Challenges in Global StandardisationHydrocarbon Allocation Forum 29 September 2014

Why standardise?

• Ease the integration of production data across

multiple assets;

• Minimise the cost and schedule of each new

implementation;

• Reduce the cost of maintenance and support;

• Ensure that user’s system knowledge is

transferable between assets;

• Lower lifetime cost of ownership.

What would be required?

A system that

• Supports the specific details of the asset and the

calculations to be performed;

• Provides sufficient flexibility that it can be easily

adapted to future business change;

• Offers an integrated presentation of total

production across the asset portfolio.

How has it gone so far?

Standardisation on a single Vendor has taken place,

providing:

• Standardisation of skill sets

• Similarity of look and feel of systems across

assets

But all instances are different, reflecting the

requirements of the asset. Typically, it is difficult to

upgrade the technology once installed and changes

must be applied, as necessary, to each asset

instance.

What’s the problem?

• Asset differences

• Continuous change

• Commercial/Statutory environment

• Exchange of data

• Allocation philosophy

• Data storage models

• Commercial pressures

Differences between Assets

• Onshore or Offshore;

• Type of products and their relative proportion;

• The type of processing;

• The statutory jurisdiction;

• Whether there is co-mingling of production fluids;

• Whether plant/asset is shared with another operator;

• How the well fluids are measured and/or tested;

• The type of export route;

• The type, quality and location of instrumentation.

Sources of Change

• Development of new wells or tie-backs

• Equipment/instrumentation failure/replacement

• Acquisition of new assets

• Engineering enhancements

• Modification of accounting philosophy or

agreements with Partners

• New staff

• Management demands

License/Lease/Ownership

• USA Onshore: Individuals own mineral rights,

leading to widespread development of small

production facilities. Production Companies operate

individual leases on behalf of a number of owners in

return for royalties.

• UK: Government confers time-restricted rights for

different types of activities through Licenses related

to “blocks” or areas, for which rent is paid.

• Developing Countries: Typically use Production

Sharing Agreements in which “profit oil” is shared

with the government.

Receipt of Data

• SCADA/Historian system in structured form via

automated interface

• Manually entered in the Field, in the form of Excel

workbooks, paper, CSV or other

• Third Party data from Partners, in any form they

fancy.

Allocation Philosophy

• Different product streams: Production, Export,

Flare or Fuel;

• Mass, Volume, or Energy;

• By difference, proportional, or some other

method;

• Stocks managed and allocated;

• Recognition of the different value of co-mingled

products (e.g. a quality bank).

Reconciliation and Reallocation

• Reconciliation and reallocation may be required

for:

• Sales figures received on a monthly basis

• Product quality adjustments after receipt of lab

analysis

• Improved accuracy production values received

on a longer period (eg monthly) basis

Competing Data Models

• PPDM

• ProdML

• OGP

• Vendor’s own

• Client’s own

Commercial Preferences

• For Vendors whose consulting division is a key

source of revenue, product standardisation offers

little appeal

• Off-the-shelf software applications and tools are

available to support a restricted set of

requirements or part of the process.

• For assets with relatively low complexity, software

products compete primarily with Excel

Conclusion

• A single global “out-of-the-box” standard for

Production Allocation and Reporting for all assets

globally is not practical.

• The solution must instead provide flexibility to the

end user to modify and extend the system as needs

change without reliance on specialist or proprietary

skills.

• The base technology must be independent of the

application/asset configuration.

• Pre-configured modules of functionality would aid

their efforts.

Example: What is a Well?Typical Well Name in Production Reporting system:

• Initially, W01• Then, W01-SS and W01-LS

Why does it matter?

• The Reservoir Engineer, as the manager of the

company’s assets, is a key client for the

production data.

• He needs to be able to correlate production rates

with geographical location and sub-surface

infrastructure

• A Well Name such as “W01-SS” needs string

processing to identify this as associated with

“W01-LS”

PPDM Well Model

Implementation Issues

• The production string is optional, that is, a well

may exist without any associated production string.

• Therefore, no single table exists to provide the full

list of well and production string combinations.

• This means that related tables have to create the

association with Production String themselves.

• Finally, it is not possible to create a new Well or

Production String until the UWI is known and this is

often issued by head-office.

An Alternative Model