435,000 M2M devices will be used in the oil and gas industry by 2016. This will be split between cellular and satellite solutions – with 275,000 and 160,000 units respectively.

The report from analyst firm Berg Insight expects a compounded annual growth rate of 21.5 per cent, increasing from the 164,000 devices sold at the end of 2011.

North America is the forerunner of wireless M2M solutions in this industry, accounting for almost half of total worldwide shipments.

The oil and gas industry often relies on remote or inaccessible facilities where wireless communication is the only viable option for monitoring and controlling drills, wells and pipelines.

New regulations, rising operating costs and increasing competition are all contributing to this growth. Oil and gas companies must also meet high demands on security and efficiency.

Players from the telecom industry are now showing an interest in this growing vertical market, including Hughes Network Systems, a provider of VSAT technology, and SkyWave, a wireless data communications provider.

“Demand for improved operational efficiency and new governmental regulations will push the adoption of wireless M2M in the industry”, said Johan Svanberg, senior analyst at Berg Insight.

“Wireless M2M, remote automation, control and monitoring are also key ingredients in order to make it cost effective to extract, transport and distribute emerging oil and gas products including liquified natural gas and unconventional resources such as shale gas and heavy oil.”