The Problem with Siloed Data in Oil and Gas Reporting06/20/2022
Making informed and quality decisions regarding your upstream oil and gas operation requires timely and accurate data often from different departments and systems. If you’re looking at a well for a workover, for example, you likely want to have the production history, decline analysis, and expenses and revenues associated with the well, plus your ownership in the well so that you can understand the direct impact to your bottom line. If two wells have similar prognoses for improvement, working on the well that you have a higher interest in first will provide your company a higher return. This type of data comes from many sources, and managers, engineers, and others looking at this data often spend much of their time finding it, cleaning it, and connecting it.
When pulling data from independent sources that have been maintained by different departments, there are often differences in the data that make it hard to line up. There may be a well in one system labeled “Smith Well 12-5” and in the other system, “Smith 12.” They could be the same well or not, but it takes time to track down details to figure it out. This is an example of the lack of master data management in upstream oil and gas.
A Single Source of Truth
Ideally, master data is entered into one system of record with all other systems linking to that system of record or being populated from it. This ensures the master data – like wells, names and addresses, ownership, etc. – is consistent across systems and allows data associated with the master data to be easily connected for analysis and reporting.
Production, expenses, revenue, and ownership are often at the well level, and if the same well has this data connected, it is easy to get a report with all of this data. I call this closed loop integration. If the well is set up in one system and then made available to other systems, the data associated with the well in the other systems can be linked back to the single well, which is a huge benefit. Having a single system of record for master data eliminates redundant data entry in multiple systems.
Business Logic Differences
Another common problem when managing data from disparate systems is that they often have different business logic that makes the data harder to bring together in a report. Let’s look at well producing status as one example.
- In production, well producing status means, ‘is this well producing now’
- In accounting, it means, ‘did it produce this month’
- In land, it means, ‘did it produce within the non-production terms of the lease’
There are many other examples of business logic differences across departments and systems, and this is a more common problem than most people think. At the end of the day, it means data has to be cleaned or manipulated prior to aggregating or reporting.
Companies that have systems and databases that are connected, with a single place to manage master data like wells, can improve the quality of reporting while reducing the time it takes to create reports. It also provides repeatability, rather than manually gathering and manipulating data in a spreadsheet that is hard to do month after month. Quicker and better analysis will help executives and operations teams make better decisions, control and reduce OPEX, and improve the profitability of the company.
Learn more about the importance of managing your company holistically using end-to-end business processes that cover all facets of upstream oil and gas – from the field through financials – with The Power of P2.
Tim Wadle, VP, Large Cap & Integrated Solutions