By Henry S. Pettingill
Prior blogs of this series provided the context for assurance. This article delves into one of the most challenging aspects of assurance: balancing technological aspects of an evaluation with the human ones. This balance may sound simple, but I have found it to be a complex issue, fraught with emotions and organizational challenges.
People-process-technology framework
Shown below is the well-known ‘People-Process-Technology’ framework, first published by Leavitt (1964). In this framework, the presence of all three components is critical, as is balance between them – sometimes referred to as the ‘sweet spot’ or ‘golden triangle’. I have found this balance to be a critical success factor for any assurance or peer-review process. Let’s look at each component as they relate to prospect peer review and assurance.
technology
Prospects are based on technical data and the interpretations of those data. In this regard, I consider technology to include not only the acquisition and application of state-of-the-art technology, but also applying ‘technical know-how’ as well as considering the availability and assessment of technical data (these latter two are also dependent on people).
people
Prospects are all about data and how we interpret that data, and the proper use of statistics to unambiguously characterize the data. However, all this is not done by computers, it’s done by human beings, who apply their expertise to interpretations, judgements, and decisions all along the way—so in the end, prospects are inventions of people.
You can’t have a prospect without physical data to describe it and allow understanding of risks and uncertainties, nor can you have a prospect without a person to aggressively seek all necessary relevant data, make observations, and interpretations. And only humans can properly integrate all the pieces of technology and quantification, all the while making judgements under conditions of uncertainty. Furthermore, a prospect is only as good as the prospector’s technical abilities, intuition, and objectivity, so this component relies heavily on the experience and training of your staff. Finally, prospects do not have feelings, but people do, and recognizing and respecting that all prospects are ‘someone’s baby’ is a make-or-break aspect of assurance.
process
Underlying any E&P decision is the process that results in that decision. Subsurface excellence depends on having a consistent and well-understood process. It has been well-demonstrated that exploration success starts with selecting the best prospects from an inventory (Pettingill, 2005). That in turn requires discipline and consistency within the selection process. Equally important is the learning process and associated predictive performance tracking, which provide the foundation of positive change. Finally, a process is only sound when it is communicated effectively and transparently to those who must follow it (back to people!). In this regard, simplicity is a great friend.
framework balance
Now let’s look at what happens when our diagram lacks balance.
people and technology dominate over process
This results in inconsistency which by itself usually leads to poor project selection, continued pursuit of inferior prospects (which burns resources!) and finally inhibits organizational learning. Another aspect that can be lost is diversity of opinions, which reduces bias and often launches healthy debates that identify issues that would otherwise be missed. Often this results in dry holes.
people and process dominate over technology
When the underlying technology, understanding of it, or application of it is not sound, the final evaluation product (upon which decisions are made) will be inferior and unsound. More dry holes!
process and technology dominate over people
This leads to a host of issues, both short-term and long-term. In the immediate term, peer review meetings can become mechanical, which in turn have several effects: 1) the intuition of the subsurface professionals is not captured, 2) the meeting can have a backdrop of fear, hostility, reluctance to share thoughts, or even 3) tactics that ultimately undermine the process. Longer term effects can set in, such as lack of confidence in the assurance process (or even resentment of it) and staff morale issues – even to the point of causing staff attrition and with it, loss of subsurface ‘know-how’ and excellence. More dry holes!
examples
Have you ever witnessed examples of these three ‘imbalance’ scenarios? I certainly have, and in every case, they resulted in an unfortunate decision that I wish I had not been a part of. In more than one case, a dry hole resulted that I realized should not have been drilled.
In summary, if our assurance process is to succeed, we must hit the sweet spot of People, Process and Technology. If we fail to concentrate on all three, it will be very difficult for us to achieve sustained excellence.
next time
The next article in the series, contributed by James Handschy who was responsible for the subsurface Assurance process at ConocoPhillips, will address how corporate culture can influence the assurance process.
references
Leavitt, H. J., 1964, Applied Organization Change in Industry: structural, technical and human approaches. In W. Cooper, H. J. Leavitt & M. W. I. Shelly (Eds.), New Perspectives in Organization Research, pp. 55-71, New York: John Wiley.
Pettingill, H.S., 2005, Delivering on exploration through Integrated portfolio management: The whole is not just the sum of the holes, SPE AAPG Forum, Delivering E&P Performance in the Face of Risk and Uncertainty: Best Practices and Barriers to Progress. Galveston, Texas, Feb. 20-24, 2005.
about the author
Henry was the head of technical assurance for Repsol from 1996 until 2000, and for Noble Energy from 2002 until 2013. He was an Explorationist with Shell, Repsol and Noble for 35 years before joining Rose & Associates in 2018, where his primary role is chairman the company’s DHI Consortium.