Australian Engineering Awards 2016: Australia Pacific LNG Business Optimisation Process Modelling (BOPM) Project (Executive Summary)
Australia Pacific LNG (APLNG) and 3esi-Enersight win 2016 Australian Engineering Excellence Award, recognized for setting a new standard of engineering excellence for CSG to LNG projects. The $23b Australia Pacific LNG (APLNG) project is one of three coal seam gas (CSG) to liquefied natural gas (LNG) projects that have been developed in Queensland, Australia. This project has commenced delivery of LNG to markets in Asia based upon long term supply contract and is underpinned by more than 13,000 PJ of P2 reserve gas from in excess of 10,000 wells over 50 years.
Unconventional plays requiring large, high cost development programs now dominate the North American onshore Oil and Gas business. Large drilling programs are often justified and forecast based on ‘type curves: forecasts for a typical single well, intended to be repeated as many times as necessary to represent an extensive drilling program. When companies want to add uncertainty analysis to their forecasts, that work often begins with extending the type curve to include a range of possible single well outcomes, often by including the production forecast for a P10 and P90 well on the curve.
SPE-179971- Comprehensively Valuing an Asset: How a Holistic Value Approach Aligns With Specific Corporate Goals (Abstract)
Valuing an asset is not simply taking total potential revenue and deducting from it the estimated cost to produce that revenue. Likewise, an asset with the highest net present value (NPV) is not necessarily the best investment for a company to make. More important than its potential to generate revenue, defining the value of an asset depends on the context of the company portfolio to which the asset belongs as well as the current and future environment and infrastructure surrounding that asset.
SPE-179969 – Solutions to 5 Strategic Issues Plaguing Executives in 2015-2016: Solving the Right Problems With Portfolio Management (Abstract)
This paper will discuss three examples where companies have used portfolio management models to rapidly explore strategic scenarios in an effort to answer strategic issues. The examples illustrate how portfolio functions including optimization, uncertainty analysis and integrated financials have allowed some companies to efficiently plan in these volatile times. The examples illustrate solving strategic issues such as rapidly exploring strategic investment scenarios, assessing investment options at multiple commodity price points, balancing financial and operational metrics, balancing near and long term performance and rapidly developing capital allocation strategies.
SPE-179968 – Integrating Planning, Financial and Economic Data: Closing the Integrity Gap (Abstract)
Alianza Casabe, a Technical Collaboration venture between Ecopetrol and Schlumberger in Colombia, was finding that ensuring data integrity between the planning, finance and economic models being used by different stakeholders for investment decisions required a substantial amount of interaction and data reconciliation. Economic scenarios were only appraised at a high level of granularity, reducing the ability to factor in economic metrics at the individual well or projects level, as part of the selection of the best possible portfolio. At the same time, existing systems were turning all planning milestones into protracted exercises demanding very high effort by all participants to deal with the intense manual data manipulation, reconciliation and quality control required. Alianza Casabe set out to enhance and simplify the planning processes, to improve efficiency in annual work plan preparation, facilitate performance tracking during execution and most important improve overall investment decisions quality.
Corporations often begin each year with a corporate strategy, a business plan and high expectations of success from their pending business operations. As they execute the business plan they meet with successes and failures, all the time wondering if they should reassess future business plans. Are they better off drilling the remainder of the proposed opportunities, or should they reconsider other opportunities? These decisions are frequently impacted by emotion and intuition as much as by technical analysis.
Throughout the year, corporate executives routinely share information with analysts and stakeholders about their results to date. The information reflects their reactions to the results received to date as tempered by their expectations for the remainder of the year. This system of information collection, analysis, decisions and communication frequently lacks consistency and can be quite time consuming.
This paper will illustrate how companies can use portfolio management techniques to improve the efficiency of their business plan monitoring and the quality of the information available to the
decision process. We will show how portfolio management can be used to track corporate performance and continually reassess the remaining business plans throughout the year. As results are derived, the company can use portfolio processes to monitor the expected business results and the probability of meeting their goals. We will illustrate how portfolio management can help decision makers determine when to change plans and when to stay on the planned course.
Every exploration and production company has the difficult task of deciding between a large number of competing oil and gas projects for future investments. Many companies are developing corporate strategies and making investment decisions without considering the relationship between the two. The result is a less than optimal financial performance and failure to meet corporate goals.
