Special Report: Industry invests for 'Big' returns
Recent survey has found that 80% of upstream oil and gas companies plan to increase their spending on digital technologies in order to drive leaner and smarter organisations, writes Keri Allan
The continued turbulence in the oil and gas industry has put the breaks on investment and continues to delay major capital projects. However, there is one area that has captured the sector’s attention: Big Data.
According to the 2016 Upstream Oil and Gas Digital Trends Survey by Accenture and Microsoft, 80% of upstream oil and gas companies plan to increase spending on digital technologies in order to help them drive leaner and smarter organisations. Analysts at global market intelligence firm IDC predict that IT spending in the oil and gas industry will increase to nearly $50bn this year.
Increasingly, the region’s oil and gas sector is looking for ways to gain a competitive edge and operational efficiencies. For some businesses, optimisation is key to survival.
Many organisations believe that now is the time for them to embrace Big Data. According to Fawwaz Qadan, head of Platforms and Innovations at SAP MENA, this sort of approach will form “the foundation for more agile business plans”, in readiness for when prices rebound.
The rise of affordable sensors, new analytical tools, advanced storage capabilities and cloud computing is creating commercial possibilities for data owners. “The oil and gas industry has vast amounts of data that accumulated over decades. Think of the petabytes of seismic data, well logs, maps, real-time data flowing in from SCADA systems and sensors, ERP systems, and so on,” says Microsoft’s Omar Saleh, director – Oil and Gas, Middle East and Africa.
“All this information presents a wealth of opportunity – in today’s world, the accuracy of predictive analysis and decision recommendations directly relates to the integrity of the data being analysed and the mix of data sources and systems incorporated and correlated.”
Indeed, technology experts are seeing an increasing demand from oil and gas companies for the adoption of Big Data solutions. This is because they can provide real-time information on business-wide operations, leading to actionable insights that can reduce costs and enhance the supply chain.
“Big Data adoption is prevalent among all regional clients, and many are investing heavily to ensure the right capabilities are available to make the most of these assets,” says Tony Milan, executive partner – Natural Resources, IBM Middle East and Africa.
Even so, the sector still has a way to go. Analyst firm Gartner reports that the oil and gas sector’s use of Big Data technology lags behind other industries, so there are sector specific challenges currently being worked out.
“This is related to organisational silos and ownership of information and data,” says Morgan Eldred, research director for Gartner’s Upstream Oil and Gas Industry Advisory Services. “This forces companies to work on information management and integration, and putting in projects for data visualisation, reporting, and high-level analytical solutions.”
As for the technologies being embraced, organisations such as SAP note increased uptake of cloud-based data analytics, and Gartner reports that the sector’s spending has been focused on Big Data for field strategies.
Eldred also notes that investment is still split between business units, as well as within IT departments. He expects to see more consolidation of Big Data projects, moving towards programmes that focus more on integration than providing niche capability within a specific function.
ICT companies are providing technological offerings covering everything from user-friendly predictive modelling and advanced analytics, through to cloud-based solutions. However, organisations are also looking to spend their money on the right staff. “Successful individuals bring a balance between industry knowledge, analytical skills focussed on solving specific problems, and technical acumen, enabling them to leverage open-source models, cloud technologies, iterative methodologies and ubiquitous computing,” says IBM’s Milan.
Big Data enables the oil and gas sector to extract extra value from existing information, offering real and tangible returns on investment, although a shortage of expertise could still hamper its full potential. It is important, therefore, that companies run their Big Data projects with sufficient investment to yield the best possible returns. Words: Keri Allan