Deliverable 5: Workflow Documentation

Up one level to Project Findings


Joint venture production reporting components are confined to Operator – Non-Operator (Partner), Operator – Regulatory Agency relationships/interactions, and JVPR-related communication automation tools. The scope of this project is illustrated in Figure 2.

Figure 2. Project scope under the theme of Joint Venture Reporting.


Discussions with the RTO-TIG directed the project team to document the workflow information gathered through SME meetings in tree diagrams, high-level flowcharts, and swim-lane diagrams. Therefore, the process of developing these charts and diagrams is described in this section.

Please note that all documentation presented in this section was derived from meetings with SMEs and other publically available research sources. This work was regularly presented to members of the RTO-TIG for feedback throughout the project. This information is compiled for the benefit of Oil & Gas Industry, specifically the SPE community.

Initially, components within JVR were documented in the form of a tree diagram. Tree diagrams generally assist in stratifying system components in great detail. As shown in Figure 3, JVR consists of two main functions, Production Accounting (which deals mainly with sales) and Production Reporting (which deals mainly with production volume).

Figure 3. Joint Venture Reporting tree diagram.

Within Production Accounting there are processing functions and data management functions. Processing involves daily data reporting at both well level and group level, as well as monthly data reporting for regulatory, sales/revenue, and volumetric purposes. The tree diagram does not include the allocation details related to processing. The allocation details have been included in the sequence diagrams related to “reconciliation” and “well test” in section on Sequence Diagrams under Deliverable V of this report. Data management entails communicating (from databases, etc.), validating, and presenting data to both Partners and regulatory agencies.

Within Production Reporting there are both Operator and Partner tasks and responsibilities. Operators are generally responsible for collecting, processing, transmitting (manually or electronically), and distributing data—typically in daily and/or monthly reports. Data collection is completed through field data capture. Data types include both numerical data (i.e. temperatures, pressures, fluid flow rates, etc.) and qualitative data (i.e. well test analysis, downtime validation, etc.). On the other hand, Partners are typically responsible for monitoring and analyzing data and for predicting revenue as well as approving investments as part of their cost sharing agreement and interests.

Flowcharts visually capture the steps in a process including tasks, decisions, and the flow of information. To begin documenting the JVPR process, a high-level flowchart was created. This diagram, which is shown in Figure 4, depicts the basic steps in JVPR without regard to who in the process completes the task. This flowchart maps the workflow processes that take place in the upstream Oil & Gas Industry. These have been categorized into operations performed at the oil field, production accounting, engineering, and production reporting, as shown in the components marked in the diagram.

Figure 4. Joint Venture Production Reporting high-level flowchart.

This diagram begins with drilling: The drilling phase varies in duration depending upon the location and depth of the well and can last longer than 6 months in some cases or much shorter in other cases. Drilling is done by either the Operator himself or a drilling contractor. Next, reserves analysis is completed, which involves determining how much oil or gas is left within the reservoir and how much more can be produced under current economic conditions. To measure the production from the well, each well may have a meter to record the production parameters and these will be reconciled with periodic well testing. In other cases where there are no production meters, production is sent to a test separator where it separates and measures the oil, water, gas, and any sediments produced. This information will be used to allocate production over a time period.

Field data capture is done either manually or automatically. The manual process involves the Pumper or Lease Operator gathering data in the field. Well tests are performed to determine how much each well produced individually. This data is captured through handheld PDAs, laptops, etc. and then transmitted to the Reservoir or Production Engineer via postal mail, fax, or CDs. Raw data can also be collected in real time using an automated system called Supervisory Control and Data Acquisition (SCADA).

The data obtained by SCADA is sent to a custom storage mechanism, which can vary depending on the companies involved in the venture. A data historian receives the data automatically from SCADA and this information is entered into a production database. This a field data capture software system, which is the first entry point for the data after it is collected by SCADA.

This data is then sent to the Engineering group for analysis and to the Production Accounting group for review and volume allocation. Both groups perform volume allocation for oil, gas, and water. If there are discrepancies in the production numbers, the Production Accountant checks with the Production Engineer to resolve the issue.

The Engineering group performs surveillance using reservoir and production surveillance tools. The results are used by the Production Engineers, who are also responsible for forecasting using forecasting and economics tools.

The Production Accounting team is responsible for cost accounting, which involves the calculation of revenue, profit, and loss. They are also responsible for reconciliation. The amount of oil, gas, and water are proportionately allocated back to each well to calculate the production allocation for all parties involved in the joint venture.

Following reconciliation, various types of reports are exchanged between the Partners and the Operator in a process known as production reporting. The Operator sends drilling and production reports to the Partners on a daily or monthly basis as specified in the Joint Operating Agreement. Revenue reports and operating expense reports are also exchanged between Operator and Partners as specified in this agreement.

