Sequence Diagrams and Scenarios on JVPR

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This section describes operations within JVPR in detail using sequence diagrams. The operations depicted in the following sections are outlined in Figure 12: Regluatory, daily, and monthly reporting, well test, production costs, and joint interest billing. The actors involved in these operations are also shown in Figure 12 and include the Operator, Partner , and Regulatory Agencies. The lines connecting the actors to operations shows the interaction between the actors for specific operations. The operation steps illustraed in each sequence diagram were obtained through interviews with SMEs. These diagrams, however, represent the general operating procedure; not operating procedures specific to any one company.

Figure 12. JVPR operations are summarized by the reporting elements listed between the Operator, Partner, and the Regulatory Agency.

Regulatory Agency Reporting Sequence Diagram (Figure 13)

The “Regulatory Agency Reporting” sequence diagram depicts the responsibilities of the Operator and the regulatory agency, as well as their interactions. Regulatory reports are sent to government bodies and regulatory agencies such as Mineral Management Services (MMS), Louisiana Department of Natural Resources (LDNR), Railroad Commission of Texas, and etc. These reports contain information regarding how much oil or gas was produced, well locations, inspection reports, well test results, tax information, and etc.


Figure 13. Reporting to the Regulatory Agency by the Operator.

Daily Reporting Sequence Diagram (Figure 14)

The “Daily Reporting” sequence diagram illustrates the duties of the Operator and the Partner and includes their exchanges. Daily reporting consists of the Operator summarizing raw data like temperature, pressure, and fluid flow rates. The Operator may be responsible for sending these reports electronically or manually to the Partner.


Figure 14. Daily Reporting between the Operator and the Partner.

Monthly Reporting Sequence Diagram (Figure 15)

The “Monthly Reporting” sequence diagram portrays the tasks of the Operator and the Partner, as well as their interactions. Monthly reports, which are created by the Operator, may contain allocated field estimates, oil, water, and gas by well or by sales meter, and data related to sales and revenue. Monthly reports are sent electronically or manually from the Operator to the Partner.


Figure 15. Monthly Reporting between the Operator and the Partner.

Well Test Sequence Diagram (Figure 16)

The “Well Test” sequence diagram depicts the well tests process which is performed when multiple wells are measured by only one meter. Operator compare actual fluid flow rates for each well with the estimated fluid flow rates determined at the beginning of production, and send this information to the Partner for validation. The Operator shuts of certain wells to measure the production of other individual wells. The monthly production of oil and gas for a particular well is sent to the Partner for validation of optimal production.


Figure 16. Well test sequence diagram for the most common case of multiple wells measured using one meter.

Production Cost Sequence Diagram (Figure 17)

The “Production Cost” sequence diagram represents the determination and transfer of the production costs involved in the JVPR process. These costs include labor, materials, supplies, equipment, workover, recompletion, overhead, and various other production costs. Calculation of severance or production taxes is also performed by the Operator, before determining the revenue and income from production.


Figure 17. Production cost as calculated by the Operator and eventually reported back to the Partner.

Joint Interest Billing Sequence Diagram (Figure 18)

The “Joint Interest Billing (JIB)” sequence diagram represents the duties of the Operator and the Partner and includes their exchanges. JIB contains expenses for well repairs and/or drilling of new wells. The JIB department may deal with the landman, financial analyst, and engineers.


Figure 18. Joint Interest Billing between the Operator and the Partner.


The interaction with SMEs illustrated that every JVR interaction consists of a different point of view regarding reporting requirements. However, the issues raised and suggestions provided by SMEs have been along similar lines. In order to identify similarities and opposing viewpoints within the reporting processes in different companies, we summarized the information obtained from SMEs in Table 1.

The columns in Table 1 were created to summarize the reporting process as comprehensively as possible for identification of discrepancies in the process. In addition, this table reflects the differences that exist among different company’s perspectives. The following descriptions elaborate on the purpose of each column that appears in Table 1.

  1. Data Reporting: Reporting may occur using pure raw data which is sent from the Operator to the Partners. That is, the Operator may report to Partners the exact readings obtained from their instruments rather than processing this data for allocation and revenue accounting purposes and then reporting the results. Here, the scenario should indicate the level of processing performed on the data before it has been reported.
  2. Contents of the Report: Depending on the version (i.e. daily or monthly), reports may have different contents. The contents of reports are listed here by company.
  3. Frequency of Reports: This column lists company policies (if any) related to reporting in various JOAs that a particular company has participated in.
  4. Format of the Report: This column lists the software tools or transmission formats used to send reports by company.
  5. Special Tools: All special tools used to prepare and transmit reports are listed here.
  6. Regulatory Considerations: If there are any common regulatory considerations that are always included in JOAs whenever a company is participating in a JVR, they were listed in this column.
  7. Other: Other special circumstances and practices are listed here by company.

