Abstract

The petroleum industry is at a juncture in its history where the ROI expectations of the investment community are increasingly at odds with the constraints presented by maturing asset bases, limitations on the supply and availability of knowledge workers, upward pressure on operating expense, regulatory compliance requirements, and the historical lead time required to bring new production on line.

The ultimate measurement of how well the petroleum industry delivers value is assessed through calculation of NPV. Recent case studies show substantial enhancement of NPV through Web-based business solutions that target reduction in operating and overhead expenses, improved timing and quality of decisions, project implementation, and leveraging knowledge workers across E&P operations to mitigate the constraints noted above.

Daily management of production and exploration assets, M&A processes, project management, rationalization of physical and technical assets, joint venture reporting, regulatory processes, and anywhere, anytime access to data and high bandwidth telecommunications are all examples of where radical improvements are being made to meet the increased business requirements of the petroleum industry.

The implementation of Web-based business solutions will require petroleum companies to rethink what processes are core to their business and how they source the tools and support personnel associated with those processes. Just as there has been a consolidation of E&P companies, internal support groups and external service companies must also find ways to leverage and consolidate to deliver much higher levels of value than has been seen in their history.

Introduction

This presentation is all about adding value in the upstream asset management process, from discovery to abandonment. The principals for adding value can be ported to the downstream and to other industries, because the root message is that anywhere, anytime, information access, and the decision quality it enables, leads to better decisions, more timely decisions, and reduced costs, which are all critical components of improving NPV.

In the exploration phase of an asset's life cycle improving NPV means lower finding costs, lower capital costs and earlier first production. In the producing phase this means lower operating costs, optimized production levels, and lower abandonment costs. Interviews with asset teams indicate that the key enablers for capturing additional NPV are: data and information access, decision quality, and business processes.

These key enablers form the basis for many additional opportunities for improving business performance and the reader is encouraged to contemplate additional applications. For example, much has been made in recent years of the aging petroleum industry workforce and the problems this situation has already started to pose for staffing and implementing future projects. Mitigation of skill shortages will to some degree require the use of more consultants, use of subject matter experts (SMEs) from distant locations, accommodating flexible work schedules, and greater overall collaboration among all stakeholders in a project.

Also, industry access to new petroleum resources and permissions to continue existing operations is only as good as the industry's reputation and ability to adequately respond to critical environmental and safety issues and crisis events.

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