Case Study: Petro-Oil Imagine that you are an engineer at Petro-Oil, a mid- sized oil and gas exploration and production company with major areas of exploration located in Saudi Arabia, United Arab Emirates, Qatar and several other countries. The Board of Petro-Oil has just set an ambitious goal to be completed in the next five years: To be the largest oil and gas producer in the Middle East by the end of 2027. A quick market research inquiry shows three major competitor companies that are larger than the company you are working for. To support their new aspirations, Petro-Oil just purchased Ceylon-II, a large deep water oilfield offshore in the South China Sea. Petro-Oil's management team has hired you to do a diagnostic of the company's current portfolio, operations, and organization to help them understand what they need to do to achieve this goal. Key points and assumptions 1. Production is generally correlated with reserves 2. Assume the reserves of each of the assets are exactly at the same rate of depletion 3. Assume that all competitors continue to seek additional reserves in the Pacific region 4. The current existing production rates in the area are significantly higher than the client's production rate Analysis The current extraction rate of Competitors A, B, and C are much higher than the company you work for and hold, at a minimum, 10% extraction rate. The company's current production rate needs to increase and the new asset has to meet the current standard of 10% extraction rate. Further exploration in the area to gain new assets for additional production is key for growth and to increase the extraction rate. Even with these two current assets, the company's current reserves are still less than the region is the largest producer. Q Define the problem through a technique that you have learned in the workshop. Q What are the causes of this problem and which technique can help you define these causes? Q How can you solve this problem and what recommendations can you give your company? Details your thought process that has helped you reach this conclusion. Case Study: Petro-Oil Imagine that you are an engineer at Petro-Oil, a mid- sized oil and gas exploration and production company with major areas of exploration located in Saudi Arabia, United Arab Emirates, Qatar and several other countries. The Board of Petro-Oil has just set an ambitious goal to be completed in the next five years: To be the largest oil and gas producer in the Middle East by the end of 2027. A quick market research inquiry shows three major competitor companies that are larger than the company you are working for. To support their new aspirations, Petro-Oil just purchased Ceylon-II, a large deep water oilfield offshore in the South China Sea. Petro-Oil's management team has hired you to do a diagnostic of the company's current portfolio, operations, and organization to help them understand what they need to do to achieve this goal. Key points and assumptions 1. Production is generally correlated with reserves 2. Assume the reserves of each of the assets are exactly at the same rate of depletion 3. Assume that all competitors continue to seek additional reserves in the Pacific region 4. The current existing production rates in the area are significantly higher than the client's production rate Analysis The current extraction rate of Competitors A, B, and C are much higher than the company you work for and hold, at a minimum, 10% extraction rate. The company's current production rate needs to increase and the new asset has to meet the current standard of 10% extraction rate. Further exploration in the area to gain new assets for additional production is key for growth and to increase the extraction rate. Even with these two current assets, the company's current reserves are still less than the region is the largest producer. Q Define the problem through a technique that you have learned in the workshop. Q What are the causes of this problem and which technique can help you define these causes? Q How can you solve this problem and what recommendations can you give your company? Details your thought process that has helped you reach this conclusion
