Production & Reservoir Management: Improving Planning Procedures

To maximize efficiency and profitability from oil and gas production, FIT provides specialized consulting services. Successful production operation depends on effective planning and scheduling to provide a mechanism for the operator to meet its material and financial commitments while ensuring a reliable, safe operating environment. In a well-run operation, the planning and scheduling process is the key to the decision process, which starts with strategic and business planning and ends with production execution and performance analysis. Ineffective planning prevents many companies from achieving their potential and, in today's economic climate, can mean the difference between survival and failure.

FIT provides a service whereby seasoned FIT planning professionals assist the client to evaluate existing planning operations for efficiency, effectiveness, and support of operations. The FIT planning procedures improvement program also strives to guide the client in maximizing the benefits of modern planning systems. The program has a first and second step: an audit, where one of the key objectives is to identify areas for improvement in existing practices and procedures, as well as to identify applications where the use of new technology will provide more reliable planning and more profitable production performance; and the second step, a mentored program for improvement. Some clients perform just the first step as an impartial means to validate areas for change, if internal resources are available to help facilitate required changes.

FIT Consultants empower the client by providing a comprehensive planning review and audit.

The planning audit reviews the current planning process and evaluates how well it meets current and expected future business needs. It covers the following specific topics:

• Expectations from the planning process.
• Sources, timing and reliability of planning information.
• Data acquisition process.
• Timetable of the planning process.
• Distribution of the plan.
• Use of the plan.
• Relevance of the plan.

Expectations from the Planning Process

FIT consultants meet with key management personnel to define expectations from the planning process and determine how reliably those expectations are met. The outcome of these interviews provides guidelines for the remaining work.

Sources, Timing and Reliability of Planning and Scheduling Information

The FIT consultants meet with key planning, reservoir, production operations and engineering support personnel to understand the nature, timing and accuracy of planning data used, as well as any recognized deficiencies in the data that, if corrected, could improve the effectiveness of planning.

Data Acquisition Process

The FIT consultants review the processes by which data identified earlier flows from the sources into the planning system. Potential improvements to ensure timeliness and data integrity are identified and defined. The consultants pay particular attention to redundant data entry and other activities that can compromise data integrity.

Timetable of the Planning Process

Generally, the full planning process begins and ends at the corporate office, where financial, marketing and supply data are developed and maintained. The FIT consultants review the timetable of the planning cycle, starting with dissemination of planning premises from the corporate office and ending with acceptance of the production plans. The consultants seek to identify delays and bottlenecks and to determine how the process can be improved to better satisfy corporate and operational needs.

Distribution of the Plan

The FIT consultants examine the timeliness of planning results to ensure that all who need these results are receiving them in time to take appropriate action. Sometimes this part of the audit leads to changes in the planning process or the planning timetable.

The consultants examine the process by which planning results are distributed. Results consist of three types of information:

1. Narrative. The narrative provides a summary of the plan and highlights any important findings. In particular, it emphasizes changes from the previous plan.
2. Premises. Logically, the premises precede the narrative. In practice, however, management is usually only interested in the premises to understand the rationale behind changes from previous plans.
3. Numbers. This material comprises operational and economic information used by several parts of the organization.

   The mechanics of disseminating this information are examined to identify potential improvements to enhance the value of the planning process.

   Use of the Plan

   The FIT consultants investigate the processes by which the plan is implemented. This part of the audit is concerned with ensuring that the systems and procedures are in place to enable the various users of the plan to take appropriate action. Follow up procedures are reviewed and recommendations made for improvements.

   Relevance of the Plan

   Frequently, when the consultants review the use of planning results, it appears that some users find the plans irrelevant to their specific needs. Although this information should have appeared earlier in the audit, it is valuable to address it specifically at this time. Results of this review can lead to changes in the planning process or the reporting procedures.

From information gathered in the activities outlined above, the consultants:

1. Benchmark existing procedures, systems and planning tools against industry peer practices. This benchmark provides a quantified measure of potential improvements in multiple areas to insure that management and operation customers are provided with the information that meets their needs.
2. Estimate the economic value of the proposed changes, based on information supplied by the field personnel and that obtained from existing plans. The value comes from better utilization of field resources to maximize the profit generated by the operation.
3. Recommend further requirements for the future to maintain the standard of excellence achieved.

Audit results enable either the FIT planning professionals or client professionals to prepare a plan of continuous improvement, with economic benefits clearly defined at each step along the way.