1. PPDM Supports Business Process Improvement Exploding data volumes threaten to overwhelm business process improvements 8 th International Conference on Petroleum Data Integration, E-Commerce and Data Management

2. 2 Yogi Schulz Biography President of Corvelle Management Consultants Information technology related management consulting Project management and systems development Computing Canada & Calgary Herald columnist PPDM Association board member Industry presenter: –Project World - 4 years –CIPS Informatics - 7 years –PMI Information Systems SIG - 2 years –Convergence - 4 years –PPDM Association - several years Management Consultants

3. 3 Outline What have we achieved? Forces acting on E&P Companies Indicators of exploding data volume Data explosion issues Responses to data explosion issues Conclusions Recommendations Questions & Answers

4. 4 Improved application interoperability Database: –capability –availability Data: –model –management –exchange –quality Hardware: –reliability –price/performance Software: –functionality –robustness Operating system: –ease-of-use –data access/sharing Network: –bandwidth –ubiquity –reliability Achieved

5. 5 Vacations 8% Looking for data 60% Looking for data 26% Handling data 24% Useful work 50% Source : Major petroleum firm Source : Oil & Gas Journal Fall 1991 Useful work 18% Meetings 5% Training 4% Unproductive 5% E & P Professional’s Time Effectiveness Engineers & Technical Staff Professional Engineering & Technical Staff Achieved

6. But wait - we need more! Achievements are threatened E&P Companies are facing new forces in the global oil & gas industry

7. 7 Forces acting on E&P Companies here & now Asset Mix/Optimization Shareholder Return Oil & Gas Price Technology Workforce Demographics Globalization Environment Read detail as homework

8. 8 Indicators of exploding data volume - 1 IT Analyst projections IDC reports storage capacity growing 36% year-over-year to 181.6 petabytes shipped during the second quarter of 2003 Gartner Group IT infrastructure expenditure changes: –1998 - 75% CPU, 25% storage –2003 - 25% CPU, 75% storage Real-time survey: Who is regularly running out of disk space? Exploding volumes of data

9. 9 Indicators of exploding data volume - 2 Seismic data Exploding volumes of data

10. 10 Indicators of exploding data volume - 3 Well log data 60 40 20 0 100 80 198019902000 MB/ trip LIS/BIT LIS DLIS Exploding volumes of data

11. 11 Data explosion issues Observations: –Loss of knowledge about available data –Highly visible impact of poor data management practices –Sluggish response times Consequences: –Frustration –Irritation –Loss of productivity –Elongated cycle times

12. 12 Solutions exist in all components of the work environment Computing Infrastructure Data Business Process Software

13. 13 Actions to tame the data explosion Computing Infrastructure Network: –WAN bandwidth - fiber –LAN bandwidth - gigabit Ethernet –architect with redundant routing –sub-net –load balance Database: –performance optimization –smart disk –link external and internal datastores Hardware: –SAN/NAS –large memory –fail-over

14. 14 Actions to tame the data explosion Software Rationalize the application software set Explore/exploit EAI Set a multi-tier application architecture as the goal Favor PPDM-compliant application software Recognize that a single vendor strategy results in uneven application portfolio capability

15. 15 Actions to tame the data explosion Business Process Confirm presence of common issues: –lack of data integration –gaps in the application portfolio –bumps in the business process –resistance to agreed business process –lapses in data quality –gaps in the computing infrastructure Address data and software issues to improve business process Improve process with collaboration Procedures PoliciesPractices

16. 16 Actions to tame the data explosion Data - 1 Data Model: –implement PPDM –contribute changes/ideas/extensions Data Exchange: –recognize that a monolithic datastore is not achievable or necessary –utilize the XML transaction definitions Meta Data: –build a catalog/taxonomy –publish catalog contents widely

17. 17 Actions to tame the data explosion Data - 2 Data Management: –implement data stewardship –reward staff for deleting unnecessary data Data Quality: –introduce common definitions of business concepts through PPDM and PIDD –clean data to enhance integratability –implement PPDM data content

18. 18 Conclusions Exploding data volumes are: –a consequence of responding to forces acting on E&P companies –undermining business process improvements PPDM deliverables form part of the solution

