Do you know how your business is doing relative to its competitors? Is California or Texas better for you to do business in? Are one of your vendors providing you better products than the others?
These are age-old questions which usually have non-objective answers. It is the foreman who has worked for years in the field that knows that one set of meters are more efficient than the other. However, as we all know, you cannot achieve success without consistency, discipline and a mechanism that searches for efficiencies.
This is where data automation can be a real game changer.
A few years ago, one of our oil and gas clients had an issue where project managers at their various rigs were not signing off on specific procedures and missing critical steps, which caused problems farther down the pipeline. It was costing the client a lot of money to fix these problems, but they identified the cause as the missed procedures back up the line as the culprit.
We built an approval app for their team to help streamline this process. The app would alert whether a project manager had not approved or denied a particular document within a period of time. If the approval took longer than the allotted time, the system would ping a supervisor and escalate the issue. The system helped improve their efficiency and reduced their costs.
However, the largest issue we’ve seen within companies in the oil and gas industry is the problem of incorrect data.
Incorrect data can come from a number of sources, but the two we see most commonly are oil feed errors and inaccurate run tickets.
Oil feed numbers are supposed to be produced by measuring the flow of oil or gas through a system. Over time, the hardware will start to malfunction and need to be replaced, like a rusty measurement needle.
But if the malfunction goes undetected, then the company is actually collecting incorrect data, which can result in incorrect allocations, incorrect royalty payments, incorrect reporting to the state, and the overall potential for overpaying and underpaying can run across the board. By digitizing the data, it’s possible to detect an error before it becomes serious and not have to deal with time-consuming prior period adjustments and penalties.
For example, the data monitoring service can flag if the same flow number has been reported three days in a row. That notification would alert someone to check the meter and fix it. That can prevent the domino effect of increasing losses as the problem goes on.
Another major issue comes down to run tickets — tickets that are filled out and tracked by the trucker loading up gas or oil from a tank to record how much oil or gas was picked up. A company can look at the numbers on the run tickets, but won’t have a clue if there are losses, inefficiencies in the meter, or even theft involved because it takes roughly two weeks for the tickets to be applied to the system. By then, they can’t tell if there’s actually a problem or figure out how to fix it.
By turning this into a digital system that automatically reports the run tickets after each run, companies would be able to pinpoint where the inefficiencies or theft is taking place. With a paper ticket system, they’re unable to identify the problems many times and just write off the differences because they believe it’s not worth their time to track it down.
But it adds up.
In the case of one company we worked with, they discovered a loss of nearly 75,000 barrels worth of stolen oil at the end of the previous year, which was worth nearly $37 million. Automation would have greatly reduced the risk of fraud and could have been handled with a system that used iPads and a fully digitized and automated system.
Investing in data flow automation can greatly reduce your costs and your losses over time, turning a small investment into much larger savings. If you would like to learn more, please contact us and ask to speak to one of our representatives.
Photo credit: jp26jp (Pixabay, Creative Commons 0)