How Connectivity Resets the Oil and Gas Digital Transformation Agenda

The oil and gas industry has a rich history of technological innovation. Today, the industry is undergoing information technology (IT) and operational technology (OT) convergence at a rapid speed.?

For oil and gas companies looking to transform their operations—from exploration right through to the customer—the focus is shifting to connectivity. It’s leveraging the Internet of Things (IoT), advanced process automation, automated surveillance, Big Data, and artificial intelligence (AI) technologies. This shift ensures that essential operations and processes are as agile and efficient as possible to respond to changing market dynamics.

The Benefits of Transformation for Oil and Gas

Fundamentally?transforming oil and gas operations ?and exploration via digitally-interconnected processes could significantly increase flexibility and enable integration with well data and other technical domains across entire systems. A November 2020 study by McKinsey & Company revealed that implementing advanced connectivity to enhance drilling and production throughput as well as improve field operations and maintenance could add up to $250 billion of value to the industry’s upstream operations by 2030.??????????????????????????

Given the enormous potential of connectivity in uniting an enterprise around a shared digital transformation vision and workforce collaboration, it’s crucial for?oil and gas companies ?to understand the different types of connectivity applications available today, their current use and how they may evolve.?

Today’s Connectivity in the Oil and Gas Industry

Many firms in the industry now use connectivity to support their rule-based methods and computational platforms to enhance operations and deliver increased value. These technologies range from intelligent, internet-connected devices that collect and analyze data in real-time from different sources (i.e., support and enhance connectivity) to those that provide backhaul connectivity (i.e., link an access node to the core network or the global Internet).?

Here are six existing and?emerging frontier connectivity technologies ?and value propositions that can unlock new capabilities as the oil and gas industry builds portfolio resilience through cost and carbon zero-basing to minimize the impact of volatility on competitiveness.

1. Radio-frequency identification (RFID)/Bluetooth. These are IoT network protocols that connect devices over the network. They’re designed to provide short-range, low-power, low-cost, and wireless data transmission between electronic devices. Examples are systems that use radio waves (RFID) to exchange small data fragments without high power and memory by means of smart wearables, smartphones, or other mobile devices. RFID and Bluetooth technology have ease of usage and top the list of IoT device connectivity protocols. An example of a use case in the oil and gas industry would be a system that automatically permits cross-functional users to interact and see materials as they flow across the supply chain, thus improving transparency and proactive management.

2. LPWAN IoT Applications.?Low power, longer range and long battery life protocol—also known as LPWAN IoT solutions—including NB-IoT, LTE-M, LoRa, Sigfox, RPMA, etc.—have witnessed significant growth in the oil and gas industry. Such applications can detect signals below the set noise level, connect battery-operated systems wirelessly to the Internet, and support private or public network deployment models. For example, firms can use Sigfox’s IoT connectivity to remotely monitor critical tank levels and operations, thereby eliminating run-outs and improving resource planning and route optimization.?

Predictive machinery and schedule maintenance to minimize costly production downtime, monitoring multi-level energy consumption to improve energy efficiency, and real-time tracking of workers’ health and safety parameters such as emergency conditions like pulse or fall detection distress, and air quality or gas concentration levels in endangered zones, also fall into this category of use cases of LPWAN IoT protocol.?

These remote monitoring, smart metering, and management of previously infeasible industrial locations by LPWAN applications produce reliable, actionable data to combat these brownfield challenges across all levels of the oil and gas supply chain. That said, it’s important to clarify that existing LPWAN applications operate in both the licensed (e.g., LTE-M and NB-IoT) and unlicensed (e.g., Sigfox, RPMA, MIOTY, LoRaWAN, etc.) spectrum with varying degrees of performance, security, quality of service, mobility support, module cost, and scalability outcomes.

3. Fiber (DOCSIS 3.x). Fiber optic connectivity is best understood as a key component of network expansion, enhanced safety, and improved productivity, allowing oil and gas companies to leverage the advantages offered by fiber to increase operational performance and reliability. They serve as links for data, control, and sensing about environmental conditions such as distributed temperature and strain sensing and monitoring, oil reserve levels, and equipment performance. Put simply, fiber optic connectivity can be installed in harsh environments at great pressure, depth, and temperature for long periods and holds substantial downhole application in oil and gas wells for environmental monitoring of geologic operations.

4. Wi-Fi 6 Technology. While Wi-Fi (IEEE 802.11ac) has been pervasive in both enterprise and residential settings, Wi-Fi 6 (IEEE 802.11ax) is the next-generation internet connectivity that supports faster downloads and upload speeds, longer battery life, reduced data latency, and improved security necessary for machine-to-machine applications in industrial environments. Wi-Fi 6 also brings significant power efficiency improvements to the oil and gas industry.?

At 9.6 Gbps, Wi-Fi 6 provides network upgrades that boost the speeds for many more end devices. According to Guidehouse Insights, global investment in Wi-Fi 6 infrastructure in the industrial segments will increase from US$1.8 billion in 2021 to US$7.1 billion in 2030 at a compound annual growth rate of about 17%. As such, Wi-Fi 6 has the potential to support numerous Industrial Internet of Things (IIoT) operations, digital picking, asset location tracking, among other use cases in the oil and gas industry where Wi-Fi was historically deemed unsuitable due to harsh operational environments. In mines or at oil and gas well pads, automated control of vehicles at mines, documenting repair, and maintaining equipment and location applications of field workers for safety are few examples of use cases that Wi-Fi 6 connectivity can support.?

