Machine-to-machine devices are playing an increasingly important role in field service, as evidenced by their rapid adoption in the oil & gas industry.
Thanks to the drop in oil prices, and a greater demand for operational efficiency, the use of M2M devices are expected to steadily increase in the next 5 years, expanding at a compound annual growth rate (CAGR) of 20.1%.
According to a new research report from analyst firm Berg Insight, the installed base of wireless M2M devices in the oil & gas industry is expected to jump 150% by 2019, reaching 1.25 million devices in place since the end of 2014.
It’s not difficult to see why the oil & gas industry first began embracing M2M devices. Facilities are usually remote and inaccessible and the data captured by M2M devices may be the only data that companies can actually obtain. 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.
But companies have been especially affected by oil prices. Market volatility has put the focus on new technology and solutions with a demonstrated high return on investment. North America is the leading region for the adoption of wireless M2M. Oil & gas and energy producers in the region were particularly affected by the price drops, which put a temporary halt on investments. The focus now has been on cost savings and 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.
The report added that oil & gas companies are prioritizing new technology and solutions with a demonstrated high ROI, especially when combined with Solution-as-a-Service (SaaS) business models that minimize the initial investment.
Field service automation, remote control, and monitoring are very important in order for it to be cost effective to extract, transport, and distribute unconventional resources such as shale gas and tight oil.
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