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Harnessing Data Analytics for Compliance Risks Mitigation in the Oil & Gas Industry

Addressing compliance challenges in the oil & gas sector using data analytics. Presentation covers business context, benefits, and recommendations for improvement. Features practical examples and benefits of implementing ACL for data analytics systems.

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Harnessing Data Analytics for Compliance Risks Mitigation in the Oil & Gas Industry

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Presentation Transcript

  1. Corvelle Drives Concepts to Completion

  2. Monitor Compliance Risks Through Data Analytics IIA Calgary Luncheon 15 September 2010

  3. Yogi SchulzBiography • Partner of Corvelle Consulting • Information technology related management consulting • Microsoft Canada columnist & CBC Radio host • PPDM Association board member • Industry presenter: • Project World - 4 years • CIPS Informatics - 7 years • PMI - Information Systems SIG - 2 years • Convergence - 4 years • PPDM Association - several years

  4. PresentationOutline • Business Context • Data Analytics System • Development description • Benefits • Conclusions • Recommendations • Discussion

  5. Business Context • Regulator publishes requirements • Oil & gas industry expected to comply • Some requirements relate tomeasurement and reporting

  6. Business Problem • Current situation: • Challenge maintaining compliance audit coverage • Suspicion of poor compliance • Goals to: • raise level of assurance over state of compliance • raise level of compliance • Approach: • Apply CSOX audit concepts to compliance audit • Improve monitoring through data analytics

  7. Oil & Gas IndustryHigh-Level Data Flow FieldProductionOperations FinancialAccounting FieldDataCapture Alberta’soil & gasregulator RevenueAccounting ProductionAccounting AlbertaEnergy PetroleumRegistryAlberta

  8. Compliance AuditPhilosophy “Trust, but verify” - Ronald Reagan

  9. Continuous auditing • A method used by auditors to perform audit-related activities on a continuous basis • Changes the audit paradigm from periodic reviews of a sample of transactions to ongoing audit procedures that test 100 % of transactions resulting in timely and comprehensive insights into risk and control issues

  10. Data Analytics SystemOverview InputDatastores Data Extract NoncomplianceIndicators ComplianceAnalytics

  11. Data Analytics SystemData Extract Data Extract Alberta’soil & gasregulator FieldInspectionSystem ExtractA - n

  12. Data Analytics SystemData Analytics Extract A ComplianceAnalytics NoncomplianceIndicators Extract B ComplianceAnalytics

  13. Data AnalyticsExamples • High metering difference • Production rate trending up • Puzzling trends in gas flare, fuel, vent, meter difference • Gas production greater than oil production for an oil well • High or low fuel consumption

  14. Data Analytics SystemReporting Noncompliance Indicators OperatorReports Reports ProductionAudit TeamReports

  15. Data Analytics SystemArchitecture Master Reports Data Extract ComplianceAnalytics Transform

  16. Data Analytics System Development • Building the system - a part-time effort • ACL dramatically reduces the amount of code • Significant architecture, design and testing effort

  17. Benefits of ACL forData Analytics development • Cost-effective and rapid development • Adaptable to change as source datastores change • Adaptable to change ACL Compliance Analytics Routines • Encapsulates expert understanding of data relationships in complex datastores • Simple validation of candidate compliance assessment indicators

  18. Benefits of ACL forData Analytics system operation • Formal, fully auditable system • Fully automated operation • Scalable solution

  19. Business benefits of this Data Analytics activity • Assurance over the state of compliance • Feedback to oil & gas operators • Improved data quality for all stakeholders • Comprehensive auditing • Greatly increased auditor productivity • Independent of skilled data analysts

  20. Conclusions • Data Analytics addressed our business challenge • ACL enabled development and operation of our Data Analytics System

  21. Recommendations • Investigate opportunities to employ Data Analytics within your organization • Consider ACL as the technology to implement Data Analytics • Consider ACL for batch Data Analytics applications

  22. Next Steps • Identify datastores to examine • Experiment to identify potential data anomalies • Design, build and test a Data Analytics system • Collect dollars revealed

  23. Questions &Discussion Can you help us improve our compliance? Please fill out evaluation form

  24. Monitor Compliance RisksThrough Data Analytics Corvelle Consulting 700, 205 - 5 Ave. S. W. Calgary, Alberta T2P 2V7 Phone: (403) 249-5255 E-mail: YogiSchulz@corvelle.com Web: www.corvelle.com Yogi Schulz Partner of Corvelle Consulting Information technology related management consulting Microsoft Canada columnist & CBC Radio host Industry presenter PPDM Association board member

  25. Bibliography • Continuous Auditing

  26. Noncompliance Indicator FileRecord Layout • Noncompliance Indicator id • Production Year/Month • Operator BA id • Facility id • Noncompliance supporting data

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