Hydrocarbon

Accounting
KPOGCL
JV
Solutions for Solutions
Accounting
Upstream Oil & Gas
Muhammad
George Telford
Munaf
Head
SVP,ofInternational
ProfessionalBusiness
Services
Development

InfoTech Private
P2 Energy
Solutions
Limited

What is Hydrocarbon Accounting?

Identification,
measurement,
recording, verifcation
and communication
of operational,
volumetric
and fnancial data
resulting from
activities involved in
the production,
processing,

Why do we need it?

Provide key
information for dayto-day decision
making in every
area of operations
from reservoir
management to
Essential to ensure
sales and
that the move
marketing.
towards a digital
oilfield results in
Ensure correct
commercial
sharing of
optimization.
production and costs
3 with joint venture

What is wrong with current

processes?
Lack of Integration
Inconsistent master data
Redundant data entry
No single source of truth

Offine
calculations
Inherent errors with
excel or manual
calculations
Poor historical records
Errors can lead to
financial loss or dispute

Visibility
4

Potential improvements may be lost due to lack of

HCA Scope
Calculation and allocation of
volumes to the reservoir
Determination and tracking of
ownership from
production to sale
Calculation of royalties and
production taxes
Distribution of revenues and
recovery of costs
5

Key Components to an HCA System

Shared master data
Single source of data
entry
Automated calculations
Auditable and verifiable
results
Based on industry
standards
Open architecture
Timely availability of

P2 Enterprise
Upstream

P2 Applications
Footprint
REPORTING
Application & Regulatory

Maps

Lease Operating

LAND

PRODUCTION

Lease Data

Field Operations

Contracts

Electronic Data
Validation
Volume Allocations

Domain/Property
Company Owned Lands
Lease Cost
Lease Acquisition
GIS

Agreements

Supply Planning
Terminal Management
Well Operations

Ad-Hoc Query

Business Intelligence

FINANCIALS
REVENUE

Accounts Payable

Partner Balancing
Revenue Settlement
Gas Plant Accounting
Production Sharing
Agreements

Accounts Receivable

PRE-DRILL
Well Planning
Geology & Prognosis
AFE Workfow
Construction
Regulatory/Permitting
Rig Scheduling

Report
Centers

Ownership

Codes

Hierarchies

DRILL &
COMPLETE

RESERVES

Drilling & Workovers

Rollups & Changes

Completions

Reserves Reporting

Facilities & Pipelines

Economics & Valuation

Reclamation

General Ledger
Cash Management
Planning & Budgeting
Governance & Compliance
Consolidations &
Reporting

Sampling & Analysis

Parties

Dashboards

ASSETS &
COSTS
Authorization for
Expenditure
Joint Venture Accounting
Fixed Assets
Inventory
Projects
Purchasing / Procurement
Asset Maintenance

Cost
Accounting
Enterprise
Upstream

P2 Applications
Footprint
REPORTING
Application & Regulatory

Maps

Lease Operating

LAND

PRODUCTION

Lease Data

Field Operations

Contracts

Electronic Data
Validation
Volume Allocations

Domain/Property
Company Owned Lands
Lease Cost
Lease Acquisition
GIS

Agreements

Supply Planning
Terminal Management
Well Operations

Ad-Hoc Query

Business Intelligence

FINANCIALS
REVENUE

Accounts Payable

Partner Balancing
Revenue Settlement
Gas Plant Accounting
Production Sharing
Agreements

Accounts Receivable

PRE-DRILL
Well Planning
Geology & Prognosis
AFE Workfow
Construction
Regulatory/Permitting
Rig Scheduling

Report
Centers

Ownership

Codes

Hierarchies

DRILL &
COMPLETE

RESERVES

Drilling & Workovers

Rollups & Changes

Completions

Reserves Reporting

Facilities & Pipelines

Economics & Valuation

Reclamation

General Ledger
Cash Management
Planning & Budgeting
Governance & Compliance
Consolidations &
Reporting

