Oil & Gas: Revamping Upstream, Midstream, and Downstream Segment with IIoT


The oil & gas industry is highly complex and technology-intensive. Hence, oil and gas executives are always in search of groundbreaking solutions that can revolutionize their upstream, midstream, and downstream segments. In fact, according to a report by Microsoft and Accenture, more than 62% of the oil & gas executives are willing to invest in digital technology.

Luckily for the Oil & Gas industry, the new suite technology of Internet of Things presents new opportunities that are enabling it to enrich its mode of operations. The IIoT technology with its advanced analytics capabilities, telematics, and sensor application is optimizing operations, improving reliability, and helping the oil industry to create new value. Each segment of the Oil & Gas industry can reap the greatest benefits from their initial IoT efforts to boost one of these objectives.

According to Cisco, some large oil & gas companies can even grow their annual profits by $1 billion by implementing fully-optimized available IoT solutions in their infrastructures.

Upstream companies focused on optimization can achieve new operational insights by utilizing a varied set of data. Midstream companies seeking new commercial opportunities and higher network integrity will realize a significant benefit by building a data-driven infrastructure. Downstream players will be able to boost up their revenues by expanding their visibility into the hydrocarbon supply chain.

Let us explore the value that the IoT technology is individually delivering to each of these segments:


The upstream industry approximately loses around $8 billion per year due to NPT (Non-Productive Time) as the engineers occupy 70 % of their time in searching and manipulating data. On the other hand, the growing need to expand the scope of data is restricted by companies’ weak data-management abilities.

The fact that a large oil & gas company is required to manage more than 50,000 wells also doesn’t help at all. Manual inspection for such a large field of wells can require a huge workforce, lowering the company’s chances to make a better fortune. Moreover, machine malfunction in even a single oil well can slow production and even result in non-compliance with regulations.

IoT advanced analytics capabilities allow the upstream oil & gas companies to monitor the performance of their oil extraction equipment from remote locations in real-time. By revamping the equipment maintenance practices, IoT is enabling the upstream segment to empower their on-shore and off-shore oil exploration practices.

The companies at all times can have detailed information about the condition of their equipment. Based on its performance, they can schedule maintenance tasks and prevent sudden component breakdown. IoT is hence transforming equipment maintenance processes from a responsive one to a proactive one.

In offshore oil exploration, IoT implementation is not only helping in the detection of probable machine breakdown but also assists in protecting marine life from damage caused due to oil spills. Read more about it here.

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Midstream operations in the oil & gas industry include processing, storing, transportation, and marketing, of crude oil. The crude oil is mainly transferred from one location to another via pipelines. However, these pipelines are in constant threat from oil mice (thieves) as they use drills and taps to illegally extract oil.

Oil-theft is especially a common occurrence in African countries like Nigeria where about 400,000 barrels worth of oil is stolen per day. The US also faces around $10 billion loss of crude due to leaks and theft. Oil companies are thus foreseeing a considerable upside in improving pipelines’ safety and reliability.

Oil and Gas Pipeline Monitoring is one of the many amazing benefits of IoT for the oil & gas industry. Specially designed flow meters measure the pressure of crude oil flowing in the pipeline. The pressure of flowing crude will remain constant in the pipeline as long as it doesn’t leak from a hole. A change in the pressure between two subsequent flow meters signifies a probable theft or leak in the pipeline, giving ample time to the company to inspect the dubious portion of the pipeline.

Installing these meters on the pipeline network will help a company to improve its reliability too. The midstream segment of the oil and gas industry can generate insights from the data volumes gathered through this integrated network about leaks caused due to corroding pipelines.


1) Effective equipment maintenance:

Ineffective maintenance practices result in unscheduled downtime which costs global refiners an average $60 billion additional operational cost per year. Hence, oil refineries require a proper maintenance system that can help them to prevent unexpected machine breakdown.

Typically, refiners preschedule maintenance for individual units or for the entire refinery to modify inspection coordination, repair activities, and to plan for alternative equipment arrangement. Refineries routinely pull individual equipment into workstations for inspection and overhaul, without having much information about the equipment’s expected condition. But now, smart devices (IoT Sensors), advanced wireless mesh networks (Network) combined with open communication protocols (Standards), and device and asset management analytics (Augmented Intelligence) are driving a shift to condition-based predictive maintenance strategies.

2) Fuel level monitoring:

As the downstream segment of oil and gas industry is filled with refining operations, it is important to manage the storing and distribution of its various products. IoT level monitoring solution allows refineries to digitize their storage processes.

Fuel and other petroleum products are stored in large tanks in a tank farm. A large tank farm can have 100 to 500 tanks. Keeping a track of fuel quantity in such a large tank farm can require a lot of manual site visiting and inspection. IoT based fuel tank level monitoring system allows refineries to keep an eye on the levels of fuel stored in the tank from distant locations. The level of tanks measured through the sensors is directly transmitted to a centralized dashboard accessible from any internet-connected device. Refineries can use this solution to keep a track of all the petroleum products until they are distributed for commercial usage.

IoT in entire Oil & Gas Industry:

Changing issues of handling data and efficiencies don’t stop at the inbound logistics of crude oil sourcing – there is the outbound logistics of product distribution to be considered. The distribution ecosystem does include not only the refining and marketing companies but also the customers to which they sell. With the implementation of IoT in all the segments of the oil & gas sector, the enterprises can empower their supply chain and better understand the loopholes in their operation.

Apparently, the Oil & Gas industry is beginning to see the IoT’s importance for future success. But it isn’t as simple as installing more sensors to create and capture value from IoT applications. Oil & Gas companies are required to identify primary business objectives and then implement IoT solutions to fulfill their specific business and segment objectives.