How Shell uses Big Data in practice

With rising costs and dwindling natural resources, it’s crucial that drilling takes
place in the locations that will provide the biggest rewards. With this in mind,
Shell collects data that allows them to predict the likely size of oil and gas
resources by monitoring low-frequency seismic waves below the earth’s
surface. These waves register differently on sensors as they travel through
the earth’s crust, depending on whether they are passing through solid rock,
liquids or gaseous material –indicating the probable location of hydrocarbon
deposits.
Until recently, this method often proved unreliable; time-consuming, costly
exploratory drills would usually be needed to confirm findings. Now, with an
increased ability to capture, monitor, store and interpret large volumes of data,
Shell’s capability to identify reserves has improved. While a previous survey
might have involved taking a few thousand readings, today it will typically
involve more than a million readings. This data is then uploaded to analytics
systems and compared with data from other sites around the world. The more
closely the data matches the profiles of other drilling sites with abundant
reserves, the higher the probability that a full-scale drilling operation will pay
off.

The technical details

When surveying potential new sites, Shell uses fibre-optic cables and sensor
technology from Hewlett-Packard. All this data is stored and analysed using a
Hadoop infrastructure that runs on Amazon Web Service servers. While the
company doesn’t publicise data volumes, it is known that the first test of the
system collected around one petabyte of information, and it is estimated that
Shell’s data-driven oilfield approach has so far generated around 46
petabytes. Their analytics team is thought to consist of around 70 people.

Ideas and insights you can steal

As one of the largest companies in the world, Shell is undoubtedly able to
invest heavily in new technology. But their reason for moving to a data-driven
approach will ring true among companies of any size: a need to achieve
better, more reliable results while reducing costs and risk. With the vast
volumes of data available these days, this is a goal that almost any company
can aim for and achieve. And this doesn’t have to mean investing in
expensive proprietary technology – third party data, whether it’s freely
available public data or part of a low-cost paid-for data solution, can provide a
wealth of business-critical insights

WHAT WE DO
Shell is an international energy company that aims to meet the world’s growing need for more and
cleaner energy solutions in ways that are economically, environmentally and socially responsible.

Shell is a global group of energy and petrochemical companies.

Our operations are divided into our businesses: Upstream, Integrated Gas and New Energies,
Downstream. Our Projects & Technology organisation manages the delivery of Shell’s major projects and
drives our research and innovation.

Our Upstream organisation manages the exploration for and extraction of crude oil, natural gas and
natural gas liquids. It also markets and transports oil and gas, and operates the infrastructure necessary
to deliver them to market.

Our Integrated Gas organisation manages our liquefied natural gas (LNG) activities and the production
of gas-to-liquids (GTL) fuels and other products. It includes natural gas exploration and extraction, when
contractually linked to the production and transportation of LNG, and the operation of the upstream and
midstream infrastructure necessary to deliver gas to market. It markets and trades natural gas, LNG,
crude oil, electricity, carbon-emission rights and sells LNG as a fuel for heavy-duty vehicles and marine
vessels.

In New Energies, we are investing in opportunities where we believe sufficient commercial value is
available. We focus on new fuels for transport, such as advanced biofuels, hydrogen and charging for
electric vehicles; and power, including from low-carbon sources such as wind and solar as well as
natural gas.

Our Downstream organisation manages different Oil Products and Chemicals activities as part of an
integrated value chain, including trading activities, that turns crude oil and other feedstocks into a range
of products which are moved and marketed around the world for domestic, industrial and transport use.
The products we sell include gasoline, diesel, heating oil, aviation fuel, marine fuel, biofuel, lubricants,
bitumen and sulphur. In addition, we produce and sell petrochemicals worldwide. Our Downstream
organisation also manages oil sands activities.
Our Projects & Technology organisation manages the delivery of our major projects and drives research
and innovation to develop new technology solutions. It provides technical services and technology
capability for our Integrated Gas, Upstream and Downstream activities. It is also responsible for
providing functional leadership across Shell in the areas of safety and environment, contracting and
procurement, wells activities and greenhouse gas management.

