This paper presents a holistic and repeatable workflow to assess in the economic context the value of decisions aimed at improving operations. This workflow focuses efforts on key root causes by considering the economic value of production volume shortfalls associated with downtimes. Also, the work reviews practical examples where business intelligence can lead to better decision making and project profitability. The workflow covers production engineering and operations, reserves planning, and economics.
The procedure involves capturing actual production; establishing performance targets, for instance, on the basis of a decline curve analysis; and logging nonproductive times according to a company-specific categorization. Next, you calculate an explained deferred production and then shortfall analysis. The detailed economic assessment considers various macro- and microeconomic aspects, in contrast to a basic evaluation with the working interest in the project and the oil price projection. Comparing target cash flows to actual cash flows enables identification of the incremental economic value, and this provides the information needed to create a value-driven action plan.
The suggested process highlights key reasons behind shortfalls, and the incremental economic analysis reveals them in the context of the project value. Consistent implementation of the workflow can aid in generating an effective action plan and tackling key root causes stemming from the variety of areas, including supply chain, design and innovation, and project execution.
When relating shortfall volumes to categorized nonproductive times, you can assess the potential improvement in the project value and profitability by comparing target and actual cash flows and reviewing economic indicators. Consideration of all economic aspects is an accurate approach towards quantifying the value of measures aimed at achieving additional volumes.
Automation of this workflow yields not only volume additions, but also a targeted improvement of business value, profitability, and other aspects important for stakeholders. The work contrasts in detail a full economic simulation to simple economics and classifies economic indicators. In addition to a workflow review, business intelligence is covered to demonstrate examples where this workflow brings value. The paper presents the need for holistic and streamlined decision-making guided with a business mindset.