Background
Occidental Petroleum (Oxy) is one of the largest oil and gas producers in the United States, with significant production operations in the Permian Basin (Texas and New Mexico), the Denver-Julesburg Basin (Colorado), and the DJ Basin, as well as international operations. Oxy’s US onshore production involves thousands of wells, tank batteries, and midstream facilities distributed across remote areas where connectivity infrastructure is limited.
Remote monitoring for oil and gas production assets is a well-understood need: tank level monitoring to prevent overflows and schedule haul-offs, wellhead pressure monitoring for production optimization and leak detection, and equipment health monitoring for compressors and artificial lift systems. The monitoring technology — pressure transducers, level sensors, flow meters, vibration sensors — has been available for decades.
The connectivity problem — how to get sensor data from a wellhead in the middle of a production basin to a platform where it can be analyzed — has historically been expensive. Cellular IoT modems with individual data plans were the standard, and at per-modem costs of $15–$60/month, a large sensor deployment became a significant recurring expense.
Oxy’s operations technology team evaluated whether a private LoRaWAN network — an infrastructure investment that would replace per-device cellular data plan costs with a flat infrastructure cost — made economic sense at their monitoring scale.
The Challenge
Per-Device Cellular Cost at Scale
Oxy’s remote monitoring program in 2023 had approximately 1,800 cellular IoT sensors deployed across their Permian Basin operations, covering tank levels, wellhead pressure, and select equipment monitoring points. At an average monthly data plan cost of $22 per sensor, the annual cellular connectivity cost was approximately $475,000 — for connectivity only, excluding sensor hardware and platform costs.
The program was planned to expand to 5,000+ sensors across three basins over the following 18 months. At the same per-sensor cost, the annual connectivity cost would approach $1.3M.
For sensors that report a small data payload — a tank level update and a few pressure readings — every 15–60 minutes, the data volume is minimal. Cellular IoT pricing that charges by the connection is poorly matched to the actual data transfer requirements.
Cellular Coverage Gaps
A second limitation of cellular-only monitoring was geographic coverage. While LTE-M and NB-IoT coverage in the Permian Basin has improved significantly, there remained production areas where cellular coverage was insufficient for reliable sensor connectivity.
Areas with cellular coverage gaps either went unmonitored or required more expensive satellite connectivity ($50–$150/month per device for Iridium or Inmarsat).
Management Complexity
1,800 individual cellular data plans across multiple carriers created procurement and management complexity. Data plan renewals, carrier changes for locations with coverage changes, and cost allocation tracking across multiple contracts required administrative overhead disproportionate to the information value.
The Solution
Private LoRaWAN Infrastructure Investment
Oxy’s operations technology team conducted a coverage and cost analysis for a private LoRaWAN network across the Permian Basin monitoring footprint:
Coverage analysis: Using terrain mapping and the link budget model for Permian Basin conditions (mostly flat terrain, minimal vegetation, favorable propagation), a LoRaWAN gateway at 50–80 feet elevation on an existing tank battery or compression facility structure provides 8–15 km radius coverage.
Gateway deployment plan: 62 gateway locations identified across the Permian Basin monitoring footprint. Each gateway location used existing elevated structures (tank battery risers, compressor skid structures, communication towers). No new tower construction required.
Network management: IoT SimpleLink provides multi-gateway LoRaWAN network management — device authentication, packet deduplication (sensors within range of multiple gateways have their packets received and forwarded once), ADR, and data delivery to VX-Olympus. All 62 gateways are managed from a single IoT SimpleLink account.
Infrastructure investment vs. cellular cost avoidance: The capital cost of 62 gateways at the target deployment scale was approximately $280,000 (hardware + installation). The annual IoT SimpleLink subscription for a network of this scale was substantially below the $1.3M projected annual cellular cost for the expanded 5,000-sensor program. The infrastructure paid back within the first year of the expanded program.
Deployment Across Three Basins
Following the Permian Basin deployment, the LoRaWAN infrastructure model extended to the Denver-Julesburg and DJ Basins:
- DJ Basin: 23 additional gateways
- DJ Basin supplemental: satellite backhaul at 4 gateway locations where terrestrial internet was unavailable at the gateway mounting site
Total IoT SimpleLink-managed gateway count across three basins: 89 gateways.