Big Data In Big Oil: How Shell Uses

Analytics To Drive Business Success

Bernard MarrContributor

The oil and gas industries are facing major challenges - the costs of extraction are rising and the
turbulent state of international politics adds to the difficulties of exploration and drilling for new
reserves. In the face of big problems, its key players are turning to Big Data in the hope of
finding solutions to these pressing issues.

Big Data is the name used to describe the theory and practice of applying advanced computer
analysis to the ever-growing amount of digital information that we can collect and store from the
world around us. Over the last few years businesses in every industry have enthusiastically
developed data-led strategies for overcoming problems and solving challenges, and the oil and
gas industries are no different.

Royal Dutch Shell is one of the largest oil and gas companies – one of the “supermajors” which
also include BP, Chevron, Total and ExxonMobil – and the world’s fourth largest company by
revenue. For some time now it has been developing the idea of the “data-driven oilfield” in an
attempt to bring down the cost of drilling for oil – the industry’s major expense.
A recent survey by Accenture and Microsoft of oil companies and those involved in the support
industries found that 86% to 90% of respondents said that increasing their analytical, mobile and
Internet of Things capabilities would increase the value of their business. The search for new
hydrocarbon deposits demands a huge amount of materials, manpower and logistics. With
drilling a deep water oil well often costing over $100 million, no one wants to be looking in the
wrong place.

Royal Dutch Shell oil rigs in the Port of Seattle. (Photo by David Ryder/Getty Images)

Surveying of potential sites involves monitoring the low frequency seismic waves that move
through the earth below us due to tectonic activity. Probes are put into the earth at the spot being
surveyed, which will register if the pattern of the waves is distorted as they pass through oil or
gas.

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In the past this would involve taking a few thousand readings during the typical survey of a
potential drilling site. But in the past few years technology has advanced to the level where it
could involve more than a million – vastly increasing the amount of data gathered during
exploration.

Shell uses fibre optic cables, created in a special partnership with Hewlett-Packard, for these
sensors, and data is transferred to its private servers, maintained by Amazon Web Services. This
gives a far more accurate image of what lies beneath. Data from any prospective oil field can
then be compared alongside that from thousands of others around the world, to enable geologists
to make more accurate recommendations about where to drill.

Production forecasting is one of the first jobs – determining the likely output of the reservoir is
key to determining what resources should be spent on collecting it. When this decision is data-
led, operators can have more confidence that this will be done efficiently.

Shell also uses Big Data to ensure its machines are working properly and spending as little time
as possible offline due to breakdowns and failure. Machinery used in drilling has to operate in
harsh conditions for prolonged periods of time so is prone to wear and damage. To counteract
this, the machinery is fitted with sensors collecting data about its performance and comparing it
with aggregated data, meaning parts can be replaced in an efficient manner and downtime
minimized, further reducing overheads.

As well as exploration, Big Data is being put to use to streamline the transport, refinement and
distribution (retail) of oil and gas. Shell is vertically integrated, and therefore involved in every
aspect of the process through to packaging and selling it to the consumer as fuel for their car for
heating their home. Refineries have limited capacity, and fuel needs to be produced as close as
possible to its point of end use to minimize transportation costs. Complex algorithms take into
account the cost of producing the fuel as well as diverse data such as economic indicators and
weather patterns to determine demand, allocate resources and set prices at the pumps.

Of course, we’ve long been conscious of the fact that we could eventually use up all of the non-
renewable oil and gas buried under the earth – perhaps sooner than we think. While this is an
environmental concern to us all, it’s a financial one to companies like Shell. Dwindling reserves
mean the cost of getting at what is available goes up, as they are forced to look deeper
underground in ever more remote locations.