19. 19 Recommendations Address weaknesses in: –computing infrastructure –software –business process –data Support relevant PPDM Association workgroups Implement PPDM deliverables Preempt loss of achievements PC hourglass

20. 20 Questions & Answers

21. 21 1800, 250 - 6th Ave. S.W. Calgary, Alberta Canada T2P 3H7 Phone/Fax: (403) 249-5255 E-mail: YogiSchulz@corvelle.com Web: www.corvelle.com Management Consultants PPDM supports Business Process Improvement President of Corvelle Management Consultants PPDM Association board member Information technology related management consulting Project management and systems development Computing Canada & Calgary Herald columnist Yogi Schulz

22. 22 Bibliography - 1 Change processes for efficiency –Al Escher, Hart’s E&P, June 2003, p.7 –http://www.eandpnet.com/ep/previous/0603/0603report.htm Data integration expands E&P choices –Patrick Deneen, Kjetil Tonstad, Thomas Halland, Hart’s E&P, October 2003, p.85 Environmental Benefits of Advanced Oil & Gas Exploration and Production Technology –http://www.fossil.energy.gov/programs/oilgas/publications/environmentalbenefits/5expl or.pdf IDC Reports Worldwide Disk Storage Market Declines in Second Quarter, But North America Shows Growth for Second Consecutive Quarter - 05 Sep 2003 –http://www.idc.com/getdoc.jhtml;jsessionid=S1G4051M0FJ02CTFA4FSFEYKMUDYUI WD?containerId=pr2003_09_04_154749 Industry Perspectives - An IBM point-of-view –John Haslett, Upstream Petroleum Solutions Forum, 25 September 2003 Integrating Seismic Data Processing and Visualization –http://www.pgs.com/technologynow/visualisation/dbaFile10380.html Light on the horizon - Holographic data storage –The Economist, 31 July 2003 –http://www.economist.com/science/displaystory.cfm?story_id=1956881

23. 23 Bibliography - 2 Malibu - Wellcore well life cycle –http://www.malibugroup.com/prod_wellcore_life.html Move to real-time decisions –Don Lyle, Executive Editor, Hart’s E&P, October 2003, p.81 Optimized Workflows for Integrated Seismic Evaluation –http://veritas- web3.veritasdgc.com/WebSite/VTechDocWeb.nsf/all/E9363F43904B2 FDF87256CA5004213CD/$File/0035.pdf Rational virtualization opens E&P eyes –Maggie Montaigne, Hart’s E&P, October 2003, p.87 Solutions for the Energy Industry –http://www.intel.com/business/bss/industry/energy/index.htm Well log file size estimates –Orestes Appel, GeoQuest WellPoint - MaxWell well life cycle –http://www.wellpoint.ca/solutions/Solutions_Maxwell.htm Work benefits from group computing –Al Escher, Hart’s E&P, July 2003, p.7 –http://www.eandpnet.com/ep/0703report.htm

24. 24 Asset Mix/Optimization Description: –depletion of onshore reserves –convergence with utilities –NOC ownership of reserves Responses: –focus on deep water/emerging basins –growth through merger –non-core asset divestiture –benchmarking focus –risk management

25. 25 Shareholder Return Description: –market performance expectations Responses: –increase returns to maintain access to capital markets –reduce costs –reduce capital requirements through outsourcing & alliances

26. 26 Oil & Natural Gas Price Description: –Uncertainty/volatility –OPEC control Responses: –hedging –risk management

27. 27 Technology Description: –leverage to improve recovery –leverage to reduce cycle times/costs Responses: –e-Business –supply chain rationalization –immersive visualization –Measurement While Drilling - MWD –remote operations –deepwater production technology –enhance seismic interpretation

28. 28 Workforce Demographics Description: –aging workforce –shrinking workforce –changing demographics Responses: –knowledge management –outsourcing –collaboration –new relationships/alliances

29. 29 Globalization Description: –Asian development & expansion –Former Soviet Union development –government activism –corporate citizenship expectations Responses: –new ventures/alliances –enhanced communication/lobbying

30. 30 Environment Description: –Maritime law –Health, safety, environment expectations –disposal of inactive fields & platforms –increasing litigation Responses: –HSE attention/investment –alternative fuels –reduced footprint field operations –more communication/lobbying