El Paso Presentation Introduction of Schlumberger Business Consulting (SBC) Capabilities. Lisa Stewart, President Production & Non- Regulated Operations Jeff Sherrick, Sr. VP Production & Non- Regulated Services. Current plan is to have a discussion – not present a deck.
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Current plan is to have a discussion – not present a deck.
This deck is to organize our thoughts.
Vic Joyce – Global Account Director
Bob Peterson – Improve Production Efficiency
Saheed Kenku – Improve Capital Allocation
Marty Stetzer – Reserves Management Improvement
Vic… Suggest you speak to this topic
Discuss credentials from Schlumberger Business Consulting (SBC)
to help El Paso “Deliver the Plan.”
Marty or Vic can speak to this topic and introduce who’s next and what they will cover
SBC CapabilitiesIntroducing Schlumberger Business Consulting (SBC)
“Schlumberger Information Solutions (SIS) announced creation of Schlumberger Business Consulting (SBC), focused exclusively on the growing demand for optimization of upstream oil and gas industry operations. SBC offers a unique combination of domain knowledge, global reach and experienced consultants targeting E&P operational processes.
SBC works with E&P companies in strategy implementation, organizational efficiency and technology strategies to help enhance core operational processes within these organizations and to gain productivity through appropriate workflow redesign enabled by information technology (IT).” Press release LONDON, April 14, 2004 –
Bob’s topic. He would expect to use one of the three attached case studies
Improve Production EfficiencyEl Paso: Highlights - Talking PointsPlan to start with pure production efficiency questions and then end on capital efficiency)
Situation: attached case studies
Develop and implement an intelligent well advisory system pilot on a subset of newly completed remotely monitored wells that will aid engineering and operations personnel in predicting and averting significant well failures. Well performance is extremely troublesome in the heavy oil environment.
New well settling-in period is the most problematic period in a well’s life. Large production gains and service cost reductions can be achieved by cutting settling-in period in half. Deep operator heuristic knowledge must be codified. The right predictive tools must be calibrated to the heavy oil well failure modes. Business process change is critical to delivering estimated gains.
An integrated intelligent well advisory system solution utilizing artificial intelligence, codified operator knowledge, and portal alarming technologies should deliver:
- 3 - 7% increase in average oil production
- 6 - 10% reduction in total per unit costs
Additional benefits include improved data management, knowledge sharing and technology transfer
Bob’s case study 1 handout
Based on advice from IWAS, control room operators will close the loop back to the wellhead
Case Study 1 – Technology first, then process improvementCanadian Heavy Oil ProducerExpects to increase production by 5%+ through use of an intelligent well advisory system
This project has completed the pilot phase; validating predictive concepts and core operational process changes on a set of approximately 200 wells for 6 months.
Validated concepts will now be scaled across 2500+ heavy oil wells in the business unit.
Bob’s case study 2 handout attached case studies
HSE, and Energy Management
Case Study 2 – Process first then technologyCanadian SBU of Super MajorImproving operational integrity assurance (OIA); plant reliability gains of 0.5% anticipated
Current status- validating operational pain points and beginning design of a pilot project to improve the effectiveness of operator plant and field rounds using hand-held computers
Situation: attached case studies
The continued drive for reserve replacement requires a more rapid development and turnaround of reservoir models and development scenarios. The current data sharing architecture does not adequately support the efficient flow, tracking, storage and sharing of development information.
The current working environment is not conducive to collaboration and exchanging viewpoints on the reservoir modeling process. The reservoir models are often complex and currently utilize linear development work flows with data flowing from one discipline to another.
Replace the linear workflow environment with a collaborative process framework which utilizes a visualization environment for development teams involved in the reservoir modeling, well planning and design and executing of development scenarios.
Bob’s case study 3 handout
Case Study 3 – Collaboration across process
Major International Offshore ProducerIncrease reserves and production through improved collaboration and management of work processes, with focus on creating a continuous- improvement environment for scenario development, execution, and uncertainty assessment.
This project has currently completed the initial evaluation. Approval has been given to proceed with the initial work process analysis for a collaborative work environment.
Saheed’s topic attached case studies
Improve Capital Allocation ProcessEl Paso: Capital Allocation/Portfolio Summary
GOM S. LA
2003 Allocation = 12%
2004 Allocation = 28% *
2005 Allocation = 28% *
2003 Allocation = 55%
2004 Allocation = 40% *
2005 Allocation = 44% *
2003 Allocation = 33%
2004 Allocation = 32% *
2005 Allocation = 28% *
CBM and Rockies
Note: Excludes corporate and other general capital items
Potential projects can be viewed (with uncertainty) for combined portfolio (e.g. cash flow, production, capital, etc.)
Probability of Achieving Goals
Is a 54% chance of achieving your goals acceptable?
How can you adjust your portfolio to improve this?
Or are your goals unrealistic?
Portfolio Solution Complexity
Note: All the El Paso team has had the Rose & Associates trainingEven with the Best of Efforts, Corporate Performance Goals May Be Missed
Marty’s topic. combined portfolio (e.g. cash flow, production, capital, etc.)
What Lisa told the audit committee
Corporate Reserves Committee
Reserves and Evaluation Group
Board of Directors
Outside Reservoir Engineering Firm
Revise Reserves Management ProcessEl Paso: Enhanced Controls on Reserve Booking
Plan to use this slide as a handout. combined portfolio (e.g. cash flow, production, capital, etc.)
And tell Lisa we can help get a management process in place to ensure her team is implementing what she told to the audit committee.
Establish Field Production Volumes
Estimate Recoverable Reserves
Operational Reserves Report
SEC / other Guidelines
SEC / other Reporting Volumes
Define Reserve Opportunities
Historic Lifting Costs, Prices, and Interests
Pro Forma Financials
Economic Cases (Compliance and Operational)
Bases & Assumptions
Annual Planning Cycle
Develop & Document Strategy
(e.g., R/P vs. Cash Flow)
Year 1 Long Range Plan
Reporting & Compliance
Integrated workflow approach recommendedE&P Reserves Management Workflow Process integrity is needed across the workflow…
Set Strategy and Vision combined portfolio (e.g. cash flow, production, capital, etc.)
Marty or Vic topic
Summing upSBC Upstream SolutionsRelate to ElPaso organization and responsibilities
Reserves Mgmt Process
Business Planning Process
Capital Allocation Process
Production Efficiency – Husky Oil
Capital Planning - Anadarko
Reserves Management – Kerr McGee
Vic Wrap-up topic. combined portfolio (e.g. cash flow, production, capital, etc.)Thank You