One alternative is offered by the growing hope that “unconventional resources”, such as shale
gas and tight oil will fill the gap. These resources, trapped in shale and sandstone, now supply
20% of the gas used in the USA and their use is expanding rapidly around the globe. However
they demand new extraction methods such as hydraulic fracturing (“fracking”). Because this is
relatively new far less data is available so exploration can be more hit-and-miss. However new
techniques are being developed to use the data that is being collected from probing and drilling
these sites to help pinpoint other locations where reserves could be hiding.
All of these elements form the “big picture” – every part of which must be synchronized if a
company is going to prosper in the costly, dangerous and highly competitive field of oil and gas
production. Thanks to big data analytics, the interconnection between these elements of the
business can be examined and monitored in detail. This means models can be built and
simulations created by analysts, to explore how minor tweaks to a certain area of operations
could have big impacts on the productivity or efficiency of another. The vast amount of data
collected from all areas of the company’s activity means the result of the simulations will
hopefully be as close as possible to the way things will play out in the real world. Ultimately this
leads to decision-makers being better equipped to make the decisions that affect the company’s
fortunes.

Shell drills into big data analytics

Headlines
Analytics transform big data at Shell Exploration and Production into sound exploration decisions, high-
quality wells, reduced costs and lower environmental impact. The company uses SAS Predictive Asset
Maintenance software to extend equipment lifespan and run times, which can account for tens of millions
of dollars in increased gas and oil production. Touching all aspects of operations, analytics helps Shell
boost both efficiency and effectiveness – keeping the company on top by bolstering the bottom line.

“SAS eliminates guesswork from our business processes,” says Tom Moroney, manager of Technology
Deployment and Geosciences at Shell Exploration and Production, Upstream Americas, Deepwater. “We
analyze tremendous volumes of real-time data to improve process and asset efficiency, well performance
and reliability. When our SAS alerts signal a performance gap, we can quickly diagnose it, interrogate the
system and prevent or mitigate critical upsets.”

Shell engineers are using these surveillance insights from analytics to improve performance of the
company’s newest platform, the Perdido spar. Below 10,000 feet of water and another 9,000 feet of mud,
salt and rock, lies an ambitious target, a swath of seabed the size of Houston that holds enough oil and
natural gas to produce up to 130,000 barrels a day.

Moroney and a Shell taskforce continually look to apply analytical methodology to develop deeper insights
into integrated production system performance for its entire deepwater portfolio across a range of
business challenges

Role of Data Analytics in the

Oil Industry
In 2006, marketing commentator Michael Palmer had blogged
Data is just like crude. It’s valuable, but if unrefined it cannot
really be used.

A fter nine years, the statement still holds true across any

industry that depends on large volumes of data. It is true that until

and unless, data is not broken down into pieces and analyzed, it
holds little value.

As the world becomes more receptive to the advantages of big

data, the oil industry does not seem to be far behind. If the huge
amount of data is just stored, then it has little worth and so, for it
to be useful, it has to be identified, aggregated, stored, analyzed
and perfected. The ability to access and draw rich insights from
large data sets can make the oil industry more profitable and
efficient. A successful oil company will quickly forecast the
potential information and keep costs low to actualize its success
without losing any discrepancy in the evaluation of the data set.

Both oil movements and popularity of big data have gradually

created a stir over a period of time. Changes in supply and demand
of oil have long been related to fluctuations in oil prices. With
falling oil prices, oil and gas industry is slowly finding its way
towards big data, in order to manage and reduce risk, thereby
increasing the overall revenue of a company. Oil prices globally are
becoming competitive and as oil-producing economies fight for
gaining global market share in oil, big data analytics can help them
in identifying areas that require significant improvement.

Benefits of Adopting Big Data in The

Oil Industry
According to Mark P. Mills, a senior fellow at the Manhattan
Institute, “Bringing analytics to bear on the complexities of shale
geology, geophysics, stimulation, and operations to optimize the
production process would potentially double the number of
effective stages, thereby doubling output per well and cutting the
cost of oil in half.”

A tech-driven oil field is already expected to tap into 125 billion

barrels of oil and this trend may affect the 20,000 companies that
are associated with the oil business. Hence, in order to gain
competitive advantage, almost all of them will require data
analytics to integrate technology throughout the oil and gas
lifecycle.

