With an oil supply glut from OPEC+ and increasing uncertainty as a global pandemic further reduces demand, upstream oil and gas is facing unprecedented challenges. Many companies are facing hard decisions with oil prices falling to historic lows, sending the industry into a tailspin resulting in layoffs for some and a screeching halt to E&P activity. To get better insight into the market amidst this uncertainty, some operators and private equity firms are turning to consultancies for data-driven analysis to extend their in-house capabilities.
Let the data be your compass
For good or bad, the numbers don’t lie. And for companies and investors looking for ways to make the most out of their existing assets, deeper analysis can shed light on new opportunities. As industry and technology progress toward the Fourth Industrial Revolution (Industry 4.0), new tools such as artificial intelligence, machine learning, robotics, cloud collaboration and wearable tech can make operations more efficient, saving time and money while uncovering better ways to operate.
In extreme conditions such as a global pandemic, data-based insights can bring clarity to a chaotic worldview. While markets continue to fluctuate, upstream oil and gas businesses can shift focus to recovering more from wells they’ve already drilled using advanced technology designed to optimize production, adding value to their portfolios while saving significant capital.
Harnessing data for meaningful decision-making
Subsurface data is critical to understanding hydrocarbon recovery potential. Petrophysical interpretation models can evaluate new potential in old wells while 3D structural models can reveal opportunities for recompletion. But data alone can’t optimize operations—companies must maximize it with robust analysis. Oil and gas technology has evolved rapidly in just the past five years, including using artificial intelligence (AI), or machine learning, to identify areas of opportunity. AI can offer unparalleled insight into production health, enabling evidence-based decision-making from leadership.
Data analytics continue to be a significant source of insight. If companies can simplify their data gathering processes and use a reliable system to aggregate and model it, they can determine which wells have the highest impact on production. The cloud also has a role to play in maximizing assets. By allowing operators to integrate everything from machine components to engineering drawings to supply chain operations within a single cloud-based platform, digitizing an information repository creates significant efficiencies and allows for greater collaboration. Per a 2018 commentary from Accenture Resources, cloud management is proven to have saved oil and gas companies as much as 20 percent in labor costs.
Partnering with oil & gas consultants
Companies invested in the upstream space may not have this digital technology at their fingertips—much of it is cost prohibitive in a time of extreme capital discipline. The best consultants, however, require it, making recommendations based firmly in integrated data analysis, taking into account factors such as geopolitics, engineering, geoscience, land management, accounting, and the life cycle of wells and assets. Because of their extensive knowledge across multiple areas of expertise, consultants lay the foundation for companies to succeed by basing plans of action on data modeling and risk management.
Consultants not only have the digital tools to make informed, data-based recommendations for companies with unique challenges, but also act as objective, third-party experts that can offer a valuable outside view. During these times of unprecedented uncertainty and even panic, consultants can provide reassurance through their lens of objectivity. Their goal is to help these companies maximize existing assets in a time of capital restraint and a rock-bottom price market, working toward earning an ultimate return on investment. Tools used today to navigate pandemic-era markets can move companies forward in better times, making them more competitive when the global economy restabilizes.
Every good oil & gas consultancy should have a proven track record with its clients, working with E&Ps and investors of all sizes, at home and abroad. Even more importantly, they’ll have experience weathering the ups and downs of recent oil market crises over the past 30 years. By using advanced technological tools and analysis to help companies work smarter, not harder, they’ll position them for leaner operations, maximized production, and future success.