The seismic shift occurring in the E&P Industry
In an industry marked by consolidation, volatility in prices and high fixed assets, meaningful management of the business is challenging. With the energy demand continuing to grow by some estimates up to 50% over the next 25 years, the reliance on traditional Petrochemical energy sources is expected to shift towards renewables. This adds complexity to an already highly complex supply chain.
The opportunity for Energy and Petroleum Companies
The Energy and Petroleum (E&P) business is noted for having an extraordinarily high asset base. According to IBM, 10% of all Business Assets globally belong to Energy and Petroleum companies. Moreover, this asset base is often global and diverse. Managing this asset base in an efficient, safe and effective manner is critical to the business operations of the organization. However the management challenge lies in processing the vast amounts of data such a diverse asset base produces especially since this data often exists in silos.
The E&P business also has an extraordinarily complex supply chain. The volatility of the customer demand requires the production to be closely aligned with demand. Given high inventory costs, supply closely needs to match demand and this requires a high degree of Supply Chain Optimization. In fact, in this era of low oil prices, Supply Chain Optimization, is often the biggest tool in an organization’s toolbox to increase the bottom-line.
Now, the rise of pervasive computing devices—affordable sensors that collect and transmit data—as well as new analytic tools and advanced storage capabilities are opening more possibilities every year. Energy producers can capture more detailed data in real time at lower costs and from previously inaccessible areas, to improve oilfield and plant performance. For example, they can pair real-time down-hole drilling data with production data of nearby wells to help adapt their drilling strategy, especially in unconventional fields.
We often find that senior executives understand the concepts around Big Data and advanced analytics, but their teams have difficulty defining the path to value creation and the implications for technology strategy, operating model and organization. Too often, companies delegate the task of capturing value from better analytics to the IT department, as a technology project. In practice, a business unit should lead the effort because it requires cross-functional ownership and participation.
The StarPoint Solution
Our experience shows that developing the capability to produce value from advanced data analytics is a C-level agenda item, requiring the sustained focus of the senior management team—not just the CIO or CTO. Three critical questions should form the basis of an effective advanced-data analytics strategy:
1. Which applications of Big Data will produce the most value for our company?
2. Which organizational model will help us achieve that value?
3. Do we have the right capabilities and talent to make the most of our data?
StarPoint understands these challenges and helps add agility to E&P companies through the use of data analytics. Understanding the value of time, our solutions take weeks, not months or years to deploy.
Some of the key areas of opportunities include:
- Improving business insights by converting siloed data to a single source of truth by consolidating data from multiple sources – internal and external
- Interactive Lease Operating Statements, with full drill down and root cause analysis capabilities
- Creating Corporate dashboards that incorporate data from multiple points on the supply chain: upstream, midstream and downstream to provide actionable insights into managing the business
- Integrating Operational and Financial data from upstream, midstream and downstream operations to drive meaningful insights into the supply chain including:
- User Demand Analysis and impact
- Inventory Target Management
- Supply and Demand Matching
- Asset Management
- Using Predictive Analytics to lower risk and test best and worst case scenarios.
- Improving the bottom line through better forecasting of supply and demand.
This capabilities upgrade should include people who understand industry specific data models, cloud technologies, pervasive computing and iterative development methodologies. Executives should keep in mind their goal of a model that enables better collaboration among domain experts, IT architects, tool specialists and experienced analytic resources. Oil and gas companies will need to improve their analytics capabilities in order to compete in an industry where decisions are moving faster and the stakes are growing ever higher. Creating a world-class analytics capability takes time and investment, and it can only happen with a sustained focus by top management.
StarPoint Technologies is a leading data analytics consultancy and we have worked with some of the top Energy & Petroleum organizations to transform themselves into data driven enterprises. Take advantage of StarPoint’s deep experience with several of the nation’s top Energy companies. Our certified consultants have the expert knowledge and experience to help your organization navigate the uncertainties of the modern energy marketplace. We know and understand the intricacies of your business model and how best to leverage the volume and uniqueness of your data, while empowering your organization to become a data driven enterprise. Thank you for your interest and we look forward to speaking with you soon.