EP00 - Introducing the E&P Business
Shell Learning Centre
INTRODUCTION Contents A.. A
ABOUT THIS BOOK ................................................................... 8
B.
UNCERTAINTY UNCERT AINTY .......... ...................... ........................ ....................... ....................... ........................ ................. ..... 8
C.
SAFETY ............ ....................... ....................... ........................ ....................... ....................... ........................ .............. 8
D.
ENVIRONMENT ENVIRONM ENT ............ ........................ ........................ ....................... ....................... ........................ .............. 8
E.
QUALITY ........... ....................... ........................ ........................ ....................... ....................... ....................... ........... 8
F.
EXPLORATION EXPLORA TION & PRODUCT PRODUCTION ION PHASES ............ ........................ ........................ .............. .. 9
G.
GENERAL BUSINE BUSINESS SS PRINCIPLE PRINCIPLES S ........... ...................... ....................... ........................ ............... ... 9 OBJECTIVES ...................................................................................... .......................................................................................................................... .................................... 9 RESPONSIBILITIES .............................................................................. .................................................................................................................. .................................... 9 ECONOMIC PRINCIPLES PRINCIPLES................................................................................. ...................................................................................................... ..................... 10 VOLUNTARY VOLUNT ARY CODES OF CONDUCT CONDUCT.............................................................................. ..................................................................................... ....... 10 BUSINESS INTEGRITY ...................................................................................... .......................................................................................................... .................... 10 POLITICAL ACTIVITIES ...................................................................................... .......................................................................................................... .................... 10 ENVIRONMENT ............................................................................... .................................................................................................................. ................................... 11 GRANTS AND GENERAL COMMUNITY PROJECTS ................................................................ 11 INFORMATION INFORMA TION ................................................................................ ................................................................................................................... ................................... 11
H.
OVERVIEW OVERVIE W OF CONTENT CONTENTS.................... S................................ ........................ ....................... ............. 11
© 2001 Shell International Exploration and Production B.V.
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A. ABOUT THIS BOOK This book provides material that is complementary to that covered during the EP00 module of Shell’s training programme. It provides background material to support the course work and allows you to review topics at a later date. However, it is no substitute for the experiences of the EP00 course itself! Several themes run throughout the training programme:• Integrating technical disciplines under a common business focus. • Uncertainty, and how to cope with it. • Safety, care for the environment, and quality as fundamental attitudes controlling our actions. B. UNCERTAINTY The Exploration and Production business operates in a highly uncertain environment. By their very nature it is impossible to know more than a few key facts about oil and gas reservoirs. The gaps in our knowledge must be filled in using assumptions that are based on general physical principles, analogy with reservoirlike features on the present surface of the Earth and experience of how reservoirs have behaved in the past. When faced with the problem of how a reservoir should be developed, there is rarely a single "correct" solution. To address this type of problem requires a major mental shift from the academic style of thinking practiced at most universities. C. SAFETY Safety is an attitude. It is not something you can learn as a separate topic, but rather it is something which influences how you think about everything else. Everyone within the company is responsible for his or her own safety. Each employee also has a responsibility to ensure the success of the company's safety programme by reporting and reducing the number of accidents and unsafe incidents. In a sense this whole training programme is about safety. You can only avoid unsafe acts if you understand what you are dealing with, and recognize that which you do not know. Recognizing that an act is unsafe is not enough - you must also have the motivation and knowledge to do something about it. D. ENVIRONMENT Protection of the environment is "good business". We can expect to lose business to any competitor who is perceived to be more environmentally aware than us. Hence there is a business need to behave in a socially responsible manner and to have the ability to demonstrate this in order to allay any unfounded fears on the part of the public. Being open and honest about the environmental consequences of Shell's activities will help to build confidence and credibility. Environmental awareness is an attitude that cannot be decreed into existence. Environmentally sound designs and practices require knowledgeable staff who are alert to the environmental consequences of their actions. The company would like to develop its own standards in advance of legal requirements. Discussions with authorities must be backed by a sound scientific understanding of the real impact of our operations on the environment. We would like to avoid future liabilities by :• reducing contaminants in effluents and wastes. • careful supervision of contractors. • good monitoring and recording procedures. • restoring land before abandoning a site. E. QUALITY Quality can be summed up in one phrase - "conformance to customer requirements". In this context, "customer" does not only mean a person outside our organisation who buys our products, but embraces every individual employee receiving a service from another. We all have customers for our work. "Requirements" must be negotiated and agreed with the customer. Much the same idea is expressed on a more technical level in engineering design, where great attention is paid to "fitness for purpose". Our products should do what they are supposed to do, no more and no less. 8
© 2001 Shell International Exploration and Production B.V.
E P00 - In t roduc in g th e E &P B usi ne s s
S he ll Le ar n in g Cen t re
Most people are already familiar with the idea of being efficient in their work. Quality requires that we are also effective. The difference between effectiveness and efficiency can be neatly summed up as:• Effectiveness - doing the right thing • Efficiency - doing the thing right first time F. EXPLORATION & PRODUCTION PHASES The following show the main phases within the E&P organisation that would be involved in the exploration & production business discussed during this training programme, along with the various parties that will be driving the activities. Other Business support groups will supplement these technical groups in assuring good business management. These would include Corporate Management, Personnel & Skill Management, Contracting & Procurement, Legal, Business Planning & Development , Finance, HSE Management, Information Technology Management and Quality Management.
G. GENERAL BUSINESS PRINCIPLES The following sections are taken in full from the "Statement of General Business Principles" published by the Royal Dutch/Shell Group of Companies.
