Ponder this: “Chevron Has More Data Than Google.”  

I know …I know…..That was a rumor I heard that the CEO of Chevron said at CERA Week.

It’s really one of those comments that made me scratch my head. I don’t know if Watson actually said this. And after my knee jerk “no way” reaction, I started thinking something else. “What if this is true?”

Further ponder this:  “Data is the New Oil.”

I’ve heard this idea flung about quite a bit lately. And considering that I have been both in the energy business and technology for 20 years I am about to abuse this analogy like it has never been abused before.

Here’s a crash course in oil production. In the oil business, oil development is broken down into three states of production.

• P3 is “Unproven or Possible” (read the oil is probably there),
• P2 is “Proven Undeveloped” (read we know the oil is there but not producing yet) and;
• P1 is “Proven Developed” (read the oil is flowing).

Remember we are talking about real oil under the ground. Chevron has spent decades and decades figuring out how to transform the “maybe” oil into “produced” oil or P3 to P1.  So let’s use this concept to the new oil.

If “Data is the New Oil,” Chevron is potentially sitting on top of the Saudi Arabia of data. But where is the monetary value in data??? Value is created by moving from data “possibilities” to “data monetization.” Some rigs cost $400,000 per hour to run. If you can shave a couple hours off of any one of the thousands of rig processes that a driller uses in any of the thousands of wells drilled we are far into the billions saved. Anyone in the oil business knows that there are thousands upon thousands of processes. We can do them better with the right data and analytics.

But, is that it??? Just cost savings? My instinct is no. So much of our day to day lives is plain old grunt work. If you look at any software process, 80% of the time is just getting data to the process. It’s the same for work processes. So much time is spent getting ready to do the real work. I can’t help but think that harnessing this data may really change how people work on a day to day process.

But how do we get to there from here?   Two immediate hurdles.  Challenge one is that most of that data is locked up in older architectures. We are going to need to really re-think integration. The second challenge is processing. See Big Data architectures like Hadoop. This is why Chevron is playing around with it. Learn more at WSJ’s Blog.