For the small number of sensors in locations outside LoRaWAN gateway coverage (isolated wellheads more than 15 km from any gateway), cellular connectivity remained in use. The private LoRaWAN network replaced cellular for approximately 85% of the sensor locations.
VX-Olympus Operational Layer
IoT SimpleLink provided the network management layer. VX-Olympus provided the operational intelligence:
Tank Battery Monitoring
Tank level sensors at each tank battery reported to VX-Olympus via the IoT SimpleLink gateway network. VX-Olympus configured per-tank:
- Product type (crude, condensate, produced water)
- Tank capacity (geometry-specific volume calculation)
- Alert thresholds (high level for haul-off scheduling, critical high for emergency haul-off)
- Historical trend analysis for consumption rate calculation
The operations team’s daily workflow: review the VX-Olympus tank level dashboard for all tank batteries across the basin, identify batteries requiring haul-off scheduling in the next 48 hours, and dispatch accordingly — eliminating most manual site visits for level checks.
Wellhead and Production Monitoring
Tubing and casing pressure sensors at wellheads provided the production monitoring data that previously required manual gauge readings during weekly field rounds:
- Daily production rate estimation from pressure and flow data
- Anomaly detection: pressure drops that indicate equipment issues
- Production decline tracking: well-level decline curves updated from daily pressure data
Production engineers reviewed the VX-Olympus wellhead dashboard rather than waiting for weekly field reports to identify wells requiring intervention.
Equipment Health
Compressor monitoring via vibration and temperature sensors on artificial lift and gathering compression equipment provided early warning of developing mechanical issues. Integration with VX-Olympus maintenance management generated work orders when condition thresholds were crossed.
The Results
Connectivity Cost Reduction
Annual sensor connectivity cost for the expanded 5,000-sensor program:
- Before (projected cellular cost): $1,300,000/year
- After (IoT SimpleLink + residual cellular): approximately $185,000/year
- ==positive:Annual savings: approximately $1,115,000==
The infrastructure payback occurred within 9 months of full network deployment.
Coverage Expansion
The LoRaWAN network enabled monitoring in locations that had been excluded from the cellular program due to coverage gaps. Approximately 400 sensors — 8% of the total program — were in locations where cellular connectivity was insufficient; these sensors were now connected via LoRaWAN gateway coverage.
Operational Efficiency
Manual site visits for tank level readings dropped significantly. Field technician rounds shifted from calendar-based weekly site visits regardless of condition to exception-driven dispatch triggered by VX-Olympus alerts. Field vehicle mileage and fuel consumption dropped proportionally.
Technical Notes: LoRaWAN in Permian Basin Conditions
The Permian Basin’s flat terrain and minimal vegetation are unusually favorable for LoRaWAN propagation. Gateways at 50 feet elevation achieved consistent 12–18 km coverage radius in most locations — significantly better than the 8–10 km model used for the conservative coverage analysis.
Specific Permian Basin LoRaWAN considerations:
- Temperature extremes: West Texas summer temperatures exceed 110°F. Gateways and sensors required appropriate thermal management in enclosures. IP65 or higher enclosures with ventilation designed for high-ambient conditions.
- Lightning: High-altitude flat terrain has above-average lightning exposure. Gateway antennas required lightning arrestors. All gateway installations included proper grounding.
- Solar power: Most gateway locations lacked grid power. Solar-plus-battery systems with sufficient capacity for 5+ days of cloud cover provided reliable gateway power.
- Spreading factor optimization: IoT SimpleLink ADR assigned SF7–SF9 for sensors within 5 km of a gateway, SF10–SF11 for sensors at 10–15 km range. No SF12 required in the Permian Basin deployment due to favorable propagation.
Conclusion
Oxy’s LoRaWAN deployment demonstrates the infrastructure economics that make private LoRaWAN networks compelling for large-scale industrial IoT programs: an upfront capital investment that replaces recurring per-device data plan costs at a ratio that pays back quickly.
For oil and gas operators with 500+ remote monitoring points, the per-sensor cellular data plan model becomes a significant recurring expense. IoT SimpleLink’s gateway-based network management enables the infrastructure investment model — one set of gateways serving many sensors — that fundamentally changes the per-sensor connectivity economics.
Talk to our team about private LoRaWAN network design for your oil and gas monitoring program.