Oil & Gas Supermajors Push Forward on Analytics


The upstream oil-and-gas industry's ability to manage production data and information is less than encouraging, but industry players do at least seem to view data and analytics as critical to their future success.

Such was a major takeaway from a reader survey conducted by the Oil & Gas Journal (OGJ) on behalf of IT outsourcing firm Wipro back in 2011. OGJ researchers attribute the difficulties to several factors, which live on today.

First, analytics are hard to produce given the first-state condition of data coming into exploration and production organizations, the study found. More than half (56 percent) of survey respondents said they felt that most of their companies' "high-end" consumers of upstream data spend 21 percent or more of their time looking for, accessing, cleaning, or preparing data. That's roughly every employee's use of one work week out of every four each month prepping data.

Second, virtually none of the respondents indicated that their data needs were being met entirely within their functional area or discipline. This, researchers said, indicates that confidence (or lack thereof!) could be a concern for those wanting to pin big changes to a set of analytics. In fact, three fourths of the 190 respondents said that a lack of overall data quality and trust in data has a high or medium impact on their organization. And, two thirds said the inability to integrate "important" data effectively had a high or medium impact as well.

Researchers concluded that the upstream oil-and-gas industry needs to embrace data governance. With data governance should come the adoption of industry data standards and processes; the ability to communicate the benefits of data standards across the organization; the appointment of data stewards to improve data quality and reliability; the momentum that can be created throughout an organization with sound data management.

Other industry watchers have come to the same conclusion.

For example, IBM business analysts Sunil Soares and Arik Kristensen delivered a presentation at a September 2011 conference in Norway that emphasized the impacts of bad data on an exploration and production (upstream) business. Bad underground data -- like incorrect geospatial coordinates -- might affect the driller's ability to drill at an exact location of an abandoned well, they said. Companies might be able to prevent production losses, or even catastrophic spills and accidents, if equipment is appropriately and preventively maintained according to a scheduled regime informed by data governance and analytics, they asserted. On the positive side, Soares said initiatives to analyze geospatial and seismic data can discover new reserves, extend the life of existing reservoirs, and maximize production.

The promise of fixing their data problems, and boosting the computing power that can address other energy sector challenges, is not lost on the major oil producers.

A few years back, BP Exploration and Production's COO Doug Suttle boasted in an IDC Energy Insights whitepaper that the company increased the recovery factor from 40 percent to 60 percent in the Prudhoe Bay Field by integrating real-time field performance data with predictive tools.

The Wall Street Journal recently reported how Royal Dutch Schell created the Technical and Competitive Information Technology (TaCIT) group within its organization to revamp its infrastructure for the advent of big-data. The TaCIT team is deploying a wide range of new technologies that revolve around the fundamental belief that better data analytics can address oil industry problems.

For example, the article noted that the TaCIT team is deploying new seismic sensors linked to new interpretative software and visual applications, with the goal of making the information more widely available throughout the organization. The one million new seismic sensors create datasets that size up to 10 petabytes, 100 times larger than those currently in use. The algorithms and interpretive software that's analyzing the data has already found 150 million barrels of oil located under subsurface structures. For a company that lives and dies by calculations of its reserves, the search for new resources using all data and analytical means possible is an existential proposition, the WSJ reported.

With the supermajors lead, the oil-and-gas exploration industry will likely be paying much more attention to data governance and the analytics they can produce.

Does your organization have a data governance strategy in place? If so, what best-practices might you pass along to the oil-and-gas industry?

Joe Gimenez, Freelance Writer, Oil/Gas/Utility Industries

Joe Gimenez is a freelance writer on issues important to the oil, gas, and utility industries. His familiarity with the capabilities and value of analytics and business intelligence in those industries has developed through his work with IT and management consultancy Capgemini, ETRM solutions provider RiskAdvisory, and analytics software solutions provider SAS. His writing has been noted for its unique observations and insights based on his own analysis of available facts. And his clients retain his services for his ability to describe the intersections of data with practical knowledge in a business context. Gimenez has honed his writing skills as a journalist and editor at various publications. His 2008 article, "On the $100/barrel Highway: The Energy Industry's Roadmap to the Future," in Business Baylor Review was prescient on the role that new technology and discoveries would play in the future of the oil industry and the retreat of the Peak Oil theory, especially with an influx of a new, nascent workforce thinking across disciplines.

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Re: Analytics to enhance production
  • 1/29/2013 1:37:19 PM
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@ kq4ym

True.

Analytical tools will be prone to error because it is the human who enters the data and directs what is to be the resultant. If human error occurs, tools cannot be blamed. 

Re: Analytics to enhance production
  • 1/28/2013 9:15:53 AM
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Analytics almost seem to be a given necessity in the oil business. The question in getting accurate data though is still a sticking point. And presumably theorizing which data to use and the importance of each to bring predictive results in line with the cost of analysis.

A slight miscalculation not only brings losses to the company but environment and legal ramifications can result as well.

Analytics to enhance production
  • 1/22/2013 9:39:41 AM
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Frankly, I have never worked for an Oil and Gas company as an employee or consultant so I won't be able to agree or disagree with the situation in the sector but one thing is impressive that organizations are considering to enhance resource extraction by using analytics which in many organizations is perceived as a great tool for assessing the customers and their demands (that is the sales and marketing aspect).

Staff requirements
  • 1/22/2013 9:35:24 AM
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" the appointment of data stewards to improve data quality and reliability;"

This to me is the most effective way to implement data quality and reliability because there has to be someone who creates and communicates formats for input of data for the end-users that are based on the principles of data standardization so that the resultant database across organization can give valuable input for analytics. Effective usage of expensive MISs implemented in the organizations can solve the problem to a great extent because in most instances, the MIS is designed to generate reports that are usable for analytical purposes.

Re: Disagree
  • 1/21/2013 11:02:41 AM
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I think the industry is much farther ahead than some people suspect. Take a look at this article:

Big Oil's Big Data Push Changing the Future of Energy

Re: Disagree
  • 1/21/2013 10:14:23 AM
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Sounds to me like there's still lots of work to be done to finesse the data collection, cleansing, and analytics processes within this industry. 

Disagree
  • 1/21/2013 7:39:01 AM
NO RATINGS

Joe I have to take issue with the premise of this post. It seems to me that the ability of both super majors and global independents to successfully exploit unconventional resources worldwide is directly related to optimizing data. To say that the industry's use of data and analytics is "less than encouraging" just does not make sense to me.

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