Ultimate Best Practice
In an ideal world, to achieve the most accurate and consistent data, upstream oil and gas companies need:
- Shared consistent “evergreen” data across all processes
- Granularity suitable for the process in question
- Aggregation as required but without loss of visibility, sometimes known as the “Golden Thread”
- The ability to capture “Actuals” and compare with forecast data
- Calculated data, such as fiscal data, on demand
- The ability to archive and compare data
Few (if any) organizations consistently achieve all the above, although a number are working towards this utopia.
The diagram below illustrates a number of key business processes and the interaction between them.
The key elements of this are:
- A common evergreen inventory of existing projects and new opportunities. This is used by all the processes to ensure consistent data
- A common set of corporate data such as FX, Prices etc.
- A common set of on-demand economic/fiscal models
- Historical data and forecast data is captured in the system
Comments on the interactions between processes:
- The strategic planning process extracts all existing projects and opportunities from the inventory, aggregates into decision units whose size will depend on the size, risks, and dependencies of the projects/opportunities. Portfolio optimization and scenario analysis are conducted to gain insights into the data and the feasibility of meeting the corporate strategic goals. Guidelines are produced for the business units in terms of targets, constraints, and project mix that are required to meet the corporate goals.
- Long-term business planning is conducted using the corporate guidelines. The granularity of the opportunities and existing projects will vary depending on their maturity. The first year of the long-term plan is the budget, and this will normally be at a monthly level of granularity. Projects and opportunities are flagged to indicated submission into the current long-term plan.
- Asset development planning provides a detailed analysis of an existing field or an opportunity. This provides detailed data into the inventory at a fine granularity. The business planning system may not use this level of granularity but can aggregate the data. The key aspect is that there is a “Golden Thread” of data to allow visibility at each level as to the source of the data.
- Capital management is the control of spending that has been approved and the reforecasting of spend for existing projects. It will take and add data to the inventory for existing projects.
- Technical evaluation of reserves extracts data from the inventory for existing projects to update the forecasts. Updated forecasts are placed into the inventory.
- Corporate Reserves has all the data required within the inventory for reporting and consolidation. The inventory contains production, updated forecasts, plans for new opportunities, etc. It will also have the data to undertake reserve forecasting.
- The above interactions are often iterative and archives are kept for each iteration to allow comparisons to be made and changes tracked.
Enlightened Upstream O&G companies are starting to implement the above using innovative processes and tools to assist in this exercise. 3esi-Enersight is proud to be the leading provider of integrated Strategy, Planning, and Reserves, helping operators minimize inefficiencies and risk from lack of information, and improve company-wide insights. Integrated upstream planning using a process like the one above is helping operators in 2017-2018 create tangible opportunities for sustainability and growth. We invite you to contact us to learn more.