Is Big Oil Ready for Big Data?
Globally, the oil and gas sector continues to experience price volatility, however, is this current environment fueling opportunities for innovation? A new report, Innovating in a New Environment, launched by Lloyd’s Register Energy, couples expert knowledge with third party insights to provide data-driven findings on the role of innovation in the current and future oil and gas industry. Key findings in the report find the “digital oil field” brings an increased need for technology innovation and strong capabilities in data, statistics and mathematics joined with the traditional science and engineering skills.
While the environment may be creating circumstances for innovation, 76% of the study’s respondents reveal that the oil price has led them to slow down or terminate most innovation activities. In relation to this, the report highlights that stopping an innovative project today may assist the bottom line in the short term, however, it could weaken a company’s ability to discover and exploit new reserves of oil and gas tomorrow. Indeed, whether prices are high or low, the fact remains that there is a declining supply of ‘easy oil’.
Therefore, digital technologies could propose the greatest efficiency benefits to be achieved in a low oil price world with dwindling ‘easy oil’ levels. Digital technology can often be expedited upstream more hastily than other technologies and they have the benefit of being scalable at a comparatively low cost. Despite this, the oil and gas industry is no foreigner to data collection implements. For instance, sensors that generate data on deposits have been used in remote environments for well over a decade. Curtin University’s Dr. Evans believes data collection and analytics will overshadow other technologies in the industry and will be directed by a focus on cost-efficiency. Ultimately, he reveals, “our ability to become lean and mean will come down to our ability to master data analytics.”
In the long term, oil and gas firms must continue to participate in innovation or are in jeopardy of losing competitive edge. As suggested by the report, oil and gas firms should look at new collaboration models to learn how other industries have completed more with less resources, utilized new technologies and employed ‘big data’.
Overall, a continual phase of low oil prices may disintegrate conservative attitudes towards innovation in the oil and gas industry. As the Innovating in a New Environment report revealed, focusing more on research and development, advanced data collection and data analytics, is becoming increasingly important in the current low oil price market. In this respect, lower oil prices may be a blessing in disguise for technology innovation in the oil and gas industry, thereby transforming the industry’s approach in an enhanced manner that will assist its needs for short and long term challenges. Consequently, the R&D Tax Incentive can have a positive effect on assisting the oil and gas industry who are partaking in innovative activities. If you believe your company is undertaking qualifying research and development activities, contact one of our specialists today to find out if you could benefit from R&D credits.
