Proving the Business Case for the Internet of Things

Wireless IoT devices in oil and gas industry to hit 1.9m by 2023

Steve Rogerson
April 16, 2019
 
The installed base of wireless IoT devices in the oil and gas industry reached 1.3 million in 2018, according to analyst firm Berg Insight. Growing at a compound annual growth rate (CAGR) of 6.8 per cent, this number is expected to reach 1.9 million units by 2023.
 
Remote monitoring of tanks and industrial equipment in the midstream and downstream sectors comprises the most common applications for wireless products in the oil and gas industry. Berg expects that shipments in the upstream sector will grow faster, although from a much smaller base, as cellular communications become an increasingly viable alternative to proprietary radio due to improved 4G LTE coverage in North America and broader support from the industry.
 
While the market has been affected by the decrease in oil prices in recent years, significant developments have taken place in regard to the industry landscape and technological advances. Major automation vendors such as Emerson, Siemens, Schneider Electric, Yokogawa, Honeywell and ABB are investing heavily in the development of software to support use cases surrounding predictive analytics and digital twins.
 
Recent developments include Rockwell Automation’s joint venture agreement with the major oilfield service company Schlumberger to create Sensia, an integrated automation provider in the oil and gas industry.
 
On the communications side, several initiatives have been launched to promote the adoption of cellular technologies in the utilities industry, primarily in the USA. In early 2019, cellular device providers, including Sierra Wireless, Cisco, MultiTech Systems, GE and Encore Networks together with spectrum licensees and utilities formed the Utility Broadband Alliance (UBBA) to advance the development of private LTE networks for critical infrastructure industries.
 
Products for remote monitoring of assets such as wellheads, storage tanks and pipeline infrastructure are offered by major industrial automation vendors, as well as a large number of specialised providers.
 
“Key consolidators in the market for remote monitoring are the private equity held companies Quorum Software and DataOnline that have acquired six and three businesses respectively between 2015 and 2019,” said Fredrik Stalbrand, IoT analyst at Berg Insight.
 
He mentions recent deals such as Quorum’s acquisitions of the Coastal Flow Measurement family of companies and Flow-Cal in March 2019, as well as DataOnline’s purchase of Sierra Wireless’ iTank business in December 2018.
 
Vendors that specialise in remote scada and tank monitoring include AIUT, Critical Control, eLynx Technologies, Silicon Controls, SkyBitz, WellAware, Zedi and ZTR Control Systems.
 
“Several players continue to have inorganic growth as a key strategy, so further M&As can be expected among IIoT providers targeting the oil and gas industry in 2019 to 2020,” said Stalbrand.