Water coning is a common problem in oil reservoirs that are underlain by an aquifer. In most cases, this problem is addressed after a watercone reaches a production well, with the irreversible consequences for oil production. Here we develop an electromagnetic tool technology to monitor the near wellbore fluid saturations in the context of water coning. We demonstrate value of the technology by conducting reservoir simulations for an oil producer and the electromagnetic simulations based on the computed fluid distributions. These simulations capture changes in the electromagnetic signals as the watercone approaches the wellbore, showing that it is possible to detect a waterfront at a distance of more than 20 meters away from the well bottom. The source and receiver are located in the production well and the signals are monitored in real time. We use the three-coil electromagnetic devices that are 5-10 meter long and consider only the vertical component of the magnetic field.