Amid plunging oil prices, oil and gas companies are slashing capital budgets in an effort to cut spending. The Houston Chronicle reports that between 2014 and 2015, most oil companies cut capital expenditures and spending 25 percent or more. Analysts expect industry players to chop another 25 percent next year, the article noted.
But one area that energy companies won’t lop off the bottom line is technology. In fact, companies like BP more than ever are opening their wallets to digital technology, according to a survey by Accenture and Microsoft Corp. The survey found that about 80% of oil and gas industry companies plan to invest the same amount (18 percent), more (44 percent) or significantly more (18 percent) in digital technology. In addition, about 89% of respondents cited Big Data as a key technology for increased investment over the next three to five years. The Industrial Internet of Things (IIoT), automation and collaboration represent other areas, as well.“Making the most of big data, IIoT and automation are indeed the next big opportunities for energy and oilfield services companies, and many are already starting work in these areas,” said Rich Holsman, Global Head of digital in Accenture’s energy industry group. “They are increasing investments in enabling people and assets, with a growing emphasis on developing data supply chains to support analytics projects that can improve efficiencies, manage cost and provide a competitive edge.”
Energy companies like BP are turning to new data tools to more efficiently manage resources. And that includes Big Data. BP’s CEO Bob Dudley said the company, which posted a $6.3 billion loss in the second quarter, “will continue to identify more opportunities for simplification and efficiency.” To that end, BP is working with GE to harvest and manage large volumes of data from sensors installed on its offshore machines. By analyzing the data, it’s possible to pursue the “power of one percent,” a GE term which states that efficiencies of only 1% can make a dramatic impact across the $32.3 trillion of relevant sectors.
WHAT IS BIG DATA?
As described by Paul Korzeniowski, BCC Research analyst, Big Data has the following characteristics: volume, variety, velocity, and variability. Volume refers to the quantity of data generated. Variety is the category to which Big Data belongs, an essential reference point or fact that helps analysts use the data more effectively. Velocity refers to how fast the data are generated and processed to meet the demands and the challenges of growth and development. Lastly, variability refers to the inconsistencies that data can show sometimes.
In essence, Big Data is the science of drawing valuable conclusions from massive data flows. In the past, BP used its own software to handle the data from its wells. But now it’s teamed with GE and its software Predix to make BP’s oil wells smarter. Predix is a cloud-based PaaS that enables industrial-scale analytics for asset performance management and operations optimization by providing a standard way to connect machines, data, and people. BP says by the end of the year, 650 wells will be connected, with each one dumping about half a million data points every 15 seconds into Predix.
BP also is partnering with GE to ensure the efficient operation of critical rotating machinery found on the energy company’s production facilities. Equipment such as compressors, generators and critical pumps are vital to ensuring safe extraction and transportation of oil and gas around the globe. By analyzing sensor data such as vibration, rotor position, temperature, pressure flow and other parameters, GE can identify changes in the operating condition of the machine or determine its operational performance, GE reported in a 2013 case study. The study reports that identifying the early onset of abnormal operating conditions minimizes disruption and avoids unnecessary periods of down time that often result in lost production or increased costs.
For companies like BP, the ultimate goal is transforming a torrent of raw data (Big Data) into actionable insights that optimize operations economically and efficiently. That way, they hope, they can keep the lights on during their industry’s gloomier days.
BCC Research reports that the global market for Internet of Things (IoT) devices and chipsets reached nearly $4.2 billion in 2014. This market is expected to reach $6.6 billion by 2015 and nearly $49.2 billion by 2020, registering a compound annual growth rate (CAGR) of 49.3% from 2015 to 2020.
Related BCC Research reports:
The Internet of Things (IFT118A)