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Schlumberger research quantifies value of data management

Friday, February 18, 2011

Senior managers in oil and gas companies estimate that between a quarter and a third of the total value generated each year from their exploration and production (E&P) activities can be attributed to the effective management of data in helping them to better understand subsurface geology. 

The finding comes as a result of research undertaken by Schlumberger for a new report by Common Data Access Limited (CDA), a subsidiary of Oil & Gas UK.

More than 20 senior executives from the UK and Norway were surveyed for the report which focuses on how information about the subsurface is valued and applied to a company’s exploration and production activities. Such 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.

The report estimates the value that data adds by exploring 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.

It finds that 70 per cent of the value generated by oil companies’ E&P activities relies on their understanding of the subsurface. That understanding in turn is derived from the combination of four components: the people, the tools, the data and the processes they apply to manage the data. Although people, tools and processes are all crucial in developing an understanding of subsurface geology, the majority (38 per cent) of understanding of the subsurface relies on data. Combining the heavy reliance of value generation through E&P activities on understanding of the subsurface and in particular data, the report’s authors calculate that 27 per cent of the total value generated by E&P activities is derived from data and its effective management.

“The survey demonstrates that data, used effectively, can add significant value to a company’s activities, often much more than is realised," said Malcolm Fleming, chief executive of CDA. "Enhanced understanding of data enables companies to increase the value of their assets by helping them increase production or reserve estimates or identify ways to more effectively develop an asset. Conversely, if it is not made available to those who need it, when they need it or if it is poor quality, then companies may not be making the most of the business opportunities before them.

“Companies can therefore heighten overall performance by investing in data quality, access and indexing systems, preservation, security and data governance.   Properly managed, data also provides benefits in the long term where the record shows that E&P companies can often re-use historic date 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.”

External Links
» CDA report
» Schlumberger

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