Six tech advancements changing the fossil fuels game

M2M device use in the oil and gas industry is set to more than double, as these technologies (including SCADA Telemetry-- supervisory control and data acquisition) emerge as key differentiators in expediting oil and gas exploration and accelerating operational efficiencies.

Adopting M2M early on enables remote monitoring and allows for more flexible control of assets from wellhead to pipeline. It also enables fiscal metering, drilling monitoring and fleet management, as well as worker safety and accident response.

It means higher productivity and eventually, lower costs for the oil and gas industry.

This is the important part: The number of devices with cellular or satellite connectivity deployed in oil and gas applications worldwide is expected to rise more than 20% over the next several years.

The top two applications for M2M in the oil and gas sector are in-land pipeline monitoring and onshore well-field-equipment monitoring.

The drivers are new regulations, rising operating costs (think unconventional drilling) and increasing competition (a lot more players on the field, and the rising ranks of the juniors).

Who to watch (and own)

In the high-tech hydrocarbons game these are our four picks: General Electric (GE) for subsea infrastructure; Transocean (RIG) for deep and ultra-deepwater rigs, Schlumberger for 3D seismic, and FMC Technologies.

As upward pressure pushes up day rates for deep-water (especially ultra-deep) rigs, it's Transocean (NYSE:RIG) all the way. This year's already been a pretty good year for Transocean, despite some rather serious legal problems, and it's got a nice backlog of contracts. But we're also looking at Ensco and SeaDrill.

But hands down, it's GE Oil & Gas, General Electric's fastest-growing segment, with annual 16% revenue growth over the last three years. GE is one of the most diverse companies out there, and it has carved itself a nice niche in the oil and gas sector. And it's impressively forward-thinking—from massive LNG projects to subsea drilling equipment. GE is positioned to experience significant growth.

This year has been an amazing year for GE Oil & Gas, with a list of contracts that would impress the biggest skeptic. Since January, GE has sealed a $620 million, 22-year contract for QGC's Queensland Curtis LNG plant offshore Australia; a $333 million 16-year contract extension for Russia's Sakhalin-2 LNG plant; a $500 million contract Petrobras for new pre-salt projects in Brazil; $600 million in multiple-customer propulsion system contracts; and most recently, a $147 million deal with Statoil for carbon dioxide injection. Adding to GE Oil & Gas' market share here is the recent acquisition of Lufkin Industries. Though it had a very rough time of things during the financial crisis, GE has turned around—and quickly. Downsizing GE's Capital Division has been fortuitous, and we see huge things ahead for this company.