How can oil and gas (O&G) companies get the most bang for their big data bucks? They need to manage data like a valuable asset, saysa new whitepaper from management consultancy Molten.

According to Molten, O&G companies are collecting vast amounts of data. It estimates upstream divisions of oil supermajors spend between $1 billion and $3 billion each year to acquire data (excluding management and technology costs). For a company investing $2 billion annually in acquisition of data, it calculates data to be an asset worth $10 billion by applying straight line depreciation over 10 years.

This rush for big data is likely to continue growing unabated. Technology research companyTechNavio forecastsbig data market in O&G sector to grow at a CAGR of 57.08% over the period 2012-2016.

Business managers, however, are yet to move beyond the acquisition stage. Despite investing billions of dollars, some O&G firms are borderline irresponsible about data’s maintenance, Molten group points out. "It’s inconceivable that any physical asset of equivalent value would not have ongoing investment in their care and maintenance. However, typically this ’asset’ oriented mindset for data is rare in the oil and gas segment, because business executives, through no fault of their own, do not or, more accurately, cannot see it in that way," says Rory Colfer, managing partner at Molten.

Business leaders and petroleum engineers attending the Intelligent Energy International (IEI) 2013 exhibition seem to agree. Implementing real-time big data analytics will be the next challenge facing the development of the digital oilfield,according to a poll conducted by BPat IEI.

The solution to this challenge could come from business ownership of data. Molten group advocates O&G firms to formalize data governance and adopt better processes to manage data. Data, it advises, should be established as a balance sheet item. The idea is to help executive teams better understand and value the asset in their business.

It’s not hard to find evidence of data management driving business performance. "We managed to increase the efficiency of reservoir engineers and production managers of one of our clients by 15% by simplifying and standardizing the reservoir modeling data management processes. This helped to eradicate low quality data and thus increased confidence in underlying data leading to the outcome that we all wanted," says Katerina Brazhnikova, Molten’s head of the Russian and CIS region.

Better data management practice also seems to drive reserve replacement ratio (RRR)–a key, high-level measure that determines a firm’s ability to sustainably produce oil and grow. Molten group researchers analyzed the performance of international oil companies (whose data is widely available) and found that firms with greater maturity in data management have highest RRRs. It goes on to estimate that the sector can reduce the error rate in assessing RRR to 7-8% within the next five years compared to the current average uncertainty rate of 10%.

But big data is no bag of magic beans. Their business performance could depend on how well O&G companies drill into it.