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Industrial internet of things enables industry to optimize assets

The industrial internet of things offers the oil and gas industry cost and safety benefits, Whitney Rockley of McRock Capital said in a presentation at the 2016 IADC/SPE Drilling Conference on 1 March in Fort Worth.
The industrial internet of things offers the oil and gas industry cost and safety benefits, Whitney Rockley of McRock Capital said in a presentation at the 2016 IADC/SPE Drilling Conference on 1 March in Fort Worth.

The world is more connected than ever before, Whitney Rockley, Co-Founder and Managing Partner of McRock Capital, said at the 2016 IADC/SPE Drilling Conference in Fort Worth on 1 March. These connections are enabled by the continued evolution of the internet and digital technologies. In 2015, 18.2 billion things were connected to the internet. That’s up from 10 billion only three years prior. “The way that we process, analyze and communicate information has been and continues to dramatically change the way that we live our lives and how we work,” Ms Rockley said in her presentation. “The good news is that I think the energy industry continues to undergo constant change, and it continues to reinvent itself.”

One of the major changes the digital age has brought about is the industrial internet of things (IIOT). “It enables machines and assets in remote and industrial locations to communicate to us, and us back to them,” Ms Rockley said. “It’s based on the premise that we can optimize existing assets and offer new services to our customers.” Many of the possible uses of IIOT-related technologies can potentially offer high returns on investment (ROI), she noted. However, there are barriers related to the perceived lack of technological maturity of and, in some cases, a lack of organizational readiness to adopt technologies enabled by the IIOT.

Several technological trends have enabled the development of the industrial internet of things, Ms Rockley continued. The number of embedded sensors that can take and relay measurements is growing by 30% each year. At the same time, network access has improved significantly. “Innovations like Intel’s core processor and Galileo boards work on the edges of the network in remote, harsh environments to connect machines to the network,” she said. Cloud-computing is also enhancing IT capabilities without the need for companies to invest in costly infrastructure, Ms Rockley added.

Investment companies like McRock Capital, technology providers such as GE and consulting companies have been studying potential uses for the IIOT in the oil and gas industry. Ms Rockely cited a recent study in which GE and Accenture surveyed hundreds of industry professionals and conducted interviews with executives on 10 potential use cases for the IIOT. The surveys focused on how the perceived ROI, technological maturity and organizational adoption readiness of the different use cases. The report highlights where the IIOT could benefit the industry and the way the industry looks at IIOT-enabled technologies, Ms Rockley said.

Of the 10 potential uses presented in the study, fleet and rig management was rated highest in terms of technological maturity and organizational readiness. This involves use of IIOT for movement of equipment and materials, driver alerts and vehicle diagnostic monitoring. Fleet/rig management did not rank high for perceived ROI, however. “Interestingly, it had one of the lowest return on investment scores, which is likely an indication that industry professionals rank its associated HSE benefits more highly than its ability to significantly impact the bottom line,” Ms Rockley said.

Production asset optimization had the highest perceived ROI of the 10 use cases that were evaluated. This use case is focused on maximizing production from existing assets and upgrading facilities through analyzing sensor data. It can be applied to a range of areas, including artificial lift and smart completions. “There’s a direct correlation with performance optimization and increased throughput, hence revenue,” Ms Rockley said. However, this use case was rated lower for technological maturity and organizational readiness.

Field productivity was ranked second for technological maturity and organizational readiness, and third for ROI. “Field productivity enables the optimized deployment of trucks and the right equipment and parts, along with the right crew, with the right skillsets to complete the job in the safest and most cost effective way,” Ms Rockley said. In addition, tablets and laptops are being used in the field for to access data, process tickets and communicate with experts.

Another use case, predictive maintenance, focuses on getting unplanned maintenance activities as close to zero as possible. This is an area in which McRock has seen a number of companies, both large and small, express interest. According to the GE/Accenture report, 60% of respondents placed predictive maintenance in their top three priorities.

A hurdle that remains to a greater adoption of technologies and processes enabled by IIOT is organizational readiness, Ms McRock said. “It takes big judgment and solid execution at all levels to transform an organization into the industrial IOT era,” she said. “We believe that today is the perfect time to innovate and offer innovative solutions to get more out of what you already have in place. Change is inevitable, so you might as well embrace it so you don’t become irrelevant.”

 

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