What CIOs Need To Know About Drilling For Oil

Technology is now being used to speed up oil exploration
Technology is now being used to speed up oil exploration
Image Credit: NatalieMaynor

Once upon a time the CIO job had very little to do with the company that you worked for. Instead of having to worry about what the company was up to, you could spend your time focused on building data centers, selecting servers, and installing more storage. What it was being used for really did not matter all that much. However, now the person in the CIO position has a seat at the company’s planning table and what the business does is almost as important as how it goes about doing this. Nowhere is this more evident than in the business of searching for oil…

Say Hello To The Supercomputer

In the world of oil exploration there is a problem. It’s really expensive to go looking for oil. First you make a guess where you think that the oil may be. Next you send a team out to wherever this may be and you have them sink a well down into the earth hopefully deep enough to find out if there is any oil there. Either there may not be any oil there or you may not have drilled far enough down. No matter, doing this over and over again can get really expensive very quickly. In order to do a better job of finding oil, CIOs at the big oil companies have started to harness the power of supercomputers.

Supercomputers, those incredibly fast and expensive beasts, are able to run algorithms that allow the company to process all of the data that they have collected about a potential oil field. The result of all of this processing can be a clearer seismic image of what lays beneath the ground. There is always the possibility that more oil can be discovered some place that the company is already drilling. Among the big oil companies, BP has been very clear about its love for supercomputers, Italy’s Eni Spa has just built a new supercomputing facility outside of Milan and France’s Total SA has just upgraded its supercomputer and tripled its computing power in the process.

Currently big oil companies are engaged in an arms race to obtain the most supercomputer processing power. Their goal is to find ways to use these computing machines to find ways to produce oil more efficiently and cheaply. Changes in the oil exploration business such as the increase in oil and gas production along with falling oil prices have served to put pressure on oil companies to come up with innovations faster than ever. Oil companies are willing to invest big dollars into supercomputers because they can reduce the time that it takes to find new deposits of oil by months and by helping the company to avoid drilling wells in the wrong area they can end up saving the company millions of dollars.

Other Ways To Accomplish The Same Thing

When you are a CIO who is engaging in a supercomputer arms race, you had better be willing to spend a lot of money. In the case of BP, their CIO has clearly shown that he is willing to do so. BP believes that so far they have only been able to scratch the surface of what is possible with supercomputers. They are currently in the middle of a 5-year investment of US$100M into their Houston, TX supercomputer center. The company has created a 15,000 square foot room inside of a three story building that is flood proof. The supercomputer that they use currently takes up roughly 80% of the available space. The computing power of the BP supercomputer has been characterized as being the equivalent to 50,000 iPhone 7’s.

Not all CIOs who are involved in the oil exploration business can take the same approach as BP. Owning and operating a supercomputer is very expensive and so only the really big firms can get away with doing this. However, since technology keeps advancing, smaller firms are starting to get creative in how they go about trying to solve the same problems. Some CIOs are in the process of moving their company data into the cloud. Once it is there, they can harness computing resources from companies like Microsoft to crunch it. The companies that are going about processing their data this way are reporting that it ends up costing them hundreds of thousands of dollars instead of tens of millions.

When trying to decide if a CIO wants to go with a supercomputer or leveraging the cloud, an important point to consider is if they will use the supercomputer enough to make the investment worthwhile or should they instead pay a premium for the ability to access a cloud provider’s assets? One of the problems with having a supercomputer is that studies have shown that these machines are often idle 80% of the time. If instead you choose to use cloud resources, then you can just pay for supercomputing resources when you use them. Another approach for CIOs is to outsource your demand for computing power to analyze your seismic data. When you do things this way, you can reserve your internal resources for only doing cutting edge research.

What All Of This Means For You

The role of the CIO has evolved over the past few years. In the past the CIO could just focus on the technology that was being used to run the company and that was enough. However, now the CIO needs to be aware of what the company is trying to achieve and how technology can be used to make this happen. One industry where this is especially relevant is the oil exploration industry.

Drilling for oil is a risky and expensive proposition. CIOs are starting to get involved and are turning to supercomputers to help make the process run smoother. The result of all of this processing can be a clearer seismic image of what lays beneath the ground. The big oil companies such as BP, Eni, and Total are all making major investments in their supercomputing resources. Oil companies are under market pressures to deliver more quicker. Supercomputers can help to reduce their risk and reduce the amount of time that it takes to find new oil reserves. The big oil companies are building big facilities to house their supercomputers. Smaller oil companies have to take a different approach. They are moving their data to the cloud and using the computing resources of companies like Microsoft to process their seismic data.

CIOs can learn a lot from what CIOs in the oil exploration industry are going through. These are industries that have realized the importance of information technology and are making major investments in their computing hardware. There are different approaches being taken to solving the same set of problems: supercomputer vs cloud. We’re going to have to watch carefully to see which CIO bet works out the best.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: Do you think that the ability of a cloud solution to scale is more powerful than a supercomputer?

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

The role of the CIO in the company has been an ever evolving position. The people with the CIO job first started out as simply being caretakers for the IT equipment that the company had purchased because of the importance of information technology. This role evolved into more of a strategic partner role for the person in the CIO position who was called on to help the company do a better job of being competitive. Going forward, CIO are now positioned to take a leadership role when it comes to solving some of the biggest challenges that their companies are now facing. Will you be ready to do this?