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From our magazine: Tactics and strategy in oil and gas analytics

Friday, May 26, 2017

Analytics tools can help us refine our tactics in the oil and gas industry, but real competitive advantage comes from finding the best way to put these tactics together, to form our 'strategy'. And here, perhaps we shouldn't expect analytics to help us, writes Keith Holdaway.

The ancient Greeks looked at a tactic as an 'art of arrangement' - a concept to be enacted so as to attain a value proposition, or ultimate goal.

The action undertaken is broken down into specific tasks that coalesce logically to invariably achieve the stated objective.

In the game of chess, for example, we would understand tactics to be a sequential set of acceptable moves to restrict an adversary's choices and hopefully attain an advantage.

This is contrasted to a strategy where such advantages or gains are accomplished over a longer period of time, with less restrictive control over the opponent.

We can distinguish between tactics and strategy in the analytical workflows applied across all oil and gas sectors.

'Tactics' could represent a role playing perspective, addressing immediate gains in a stepwise function constrained by first principles and available data.

'Strategy' could be as a more long-term persistent analysis to attain an ultimate goal.

Most analytics are 'tactics'

The hype surrounding artificial intelligence and its associated offspring, machine learning and deep learning, muddies the waters of analytics and the intrinsic value that can be garnered from their applications.

From sensors to sentinels to sense-making we delve into the world of predictive and prescriptive power discovery and cognitive exploration across a vast and deep sea of multivariate and stochastic data.

The advanced analytical methodologies applied to the siloed data from various E&P disciplines and engineering schools of thought can increase the intrinsic value of data by turning raw measurements and soft data into actionable knowledge.

But I believe this is all down to tactics; the piecemeal steps that are dynamic to the given datasets at a given spatio-temporal dimension.

The long-term strategies are less constrained and less sensitive to the analytical workflows.

These workflows are governed by a suite of soft-computing techniques such as neural networks, ensemble methodologies, fuzzy logic, genetic algorithms, random forests etc.

Combining tactics

But the strategy that is a composite of these techniques or tactics is the ultimate value proposition.

In other words don't be sucked into the ever deepening abyss of analytics as the harbingers of ultimate power to address a strategy, as these analytical methodologies are constrained tactics with limited power and application.

In the lofted perches where chess masters reside, strategy is everything to achieve success.

But for us mere mortals we should stick to chess tactics as the most efficient means to winning the game.

I believe the same applies to data scientists who espouse analytics as a means to resolving oil and gas problems in a complex heterogeneous reservoir.

Let analytics provide you with an arsenal of tactical moves but don't harness these tactics as your overall strategy.

You may be disappointed.

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