5G in the oil & gas industry is a new trend. The oil & gas industry is always a pioneer in adopting new technology. Given the continued growth in the upstream production activity and unconventional oil production in the US, the oil & gas industry is hovering to be a leader in 5G network transformation. The oil & gas industry operates in extreme weather conditions and harsh environments and has faced certain challenges such as low latency network connectivity, security, and managing network sites at remote locations (such as voice & video, alarms in emergency situations & mobile connections) that are resulting in the need for the adoption of robust communication technology. Consequently, 5G is one of the leading technologies that effectively mitigate these issues by offering ultra-high speed and low latency communication between offshore sites, drilling sites, and vessels.

The 5G network offers a significant opportunity to leverage smart technologies such as machine learning, IoT, and robotics. The robust networks provide smooth connectivity essential for daily operation. It also offers opportunities to replace existing wired LANs, sensors, switches, and activators. Over the years, there has been an increasing interest in integrating IIoT in the oil & gas sector. IIot offers complex functions such as extreme IoT systems (<10 ms latency, 99.9% availability), massive mobile broadband, and ultra-reliable low latency. The high integration of devices such as automated guided vehicles, untethered AR/ VR, security cameras, robotic controls, and sensors, among others, demand robust connectivity for smooth functioning even at extreme temperatures and locations. However, 4G LTE and WIFI can support some of these functions, but 5G networks can only support URLLC (ultra-reliable low latency communication).

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Increasing the Adoption of 5G technology is vital for gaining a competitive advantage in the oil & gas industry.

The oil & gas companies are actively deploying 5G technologies to leverage communication efficiency even at extreme locations, track real-time activity in the field, and enhance response during emergency conditions. Technological advancements are expected to shape the future of the oil & gas industry in the coming year. Deployment of 5G enables the oil & gas companies to achieve maximum productivity by automation and monitoring the oilfield. The data collected from automation in oil fields is further utilized to provide real-time insight into the current situation. Thus, as we advance, companies that are integrating 5G in their production process are expected to gain a competitive advantage in the market.

Major advantages: 

  • Safety & Security: Improve safety & security measures at oilfield through ease in identification of abandoned objects and unauthorized parking, provide real-time video surveillance in case of emergency situation 
  • Ultra reliable low latency communication: Due to high bandwidth, the 5G network supports data transmission in approximately 1 millisecond and is highly used in drilling sites, offshore platforms, and vessels.
  • High bandwidth: As compared to a 4G network, the 5G network has higher bandwidth that can deliver data up to 20 Gigabits-per-second (Gbps) and 100+ Megabits-per-second (Mbps) average data rates. Due to this, oil & gas companies are emphasizing deploying a 5G network in order to track data in dead zones, track off-shore rigs and, share live videos & photos & photos and enable sensors to detect the abnormal temperatures in the oilfield based on the action that could be taken to prevent production loss. 
  • Enhanced Automation: 5G network is allowing enhanced automation, such as the integration of AI, data science, and IoT in the oil & gas industry. 

High Operational Cost is one of The Major Challenges.

One of the significant major challenges hindering the growth of the market is the expensive cost of installation. 5G deployment means more hardware & software configuration. Deployment of 5G requires the installation of 60 smalls per square mile, and the cost of each microcell is around $200,000. Furthermore, 5G operators must also pay high fees to buy spectrum, configure, test, and manage networks. Hence, the high installation cost is one of the prime factors that is hindering the market's growth.

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Development Scenario in Overall 5G Network in Oil & Gas Industry

The global 5G in the oil & gas market is highly influenced by the overall high capacity and high bandwidth that enable the real-time transfer of a high volume of data to deliver highly efficient, safe, and reliable real-time data solutions, several major oil & gas manufacturing companies are constantly focusing on integrating 5G network over 4G to broadcast audio, video & data to the 911 emergency call center, to enhance field safety & security, to detect abandoned object and others. The major companies in this field are Huawei, Nokia, Tampnet, Ericsson, and others.

Recent Developments in Oil & Gas Industry Related to 5G Network:

  • In June 2021, Nokia collaborated with system integrator NetNordic to deliver 4G & 5G solutions to Equinor, one of the world's leading oil, gas, and wind power producers. This strategic collaboration would enable Eqinour to strengthen this performance by identifying real-time problems and taking quick action.
  • In August 2020, Petronas announced leveraging 5G technology in the oil & gas industry as a part of the Malaysian Government's 5G deployment strategies.
  • In January 2021, STC and Huawei signed an MOU (Memorandum of Understanding) with Saudi Aramco to study the application of 5G in oil & gas industry. This collaborative relationship would leverage economic growth and societal benefits worldwide.

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