As Oil Prices Plunge, Big Oil Turns to Big Data
The Internet of Things has come to oil and gas exploration and production, as Big Oil looks to cut risks and boost revenues in the face of falling prices, says Lux Research
BOSTON, MA – September 8, 2015 – With plunging oil prices, large oil and gas companies are using Big Data to manage risks, cut costs, and increase revenues, according to Lux Research.
As hardware developers have brought a raft of new and existing sensor technologies to the industry, developers have more data to work with than ever. Oil and gas majors can exploit Big Data by identifying high-value use cases like reducing operational costs by anticipating bit-wear, optimizing rig utilization, and improving recovery factors.
“As growth slows, oil majors need to reduce risk in exploration and production, and the rapidly increasing volume of data collected on the oilfield provides an opportunity to do so, if companies can find the right targets,” said Colleen Kennedy, Lux Research Analyst and co-author of the report titled, “Big Data in Oil and Gas: The Intelligent Oilfield.”
“Big Data is becoming a critical competitive advantage, and as a result, oil and gas M&A activity will spreads from oilfield services consolidation into IT plays,” she added.
Lux Research analysts evaluated current Big Data and related technologies in oil and gas, before identifying high-value use-cases in the industry. Among their findings:
- Breakthrough is in sight. Big Data is poised for a breakthrough in oil and gas because the technology for acquiring, analyzing and acting on it is coming together. Companies like Glori Energy and Environmental BioTechnologies are complementing seismic data with novel sensors while others like Silixa and HiFi Engineering are bringing hardware like connected tools and smart pumps.
- Companies need focus. In contrast to information-based industries like telecom, oil and gas needs a targeted approach to Big Data. High-priority use cases fall into six main categories: boosting production rates, reducing nonproductive time, predicting equipment failure, decision support for project planning and trading, de-risking exploration, and regulatory compliance and early event detection.
- Human and environmental benefits also flow from data. Several technology developers are tapping Big Data to help oil producers manage health, safety and environmental impacts. NuPhysicia, for example, offers telemedicine for workers far from health care centers.