industry, how much money can be saved by the companies, and to what extent can the assets be connected to provide improved data analytics. The case study given below will reflect upon all these aspects.

Case Study of Shell

Shell is the most active investor in the Internet of Things in Oil and Gas industry. In 2015, the company needed a technology to monitor its oil fields in some regions of Nigeria’s toughest terrain. Upland Consulting, a technology services firm came in to help Shell find a technology which can replace manual oilfield data collection in the Niger Delta. As Upland’s CEO describes, “The key criteria for selecting a solution were the technology’s ability to cover difficult terrain, power performance, and long-range transmission as well as network scalability, two-way communications and secure data transmission”.  

The energy major went on to evaluate both cellular and satellite but ended up choosing Random Phase Multiple Access Technology (RPMA). And, Ingenu Networks is the company which licenses the RPMA chipsets. This technology can transmit up to 450 square miles in the 2.4 GHz band.

This was a very rare occasion. During that period, the Internet of Things in Oil and Gas was being deployed fully to optimize upstream operations. The access points developed by Ingenu were almost the size of a shoebox which can be attached to cell towers, broadcast towers or utility poles. And as informed by Ingenu’s CEO, Shell just needed 8 access points to cover its oil field footprint in Nigeria. 

The energy firm only invested $87,000 which covered the cost of both – the equipment and its installation. Croatia’s Koncar Inem is the manufacturer of digital oil field modules deploying RPMA of Ingenu in Nigeria. These end point devices were the ones to be installed in the flow stations, manifolds and at wellheads. So, the flow of data was that endpoint communicated with the access point from where the data was transmitted to Shell’s offices. A year after deploying IoT, Shell saved $1 million by reducing site visits and expediting data collection.

IoT Bringing Real Change

 The story of Shell is just one case in point where deploying IoT helped in saving millions. There are many such cases which have resulted in optimized processes and enhanced efficiencies. It is a real innovation which is actually bringing change in the industry. 

We also have professionals who see the Internet of Things in Oil and Gas industry as a bane for the workforce. But what they should understand is that deploying successful IoT systems require skilled human environment. This infrastructure will provide us with accurate information in real-time but the industry will need a skilled workforce to analyse and interpret that data for better decision making. To make the Internet of Things in Oil and Gas industry risk proof and fail-safe, the most important requirement will be a human intervention at the right time. Therefore, IoT in an actual sense is bringing a real change in the industry by keeping a check on the operations and at the same time keeping the workforce on its toes by helping them become skilled.

IIoT oil and gas, Upstream, IoT, Investment in IoT, O&G companies, data analytics, industrial internet of things, digitization, Shell


Niharika Vyas

Project Engineer

With a background in Electrical Engineering, Niharika found her purpose in writing. She brings a fine blend of technical knowledge and writing skills on the table, for the oil and gas industry.

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Niharika Vyas

Project Engineer

With a background in Electrical Engineering, Niharika found her purpose in writing. She brings a fine blend of technical knowledge and writing skills on the table, for the oil and gas industry.

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