Data - the Oil & Gas asset that isn’t managed like one

Copyright © 2013 Molten Limited 1

Data - the Oil & Gas asset that isn’t managed like one

By Rory Colfer, Managing PartnerSeptember 2013


Rory is a Managing Partner of Molten. Together with Irene Molodtsov he established Molten, a transformational change consultancy in the Energy Sector, in 2003.

—Rory has over 15 years’ consulting and Oil & Gas industry experience. A chartered accountant and former CEO and Finance Director, Rory brings industry and business experience to consulting.

—He has led major programmes from corporate strategy assignments to development of optimal organisation structures and post-acquisition and merger restructuring. Rory has led several key data management projects for global supermajors, including defining the data management strategy and operating model, leading the implementation of the operating model, and defining their data governance and organisational model.

—He is also a performance coach and regularly assists senior executives in London, Moscow, Houston and Hong Kong.

Rory ColferManaging Partner at Molten

”About me


1. Examples of poor data management in Oil & Gas2. What is the value of your Data3. Is Data a management or technical challenge in Oil & Gas companies4. Role of Data across the value chain5. How is Data managed in Oil & Gas companies6. Reserves growth vs. data management capability 7. World class data and information management8. How to evaluate ROI of Data9. What is ‘Big data’ and what is its impact on Oil & Gas10. Key take aways11. Finally…

Today’s agenda


Field tapes containing critical seismic lines went missing in a

particular Business Unit. The potential consequences included

loss of operating licenses and substantial fines from the State.

Root cause – poor management of seismic data

Subsurface

The geodetic references for two separate data sets on an

onshore gas prospect were different. However, the two data

sets were combined using the same geodetic reference. The

resulting analysis concluded that prospectivity was poor. Some

time later an intern came across the anomaly and reported it.

The appraisal was rerun and showed high prospectivity.

Appraisal well was drilled as a consequence, resulting ultimately

in one of the highest flow rate gas wells in North America.

Root Cause – poor management of geodetic data

Wells

Poor/inconsistent workflows across disciplines led to 3 self-

operated and 1 partner-operated fields using faulty fluids

models in fiscal allocation calculations. For just one of these

fields, the impact was $3mm/year - for 6 years.

Root Cause – poor management of reservoir fluids data

Production

Exploration

An individual (now retired) in conversations with the head of

region as they were about to abandon exploration rights. He

pointed out that data had been acquired 15 years previously.

The report was found under a desk, after searching the office.

The outcome was recognition of a target worthy of exploration

which would have been given up due to the lack of good data

management.

Root cause – poor management of exploration data

Examples of poor data management in Oil & Gas


How much does your company spend on Data a year?


What is the value of your Data?Data is an asset

Risk reductions – sustaining licences to operate, maintaining the value of data assets, avoiding unintended data loss, preventing catastrophic loss through operating with poor data

Acquisition cost reduction – benefits can run into tens of millions of dollars per year based on 5% optimisation

Revenue increase – improved finding efficiency and better operational results from better informed decision makers

Opex Optimisation – reducing the cost of data

management by managing our data better and avoiding

rework, running to 2% optimisation.

Rory Colfer

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Data is a common business problem

Changes to any one of these tiers will have an impact on the other two, and hence typically will need to be managed in association.

Is Data a management or technical challenge in Oil & Gas companies?


Role of Data across the value chain


How is Data managed in Oil & Gas companies?


Reserves growth vs. data management capability


World class data and information management

Our definition of world class data and information management is in our framework

This framework can be applied to assess your data management processes, strategy and capability against your peers, your business strategy, your ambition and can help to define a roadmap to bridge performance gaps


How to evaluate ROI of Data?Forensic Analysis

Regions or Assets

Planned cost

Challenged cost

Value*

CAPEX*

OPEX

High value activities can be identified, maintained and improved where possible.

Capital and operating expenditure require separate evaluation methods and must be clearly segregated.

Low value activities can be identified and targeted for cost reduction.

Costs and value of data management, for different functional areas in different geographies and target benefits :

— Differences in ROI can be questioned and then explained.

— Relatively poor rates of return can be challenged.

— Strong rates of return can be identified and focused upon

Functional Activity Breakdown


What is ‘Big data’ and what is its impact on Oil & Gas?

‘Big data’ is a collection of complex data sets so large that they are often difficult to process using traditional database management tools or data processing applications.

Opportunities

1. Safety - Analysing big data around safety incidents and near misses will enable future incidents to be avoided

2. Unconventionals – applying big data to better predict unconventional reserves, production forecasts and optimize well plans

3. Many more….

We have over 40 years of experience of ‘Big data’ in our SectorWe routinely splice and dice large complex data sets like seismic, well logs and reservoir models, to deliver key insights that drive critical decisions such as field development concept selection, depletion strategies and enhanced oil recovery plans”

Challenges

There are many and we need to work out how to deal with them.Access, analysis, capture, curation or maintenance, definition, secure deletion, presentation or visualisation, search, sharing, security, storage and transfer.


1. Data costs huge money

2. It’s not enough for executives to consider ‘people’, ‘process’ and ‘technology’ when assessing their business initiatives. Now we must consider data too

3. Data management is generally a career cul-de-sac. This point is emblematic of the whole data management issue

4. Get it wrong and it’s wrong on a macro and a micro scale

5. Get it right and significant efficiencies flow

Key take aways

16Copyright © 2013 Molten Limited

Finally…– Data has significant value in Oil & Gas businesses

– The value can be articulated

– The value justifies a rigorous approach to its management

– Three critical success factors:– Clear setting of accountabilities (governance) for data within the business – Ensure that fit for purpose data is provided the business– It must be a career


For more information or to read on "How oil and gas executives could use ‘Big Data’ as a powerful source of competitive advantage," please visit our website here.

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Data - the Oil & Gas asset that isn’t managed like one

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