Drilling down: the analytics revolution in oil and gas
If there’s one industry that should know a thing or two about extracting the maximum value from the resources at its disposal, it’s the oil and gas sector. And data is just another one of those resources – albeit one that, thanks to analytics, is increasingly becoming as valuable to the business as the petroleum it is helping to find.
Big data is a big deal for oil and gas firms. A recent survey by Accenture and Microsoft of both oil companies and those involved in supporting industries found that 90% of respondents said increasing their analytical, mobile and internet of things capabilities would increase the value of their business. Oil and gas firms need to improve their analytics capabilities in order to compete in an industry where decisions are moving faster and the stakes are growing ever higher.
Of course, the most important question (other than “what the hell were the other 10% thinking?”) is how are they actually doing that? What are the practical applications that are making a difference?
“For many years, oil and gas organisations have been collecting a great amount of information for operational efficiency purposes,” argues Michael Curry, VP for Engineering Analytics at IBM, in a recent interview I did with him for MeetTheBoss TV. “Now they’re starting to see the value of taking that information out of their core operational systems, and using new practices like big-data analytics to get more value out of that information and apply it in new ways across their decision-making.”
Take exploration, for instance. With drilling a deep-water oil well often costing in excess of $100 million, firms need to be reasonably certain of success before embarking on a new project. In the past few years, technology has advanced to the level where surveying a potential drilling site could now involve more than a million different data points – vastly increasing the amount of information gathered during exploration, and taking a lot of risk out of the process.
Data is helping further downstream, too. Once drilled, sensors deep in the wells or on drilling equipment or pipelines send a constant stream of information that can help producers understand productivity and flow rates, as well as if or when a piece of equipment might fail, while sensors can also help monitor pipelines and other equipment and allow a more predictable and precise approach to maintenance.
Of course, all that data means nothing without the right analytical tools. Better analytics can improve the way companies manage the entire process of drilling and connecting a well, improving their ability to characterise sites with less trial and error, identify potential opportunities and areas for concern, spot trends, intervene early and create repeatable solutions with predictable outcomes.
“You need to have information you can trust, and you need to put it into context for users”
“You need to have information you can trust,” says Curry. “You need to put it into context for the business user that’s trying to understand that information, and then give them the tools to react to what they find and impact a change in business systems or actual physical systems.”
New analytic capabilities enable oil and gas companies to move beyond traditional real-time monitoring to embrace real-time prediction and agile responses. “This is about pulling that information together in a coherent way, and providing dashboards and views on that information that allow business people to make decisions,” he says.
And it is that ability to make faster – and better – decisions that is really helping the industry to get more out of its resources. “With the availability of cloud computing, big-data analytics and the Internet of Things, there’s just so many possibilities that weren’t there even five years ago,” concludes Curry. “They’re finding ways to apply technology to get better at finding oil and gas supplies. And they’re using it in their overall operational landscapes, so that they can deliver things faster, they can innovate more quickly, and they can try new things. That’s all leading to gains, both in terms of the amount of production that’s out there, and in terms of safety.”
As a journalist, editor and now presenter at MeetTheBoss TV, Ben has been writing and speaking about the intersection between business, people and technology for the past 15 years. In a career that’s taken him from working for consumer music and style mags to Editor-in-Chief of Business Management magazine – via work for the likes of The Guardian, Frost & Sullivan and Bloomberg, amongst others – he’s interviewed some of the biggest names in business, spoken at international events and moderated countless roundtable discussions.