Once the basic tasks in the JVPR process were documented, a swim-lane diagram was utilized to show more detail regarding the steps completed and the parties responsible for each task (i.e. actors) within the process. The responsibilities of each actor have been identified and are shown in Figures 5a and 5b. Verbal descriptions of each element in the swim-lane diagram are provided subsequent to the presentation of the figure along with a list of further questions for SMEs.

Figure 5a. Joint Venture Production Reporting swim-lane diagram.
Figure 5b. Joint Venture Production Reporting swim-lane diagram (continued).

Swim-lane diagram task descriptions:
1a. There are two ways of gathering data in the field - manually and automatically.
1b. If the data is collected manually, the Pumper observes flow rates (oil, gas, and water), pressures, and temperatures manually by looking at paper charts and recording these readings on paper or laptop.
1c. Using information gathered manually, the Pumper performs well testing and oil measurement using temperature and pressure readings at the well head.
1d. Using information from well tests and data gathered manually, the Pumper creates run tickets (i.e. information that is obtained after measurement and testing of crude oil that is used as the basis for all payments for oil delivered from the lease), which are sent to the Production Accountant/Analyst.
2b. If the data is collected automatically, the Instrumentation Technician captures flow rates (oil, gas, and water), pressures, and temperatures using field data capture (FDC) systems. This data is then sent to the Production/Field Engineer for approval. (Responsibilities of the Instrumentation Technician: 1) is responsible for maintaining automated reporting systems such as SCADA and DCS; and 2) is in charge of maintaining data in exploration and production databases.
2c. After collecting automated data, the Instrumentation Technician measures the volume of oil, gas, and water using temperature and pressure readings at the well head and runs a series of tests for temperature, density, and basic sediments and water content (BSW) on these measured quantities.
2d. The Instrumentation Technician uses the information obtained after measurement of oil, gas, and water and well testing to create run tickets, which are sent to the Production Accountant/Analyst.
3b. The Facilities Engineer performs regular inspections of the machinery in the field. The Operator’s Facility Engineers are responsible for designing and evaluating the surface equipment required to produce oil and gas.
3c. Based on inspections, the Facilities Engineer decides if machinery maintenance is required.
3d. If maintenance is required, the Facilities Engineer will schedule maintenance activities within his Authorization for Expenditure (AFE) limit.
3e. Based on maintenance, the Facilities Engineer also checks if machinery needs to be replaced.
3f. If replacement is needed, the Facilities Engineer obtains permission for replacement.
3g. After obtaining permission for replacement, the Facilities Engineer calculates the total cost for replacement and sends it to the Joint Venture Accountant. Different types of oil and gas wells require different facilities, so the Facilities Engineer’s involvement and responsibilities tend to vary (e.g. onshore, offshore, subsea, plants, etc.)
4c. Based on the data received from the Pumper and/or Instrumentation Technician, the Production/Field Engineer verifies the accuracy of this data and approves it.
4d. Once the data is approved, the Production/Field Engineer creates daily reports of raw data such as temperatures, pressures, fluid flow rates, and etc. and/or transactional data (data specified in joint operation agreements).
4e. Using the data from daily reports, the Production/Field Engineer creates workover reports and production logs. The workover reports include any operations performed on a well to restore or increase production. The Production/Field Engineer also monitors production to ensure optimal production rates are achieved, as well as recommends and completes workovers to fix problems at the well.
4f. After analyzing the reports, logs, and any other information, the Production/Field Engineer uses information from them to design the well completion (i.e. detailed well completion plan describing where the well is to be perforated, types of completion, and where the packer and tubing is located). From this data and adjacent well performance, a monthly forecast is generated.
4g. The Production/Field Engineer will forecast monthly production estimates based upon information from the Reservoir Engineer, if the Reservoir Engineer is assigned, and/or based upon well performance and any other pertinent well or nearby field information.
5d. The Reservoir Engineer receives the approved data from the Production/Field Engineer and analyzes the well and/or reservoir (i.e. a collection of wells) performance using well tests. The Reservoir Engineer checks or calculates reserves, performs simulations, and recommends development plans (i.e. changes in placement and possible increase in the number of wells.)
5e. The Reservoir Engineer determines whether the well tests are valid. If invalid, the Reservoir Engineer performs well tests to analyze reservoir and well performance.
5f. If the well test is valid then the Reservoir Engineer uses the results of the test for building reservoir simulation models. These models will determine whether the reservoir is worth exploiting further.
5g. Based on the simulation model, the Reservoir Engineer conducts reserves analysis to determine how much oil or gas is left in the reservoir and how much more oil and gas can be produced.
6e. The Production Accountant/Analyst receives the run tickets from the Pumper and the Instrumentation Technician and reviews them.
6h. Based on the monthly forecasts and well completion reports received from the Production/ Field Engineer and the well test, the Production Accountant/Analyst performs volumetric allocation (matching every run ticket with the well meters).
6i. Based on revenue accounting and hydrocarbon allocation, the Production Accountant/ Analyst verifies whether the actual production matches the sales volume.
6j. If the production and forecast do not match and vary by a significant amount, the Production Accountant/Analyst performs reconciliation between actual production number and the forecasted production number. This discrepancy could be due to manual error, machine error, or downtime of wells, etc.
6k. Based on well tests, the Production Accountant/ Analyst allocates production volumes back to the wells and zones in order to pay royalties to different working interest owners.
6l. After allocation is complete, the Production Accountant/Analyst creates monthly production reports containing the amount of oil and gas produced by the well and other information based on joint operation agreement required by Partners and/or government agencies.
6m. The Production Accountant/Analyst uses information from the monthly production reports to create regulatory reports, which are sent to state agencies (Texas Railroad Commission) and/or federal agencies (Mineral Management Services (MMS) and Department of the Interior), as required. If a state has royalty interests in a field, then the Production Accountant/Analyst sends production data to state regulatory agencies.
7e. The Operations/Asset Manager reviews the daily reports sent by the Production/Field Engineer. Operators send invoices to non-Operators that compare the invoiced amount with the daily report. This allows non-Operators to verify they have been billed the correct amount.
7f. Based on the joint operation agreement, the Operations/Asset Manager determines whether to send daily reports to Partners.
7h. The Operations/Asset Manager creates key performance indicator (KPI) reports and sends these reports to the Executive for further review. KPIs include lease operating expenses (i.e. summary of all operating costs), lifting costs per barrel, drilling/completion payout, and workover profitability (e.g. details about well repair jobs, etc.).
8m. The Revenue Accountant receives monthly production reports from the Production/Analyst Accountant and uses these to create revenue reports.
8n. Based on the financial reports created, the Revenue Accountant does the tax calculation and pays severance taxes and royalties to different working interest owners and government agencies.
9l. The Joint Venture Accountant receives cost information from the Facilities Engineer and creates cost and capital expenditure reports, which are sent to the Executive and Non-operated Asset Manager.
10i. The Executive reviews the KPI reports received from the Operations/Asset Manager.
10j. After reviewing the KPI reports, the Executive creates executive KPI reports.
10n. The Executive reviews revenue, as well as cost and capital expenditure reports received from the Revenue Accountant and the Joint Venture Accountant.
11f. The Non-operated Asset Manager collects non-operated data (i.e. how much was produced, revenue, and cost details) from the reports sent by the Operations/Asset Manager.
11j. The Non-operated Asset Manager reviews field KPI reports and capital planning and budgeting reports. This task involves reviewing the production volumes, as well as the amount of capital and expense dollars spent.
11n. Based on the cost and capital expenditure reports sent by the Joint Venture Accountant, the Non-operated Asset Manager analyses Partner performance, sales, and revenue. The non-Operator’s share of oil and gas is either sold by the Operator and the revenue is credited to the non-Operator or the non-Operator sells it themselves.

