IDC Energy Insights Report Evaluates Production Optimization for Oil and Gas Companies

FRAMINGHAM, MA, March 28, 2013 – IDC Energy Insights today announced the availability of a new report, “Business Strategy: Production Optimization – Focus on Operations” (Document # EI239843). According to the new report, the deployment of information and communication technology ‒ particularly analytics ‒ is extending oil and gas companies' ability to optimize based on diverse objectives, a richer set of information, and a more extensive and complex set of parameters. There is also a renewed focus on long-term productivity, not just of a well but of the portfolio of resources for the long term. The implication for oil and gas companies is that there is a need to rethink optimization ‒ the objectives, the time horizon, and the approaches.

Over the past decade, production optimization has been narrowly focused on maximizing the revenue-generating capacity of an oil or gas well. With advances in technology and unconventional plays, the oil and gas industry is now taking a broader view beyond the well to reservoirs, gathering networks, and processing systems. According to Jill Feblowitz, vice president, IDC Energy Insights, "Oil and gas companies are looking at production optimization to fine-tune recovery, address poorly performing wells, extend the life of an asset, and get resource to market."

Key findings of the report include:

• Growth through better recovery is a prominent strategy, especially given the world's increasing demand for energy over the long term.

• Forty-eight percent of upstream companies will be investing in smart well production in the next one or two years.

• Access to more information from multiple sources and disciplines and more sophisticated analytics will improve the oil and gas industry's ability to optimize production.

The Role of Business Data in Optimization

The amount of data being produced in the oil and gas industry will only increase. Smart instrumentation (level, temperature, pressure, flow rates, and vibration) will continue to penetrate the market as new wells are drilled, equipment is replaced, and vendors embed communication capabilities in the equipment they manufacture. With more technical data available, there is an opportunity to apply more sophisticated optimization routines that involve multiple optimization models.

As such, IDC Energy Insights expects that business data will play a greater role in optimization.

Streaming commodity pricing or costs found in the enterprise resource planning and enterprise asset management systems will be vital inputs into optimization models. This means that optimization may no longer be done within technical applications but that optimization will be routinely performed on data from multiple sources and disciplines on an analytics infrastructure.

With that in mind, IDC Energy Insights sees an uptake in the adoption of Big Data and analytics to support production optimization in the next five years. Big Data and analytics makes it possible to optimize based on a richer set of data from multiple disciplines. This technology will also reduce the amount of time it takes to run through multiple iterations or run integrated models, for example. Visualization combined with analytics will provide a way to bring optimization from statisticians to the business.

For additional information or to arrange a one-on-one briefing with Jill Feblowitz, please contact Sarah Murray at 781-378-2674 or Reports are available to qualified members of the media. For information on purchasing reports, contact; reporters should email

About IDC Energy Insights

IDC Energy Insights assists energy businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the utility and oil and gas industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit, email, or call 508-935-4400. Visit the IDC Energy Insights Community at