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The production mandate – IDC energy insights report

A recent IDC Energy Insights global survey of 40 upstream oil and gas companies confirms production management is a top priority.

Overview

It is common knowledge that the oil and gas industry has reached the end of "easy oil." New resources are more expensive to find and develop than the conventional resources that have provided oil and gas to the world for many decades. With high capital investment required, even companies with the strongest asset bases are experiencing the pressure to improve performance.

To better understand how exploration and production (E&P) oil companies can become more competitive, Accenture and SAP commissioned IDC Energy Insights to conduct a global quantitative survey with 40 upstream oil and gas companies.

Survey results indicate that the answer to better performance lies in better management of operations, referred to in this study as "production management" which includes production forecasting, production planning, well operations, and production accounting.

Source: IDC Energy Insights, "The Production Mandate," by Jill Feblowitz, February 2015.

The "The Production Mandate" report is copyrighted 2015 by IDC Energy Insights and is reused with permission.

Background

Findings are based on analysis of a quantitative survey and in-depth interviews conducted with line of business and IT across company ownership types, resource plays, and geographies. Of particular interest is the role that an integrated approach plays in improving data quality and acquisition, establishing consistent processes across functional business units, and utilizing operational and business applications — also known as OT/IT integration — which can help oil and gas companies achieve their business objectives.

Key Findings
Analysis of the quantitative survey and in-depth interviews reveals:

  1. Production management is the top priority for almost 50% of respondents

  2. Access to accurate, rationalized data is not available in a timely manner—“It takes as much as a month to get accurate cost data for 24.3% of onshore wells and 10% of offshore wells.”

  3. Forty percent of companies that participated in the study reported that production management-related IT initiatives will be given the highest priority for immediate action if a business case is made

Best-in-class companies are pursuing an integrated approach of improving data quality and acquisition, establishing consistent processes across functional business units, and utilizing operational and business applications.

Recommendations

IDC Energy Insights has identified the following actions for companies to consider strengthening their production management capability.

  • Create the Governance for Production Management

  • Standardize Data and Rationalize Applications Globally

  • Define Cross-Business Processes and Support with Workflow

  • Enable Workflow to Support Data Delivery

  • Integrate Technology

  • Implement Analytics

  • Look for Efficiency Opportunities

  • Build for Scale

Author
Jill Feblowitz
Vice President, IDC Energy Insights
feblowitz@idc.com

Vice President for IDC Energy Insights, Ms. Feblowitz is a nationally recognized thought leader in the application of information technology to the business problems of the energy industry. Working as a consultant to traders, engineers, and C-suite executive professionals in the energy industry for over 25 years, her group of analysts consistently provide solutions to help oil, gas and utilities companies maximize the business value of their technology investments and minimize technology risk through accurate planning.