Production Management Systems should have the ability to support operations as well as accounting, but many systems today, both internally developed and purchased, do not meet this requirement. This paper addresses issues and problems from the perspective of Production Operations and their associated needs and requirements. A major concern of production operations is the maximization of profit which involves the optimization of production and the minimization of the expenses involved. Timely and accurate information provides some of the basis on which management makes decisions related to daily operations and future planning and budgeting. Supporting systems are essential for data gathering and subsequent retrieval for meaningful analysis and decision making.
Generally, systems to support accounting were the first business systems to be developed for most oil companies and because of this many of them fall short in meeting the needs of operations. System requirements were dictated by regulatory reporting, accounting or financial reporting needs. Critical operational data and associated relationships needed by operations were never captured or lost along the way. For example, for revenue purposes, lease level volumes are sufficient in many cases, but engineering often requires volumes at a well / zone level. Another typical implementation involves using financial records as the source of operational data (volumes). The drawback to this approach is that often times, volumes are not at a level required by operations (well/zone) or differ from volumes in other systems. In these cases, operations looks to other sources and as a result, different volumes are used and the questioning, reconciliation process begins. Operations finds themselves constantly in the situation of getting true production volumes from other sources, even buying them from an service company who obtained them from state agencies, who obtained them from the oil company originally.