1. In Real-time and Highly Cost

Effective
Data volume in the oil industry grows with rapid speed and
handling a large amount of data efficiently becomes very
important. Oil companies have always been generating extreme
volumes of data at a very high rate on a daily basis. Traditionally,
large volumes of data can be very expensive for both oil and gas
producers. Such huge costs can significantly impact the financial
performance of the company.

With the use of big data, companies can not only cut costs but also
capture large data in real time. Such use of analytics can help in
improving production by 6%-8%. However, the role of big data in
the industry of oil and gas goes beyond efficiency and analyzing
large volumes of data in real time. Near-real-time visualization,
storage of large data sets and near real-time alerts are considered
the most important advantages in big data analytics.

2. Reduction of Risk and Better

Decision Making
Geographically speaking, layers of rocks vary across regions, even
though they may be similar structurally. Lessons usually learned
from one area can be applied to similar areas. Traditionally,
unstructured data is stored in different databases or any storage
facility, which requires a lot of time and effort. Data science can
help in reducing risk and help in learning more about each
subsystem thereby increasing the accuracy in decision-making.

3. High Accuracy in Drilling Methods

and Oil Exploration
Since oil depends on drilling and oil field exploration, any use of
big data analytics in this field is considered a boon. Miller writes,
“Big-data analytics can already optimize the subsurface mapping
of the best drilling locations; indicate how and where to steer the
drill bit; determine, section by section, the best way to stimulate
the shale; and ensure precise truck and rail operations.”
The search for new hydrocarbon deposits demands a huge amount
of materials, manpower, and logistics. With drilling a deepwater
oil well often costing over $100 million, no one wants to be looking
in the wrong place. To avoid this issue, Shell uses fiber optic cables
(created in a special partnership with Hewlett-Packard for these
sensors), and the data is then transferred to its private servers,
maintained by Amazon Web Services (AWS). This gives a far more
accurate idea to engineers of what lies beneath and saves a
considerable amount of time and effort.

New oil drilling locations and new ways to stimulate shale oil are
only some of the benefits of applying big-data analytics in the oil
industry. Seismic software, data visualization, and pervasive
computing devices are some of the modern analytical tools that are
currently being adopted by the oil firms.

4. Ensures efficient performance

of machines
Oil drilling is a continuous process and machines have to work for
long hours under severe temperatures and conditions. Big data is
used to ensure that machines are working properly and are not
damaged due to breakdowns or failures. Machines are fitted with
sensors that collect data about its performance. This data is then
compared to the aggregated data ensuring that parts are replaced
in an efficient manner and downtime is minimized, further
reducing additional expenses.

In a recent survey by Accenture and Microsoft, oil companies and

those in the support industries established that 86% to 90% of
respondents said that an increase in their analytic capabilities, use
of mobile technologies in the field and banking more on Industrial
Internet of Things would increase the value of their business.
According to the survey, over the next 3–5 years, investment in big
data and automation are expected to increase from 56% to 61%
and 53% to 65%, respectively. Finding and producing more
hydrocarbons, at lower costs in economically sound and
environmentally friendly ways can not only add value to the data
but also helps in accurate decision-making

Analytics-driven insights are the new oil:

How Shell is transforming data science
Dan Jeavons (Shell)
9:05–9:30 Tuesday, 22 May 2018
Data science and machine learning, Data-driven business management
Location: Capital Suite 2/3Level: Intermediate
Average rating:
(5.00, 2 ratings)

The oil and gas industry has always been at the forefront of digital transformation; from
control systems in refineries to sensors across a digital oil field, data and analytics continue
to be a source of competitive advantage. As the world moves to a lower hydrocarbon future,
Shell is using data to drive its own organizational change. Analytics and the transformation
of a skilled analyst workforce into the next generation of citizen data scientists are the keys
to Shell’s growth. Shell has placed the responsibility for analytics within the office of the
chief digital officer. With a seat at the strategy table, how can analytics both align and
influence the direction of one of the world’s largest energy companies?

