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How assurance can aid businesses to deliver greater value

When people want assurance, they’re often looking for certainty. But in the oil and gas industry, and particularly in subsurface disciplines, certainty is rarely a factor you can count on. What you actually need are experts who can help you manage and navigate varying degrees of uncertainty.

In subsurface, assurance isn’t about checking you have the right answers. It’s about exploring alternatives. It’s a way of helping technical teams – and business leaders – to realise that the field they’re playing in is greater than their own perspective allows them to see.

This doesn’t make assurance any less important – it actually means it’s all the more vital. When you’re making upstream decisions, you’re risking the company capital, and if you don’t invest in assurance upfront, the consequences can be devastating.

 

There are three types of assurance

Broadly speaking, there are three types of assurance, all of which Rockflow provides:

The first is provided when testing whether a tool or piece of work is fit-for-purpose. It needs someone with deep technical experience, focused on a model or measurement to assess how accurate it is. An example could be assessing a simulation model, or checking a seismic depth conversion.

The second is an assessment on whether you’ve met a standard or defined process. The example most will be familiar with is the reserves standard. Assurance tests whether the reserves standard is met and can identify issues in the current booking or opportunities for further bookings.

The third is a kind of assurance that many small-to-mid-sized companies forget to seek out early enough: assurance that the work of the technical team supports the business decisions and investments the company is making.

This third type of assurance is far more open-ended, but can have a significant impact on the business.

One type of assurance can lead to another.

You might begin by asking one very specific question – for example, are the calculations informing our field plan technically correct –  but, with the right consultants providing assurance, this can lead to other questions about the business decision being supported.

For instance, one company initially asked us to provide assurance on their seismic depth conversions but we ended up exploring the many different ways they could drill a well, since that was more pertinent to the decision the company was making.

Ultimately this kind of assurance can be the difference between making a right or flawed commercial decision, or between correctly assessing or misvaluing a business opportunity. Without assurance, bias will go unchecked. This is not to say your teams are untrustworthy without assurance, it’s simply to say every human being is subject to bias. And anything you can do to reduce the impact of that bias is going to be a lifesaver, potentially literally.

 

How we overcome bias through coaching

If this business assurance is done too late, it can result in a late project change or delay to a business decision. This can be expensive and provide a significant loss of reputation and value.

So this type of assurance is best done early in the process by technical assurance experts experienced in business delivery and coaching. Not so they can offer a second opinion, necessarily, but so they can begin systematically asking questions and coaching your technical teams through the business decision process, supporting decision-making without negating the hard work that has already been done.

Your people should be proud of their work

That said, the hard work that’s already been done should come with a disclaimer. Your people should be proud of their work but sometimes the amount of time you’ve put into a project can skew your judgement. That’s just human nature.

Putting a lot of work into a single model or study can inhibit us from seeing alternatives or the wider range of possible outcomes. For example, if an analyst has completed a brilliant piece of technical work, they’re unlikely to want to repeat the same process for three separate outcomes. Or if a reservoir engineer has developed a technical description of a reservoir, they might be reluctant to acknowledge there could be a wide range of equally valid descriptions.

Here the value that assurance can bring is to help the team identify and value a range of possible scenarios, to test the robustness of the project or business decision in the face of subsurface uncertainty.

 

Our organisations can become biased too

On a business scale, once you’ve got people aligned to a project it can take on a life of its own, and it’s difficult to stop that momentum the longer it’s allowed to build.

Over the years, we’ve seen that subsurface teams tend to have an inverse degree of influence on the project in relation to the amount of money already spent on it. Early on, their insight can shift an organisation’s rudder so it avoids the iceberg. If it’s late in the day, there might not be enough time or willingness to turn.

 

The Rockflow approach to assurance

When Rockflow steps in to complete assurance, we don’t want to act as another layer of management, or as a kind of exam invigilator. We focus on questions rather than answers, we coach teams, and we facilitate conversations. Why did you choose this standard? What decision are you trying to make? What logic did you go through to reach this decision?

The advantage of this is that it provides more than a one-time assurance event; it also builds the expertise and capacity of your team, so that you continue to benefit for the long term. The process ensures they are less likely to get stuck in their biases, both in their current project and also in projects to come.

Unfortunately, as we found in one case of sticky oil, we’re often not called in when businesses are readying to make an important decision. Instead, we’re called in when an element of the plan – the flow assurance, the well design, the fracking process – has already failed. At that stage, after checking the situation, we often have to be bearers of bad news.

Assurance is a service you’re far better off bringing in while a decision is still forming and the work is still maturing. At that point, you’ve not only got a greater chance of impacting the value of the project, you’ve got a far greater chance of hearing good news in the future.

To learn more about how we can support you, take a look at our technical assurance services.

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