Back to OurEnergyLibrary search




Connected Barrels: Transforming Oil and Gas Strategies With The Internet of Things

Connected Barrels: Transforming Oil and Gas Strategies With The Internet of Things

Full Title: Connected Barrels: Transforming Oil and Gas Strategies With The Internet of Things
Author(s): Andrew Slaughter, Gregory Bean, and Anshu Mittal
Publisher(s): Deloitte University Press
Publication Date: September 1, 2015
Full Text: Download Resource
Description (excerpt):

After years of high and rising oil prices led to a longstanding oil price of more than $100 per barrel, new extraction technologies have opened up fresh sources of supply that suggest a new price equilibrium of $20 to $30 less per barrel.1,2 This new normal of lower oil prices not only will lay bare inefficient oil and gas (O&G) companies but will push even the efficient ones to find ways to preserve their top and bottom lines. Luckily for the O&G industry, a new suite of technologies promises to help companies tackle these challenges. The Internet of Things (IoT), which basically integrates sensing, communications, and analytics capabilities, has been simmering for a while. But it is ready to boil over, as the core enabling technologies have improved to the point that its widespread adoption seems likely. The IoT’s promise lies not in helping O&G companies directly manage their existing assets, supply chains, or customer relationships—rather, IoT technology creates an entirely new asset: information about these elements of their businesses. In an industry as diverse as O&G, it is no surprise that there is no one-size-fits-all IoT solution. But there are three business objectives relevant to IoT deployments in the O&G industry: improving reliability, optimizing operations, and creating new value. Each O&G segment can find the greatest benefit from its initial IoT efforts in one of these categories, which are enabled by new sources of information. With this in mind, this article provides segment-level perspectives, aimed at helping companies understand how information creates value, the impediments to value creation and how they can be addressed effectively, and how companies can position themselves to capture their fair share of that value.3 Upstream companies (e.g., exploration and production) focused on optimization can gain new operational insights by analyzing diverse sets of physics, non-physics, and cross-disciplinary data. Midstream companies (e.g., transportation, such as pipelines and storage) eyeing higher network integrity and new commercial opportunities will tend to find significant benefit by building a data-enabled infrastructure. Downstream players (e.g., petroleum products refiners and retailers) should see the most promising opportunities in revenue generation by expanding their visibility into the hydrocarbon supply chain and targeting digital consumers through new forms of connected marketing

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of OurEnergyPolicy.org, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.