Oil and gas supplied 57.4% of the world’s energy in 2021. Though the world is moving towards renewable and carbon-free methods of energy production, oil and gas will continue to power our factories, houses, and cars for years to come. Oil and gas prices have experienced significant fluctuations in recent years. In 2018, the average cost of a barrel of oil was $61.34, which dropped to $27.22 in 2020 due to the impact of COVID. However, it rebounded and reached $94.68 in the first quarter of 2022.
In addition to being an industry with unstable revenues, oil & gas employees often work in hazardous conditions. According to a report, derrick operators in the oil, gas, and mining industry rank as the third most dangerous profession in the US. Another source says oil field workers are in the sixth most dangerous profession in the world. Given this, the oil and gas industry can benefit significantly from technologies that can save time and money as well as improve worker safety.
Leveraging 5G private networks for industry transformation
According to McKinsey & Company, improved connectivity could add up to $250 billion to upstream operations of the oil & gas industry between 2020 and 2030. Also, an Arthur D. Little and Ericsson report states a digitally enabled workforce is 8.5% more productive and has a 48% reduced loss from health and safety incidents.
How can oil & gas companies achieve these benefits? One obvious solution is for oil and gas fields and refineries to establish ubiquitous wireless broadband coverage by deploying industrial wireless networks such as private 5G. Currently, most oil and gas operations are heavily dependent on expensive satellite connections that provide voice-only communications. On the other hand, private cellular networks can cover not just the huge outdoor environments of oil and gas fields and refineries more cost-effectively but also enable scores of new digital applications and automation that can make operations efficient and productive.
Enabling digital transformation with private networks
Private 5G networks provide high-speed wireless broadband connectivity and foster industry-wide digital transformation by enabling energy companies to use new digital technologies. For instance, they can use technologies like augmented reality (AR) to train employees quickly and help make repairs simpler – envision the AR hardhat! Group communications with Push-to-X (P2X) will thrive. HD video will become commonplace, with 4K video streamed for search and rescue, fires, intrusion detection and quality assurance / remote inspections.
Cameras will soon be on drones, land vehicles, drilling platforms, and oil fields. Real-time video analytics, powered by AI, and processed at the edge, will provide up-to-date information and actionable insights for management. Drones will be used with HD video cameras, scanning terrain and equipment difficult for people to reach, saving significant labor costs. They will also be used for emissions gathering, improving worker safety by ensuring employees stay out of areas with unsafe environments. On offshore rigs, it’s claimed that switching to drones can result in a 75% reduction in manual inspections and a 90% reduction in the time needed to carry out an inspection. One report states that drones can reduce “health and safety incidents, resulting in 35% less cost to the provider.”
With industrial wireless networks, oil and gas firms will be able to use the Internet of Things (IoT) to track equipment and personnel better. Other use cases will include vibration monitoring, predictive maintenance, remote drilling, and smart maintenance.
Enabling real-time monitoring and automation with private networks
Private 5G networks play a crucial role in enabling real-time monitoring and automation in oil and gas fields and refineries. By establishing a highly reliable and low-latency communication infrastructure, these networks provide significant advantages, allowing for seamless connectivity and data transmission across various systems and devices. The implementation of private 5G networks empowers these facilities to collect and analyze data from sensors, equipment, and personnel in real-time, enabling operators to promptly detect and respond to critical events and anomalies.
Additionally, the seamless integration of advanced technologies like artificial intelligence (AI) and machine learning (ML) within private 5G networks facilitates automation, enabling the deployment of autonomous systems, remote control operations, and predictive maintenance. This integration leads to improved operational efficiency, reduced downtime, and optimized resource allocation. By leveraging private 5G networks, oil and gas fields and refineries can unlock the full potential of real-time monitoring and automation, ultimately enhancing safety, productivity, and overall operational performance.
State of adoption of 4G, 5G and private networks in oil & gas companies
An estimated 40% of mature onshore oil & gas sites have poor wireless connectivity, covered by outdated technology that experiences significant reliability and bandwidth issues. However, several oil & gas companies have either deployed or announced deployments of private wireless networks. Examples include:
- In 2022, Origem Energia in Brazil collaborated with Nokia and SC Caprock (Speedcast’s Brazilian entity) to deploy a private LTE network at four natural gas plants and associated wells. They utilize the 700 MHz band for PTT and PTV, with plans to incorporate video surveillance, employee tracking, and health and safety wearables in the future. This network covers 600 gas wells across 13 municipalities.
- Centrica Storage Limited in England revealed plans in 2020 to implement a 5G-ready LTE network in County Durham. Ericsson and Vodafone will install the system to facilitate connections for maintenance, operations, and safety applications through handheld devices.
- Tampnet, a Scandinavian operator, asserts that they operate the largest offshore high-capacity communications network globally. In 2021, with assistance from Ericsson and Microsoft, they established a private LTE network in the Gulf of Mexico, covering 50 oil & gas rigs. This network enhances communication, employs drones for visual inspections in hard-to-reach areas, and collects data regarding vibrations and the presence of greenhouse gases.
- In 2021, Changqing Petrochemical inaugurated China’s first 5G smart refinery. They collaborated with Huawei and the China Telecommunications Shaanxi Branch to improve worker safety and monitor numerous pieces of mobile equipment. Additionally, Changqing Petrochemical employs 5G, digital twins, and advanced visual recognition technologies to create an intelligent auxiliary inspection route.
Private networks and the future of connected oil and gas fields
Private LTE and 5G networks are likely to become commonplace in the wide-open spaces of oil and gas fields, refineries, and offshore drilling rigs. In comparison to Wi-Fi, private cellular networks require fewer access points, offer enhanced security, and are better equipped to handle the demands of IoT. The availability of vast amounts of operational data, combined with edge computing and AI, will drive efficiencies, enabling oil & gas firms to swiftly enhance safety, productivity, and profitability.
