The Role of IoT in Oil and Gas industry Innovation

Key takeaways

• • Companies in the oil and gas industry stick to IoT for improved safety and better environmental impact.
  • Some benefits of the IoT in the oil and gas industry include greater operational efficiency, improved geo-hazard risk prevention, enhanced business agility, and streamlined inventory management.
  • Most use cases of IoT in the oil and gas industry are centered on production, pipeline monitoring, processing, and logistics.
  • Four key trends of IoT in the oil and gas industry include edge computing, focus on cybersecurity, greener environmental impact, and 5G connectivity.

Why do oil and gas companies resort to IoT tools?

IoT helps oil and gas companies manage and prevent risks. For example, if workers disregard safety protocols or carbon emissions at a company exceed predetermined limits, IoT can alert managers to it instantly.

Let’s take a closer look at two key reasons why companies choose IoT in the oil and gas industry.

Improved safety

Drilling, refining, and transporting volatile substances are all risky oil and gas operations that happen every day. IoT makes the entire process a lot safer for oil and gas industry workers by integrating:

Real-time monitoring. Sensors monitor pressure, temperature, and gas leaks. In case of an emergency, it can issue an alert to workers and prevent blowouts.

Wearables tracking. If the company is advanced enough, it can assign special wearables to each worker and monitor health parameters through it. The moment it detects an abnormal heart rate or other elevated fatigue level indicators, the IoT system can call for help right away.

Better environmental impact

Greenhouse gas emissions, spills, and toxic waste aren’t uncommon in the oil and gas industry. IoT helps companies reduce their environmental footprint by integrating things like oil spill detection and water waste management. In the latter case, IoT devices optimize water usage in hydraulic fracturing and monitor the safe disposal of wastewater.

Overall, IoT makes adhering to biosecurity guidelines easier. Not only does the company limit its harmful impact on the environment, but it also saves money that could be spent on lawyers, fees, and other legal services.

🌟 Purrweb’s case: Carbon accounting app   This app functions as an ecological consultant for different businesses, including oil and gas companies. The system can help comply with local regulations of any sector. The app allows users to calculate their CO₂ emissions. Then it sends this info in the form of a report outlining the cost of offsetting their carbon footprint. Users can find out what their carbon footprint is through a curated dashboard inside the app.

Benefits of IoT in the oil and gas industry

In short, they boil down to money and hazard prevention, given that the oil and gas industry is dangerous to work in. But it’s an oversimplification — let’s go over the four main ones:

Greater operational efficiency

Gas compressors and drilling rigs are difficult to use and expensive to maintain. If it’s not utilized optimally, the company can incur heavy losses. Luckily, IoT helps improve operational efficiency with automation. Instead of adjusting valves and calibrating equipment manually, IoT devices equipped with special sensors can do it automatically or tell workers where the problem is.

Improved geo-hazard risk monitoring

One of the main strengths of IoT devices is the ability to track geo-hazards precisely — for example, soil shifts. It can destabilize drilling sites or pipelines. Changes in pressure and moisture levels serve as indicators of a shift, and IoT sensors can detect it fairly well. Another hazard worthy of remote monitoring is harsh weather conditions.

Enhanced business agility

IoT improves communication between the manual labor and the business side of the company and makes critical decisions faster. All thanks to special tools:

Unified data platforms. IoT devices gather data from offshore rigs, refineries, and distribution centers into a single dashboard. There, managers can access key info and share it with other departments.

Remote collaboration. Given that the majority of the info is stored on a dashboard, managers don’t have to operate on-site to see it. There are fewer delays overall.

Faster response to market changes. If the oil prices suddenly increase, the company can easily ramp up production at sites equipped with IoT devices.

🌟 Purrweb’s case: JOURNY   The app was designed to streamline communication between different departments, primarily field teams and managers. The former can enjoy route optimizations, fill out dynamic forms for data collection, and schedule tasks. We redesigned the app and made sure it can be supported on both iOS and Android. The old version was Android-specific.

Streamlined inventory management

IoT devices are good tools for eliminating overstocking or excess waste. To improve asset tracking, IoT sensors track the location and status of mud pumps, blowout preventer components, valves, rotary tables, and other inventory.

