The oil and gas industry needs to think big with Big Data

By Richard Dyson, io oil & gas consulting on 10/17/2016

The popularity of Big Data as a force for improving business performance has enjoyed exponential growth over the past few years. Research by Google suggests that online searches for the term have increased by a factor of ten since 2011. Small wonder then, that Big Data has in fact been at the forefront of performance optimization in a prolific number of sectors over the past few years, ranging from healthcare to real estate and professional sport, as well as the oil and gas industry.

But, while Big Data may be relatively new to some industries, it is not new to oil and gas. Its unique ability to uncover invisible patterns and trends by linking disparate data has meant that it has long been an essential tool for the industry. Big Data techniques can help oil and gas companies identify enormous efficiency savings and improve the performance of components throughout their operations. In the past, Big Data’s most common oil and gas application has been in seismic interpretation software, which has helped to revolutionize the structural mapping of oil and gas fields, and led to the discovery of substantial oil and gas reserves, which would have otherwise been hard to locate.1

In recent years, a number of new applications for Big Data have emerged in the oil and gas industry. Big data techniques can now be used to implement a statistical approach to product optimization. One of its most exciting new applications is its use in sophisticated reservoir monitoring, which allows companies to optimize field depletion planning, de-risk drilling and maximize their return on investment. Big Data has also been used to forge the concept of the Industrial Internet, which means combining machines and intelligent data to improve the quality of Predictive Asset Maintenance.

Cloud Computing, a nascent yet fastest-growing and exciting corner of the industry, is one of the newest areas in which Big Data promises to drive significant value for oil and gas companies. The innovative client-server model it uses allows oil and gas industry professionals to perform more complex analyses by harnessing significantly greater amounts of data. This in turn allows companies to reduce operational costs, non-productive time (NPT), as well as lessen risk and uncertainty. As more cloud-based systems come online, so too will remote working practices for the oil and gas industry, and these will also allow companies to make significant safety improvements in the field of oil and gas.

The increasing possibilities for data-driven innovative processes in the oil and gas industry, as well as the significant role which they can play in optimizing performance, have not gone unnoticed by oil and gas companies. An Accenture and Microsoft Digital Energy Trends Survey conducted earlier this year found that 56% of oil and gas industry executives believed that harnessing and utilizing big data analytics will form a crucial part of their business strategy over the next three to five years.2

But it needs to be said that, in spite of a few examples to the contrary, the implementation of Big Data on a grand scale within the E&P segment of the oil and gas industry has been sluggish, not least when compared to its expedient uptake in other innovation-orientated industries like the tech sector. While large firms with extensive resources have the ability to fund pilots and explore new tools and techniques, this practice has not been widely replicated within the whole industry. Most oil and gas companies are still not analyzing or using the extensive amounts of data which they are collecting in its most effective way.

There are various reasons for this. Many firms still do not have access to new software processing tools, which are at the vanguard of Big Data analysis. Industry-leading computer programs would normally only be available to a handful of individuals involved in the E&P industry. Furthermore, despite having solid Big Data capabilities in principle, many oil and gas firms continue to find themselves hamstrung by silos and a lack of data integration across various parts of the business. For example, if different teams or units of a large business use slightly different formats to one another when keying in data, this can pose significant obstacles when the business attempts to undertake broad-spectrum analysis of various datasets and develop industry insights.

Another industry challenge is the lack of access to personnel who have the necessary skills and knowledge to apply Big Data techniques in innovative ways. The Lloyd’s Register Energy Oil and Gas Technology Radar 2015 survey found that 29% of oil and gas executives cited skills shortages as the greatest barrier to industry innovation.3 Yet there are still only a small number of data scientists who understand how to manipulate Big Data to create innovative data processes, and even these people are often overlooked as potential employees by an oil and gas industry which is reluctant to make new hires in the low oil price environment. Naturally, this only serves to compound its problems.

There are also those within the industry with concerns that collecting and relying heavily upon vast streams of Big Data leaves a company and its clients vulnerable to malicious use. It is paramount to recognize and understand the value of data security and confidentiality—taking information security seriously with appropriate systems and processes in place.

On a wider level, the greatest obstacle to the implementation of new Big Data techniques in oil and gas is a chronic lack of collaboration. Many firms dogmatically refuse to share their innovative data processes and technologies with the industry at large, with an eye to retaining a competitive edge in the market. While as a short-term strategy this may indeed yield a fractional competitive advantage, it also creates significant inefficiencies within the industry, such as incongruous data standards between various oil and gas companies.

Industry-wide collaboration, as well as a collective willingness to embrace new ways of working, is at the heart of the mentality shift which is urgently needed to revolutionize the oil and gas sector. As companies adapt to the reality of oil prices staying lower for longer, they need to look forwards, not backwards, and embrace innovative solutions like Big Data as the logical answer to performance optimization. Oil and gas was one of the first sectors to understand the myriad of possibilities which Big Data could bring the private sector. Amid continuing economic uncertainty in the industry, now is not the time for companies to shorten their stride.

Related News ///

  • No related news found.


Comments ///


{{ error }}
{{ comment.comment.Name }} • {{ comment.timeAgo }}
{{ comment.comment.Text }}