3 ways analytics is disrupting the oil and gas industry
If you follow the stock market, you’ve probably noticed that when oil prices drop, the market follows suit. Conversely, when oil prices spike, the market does, too. Thus, in mid-January, when oil prices plummeted to $26 a barrel, the S&P 500 dipped to levels unseen since April 2014. But market levels catapulted upward the following week when oil spiked by 23 percent. Indeed, the pattern is hard to miss.
Falling prices often signal softness in demand that can signal an impending economic slowdown. However, many experts believe that oil crashes feed off a supply glut, not off weak demand. If they are correct, then such a situation could be exacerbated by the dumping of Iranian oil into the market.
What, then, are oil producers to do? How can they manage the external forces driving their market while still hitting production targets?
I’ve asked a few petroleum companies how they use IBM analytics solutions to combat adverse market conditions. Though their methods differ, each company uses data—both structured and unstructured—to disrupt existing business practices in ways that help it stay at the forefront of the oil marketplace in the insight economy.
Emirates National Oil Company
Headquartered in Dubai, UAE, the Emirates National Oil Company (ENOC) is a leading integrated regional oil and gas company and a global player in the energy sector value chain. Yet ENOC lost days each month to manual input and checking of financial data from 31 subsidiaries. How could the company accelerate its processes without compromising accuracy?
By deploying IBM Cognos Business Intelligence and IBM Cognos Controller, ENOC sped its operations while boosting the accuracy of its financial consolidation processes. In doing so, it has cut its labor expenses to unprecedented levels even as the business itself scales.
Santos Ltd., a leading oil and gas producer in the Asia–Pacific region, serves the energy needs of homes, businesses and major industries across Australia and Asia. Yet even for such a force in the industry, downtime is a force to be reckoned with. When a critical asset fails in a Santos operation, the company loses revenue and suffers the costs of time spent on the road by engineers in the Australian outback.
To proactively address asset failure, Santos sought to identify faults before they resulted in failure, keeping downtime to a bare minimum. By alerting engineers to asset downtime, the analytics solution deployed by IBM and Santos helps the company cut travel time and quickly resolve problems even while helping boost production output—potentially saving the company in excess of AUD 10 million each year.
Gasmart is an integrated group of gas stations operating in the cities of Tijuana, Rosarito, Tecate, Mexicali and Ensenada in Baja California and the city of Guanajuato in the Bajio area. Amid a wave of changes to the Mexican oil and gas marketplace that spurred competition in the industry, producers such as Gasmart must rethink every aspect of business to derive as much benefit as they can from their assets.
By implementing the IBM Maximo Asset Management enterprise asset management software, Gasmart heightened its levels of visibility into and control over its maintenance activities. The solution helps optimize maintenance scheduling with an eye to cutting inventory costs and extending the life of existing assets. After implementing a Maximo Asset Management solution, Gasmart cut overall maintenance costs by 24 percent—and some specific costs by more than 60 percent.
To learn more about how IBM can help you solidify your place in the oil and gas, chemicals and petroleum market, explore IBM industry solutions designed to help you do just that. Moreover, if you plan to attend InterConnect 2016, don’t wait until the last minute to choose your itinerary. In the days leading up to the conference, use the session preview tool to decide what sessions you plan to attend at this year’s show.