Several flow diagrams were obtained from SMEs. The following figures provide examples of various workflows within currently used in the Oil & Gas Industry. Figure 6a shows a production reporting data flow for general operations within Hess Corporation. Figure 6b depicts the flow of information for international well production reporting on a monthly basis. Utilizing a swim-lane diagram, Figure 6c illustrates the production reporting workflow for Hess Corporation. Finally, Figure 6d outlines an example of integrated process flow within Anadarko.

Figure 6a. Production reporting data flow as provided by Hess Corporation.
Figure 6b. Current data flow for international well production reporting on a monthly basis.
Figure 6c. Production reporting swim-lane diagram workflow mapped at Hess Corporation.
Figure 6d. Integrated process flow has been provided by SME meeting minutes, Appendix B-#20 of Anadarko.

This diagram shows the kind of data that goes to and from the production database (PDB).

  • Information flow from the production accounting group, the WINS system, field Operators (PDC), operations group, current production system (PRA), field automation systems (AGS, ADB, CASE), and gas accounting group, goes into the PDB.
  • Route setup has the list of every Operator and the wells belonging to the Operator.
  • PDB contains transactional data from every Operator.
  • WINS is a well system that is managed by the land administrator. It transmits information related to new well setup, completion class, and status changes, to the PDB.
  • The Operations group sends daily volumes for Non-Operated and acquired wells, to the PDB.
  • The PRA transmits monthly production and sales data from operated and non-operated fields.
  1. SAP/PRA uses data from the PDB to obtain information about:
  • Tank gauges and downtime
  • Well tests and run tickets
  • Pressures and automated volumes
  • Injection volumes and non-automated gas volumes
  1. ARIES software uses the daily and monthly production volumes from the PDB to perform reserves analysis and forecasting.
  2. Property Tax software uses the daily and monthly production volumes from the PDB to perform tax planning and analysis.
  3. Operational Reporting software uses monthly production volumes from PDB, for corporate data warehouse (this is not clear)
  4. DSS/OFM softwares use daily or monthly production volumes from PDB to determine production volume (this is not clear).
  5. WINS software uses pumper route and well relationships, from PDB, to obtain well contact information.
  6. Marketing software uses daily or monthly production volumes from PDB to make crude marketing arrangements.

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