Big data analytics burst onto upstream industry as next frontier
The upstream oil and gas industry has, historically, lagged behind other heavy industries, when it comes to the speed at which companies adopt new technologies. Anything new—be it tools, equipment or even new operational procedures designed to increase efficiency—must be proven in the field before many operators will trust it, complete with detailed case study results. Yet, when the industry is booming—and rushing to find new resources—most E&P companies don’t have the time to consider partnering on a pilot project or changing how they operate. When the industry is in a downturn, most simply can’t afford trying new technologies, when there are no guarantees that they will work or not.
The time is right. However, for data analytics, that dynamic within the upstream sector may be changing. In the middle of the latest downturn—the worst since the 1980s—E&P companies and oilfield service firms have both begun to take a hard look at their operations, to find ways to save time and money. The results have included increased standardization of procedures, new performance contracts that rebalance risk and incentivize productivity, and growing interest in the use of data analytics.
The industry has taken notice of how the Internet of Things (IoT) and Big Data have revolutionized other sectors, such as manufacturing, healthcare and transportation. For oil and gas, the possibilities are seemingly endless—from descriptive and diagnostic analytics that allow companies to learn how to increase efficiencies after an operation has taken place, and where an operation might have gone wrong after the fact, to predictive—or even prescriptive—analytics, which can automate maintenance schedules to ensure optimal equipment uptime. Eventually, this digital transformation may even enable full automation of procedures, as oilfield equipment is increasingly built with internal computers that can read real-time data, although that is still only a long-term goal for the industry.
There are now many players setting themselves up to compete for market share in this digital space within the upstream oil and gas industry. These competitors range from large, publicly-traded companies with offices that span the globe, to small start-ups with only a handful of employees. In the midst of such competition come concerns like data ownership between companies and cybersecurity—other potential markets which have, themselves, spawned new third-party vendors looking to provide services to the oil and gas industry.
All of these issues and more will be discussed on a weekly basis in World Oil’s new blog. Please check back again next week for more discussion on the future of data analytics in the upstream oil and gas industry.
The Authors ///
FROM THE ARCHIVE ///
comments powered by