Sampling & Analysis

Parties

Dashboards

ASSETS &
COSTS
Authorization for
Expenditure
Joint Venture Accounting
Fixed Assets
Inventory
Projects
Purchasing / Procurement
Asset Maintenance

Joint Venture Accounting

Recover costs from joint
venture partners
Cash Calls
JIB Invoices and Statements

Transactions generated

Allocations
Payroll Burden
Utilization
Overhead

Tracks Payouts / Cost

Recovery
Track gross and net costs
12

Authorization For Expenditure

Track and Monitor
Projects
Generate AFEs
AFE Accruals
Capitalized Interest and
Overhead
Master AFE
Manage AFE
Supplements and
Amendments
13

Track gross and net

JVA / AFE Lifecycle

AFE
AFE AFE

Payab
les

Receiva
bles
Posted
to GL

Journal
Entries

3rd
Applicati
Party
ons

Tr
Tr
x
x Trx

JVA
Eligible
Transacti
ons
14

Process
ing

Operations & Field

Data
Enterprise
Upstream

P2 Applications
Footprint
REPORTING
Application & Regulatory

LAND
Lease Data
Contracts
Domain/Property
Company Owned Lands
Lease Cost
Lease Acquisition
GIS

Maps

Lease Operating

PRODUCTIO
NField
Operations
Electronic
Data
Validation
Volume
Allocations
Supply
Planning
Terminal
Management
Well
Operations
Sampling
&

Ad-Hoc Query

Business Intelligence

FINANCIALS
REVENUE

Accounts Payable

Partner Balancing
Revenue Settlement
Gas Plant Accounting
Production Sharing
Agreements

Accounts Receivable

Parties

PRE-DRILL
Well Planning
Geology & Prognosis
AFE Workfow
Construction
Regulatory/Permitting
Rig Scheduling

Report
Centers

Ownership

Codes

Hierarchies

DRILL &
COMPLETE

RESERVES

Drilling & Workovers

Rollups & Changes

Completions

Reserves Reporting

Facilities & Pipelines

Economics & Valuation

Reclamation

General Ledger
Cash Management
Planning & Budgeting
Governance & Compliance
Consolidations &
Reporting

Analysis
Agreements

Dashboards

ASSETS &
COSTS
Authorization for
Expenditure
Joint Venture Accounting
Fixed Assets
Inventory
Projects
Purchasing / Procurement
Asset Maintenance

Production Suite
Allocation Process
Modeling (APM)

Reserves

Electronic
Data
Validation
(EDV)

Reporting

Producti
on
Managem
ent
Field
Operati
ons
Samplin
g&
Analysi
s

1
7

Plannin
g&
Forecas
ting

Termina
l
Managem
ent

Electronic Data Validation (EDV) module

Connect
to
Scada/D
ata
Historian

Validate
Incoming
Data

Scada/
Data
Historians

Electronic Data
Validation (EDV)

Honeywell
PHD
CYGN
ET

Wonderware
ISQL

1
8

View. Edit
and
Report

Publish Data
to
Integrated
Core
Solution Productio
n
Managem
ent

Support Viewing,
Editing and
Reporting
Well Event Graph

19

Field Operations Module

Manual data
capture in the
field
Disconnected
Hardware
Independ
ent
Configura
ble
Local
Reporting
20

Graph of
Gauge Sheet

Enter data as
Gauge Sheet

Support Viewing,
Editing and
Reporting
Custom Report
Example for Client

22

Production Data Management

Integrated with Field
Operations and
Electronic Field
Validation (EDV)
Well Events such as
Status, Well Test and
Downtime plus User
Defined Event
capabilities
Over 20 standard
types of equipment
plus User Defined
Equipment
capabilities
23

24

Production Allocations Engine

Powerful, robust and
fexible Allocation
engine that supports
simple to the most
complex allocation
Calculate
the
Theoretical Volume
using
Theoretical
Production Method
Reconcile volumes
(Back Allocate)
2
5

