Big Oil Needs Big Data
While gathering my thoughts for FlowBack, two pieces of information recently flashed across my screen. First came the news that BP CEO Bernard Looney will again be a keynote speaker at next year’s International Petroleum (IP) Week in London and then, perhaps predictably, we heard that the event will be digital. Mr Looney, no doubt, will stare out of our computer screens and tell us more about his company’s transition to meet net carbon zero by 2050. He will also give us more words of wisdom on the industry’s transition in areas like carbon intensity, diversification and indeed the digital arena.
Data mining and data analytics are both buzz terms in the industry. Geologists and engineers now know more about oil prospects than ever. Decisions are backed by hard evidence, whatever the uncertainties of the global economy. It is a bit like governments around the world six months into the pandemic. They still have to make challenging decisions involving brakes and accelerators, but they are better informed about what will happen if different courses of action are followed.
By the same token Mr Looney and his fellow ‘Big Oil’ CEOs feel better informed about what they need to do. They have the time and the reserves – even the will – to turn their tankers around, although smaller companies may go to the wall. Mr Looney, we are to understand, believes in clean energy and thinks it is a lucrative market. How he is going to get there is less clear.
In the short term at least, there is no shortage of mixed messages. At the time of writing the oil price is up above $40 a barrel but the pandemic still rages. A recovering oil price will bring more assets back into play but, to quote immediate history, Rystad Energy reminds us that Covid-19 has brought about a 20% reduction in economically recoverable oil. This brings us back to the beauty of sound data analysis and science-based decision-making. As the geologist Catriona Penman notes in a recent article in World Oil: “With the uncertainty caused by Covid-19, the decision to bring back a shut-in well, or begin producing a drilled-but-uncompleted well, will require a heightened level of analysis.”
Even in the six years since the last oil price crash, visualisation technology underpinned by sophisticated data analytics has improved exponentially. Concepts like digital twinning add a new dimension to the way assets can be modelled over time. Digital IP Week will remind us remotely of these and other developments. Mr Looney, you could argue, has the perfect platform for making his case.