Can big data rescue the oil and gas industry from its current decline?
While consumers are not upset over the lower prices this winter for gasoline and heating oil, oil/gas companies and their investors certainly have a legitimate interest in improving their performance.
Duncan Irving recently wrote on Forbes about “Why Big Data Has Everything to Do with the Price of Oil.” Irving is Practice Lead, International Emerging Industries for Teradata.
Creating the Digital Oil Field
Irving writes that the industry has poured a lot of money and effort into creating the Digital Oil Field, also known as Integrated Operations of the Future, the Smart Field, Intelligent Field, or e-Field. However, unlike the manufacturing, aerospace or automotive industries – ones that have used technology to come back from challenges – Irving writes oil/gas companies have not transformed their industry as hoped.
Why haven’t the industry’s advances in data, communications and technologies paid a bigger dividend? “The big difference is that the oil and gas industry does relatively little with this wealth of technical data when it comes to business decisions,” Irving writes.
Missing the Big Picture
Why? Individual businesses and technical domains understand their part of the complex industry, according to Irving, but “they guard their data closely.” “…We might know the price oil fetches and what the last compressor maintenance bill was, but we are still sketchy on the full lifecycle costs of getting it out of the ground,” he writes.
Sound familiar? How many other industries, companies and organizations are also challenged in integrating data from various sources and collaborating to maximize planning, development and operations? How many are missing opportunities to leverage data to drive their bottom line?
Enabling the ‘Connected Well’
Irving notes the Quantified Self and the Connected Car paradigms integrate data from disparate domains to create new business models in the healthcare and automotive markets.
He writes: “What if we brought this to topside, reservoir, production and maintenance domains, integrating them under a ‘Connected Well’ approach?” If the industry can overcome the cultural obstacles of such an approach, Irving sees an opportunity to move to advanced analytics, adopting a discovery mind-set.
Given the current economic and operating climate, big data will have everything to do with the price of oil, Irving concludes.
Irving promises a future blog, following up on this subject. What he writes – and how the oil and gas industry respond – will be very interesting to follow. There could be lessons to learn from this line of thinking.
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