Volume Allocation

26

Over 15 methods for

calculating
Estimated
Production including CC,
PQ and PI curves
Operational (Daily) and
Monthly
Allocations
Formula functionality
Standards Products (Oil,
Gas, NGL, Water, etc)
plus the capabilities to
define additional
products
Standard Dispositions
(sales, fare, inventory,

Volume calculation methods

Application
generated
Choke
Correlation
curve for
calculating
choke setting for
Volumetric
Allocation
calculations

27

Network Viewer

2
8

Reven
ue
Enterprise
Upstream

P2 Applications
Footprint
REPORTING
Application & Regulatory

Maps

Lease Operating

LAND

PRODUCTION

Lease Data

Field Operations

Contracts

Electronic Data
Validation
Volume Allocations

Domain/Property
Company Owned Lands
Lease Cost
Lease Acquisition
GIS

Agreements

Supply Planning
Terminal Management
Well Operations

Ad-Hoc Query

Business Intelligence

FINANCIALS
REVENUE

Accounts Payable

Partner Balancing
Revenue Settlement
Gas Plant Accounting
Production Sharing
Agreements

Accounts Receivable

PRE-DRILL
Well Planning
Geology & Prognosis
AFE Workfow
Construction
Regulatory/Permitting
Rig Scheduling

Report
Centers

Ownership

Codes

Hierarchies

DRILL &
COMPLETE

RESERVES

Drilling & Workovers

Rollups & Changes

Completions

Reserves Reporting

Facilities & Pipelines

Economics & Valuation

Reclamation

General Ledger
Cash Management
Planning & Budgeting
Governance & Compliance
Consolidations &
Reporting

Sampling & Analysis

Parties

Dashboards

ASSETS &
COSTS
Authorization for
Expenditure
Joint Venture Accounting
Fixed Assets
Inventory
Projects
Purchasing / Procurement
Asset Maintenance

Revenue Process
PRODUCTION
ALLOCATION

REVENUE
DISTRIBUTION

31

SALES
ALLOCATION

PRODUCTION
SHARING

ORACLE
INTEGRATION

Typical PSC Structure

Gross
Production
- Royalty

- Cost Recovery

= Profit Oil
Contractor
Take
Country Take

- Income
Taxes

Production Sharing Agreements

Flexible calculation framework built around
the concept of plug and play equations
Calculates:
o Cost Recovery and carry forward
o Profit Oil
o Entitlement
o Cash
Flow o NPV
o Any
other
required
calculatio
ns

Integrated
33 with

Production Sharing Agreements

AGREEMENT

RC
HIERAR
CHY

EQUATI
ON
GROUP
EQUATI
ON
CONTEX
T

34

PRODUCTI
ON
AGREEME
NT
CONTEXT

COS
T

MONTHLY
PSA
CALCULATI
ON
CALCULAT
ED
RESULTS

LIFTIN
GS

2000

Contractor Cash Flows in

MOD

1500

1000

500

Contractor Cost OIL MOD

-500

Contractor Profit Oil

MOD CAPEX MOD
OPEX MOD

1000

Admin Overhead MOD

Bonuses MOD
Exploration Costs

1500

MOD Appraisal Costs

MOD Cum Cash Flow
in PV
2043

2042

2041

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

-2000

Revenue / Partner Balancing

Allocation of Sales
Volumes
Calculation of pricing
Index, gravity scale,
etc.

Revenue deductions
Processing,
transportation, etc.

Automated prior
period
processing
Fully integrated
36

Production

About P2 Energy
Solutions

Some of our
Customers

38

Why P2ES for Hydrocarbon

Accounting?
P2 is the largest
independent
software/data solution
company focused on
upstream oil & gas

70
0+

1,20
0+

Regional
Offices in

Tunis
and

Dubai

OIL &
GAS
CLIENT
EXPERT
- Data
STAFF Accounting - Land - Mapping
S
SOLUTI
ONS
39

- Operations

$25M Annual
R&D Investment

Hydrocarbon Accounting
Solutions for
Upstream Oil & Gas