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How Critical is IoT for the Oil & Gas Industry?

 

July 07, 2021  |  By Steve Terry

 

With the introduction of smart devices, self-driven vehicles, neural engines, IIoT, and data-driven technologies, Digital Transformation drive has largely impacted the global economy. Though a tech-driven industrial revolution is yet to be witnessed, studies reveal a progressive demand amongst leaders to explore new and innovative technologies (Industry 4.0) to simplify and solve their critical processes.

Among the sectors adopting IoT technology, Energy (Oil & Gas and Power) industries lead, with 94% of companies actively integrating IoT technology into their eco-systems, and 26% of these IoT projects are pilot tested and are in the use phase.

Why Adopt IoT

With decreased oil prices, stringent emission norms, growing demand for green power generation, and the state of Covid-19, decision-makers are forced to implement data-driven technologies to lower the unit costs of oil production and ultimately gain higher returns on capital. Independent studies reveal that about 43% of O&G companies will implement workable IoT systems before 2024, paving ways for a stronger, leaner, and more durable O&G sector.

The primary reason for the Oil & Gas industry to adopt IoT is that the technology can enhance Asset management capabilities through Real-time or Cloud-based Predictive maintenance solutions, which are often regarded as complex and time-consuming manual tasks. In addition to PM solutions, Industrial IoT also enables efficient emission control methods, optimized operations, remote monitoring, workplace, and employee safety. The following depicts the priority of issues that decision-makers of Oil and Gas intend to solve using IoT:

  1. IT Security
  2. Asset and Predictive maintenance
  3. Emissions monitoring and reduction
  4. Infrastructure
  5. Employee safety
  6. Workplace safety
  7. E-Mobility
  8. Production optimization

Conventional Vs. Industrial IoT approach

Most oil production companies operate on a contract basis, and every second of oil production counts. Delay and downtime losses directly impact the profits, and in a majority of cases, sudden breakdown of critical equipment is the culprit. Therefore, managers are excessively dependent on condition-based maintenance (CBM) or Predictive Maintenance (PM) technologies to understand the performance and condition of Critical equipment.

However, CBM or PM approach has its limitations. They are used periodic maintenance of machine conditions and lack continuous data at various loads and conditions that are critical to determining predominant failure modes.
They also lack advanced alert systems necessary for human and equipment safety in an emergency or breakdown situation. Also, PM systems are complex and require skilled personnel to decode frequency-based data, often prone to errors and manipulated for immediate rewards. However, CBM or PM technologies provide an end-to-end maintenance solution to asset managers when integrated with IoT platforms, solving most of the conventional approach issues.

They assist engineers to monitor the condition of machines at in-accessible locations (such as mud pumps), determining the health of critical equipment such as engines (using Torsional or linear vibration technologies), and studying the condition of lube and hydraulic oils in real-time, and to determine their RUL (remaining useful life). Integrating process control sensors (such as pressure, flow, temperature, etc.) with IoT Gateways (Reekoh) enables owners to correlate with the CBM data and optimize machine performance with several parameters on a single dashboard that can securely be accessed from any part of the world. IoT also allows continuous data storage capability to optimize with trends, AI (Artificial Intelligence), and ML (Machine Learning).

Case Study: Demonstrating ROI for Industrial IoT Projects

Several Oil & Gas companies have successfully Pilot tested IoT Projects and have integrated them into their ecosystem. One such simple, single-sensor installation example of IoT-based Asset Maintenance (CBM or PM) activity is presented here to demonstrate the ROI (return on investment) from an IoT Integration project with Reekoh. The project objective was to extend the oil (engine lube) change interval from 1000 to 2000 running hours on an offshore floating rig platform using a sensor and an IoT-based continuous trend monitoring algorithm. Though laboratory tests confirmed that the oil is fit for use at 1000 Engine running hours, it was replaced every 1000 Running hours, irrespective of its quality, following the OEM (original equipment manufacturer) recommendations.

To extend the interval and ensure the quality of lube (as per ISO 4406), an oil health sensor was installed to monitor the quality parameters of the engine lube in real-time. The sensor’s RS485 output was integrated into an MQTT Broker (Reekoh), and data was transferred to a secure AWS Cloud platform. A dashboard was set up to plot graphs and provide real-time recommendations and alerts to the operator via Email and SMS to interpret the data. With the real-time oil quality data, the lube oil was extended up to 1500 Engine running hours on its first cycle, with lab reports validating the data accuracy at various intervals. On its second cycle, the lube was extended up to 2000 running hours, saving one full oil refill (800 Liters of lube) every two months. The project was scaled for all engines on the rig resulting in a half-million-dollar savings (direct savings) in a year, with an impressive ROI of eight (8) months. Post successful implementation, the system is permanently installed on the rigs, and the solution is scaled for various other offshore and marine platforms.

Advantages of Implementing IoT

IoT provides multiple business benefits for oil and gas companies. A few of them are:

  • Asset Maintenance using IoT-based PM and CBM: Linear vibration sensors, torsional vibration sensors, pressure sensors, flow sensors, temperature sensors, SCADA Systems, Customer output from machines can be integrated into IoT for remote asset monitoring with real-time alerts.
  • Pipeline monitoring for refineries: Remote flow control systems are configured to send alerts to a smartphone or PC to monitor process parameters.
  • GPS: GPS sensor integration to tugs and transport vessels to track location and delivery times and forecast and manage inventories on offshore platforms.
  • Risk mitigation: IoT systems assist in monitoring the drilling and mud extractions on a rig and ensure safe operations. In case of emergency, Annunciators or Sirens integrated can alert the operators, significantly reducing the risk of human injury or fatality.
  • Environmental impact: By optimizing the inventory, reducing the emissions and wastage (lube oil), IoT enables rig operators to reduce carbon footprint.

Integrating IoT with existing systems

Implementing IoT projects is critical for industries to remain competitive, but there are massive advantages to be gained by leveraging the data that already exists within active sites, systems, and infrastructure. Taking an approach of using integration to break down silos of information and technologies gives operations faster and greater ROI and time to value.

By leveraging existing data and integrating this with IoT and the IT layer of operations that drive business automation and decision making, operators can scale solutions more quickly and reduce implementation risk and cost.

Conclusion

Globally and across all oil and gas industries, IoT continues to enable companies to become more efficient, productive, and safe. Regardless of the field of implementation, IoT can ultimately help operators to optimize processes resulting in profits. Given that the decision-makers are keen on innovation and IoT implementation, the faster organizations adopt IoT, the quicker one can optimize systems and stay ahead of the competition. And, through training and educating employees on IoT and its advantages, organizations can foster a culture of adapting to new technologies and enabling smooth digital transition.

Reekoh is a leader in industrial OT/IT integration solutions and expertise across a wide range of industries, such as Oil & Gas, Manufacturing, Energy and more. Our platform, products and teams are built to help large organizations achieve agile integration of OT and IT data quickly, and to enable the successful adoption and scale of IIoT and digital transformation solutions.



Steve Terry is Reekoh’s Chief Commercial Officer