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© vladimir melnik dreamstime.com Analysis | August 17, 2015

Wireless M2M in Oil & gas growing steadily

According to a new research report from the analyst firm Berg Insight, the number of devices featuring cellular or satellite connectivity deployed in oil & gas applications worldwide is set for growth
According to a new research report from the analyst firm Berg Insight, the number of devices featuring cellular or satellite connectivity deployed in oil & gas applications worldwide was 0.5 million at the end of 2014. Growing at a compound annual growth rate (CAGR) of 20.1 percent, this number 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 & gas industry is characterized by remote and inaccessible facilities where wireless communication in many cases is 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 oil & gas upstream segment.

Wireless M2M solutions have become increasingly popular in oil & 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 & 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 & gas and energy producers in the region were particularly affected by the price drops which resulted in halted investments. This change in the market has however led to an increased focus on cost savings and efficiency. He adds that new technology and solutions with a demonstrated high ROI are prioritised, especially when combined with Solution-as-a-Service business models which minimise the initial investment. Automation, remote control and monitoring are extra important in order to make it cost effective to extract, transport and distribute unconventional resources such as shale gas and tight oil.

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