The Value of Information and success factors for a NDR

Th e Va lu e of I n for m a t ion
a n d su cce ss fa ct or s for a N D R
Source :
ht t p: / / www.agiweb.org/ ngdrs/ ndr5/ post conference/ present
at ions/ Tonst ad.ppt
Kj e t il Ton st a d
Ex plor a t ion M a n a ge r M iddle Ea st
St a t oil ASA

2

Cont ent
• Short present at ion of St at oil
• The value of I nform at ion
• I nform at ion “ front end loading”
• The Whale – “ from am bit ion t o act ion”
• The Diskos proj ect – a sim ple “ pay back” evaluat ion
• Nat ional Dat a St ores - im port ant success fact ors

1


3

This is St at oil
• A m aj or oil producer:
one m illion barrels per day

• World’s t hird largest crude oil seller
• Market s t wo- t hirds of all Norwegian gas t o
European cust om ers

• Largest ret ailer of oil product s in Scandinavia
• A group wit h clear growt h t arget s

4

Operat ions in 28 count ries

2

5


Product ion of oil and gas is rising
1 000 boe/d
6% annual
prodn growth

1600

1 350

1400
1200
1000

Oil and gas product ion
( 2003: 1 080 000 boe per day)

966

1 003


1 007

1 074

1 080

I NT 8.2%

1 120

NCS 91.8%

800
600

I ncrease in product ion
1 350 000 boe per day in 2007

400


I NT 25%

200
0
1999

2000

2001

2002

2003

Oil

2004
target


2007
target

NCS 75%

Gas

Th e va lu e of I n for m a t ion

What is t he value of dat a and inform at ion?

3

7

Quest ions and answers
• Typical quest ion
– Shall I acquire a 2D or 3D survey in t his area?
– Should I shoot seism ic or j ust drill anot her well?
– Shall I acquire a core in t his well?

– Should I by anot her st udy?
• Typical answers from your Manager
– What is t he cost
– What is it wort h
– What is t he ret urn on t his invest m ent ?

8

Value of I nform at ion
• I t ’s t he difference bet ween t he proj ect value wit h t he inform at ion and
t he proj ect value wit hout t he inform at ion, m inus t he cost of acquiring
t he inform at ion

• These im plies t hat :
– t here m ust be alt ernat ive out com e, ot herwise no inform at ion could
add value, which again is t he sam e as t o say t hat t here m ust be
uncert aint y

• I f t here is uncert aint y
– t here m ust be choices, if t here is no choices – t here is no decisions

t o be m ade, and inform at ion is in fact wort hless

4

9

I nform at ion
• According t o t he I nform at ion Theory:
– I nform at ion is defined as - “ reduct ion of uncert aint y”

Dat a and I nform at ion will reduce uncert aint y in proj ect s…!

9 A NDR should provide Dat a and I nform at ion t o Governm ent and
I ndust ry and t hereby cont ribut e t o proj ect risk m it igat ion and
hence increased value creat ion!

10

IT EFFORT COMPARED WITH SUCCESS


700

But , will t here be a difference in
overall perform ance in a count ry
wit h m uch relevant Dat a and
I nform at ion available t o t he
indust ry com pared t o a count ry
wit hout ?

600

Reserves Addition

500

400

300

200


100

0
0

50

100

150 Staff
Support
(Data Management and TAs)

200

250

300


Paras 1999

5

11

Breakthrough: The Information Orientation of an
organization is linked to performance

I nform at ion
Orient at ion

Business
Perform ance

Pe ople

I n for m a t ion

Te ch n ology


Pr oa ct ive n e ss

Se nsin g

M a n a ge m e n t

Sha r ing

Pr oce ssing

I n nova t ion

Tr a nspa r e ncy

M a int a ining

Con t r ol

Or ga n iz ing

Busin e ss
Pr oce ss
Ope r a t ions

For m a lit y

{

• M a r k e t Sh a r e Gr ow t h
• Fin a n cia l Pe r for m a n ce
• Le ve l of I n nova t ion
• Su pe r ior Com pa n y
Re pu t a t ion

Colle ct ing

I nt e gr it y

Source: Dr. Donald A. Marchand

12

6

13

I nform at ion “ Front end loading” : Cost

Gr a h a m Tile y Sh e ll Ex plor a t ion

14

The Whale – “ from am bit ion t o act ion”

7

15

I nform at ion “ Front end loading” : Va lu e

Gr a h a m Tile y Sh e ll Ex plor a t ion

16

Uncert aint y – Choice – I nform at ion - value
• I t is im port ant t o focus invest m ent s t owards inform at ion and
inform at ion syst em s t hat support decisions at t he value generat ion
“ front - end” of t he proj ect life cycle

• Governm ent s should m ake all relevant Dat a and I nform at ion available
as front - end loading t o proj ect s t o m it igat e risk and t hereby m axim ise
revenues from all invest m ent s

• Dat a and I nform at ion not in use has absolut e no value t o nobody..!
• A NDR will cont ribut e t o risk m it igat ion and value creat ion by m aking
im port ant Dat a and I nform at ion available t o governm ent and indust ry

8

Th e N or w e gia n N D R
A success st ory

18

The Diskos proj ect
M a in obj e ct ive s a s t h e y w h e r e for m u la t e d in 1 9 9 3 !

