Achieving Great Data in the Oil and Gas Industry
Have you noticed something different this winter season that most people are cheery about? I’ll give you a hint. It’s not the great sales going on at your local shopping mall but something that helps you get to the mall allot more affordable then last year. It’s the extremely low gas prices across the globe, fueled by over-supply of oil vs. demand contributed from a boom in Geo-politics and boom in shale oil production in N. America and abroad. Like any other commodity, it’s impossible to predict where oil prices are headed however, one thing is sure that Oil and Gas companies will need timely and quality data as firms are investing in new technologies to become more agile, innovative, efficient, and competitive as reported by a recent IDC Energy Insights Predictions report for 2015.
The report predicts:
- 80% of the top O&G companies will reengineer processes and systems to optimize logistics, hedge risk and efficiently and safely deliver crude, LNG, and refined products by the end of 2017.
- Over the next 3 years, 40% of O&G majors and all software divisions of oilfield services (OFS) will co-innovate on domain specific technical projects with IT professional service firms.
- The CEO will expect immediate and accurate information about top Shale Plays to be available by the end of 2015 to improve asset value by 30%.
- By 2016, 70% percent of O&G companies will have invested in programs to evolve the IT environment to a third platform driven architecture to support agility and readily adapt to change.
- With continued labor shortages and over 1/3 of the O&G workforce under 45 in three years, O&G companies will turn to IT to meet productivity goals.
- By the end of 2017, 100% of the top 25 O&G companies will apply modeling and simulation tools and services to optimize oil field development programs and 25% will require these tools.
- Spending on connectivity related technologies will increase by 30% between 2014 and 2016, as O&G companies demand vendors provide the right balance of connectivity for a more complex set of data sources.
- In 2015, mergers, acquisitions and divestitures, plus new integrated capabilities, will drive 40% of O&G companies to re-evaluate their current deployments of ERP and hydrocarbon accounting.
- With a business case built on predictive analytics and optimization in drilling, production and asset integrity, 50% of O&G companies will have advanced analytics capabilities in place by 2016.
- With pressures on capital efficiency, by 2015, 25% of the Top 25 O&G companies will apply integrated planning and information to large capital projects, speeding up delivery and reducing over-budget risks by 30%.
Realizing value from these investments will also require Oil and Gas firms to modernize and improve their data management infrastructure and technologies to deliver great data whether to fuel actionable insights from Big Data technology to facilitating post-merger application consolidation and integration activities. Great data is only achievable by Great Design supported by capable solutions designed to help access and deliver timely, trusted, and secure data to need it most.
Lack of proper data management investments and competences have long plagued the oil and gas sector with “less-than acceptable” data and higher operating costs. According to the “Upstream Data and Information Management Survey” conducted by Wipro Technologies, 56% of those surveyed felt that business users spent more than ¼ or more of their time on low value activities caused by existing data issues (e.g. accessing, cleansing, preparing data) for “high value” activities (e.g. analysis, planning, decision making). The same survey showed the biggest data management issues were timely access to required data and data quality issues from source systems.
So what can Oil and Gas CIO’s and Enterprise Architects do to prepare for the future? Here are some tips for consideration:
- Look to migrate and automate legacy hand coded data transformation processes by adopting tools that can help streamline the development, testing, deployment, and maintenance of these complex tasks that help developers build, maintain, and monitor data transformation rules once and deploy them across the enterprise.
- Simplify how data is distributed across systems with more modern architectures and solutions and avoid the cost and complexities of point to point integrations
- Deal with and manage data quality upstream at the source and throughout the data life cycle vs. having end users fix unforeseen data quality errors manually.
- Create a centralized source of shared business reference and master data that can manage a consistent record across heterogeneous systems such as well asset/material information (wellhead, field, pump, valve, etc.), employee data (drill/reservoir engineer, technician), location data (often geo-spatial), and accounting data (for financial roll-ups of cost, production data).
- Establish standards and repeatable best practices by adopting an Integration Competency Center frame work to support the integration and sharing of data between operational and analytical systems.
In summary, low oil prices have a direct and positive impact to consumers especially during the winter season and holidays and I personally hope they continue for the unforeseeable future given that prices were double just a year ago. Unfortunately, no one can predict future energy prices however one thing is for sure, the demand for great data by Oil and Gas companies will continue to grow. As such, CIO’s and Enterprise Architects will need to consider and recognize the importance of improving their data management capabilities and technologies to ensure success in 2015. How ready are you?
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