Dan Jeavons details Shell’s journey to data analytics excellence, focusing on the
deployment of self-service analytics both for the data science teams who look to deploy
mission-critical models for real-time use and for the longer-term strategy of filling the “data
science skills gap.” Shell has been working closely with Alteryx as a co-innovation partner,
driving the development of products like Alteryx Promote and developing a platform
ecosystem with other innovative partners like Databricks to accelerate the development of
their advanced analytics platform as part of its digitalization journey.

Data investigation and collaboration are not just for secret agents using arcane tools.
They’re a world-changing set of technologies and techniques that should belong to
everyone. Join in to learn how Shell validates and reinforces the value of data science in an
established and traditional company and how the move to real-time models is challenging
the business to keep innovating.

Topics include:
  Shell’s downstream lubricants supply chain, which uses Alteryx’s platform to provide
critical information on inventory, margin, forecast accuracy, and blending options
 Shell’s downstream trading compliance team, which monitors operations across
multiple markets, achieving compliance with current regulations and creating
transferability as markets and regulations develop
 Shell Exploration, which uses a "New Well Portal” where various subject-matter
experts can come to understand future extraction opportunities
 Shell Contracting and Procurement, which uses predictive analysis as part of a
solution to optimize the ordering, storage, and utilization of pieces of spare part
inventory ranging from well heads to pipeline parts
 Shell Downstream Retail, which digests multiple data sources and transforms
manual monthly process into accurate, error-free automated reporting around of the
performance of its marketing campaigns

SHELL DRILLS INTO BIG DATA ANALYTICS

Multinational oil and gas company Shell uses big data

to improve its operations and increase output in its wells
In the recent past, the company has started installing optical fibre cables with sensors within the wells to measure
data.

According to Shell, it utilises the collected data to analyse how the wells are doing and how much oil or gas was still
left. These fibre cables, which were created by HP, generate massive amounts of data that is stored at a private
isolated section of the Amazon Web Services. Because of these huge data sets, the company has started piloting
with Hadoop in the Amazon Virtual Private Cloud, added the oil and gas explorer.
Hadoop is an open source software project that enables the distributed processing of large data sets across clusters
of commodity servers.
A company source said, “All the data is of course impossible to understand correctly if not properly visualised.
Therefore, in order to make the data relevant information Shell is working together with IBM and DreamWorks
Hollywood. An unexpected combination, but one definitely needed to visualise so much data.
“All data that is received from the seismic sensors are analysed by the artificial intelligence developed by Shell and
rendered in 3D and 4D maps of the oil reservoirs. Although the analyses are done in the cloud, the visualisations are
immediately available to the crew working at the local factory.”

Shell also plans to deploy these optical fibre cables to approximately 10,000 oilwells.

The petroleum industry, also known as the oil industry or the oil patch, includes the global
processes of exploration, extraction, refining, transporting (often by oil tankers and pipelines), and
marketing of petroleum products. The largest volume products of the industry are fuel
oil and gasoline (petrol). Petroleum (oil) is also the raw material for many chemical products,
including pharmaceuticals, solvents, fertilizers, pesticides, synthetic fragrances, and plastics. The
extreme monetary value of oil and its products has led to it being known as "black gold". The
industry is usually divided into three major components: upstream, midstream, and downstream.
Midstream operations are often included in the downstream category.
Petroleum is vital to many industries, and is of importance to the maintenance of
industrial civilization in its current configuration, and thus is a critical concern for many nations. Oil
accounts for a large percentage of the world’s energy consumption, ranging from a low of 32%
for Europe and Asia, to a high of 53% for the Middle East.
Other geographic regions' consumption patterns are as follows: South and Central
America (44%), Africa (41%), and North America (40%). The world consumes 30
billion barrels (4.8 km³) of oil per year, with developed nations being the largest consumers.
The United Statesconsumed 25% of the oil produced in 2007.[1] The production, distribution, refining,
and retailing of petroleum taken as a whole represents the world's largest industry in terms of dollar
value.
Governments such as the United States government provide a heavy public subsidy to petroleum
companies, with major tax breaks at virtually every stage of oil exploration and extraction, including
the costs of oil field leases and drilling equipment.[2]
In recent years, hydraulic fracturing has moved to the forefront of the industry as this new technology
plays an extremely crucial and controversial role in new methods of oil extraction.[3]