The application of portfolio analysis within the strategy and investment stages provides a disciplined and systematic method of analyzing these relationships. Portfolio analysis can be used to develop and compare strategies given a “pool” of investments. Conversely, portfolio analysis can also be used to evaluate individual investments with respect to how they impact the
company’s ability to meet its strategy. Effective portfolio analysis requires high-quality data addressing such questions as: what assets are currently owned, which ones might be purchased, what stakes might be acquired, or what stakes might be developed in the near future? By taking on a particular economic project, is another opportunity missed that has a better net return?
This presentation will illustrate the use of portfolio analysis to develop and compare alternate strategies that a company might pursue. The examples illustrate how projects and corporate performance measures interact and how the interactions create new opportunities for the corporation. The interactions can be quantified in terms of simple graphical summaries that allow decision-makers to compare alternate strategies and quickly assess the business performance trade-offs they will likely face when they select one strategy over another.
SPE 169853 – Transforming Portfolio Optimization through Re-engineered Processes and Technologies (abstract)
The process of upstream planning for the Oil and Gas industry has historically been a time consuming and inefficient process.
The majority of effort is spent collecting data from multiple functional areas and organizational teams within an organization to form a holistic view of a company. By introducing an integrated solution that combines opportunity cataloguing, economic analysis, and optimization into a single workflow, planners can expect significant efficiency gains, reduced time spent planning, and more accurate results.
Through an analysis of the implementation of such a system at Chevron’s Gulf of Mexico business unit, the challenges and benefits of implementing an integrated system as described will be demonstrated.
SPE 169844 – Simplified Business Planning: A Business Unit’s Approach to Creating More Realistic, Higher Return Plans; Faster (abstract)
In the oil and gas industry the term “business planning” brings visions of late nights, additional meetings and countless hours spent collecting and reconciling large amounts of data. This negative connotation has been reinforced year after year as companies struggle to pull together the information required to create realistic and achievable plans to forecast future development and guide the growth of their business.
It is unfortunate that business planning has got such a bad rep as it is critical to the success of any company in any industry. In business planning the goals are to select the best projects from a portfolio of opportunities to maximize the return on investment while being able to effectively communicate and stand-behind the details of how the different scenarios were created to provide confidence in the decision to invest.
The Oxy Permian business unit saw the potential rewards that improvements to their planning process could generate by improving their planning efficiency, reducing errors and breaking out of the same painful cycle they had experienced in previous years. In this paper, we present the realized improvements and results of the improved workflow, focusing on those which were seen to have the largest impact on results including:
Consistent capture and reporting of data across all teams
P50 curves developed, compared and reviewed across teams
Improved ability to account for granular risk factors across plan
Type well scheduling:
Increased ability to rapidly build, explore and turn-around new scenarios
Increased value of the portfolio
Visibility of the plan:
Increased communication and buy-in from teams
Time to market data:
More realistic view of cash flows and activities
Increased confidence in ability to execute the plan
Using this new approach the Oxy Permian planning team was able to turn around three different investment scenarios, numerous development strategies and create a 5-year long-range plan that the entire management team could present and stand behind.
SPE162748 – An Integrated Portfolio Management Approach for More Effective Business Planning (abstract)
Portfolio management has become an important aspect of oil and gas business planning to support the efficient allocation
of capital. As oil and gas becomes more difficult and expensive to find, petroleum companies are looking to portfolio
management for providing both a more streamlined business planning process and an advantage over the competition in the
However, portfolio management has traditionally been deployed at a corporate planning level and has often missed
the opportunity to consider the operational reality at the asset team or regional level. Each capital investment decision must
be consistently evaluated for its ability to contribute to the corporate strategy while maximizing the usage of available
resources. The aim of this study is to show how an integrated portfolio management solution can provide benefits when used
at every stage in the asset development life cycle (from exploration through to production and abandonment) as well as at
different levels in the corporation (asset teams through business units to corporate planning) to drive more efficient and
effective business planning.
This robust, integrated approach to portfolio management will drive more efficient investment across the corporation.
The methodology can be applied to business planning processes at the asset team, the business unit, and at the corporate level within any petroleum company.
- Oil and Gas Industry’s First Conference Devoted to Planning Attracts More Than 70 Energy CompaniesDecember 6, 2016 - 12:29 pm
- APLNG and 3esi-Enersight Win 2016 Australian Engineering Excellence AwardSeptember 8, 2016 - 4:00 am
- Gartner Hype Cycle for Upstream Oil and Gas Technologies, 2016August 15, 2016 - 15:25 pm
Interesting linksHere are some interesting links for you! Enjoy your stay :)
- Upstream Planning Networking Happy Hour in Brisbane, June 13
- June 13, 2017,
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