Production Capability Maturity Model: How to Make the Transition From Reactive to Proactive Upstream Oil and Gas Operations02/24/2016
When companies begin to see data as an operational differentiator, they’re ready to advance to the Proactive level
This is the second in a five-part series about the Production Capability Maturity Model for upstream oil and gas companies. This blog covers the Reactive-to-Proactive transition and why upstream organizations make it.
At the end of that blog, I wrote that when an exploration and production company comes to understand the importance of connecting the field and back office and all of their associated datasets, it can “graduate” to the next level in the model – the Reactive level.
I say “graduate” because navigating the Production Capability Maturity Model is a lot like navigating college: It’s done incrementally. Before you can graduate, you first must have taken senior-level courses. Before you can take senior-level courses, you first must have passed junior-, sophomore-, and freshman-level classes. Everything builds, and you become smarter and more capable along the way.
Applying that concept to the upstream oil and gas business, let’s go over how an E&P company can progress from left to right along the Reactive bar and prepare for the transition to Proactive operations.
Now that the field and back office are connected, companies have lots of SCADA and manually captured data entering their systems.
Here’s where the biggest risk lies: If companies don’t validate all this information, they’ll continue to operate in a Reactive state. For example, if un-validated numbers are used when making allocations, paying royalties, and preparing regulatory reports, lots of time- and money-sapping prior period adjustments (PPAs) will have to be made.
That’s the first step toward Proactive operations: understanding that when data is reconciled early in the process, everything else naturally falls into place. Accurate work begets more accurate work.
The second step is taken when organizations recognize that production data management shouldn’t be viewed as a “necessary evil” but rather as an operational differentiator. “We have to account for our lease use and sales because we have to pay our royalty owners and file regulatory reports” gives way to “We have lots of rich data at our disposal now; maybe we can start using it to pinpoint and correct production issues much more quickly or, even better, predict when they’re going to happen.”
The foundation has now been laid for the move from Reactive to Proactive operations.
The Proactive-to-Managed journey for upstream oil and gas companies will be the topic of our next blog. Looking for more production content? Head on over to this page to download our production webinar powerpack. These were our most-viewed production webinars in 2015.
About The Author
Alex Schultz works on P2’s corporate marketing and communications team. Prior to coming on board at P2, Alex worked as a news and sports reporter in California’s San Joaquin Valley, where he covered everything from local politics and citrus farming to college baseball and senior slowpitch softball leagues. When he’s not writing about the innovative and resilient upstream oil and gas community for P2, you’ll likely find Alex in one of two places: at Folsom Field in Boulder, CO, watching (and usually regretting his decision immediately) a University of Colorado football game, or trying (and usually failing) to hook a rainbow trout from one of Colorado’s mountain streams. Alex holds a bachelor’s degree in journalism from CU-Boulder.