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 over the years as companies struggle to pull together the information they need to create realistic and achievable plans and to forecast future development to guide the growth of their business.

It is unfortunate that business planning has such a bad reputation as it is critical to the success of any company in any industry. In business planning, the goals are simply to select the best projects from a portfolio of opportunities to maximize the return on investment, while being able to effectively communicate the details of how the different scenarios were created to provide confidence in the decision to invest.

This paper describes a case study in which one of Occidental Oil and Gas Corporation (Oxy BU) business units improved a few key elements in their business planning process which helped them create a more realistic, higher return plan, faster.

The Oxy BU 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 results of the improved workflow, focusing on those which were seen to have the largest impact on results including:1

Data consistency: Consistent capture and reporting of data across all teams 
Minimize bias: P50 curves developed, compared, and reviewed across teams 
Risk analysis: Improved ability to account for granular risk factors across plan 
Type well scheduling: Increased ability to rapidly build, explore, and turn-around new scenarios 
Opportunity selection: 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 
Resource balancing: Increased confidence in ability to execute the plan 
Data consistency: Consistent capture and reporting of data across all teams 
Minimize bias: P50 curves developed, compared, and reviewed across teams 
Risk analysis: Improved ability to account for granular risk factors across plan 
Type well scheduling: Increased ability to rapidly build, explore, and turn-around new scenarios 
Opportunity selection: 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 
Resource balancing: Increased confidence in ability to execute the plan 

Using this new approach, the Oxy BU planning team was able to turn around three different investment scenarios, numerous development strategies, and create a five-year, long-range plan that the entire management team could present and stand behind.

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