According to IBISWorld statistics, the Oil & Gas Industry is the 3rd largest industry in 2020 (based on revenue)i. As such, it is clear that innovation will go a long way to making it an even greater role-player in the world economy. Advancement in technology in the form of the Industrial Internet of Things (IIoT) will prove to be the game changer that makes it possible.
The integrated network that IIoT creates, in which large datasets are collected, processed, analysed, and utilised in real-time, is expected to have a significant impact on the Oil & Gas industry in the next decade. Many companies in the industry, however, are yet to adopt IIoT, often relying on legacy infrastructure that is quickly becoming untenable in staying competitive and profitable.
Below are five ways in which IIoT is expected revolutionise the Oil & Gas industry:
1. It will reduce time spent managing assets, leading to greater operational efficiency.
One of the greatest losses that the Oil & Gas industry suffers year-on-year is that of maintaining and managing assets. Predictive and Preventative maintenance is improved in heaps and bounds due to the implementation of IIoT in the industry.
One industry concern is that the input of those in the Baby Boomer generation, who were instrumental to the innovation of the 3rd Industrial Revolution, is becoming a rarity. Thus, older methods, which require very specific knowledge, are becoming untenable in what is now referred to as the 4th Industrial Revolution (4IR) or Industrie 4.0.
Newer technologies (such as IIoT) are becoming necessary for survival in a rapidly changing industry landscape where vital Big Data analytics are streamlined by the implementation of IIoT. In this sense, IIoT leads to asset and system optimisation, while quickly alerting business owners to issues that require their urgent attention. The end result is that more time can be spent focusing on the day-to-day business operations, and less time spent fretting about the next complication.
2. Global revenue will increase significantly.
The Oil & Gas industry constitutes around 3.8% of the global economy, which is a significant amount. According to projections by Oxford Economicsii, wide-scale adoption of IIoT in the Oil & Gas industry is expected to increase global GDP by 0.8% in the next 10 years, an increase which alone is expected to total close to $1 trillion.
However, if IIoT is not implemented, it does not bode well. Globally, oil prices remain low and profit margins have been tightening, which means that greater output is needed to achieve the same (or better) results as before. Price-cutting is not an effective long-term strategy for staying competitive. Those in the Oil & Gas industry will need to find ways of producing more output at lower costs to improve their profit margins and to remain in charge of their own destiny in the increasingly competitive industry.
3. Real-timedatawill significantly improve production output.
The Oil & Gas industry has been relying on Big Data for years to improve and innovate. The problem is that Big Data is becoming increasingly more intricate and voluminous. IIoT is vital for collecting data at a rapider rate, utilising all the information contained within it, and being able to utilise the prospected information in real–time.
Since IIoT produces real–time working information, even minor improvements in efficiency can have an immense impact. Readily usable information is critical for innovation in the industry (which results in reduced costs and increased profit). The quality and quantity of information is also improved through IIoT, which means that better informed decisions can be made on-the-go – often without human intervention. Thus, data analytics can lead to process automation, which in turn expedites production, and in turn leads to greater output.
The focus of IIoT is, after all, improved analytics. Increasingly complex (yet simple to use) sensors and computational systems are leading to more innovation all the time. So much so, that it is estimated that advances in technology (through the use of IIoT) can increase output by as much as 6-8%iii, all through eliminating inefficiencies and improving already-efficient processes. The addition of edge computing means that big datasets can be processed in large volumes at a decentralised level through the cloud.
4. The amount of safety risks will be slashed.
Safety concerns abound in the Oil & Gas industry, not only in the process of extracting natural resources, but also in its refining, transportation, and storage. Better data means a faster response-time to threats and dangers, greatly reducing losses when something goes wrong.
Perhaps more importantly, though, is that real-time Big Data analytics can ensure that potential problems are snuffed out long before they cause damage. This means that, in many instances, excessive revenue/product losses and danger to on-site workers can be avoided altogether.
Safety of physical and human assets are not the only concern, however. Newer technologies, in the form of integrated IIoT solutions, can minimise the risk to data, which in and of itself has great value and must be protected.
5. The industry’s environmental footprint will besubstantially diminished.
There are many obvious environmental benefits to the implementation of IIoT. Most of these benefits stem from the way that IIoT improves processes – leading to reduced resource wastage, less carbon emissions from travel, greater protection from possible disaster, etc.
With increased regulations and sanctions that force the industry to reduce its environmental footprint, IIoT may soon become a necessity to remain within permitted limits (whether by local or international standards). Not only does IIoT provide a clear benefit for the environment, but it can also lead to greater customer trust and approval, and provides leverage for a pricing strategy that gives you the competitive edge.
To ensure that you get the competitive edge that sets you apart in the Oil & Gas industry, be sure to contact Cyntech so we can discuss the next steps with you.
This is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)