IoT use-cases in production

These benefits are too hard to pass up, which is why IoT has been slowly becoming more widespread. According to Statista, the global revenue of the IoT market is set to gradually increase from 2024 to 2029 by $612.5 billion.

The oil and gas industry is being transformed by IoT alongside those niches, too. We collected several cases of IoT use in the oil and gas sector. From production and predictive maintenance to processing and delivery, read on to find out how IoT is revolutionizing the oil and gas market.

Seismic data collection

IoT sensors allow oil and gas sector researchers to analyze subsurface structures — this helps them locate oil and gas reserves. Special geophones and seismometers can help identify potential oil and gas reservoirs as well.

It also makes exploration cheaper. Traditional seismic surveys involve deploying teams and heavy equipment. If an oil company uses IoT equipment, it can collect data remotely. For example, it can use drones that scan seismic activity and upload it to in-house dashboards automatically.

Process monitoring

IoT tracks crude oil distillation and catalytic cracking, which helps prevent accidents and safeguard from hazards.

In the oil distillation process, the oil is heated to 600 °C, and there are many things that can go wrong. For example, if the temperature isn’t hot enough, excess waste doesn’t get burnt off — instead, it accumulates and damages equipment.

During this process, IoT devices track flow rates, pressure, and chemical composition of oil. This makes it easier to ensure the mixture boils properly and the impurities are pumped out.

🌟 Purrweb’s case: Koblik Group We adapted the CRM for Koblik Group, an agricultural machinery manufacturer, into a mobile version. Our system analyst contacted the client — together, they settled on three sections: calendar, partners, and interests. Development began with project design. Daily communication helped us avoid issues and expedite the progress, and in the end, we completed the project in just two months. Our system analyst contacted the client — together, they settled on three sections: calendar, partners, and interests.

Drilling optimization

Where to drill, when to drill, how to drill? IoT devices can help oil company managers answer these questions, thanks to predictive analytics. The oil company can get access to tons of data about the exploration site: seismic readings, weather conditions, soil composition, and so on.

Remote monitoring of drilling parameters

We discussed this briefly in other paragraphs, but it’s still worthy of another mention. IoT sensors excel at tracking pressure levels, fluid flow rates, temperature, and other parameters like torque and rotary speed. It allows companies to get real-time updates about oil rigs and drills, which can prevent accidents before they happen.

IoT use-cases in pipeline monitoring

Pipelines represent one of the most vulnerable components of the oil and gas industry. While essential, they are susceptible to leaks and other malfunctions. Here’s how IoT can help address these challenges.

Performance analysis

IoT sensors monitor pipeline performance by identifying bottlenecks. For example, if sensors detect uneven flow rates, it can indicate partial blockages or valve malfunctions.

This data can provide insights into seasonal variations in pipeline performance. Say an oil company is using IoT sensors to monitor pressure in a pipeline transporting crude oil, for example — when the sensors detect a significant pressure drop, operators can pinpoint and resolve the issue.

Predictive maintenance

A key strength of IoT in the oil and gas industry is avoiding malfunctions and detecting early signs of wear and failure. It can do that thanks to special monitoring tools, algorithms, and alerts.

Advanced remote equipment monitoring. Are pumps, compressors, and valves working as intended, or are there some abnormal vibrations and temperature fluctuations? IoT sensors track data like this without fail, so operators can schedule maintenance long before it fails.

Predictive algorithm usage. This feature is great for calculating the remaining lifespan of components. Varying pressure levels, corrosion, and other similar factors can serve as signs of an impending malfunction.

🌟 Purrweb’s case: Shockers   Not only does this app have continuous data streaming capabilities, but also predictive maintenance. Users can check out an advanced dashboard with crucial stats inside the app, such as how many shots were fired from a manufacturer’s stun gun. It’s a feature-rich app that also monitors important data via IoT sensors. For example, when the trigger was pulled, the duration of the shot, and so on.

Automated alerts. If the IoT system detects weird vibration levels on pipeline pumps, it can immediately send a notification to the company’s managers. From then on, they can take action to avoid costly repairs or an unexpected breakdown.

