Data consortiums solve many of the challenges that plague the energy sector today: a lack of comprehensive high-quality data, limited ability to observe the wide range of experiments conducted by others, and an inability to apply advanced analytic approaches across isolated datasets.
The energy industry has a data problem.
There’s no shortage of data: every major upstream oil and gas company collects petabytes of it. But the value that can be derived from individual data on its own is limited – this only teaches the company about what it has already done.
To unlock new value, the industry needs to go beyond the same isolated datasets. For decades our parent company Verisk Analytics has been pooling data for other industries such as banking and financial services have been reaping the rewards by collectively pooling their data, enabling them to take a broader, more informed view of industry trends.
These benefits are available for the oil and gas industry, too.
Unlocking data’s hidden value
Data has the power to improve business decisions materially. But many oil and gas companies haven’t yet reached the point where data-driven insights have had a sustained, positive business impact.
Instead, companies find themselves relying on analytics drawn from in-house historical data. And decisions made on the back of this data are often only incrementally better. Yet we know that data can do so much more.
There’s limited value in the current approach
Faced with mountains of data, companies often turn to artificial intelligence. But the insights that can be drawn from isolated data are limited, even when processed by algorithms.
As a next best solution, companies often opt to use external data, which comes with its own problems. External data tends to be inaccurate, out of date, or incomplete, making it next to impossible to glean valuable insights.
It’s time to pivot
Other industries have relied on data consortiums for decades.
Because they pool relevant, up-to-date data that has already been prepared for analytics, consortiums provide data that is of the highest possible value to the industry. At the same time, they minimise risks and the exposure of sensitive information.
Not only can consortiums help answer companies’ most pressing questions today— but they can provide the foundation the industry needs for future innovation and discovery.
What can oil and gas learn from industries that are already using consortiums successfully? Find out more in part two of our series.
Have concerns about how a data consortium could work in practice? We address three concerns we often encounter in the industry.
1. I’m giving away more value than I'll receive: When managed correctly, each member will get out much more than they put in. We unpack the most important success factors for a well-run consortium in the third article in our series.
2. I don’t want to give away my competitive advantage: The quality of your resources and your management team’s capabilities are where your company’s real strengths lie. Sharing data in exchange for more and better data will only enhance these strengths.
3. I don’t think I can convince my management team that pooling data is a good idea: In reality, management teams have proved to be very receptive to the idea of a consortium and want to be able to make better decisions.
This report is part of Wood Mackenzie’s series on data management best practice. In a recent presentation at the 24th annual Petroleum Networking Education Conference and Exhibition, Preston Cody looked at how a data consortium could add value to the upstream industry. Fill in the form on this page to receive a copy of his presentation deck.