Petrol topped $4 per gallon in the US recently. Crude oil is trading at all-time highs-above $125 a barrel. As a result oil and gas companies are delivering fat profits. In May, Exxon Mobil reported $10.9 billion in profits for its latest quarter, just short of its record-breaking $11.7 billion the quarter before.
It's tempting-and politically expedient-to explain such astounding numbers by saying that greedy oil companies are taking advantage of market fears, making money on the bent backs consumers. So many of us, after all, have no choice but to buy fuel. We fill our cars to drive to work, where buildings must be heated in winter, supplies must be shipped, products hauled in trucks and executives jetted hither and yon.
Yet economists will counter that taking advantage -spotting a revenue opportunity and moving on it- is exactly what companies should do: That's capitalism. Oil companies excel at identifying where their profit advantage lies. And they obtain that advantage through sophisticated business intelligence systems.
Without good business intelligence (BI), oil companies risk their livelihoods, says David Knapp, a senior editor at the Energy Intelligence Group, an information provider for the oil industry. "Those that have lagged in understanding have lagged in performance," Knapp says. BI is all about understanding what makes your company-and your industry-thrive. Mortgage lenders, for example, are currently going under in part because they didn't analyse enough of the right customer data and signed up risky borrowers.
Oil companies have always lived and died on BI, says Gary Lensing, VP and CIO for global exploration and production at Hess, an oil exploration specialist. "Data drives what we do, always quantifying where that value is."