Drowning in data – O&G’s missed opportunity
In today’s rapidly automising world it is often emphasised how companies should invest into data gathering devices to know their process and product better. This particularly comes up in terms of IoT and remote monitors and sensors. One company after another race to incorporate the latest innovation hoping to collect more information about the operations. It is almost regarded as a crucial need and is rarely questioned among users.
Now, however, McKinsey and Company, a worldwide management consulting firm, has done research into whether all this collected data is used and needed. The answer is a simple no. Focussing specifically on the energy industry, they studied how much of data collected from oil rigs would make its way to the executive level. These executives would then make decisions widely concerning the company and the course it would take. McKinsey and Company found that from some 30,000 data points around the world, information from only less than 1% would make it into the hands of the high-level management. The rest is either dismissed, of no use, a duplicate of other existing data, or, in some cases, even incorrect.
The remaining 99% point towards a problem of resources. Time, money, equipment and skills are wasted on gathering, processing and analysing of information that does not yield any significant output. It is therefore only a question of how to distinguish between the “good” and the “bad” data. One option could be computerised analytics, which has so far been proven in fields of banking and airlines, yet the energy sector seems to be a sceptic. At best, it could drive down the breakeven cost of an oil barrel. Even at its worst, it would still significantly decrease the amount of data that would have to be processed manually by humans, resulting in better efficiency.
Another point is how the companies do not know how to use the data they have in their possession. Instead of looking at long term solutions, to e.g. determine a course of action, it is only passed on to first level engineers. Although they use it smartly, it rarely extends past 15 minutes – where to drill, where to avoid. The very same data bits could be stored to find trends and establish patterns, yet this is another point the energy sector has not concentrated on.
For now, however, Oil & Gas companies are drowning in an abundance of data that they hav
e no real need for. With how they are working, something must change. Either all the data should be considered over years for wider interpretation, or the unused data should be discarded at an early stage. One way or another, improvements must be made to deal with the aforementioned 99%.