McKinsey bloggers report on scouting Permian basin activity from space. Earth observation satellites provide an accurate view of shale activity in near real time, now that high and very high-resolution imagery is commercially available. On-demand image acquisition with up to daily revisits and advanced-analytics image processing provides an ‘outside-in’ way of reporting on activity, independent from other market sources.
McKinsey uses AI image-processing to provide ‘absolute accuracy’ and fine detail enough to identify a frack job and count the number of trucks involved. McKinsey has monitored 30,000 square kilometers of the Permian twice a month since September 2019 and has identified every newly cleared well pad and drilling or fracking event.
Satellite-derived observations have been combined with publicly-available regulatory data using ‘advanced analytics’ to provide insights into shale oil and gas activity. The McKinsey analysis found that new well-pad clearances have been increasing steadily since November 2019, with large public E&P companies leading the pack and a decline in the share of majors. Intriguingly, 20% were cleared without filing for a permit!
McKinsey is now working to add new data attributes such as working capital (for rigs, pipes, sand, and frac fleets) and pad-specific information on water and sand injection, opening up new opportunities for optimizing operations and monitoring competitors.
The McKinsey approach mirrors that used by Verisk/WoodMac, as we reported from the 2019 Esri PUG, and Baker Hughes’ truck-mounted ‘AI-to-go’ surveillance, the lead in our last issue. We also heard at the PUG from Orbital Insight on how oil storage can be tracked by checking the shadow on oil storage tanks.
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