Pipeline integrity, corrosion, and leak monitoring

A company in the oil and gas sector could adopt special IoT equipment designed to track the structural health of pipelines — and notify the owner of potential issues. Acoustic and ultrasonic sensors can identify leaks by sound anomalies or pressure changes in the pipeline. For other IoT devices, changes in moisture levels, pH, and temperature are signs of corrosion.

There are even fiber-optic sensors embedded along pipelines that can identify strain, temperature changes, or unusual soil movement. They’re especially handy for inspecting subsea pipelines that are hard, if not impossible, to reach.

IoT use-cases in processing

Generally speaking, IoT can help reduce costs in the downstream sector of the oil and gas industry — from refining operational efficiency to extending equipment lifespan.

Advanced analytics

Data collected by IoT sensors can be fed into advanced analytics platforms for one goal — to optimize oil and gas operations in two ways:

Removing things like excessive energy consumption, downtime, feedstock quality variability, and so on can help with improving operational efficiency. Operators can take a look at an in-house dashboard, see these issues at a glance, and begin planning on how to improve yield.

For example, inefficient supply management can be costly. Both raw materials and finished diesel can turn into excess stock or get mixed up if not lost. IoT sensors can pick this data up and let operators see a clear trend that needs fixing.

🌟 Purrweb’s case: Fintarget This is an app for brokers and investors that provides tools for searching and placing investment strategies. It allows users to generate passive income. A good example of advanced analytics here is the dashboard. It has everything the user could possibly need: recent transactions, portfolio composition, and more. A dashboard with statistics and a knowledge base. Dashboard with advanced analytics aside, this app also has an investment account and a financial transactions feature.

Digital twin generation

IoT systems can help create digital twins for processing plants. This lets oil and gas sector operators simulate and test processes in a virtual environment.

Let’s take a petrochemical plant as an example:

1. Firstly, the plant installs IoT sensors along with the design software. The former tracks yield and feedstock composition and the latter allows operators to actually simulate a processing plant.
2. After that, the engineers launch a real-time model of a refinery unit. It has different features that can be altered by users: operating temperatures, pressure, energy levels, and so on.
3. Finally, operators test failure scenarios to identify vulnerabilities. Once they do, they adjust refining parameters in real life to maximize good yield and improve operational efficiency.

Equipment lifespan extension

One of the superpowers of IoT in the oil and gas industry is tracking equipment health. Predictive maintenance aside, it can help companies maximize the lifespan of critical assets by detecting early signs of wear in advance. Vibration sensors, thermal cameras, and pressure monitors identify damage in processing equipment before it gets worse.

IoT use-cases in logistics and distribution

Production and operational efficiency aside, if we’re talking about the oil and gas industry, IoT can help when it comes to logistics, too.

Asset location tracking

Thanks to IoT sensors, maintaining the visibility of tankers, pipelines, and storage tanks isn’t an issue.

Companies use GPS tracking to monitor the location of oil tankers and gas shipments. This helps streamline transportation routes and avoid delays caused by traffic or poor weather.

IoT also enables geofencing. It lets businesses mark the boundaries of their warehouse digitally.

Ever heard of Apple AirTags? Geofencing works similarly, except it’s built into equipment. Unlike AirTags, thieves can’t remove it, so you’ll always know where your things are.

Say the oil company is tracking expensive drilling equipment. If it suddenly leaves the warehouse’s premises in the middle of the night, the company manager can instantly receive an alert and promptly notify local law enforcement.

🌟 Purrweb’s case: Сargo This is an app for delivery drivers. They can use it to scan items, map out a route based on order priority, and more. We focused on the frontend development while the in-house team handled the backend. Development started out slowly, and there were challenges with bug fixes. Despite this, we successfully launched the app on time. Now, this white-label app has become one of our client’s most popular solutions. Cargo also utilizes GPS, which can help customers check if their goods are on the way.

Efficient billing systems

Payments have become much less erratic and more transparent with IoT. The billing process owes it to automated data collection.

Some customers can be difficult or threaten legal action over pricing. Luckily, smart meters and flow sensors installed at delivery points can measure the precise amount of oil and gas delivered.

