ENERGY "Internet of Things" Could be a Savior Oil Industry Seeks as it Contends with Low Prices

Oil and gas companies, which are grappling with an intense battle for customers amid a supply glut and stressed prices, are increasingly looking for ways to improve efficiency and reliability of their assets to gain a competitive edge. One area of rising investment is in the confluence of technology that allows greater communication and integration of different devices and sensors, the so-called Internet of Things (IoT), a promising disruptor that can allow producers to keep wells flowing and refineries running at a pace that wasn't possible only a few years ago.
IoT has captured the imagination of consumer-device manufacturers, from refrigerators that can automatically restock favorite foods to cars that communicate with other vehicles and road infrastructure. Lower costs of sensors and the ability to transfer and process growing amounts of data is enabling the shift to greater connectivity for both consumer and industrial applications. In the oil and gas sector, a critical industry that’s generally resistant to chasing the latest fads, the adoption has been explosive. 

Companies are rushing to create cloud services that connect and integrate wells with other equipment in effort to optimize energy consumption, increase reliability, and allow for condition-based maintenance that helps producers maximize returns and maintain continuous output.

This is happening as a result of the growing number of devices with cellular or satellite connectivity deployed in oil and gas applications around the world, which was 423,000 at the end of 2013, according to Berg insight, an analyst firm focused on the machine-to-machine market. Berg estimates that number will rise by 21.4 percent per year to 1.12 million by 2018. All those devices churn out peta-bytes (millions of gigabytes) of data that has to be analyzed and shared on cloud systems, and protected from cyber risks. The applications are almost limitless, from drones that can inspect remote operations to wearable devices that track workers and foster better collaboration.