The oil and gas IT project journey: From orbit back down to Earth

Fibre, satellite and cable networks all play a role in helping energy firms develop new sites. Analysts at NSR explain what the future holds

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If you look at a map of the network connectivity around the well-established oil fields in Alberta, you’ll notice that bandwidth is readily available via fibre. Where fibre can be laid, it’s always the cheapest option, costing far less than satellite.

Yet satellite still plays a essential role in oil and gas exploration and production. Its most obvious use is in remote areas of the globe, where it can be the only connection to the outside world. But even in the well-wired oil regions of Alberta, companies still retain their space-based connectivity.

Jose del Rosario, a senior analyst at Northern Sky Research (NSR), a market research and consulting firm that specializes in the satellite industry, explains how a new oil or gas project typically develops.

“For the greenfield areas where there’s no infrastructure, satellite goes there first, stays there for a while, and once you get a community going, and you start producing or deploying terrestrial cell sites, then that load becomes backup and moves to terrestrial 3G.”

Finally, he says, the community gets wired and moves to cable or fibre, with satellite as backup.

This doesn’t mean that satellite competes with fibre or cable, any more than smartphones compete with laptops. In fact, Grady says that “satellite has always played well with other technologies.”

For companies in the oil and gas industry, many of which use both mediums, satellites are indispensable in making the network as expansive as possible, he adds.

“There’s kind of growing trend where the remote location isn’t really considered a remote location anymore—it’s just kind of another node on the network,” says Brad Grady, another senior analyst at NSR. “And satellite is a very integral part in extending that office, that node on the network…to that remote location.”

Pushed and pulled into innovation

It’s debatable whether you can call a technology “new” before it’s actually been used for its intended purpose. Whether connected by fibre or satellite, new hardware and automation software hasn’t been readily adopted by oil and gas companies, a fact on which Cisco and the analysts at NSR agree.

But Grady says they’re “not necessarily late adopters in that they’re kind of behind the times in terms of technology, or innovation, or those kinds of things. It’s more that they’re very conservative in deploying these technologies.”

With an “if it ain’t broke, don’t fix it mentality,” the oil and gas sector is reluctant to hear pitches for transformation and change, he says.

Yet we’ve seen many so-called conservative sectors—take banks, for example—that have embraced innovation, somewhat reluctantly, for various reasons. Canadian banks were practically forced by their employees to enter the social media game, finding business-oriented collaboration platforms to get ahead of a potential problem.

Then there are the consumers. Some retailers who at first took ages to even put up a Web site are now marketing their products online and interacting with their customers in real time.

The oil and gas industry may be immune to these particular kinds of pressures, but there’s one they’ll face sooner or later. Some adventurous energy companies will invest in more video, smarter sensors and better automation software, and they’ll get a leg up on their competition. Once that balance shifts, we’ll surely see a belated attempt by the others to keep up.

Download Allstream’s industry brief: Creating a Collaborative Network in the Oil and Gas Industry.

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