Data is not a true commodity, but as the fuel of a massive digital transformation it has to remain open and transparent, used and reused, in order to provide the energy industry with its greatest opportunities, a panel of experts said March 12 at CERAWeek by IHS Markit.
"If you look at the traditional life cycle of oil from extraction through tread core, refinement and then finally through ultimate consumption, then data is the new oil," Chesapeake Energy Corp. Chief Digital Officer Kentaro Kawamori said during the conference.
"Think about data the way you think about oil," said Craig Hayman, CEO at AVEVA Group PLC, a British multinational information technology company.
Hayman said both oil and data have upstream, midstream and downstream process streams. For data, the upstream stage involves emitting the data from various footprints. In the midstream phase, data is refined into a product the industry needs. Finally, the downstream stage is the delivery process. Just as oil needs to be processed and refined, raw data also must be transformed into something useful to the company, Hayman said.
"So the parallel between oil and data applies here. Data has an inherent energy value to it and you can take it and make something useful from it. So data has the same characteristics as oil ... it needs that flow through an organization to be valuable," Hayman said.
Data has been compared to other industries, but the comparison with oil and gas could not be more striking, said Hussein Shel, the principal program manager at Microsoft Azure, which focuses on cloud computing services.
"Data have been the center of the decisions that are made in the oil and gas industry for decades," he said.
Shel said partnerships are necessary to build a data ecosystem that collects information and refines it to provide insight to the industry. Microsoft is working closely with energy industry leaders to make data meaningful through machine learning and analytics, seismic processing and interpretation, and drilling and production optimization. Shel said they partner with industry leaders to understand their problems, and team with other internet service providers to unlock insights that can enable opportunities for its partners.
But as the importance of data increases, so too does its value and power. "People forget about how pervasive the impact of hydrocarbon is, and that is a great 'parallelization.' Data is incredibly pervasive," said Colette Cohen, CEO at The Oil and Gas Technology Centre, a U.K.-based research and technology center.
However, data should not be "siloed" or owned, she said. It has to stay very open to provide the greatest chances of success.
"What we have to be really careful about is that oil is quite elitist in the way we trade it, and cost it and in what it enables, and we have to make sure that data doesn't become that," Cohen said. Data becomes even better when it can be taken from one company, passed on to another and enhanced, she said. It needs to be passed and shared to get the most value from it.