The oil and gas industry has been discovering a bounty of something perhaps more valuable than new reserves: data! Much of it comes from something else that’s new to the industry: 5G and IOT. All of this adds up to a whole new game for the industry. But the industry is late to the game and needs to recruit quickly for analytics skill and leadership.
The big question is whether the industry can exploit data with the same level of skill they exploit new deposits. This is especially important now that the energy industry has begun to explore solar, wind, and other types of renewable energy.
Some industry insiders complain that analytics was neglected for too long, long after it should have recognized signs of decline. Even a wet finger in the breeze would have shown them the need for data-driven metrics to survive tighter margins. One would think that the industry would have been poring over data all this time, learning to use any metrics peculiar to alternative energy.
There must have been whistleblowers. How could an industry ignore the vast amounts of data just begging to be analyzed and the competitive edge to be had? Perhaps, even with all that, the whistleblowers couldn’t overcome the internal resistance, an old story of good-old-boy cultures that kept so many newcomers out.
Not that the oil and gas industry has been devoid of innovation. One famous instance came in the early 70s when Royal Dutch Shell used scenario planning to prepare for the possibility of a series of oil shocks. It was just one scenario among several the company prepared for, but when it did happen they had a plan. While Shell executed on its plans, its competitors took a licking. In the end, Shell came out of the crisis in even better shape than before.
Today, Shell continues to use scenario planning. It also uses sophisticated big data analysis to scope out the subtleties of site geology before they drill. Then as drilling commences, optical fiber cables transmit sensor data from inside wells to render 3D and 4D maps of the remaining crude.
Oil and gas companies should recruit analytics-savvy executives from outside the industry. Perhaps good recruits might be found in the alternative energy industries.
Alternative energy industries, meantime, should recruit smart people from the oil and gas industry. Those people know the mistakes to avoid.