Oil and Gas Companies Embrace Connected Technologies to Improve Asset Performance

By Mark Sen Gupta



Upstream and midstream oil and gas companies continue to search for new approaches to save money.  As part of their larger digital transformation, many of the larger companies in this space have had good results by embracing Industrial IoT-enabled connected technologies to increase efficiencies and address other Embracing Connected Technologieschallenges.

These larger companies typically have huge technical staffs and project organizations, enabling them to pursue initiatives outside the day-to-day tasks of running their plants, production fields, pipelines, and other facilities.  Most smaller companies don’t maintain these large overhead organizations, but could still benefit from connected technologies if willing to partner with appropriate technology firms.

Things to consider:

  • Connected services can provide recognized benefits
  • The current economic climate demands innovative solutions to maintain operations
  • Technology firms, like mCloud, can help provide smaller organizations with access to these types of cost-saving benefits.  This also applies to  larger organizations without the appropriate skillsets

How Are Oil and Gas Companies Succeeding with Industrial IoT?

Many of the larger oil and gas companies have invested in technology and partnerships to reduce expenses and improve competitiveness.  These larger entities typically have large engineering departments and deep pockets, allowing them to experiment with new technologies and discover new solutions.  However, due to the highly specific skillsets often required, even many of these larger companies have partnered with specialized technology providers for some of their digital transformation-related initiatives.

Alleviating the Woes of Rotating Equipment

The biggest area of investment relates to rotating equipment.  Rotating equipment at compressor and pump stations including gas turbines and centrifugal compressors and pumps require regular maintenance.  This could include routine maintenance, inspections or a complete overhaul depending on the maintenance schedule. ARC Advisory Group research shows that only 18 percent of asset failure is age related.  The other 72 percent is where a more proactive or predictive approach to maintenance becomes essential.

During the recent slump in oil prices, one of the world’s largest exploration and production companies was operating as leanly as possible.  However, an operational parameter wasn’t monitored effectively and equipment failure went unnoticed in its machines.  That operating company partnered with a large rotating equipment provider to deploy asset performance management (APM) solutions to be able to detect signs of mechanical stress on particular rotating equipment.  The partner-managed services team notified the operating company of this stress and provided weekly briefings.

Rather than waiting until a hard alarm was tripped at the operating company’s facility that would have triggered reactive maintenance, the team presented the operating company with a range of potential root causes.  It used this information to inspect the equipment to determine the actual underlying cause.  This enabled the operating company to repair or replace the equipment during planned downtime before it failed.  This early detection of machine problems combined with proactive maintenance allowed the operating company to avoid potentially tens of millions of dollars’ worth of lost production.  These types of results are why all large oil and gas companies have APM programs in place.  ARC research indicates that these typically deliver fast return on investment.

Early Corrosion Detection

All operating companies desire effective insight into how and where their pipes are corroding.  However, traditional methods of corrosion control and monitoring are problematic. Direct equipment inspection is cost-intensive and does not help determine when corrosion takes place.  Traditional monitoring techniques don’t provide insights on how changing process conditions might impact corrosion rates. All too often, corrosion is only found after damage has occurred.  By working with their analytics technology partners, operating companies have been able to combine the structured and unstructured data they have been collecting for years with domain experts to develop real-time mitigation strategies for corrosion associated with specific piping material, fluid type, and other process and environmental parameters.  

Staying on Top of Automation

Many automation suppliers now offer connected support services to manage automation assets.  These programs can manage patches and updates and use analytics to predict or detect hardware failures, but Embracing Connected Technologiesthese programs tend to focus on their own products.  End users with automation products from multiple vendors either need to have contracts with each supplier, or maintain their own support staffs supplemented with telephone support from the automation supplier.   Larger oil and gas companies opt for the latter, but smaller organizations lack adequate manpower and the procedures needed to keep up with the increasing demands of automation technology.   This situation worsens when cybersecurity is added to the mix.  This creates a less-than-optimal situation where staff is minimally prepared to deal with the complexity and disruptions.

The Challenges Smaller Organizations Face

Smaller organizations face the same challenges as larger companies, but with fewer resources to address these challenges.  In most cases, the existing engineering staffs can only maintain the status quo, with little time left to improve equipment, process, and procedures.  Good technical staff is difficult to find and expensive to hire.  This also makes them difficult to keep.

With new technology comes the need for new skillsets.  Digitalization skills like data science and artificial intelligence are not standard skillsets in the industrial space.  Attracting this talent from the likes of Google, Microsoft, and Amazon is a tall order for many smaller industrial organizations.  Even large organizations struggle to attract and maintain people with these skills.

Embracing Connected TechnologiesHow mCloud Can Help

According to mCloud, the company’s AssetCare asset management platform drives results by collecting real-time and historical data directly from assets and then moves those data into the cloud, where the solution performs advanced heuristics and uses artificial intelligence to detect issues and provide insights and guidance to help asset owners optimize asset performance.

According to mCloud, the company is developing the following capabilities:

  • Control Systems – monitor, address issues and recommend improvements for key control system assets to maintain safe, efficient, and reliable production
  • Asset Reliability – monitor critical assets to identify changes in performance and the need for maintenance to reduce costs and the impact on production
  • Production – maintain a view of production KPIs to measure solution impact.  In addition, focus on capabilities to optimize production, monitor and reduce emissions, and more
  • Asset Management – maintain a repository of 3D models, laser scans, and associated asset data as a foundation for improved engineering, inspections, maintenance, and operations

The solution offers a variety of ways to get additional data into AssetCare using cutting edge IoT devices, drones, and other data gathering means.

The AssetCare solution provides customers with the ability to analyze this data in a variety of ways, including dashboards, monthly reports and hands-free remote assistance. The company anticipates that customer value will continue to improve as new technology and capability is applied to more and more connected assets.


Today’s technology enables solutions unavailable in the past, but the skillsets needed to design and implement these are different than the skillsets traditionally found in the industrial setting.  Smaller organizations face several headwinds including pricing pressures, available workforce, and operating costs.  These organizations must search for new innovative solutions technologically and organizationally to thrive.

ARC Advisory Group recommends:

  • Focus on your core business.  Smaller companies can easily get distracted managing the minutia of the day-to-day.  Companies need to evaluate the value of managing the supporting processes and technology in house, versus outsourcing the responsibility.
  • Re-evaluating roles inside the organization. Each role should be evaluated based on purpose and the capability for that role to be automated or performed remotely. Any role performed in front of a computer screen can be performed from anywhere. Some personnel perform multiple roles. If part of their role can be performed remotely, users can begin to de-man the site by combining physical roles into fewer personnel.  Roles that require hands on the physical equipment could also potentially be automated.  The quest for cash in a world of lower margins demands appropriate action.
  • Partner with technology providers.  Times have changed.  Many technology suppliers can offer solutions to help owner-operators manage their operations with minimal on-site personnel.  It often makes sense to identify appropriate partners from among these. As new technologies emerge, it is likely that more than one partnership will be needed.


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Keywords: Connected Technologies, Digital Transformation, Oil and Gas, mCloud, Asset Management, Predictive Maintenance, Industrial IoT, ARC Advisory Group.

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