RESEARCH REPORT

In brief

In brief

  • Accenture Strategy conducted analyses in 2018 to determine the value of the data that oil and gas companies now have at their disposal.
  • We calculated the value potential across four domains: portfolio management, asset development, operations and commercialization.
  • Our findings suggest that trillions of dollars are being left on the table. Companies that claim their share will get four things right.

Historically, oil and gas companies have used only a small fraction of the data at their disposal to make better decisions. That will change soon. Advanced analytics are now available to help them solve what have long been considered unsolvable issues across the value chain—from portfolio management, development and operations all the way to commercialization. While the impact of analytics will vary across these domains, the cumulative effect is significant: A return on investment that is almost four times the baseline. When used in tandem with artificial intelligence or machine learning, the result is even more profound.

Eighty-seven percent of oil and gas companies consider themselves data-driven organizations. But they use just a fraction of the data now at their disposal.

Let’s consider the value potential within each domain.

In portfolio management, a 10 to 15 percent improvement in capital efficiency is possible.
Dynamic risk-return assessments can predict the likely evolution of an asset’s financial performance. These insights lead to reduced capital investments and a boost in productivity.

In the area of asset development, companies can lower capital expenditures by 10 to 20 percent and achieve a 5 to 10 percent improvement in productivity.
Analytics can make an integrated and efficient approach to field development possible by pinpointing optimal well locations, informing design decisions, and identifying and remediating project risks.

In the area of operations, companies can boost their productivity by 2 to 7 percent and reduce operational costs by 5 to 15 percent.
Analytics can reveal what interventions are needed at the wellhead, refinery or other facilities to maximize throughput, while minimizing costs.

When it comes to commercialization, a 2 to 5 percent margin uplift is possible.
Analytics can help companies identify the most profitable plays—not just at the wellhead, but across the value chain.

Increase over baseline ROI

Portfolio management 8 - 10% gain in capital efficiency: ROI improvement 0.8x. Development 10 - 20% reduction in Capex spend & 5 - 10% gain in productivity: improvement 2.1x. Operations reduction in Opex spend & productivity gain: improvement 0.6x. Commercialization 2 - 5% improvement through advanced analytics: improvement 0.3x.

Analytics at the core

Leading companies will cast a system-wide data net and then apply analytics to identify (and redefine) causal relationships between domains. With such insights, companies can dissolve boundaries and begin working in concert to optimize the whole system.

30%

Oil and gas companies that apply advanced analytics can slash exploration and production costs by up to 30%. That translates into ~$4.5 trillion over the next 10 years.

Analytics in the New

Beyond transforming core operations, industry leaders will re-imagine the future roles they will play within emerging energy ecosystems. Advanced data analytics help companies pivot to new business models in three ways:

  • By enabling a better understanding of consumers’ needs and behaviors
  • By determining the relevance and potential value of different models
  • By rethinking the role and placement of each molecule to maximize bottom line impact

In these ways, analytics help companies identify what they will sell in the future, how they will sell it, and to whom.

Connecting the dots

To be competitive in an era of “free” energy, companies need to make sure four elements are in place:

  • The right talent. Welcome talent from other disciplines—such as image processing experts from the healthcare industry—to gain analytics firepower and insights.
  • The right North Star. Shift the corporate focus from managing capital risk to managing the speed and accuracy of decision-making.
  • The right analytics backbone. Use advances in computing power, automation, storage and data science to consider all aspects of the value chain system in a matter of seconds.
  • The right partners. Create ecosystems to ensure molecules are dispatched to end uses that exhibit the greatest demand. Use partnerships strategically to provide services—not to sell commodities at the wellhead.

SlideShare: Oil & gas: How do you compete with free?

Manas Satapathy

Managing Director – Accenture Strategy, Energy

Arnold Volkenborn

Managing Director – Accenture Strategy, Energy, Asia Upstream Lead

Prashant Mehrotra

Senior Manager – Accenture Strategy, Energy

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