Jonathan Barrett, Managing Director, EMEA at Dataminr
The energy sector is plagued with uncertainty. When energy services are impaired by a disruptive event, the resulting business impact can be immediate, significant, and widespread. Organisations that succeed in returning to normal operations and minimising the unpredictable impact are the ones with corporate security teams who are one step ahead when it matters most.
While energy companies take every precaution to safeguard against disruptive events, they are inevitable. Even with contingency plans in place, there are still many factors out of an organisation’s control. Getting ahead and earning time to deal with an unfolding situation is a material advantage; gathering as much pertinent information and getting a 360-degree view as rapidly as possible is fundamental to making the right and timely decisions. With many energy companies having infrastructure and operations in disparate and remote areas, being aware of when something is happening is often the first obstacle to scale, but the right AI technology can provide vital information in real-time.
The value of real-time alerting
There are multiple ways in which unforeseen events can impact corporate risk within the energy industry, in areas such as up-stream, down-stream, supply chain ecosystems, logistics and HSE. Commercial opportunities and brand reputation can also take a hit in terms of risk profile and stock price within the energy industry. Access to real-time insights has changed the information flow paradigm, particularly in times of crisis. Around the world, events and news are often reported on social media as it happens, increasingly before the full extent of an event is known by traditional news sources. Companies that don’t take advantage of AI-driven real-time insights are being left in the dark while business impacting events unfold
With such large volumes of data and multiple viewpoints to monitor from diverse sources, determining what is relevant quickly is challenging for many companies. It’s here that the latest advances in artificial intelligence come into play, allowing professionals to cut through the noise and gain awareness of critical information relevant to their businesses. Advanced algorithms can sort through publicly available data sources to detect meaningful signals in the shifting seas of alternative data, providing the insights most needed by business leaders to act with confidence and speed. These alternative data sources act as a crucial component of risk crisis management. Why? Because in order to manage against the unpredictability of a crisis and its ensuing fallout, energy companies must be armed with all the available information, in real time.
The domino effect
Decision making in the energy sector cannot always be based on predictable outcomes. The landscape is continually shifting, and important information emerges from unexpected sources. This is why those working in the energy sector can gain so much from the powerful combination of AI applied to alternative data.
In Baumgarten, Austria, in 2017, a fire broke out as a result of a gas pipeline explosion. This led to the minister of neighbouring Italy to declare a state of emergency due to the lack of gas supplies, causing day-ahead pricing to shoot up more than 215%, the highest ever for Italian natural gas pricing. A tweet from an office worker who spotted the blaze from 100 kilometres away created a domino effect in a chain of events. Real-time alerting informed workers in the company of the fire ahead of both local and national news, and 90 minutes before an official company statement. Knowing so far in advance gave businesses the head start they needed, to implement their plans and minimise the resulting damage.
For all businesses connected with the energy industry, real-time alerts provide invaluable information for managing risk and through the most challenging crises. They also gives ongoing situational awareness, which, in turn, supports corporate security teams dealing with ongoing threat management. Real-time alerts are essential for organisations with teams in remote locations, to provide context and assess the overall threat landscape. Real-time alerts that contain images are even more useful, as teams can literally see what’s happening and they are given a more detailed context of the situation. For immediate incident response, the sooner someone is made aware of an event, the sooner it can be dealt with and the better it can be contained.
Business continuity and disaster recovery
Whenever a crisis befalls an energy company, there is a correlating business impact. Disrupted service can mean customers are left without the fuel they need. The operations and finance teams must work to ensure that the company manages the ensuing damage swiftly by preparing for repair costs and determining how insurance and business continuity plans will affect the bottom line.
As a crisis unfolds, it’s down to corporate security teams to initiate recovery and business continuity plans. Resources must be thoughtfully and appropriately allocated to re-establish normal operations. Disaster recovery plans must be put in place to help businesses understand what to do should such an event occur, to best protect people, equipment and infrastructure. Fundamentally, a corporate risk plan should take into account a wide range of potential challenges, which considers all outcomes to establish how they can be handled, to minimise impact and risk. Organisations need to be seen to be taking all the right steps to mitigate risk and deal with the crisis quickly and appropriately, for the sake of their staff and brand reputation. The long term impact of failing to deal with a situation is often significant, as organisations work to regain the trust of customers and ensure something similar doesn’t happen again in the future. Energy companies can end paying for decades after an event, often in the billions.
Collective and consistent access to real-time information, across critical business functions and processes, can help teams understand how to limit damage in a range of ways. The up-to-date insights real-time information can provide professionals in the energy sector, can be its lifeline during a crisis. Without these, organisations can face considerable downtime, loss of valuable data and safety breaches. Therefore, being able to minimise the damage caused by such crises will ensure businesses can return to normal as soon as possible. www.dataminr.com