Satellite 2014: Mining, Oil & Gas, and Electrical Utilities – A Booming Market for Satellite Communications?

Certainty of service. At the end of the day, customers in mining, oil & gas and electrical utilities don’t care who runs the network, or from whom they are purchasing their software and equipment. All that matters is who can provide the level of service and support to ensure their customers never need to worry about going offline.

Speaking on a panel discussion at Satellite 2014, Tim Osburn, CIO of Diamond Offshore Drilling, may just represent one industry in that group, but his words speak volumes about what each segment expects out of their satellite partners. Operating roughly 41 offshore rigs, Diamond Offshore Drilling relies heavily on satellite technology to deliver reliable and effective connectivity 24/7. Those demands are being driven by four factors:

  • Heightened government intervention adding additional regulation around higher bandwidth efficiency for sending critical data from rig to shore
  • Customers enforcing industry standard compliance onto rig operators, which means the drilling company needs to be more disciplined in data-collection processes
  • Rigs are becoming more and more technologically sophisticated with many components relying heavily on software. This requires a higher rate of security across multiple aspects of the rigs
  • Crew morale. With employees often being aboard rigs for 28 days, working 12-hour shifts, the ability to be connected is an attractive option for acquiring talent in this industry

Osburn frames it nicely by saying his company is in the drilling business, not the communications business and therefore doesn’t necessarily care who is helping them meet such objectives—only that they are helping them meet such objectives.

So the topic of consolidation of the value chain where operators are coming down to provide service isn’t necessarily a differentiating factor to Osburn. But in other markets the discussion is a bit divided. The utilities market is a good example. Ed Smith, sales engineer manager for North America, iDirect, points to the fact that some larger utilities are willing to take on the responsibility of handling the communications infrastructure, while other smaller utilities are in no such position to do so. This means the debate is indeed relevant in the utilities market around who provides the service.

For this very reason companies like iDirect play an important role of generating the interest of using VSAT in these markets. Smith says one challenge with utility customers has been dealing with pricing models of the different service providers. As he says, it is often hard to quantify the cost of satellite to utility customers simply because prices can be wide spread. As such, iDirect develops the software and equipment that works across the board, allowing customers to make the decision that best suits their particular needs.

Michael Pollack, vice president, Utilsat, believes this decision of which company with which to work all comes down to determining how much control you want over the network as a customer. But regardless, he believes the driving factor continues to be around the ability to deliver this certainty of service and a great customer experience, which is where he says HTS will play a huge role, providing that faster, more reliable experience.

Can the coming of HTS be the true game changer that markets such as mining, oil & gas and electrical utilities have been looking for? Osburn says it is all driven by the reliability of VSAT and that more companies in these segments might be willing to pay more for such services if the value chain can assure the availability of more bandwidth and can promise a sustained level of service and support.

As Independent Energy Consultant Keith Johnson says, it all comes down to engineering a system that can promise to operate during the downtimes. Do this, he says, and you their attention.

Key takeaway: Customers in mining, oil & gas and electrical utilities are in the business of serving their customers 24/7/365. As such, they care less about who is providing the technology and more about working with the best set of partners that can focus on service and support. The coming of HTS provides a new dynamic to address these needs, but could also open up additional revenue opportunities for players across the value chain to address ongoing service and support needs.

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