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The practice of benchmarking is not a new concept to the oil and
gas industry and its importance within all divisions of an operator
has grown significantly over the last 20 years. The last ten are
particularly notable, as the technology and products that capture
and store this data have become more advanced, affordable and
ultimately vital to a company's success or downfall. With such a
large selection of products with seemingly similar offerings to
choose from, what are the key distinctions to look out for if you
are seeking to implement a stringent benchmarking program? Below I
have outlined one factor to bear in mind above all else when
looking to benchmark.
One topic I have heard raised again and again when discussing
benchmarking amongst my peers is the difficulty in finding true
comparative data. While the oil and gas industry is slowly getting
better at this, we are not yet at a point where standardized
definitions for measurements, terminology and processes can be
assumed across geographical regions, individual operating companies
or even departments within the same company. This makes the process
of gaining true insight from multiple data sources difficult. With
much of this data being taken from publicly available sources, and
thus with little direct quality control against the original
source, implementing major changes or performance targets within
your own company based off this data comes with a certain amount of
risk. So, what can be done to help ensure that you are grouping and
comparing apples with apples? Setting clear company-wide
definitions and measurement standards is the first step towards
ensuring effective internal benchmarking. This will take a cultural
change and strong organizational leadership to implement initially,
particularly for multi-national operators, but establishing
reliable internal benchmarking and reporting must be completed if
any value is to be gained from looking at the performance of your
peers.
Managing to set standardized definitions for data capture and
measurements is obviously much harder to implement across the wider
operator community, however there are organizations and industry
groups that have managed to achieve this. There are many examples
of informal arrangements taking place between operators within the
same field or county in which data swapping and comparisons have
taken place with the aim of improving overall performance and
increasing efficiency. On a larger scale, peer-to-peer data sharing
clubs such as Rushmore Reviews use a model of pre-determined (by
the participating operators) data definitions and strict reporting
parameters to build up a large database of wells from which
reliable conclusions can be made. The advantage of the formalised
versions of data sharing over the informal data "swaps" is of
course third-party independent quality control, however this does
come at a cost and takes up more of the operator's resources.
When looking to benchmark performance, be it internal or
external, reliability of the data is paramount. In any organization
or industry, implementing procedural change in order to drive
performance improvement is a large undertaking that requires
investment of both monetary and human resources. It is done with
the aim of introducing long lasting performance improvements and
promoting a culture of continuous learning. There are many factors
to consider when choosing which data providers are the right fit
for your company's unique requirements, but as with anything in
life quality over quantity tends to pay off in the long run.
Learn
more about peer-to-peer data sharing and benchmarking services
from Rushmore Reviews.
David Masson, Rushmore Reviews Product Management
Specialist, IHS Markit.
