It’s become an all-too-familiar reality: Thin operating margins, industry consolidation and the need to stay relevant as customers adopt new technologies present multiple challenges for Canadian oilfield service companies.
As E&P operators are forced to squeeze costs, it’s clearly more vital than ever to maintain existing contracts and identify new business prospects.
The role of data in this context is evolving quickly. Today’s service companies want data sets to provide insight into current and future customer purchasing trends, and to drive operational efficiency, according to a new white paper examining data usage in the oil and gas industry authored by the Daily Oil Bulletin and geoLOGIC systems ltd.
“We recognize and have shared in the challenges facing both operators and service providers over the last six years,” said David Hood, geoLOGIC’s CEO. “We produced this white paper to encourage companies to think about how they are using data and intelligence tools, to give them an understanding of how the industry as a whole is thinking about data usage, and to provide some suggestions for potential use cases that can help them reach their corporate goals.”
To inform the white paper, a survey was conducted in April to identify how service companies are using data and to assess future requirements.
Business development was identified as the most important reason service companies use data. They often use data sets and mapping products that display operator lease-holdings, field activity, infrastructure and recent M&A activity to track customers and identify activity trends. More specific data and tools are also available to provide deeper insight into customers’ needs. These include:
- Trends in technological and product choices for specific applications in specific regions, enabling companies to optimize services or add new product lines or increase capacity to meet growing demand;
- Trends in material and service intensity in different regions to improve logistics support and timeliness of delivery;
- Production forecasts allowing companies to identify regions of growth in drilling, MRO activity, or areas with high asset retirement obligations that should be targeted;
- Forecast and technology trend data that can help assess whether to right-size or eliminate product lines that may be losing relevance with customers; and,
- Competitive indicators, including relationships between service companies and customers, performance and market share in specific regions.
The desire for service companies to increase margins through improved efficiency remains strong. By applying analysis to multiple data streams, service providers can find opportunities to cut costs and potentially capture or recapture higher margin revenue streams. Some potential opportunities include:
- Using activity data and mapping tools to position materials, equipment and crews close to hotspots, eliminating logistics costs;
- Using trends in material and service intensity, combined with activity levels, to allocate assets and pre-purchase materials based on expected demand;
- Redeploying existing assets and skill sets to new growth areas based on activity levels, customer capital allocations, and changing service and material requirements; and,
- Developing new, higher margin product lines based on technology trends, activity trends, or competitive intelligence.
“Given the diversity of services and materials supplied, the actual data and intelligence tools needed by service providers can vary significantly depending on where the company fits in the supply chain, how vertically integrated they are, and where they choose to do business,” said geoLOGIC president and chief operating officer Terry Jbeili.
geoLOGIC has launched the gDC Cloud, a cloud-based web platform that offers the scalability and flexibility needed by service companies seeking data and intelligence tools — without many of the costs and challenges associated with traditional platforms.
“The gDC Cloud’s microservices architecture and embedded ETL technologies underscore this powerful platform that is inherently data agnostic, enabling the seamless integration to our premium data and advanced applications, as well as easily scalable to address future data needs across the energy spectrum,” added Jbeili. “This provides an ability to generate even greater insights into specific operations to find the business edge needed in today’s environment.”
The white paper, entitled Strategies for data-driven value creation within oil and gas, offers guidance on how operators and service companies can leverage data and business intelligence tools via web-based and cloud solutions to improve workflows and achieve business goals. It can be downloaded free here.