Wednesday, 24 July 2013
When an oil company looks to buy into a piece of land (or sea) in a part of the world that is already pretty well explored, one of the first things they do is what is known as "dry hole analysis".
This involves a thorough, historical and forensic analysis of all of the successful and unsuccessful exploration wells in the area in order to learn as much as possible about the geology, and about the risks and reasons for failure. Some previous exploration wells will have been successful and resulted in the discovery of oil and gas fields, and the new oil company researches these, to fully understand the combinations of reservoir rock, geological structure, caprock and oil charge that resulted in the accumulation of a commercial quantity of hydrocarbon. This is knowledge that is needed, but its also knowledge that everyone else has, and once one oil field has been found, the obvious look-alikes will have been snapped up quickly.
Therefore it is even more important to research the wells that found nothing - the so-called "dry holes." Each dry well was, at one time, someone's "smart idea" or, sometimes, someone's "sure thing", that failed. Why did they fail? What did those previous explorers fail to appreciate/ What did they not know? An understanding of the dry holes may help you avoid repeating the same mistakes that others have done. Sometimes, really good detective work will also reveal things the previous explorers overlooked, and those dry holes can sometimes be a pointer to ignored riches.
This is a good example of thorough "learning before"; learning from the experience of others, in order to build upon the knowledge of the past, rather that to repeat ancient history.
Do other industries do the same? Do product companies do a thorough, historical and forensic analysis of previous successful products (their own and those of their competitors), and also of the "dry hole" products - those than failed? Do construction companies study not just the award winning properties, but those which turned out to be awkward, unpopular and high maintenance? Do TV companies study not just East Enders and the Sopranos, but also Triangle and Cop Rock?
One would hope they do!