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Revealing the true value of data and data management to oil and gas companies

April 2011

By Malcolm Fleming, CDA's chief executive

At Common Access Data Limited (CDA) our role is to provide shared data management services to the exploration and production (E&P) sector. These resources help deliver the subsurface data companies require but how do we ensure that these companies are following the data management practices which will allow them to best make sense of data, reduce geological uncertainty and unlock new sources of economic value?

The way subsurface data is handled can have a significant impact on the overall performance of E&P companies so we commissioned Schlumberger to compile a report on how firms perceive and value information derived from subsurface data and apply it to their E&P activities. More than 20 senior executives participated in the study, from oil companies in the UK and Norway in management roles covering exploration, asset, subsurface and production activities.

Data management key to value generation

In their estimation, between a quarter and a third of the total value generated each year from their E&P activities could be attributed to the effective management of data because it helped them to better understand subsurface geology. This information typically includes exploration data (eg seismic surveys), production data (eg hourly flow readings) and interpreted data, in the form of information that includes processed seismic data and dynamic reservoir models.

Data central to understanding subsurface

To gain an accurate estimate of how data adds value, the study considered four elements: the total value delivered each year by projects; the company’s balance between exploration, production and development; the contribution that knowledge of the subsurface delivers to these activities; and the extent to which interpretation of the subsurface is dependent on the data.

On average, the senior managers involved in the study believe that 70 per cent of the value generated by oil companies’ E&P activities relies on their understanding of the subsurface. This understanding is influenced by the combination of four factors: the people, tools, data and the processes applied to manage the data. Although people, tools and processes are integral to establishing an understanding of subsurface geology, the surveyed participants perceived data to be the most influential factor (at 38 per cent) with people, tools and processes registering 32.7 per cent, 15.1 per cent and 13.7 per cent respectively.

What this study demonstrates is that data, managed effectively, can add significant value to a company’s activities, often much more than is realised. Companies which enhance their understanding of data can increase the value of their assets by using the information to increase production or evaluate potential prospects more accurately or identify ways to more effectively develop an asset. On the other hand, if it is not made available to those who need it, when they need it or if it is not of the required quality, then companies should invest in better ways to manage their data to make the most of the business opportunities before them.

Depending on the resources available and companies’ existing capabilities, there are various ways to improve data management. Improvements might be made in areas such as data quality, access and indexing systems, preservation, security and governance, all of which will improve overall performance.

Extending life of UKCS

Properly managed, data also provides benefits in the long term. The report highlights the fact that E&P companies can often re-use historic data (which are available through resources such as CDA’s Well and Seismic DataStores) to re-evaluate previous interpretations of reservoirs, leading to the development of new fields or the redevelopment of existing ones, thereby extending profitable oil and gas production. This is particularly topical as the UK continues its focus on making the most of its indigenous oil and gas resources.

Professionalising data management

The findings of the report reinforce the need for CDA’s current campaign to ensure that the discipline of data management is recognised as a profession in its own right. Throughout 2011 we will be working collaboratively with E&P companies and service companies in the UK, Norway and Canada to establish a universal ‘competency map’ for E&P data managers. This will provide the framework for measuring competencies, planning career development, educating and recruiting new entrants and midcareer data managers into the profession. It will also provide the foundation for independent accreditation of E&P data management professionals by a certifying authority.

Formalising the data management discipline in the oil and gas industry will allow wider recognition of practitioners’ skills and further integration of the practice into the business, helping to secure long-term economic benefits.