Proving the Business Case for the Internet of Things

Cellular and satellite M2M devices growing at CAGR of 20% in oil and gas, says Berg

Steve Rogerson
August 25, 2015
The number of devices featuring cellular or satellite connectivity deployed in oil and gas applications worldwide is growing at a compound annual growth rate (CAGR) of 20.1 per cent, according to a research report from analyst Berg Insight. The number was 0.5 million at the end of 2014 and is expected to reach 1.25 million units by 2019.
The split between cellular and satellite based M2M devices at the end of the forecast period will be 0.99 million units and 0.27 million units, respectively.
The oil and gas industry is characterised by remote and inaccessible facilities where wireless communications in many cases are 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 upstream segment.
Wireless M2M products have become increasingly popular in oil and 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 and 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 and gas, and energy producers in the region were particularly affected by the price drops that resulted in halted investments. This change in the market has however led to an increased focus on cost savings and efficiency.
Svanberg said that new technology with a demonstrated high RoI was prioritised, especially when combined with something-as-a-service business models that reduced the initial investment. Automation, remote control and monitoring are extra important to make it cost effective to extract, transport and distribute unconventional resources such as shale gas and tight oil. 
Major M2M companies, oil and gas M2M specialists and global industrial technology companies are active on the wireless M2M application market in the oil and gas industry. Sierra Wireless, Digi International, Orbcomm and Numerex are major M2M players that deliver to a wide range of industries including oil and gas.
FreeWave Technologies is an important vendor of M2M private radio to the North American upstream and midstream oil and gas markets. Pason Systems and Zedi are Canadian based companies that are major vendors of specialised field instrumentation, equipment, services and M2M products for the upstream and midstream segments.
Critical Control, Elecsys, ZTR Control Systems, ELynx Technologies, Willowglen Systems, Oleumtech, AMCi Wireless, DataOnline and American Innovation are providers of specialised wireless M2M products for remote control, monitoring and automation in oil and gas. Tanklink, ISA, Sensile Technologies, Silentsoft, Powelectrics and Silicon Controls are major vendors of remote monitoring equipment for storage tanks in the downstream segment.
Other important players are global technology and automation companies. Emerson, Siemens, General Electric, Schneider Electric, Honeywell, ABB and Rockwell Automation are all major providers of wireless control to the oil and gas industry.