Technological advancements continue to unlock new and exciting opportunities, and areas for improvement, across every industry. New apps allow for increased connectedness, better processors give us better computing power, and wearable technologies enable us to have more visibility into our own lives. Those are obvious everyday examples, but have you ever stopped to consider how technology can impact an industry as prolific as Oil and Gas?

O&G of the Past

Historically, energy companies have lagged behind those of other industries in their adoption of new data-driven technologies. Maybe it’s because of the remote location of many of the wells or perhaps it’s because of one of these deeper reasons cited by McKinsey:

• Lack of Clear Value: Better data is useful in theory, but no change occurs unless the impacts can be conceptualized.
• Resistance to Change: Though managers may see value in modern data systems, employees may be resistant to change the way things have always been done.
• Integration Challenges: Even with proven value and employee buy-in, if merging the new with the old is too laborious, it is unlikely to be seen through.

Whatever the particular reason, the outdated data systems that have become the norm for upstream energy companies present an interesting opportunity for advancement and growth.

Key Goals

With the current state of the industry’s technology in mind, let’s move on to understanding what goals drive Oil and Gas company strategies. William Moloney, Director of Trident Energy and ATX Energy, simplifies it down in a Forbes article to these three points:

• Lower Cost: With cost listed as a primary goal, efficiency is paramount (in terms of the best utilization of resources).
• Lower Emissions: Operational and procedural optimization are key drivers of bringing down emissions.
• Lower Risk: Decisions are less risky if they are informed. Thus, the appeal of modern and holistic data systems.

To emphasize the substantial impact that these targets could lead to, McKinsey estimates that up to $250 billion of value could be added to upstream Oil and Gas operations in the next decade, as cited here. Accessing this potential means using data and technology to increase efficiency while reducing costs.

The Role of Data

Meeting the lower cost, emission, and risk goals requires technological solutions that provide value in an easy-to-use manner. Efficiency, optimization, and informed action can all be simultaneously achieved through the use of company-wide data systems that track and showcase the right information. Such information can be used to achieve all three goals via…

• Visibility: In reality, unlocking the untapped value within Oil and Gas boils down to better visibility and the understanding that can be found by using accurate and company-specific data. Such data presented in dashboard form with the ability to access detailed models provides a firm with all it could need to understand its operations.
• Reporting: Visibility taken a step further means that everyone - internal and external - understands what’s going on and what is being done to improve current operations. Communicating what is found through the data is necessary not only for internal leaders and employees to assess but also for investors to be kept in the loop. Enhanced data means these communications are more effective and fact-driven.
• Decision Making: Finally, more information is only as useful as it is actionable. Data has the power to highlight strengths, weaknesses, and opportunities such that a company is able to leverage what it is currently doing well while making improvements where money is left on the table.

The specific data that is tracked, as well as how it’s used, is going to differ between companies. The overall goal is to use that data to improve information, save money, and provide consumers and stakeholders with the most value. A universal plan is not feasible, but each company can unlock its own route to success through modern data systems that highlight where and how to improve.

The overarching best path seems to be a properly curated data tracking system that can be used to monitor, assess, and optimize everything from well-specific data to financial models. For the Oil and Gas companies that choose to take this step, the results could be revolutionary for their output, profitability, and stakeholder satisfaction.

The Opportunity at Hand

What exactly is at stake here? With the increasing desire to modernize and use data to the advantage of business, the outdated systems used in practice will not last much longer. Midsize companies will be able to capture a bigger hold on the industry, and even the small firms will find themselves in a position to grow rapidly and scale to new heights.

The upstream energy companies that choose to innovate and invest in new data systems will be rewarded. Those that do not, just like their systems, may quickly be things of the past.

Let Us Be Your Differential

Here at Differential, we see the value in data. Our team has a history of creating innovative, data-based products to increase the effectiveness of businesses in a variety of industries.

EASE, a technology first developed by Differential for airport use, has massive potential for the Oil and Gas industry. The system, which operates as a full-scale data integration center, can be used by drilling companies to manage and assess key metrics which will enable better decisions and resource efficiency via increased visibility.

Differential also partnered with Lexmark to develop a state-of-the-art data analytics solution that helped the tech company unlock new opportunities for growth by developing an innovative, data-driven business model.

To complement those projects, Differential has over a decade of experience specifically in Oil and Gas through the works of Shahbano Imran and Tyler Siegrist. Shahbano has led the design and development of large-scale enterprise applications used to deploy $800M+ of capital. Tyler has extensive experience with high-level product strategy within the industry and has developed expertise in using data for functional O&G decision making.

Reach out today to schedule a consultation with our team.