For this Company Spotlight, we interviewed Validere’s Co-Founder and CEO (Nouman Ahmad) and SVP of Marketing (Ben Tao) about how the company is improving how the oil and gas industry collects, aggregates, and validates real-time, dynamic data sources to make better informed commodity pricing and operational efficiency decisions that also incorporate ESG considerations to maximize profitability. Validere is a leading data and analytics SaaS provider that is digitally transforming the world’s largest supply chain to be more sustainable and efficient. For more information on Validere, please visit www.validere.com.

Background: In 2013, Nouman and Ian Burgess, who had recently earned his PhD at Harvard for his development of a nanomaterial that identified numerous characteristics of liquids more effectively than existing instruments, decided to be business partners. As they were trying to decide which industry to tackle first with this nanomaterial technology, the news broke that the disastrous crude oil tanker derailment in Lac Megantic, a small town in Quebec, would not have caused nearly as much damage had the crude oil not been misclassified and stored in the wrong type of tanker. This led to Canada’s Department of Transportation reaching out to Harvard about the nanomaterial Ian developed. In 2016, Nouman and Ian co-founded Validere to solve the problem of misattribution of hydrocarbons in the oil and gas industry. However, as they looked more into the issues that led to the Lac Megantic incident, they found that the problem wasn’t that the industry needed better sensors/measurement devices, it was more of a data aggregation/validation and technical expertise issue. At that point, they decided to pivot away from the nanomaterial approach and to instead develop a software solution.

Key Features: Oil and gas is a complex and fragmented supply chain (i.e., oil changes hands 11 times between when it is pumped out of the ground and when it is processed at the refinery). Before Validere, there was no system of record for this complex supply chain inventory that is complete, accurate, and auditable. Validere has developed a platform for transparent and efficient supply chain management for the oil and gas industry by providing the following capabilities:

Compatibility: Connects to all major existing telemetry, sensors, and other data sources to create a universal data layer that is accessible and utilizable across functions (i.e., commercial, operations, ESG, etc.
Machine Learning: Ensures data accuracy by using machine learning models and other advanced analytic techniques to address bad or conflicting data. Validere’s machine learning models are trained using industry-wide datasets (6+ million barrels tracked per day).
System-level Optimization: Industry-leading data set and proprietary models also enable intelligent and actionable recommendations to be presented in a way that is easily understandable by operations professionals.
Audit Trail: Records all relevant attributes and characteristics of the product to create audit trails and a single source of truth that enable customers to extract full value by properly marketing the product.

Use Cases: Validere’s platform benefits companies across the entire oil and gas supply chain, including the following customer types:

Upstream: Ensures that producers receive fair value for their products by providing auditable evidence that can be used to make the case for higher prices due to higher quality and/or lower emissions profile (average $0.81/barrel netback increase and up to 5% higher premium for low emission gas).
Midstream: Validates the characteristics and attributes of the product(s) received that enables lease aggregators to accurately determine what price they should be paying producers and where to sell downstream to receive the best price (system imbalances reduced by 30% leading to $0.20/barrel savings).
Downstream: Optimizes blending operations by being able to buy the proper spec products and having confidence that they are receiving what is advertised (average $0.64/barrel increase in blend margins).

Closing Thoughts: With the global oil and gas commerce market estimated to be approximately $40 trillion per annum, losses of just 3-5% from poor data quality equates to over $1.2 trillion of lost value annually. We look forward to how technologies like Validere’s will help the oil and gas industry not only eliminate these losses but also generate value from increased sustainability efforts.

Company Spotlights

January 2022