Opinion

Oil and Gas Companies Are Spending Too Much Time and Money on Their AFE Processes


So how do we go about streamlining the AFE workflow and approval process?

Most companies' AFE processes are costing them time and money because they rely on manual processes that can move only as fast as the slowest employee.

To illustrate the real costs of this manual process, let's take a look at an operator I recently met with. They operate throughout the Ukraine, Russia, Hungary, Bulgaria and Slovakia, producing in excess of 11,000 barrels of oil equivalent per day.

Over the last four years its annual capital expenditure has ranged between one and two hundred million US dollars.

Despite their large and complex business, when it came to managing capital expenditure the company largely relied on manual, paper-based method for the “Authorisation for Expenditure” (AFE) process.

With manual AFE processes in place, they spent more than 1,000 hours last year on the administration of AFEs, costing them over $80,000 on AFE creation, cost estimation, project iterations, and duplicate data entry.

There was also no single audit trail, with multiple templates across countries. As a result, different templates were being used and this resulted in inconsistent – and sometimes incomplete – information being received.

How can this operator achieve the same cost-reducing and time-saving goals of their competitors? By stremalining processes

The company approached TouchstoneEnergy who recommended EnergyFlow, an industry-tailored Business Process Management Platform.

Upon implementation, they have immediately started to operate more efficiently and look forward to more gains thanks to these best practices:

  • Integration of existing solutions: EnergyFlow dynamically links to the company's other applications. All information is now stored in a central database and a number of reports have been built providing them with key information that they did not have readily available before. By removing duplicate data and using their integrated tools they can drive real, cross-team collaboration.
  • Automated, Consistent and Accessible AFE Approvals: Giving staff access to accurate and integrated data will make their data-gathering a smooth process. Manually moving information from location to location will be a thing of the past. Further, automation will give them the ability to fine-tune their workflows and easily identify any lingering bottlenecks.

A lot of companies continue to experience AFE challenges similar to these. AFE management isn't often seen as an area ripe for cost-reduction, but it is a relatively easy way to eliminate unnecessary work and get AFEs processed quicker and more accurately. The streamlining of processes can really make a difference in cutting costs when budgets are low.

In short, improvements to your AFE processes can make a big difference for your organization … no matter the price of oil.

Want to Learn More?

Check out all the features of EnergyFlow to see how your business can reduce costs in a fluctuating energy market.



New service from OilVoice
Trip Shepherd is for companies who need to track their staff in areas of risk.
It's free to use, so we invite you to try it.

Visit source site

https://touchstoneenergy.co.uk/resources/news/spen...

Business ProcessexpenditureDevelopment Capital ExpenditureOilandGasTouchstoneoil and gas upstream

More items from marcuskelly


How a reactive and predictive maintenance strategy improved results for a Midstream Oil and Gas company

Better tracking and recording of spend against budget was a key success factor for this Enterprise Asset Management project in the Midstream Oil and Gas Industry. In addition to this success, incorporating inventory management, planned, reactive and predictive maintenance was also part of the proj ...

Marcus Kelly - TouchstoneEnergy


Posted 3 months agoPress > Asset Managementasset management systemMaintenance and inspection +6

7 steps for implementing reliability-based maintenance for Oil and Gas companies

Modern Enterprise Asset Management (EAM) solutions help maintenance teams in the oil and gas industry step up their processes and make effective asset management part of the overall enterprise strategy. Here are seven ways modern solutions help maintenance teams: 1. Reliability. Reliable oper ...

Marcus Kelly - TouchstoneEnergy


Posted 6 months agoPress

Managing the transition from legacy to modern systems in Oil & Gas

Legacy IT Systems, either software or hardware that were commissioned between the 1980's and early 2000's, are a significant obstacle in any Oil & Gas organisation's drive towards modernisation. Whilst the age of these systems is not necessarily an issue, continued product support is a challenge f ...

Marcus Kelly - TouchstoneEnergy


Posted 7 months agoOpinion > OilandGasE&P SoftwareBusiness Process +8

Why Oil and Gas companies need to consider an Enterprise Asset Management solution

You may well already be using some form of asset management system, it may work well for you, so why would you need to look at anything else? At TouchstoneEnergy we firmly believe that in order to have the edge over your competition, you need to be looking forwards as well as back. It is all very ...

Marcus Kelly - TouchstoneEnergy


Posted 8 months agoOpinion > Asset Managementasset management systemOilandGas +4

Asset Management in Oil and Gas London Event: A Masterclass in Maximising Operational Efficiency.

Infor EAM is best-in-class asset management software that can help you digitise and optimise your maintenance operation to reach new levels of efficiency. Unlike niche solutions that simply can't grow with you, or ERP add-on products that require extensive customisation, Infor EAM is a purpose-b ...

Marcus Kelly - TouchstoneEnergy


London   England   GB 12 Mar 2019


Posted 8 months agoEvent > LondonAsset Managementasset management system +3
All posts from marcuskelly