In the UK, it is not that long ago that people had to go to the Department of Energy and Climate Change – which is now the North Sea Transition Authority – to inspect composite well logs on microfiches. Now, as production data, licence boundaries, well updates and many more types of subsurface data are more frequently shared through online databases anyone can directly connect to via their home device, one can ask what the effect of this data democratisation is on the subsurface intelligence business. In this article, which will be published in parts online but appeared in Issue 1 of the magazine as a whole, we explore this question from a number of perspectives.
Download Issue 1 of this year’s magazine to read the full story.
For today’s article, Alyson Harding (Westwood Global), Andrew Vinall (Ember Exploration) and David Moseley (Welligence) share their views.
“..the value to our underlying data and reports is immense.” – Alyson Harding – Westwood Global
“The amount and variety of subsurface data being made available is growing,” says Alyson Harding. Alyson is the Technical Manager at Westwood Global Energy in London, where she oversees upstream activity in Northwest Europe.
The several hundred relinquishment reports that the Norwegian Petroleum Directorate has released since June 2021 is a good example. “As a subsurface intelligence business”, she continues, “we incorporate details of the mapped prospects shown in the relinquishment reports in our own databases. Although this has added to the workload for the team to process this additional information, the value to our underlying data and reports is immense.”
The UK NSTA has been releasing relinquishment reports for a number of years and we have been including this detail in our database and reports. More recently, Westwood has also expanded our intelligence service to include energy transition-related data, including carbon capture and storage and hydrogen, which has added to the amount of data to track.
“It is true that more data have become available, but that doesn’t mean that it is a matter of a button click and the magic happens.” – Andrew Vinall – Ember Exploration
Andrew Vinall has worked in the subsurface intelligence business since 2003 and was part of the Hannon Westwood management team until the company was sold to private equity investors in 2015.
Asked about whether getting hold of data has become easier over the years, Andrew says: “Yes and No. It is true that more data have become available, but that doesn’t mean that it is a matter of a button click and the magic happens. Data is often not in the right format and therefore needs to be crunched first. This can lead to a lot of work.”
Another interesting observation is that data can sometimes seem unavailable, whilst in fact it is not. Andrew mentions the relinquishment reports from the Norwegian Continental Shelf: “Yes, the NPD only recently started releasing these valuable documents via their FactPages, but it was always understood to be possible to get hold of these documents if you could find the right people at the NPD,” he says.
“Intelligence historically came from a financial rather than subsurface perspective”, continues Andrew. WoodMac was started as a stockbroker in Edinburgh in the early 1970’s, and accountancy firm Deloitte acquired much of fellow accountancy company Arthur Andersen following the Enron scandal of 2001. Ultimately though, it is a combination of subsurface and commercial information that translates into where and in whom to invest and where not to.
“For a long time,” Andrew says, “WoodMac was the benchmark when it came to reports on asset and corporate evaluations, even though we knew that there were always things to improve as we could compare their reports to the assets we worked on ourselves.”
The intelligence landscape is quite diverse nowadays, with a large number of companies operating globally such as Enverus, Westwood, NVentures and IHS. “All intelligence companies have their own niche and report, present and analyse the data in different ways”, adds Andrew.
While Teams calls, Social Media, online investor forums and digital databases all form ways to get to subsurface information these days, it was a lot different in the past. “In our days, interviews with senior people within oil and gas companies were the most important way to gain insight into what they were up to. However, it was very important to correctly interpret what people had told you, because an incorrect interpretation could have serious implications,” Andrew concludes.
“Conversations with people remain essential to add colour to our analyses.” – David Moseley – Welligence
“Database architecture is a key aspect in the way intelligence companies are able to respond to the changes in the way data is made available into the public domain”, says David Moseley from Welligence. David is Vice President – North Sea Research at the company that puts a data-driven approach, accelerated by AI, at the forefront of their intelligence service.
“It’s not hard to imagine that older databases are not entirely compatible with handling a constant feed of production data, to name an example of data that is now at our fingertips for some countries we report on. Integrating legacy systems with new data streams is therefore a challenge that some companies may face.”
“Welligence was set up in 2016 and from the start, we have adopted a data-driven approach where we can run machine learning algorithms to inform economic models based on the millions of data points we mine. For us, that is one of the key elements of our valuation platform”, David continues.
“At the same time”, he admits, “one of the key challenges, especially now that so much data is readily at hand, is ensuring a proper QC of the data. For instance, authorities may report a completion date of a well as being the 1st of December, but we see that the rig has been off-site for months. It needs checking to spot this and correct for it. This ultimately needs human intervention because we cannot afford running models with bad data.”
Big data is surely revolutionary, enabling companies like Welligence to run scenarios that would have been impossible to run even 10 years ago. At the same time, conversations with people remain essential to add colour to the analyses. It’s something that cannot be replaced,” says David, “as talking to people will provide us with a sentiment and opinion that is not reflected in any type of data.”
Saying that, David sees that people’s attitude towards sharing data has changed somewhat over the years. With more data being shared publicly, people seem less willing to share insights beyond that. “Because of that, those instances where we do get a bit more of a flavour about what is happening behind the scenes are really insightful and useful,” David adds. In that sense, an element of scouting remains in the intelligence business.
See also: “I got kind of bored and underutilised sitting on the sidelines “refreshing” job pages” – Jamie Vinnels