Table 1. Specific information gathered from different companies.

The information listed previously in Table 1 is based on the descriptions provided during SME interviews. The scenarios described during these interviews are summarized in the following sections.

1. Operator and Partner from the same company (Devon)
• Pumpers enter well test data and other raw data daily into a program called eVIN. (corresponds to item 2b & 2c in the swim-lane diagram)
• This data is then sent to a production data allocation system called TOW, where daily & monthly allocated data is stored. It contains actual well head production, volumes of oil or gas etc.
• Reservoir engineers then get this daily and monthly data and put it into RIO (Reservoir Information Online). RIO/TOW gets data from each individual well. (corresponds to item 5d in the swim-lane diagram)
• OFM is used by the people on the field and production engineers for surveillance of the production data. This is mainly done by Operator and sometimes Partner as well. (corresponds to item 4f in the swim-lane diagram)
• From RIO data goes to PEEP (Petroleum Evaluation Economic Program).
• In the meantime, some Partners (like Samson, Anadarko etc) have online portals with which the monthly data can be accessed by them.
• Regulatory reports are sent, by the Operator, on a monthly basis to regulatory agencies such as MMS.
• Partners also access monthly data from public data sources like Texas railroad commission. This information is in Excel files and is then batch loaded to RRC.
• In operated field, reservoir group deals with budget and forecasting of the production. This is Lisa’s role in the planning and reserves group. She handles budget and reserves reporting to the corporate group. (corresponds to item 5f & 5g in the swim-lane diagram)
• Creation of records for new wells: Data required for this is API number, field name, lease name, well number, latitude, longitudes, gas or oil well, spud date, TD date, rig release date, depth, first production date, reservoir data, water allocation, water management.
• During this process, daily operations reports are sent to Partners, (via email, PDF etc) if they ask for it. (corresponds to item 7f & 11f in the swim-lane diagram)

2. Reservoir engineering (RE) advisor from Partner side (Oxy)
• RE role involves looking into Operators investments in some wells to be drilled. This economic approval/disapproval to participate in the joint venture depends on factors such as geological data, surface and sub surface conditions obtained from Operator as well as reservoir evaluation.
• The production data information and lists of wells is maintained by the Partner using software called Enerdeq.
• Surveillance is done by the Partner using tools such as OFM & DSS.
• RE is an advisor to the Partner with responsibilities in predicting and monitoring production figures. This is done using a production monitoring software called Permian dashboard.
• This Partner deals with several Operators who send them various reports such as work reports (can be sent daily or weekly), drilling reports which are sent promptly, production information which comes in as raw data. This raw data can be temperature readings, fluid flow rates, and etc.
• This data then goes to production accounting for allocation.
• RE also receives valid test results and projection and injection data reports.
• Operators from smaller companies send this data as paper based data (via post), while larger companies use CDs, emails and PDFs.

3. Onshore operations in North America (ConocoPhillips)
• As Operator, they own the physical meter and the pipeline connected from the well to this meter, but when they are the Partners, they only own the meter but not the well or the pipeline.
• Fluids passing through pipeline change ownership, so they have to keep records and files for each well, recording volume, pressure and temperature at the meter.
• Upstream operations are performed by Facility Engineer, Maintenance Engineer. (corresponds to row 3 in the swim-lane diagram)
• Installing SCADA and calibration of control equipment is done by Instrumentation and Electrical team. (corresponds to item 2b & 2c in the swim-lane diagram)
• First capture point of raw data is SCADA, and then reservoir engineers use higher level analysis tools like OFM, DSS and Spotfire to optimize wells, while the operations team is concerned with optimizing production. (corresponds to item 5f & 7g in the swim-lane diagram)
• Production monitoring is done daily or monthly using applications like Auvoset and P2ES which are production monitoring tools.
• Production Technician/Analyst checks valid gross level numbers before putting them into the system and also facilitates manual operations. (corresponds to item 6i & 6j in the swim-lane diagram)
• The production number is given to allocation engine which allocates on a 30 day or 90 day period. This back allocation is done through well tests.
• Raw data is sent on an hourly basis but analysis is done monthly during allocation.
• Production reports are also sent monthly, these are more accurate. (corresponds to item 6k in the swim-lane diagram)
• Production reports are sent to the Partners hourly or daily. Daily reports contain estimated values. (corresponds to item 4d in the swim-lane diagram)
• Multi skilled Operators (MSO) adjust parameters of controllers, downtime and well tests.
• They perform different well tests for different operations (usually every 6 months).
• Maintenance reports are created using SAP, Maximo, drilling and work over reports are created using Wellview EDM, and operating expenses reports are created using SAP.

