Despite all the attention paid to alternative energy, oil is still the key driver of the world’s economy. It is worrying, therefore, that the outlook for the global oil and gas industry in 2018 continues to be uncertain.
By Erich Gerber, General Manager, Asia Pacific and Japan at TIBCO.
The year began on a positive note, with Brent prices briefly breaking US$70 per barrel. However, industry observers differ in their views on how oil prices will move this year, given concerns over factors such as US shale supply response to the recent oil price rise, the impact of higher oil prices on global oil demand, and the possibility of supply disruptions in a fragile geopolitical environment.
While OPEC’s members pledged last year to extend relatively short-term production cuts in a move to bolster prices, the deferment or cancellation of over US$600 billion worth of projects through 2020 does raise questions about supply and security after that dateline.
The current improvement still leaves the oil price well short of the records established before the financial crisis of 2007/2008. The price slide hit the upstream sector first, but the need to manage costs has spread throughout the entire value chain, from exploration and production to utilities serving retail customers.
In the face of these challenges, what can oil companies do to achieve more stability in their business?
The industry solution has been an intensified focus on data analytics. Oil and gas has always been a data-intensive industry, with massive quantities of data coming from drilling and production equipment as well as daily operations. With the low cost of sensors, industrial equipment is becoming more and more connected, and we’re getting more data from that equipment.
What is new is a greater willingness by leading companies in the sector to use advanced technologies to gather, aggregate and analyse data. The objective is to achieve a truly digital business – not only reducing costs, increasing efficiencies and enhancing security but fundamentally changing the way the industry operates.
Predictions For The Oil And Gas Industry
IDC believes that oil and gas companies are already adopting software that will reduce costs and help to build a stable IT environment; automating workflows, filling functionality gaps and aligning processes. By 2019, it is expected that 40 percent of all oil and gas companies will have basic platforms for managing data, and for generating analytics and cognitive/AI solutions for performance-related insight.
These technologies largely empower visual analytics capabilities for oil and gas companies, which are strong functions across exploration and production – for analysing subsurface, geology, seismic drilling and completions data. This is pivotal to optimal oil and gas exploration and production strategy, tactics and operations. Visual analytics enables process control, ongoing quality improvement and optimisation, making it central to production surveillance.
Some key usage scenarios include operations metrics, drilling analysis and benchmarking, equipment surveillance, asset management and ongoing visibility, competitor analysis, production root cause analysis, drilling operations and health safety and environment applications e.g. incident tracking and prevention. Visual analytics provides visibility, transparency and understanding of data and operations in all these areas and applications.
Empowering Good Decision-Making With Complete Data Transformation
Some companies are already at the forefront of such initiatives. Leading oil and gas company Anadarko is utilising a complex-event processing platform to build the data acquisition and streaming layer of their real time data system. With a single platform for data acquisition and processing, Anadarko is able to reduce the time and complexity associated with getting the real-time data system up and running to optimise the drilling process on their wells.
Another example is Nabors, a leading provider of offshore platform rigs in the United States. Leveraging the TIBCO Connected Intelligence portfolio, Nabors’ real-time drilling analytics provides optimized drilling operations for their customers, saving time and money while also finding and correcting many drilling problems before they happen.
Merely having operational analytics and making sporadic use of technologies such as cloud and mobility is not sufficient. Given the continuing low price of oil, the oil and gas industry is extremely focused on production surveillance and optimisation to get the most out of their equipment and keep it running efficiently. Exploration efforts involve retooling and positioning capabilities for more optimised approaches, using technology. The potential is massive, with IDC predicting that oil and gas companies will be able to reduce costs and increase efficiencies by 10-50 percent, by evolving IT to third platform technologies.
To ensure this outcome, companies must prioritise their digital transformation process, including networks, analytics, communications, cloud, SaaS and DaaS. Utilities must take a step back and visualise where they want to be, then use this vision to devise an agile, comprehensive strategy that manages data and technology decisions in tandem with operations. This is the route to value, insight and action.
With a clear vision of complete data transformation, Cargill ETM has rapidly achieved supply chain optimisation by taking calculated steps towards this vision. Starting by building a crude refinery research analysis dashboard, what had been a 300,000-row spreadsheet turned into the ability to quickly see and understand results for all units across the refinery complex – their turnarounds, capacity, and results including yields and margins.
Breaking down silos of data management and communication has also prompted the sharing of insights among business leaders, platform leaders and analysts, bringing about truly positive business outcomes. The ability to mash-up data sources, produce an analytic profile of the data, and apply statistical quantitative modelling integrated services, means data is now on hand for analytical visualisations.
Recognising the importance of comprehensive and complete data, Cargill now plans to take data transformation to the next level, including data pattern recognition, multi-dimensional analysis, and trending, allowing them to see new problems and discover new insights.
All along the value chain, it can be said that the oil and gas industry has entered the era of advanced analytics.
These new technologies in the oil field are providing energy firms with significant new opportunities. To respond to this challenging and fast-moving environment, companies must augment traditional analytic methodologies with data visualisation and advanced analytics to make better, faster decisions on production assets.
The advanced analytics tools available today allow businesses to plan and execute better than the competition and manage the efficiency and profitability of assets, while continuing to innovate.
Visual analytics capabilities provide a comprehensive overview of what is happening, but only advanced analytics offer the predictive and prescriptive elements of the value chain – helping operators get clarity on what positive or negative events are likely to happen next, and what they need to do about it.
From analysing where to drill to estimating ultimate production, helping energy utilities analyse customer demand, or reducing Non Productive Time by analysing failures and predicting future events, oil and gas businesses need to take advantage of advanced analytics tools to maintain competitiveness and maximise profitability.