Objectives The objectives of Shell companies are to engage efficiently, responsibly and profitably in the oil, gas, chemicals, coal, metals and selected other businesses, and to play an active role in the search for and development of other sources of energy. Shell companies seek a high standard of performance and aim to maintain a long term position in their respective competitive environments.
Responsibilities Four areas of responsibility are recognized: a) To shareholders To protect shareholders' investment and provide an acceptable return. © 2001 Shell International Exploration and Production B.V.
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b) To employees To provide all employees with good and safe conditions of work, good and competitive terms and conditions of service; to promote the development and best use of human talent and equal opportunity employment; and to encourage the involvement of employees in the planning and direction of their work, recognizing that success depends on the full contribution of all employees. c) To customers To develop and provide products and services which offer value in terms of price and quality, supported by the requisite technology and commercial expertise. There is no guaranteed future: Shell companies depend on winning and maintaining customers' support. d) To society To conduct business as responsible corporate members of society, observing applicable laws of the countries in which they operate giving due regard to safety and environmental standards and societal aspirations. These four areas of responsibility are seen as an inseparable whole.
Economic Principles Profitability is essential to discharging these responsibilities and staying in business. It is a measure both of efficiency and of the ultimate value that people place on Shell products and services. It is essential to the proper allocation of corporate resources and necessary to support the continuing investment required to develop and produce future energy supplies to meet consumer needs. Without profits and strong financial foundation it would not be possible to fulfil the responsibilities outlined above. Shell companies work in a wide variety of social, political and economic environments over the nature of which they have little influence, but in general they believe that the interests of the community can be served most efficiently by a market economy. Criteria for investment decisions are essentially economic but also take into account social and environmental considerations and an appraisal of the security of the investment.
Voluntary Codes of Conduct Policies of Shell companies are consistent with the two existing internationally agreed codes of conduct for multinational enterprises, namely the OECD Declaration and Guidelines for International Investment and Multinational Enterprises and the ILO Tripartite Declaration of Principles.
Business Integrity Shell companies insist on honesty and integrity in all aspects of their business. All employees are required to avoid conflicts of interest between their private financial activities and their part in the conduct of company business. The offer, payment, soliciting and acceptance of bribes in any form are unacceptable practices. All transactions on behalf of a Shell company must be appropriately described in the accounts of the company in accordance with established procedures and be subject to audit.
Political Activities a) Companies Shell companies endeavour always to act commercially, operating within existing national laws in a socially responsible manner, abstaining from participation in party politics. It is , however, their legitimate right and responsibility to speak out on matters that affect the interests of employees, customers, and shareholders, where they have a contribution to make that is based on particular knowledge. b) Political payments As a policy Shell companies do not make payments to political parties, organisations or their representatives. c) Employees Where employees, in their capacity as citizens, wish to engage in activities in the community, including standing for election to public office, favourable consideration is given to their being enabled to do so where this is appropriate in the light of local circumstances. 10
© 2001 Shell International Exploration and Production B.V.
E P00 - In t roduc in g th e E &P B usi ne s s
S he ll Le ar n in g Cen t re
Environment It is the policy of Shell companies to conduct their activities in such a way as to take foremost account of the health and safety of their employees and of other persons, and to give proper regard to the conservation of the environment. In implementing this policy Shell companies not only comply with the requirements of the relevant legislation, but promote in an appropriate manner measures for the protection of health, safety and the environment for all who may be affected directly or indirectly by their activities. Such measures pertain to safety of operations carried out by employees and contractors; product safety; prevention of air, water and soil pollution; and precautions to minimise damage from such accidents as may nevertheless occur.
Grants and General Community Projects The most important contribution that companies can make to the social and material progress of the countries in which they operate is in performing their basic activities as efficiently as possible. In addition the need is recognized to take constructive interest in societal matters which may not be directly related to the business. Opportunities for involvement - for example through community educational or donation programmes - will vary depending upon the size of the company concerned, the nature of the local society, and the scope for useful private initiatives.
Information The importance of the activities in which Shell companies are engaged and their impact on national economies and individuals are well recognized. Full relevant information about these activities is therefore provided to legitimately interested parties, both national and international, subject to any overriding consideration of confidentiality proper to the protection of the business and the interests of third parties and the need to avoid wasteful information exercises. Increasingly the behaviour of large companies is subject to rigourous external scrutiny. The reputation of the Royal Dutch/Shell Group of Companies depends on the existence and knowledge of clearly understood principles and responsibilities and on their observance in day to day practice in widely differing environments. Although individual operating companies may elaborate their own statements to meet their national situations, this Statement of General Business Principles serves as a basis on which companies of the Royal Dutch/Shell Group, in their operations, pursue the highest standards of business behaviour. Shell companies also promote the application of these principles in joint ventures in which they participate. H. OVERVIEW OF CONTENTS The first three chapters of the book provide a picture of what a reservoir is and how we describe it once we have found it. They also cover the sort of information that we can find out about a reservoir and also the key information that we do not know. • Chapter 2 The Reservoir • Chapter 3 Acquisition of Reservoir Data • Chapter 4 Reservoir Description
The next three chapters describe the stages in the life of an oil or gas field, and the activities which must be carried out at each stage. • Chapter 5 Appraisal Planning • Chapter 6 Development • Chapter 7 Production Operations The final two chapters outline some of the business "tools" applied to manage the various activities during the life of a field. • Chapter 8 Petroleum Economics • Chapter 9 Project Management
© 2001 Shell International Exploration and Production B.V.
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© 2001 Shell International Exploration and Production B.V.
