Extracting a volatile substance from a remote location on a massive scale and with maximum efficiency takes one resource above all others: innovation. Cutting-edge technology and new techniques have always helped the oil and gas industry overcome insurmountable obstacles and achieve what seems impossible. Now, the industry is in the midst of a new wave of advancement that eclipses anything that came before.
Technologies like artificial intelligence, augmented reality and surveying drones bring exciting capabilities to the oil and gas industry. They also each serve as invaluable sources of data into all aspects of operations. Thanks to the explosion of data, it’s possible to measure, capture, store and analyze more information than ever before. Essentially, this flow of data helps companies know the unknowable. And in a highly speculative industry like oil and gas, that’s an obvious (and tremendous) advantage.
The average company manages almost 163 terabytes of data, and that number is only climbing. Countless valuable insights live inside that data—like how to recover from the COVID-19 pandemic, where to invest precious resources and when to be worried about renewables—but they’re not easy to find and interpret. The oil and gas companies that use data effectively won’t always see automatic results. But if they’re systemic about refining their data, it will become an invaluable resource that propels them into the future.
Building a Data-Driven Company
The most important data sources for an oil and gas company may be located in far-flung locations or on pipelines that stretch for miles on end. Getting information from those remote locations and into the hands of decision-makers is one challenge to building a data-driven company.
Validation is another: For data to be insightful and trustworthy enough to act on, the underlying information must be free of errors and omissions. Preserving the data’s integrity takes a comprehensive effort to convert, validate, cleanse and map it.
Once a company knows all the places that data flows into, it must create links between those sources. Without those links, it would take much longer to analyze the data, and the analysis would suffer from information deficits. More data is always better, but anything less than all the data is cause for concern.
Also worrying is the risk of hackers compromising repositories of valuable data. The oil and gas industry must put robust cybersecurity measures in place that keep data locked down—without making access difficult for employees in the process. To achieve this, companies must walk a fine line or face the consequences if they fail in either direction.
The Benefits of Putting Data First
Data may be an asset, but as this makes clear, it’s challenging to manage. However, as oil and gas companies increasingly drive success using data and technology over heavy equipment and expansive extraction sites, companies that don’t evolve won’t remain competitive. To make the initiative attractive to all stakeholders, consider the benefits of running a company with a centralized database of all the best information available.
1. Improved decision-making: Data from multiple sources integrated in one place gives decision-makers the 360-degree perspective they need to choose their next steps wisely. Nothing guarantees correct decision-making every time, but companies make the right choices far more often when they have an expansive information repository to draw from. Every question has an answer, and no uncertainty lasts for long with centralized data.
2. Consistent performance: When an oil and gas company has sites and workers spread across multiple locations, there’s a high risk for miscommunication and poor coordination. Centralized data arms everyone with the same information, so they have a consistent understanding of what’s happening. Not only does everyone have a shared set of facts to work from, but they also can stop searching all over for the information they need.
3. Resource optimization: Few companies have the time or staff to spare on complicated data management. When it’s done automatically—guided by best practices for collection and organization—employees can spend less time preparing information and more time putting it to good use.
4. Elevated performance: Data is easier to extract when it lives in a centralized location. Whatever users need to access comes to them on-demand, along with whatever contextual data they need to enhance their understanding. Therefore, companies save time and money on data management by centralizing their information. They can save even more by using that data to elevate efficiency, productivity, profitability or any other KPI.
It may sound unbelievable, but data is very quickly replacing oil and gas as the most important resource in the energy sector. Some companies will debate or resist that fact. Others will get on board and make data their new priority. It’s not hard to predict which of these companies will fare better in the energy economy of the future.
About the Author:
Fernando Salazar works as integration services manager for Enertia Software, a Midland, Texas-based software provider focused on solutions for upstream oil and gas companies. Salazar has worked with Enertia Software support and integrations for more than five years, specializing in interfaces, business intelligence and reporting.
2023-01-31 - North Hudson said it's providing capital solutions to small- and mid-sized operators at a time when capital providers in the oil and gas sector are pulling back.
2022-12-19 - Palliser Capital recommended the replacement of Capricorn Energy's CEO and CFO, among others, and recommended former BP North Africa regional president Hesham Mekawi and former Spirit Energy CEO Christopher Cox as replacement directors.
2022-11-18 - Diamondback, Marathon Oil and Devon have dominated second-half M&A thanks to higher EBITDA multiples and yields than smaller E&P competitors can offer.
2022-11-10 - Diamondback Energy has targeted $500 million of noncore asset sales in the Permian Basin in connection with its $1.6 billion FireBird acquisition last month.
2022-11-11 - BP expects its production to slip slightly in the fourth quarter of 2022 but foresees a pricing environment that supports higher oil and gas realizations owing to Russian supply issues.