New reservoir exploration technologies, heightened oversight requirements and a plethora of third-party contractors combine to make the upstream sector of the oil and gas industry increasingly complex. A portfolio of varied projects and joint ventures only increase that complexity.
These business factors collide, sometimes catastrophically, to hamper effective resource planning. Upstream operators must look closely at planning strategies and how they’re implemented to secure efficient and safe daily operations.
Unfortunately, disjointed planning processes and opaque discipline silos are rife in upstream operations. A lack of system and process standardization results in untrustworthy data. And, when plans are developed and executed in isolation, conflicts and frequent rework are unavoidable. This can lead to higher costs, failure and risks, not to mention human and environmental safety concerns.
It takes considerable time and effort to produce a workable integrated plan in this environment. Most traditional planning tools don’t respond well to changing circumstances, so planners will make allowances for errors by building in slack that can result in extra costs and lost production opportunities.
According to IDC Energy Insights in its 2013 “Predictions” report, higher oil prices enable deepwater offshore/arctic development and the use of enhanced oil recovery techniques. In response to this exploration boom, many subsurface technologies are experiencing their first at-scale deployment. IT innovations are keeping pace with the speed of this deployment, providing massive amounts of data for near-real-time performance analytics.
These developments pave the way for the deployment of an integrated operational plan that brings analytics into play. To operate at peak performance, operations managers need:
- Consolidated data on resources and requirements from multiple departments, disciplines and contractors;
- Optimization and simulation algorithms to deliver the highest quality plan at the lowest cost;
- A platform to develop and share strategic plans among various constituents;
- Assessment methodology to monitor those plans for long-term viability and effectiveness.
The most challenging – and often most valuable – of these requirements is the data. Integrated data ensures reliability, consistency and transparency across planning silos.
In addition, optimization and simulation software helps organizations develop alternative short- and long-term operational plans in a collaborative environment. This creates a plan that will work within the constraints of available resources, delivering the maximum value within the time available.
For a leading Italian energy producer that operates in 40 countries and serves more than 61 million customers, offshore work among multiple departments, disciplines and contractors was a struggle. Multiple planning systems, inconsistent processes and a lack of alignment among groups meant frequent errors, conflicts and missed opportunities. Plan assembly took too long, and schedules were constantly reworked. With costs and equipment failures on the rise, the company needed to automate processes and share knowledge more efficiently for a better bottom line.
The company made use of planning and monitoring software that includes automated data integration, predictive analytics and essential modeling, optimization and scheduling capabilities. The software also integrated performance monitoring dashboards and geospatial visualizations that track overall plan performance and generate automatic alerts when objectives aren’t met.
Now, information from all existing planning systems is standardized and consolidated into a unified plan. Nearly 1,400 users gain access to the system daily. Plans and portfolio activities are optimized for improved efficiency. A planning dashboard lets managers monitor plan execution and performance against established KPIs, check for plan consistency and flag potential conflicts. The integrated planning software allows the company to simultaneously create long-term strategic plans (up to 2050), medium-term tactical plans (up to 3 years in the future), and short-term operational plans (up to 30 days).
The Path Forward
The Italian energy company example highlights the importance of aligning people, process and technology to improve integrated operations. The digital generation is now making many resource decisions in the complex upstream business model, and they expect to have IT tools that help analyze volumes of data to optimize operations. Companies that enable advanced analytics take a huge step toward integrated planning that maximizes production and reduces operating costs without compromising safety. This is an incredible asset that will benefit the bottom line of any company.