Shell Oil Company is one of the reputed company in the world. Shell oil is United States based
wholly owned subsidiary of Royal Dutch Shell, transnational corporation "oil major" of Anglo-Dutch
origins, which is amongst the largest oil companies in the world. Approximately 22,000 Shell
employees are based in the U.S. The U.S. headquarters are in Houston, Texas. Shell Oil Company,
including its consolidated companies and its share in equity companies, is one of America's largest
oil and natural gas producers, natural gas marketers, gasoline marketers
and petrochemical manufacturers.
Shell is the market leader through approximately 25,000 Shell-branded gas stations in the U.S.
which also serve as Shell's most visible public presence. At its gas stations Shell provides diesel
fuel, gasoline and LPG. Shell Oil Company was a 50/50 partner with the Saudi Arabian government-
owned oil company Saudi Aramco in Motiva Enterprises, a refining and marketing joint venture
which owns and operates three oil refineries on the Gulf Coast of the United States. However, Shell
is currently divesting its interest in Motiva.[3]

The Shell Oil Company Warehouse, built in 1925 and located at 425 S. N. 16th Ave. Phoenix, Arizona. It is
listed in the National Register of Historic Places. Reference #85002073
Shell gas sign, also in Phoenix

A Shell gas station near Lost Hills, California

Shell products include oils, fuels, and car services as well as exploration, production, and refining of
petroleum products.[4] The Shell Oil Refinery in Martinez, California, the first Shell refinery in the
United States, supplies Shell and Texaco stations in the West and Midwest.[5]
Shell gasolines previously included the RU2000 and SU2000 lines (later there was a SU2000E) but
they have been superseded by the V-Power line.[6]
In 1997, Shell and Texaco entered into two refining/marketing joint ventures. One combined their
Midwestern and Western operations and was known as Equilon. The other, known as Motiva,
combined the Eastern and Gulf Coast operations of Shell Oil and Star Enterprise, itself a joint
venture between Saudi Aramco and Texaco.[7]
After Texaco merged with Chevron in 2001, Shell purchased Texaco's shares in the joint
ventures.[8] In 2002, Shell began converting these Texaco stations to the Shell brand, a process that
was to be completed by June 2004 and was called "the largest retail re-branding initiative in
American business history".[9] In the year 2016, Shell Nederland Raffinaderij BV (Shell Pernis) said
that it has started a new aromatics unit at the large Pernis refinery in Rotterdam, Netherlands.[10]
In recent years The Shell Oil Company's Midstream, and Downstream, in particular, have become
limited to petroleum, and chemical products. This has come as a result of Royal Dutch Shell
breaking off its Natural Gas and power businesses in to a new segment named Integrated Gas. The
Shell Oil Company's former Natural Gas, and energy divisions are now Shell Energy North America,
a closely integrated, but distinctive entity that runs across North America and is headquartered out of
Houston.[11]

Big Data in Big Oil: The

Amazing Ways Shell Uses
 Analytics to Drive
Business Success
bernardmarrNovember 17, 2015

