Crude oil prices were uncharacteristically high and stable from 2016 to 2019, which led to a 280% increase in global Capex budgets. This operating strategy reflected a volume over value method. Recently, Crude Oil has dropped by 70% based on a slowing Chinese economy, a surge in US production, and OPEC production disputes. Companies are challenged to continue to increase production while driving down cost, however, operations regardless of cost is no longer the status quo. The best operating strategy is now value over volume.
The industry is suffering through one of the worst commodity price downturns in history and operators need an innovative way to enable financial discipline.The leading industry method for cost control is the Authorization For Expenditure (AFE) process; however, most clients express that these systems have poor user interfaces, slow workflow processes, and require users to understand complex General Ledger coding. These AFE complications and inefficiencies create volumes of wasted man hours and millions of dollars in lost revenue every year. Sia Partners & Appian have developed a better AFE system which speaks the language of oil & gas operations and eliminates complicated GL language and workflow processes. The objective of the AFE process is to communicate a responsible plan for employing the company’s capital, ensuring accuracy and control in reporting the results of project performance.
Real world examples of AFE Problems:
Key Functionality and Features:
With Appian's AFE Transformation application, O&G companies can streamline, track, and learn from all their AFE's.
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