Conversion of Raw Data to Analytics Truly Impacts Bottom LineWed, 01/21/2015 - 11:22
Q: When WellAware Holdings (WellAware) was created in 2012, what difference did you feel this company could make in the oil and gas market?
A: WellAware is a data analytics company which helps oil and gas companies reduce operating expenses, lower unplanned downtime, and improve their safety and operating compliance. Our services focus on helping to collect data, monitor it, analyse it, and present solutions in a number of areas. Today, reducing a company’s operational costs by US$1 has the same impact on the bottom line as US$3 in revenue. There is also a yawning knowledge gap that companies need to deal with. Another priority is downtime. The oil and gas industry currently faces 5-7% of unplanned downtime, which costs billions of dollars to oil companies. Finally, in terms of safety and operating compliance, the oil and gas industry is seven times more risky than other industries. To address this, WellAware deploys some new, exciting technologies that keep employees safer in oilfields. Another issue we handle is that it is difficult for oil companies to access much of the data they generate. The industry has essentially built isolated islands of data that is located on telemetry devices at the oilfields. This means accessing that data takes up resources, time, and money. Secondly, in many control rooms, employees have to be tied to a computer to monitor production. This is all highly unproductive. Therefore, WellAware takes the data from these locations and converts it into analytics. Instead of having staff tied to their computers, we allow them to access those analytics from mobile devices. Companies like Google and Apple have spent billions on developing such devices and the energy sector needs these options to become standard practice. Many operators in the field already have tablets but very few of them use these devices to help them do their jobs better, to be more cost-efficient, to reduce operating expenses, and to avoid accidents. There is a huge opportunity for WellAware to leverage existing technology, get this data on mobile devices, and help oil and gas companies better manage their assets. However, these devices still have a limited capacity but we are accounting for that through the Internet of Things, which has been the main topic at several trade shows in the last year. By allowing oil and gas operators to access data in real time with an unlimited capacity, the Internet of Things will help this sector reduce costs. These analytics will also be immediately accessible and understandable. To understand how these analytics help companies in different ways, executives will no longer need to export the data, send it for analysis to different teams, and wait several days to make a decision. The analytics will actually provide alerts about problems and make recommendations about how to fix them, such as indicating the need to send a team to a specific wellhead if a problem arises there. On top of that, not everybody in an organization needs to see the same data, different parameters can be set to bring different information to teams. We have a very easy-to-use dashboard so that these parameters can be filtered and installed very easily. Essentially, we turn the data into information before helping companies optimize their operations with that information. We do all this in four stages. First, we use descriptive analytics, which provide answers to questions such as what happened to cause a wellhead to fail, for example. To do this, we track the common variations that cause a wellhead to go down. Secondly, we turn to diagnostics to figure out why these problematic events happened at the wellhead. Once we fully understand what happened and why it happened, we can turn to the third step: predictive analytics. Through a trend analysis, we can predict what will happen and come up with strategies to get the well in question optimized. Finally, we deploy prescriptive analytics, in which we run scenarios that show companies the different economic impacts of various decisions on the wellhead. This way, companies can see cost, profit, and production breakdowns of different strategies before implementing them.
Q: What opportunity is there for WellAware to provide its solutions to Mexican public entities?
A: There is a great opportunity for us to set a high standard in terms of what CENAGAS or CONAGUA should expect from a partner like us. We provide a great technology that is easy to use and allows for access to real-time data anywhere. We anticipate it to be very popular among such entities. There is also a key differentiator in our solutions compared to our competition, outside of mobility and analytics. We are a virtually integrated company, as we provide the hardware, the components that ensure connection with different telemetry devices, the network that collects data, and the software itself. We are an end-to-end solution provider.
Q: Which oil and gas industry activities generate most demand for your solutions in Mexico and beyond?
A: Chemical management is gaining a lot of traction for us as it is largely an untapped opportunity for WellAware. Chemicals rank in the top three costs for energy producers. They are expensive and if inventories are not wellmanaged, costs can quickly pile up. This is why WellAware has garnered a lot of interest to help improve chemical management. After this, production monitoring systems are definitely a big earner, followed by pipelines. However, our presence in Mexico is limited for the time being. We are still developing the North American market generally, particularly the US, which is where we are devoting most of our resources. With the Energy Reform in Mexico, we obviously do anticipate some business here. For example, in 2013, Mexico had 3,052 illegal taps of pipelines, which cost PEMEX US$1.2 billion in lost gasoline. WellAware can put monitoring systems in place that will provide accurate accounts of reduced flow in instances of stolen gasoline. This will alert operators right away to a deviation of the fluid and allow somebody to be immediately dispatched to investigate. This could be a very good solution for PEMEX and Mexico. We also believe we could sell our software to any of the companies involved in Round One, including foreign companies, local suppliers, and PEMEX itself. We can also help address some of the major challenges facing companies entering the market, such as chemical management and human safety. WellAware can take the human element out of the equation by having less people present at the well site. We can prevent people from needing to go to the wellheads to collect data, making the entire process much safer by being done remotely. This also translates to increased safety in other areas, such as fewer traffic accidents, since less people are on the road. We are currently learning about the new Energy Reform and the opportunities to enter the market. It is also an honor to have Carlos Slim, with his vast experience in the industry, providing us with his vision as backer of WellAware. He sees that our analytics platform and our business approach is highly applicable to the problems the oil and gas industry is facing today, by reducing unplanned costs, reducing unplanned downtime, and improving safety. This is also the case for another of our backers, Dick Cheney. Ultimately, the problems we help to fix are industry-wide. We want to deploy our solutions here and in the US to help reduce our dependency on imports from the Middle East. We have a duty to make the North American oil and gas sector more efficient than any other region out there.