Assurance of the Asset Action Plan: A Strategic Endeavor Toward a Credible and Reliable Forecast

Abstract

Oil companies are facing several challenges from external and internal environment like volatility of crude oil price, capex reduction, subsurface uncertainty, delay in the surface facilities etc. that impacts the long-term strategic plans. Kuwait Oil Company (KOC)'s annual Asset Action Plan (AAP) operationalizes the long-term strategy of the company assurance of annual AAP is key for having a credible forecast and meeting long term goals. A robust Corporate Assurance process has been developed that consists of workflows that will guarantee company's ability to develop and execute credible field development plans. A review on proper planning, execution and alignment of different business processes is required during assurance of Asset Action Plan. This assurance process provides confidence to the management in approving the AAP. Opportunity based Asset Action Plan (AAP) process is the backbone of KOC's annual business planning and portfolio management system. This allows alternative portfolio choices and management can make the right decision. The opportunity will provide consistency and clarity of the Portfolio constituents and common rational basis for investment decision making and allow for alignment between the KOC major business processes. AAP process is carried out annually and is initiated through high level business guidelines management. During finalization of AAP, an assurance review by corporate technical team for large national companies having multiple assets is considered as best practices that support management in approving the AAP and to steer the company in right direction. AAP Assurance process involves reviewing the forecast with the historical performance of the reservoir, planned activities, expected outcomes from the activities, feasibility and associated cost. A systematic three stage process has been adopted to conduct AAP Assurance for reservoirs which are at different phases of development. This assurance workflow and methodology helps to align changing oil and gas scenarios, different business process, health of the reservoirs and meeting future production targets. This process ensures that proposed AAP plan will be able to deliver production target commitments and identify any gaps and propose mitigation plans. This also confirms that ongoing development plans are in alignment with facility planning. It also validates conformance of the adopted reservoir development and management workflows with global best practices (analogue reservoirs) to maximize recovery and maintaining health of reservoir.