M2M growth in oil and gas sector

Aug 31, 2015 • NewsM2MOil&GasResearchBerg Insight

The installed base of wireless M2M devices in the oil & gas industry will reach 1.25 million by 2019 according to latest report from analysts Berg Insight:  M2M Applications in the Oil and Gas Industry

The number of devices featuring cellular or satellite connectivity deployed in oil & gas applications worldwide was 0.5 million at the end of 2014, says Berg, and  is growing at a compound annual growth rate of 20.1 percent and expected to reach 1.25 million units by 2019.  Of these, 0.99 million are predicted to be cellular units, with the remainder satellite based.

The oil and gas industry is characterised by remote and inaccessible facilities where wireless communication in many cases is he only viable option for transferring M2M data. Pipeline monitoring and tank monitoring are the top two M2M applications in the midstream and downstream segments, reports Berg, while on-shore well field equipment is the most common wireless application in the oil and gas upstream segment.

Wireless M2M solutions 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 & 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.

Sierra Wireless, Digi International, Orbcomm and Numerex are major M2M players that deliver solutions to a wide range of industries including oil & gas.


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