Data Model: Authorization For Expenditure
The process of managing Authorization For Expenditure (AFE) is core to practically all E&P companies. Authorizations For Expenditure (AFEs) are typically raised by companies to provide a draw down against the broader capital budgets in relation to specific projects and account for the budget, projected field costs and actual costs based on a standard chart of accounts which depends on the type of project. AFEs are typically circulated between all concerned parties for review and approval prior to capital expenses being accrued. The process of managing AFEs also includes the working interests of partners in joint ventures which are so typical in the upstream sector of the oil and gas industry.
The current PPDM 3.8 and 3.9 data models lack the detail necessary for storing details of AFEs and their associated chart of accounts. For example: the various tangible and intangible costs for executing a project along with salient information regarding the status and timing of the expenditure plan.
The requirement is to extend the PPDM 3.9 data model to capture the AFE information that engineers and finance people typically use for reviewing and approving major capital projects as well as tracking costs associated with the execution of such projects in the field. The desired outcome is for the PPDM data model to support the capture and management of the key information required to analyze and optimize capital spending and provide sufficient information for operating companies to feedback into their planning loop for continuous improvement in cost efficiency.