We believe that information is the Oil and Gas industry’s next big unconventional play, and apparently we aren’t alone. Kim Nash of
CIO Online states, “after oil, the best kind of gusher to discover and manage these days is data, and therefore profits, in real time.” And as Nash intelligently reminds us, when treating information as an asset, ”there is no shortage of data points; the value is in interpretation.” Accurate interpretation of highly relevant information is the key to making good decisions, which is why “without good BI, oil companies risk their livelihoods” according to David Knapp, a senior editor at the Energy Intelligence Group. ”Data drives what we do, always quantifying where that value is.” Gary Lensing, VP and CIO for global E&P at Hess confirms.
What’s special about BI for Oil and Gas?
Everyone who works at an oil and gas company is focused on collecting, storing, analyzing, interpreting, or consuming some form of data. And unlike other industries, Oil and Gas doesn’t focus only on using data to gain operational efficiencies. Energy firms really use data to analyze core assets and extract value. In fact
Business Intelligence seems to be bred into the industry itself according to Lensing, “Engineers and geoscientists and everyone have been taught BI from the start.” So there’s lots of data, people who know how to use it, and value to be gained. Where’s the catch?
Everyone seems to agree about the importance of good Business Intelligence
, but what’s interesting is that the method for how to get there from here is not very clear. As the article notes, “BI in oil and gas isn’t a simple matter of buying a set of analysis tools and feeding data into them.” Business Intelligence is dependent on many sources of clean, accurate and up to date data. And unfortunately IT in Oil and Gas is regularly relegated to desktop technician status with a focus on reducing cost.
Data management is seen as a necessary evil, and budgets have been focused around getting by rather than getting ahead.
In fact, a recent study by Schlumberger and CDA called ‘
The Business Value Case for Data Management’ suggests that “until very recently the data management community has most often published and presented their methods and challenges to themselves. Users and Budget Holders have not been involved in the discussion.” (page 11) The same article states as it’s findings that “all oil company personnel should carefully review their current data management. In most companies there are opportunities to . . . significantly increase the total value an organization generates.”
Real-Time, Field and Tracking Data
An exciting and growing aspect of business intelligence are newer types of data inputs. RFID tracking can automate asset history tracking, real-time data can drive decisions on the fly, and field data brings a better understanding of what’s going on on the ground to the corner office. “An engineer in Houston can monitor drilling activity in West Africa, see an anomaly in how the drill bit sinks into the ocean floor and can send that data over satellite to a geoscientist in Houston, who can view the visualization and e-mail a recommendation on how to adjust the machines,” Lensing says. This and other types of adjustments can account for faster time to market, fewer lost wells and even better documentation for compliance, safety and other issues. “The ability for people on a platform to communicate with people in the home office and work on the same set of data means we can get more production done faster and more accurately,” he says. “How you choose to analyze the data and the decisions you make—there’s your competitive advantage.”
The Impact of Business Intelligence
No one argues that oil isn’t one heck of a lucrative industry. And all those profits don’t come from good business intelligence practices alone. But it’s a powerful notion to run a company with the mind-set that virtually every employee is a data analyst. “Give people in any industry access to information along with tools to interpret the past, model the future and imagine different paths between the two,” says Lensing in the article ”and they can change the trajectory of companies.”
Read our case study to find out how we helped one client improve their business intelligence capabilities.