how can the oil and gas industry exploit the big data revolution?

In a world in which new innovations are constantly changing the way we do business, the term “big data” is never too far from the headlines. Big data refers to datasets of unprecedented scale, which, if analysed properly, can provide business with new and exciting insights into how they can improve and streamline their business models. As the Fourth Industrial Revolution continues apace, trade media publications have become rife with articles clamouring for the oil and gas industry to harness its big data expertise from areas like seismic studies, and apply this expertise in other business areas in order to improve productivity and maximise efficiency.

But while such articles are often long on passion, they also tend to be rather short on specifics. To the critical reader, they beg an important question: how can the oil and gas industry’s current expertise with big data really be exploited for use in other areas?

One potential solution is to draw on the innovative practices which are currently taking hold in the construction industry, such as the Building Information Modelling (BIM) initiative. BIM has been described as “a collaborative way of working, underpinned by the digital technologies which unlock more efficient methods of designing, creating and maintaining our assets.”[1] Within the UK construction industry, BIM digital solutions are used to ensure that built assets are operated more effectively and efficiently. For improving productivity and slashing costs, it has proven to be a winner. A recent UK Government report showed that the implementation of BIM on projects has delivered average capital expenditure savings of 20 per cent.[2]

At first glance, BIM could easily be mistaken for being little more than a 3D CAD model making some rather exaggerated claims about the benefits it can provide. But you only have to delve a little deeper to see that by setting a standard for capturing critical asset and equipment data within a holistic 3D asset model, BIM is in fact revolutionising lifecycle information management. Indeed, similar big data solutions applied to the oil and gas industry could yield a wealth of efficiency savings.

As the UK construction industry continues to evolve, BIM is rapidly becoming the bedrock of the Government’s Digital Built Britain strategy, which aims to create a construction sector which can take full advantage of the opportunities presented by the Fourth Industrial Revolution. Digital Built Britain’s vision for the construction industry’s future includes data-driven collaborative work methods to enable the best use of supply chain capability; data recording to understand asset performance, and the use of the Internet of Things to predict maintenance.

All of these concepts also have a strong resonance in the oil and gas industry, and indeed, some of them are already in the early stages of being adopted as upstream work methods on oil and gas projects. But what separates the success of the UK construction industry from the oil and gas industry in harnessing the potential of big data has been the collaborative approach which it has taken to driving innovation. Indeed, in delivering the BIM Strategy and the wider Digital Built Britain strategy, UK construction companies such as Laing O’Rourke have demonstrated a remarkable capacity for cross-industry cooperation.

By contrast, oil and gas companies have lacked an integrated approach to harnessing the digital oil field. For too long, they have preferred to keep innovative digital technologies and data processes to themselves, in order to cling onto fractional competitive advantages against their rivals. But while this approach to doing business may yield marginal economic benefits in the short-term, in the longer-term it risks stemming the flow of innovation which will lie at the heart of the oil and gas industry’s future success in the lower-for-longer price environment. Rather than retreating into isolation, oil and gas companies should seek to drive innovation in the big data sphere by encouraging cross-sectoral partnerships. As well as collaborating with other upstream firms, this could also mean working with downstream firms, universities, and Government agencies which are eager to promote research in the technology sphere.

The writing is on the wall. Succeeding in today’s oil and gas industry demands a stronger push by companies for collaboration. This could mean turning to consortium building and innovative financing techniques, which are some of the new ways in which they can cut costs on projects. And from a big data angle, it will certainly mean oil and gas companies sharing their digital technologies and data processes, as well as standardising their data-related practices in order to unlock a wealth of new efficiencies across the supply chain.

With vast resources and elite-tier human capital, the oil and gas industry is uniquely placed to take full advantage of the big data revolution. However, a palpable lack of industry collaboration on the issue threatens to stand in the way. In order to harness the Fourth Industrial Revolution, oil and gas companies will need to band together, in the knowledge that significant reward awaits further down the line.