Wireless M2M Devices in Oil & Gas Industry Expected to Reach 0.43M by 2016

By Shankar Pandiath November 26, 2012

Berg Insight, the analyst firm that offers premier business intelligence to the telecom industry, has stated in its research report at the end of 2011 that the number of devices with cellular or satellite connectivity deployed in oil and gas applications worldwide was about 164,000 units.

They had also gone on to mention that if this growth continues at a compound annual growth rate or (CAGR) of 21.5 percent, the number of devices in the industry with cellular or satellite connectivity would be about 435,000 units by 2016.

By 2016, the split between cellular and satellite-based M2M devices will be 275,000 units and 160,000 units, respectively. The oil & gas industry generally has its facilities located in remote and inaccessible areas. The only communication viable in many cases is via wireless M2M devices.

M2M and Telemetry solutions are most useful in the monitoring and controlling of wells, drills and pipelines.

North America accounts for almost half of the total devices shipped worldwide, and are the forerunner in using M2M solutions in applications in the oil and gas industry. Leading telemetry players like Pason Systems and Zedi are based in the region. There are other notable players – the global SCADA vendors like ABB, Honeywell and Schneider Electric – all of which specialize in remote monitoring and wireless M2M communications.

There is interest from the telecom industry as well. One of the world’s largest VSAT system providers, Hughes Network, markets develops and markets wireless modules for applications to be used in the oil & gas industry. SkyWave, a prominent wireless data communications provider, is slowly inclining toward the market, and its SCADA-based applications are now generating sizable revenue for the company.

There are many factors that drive the M2M solutions market in the oil & gas industry. Some of these factors are accelerating competition between international oil companies (IOC) and national oil companies (NOC), rising operating costs due to increasingly inaccessible reserves, and new regulations that keep the market on its toes.

Stake holders need advanced SCADA and Wireless M2M solutions to comply with the regulations. These solutions are designed to meet high demands of security and efficiency needed in high-risk industries such as oil & gas.

"Demand for improved operational efficiency and new governmental regulations will push the adoption of wireless M2M in the industry," said Johan Svanberg, a senior analyst with Berg Insight.

 "Wireless M2M, remote automation, control and monitoring are also key ingredients in order to make it cost effective to extract, transport and distribute emerging oil & gas products including LNG and unconventional resources such as shale gas and heavy oil," concluded Svanberg.

Want to learn more about M2M technologies? Don’t miss the M2M Evolution Conference, collocated with ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at M2M Evolution Conference. Follow us on Twitter.

Edited by Braden Becker

IoTevolutionworld Contributor

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