Internet of Things (IoT) in the Oil and Gas Industry - 4 Specific Use Cases

The Internet of Things (IoT) revolution emerged around the turn of the century, first coined by Kevin Ashton as part of an RFID tracking project. Today IoT accounts for around $40 billion of market value, with roughly a quarter of businesses using IoT products. Asset-heavy industries such as oil and gas have particularly profited from the IoT boom.

How? There are many benefits to implementing industrial IoT in the oil and gas industry, including real-time monitoring, automation of manual tasks, and compliance with regulatory standards. Ultimately, oil and gas companies can expect a positive ROI (after the initial investment), thanks to a combination of reduced downtime, prevention of production loss, and increased productivity. 

Here are some of those IoT use cases and their benefits: 

  • Extend the lifespan of your Original Equipment Manufacturer (OEM) equipment

  • Detect anomalies for upstream operations, effectively and at scale

  • Detect hazardous gases before major events occur

  • Monitor storage tank levels to prevent spills and leaks

1. Extend the lifespan of your upstream OEM equipment. I.E. Drawworks and Top Drive systems

A lot of systems in the oil & gas industry, such as the drawworks control system or top drive system, are Original Equipment Manufacturer (OEM) systems. These predominantly proprietary systems offer operators a limited access to their control networks. Which means most of these systems don’t provide access to the kind of data you would need for maintenance or performance optimization purposes, especially for predictive maintenance

However, by installing additional sensors, such as vibration, temperature, and pressure sensors, directly onto the mechanical parts of your your drawworks or your top drive systems, operators can gather more comprehensive data. By combining this data with the existing system data, and using machine learning, operators can identify patterns and events that lead to increased wear and tear and potentially equipment failure. With this knowledge, operators can implement predictive maintenance measures to reduce the risk of machine failure.

As long as you don’t interfere with its operation, existing sensors, control systems or control network, you can usually add additional sensors, even wirelessly, to existing equipment, even if it’s OEM equipment. 

2. Detect anomalies for upstream operations, effectively and at scale

Monitoring low-productivity wells is a major challenge in upstream production and provides a great opportunity for internet of things in the oil and gas industry. The usual methods of using Programmable Logic Controllers (PLCs) and Supervisory Control and Data Acquisition (SCADA) systems for remote monitoring are not financially viable for low-productivity wells as these systems are expensive, with each part costing thousands of dollars. And those wells just don't generate much profit. 

Why remote monitoring with IoT is more effective and efficient

IoT-powered remote monitoring eliminates the need for both physical visits and individual well-checks, allowing operators to remotely collect near-real-time data from multiple wells simultaneously without any trips to the well. 

You see, we’re able to go a step further than remote access by setting up specific thresholds and alarms—essentially real-time monitoring at scale. Operators receive immediate notifications when there are deviations in production parameters which means they don’t need to constantly have eyes on the their wells. This enables them to take prompt action and make necessary adjustments to optimize resources at multiple wells at once. By adopting this proactive approach, potential issues can be identified early on, preventing them from turning into expensive complications. Ultimately, this ensures the seamless operation of upstream production activities.

3. Detect hazardous gases before major events occur

In remote locations with limited local monitoring, there is a genuine risk of dangerous gases spreading and causing harm. However, by installing gas sensors that can quickly detect the presence of these gases and raise alerts, proactive measures can be taken to prevent a more severe incident from happening.

Gas detection & condition-based alerts 

By deploying advanced gas sensors strategically throughout the site, the system can continuously monitor the air for the presence of harmful gases. As soon as any of these gases exceed a predefined safety threshold, the system triggers immediate alerts or work orders to the designated personnel. This notification ensures that swift action can be taken to mitigate the risk.

Upon receiving the alert, trained personnel equipped with proper safety gear can quickly respond to the site for inspection and necessary actions. By promptly addressing the gas release, they can prevent the spread of the hazardous gases, safeguarding the well site, workers, and surrounding areas from potential harm.

4. Monitor storage tank levels to prevent spills and leaks

In upstream operations, dealing with the extraction of oil, gas, and water at the same time brings its own difficulties. One particular challenge is the potential when storage tanks used to contain oil from production wells reach their upper limits. Without constant monitoring, these tanks can overflow, resulting in oil spilling onto the ground. The consequences of such spills can be significant and must be addressed promptly.

Monitor tank levels constantly 

To tackle these issues and prevent potential environmental hazards, the implementation of IoT technology proves invaluable. By installing sensors that monitor tank levels and detect the presence of harmful gases in the surrounding area, operators can gain real-time or near-real-time access to critical information. By using remote monitoring, events can be quickly identified, allowing for timely intervention.

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The ROI of Implementing IoT in the Oil and Gas Industry

If you ask the average person working in an industrial field how expensive IoT is, they’d probably answer that it’s high. While costs have decreased significantly in recent years, thanks to out-of-the-box solutions, the investment remains a significant factor in the decision to implement one of the use cases mentioned above. 

However, the ROI of those same investments almost always overshadows any original investment, in our experience. By using IoT technology, oil and gas companies can streamline their operations, reduce costs, and increase productivity—all of which provide positive ROI in the long term. Time and time again, the benefits vastly outweigh the detractions. 

For personalized consultation on how you can reap the benefits of  the internet of things in the oil and gas industry, let’s start a conversation

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