INS IDE STO RY
Oil & analytics do mix
From the boardroom to the oil field,
from healthcare to manufacturing, analytics continues to expand its reach and its
impact throughout the business world, but
as many of the articles in this issue point
out, the analytics profession and those
who practice it are only just now scratching the surface of their true potential.
Take the oil and gas industry, the
subject of this month’s cover, for example.
The industry in general, and exploration
and production (E&P) companies in particular, faces many complex problems that
could benefit big time from data-driven
analysis and solutions, yet the adoption
and application of analytics remains
sketchy at best.
In “Analytics in the oilfield,” Warren
Wilson notes that while many E&P companies have embraced business intelligence and other analytics tools in their
back offices, they are way behind the
curve in terms of operations technology.
Wilson, a long-time IT analyst in the E&P
sector and an oil field roughneck in a previous life, says drilling data is routinely
gathered in real time so that a rig can
be shut down if problems arise, yet the
data is then discarded, “foreclosing any
opportunity to look for patterns that could
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enable earlier problem detection and
point the way toward better practices.”
Along with discarding potentially valuable data, Wilson says the E&P sector
also suffers from data fragmentation,
furthering hampering analytical efforts.
Atanu Basu follows Wilson’s article with
an article that looks at how prescriptive
analytics can reshape fracking in oil and
gas fields. Basu, CEO of a company
whose prescriptive analytics software
focuses on improving oil and gas exploration and production, notes that current
fracking practices are quite inefficient:
Horizontal drilling and hydraulic fracturing recovers 20 percent or less of the oil
in the shale rocks. That means drillers
spent $31 billion in 2013 on suboptimal
frack stages across 26,100 wells in the
United States.
Given the sky-high cost of oil exploration and production, and the potential
for analytics to boost operational efficiency, E&P companies are leaving a lot of
money on the table. Sure, oil companies
make a ton of money, but why would they
spend it on inefficient operations when
they don’t have to?
– PETER HORNER, EDITOR
peter.horner@ mail.informs.org
W W W. I N F O R M S . O R G