In a recent survey we carried out, (download the report here), we asked professionals involved in Hydrocarbon Accounting (HCA) how confident they were in their data. Around 65% said that they were “not at all” or only “somewhat” confident in the data they were using as input to the hydrocarbon allocation process. This situation is problematic, given that allocation is all about determining the division of ownership of hydrocarbon products, and that mistakes can have a real and substantial financial impact. Inadequate systems and processes can make it difficult to manage routine issues like mismeasurements, and initially small problems can give rise to a cascade effect with consequences that are difficult to unravel. A failure of compliance is not the least of the potential problems.
I made a presentation at yesterday’s conference on Developments with the Digital Oilfield in London. The title of my talk, “Why private cloud is a cul-de-sac of doom”, was somewhat tongue-in-cheek, and intended to be mildly provocative. However, I had a serious purpose, in that the words and terms we use to describe things are important in creating clarity and driving ideas. Misusing them dilutes their power and ultimately diminishes opportunities. In that context, the term “private cloud” is one that has minimal value and causes confusion.
In a recent posting to LinkedIn, comments from an oil company contact were reported to the effect that high levels of investment in hydrocarbon allocation systems were unsustainable. The poster invited people to consider whether it was time to concentrate on value for money. I won’t link to the post, partly because it was on a closed group, but also because I wanted to focus on the general issue that it raises, rather than the specifics of the post.
When I do presentations of energysys.com, and I show how good it is and how it can transform a company’s business, I’m often asked whether it can be installed locally, and why we’re delivering our solution in the cloud. The answer to the first question is “no”, but the second question requires a more considered response. Why, indeed, do we deliver our solution for production reporting and allocation in the cloud?
The ways that oil and gas companies address IT, outside core disciplines such as geology and geophysics, are marked by an unrelenting enthusiasm for cost cutting. However, it’s often the case that the methods employed, including outsourcing or offshoring, end up forcing a difficult choice between quality of service and cost. In the short term it’s easy to cut costs, but when you discover the things that don’t work because they’re outside scope or ill-defined, and the costs of putting them right, some options can be less appealing.