Challenges of Networking the Smart Oil Field

Feb. 16, 2016
Adapting wellhead automation with cost-cutting technologies related to the Industrial Internet of Things can help stabilize upstream oil and gas operations in the face of drastically falling prices.

Falling global oil prices continue to have a backbreaking effect on cost-intensive upstream oil operations and the economies that are heavily dependent on oil production. As prices fall to less than half what they were in 2014, oil companies are feeling the pressure to finally implement modern cost-cutting networking technologies throughout their operations. Though the concept of the connected oil field presents new challenges with regard to security and new technology resistance, the benefits of edge computing, Ethernet and wireless gateway systems cannot be ignored.

To address these issues and help move the industry forward, it’s important to recognize the three main categorical drivers within smart oil field enablement: safety, legacy system modernization, and real-time analytic capability.


Pervasive Ethernet and wireless technology in oil field extraction raise concerns regarding reliability and cyber intrusion. Field operators understand that improving connectivity and networking capabilities between their field operation and control centers could provide large operating cost savings and leaps forward in efficiencies, but the question still remains: Is it safe and secure?

The truth of the matter is no network is 100 percent safe and secure, but with industrial routing, wireless and edge computing, a lot of oversight and redundancies can be deployed to manage assets in a manner that provides a higher degree of reliance and security than currently exists in most oil field operations today. And with plummeting oil prices forcing upstream oil to drive out as many inefficiencies in their operations as possible, the pressure is on to shift from simple serial networks to scalable, smart networking technologies.

In this shift, many oil companies are realizing the fact that industrial networking technologies, such as industrial routers and wireless gateways, don’t simply offer more operational tools to drive production efficiencies; they offer increased security and safety as well. In addition, true industrial networking providers can now provide out-of-the-box functionality for easy integration into existing DCS and SCADA systems. In addition, industrial wireless and gateway technologies allow for remote access and increased control of assets in the field. This translates into recognizing more robust alarm and anomalous production data at each well in real time, thus significantly mitigating shutdown risks.

As for security concerns, industrial routing technology tethers the site-to-center operation together by providing secure firewall protection combined with scalable bandwidth for potential satellite expansion. The combination of ease-of-use and the ability to support VPN/firewall/NAT will assure that your smart oil field network is also a secure oil field network.

Legacy system modernization

According to a 2015 industry report, 80 percent of oil and gas firms invested heavily in the operational efficiency of existing projects or reserves, highlighting the need to focus on smart networking technology as a central means of achieving immediate return on investment in wellhead automation.

For example, the connectivity between field control and the sensor level is often ignored, severing the reliable data connection between the control room and each meter on each well, pump and attached pipeline. Because important metering information at each wellhead is often only actionable while on site, this limits the potential for real-time analysis and control of wellhead operations via remote access. This common scenario is due to the fact that most leading automation vendors have invested heavily in advancing SCADA and sensor technologies while largely ignoring the connectivity in between.

With the new connection options available via modernized DCS infrastructures, paying a bit more attention to industrial networking investments can enable operators to connect all of their legacy devices to the control center for central management. Then, if a satellite expansion of a wellhead network is desired, wireless technology allows engineers to quickly install networked devices, thus saving time, commissioning expenditures and operations costs.

Real-time data processing

The amount of data being generated each minute within the upstream oil industry is significant. In the traditional oil field, data is generated at the sensor level with limited modes of transport from the site of central control. The modes of data transport range from limited bandwidth pathways to on-site pen and paper reporting. Likewise, offshore networks rely heavily on satellite communication to pull operational data for analysis, which can take days to extract, aggregate and process. In short, the smart oilfield concept of connecting these disparate sources of data to a central control area is not overly ambitious and uses modes of connectivity that are already developed, tried and tested.

The resistance to adopting Ethernet and wireless gateway technology is crumbling to logic and the realization that much of the oil and gas industry can no longer afford not to accept and invest in the benefits that smart networking technology provides to oilfield optimization and security.

Keep in mind, however, that real-time data processing can only be supported by a capable industrial network. Moxa, and other companies within our space, are enabling the smart oil field revelation by connecting the application layer with the pervasive sensing nodes dispersed throughout the modern oil field.

Smart oil field investment

Industry leaders within upstream oil, both big and small in scope, are realizing the benefits of a smart oil field and investments in Industrial Internet of Things (IIoT) technologies in the field. For example, Shell Oil reports that as much as $5 billion in value has been achieved by implementing smart oil field technologies in 50 assets between 2002 and 2009. As of 2010, Chevron estimates that the benefits brought about by its own smart oil field initiative, iField technologies, resulted in an operational cost savings of two to eight percent. According to Oxford Economics, the adoption of IIoT technology by the oil and gas industry has the potential to increase global GDP by up to 0.8 percent—$816 billion—by 2025.

Today, amid another low in oil prices and further advancements in Ethernet and wireless gateway technology, companies like Moxa are further enabling the capabilities of upstream oil to convert existing serial networks, such as Modbus TCP, to Profinet, 3G, 4G, Wi-Fi and Ethernet. Expanding an oil well network to capitalize on peripheral resources is now less expensive and quicker to implement than ever before due to tested and resilient industrial wireless technologies. As such, the smart oil field is becoming the definition of operational success and, in many cases, leading oil and gas companies and holding firms alike cannot afford not to invest in the transition toward a connected, smart oil field.

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