🌟 Purrweb’s case: Vendify   This is an app for smart vending machines that sell refrigerated food. The client scans a QR code on a Vendify fridge to access produce. Once they get the desired goods, the fridge calculates the total cost and processes the payment. When it came to IoT development, this app wasn’t our first rodeo. So, we finished the MVP in just six weeks. Our team designed the app from scratch and built the entire frontend ourselves.

5 most common hurdles business owners face trying to implement IoT

The oil and gas industry isn’t just a bed of roses. While IoT makes things easier, its integration can present its own set of challenges.

1. Data security issues

🤔 Challenge. IoT devices collect a lot of sensitive operational and strategic data. Because of this, systems with IoT integrations become prime targets for cyberattacks. Hackers can exploit vulnerabilities to disrupt work processes, steal proprietary information, and even sabotage equipment.

✅ Solution. Companies should implement end-to-end encryption for data transmission and authentication protocols. Regular cybersecurity audits, network segmentation, and specialized threat detection systems can prevent unauthorized access.

2. Regulatory compliance

🤔 Challenge. Oil and gas companies must adhere to strict regulations regarding environmental impact, data storage, and workplace safety. If the IoT system fails to comply, the business will have no choice but to deal with fines, shutdowns, reputational damage, and other problems.

✅ Solution. Businesses should design IoT systems that comply with local and international regulations, like GDPR for data protection and EPA standards for environmental monitoring. Partnering with compliance experts during design is a good option.

3. Integration with outdated legacy systems

🤔 Challenge. Legacy systems can be called “the bane of oil companies’ existence” — they’re often completely incompatible with modern IoT solutions. Data silos and development delays are common in this case.

✅ Solution. APIs can help bridge the gap between legacy systems and IoT platforms. Gradually updating the system can help companies modernize without stopping crucial working processes.

4. Data overload

🤔 Challenge. IoT sensors capture a ton of data in the oil and gas industry. Most of it is important, but it’s easy to become overwhelmed without proper data management. In the end, key info is lost in the sea of data that’s no longer relevant.

✅ Solution. AI and machine learning can help with filtering data. If the company has an internal dashboard, it can help with data overload, too. Instead of collecting data personally from every single device, a dashboard could pick the most critical info and display it in one convenient place.

5. Skilled talent shortage

🤔 Challenge. Finding developers who are specialized in sensor deployment, network management, and data analytics is tough. The search for the right development team slows down projects overall.

✅ Solution. If the company can’t find decent developers, it could invest in employee training programs to upskill its existing workforce in IoT technologies. Another option is teaming up with technology providers and consulting firms.

3 future trends of IoT in the oil and gas industry

What’s going to happen to the oil and gas sector in the future? We have some ideas:

Edge computing

Processing the entire swathes of data generated by drilling equipment can damage sensors, overwhelm business networks, and increase technology costs by a wide margin. Edge computing makes the process more productive and allows intelligent sensors to work as intended — this way, it keeps workers relying on them safe.

Imagine an IoT solution that tracks the temperature inside a reactor. Without edge computing, it could record minute temperature fluctuations 24 hours per day. The majority of this data is irrelevant. With edge computing, the sensor sends out only relevant markings, i.e. significant temperature spikes during refining. In the end, it makes data processing quicker and cheaper.

Focus on cybersecurity

As IoT in the oil and gas industry becomes more widespread, so does the emphasis on protecting connected systems from cyber threats. Businesses are deploying AI-driven threat detection, encrypted communication protocols, and other safeguarding IoT technologies.

Because oil companies seek to protect their data, startups that offer solutions in this space are likely to attract investments.

5G connectivity

5G networks offer high-speed, low-latency communication. Essentially, it’s going to make remote monitoring of the equipment’s condition more seamless. IoT devices connected to 5G can quickly transmit data about drilling sites to in-house dashboards or other IoT systems. The same goes for seismic data, which can improve drilling precision.

➡️ If you want to launch your own IoT solution in the oil and gas industry, contact us. We can help develop an IoT solution in any niche — from the oil and gas industry to the automotive and healthcare sectors. Fill in the form below and get a free project estimation in 48 hours.

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