Gaurav Verma
Gaurav Verma (Research Manager, IDC Energy Insights)

Uncertainty still reigns when it comes to 5G adoption plans in the oil and gas (O&G) industry. However, it is already clear that for O&G players 5G will become a real competitive advantage in the not too distant future.

Given the current ambitious plans for digital initiatives in the O&G industry, the existing network would not be able to support the upscaling of digitally enabled operations such as digital wellsite operations, remote management of unmanned production platforms, and digital oilfields.

Eventually, upstream O&G players will need 5G network connectivity solutions to transfer the vast amounts of data in near real time with low latency to deliver the scale and speed required for future digital oilfield operations.

5G Provides a Foundation for Unmanned Oil Production Facilities

Efficiency and agility in oil exploration and production (E&P) are becoming a necessity, and this is driving ambitious digital initiatives in the E&P part of the oil value chain. These include digital oilfield initiatives, IT and OT integration, digital wellsite operations management, and unmanned production platform management.

Remote management of unmanned oil production platforms is a key potential use case for 5G for oilfield asset owners, as this would take the concept of digital oilfields to the next level. Given the proclaimed benefits of 5G, ultra-reliable low-latency communication (URLLC), massive machine type communications (MMTC), and enhanced mobile broadband (eMBB), the management of unmanned production platforms is a fairly realistic possibility.

This is currently not achievable with 4G/LTE networks, at least not with high speed and scale. A couple of years back, Norwegian oil group Equinor built an unmanned wellhead platform, but this was a small platform without the full range of processing equipment, drilling plant, etc. With a regular, fully fledged production platform, digitalization efforts with IoT sensors and IT-OT integration, for instance, are more challenging with 4G.

In fact, the ability to deploy industrial-grade IoT solutions for critical asset performance management on an unmanned platform will require a robust and reliable connectivity solution. This would require the network to meet denser connectivity requirements and be able to handle huge data transfers with low latency. Some of these issues could only be addressed with new radio standards such as 5G.

Real-time data streaming for effective monitoring has been a critical success factor for the upstream O&G business. Any efficiency gain here could translate into millions of dollars of saving for a single operator.

Plan the Adoption Road Map with the Vision of Future of Digital Oilfield Operations

The paradox in O&G companies’ approach is that, on one hand, they view 5G as an optional technology that they could live without. On the other hand, they have substantial investment plans for the next three to five years in the likes of IoT, cloud, AI/ML, and AR/VR.

Some examples include real-time equipment health as part of APM solutions or equipment digital twins (IoT), video analytics powered by AI for health and safety (AI), and virtual reality centers for real-time drilling monitoring (VR).

The irony is that O&G firms do not seem to have fully considered all these use cases and the fact that once they moved from proof-of-concept to large-scale deployment they would need 5G for denser connectivity, higher data capacity, and low latency.

Furthermore, digital-powered operations will generate time-critical exabytes of data that would need very high bandwidth and low latency data streaming to site offices. Although some data can be slowly transferred to datacenters, some will have no value if transferred with long delays.

For instance, if your drill bit is about to hit volcanic rock, you need to make a quick decision to have the drillers change course. There are other use cases where real-time high-definition data streaming has much more business value to O&G operations:

  • Real-time critical equipment performance monitoring
  • Predictive maintenance
  • Refinery process automation
  • Robotics operations (subsea engineering)
  • Immersive experience — AR/VR powered field execution
  • Intelligent video surveillance — asset and people safety use cases

O&G companies must start building a strategic digital road map for 5G adoption, and it must be well aligned with the overall digital strategy and business goals. They should start by developing a business case for how to move from just monitoring production progress to actually managing and controlling production platforms remotely and efficiently.

They should evaluate the long-term business value against the upfront investment, be aware of the opportunity cost of not opting for 5G, and assess the impact on adjacent technologies.


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