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Data Management and the IT Service Model for Oil & Gas

Data Management and the Digital Oilfield

As we’ve covered in a previous post, when it comes to data management, more data isn’t always better. But more complete, real-time data can be a key differentiator if it is tied to notifications and actionable business intelligence.

I ran across an article in Venture Beat from last year discussing five trends in oil and gas technology. The first trend discussed a McKinsey report that described the digital oil field: ““instruments constantly read data on wellhead conditions, pipelines, and mechanical systems.

That information is analyzed by clusters of computers, which feed their results to real-time operations centers that adjust oil flows to optimize production and minimize downtimes.”

Proving Out Investments in IT

The article went on to say that while “total upstream energy IT support spending is about 25 cents per barrel of oil,” some analysts “believe digital oilfield technologies could increase the net present value of oil and gas assets by 25%.”

Even as the energy industry makes these investments in higher quality data from the field, returns of 25% or more are very dependent on management of data once it reaches the front office.

The Harvard Business Journal recently published a blog along these lines called, ‘Don’t Just Serve – Enable: A new Model for IT Organizations.’ As the author, Bill Franks highlighted, “Business users need increasingly fast, broad, and flexible access to data.”

Changing the IT Data Service Model

One hold-up to this access can be the IT process, which because it has to serve everyone’s needs can often seem to fill no one’s. Particularly for oil and gas, “IT must shift focus to enabling access to the range of raw data elements that go into” traditional views and reports so that users can “mix and match data as required for their specific problems.”

As Upstream companies work to get the most value from their investment in each and every well, better data management may be the key to increasing production without a matching investment in new wells.

Since traditional reports often don’t enable users to dig as deeply as they need to, Franks suggests creating discovery environments.

“Within a discovery environment, users can query a broad range of data, create output data (which is not typically allowed in such systems), and even load new data.”

Discovery Moves the Needle on Data Management

These discovery environments, says Franks, have been a big success factor for many large companies. The big reason for this is that it’s easier to experiment “since they are already working within the scalable systems that will be used to deploy their findings, it is much easier and faster to move from prototype to final product.”

For an E&P company, this could mean iterating and making improvements to the process of drilling after only five wells instead of ten. Over time, these efficiencies could make a huge difference in production.

It can be difficult to challenge long-standing methods of looking at data. Oil and gas companies can’t afford to do anything less if they are to keep up in such a competitive industry. As Franks remarks, “Why wouldn’t you want people empowered to freely search for the next great business-changing analysis?”

For more strategies on making data a benefit, not a burden, for oil and gas, check out this post…

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