Physical Layer Relevance in the Oil and Gas Market

This is the first installment in a series of blog posts on the oil and gas industry. It will explore topics such as data delivery, trends in the industry and the evolution of oil and gas networks.

Recent articles about the energy outlook from international oil companies (BP and ExxonMobil as examples) indicate that energy demand will continue to grow because as the world’s economy expands, more energy will be needed to fuel higher levels of activity and living standards. Energy outlook publications show another important factor to consider: how this growth in demand will be curbed by faster gains in energy efficiency.

The oil and gas vertical market leads the world in technological innovation and productivity in different areas, including its endless demand for capacity and bandwidth. Building out and maintaining network capacity requires a solid foundation in the communications layer, including the physical layer, but requires spending capital with increased operating expenses in the future.

There is no doubt that the oil and gas market is evolving in regards to telecommunications. It is developing in three environments:

• Upstream (also known as the exploration and production sector, or E&P) – exploratory wells drilled to bring crude oil and/or raw natural gas to the surface.
• Midstream – the transportation, storage and wholesale of crude or refined petroleum products from production sites to refineries, or straight to customers like public utilities.
• Downstream – the refining of petroleum crude oil and the processing and purifying of raw natural gas. It also serves as the distribution of products derived from crude oil and natural gas.

Real-time data acquisition and delivery are always needed, as is getting more bandwidth to support critical operations.

This data demand is driven by several factors, including people in field and remote offices having constant connectivity to access consumer data. This is driving the oil and gas market to re-think production services, transport services and delivery to markets. Meanwhile, manufacturers continue to pursue innovation with faster end-to-end solutions that simply stimulate oil and gas users’ data acquisition and delivery to sustain critical operations.

The question is not how to re-think all services within the oil and gas vertical market, but what trends in the next years will shape how this vertical will evolve? Let’s consider some of the challenges facing the oil and gas industry today:

• Price puzzle
• Consumption restraint
• Health and safety environments
• Constant energy demand
• Decrease on capital investments

Price puzzle, restraint and the decrease in capital investments are two of the largest concerns to sustainable oil and gas development. The constant energy demand for efficiency is the most immediate challenge that international oil companies, operators, pipeline and service companies face today and in the future. The oil and gas vertical market’s next step is network evolution to address these situations.

Solving this problem requires solutions that are simple but also scalable and flexible to support applications cost-effectively on their first deployment. This will maximize their return on investment before ripping-and-replacing layers of technology as new waves of capabilities become available.

In my next post, I will discuss the evolution of oil and gas networks, the challenge of evolution for network owners, and how CommScope is viewed as a valuable partner for their networks.