2156 Views
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Shutterstock - by bleakstar 242852335

The oil and gas industries are facing major challenges – the costs of
extraction are rising and the turbulent state of international politics adds to the
difficulties of exploration and drilling for new reserves. In the face of big
problems, its key players are turning to Big Data in the hope of finding
innovative solutions to these pressing issues. Big Data is the name used to
describe the theory and practice of applying advanced computer analysis to
the ever-growing amount of digital information that we can collect and store
from the world around us. Over the last few years businesses in every
industry have enthusiastically developed data-led strategies for overcoming
problems and solving challenges, and the oil and gas industries are no
different. Royal Dutch Shell is one of the largest oil and gas companies – one
of the “supermajors” which also include BP, Chevron, Total and ExxonMobil –
and the world’s fourth largest company by revenue. For some time now it has
been developing the idea of the “data-driven oilfield” in an attempt to bring
down the cost of drilling for oil – the industry’s major expense. A recentsurvey
by Accenture and Microsoft of oil companies and those involved in the support
industries found that 86% to 90% of respondents said that increasing their
analytical, mobile and Internet of Things capabilities would increase the value
of their business. The search for new hydrocarbon deposits demands a huge
amount of materials, manpower and logistics. With drilling a deep water oil
well often costing over $100 million, no one wants to be looking in the wrong
place. Surveying of potential sites involves monitoring the low frequency
seismic waves that move through the earth below us due to tectonic activity.
Probes are put into the earth at the spot being surveyed, which will register if
the pattern of the waves is distorted as they pass through oil or gas. In the
past this would involve taking a few thousand readings during the typical
survey of a potential drilling site. But in the past few years technology has
advanced to the level where it could involve over a million – vastly increasing
the amount of data gathered during exploration. Shell uses fibre optic cables,
created in a special partnership with Hewlett-Packard, for these sensors, and
data is transferred to its private servers, maintained by Amazon Web
Services. This gives a far more accurate image of what lies beneath. Data
from any prospective oil field can then be compared alongside that from
thousands of others around the world, to enable geologists to make more
accurate recommendations about where to drill. Production forecasting is one
of the first jobs – determining the likely output of the reservoir is key to
determining what resources should be spent on collecting it. When this
decision is data-led, operators can have more confidence that this will be
done efficiently. Shell also uses Big Data to ensure its machines are working
properly and spending as little time as possible offline due to breakdowns and
failure. Machinery used in drilling has to operate in harsh conditions for
prolonged periods of time so is prone to wear and damage. To counteract this,
the machinery is fitted with sensors collecting data about its performance and
comparing it with aggregated data, meaning parts can be replaced in an
efficient manner and downtime minimized, further reducing overheads. As well
as exploration, Big Data is being put to use to streamline the transport,
refinement and distribution (retail) of oil and gas. Shell is vertically integrated,
and therefore involved in every aspect of the process through to packaging
and selling it to the consumer as fuel for their car for heating their home.
Refineries have limited capacity and fuel needs to be produced as close as
possible to its point of end use, to minimize transportation costs. Complex
algorithms take into account the cost of producing the fuel as well as diverse
data such as economic indicators and weather patterns to determine demand,
allocate resources and set prices at the pumps. Of course, we’ve long been
conscious of the fact that we could eventually use up all of the non-renewable
oil and gas buried under the earth – perhaps sooner than we think. While this
is an environmental concern to us all, it’s a financial one to companies like
Shell. Dwindling reserves mean the cost of getting at what is available goes
up, as they are forced to look deeper underground in ever more remote
locations. One alternative is offered by the growing hope that “unconventional
resources”, such as shale gas and tight oil will fill the gap. These resources,
trapped in shale and sandstone, now supply 20% of the gas used in the USA
and their use is expanding rapidly around the globe. However they demand
new extraction methods such as hydraulic fracturing (“fracking”). Because this
is relatively new far less data is available so exploration can be more hit-and-
miss. However new techniques are being developed to use the data that is
being collected from probing and drilling these sites to help pinpoint other
locations where reserves could be hiding. All of these elements form the “big
picture” – every part of which must be synchronized if a company is going to
prosper in the costly, dangerous and highly competitive field of oil and gas
production. Thanks to big data analytics, the interconnection between these
elements of the business can be examined and monitored in detail. This
means models can be built and simulations created by analysts, to explore
how minor tweaks to a certain area of operations could have big impacts on
the productivity or efficiency of another. The vast amount of data collected
from all areas of the company’s activity means the result of the simulations will
hopefully be as close as possible to the way things will play out in the real
world. Ultimately this leads to decision-makers being better equipped to make
the decisions that affect the company’s fortunes.