TOKYO -- Hitachi will employ its big-data analysis technology to help reduce the cost of shale oil development.
The Japanese company expects strong demand for the service at a time when falling crude oil prices are making shale oil development increasingly costly. It will initially collect data on Bakken, a shale formation beneath the U.S. state of North Dakota. About 6,000 shale oil wells are there.
Information to be analyzed will include North Dakota's data on oil well locations and environmental regulations, University of North Dakota data on shale oil reserves, and production data from such major developers as ConocoPhillips and Continental Resources.
Hitachi will then compute cost estimates for potential projects and recommend locations, for instance. Producers could save money by avoiding development where reserves are limited in the first place.
After experimenting in North Dakota and establishing a business model this year, Hitachi will consider taking it elsewhere next year. It aims to enable producers to cut costs by 10% or so.
Hitachi currently has big-data research laboratories in countries like the U.S. and the U.K. It is considering setting up sites in China, Singapore and India as well.
The company aims to generate 150 billion yen ($1.24 billion) in sales from big-data-related operations in fiscal 2015, nearly quadruple the 40 billion yen seen in fiscal 2013.