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Oil industry invests for 'big' returns

by Arabian Oil & Gas Staff on Dec 7, 2016

Tech experts are seeing an increased demand for Big Data solutions.
Tech experts are seeing an increased demand for Big Data solutions.

The continued turbulence in the oil and gas industry has put a break 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 oil and gas will increase to nearly $50bn this year.

Today’s challenging market conditions continue to hamper the region’s oil and gas businesses and as a result the sector is increasingly looking for ways to gain a competitive edge and operational efficiencies. For some businesses, optimisation is key to their survival.

With this in mind, 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 a new type of enterprise and will, in turn, be “the foundation for more agile business plans” in readiness for when prices rebound. “This is going to drive innovation in the digital economy,” he says.

One way to improve efficiency quickly and deliver long-term value is to capitalise on the masses of data companies capture every year. Importantly, the rise of affordable sensors, as well as new analytical tools, advanced storage capabilities and cloud computing are now creating commercial possibilities for data owners.

“The oil and gas industry is blessed with 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 etc,” notes 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 relate 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 of these customers are heavily investing to ensure the right capabilities and talent are available to make the most of these assets,” says Tony Milan, executive partner – Natural Resources, IBM Middle East and Africa. “Business IT engagement is evolving as real-time collaboration allows companies to reap significant benefits from Big Data initiatives.”

But 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,” notes Morgan Eldred, research director for Gartner’s Upstream Oil and Gas Industry Advisory Services. “This forces companies to work on information management and integration along with putting in projects for data visualisation, reporting and high level analytical solutions.”

As for the technologies being embraced, organisations such as SAP are noting an increased take-up in cloud-based data analytics and Gartner has reported that the sector’s spending focus has been on Big Data for field strategies.

Eldred also notes that investment is still split between business units and divisions as well as within IT departments, and looking forward, 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 in the region are responding to the growing interest in Big Data by providing a growing range of technological offerings, covering everything from user-friendly predictive modelling and advanced analytics, through to cloud-based solutions. However, as well as technology, organisations are looking to spend their money on the right staff, which to date has been a challenge. “Staff investment is being made but to date very few companies in the region are geared up with data scientists,” Eldred says. “Typically they’ll bring in these sorts of resources for a specific proof of concept and project, which increases the overall cost and time to value.”


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