" e st a blish a j oin t , ce n t r a l da t a ba se for im por t a n t
qu a lit y a ssu r e d ge o- da t a a n d m a k e t h e m e a sily
a cce ssible for t h e u se r "

Re qu ir em e n t spe cifica t ion for Cen t r a l Ge o- D a t a St or a ge
N PD 1 1 t h Ju n e 1 9 9 3

9

19

The Norwegian NDR Challenge
Bu ild a br idge be t w e e n t h e oil com pa n ie s n e e d t o
st or e , m a n a ge a n d a cce ss r a w da t a , a n d t h e
gove r n m e n t n e e d t o bu ild a n d m a in t a in a n a t ion a l
da t a ba se

20

Post st ack seism ic wit hout NDR

Ta p
es

Operator
Partners

Processing contractor
Authorities
Archive

10

21

Post st ack seism ic wit h NDR

Processing contractor
Tapes
NDR

Ne
tw
o rk

Operator
Partners
Authorities

22

Evaluat ion of t he DI SKOS
proj ect , an exam ple
Process

Time used
in 1999

Logging in

2 min

Selecting data

5-10 min

Processing a
request
(1000km/3D
survey)
Network transfer
(13-14 Gb/hour)

10 min/2hours

Total

1 day

Time used
in1992

10 min/5hours
(8bit data)

10 days

" I n short t im e ( approxim at ely 5 m in) was t he dat a overview est ablished in t he
act ual area ( Nordland I I ) " . Fra: Vurdering av Pet roBank desem ber 96 av rådgiver Geir St øle, St at oil

11

23

Data downloaded from the Diskos
data base from 1999 to mid 2003

2500
2000
1500
Giga
byte

1000
500
0
1999

2000

2001

2002

Accumulated download 1999 – 2003 = 57 Terabyte
Total data volume in database = 60 Terabyte

2003
Source: PetroData a/s

24

Evaluat ion of t he DI SKOS proj ect
Benefits
zTangible benefit s
–reduced act ivit y in G&G ar chive
–dat a ver sion cont rol
–reduced st orage cost
–refor m at t ing
–int er nal and ex t ernal dist r ibut ion
–work st at ion for m at t ing
–reduced SW and HW inv est m ent
–reduced disk space needs
–dat a select ion and overview
–spec dat a select ion
–effect ive & safe dat a t rade
–NPD updat es ( cult ur e dat a)

zI nt angible benefit s
–fast er proj ect cycle t im e
–m ore dat a accessible
–qualit y assur ed dat a ( im pr oved
user confidence)
–m ore effect iv e dat a flow from
cont ract or s t o St at oil
–use of st andar ds
–easy r eport ing t o NPD
–easy r eport ing of dat a in license

" The maps are not beeing more correct
if you put them into a screen"

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Stortingsmann Bastesen på
Geodesi og Hydrografidagene
20.11.98

12

25

Evaluat ion of t he DI SKOS proj ect
The tangible benefits exeeds the cost!
Cost ac
Benerfit ac

94

95

96

97

98

99

00

2,1

4,8

9,1

13,9

19,2

26,2

33,5

0

0

0

5

15

42,4

69,8

Cost reduction in 1999

26

1 st , 2 nd , 3 rd and 4 t h levels of effect s
• 1 st level: I nform at ion “ front - end loading” and risk m it igat ion
• 2 nd level: Report ing and dist ribut ion of dat a t o governm ent and
part ners

• 3 rd level: More efficient St at oil int ernal access t o dat a
• 4 t h level: Overall cost reduct ion for St at oil in handling and m aint aining
huge seism ic dat a volum es

13

27

Norwegian NDR – success fact ors
• A NDR is not a m useum , nor an archive …but it should be a living dat a base…
• A NDR and t he governm ent release policy are st rongly conect ed
• High focus on get t ing dat a in, qualit y assure t he dat a and get t ing t he dat a out
of t he syst em and used by governm ent and indust ry

• Dat a qualit y ( next slide)
• Assure support / buy in from oil com panies and cont ract or com panies
• Governm ent report ing should be in line wit h com panies int ernal specs
• Governm ent report ing from oil com panies m ust be t im ely..
• Secure use ( t echnical, operat ional, st aff …build in t rust ..)
• Operat ional business m odel …t he right incent ives
• Clear on all legal and cont ract ual aspect s..predict able fut ure..
• Organisat ional – all st akeholders should be included

28

Success fact ors - Dat a qualit y
• Reliable dat a qualit y is essent ial for success.
• Knowledge about t he st at us of qualit y is m ore im port ant t han
always having highest qualit y.

• Consist ency in qualit y is im port ant
– exam ple: H igh Qualit y Log D at a in Norway,
( not highest possible qualit y but consist ent ! )

• I n t he first phase of t he Norwegian NDR a lot of effort was
required t o load seism ic according t o agreed st andard t o t he NDR.

• Difficult balance bet w een high qualit y and required effort .
– Dat a qualit y will increase over t im e in case dat a is used
frequent ly

– But a feedback loop is st rongly required

14

29

The balance bet ween “ Cooperat ion and
Com pet it ion”
• I n Norway it was decided t o coope r a t e on DM and com pe t e on
int erpret at ion.

• Good clim at e for cooperat ion in Norway.
– cult ure
• Com panies st rive t o creat e I nform at ion
– “ appreciat
by t he
ies t o gain
asym med”
et ries
in taut
hehorit
m arked
com aut
pethorit
it iveies
advant
• Norwegian
give “ages
st rong” advices, but are also willing t o
cooperat e ( good balance) .

• Trust is essent ial.
• Make sure t hat t he syst em is secure
– but don’t get “ hyst eric” about securit y.

30

Mot ivat ion
• What is t he m ot ivat ion for est ablishing a Nat ional Dat a Reposit ory in
your count ry ???

15

31

I nform at ion and t he Mult iplier Effect

Com pet it ive
Necessit y

Com pet it ive
Advant age

Technology
St rat egy

I nform at ion
St rat egy

Technology
Orient at ion

I nform at ion
Orient at ion

Cost Savings for
Efficiency

Creat ing Value for
Effect iveness

16