Expansion of Machine-to-Machine Solutions and Cellular Networks Enable On-the-Spot Field Connectivity
Most of today’s oil and natural gas production occurs in largely remote areas - away from urban centers and other infrastructure, therefore, connectivity between operations and field activity is always a challenge. In today’s competitive and highly volatile energy market, it is imperative that oil and gas companies optimize their exploration and production activities, and that the service and supply sector stay as close to their customers as possible. This means, fast decisions, facilitated by almost instant data communications, are keys to sustained industry revenue generation and cost reduction.
The collection of critical data from remote well sites and outlying production locations is crucial, knowing where assets are, or how fast a service vehicle can be re-routed to reach a broken pump in the field can make the difference between thousands, or hundreds of thousands of dollars from lost production.
Another consideration is the stringent regulatory environment in which the industry operates. Leading practices in health and safety management are greatly dependent on ‘real-time’ knowledge and access to the ‘where and when’ of field workers, especially those working in lone work situations. Access to real-time field data that supplies location based information on a worker’s movements or last known location helps to increase visibility of workers, implement necessary emergency protocols and ensure regulatory compliancy.
According to CAPP (Canadian Association of Petroleum Producers), in 2010, the upstream industry spent ‘$8.4 billion on field equipment’.1 Tracking of this equipment, ensuring its maintenance and routing, and collecting data from equipment instruments and assets in the field is critical.
Machine-to-machine (M2M) solutions, is the general terminology used to describe “machines using network resources to communicate with remote application infrastructure for the purpose of monitoring and control.”2 Machine-to-machine solutions benefit from real-time two-way control and intelligence which allow operators and suppliers to make alterations in processes and programs that ultimately contribute to bottom line savings. This key differentiator is what separates M2M solutions from other past technologies such as Telemetry or SCADA (Supervisory Control and Data Acquisition), which are considered less intelligent and do not necessarily integrate as seamlessly into back-end systems or applications.
Key industry M2M market drivers have taken place in Canada, and in North America. One such driver that is establishing the path for growth in the M2M market is the expansion of public communication networks such as cellular. Gordon Nelson, Vice President, Business Sales, Western Canada, from Rogers Communications says, “The way the Canadian Oil and Gas industry is using the Rogers network is changing. Today, our network isn’t just simply used for voice and data; M2M solutions allow systems to collaborate – to process transactions, to share data, to execute processes. It’s more than just smartphones and laptops, its machines, sensors, switches, and buildings, connecting anytime, anywhere.”
Satellite communications, an alternative network choice to cellular, was once the only suitable choice for the industry due to the insufficiency of cellular coverage required for the needs of the oil and gas industry. The high cost and lower bandwidth related to satellite, along with significantly increased cellular coverage, including the evolution of bandwidth and throughput standards, are some of the underlying influencers in the market which are challenging the satellite position and pushing cellular as the choice network.
Moreover, previous industry reliance on private radio networks, another alternative network, for field communications and equipment monitoring, is also being challenged due to the expansion of cellular networks and overall growth in the M2M market. The most obvious reason for this challenge is likely attributed to the fact that radio network builds, similar to wireline, have costly and often lengthy implementation times. Private radio networks are also not easily portable and are susceptible to the environment and natural disasters such as lightning, temperature and heavy snow. Furthermore, private radio networks offer much less bandwidth capability than cellular networks and as machines become more intelligent and M2M applications benefit from greater R&D, the need for greater bandwidth is required.
The industry is recording, monitoring and controlling more and more data today. For example, according to CAPP, Western Canada alone was responsible for drilling over 18 million meters in 2010. As a result, large quantities of directional drilling, well logging and reservoir testing data is collected at the well site and is pushed through recording equipment, and transferred via cellular back to head office.
Real-time data interpretation is a necessary requirement to actively control operations costs and increase speed of delivery of products and services. Operators demand the best commercially viable software to interpret the data, and expect seamless integration back into head office systems. An engineer or geophysicist sitting at a desk in the corporate office must be able to access on-the-spot field data to be able to make highly informed and accurate decisions about field processes in real-time.
As cellular networks expand geographically, many industries – including oil and gas – are shifting away and converting from satellite and radio communications networks. For example, the transportation industry is taking advantage of cellular networks, and readily employing fleet tracking and telematics solutions. A reduction in operational costs is realized through reduced insurance premiums, improved vehicle performance and fuel savings achieved through driver diagnostic reporting. Even governments and industry organizations are encouraging the implementation of M2M solutions technology for cost control and regulatory compliance.
As M2M solutions in the marketplace continue to evolve, the preference in cellular network utilization is taking place. Those businesses currently employing satellite networks are some of the first to adopt cellular networks solely based on operational costs savings. According to Sebastian Grochocki of Microhard Corporation – which specializes in the design and manufacture of long range robust wireless equipment, – “Many oil and gas customers are shifting to professionally managed networks such as cellular because of the benefits of universal access, lower operating costs and higher bandwidth for faster data transfer.”
Rogers Communications has established a highly specialized data solutions team, who focus on the design and implementation of M2M solutions for their business customers. The expansion and availability of cellular networks and M2M solutions, along with new offerings of specialized oil and gas applications is paving the way for valuable changes in the way the oil and gas industry manages their operations and makes decisions in the field.
References:
1 CAPP 2010 Statistical Handbook.
2 ABI Research, Maximizing Mobile Operator Opportunities in M2M, Sam Lucero.
