Over my career, I've attended many events where the audience was blasted with the value of analytics -- and the pitch usually fell on deaf ears. The 2015 SAS Energy Analytics Forum (which doubled in size from last year) was vastly different. The attendees had more questions and more urgency to take action. This year, attendees were not asking "why?" They were asking: "how?" and "where do we start?"
Here are just a few of the conversations I had with customers, which highlights the business issues analytics can help tackle:
- Forecasting production, cost, and profits at different level of details.
- Forecasting the (economic) life of not just one well, but a field of wells.
- Doing more work safely, and with fewer resources.
- Selecting the right assets for investment.
- Measuring success on a daily basis (production and drilling).
The conversations quickly went to: "Yes, that’s a nice visual, but how is the data being pulled and modeled?" And in almost every conversation, the data they needed to measure either didn’t exist, or wasn't collected in a manner that allowed for analytics, meaning they couldn't use their data to detect issues in operations and production. In the past this was accepted, perhaps due to the high profits associated with $100 a barrel prices. But today oil's going for $40 a barrel or less, and the people I spoke to are being asked to change the status quo. It's no longer just about visualizing data -- it’s about predicting and preventing problems before they happen.
Another big change was that companies were openly sharing their experiences with one another. Even though the room was full of competitors, the atmosphere seemed more relaxed and everyone was more focused on solving common challenges.
Although the five topics above may seem basic issues that should always have been addressed, the fact is today’s economy is pushing the oil and gas industry to find new ways of making data-driven decisions. The rearview mirror reporting and the pretty visuals of the past are no longer enough. Today they need to know not only what happened, but the probability and risk of what may happen in the future. Analytics provides these insights -- and with the ever-shrinking profit margins and loss of experience from the “big crew change” (retirements), big oil needs the power of analytics to help transform every decision being made, and to improve business processes as much as possible.
To learn more, download this white paper: Analytic Innovations Address New Challenges in the Oil and Gas Industry
