Perspectives on the Industrial Internet of Things

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Talking M2M in Oil and Gas with Berg Insight | @ThingsExpo #IoT

The oil and gas industry is characterized by remote and inaccessible facilities

This post was written with the help of Johan Svanberg, senior analyst at Berg Insight. Svanberg holds a Masters degree from Chalmers University of Technology. He joined Berg Insight in 2007 and his areas of expertise include embedded connectivity, M2M/IoT markets and mobile applications.

According to a new research report from the analyst firm Berg Insight, the installed base of wireless M2M devices in the oil and gas industry is forecasted to grow at a compound annual growth rate of 20.1 percent. We caught up with Johan Svanberg from Berg Insight to discuss this report that investigates the worldwide market for wireless M2M applications in the oil and gas industry.

Overview
The oil and gas industry is characterized by remote and inaccessible facilities where wireless communication in many cases is the only viable option for transferring M2M data. Pipeline monitoring and tank monitoring are the top two M2M applications in the midstream and downstream segments while on-shore well field equipment is the most common wireless application in the oil & gas upstream segment. Wireless M2M solutions have become increasingly popular in oil & gas applications in the past few years. The main drivers for adoption are safety and environmental concerns, regulatory compliance and demand for improved operational efficiency. “In 2014, M2M solutions in the oil & gas market experienced very healthy growth levels before slowing down at the end of the year when oil prices reached half of previous levels”, said Johan Svanberg, Senior Analyst, Berg Insight.

North America is the leading region for wireless M2M in oil & gas, and energy producers in the region were particularly affected by the price drops, which resulted in halted investments. This change in the market, however, has led to an increased focus on cost savings and operational efficiency. He adds that “new technology and solutions with a demonstrated high ROI are prioritized, especially when combined with Solution-as-a-Service (SaaS) business models, which minimize the initial investment.” Automation, remote control and monitoring are even more important, in order to make it cost effective to extract, transport and distribute unconventional resources such as shale gas and tight oil.

How Does Berg Insight Categorize M2M, SCADA and IIoT?
M2M is an abbreviation for machine-to-machine, or technology that supports wired or wireless communication between devices. M2M technology has evolved from telemetry which is a technology that allows the remote measurement and reporting of information of interest to the system operator.

Supervisory Control and Data Acquisition (SCADA) systems are centralized systems that utilize telemetry to monitor and control remote facilities. SCADA, telemetry and M2M solutions can be found throughout the oil & gas value chain including applications such as drill and well monitoring, fiscal metering and pipeline monitoring.

Today, M2M and telemetry are integral parts of the broader term Industrial Internet of Things (IIoT). The oil & gas industry is characterized by remote and inaccessible facilities where wireless communication in many cases is the only viable option for transferring data. Wireless technologies such as private radio, cellular and satellite communication can provide ubiquitous online connectivity at reasonable cost and deliver very high performance, as well as excellent availability. All of these components combined enable the delivery of operations management, equipment management and regulatory compliance applications linking remote equipment and enterprise IT systems.

What Are the Key Findings?
Berg Insight estimates that shipments of oil and gas M2M devices featuring cellular or satellite communication capabilities reached 0.12 million units worldwide in 2014. Growing at a compound annual growth rate of 21.0 percent, shipments are expected to reach 0.30 million in 2019. Compound annual growth rates for cellular and satellite based devices will be 21.1 percent and 20.6 percent respectively during the same period. The installed base of oil & gas M2M devices is forecasted to grow at a compound annual growth rate of 20.1 percent from 0.5 million units at the end of 2014 to 1.25 million units by 2019. The installed base of cellular and satellite based M2M devices in 2019 are forecasted to be 0.99 million units and 0.27 million units respectively. Berg Insight anticipates that pipeline monitoring and tank monitoring will be the top M2M applications in the oil & gas industry. On-shore well field equipment monitoring will be the most common wireless application in the upstream segment.

To download the full report, visit: http://www.berginsight.com/ShowReport.aspx?m_m=3&id=210 or be sure to see the report summary here: http://www.berginsight.com/ReportPDF/ProductSheet/bi-oilandgas3-ps.pdf.

The post Talking M2M in Oil & Gas with Berg Insight appeared first on FreeWave WaveLengths.

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More Stories By Scott Allen

Scott is an executive leader with more than 25 years of experience in product lifecycle management, product marketing, business development, and technology deployment. He offers a unique blend of start-up aggressiveness and established company executive leadership, with expertise in product delivery, demand generation, and global market expansion. As CMO of FreeWave, Scott is responsible for product life cycle/management, GTM execution, demand generation, and brand creation/expansion strategies.

Prior to joining FreeWave, Scott held executive management positions at Fluke Networks (a Danaher Company), Network Associates (McAfee), and several start-ups including Mazu Networks and NEXVU Business Solutions. Scott earned his BA in Computer Information Systems from Weber University.