Vendors which support the oil and gas industry to leverage Wi-Fi 6 access points as gateways by simplifying connecting and managing remote gas turbines, also provide analytics and assurance powered by AI and machine learning for easy troubleshooting and management of their wireless networks.

5. 5G Technology.?5G digital technology consists of a mix of low-, mid-, and high-band millimeter wave (mmWave) spectrum. The major U.S. wireless companies all have plans to build out 5G infrastructure to support their customers.?

High-band or mmWave 5G connection is super fast (20-26 GHz) and has the most improved latency, although most of the debate about 5G today focuses on mid-band or low-band connectivity. As oil and gas companies become more sophisticated in their use of low-latency commercial and private 5G networks, this automation will be defined by the expansion and evolution of the existing 5G spectrum, like low- to mid- to high- band 5G networks, taking humans out of the loop entirely in certain decisions.?

With repetitive, high-speed decisions, 5G is expected to drive Industry 4.0 adoption in oil and gas exploration. For instance, use cases like higher efficiencies and reduced costs, productive leveraging of oil and gas operational data coming off equipment on a millisecond basis, and richer communication with field workers enabling firms to move more significant amounts of data more quickly.?

With these capabilities, the oil and gas firms should create a unified ‘network of networks’, connecting a vast array of new connected 5G devices, existing 4G connected devices, skills, knowledge, and experience to sustainably develop and integrate hydrocarbon resources into other sectors energy and chemical (electric power), transportation and shipping (rail, air, merchant marine), finance and banking, information and telecommunications, water, etc. It enables a unified?5G infrastructure ?oil and gas service market where the greatest returns from connectivity will be realized.

6. Low-Earth Orbit Satellite Constellation

Like high-band 5G, low-earth orbit (LEO) satellite constellation is the newest frontier connectivity. These frontier technologies provide improved speed, ultralow latency, efficiency, and high-quality coverage taking existing use cases in the oil and gas industry to the next level.?

Oil and gas firms looking to take advantage of AI, IoT, machine learning and enhance their digital capabilities will need to provide high-quality connectivity for their connected devices no matter where they are located. The network must have enough bandwidth to handle large volumes of data and high-performance levels to support real-time applications.?

Advanced and frontier connectivity like the LEO constellation will enable new capabilities in the oil and gas domain, increasing intelligent mobility systems and providing ubiquitous coverage to remote locations where fiber or cellular tower is impractical.?

However, the business case for commercializing LEO technology remains uncertain. New and existing use cases—such as preventive equipment maintenance, improved navigation, automated guided vehicles in mines and oil and gas well pads, logistics, high-quality connectivity to remote oil fields (offshore and onshore), and disaster management—are applications that oil and gas companies can leverage if LEO satellite constellation companies, like SpaceX’s Starlink, OneWeb and Telesat that have launched test satellites, realize their full potential. Against this backdrop, the current challenge for LEO operators is in overcoming technical barriers and economics related to business models and upfront CapEx.

Device Integration and Strategic Partnerships Are Required

Bringing reliable, secure, and high-quality connectivity to oil and gas companies demands careful integration of critical devices in the field (i.e., data from drilling pumps, valves, equipment), leveraging collaboration tools to connect field personnel with headquarters, and attracting and retaining qualified personnel so that the technologies augment people’s skills. For instance, while many oil and gas companies use intuitive, unified communications services for voice, chat, and collaboration, thus enabling crew members to communicate with family, friends, and onshore colleagues, less reliable and insecure connectivity can exasperate users.?

As oil and gas companies adopt sophisticated and integrated connectivity technologies, some questions and uncertainties arise that require consideration. New business models are needed to enable connectivity providers to sustain the necessary capital investment, in particular, forging long-term sustainable partnerships to facilitate network sharing to reduce costs of 5G deployment.?

Finally, oil and gas companies must transition to low-carbon businesses by shifting investments, operations, and products. That’s the main issue at the top of customers’ minds and where we expect to see most margin growth. Recent advances in stand-alone task automation AI applications supported by high-quality connectivity show that this objective can be achieved in various areas: detecting and preventing methane leakage from natural gas pipelines and compressor stations, improving CO? sequestration, real-time gathering and analyzing of data from oil wells to provide instant insights and solutions, remote inspection of offshore rigs and pipelines in difficult to access locations, and assessing potential risks of new projects before they are implemented.

While oil and gas companies may be skittish about?cybersecurity ?as they deploy IoT technologies across the value chain at an unprecedented rate, this is beginning to change. In general, companies across industries have shown a willingness to build their private networks, and partner with traditional telecommunication operators to provide a secure and reliable backbone of connectivity architecture.?

Thus, the key for the oil and gas companies as they expand their digital intelligence and reach of high-quality connectivity is to pursue ecosystem partnerships with commercial and private providers to ensure that their security and privacy controls are transparent, that they reprioritize building their cyber defenses, and that their customers get fair value from the firm’s investment in these mission-critical IoT and high-quality connectivity technologies.

This post was sponsored by?AT&T Business , but the opinions are my own and don’t necessarily represent AT&T Business’s positions or strategies.