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The value of smarter oil and gas fields

Unlocking the full value of your assets

Executives in the petroleum industry face the dual challenge of increasing both production and profitability in the face of shrinking reserves and tightening regulations. As a result, they are looking to information technology solutions to bring their people, processes and petroleum technologies together in new ways.

by 2035, world energy consumption is projected to grow by 49%—with 52% of that energy supplied by oil and gas <sup>1</sup>.

By 2035, world energy consumption is projected to grow by 49%—with 52% of that energy supplied by oil and gas 1.

But today, many companies are unable to monitor, predict and proactively respond to critical oilfield events. Often, processes and information are not integrated and the business is operated through functional silos. However, when an oilfield is effectively managed as a system, data sources are integrated and used to optimize all aspects of the value chain.

The executive brief from the IBM Center for Applied Insights, The value of smarter oil and gas fields (PDF,1.88MB), explains how well-planned investments in data integration and business analytics can link all of a field’s business functions into a smoothly operating system. The executive brief outlines a set of capabilities that upstream oil and gas producers can develop to raise production levels, recovery rates and cost efficiencies.

The value of smarter oil and gas fields: A competency outcome map
The journey consists of a series of steps that, if taken in a logical sequence, can greatly shorten time-to-value and increase investment returns. First is the instrumentation of critical points in the systems. Subsequent steps leverage that foundation and layer on increasingly sophisticated data management and analytics capabilities. While the steps can be applied to the entire enterprise or a particular segment, the key is achieving the necessary level of maturity before moving on.

Chart: value and maturity. Source: IBM Center for Applied Insights.

Using an illustrative organization, we demonstrate a model that quantifies the economic impact of smarter oil and gas fields. This case study is based on a medium-sized, deepwater oil field applying capabilities across all levels over 2-3 years. In this example, the company breaks even mid-way through the third year of the project and yields a 350% return on investment by year 7. Using our model, we can demonstrate the benefit to your company based on your own data.

The years ahead will only see increasing challenges for the oil and gas industry. As energy demand rises and easily accessed sources dwindle, petroleum organizations―and the world in general―can no longer afford to leave oil and gas fields underutilized.

Fortunately, there is now a suite of technologies that can help lead the industry into a smarter future. Learn how integrating information across the whole system will drive improvements and deliver real, quantified economic value.

1. Energy Information Administration, "International Energy Outlook 2010, Reference Case," July 2010 Retrieved from