4. Operator from Anadarko (Bill Liddell) and Partner from BP (John Larson)
• Before starting any project, factors considered by the Operator are acreage, geology, resource potential, costs, depths, temperatures, and etc. After all this consideration, reservoir engineers do cost analysis. Operating costs, projected rates are put into economic model to check if it meets hurdle rate (mark).
• Identification of the wells in each field is different for International market and domestic (USA) market.
• Internationally, the identification is done by using the concept of unique well identifiers; in the US there are API numbers. Both identification systems do not match with each other.
• Data capture is mainly done by SCADA; some field engineers carry pen recorders to record rates & volumes, laptops too.
• Preferred format for sending reports to any Partners and regulatory agencies such as MMS (mineral management service), Texas Railroad Commission is excel spreadsheets. The frequency of sending different reports such as drilling reports, production reports, and etc. depends on the joint venture agreement between the Operator and Partners. Regulatory reports are sent monthly and also provided to public domain (HIS, TRC, and etc.).
• Well test is done once a month if 2 or 3 wells go to a one meter, for individual wells it is done every day. Sometimes for material balance, shut in tests are done everyday.
• Metering is done at well head, sensors are present up and down the wellbore (off shore). Sometimes meters are on radio not always SCADA. After FDC, automation database is mapped onto production database, the daily production data goes into OFM. The data they send/receive is mainly volume, rates, pressures etc. This is sent electronically. The ARIES forecast changes reserves so MBX (Manage by Exception) curve is used to make a well do better. Raw data from PDB goes into PRA (Production Revenue Accounting). They use SAP environment to do the regulatory reporting and activity reports. (corresponds to item 6l in the swim-lane diagram)
• Most big companies have a group called Joint ventures in their accounting team. (corresponds to row 9 in the swim-lane diagram)
• Outside operated projects do not always have different engineers involved, so facility decisions are usually made by Operator itself.
• Reservoir engineer is involved with checking reserves, simulations and number of wells. (corresponds to item 5f & 5g in the swim-lane diagram)
• Production engineer checks whether production is optimal or not and fixes problems related to wells.
• Facility engineer’s role varies from onshore to offshore. These roles depend on size of company and project. (corresponds to row 3 in the swim-lane diagram)
• Outside operated group’s production accounting team receives Authorization for expenditure (AFE) from Operator, when a new proposal comes and the outside operated team then puts this data into their own AFE by entering it into SAP system. They look at the codes on the invoice and then check the charges put on the project.
• Outside operated group receives daily drilling reports from Operator.
• Operator also sends invoice and John compares the invoice with the daily report to verify if outside operated group has been billed for the right amount.
• The production accounting team from outside operated side keeps track of how much oil/gas is sold and they pay accordingly.
• In BP, monthly reports are sent to Partner corporate management and then to Partner asset manager. Any problems related to equipment replacement and well fixing are checked with facility, reservoir and production engineers. (corresponds to item 11f & 11i in the swim-lane diagram)
• Outside operated group receives daily drilling reports from Operator.
• Operator also sends invoice and John compares the invoice with the daily report to verify if outside operated group has been billed for the right amount.
• The production accounting team from outside operated side keeps track of how much oil/gas is sold and they pay accordingly.
• In BP, monthly reports are sent to Partner corporate management and then to Partner asset manager. Any problems related to equipment replacement and well fixing are checked with facility, reservoir and production engineers. (corresponds to item 11f,11i & 11m in the swim-lane diagram)
• Outside operated team is involved in reviewing field KPIs (Key performance indicators). This involves checking the amount of capital spent, checking the amount of production and its expenses, since all these factors have a different budget and these budgets need to be estimated in advance. KPIs reviewed here are lifting costs and finding and development costs. (corresponds to item 11i in the swim-lane diagram)
• Operations manager sends asset theme information to Partner asset manager and is also involved with HSE activities along with production and facility engineers.
• John also looks into all the sales reports, daily production reports, revenue statements and quarterly or monthly budgets. For this he deals with Operations manager, production engineer and land department people (land department keeps track of ownership of wells and land).
• This data involving sales and costs reviews goes to Partner corporate management for approval.

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