Given the capital-intensive nature of the industry, KPIs help in optimizing asset utilization and managing complex projects with long lead times. Safety and environmental KPIs are particularly vital in this industry due to the high risks associated with oil and gas extraction and the potential for severe environmental impacts. KPIs enable companies to maintain regulatory compliance and oversee the safety of operations. Furthermore, in a market influenced by volatile commodity prices, KPIs are indispensable for adapting to market changes and making informed decisions to maintain competitiveness and profitability. They provide the data-driven insights necessary for the Oil & Gas sector to navigate the unique challenges it faces, from exploration to distribution.
KPI |
Definition
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Business Insights [?]
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Measurement Approach
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Standard Formula
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Asset Downtime Rate More Details |
The proportion of time that production assets are not operational due to maintenance or failures, affecting overall production efficiency.
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Helps assess the reliability and availability of assets, directing focus on maintenance strategies and operational efficiency.
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Considers percentage of time an asset is not operational due to unscheduled maintenance or breakdowns.
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(Total Downtime Hours / Total Operating Hours) * 100
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- Increasing asset downtime rate may indicate a lack of proactive maintenance or aging equipment.
- A decreasing rate could signal improved asset reliability or more efficient maintenance practices.
- Are there specific assets that consistently contribute to downtime?
- How does our asset downtime rate compare with industry benchmarks or similar operations?
- Implement predictive maintenance strategies to address potential failures before they occur.
- Invest in technology for real-time monitoring and condition-based maintenance.
- Regularly review and optimize maintenance schedules based on asset performance data.
Visualization Suggestions [?]
- Line charts showing asset downtime rate over time to identify trends and seasonal patterns.
- Pareto charts to prioritize the most significant contributors to asset downtime.
- High asset downtime rates can lead to production delays, revenue loss, and increased maintenance costs.
- Chronic downtime may indicate underlying issues with asset reliability or maintenance practices.
- Enterprise Asset Management (EAM) software for tracking maintenance activities and asset performance.
- Condition monitoring technologies such as vibration analysis or thermography for early fault detection.
- Integrate asset downtime data with production planning systems to minimize the impact on production schedules.
- Link asset downtime tracking with procurement systems to ensure timely availability of spare parts for maintenance.
- Reducing asset downtime can lead to increased production output and overall operational efficiency.
- However, investing in proactive maintenance may initially increase costs but can lead to long-term cost savings and improved asset lifespan.
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Breakeven Oil Price More Details |
The price of oil per barrel at which the company breaks even on its operations, providing insight into economic sustainability at various market prices.
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Provides insight into the financial viability of oil production at different market prices, influencing investment decisions.
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Takes into account the oil price at which total revenues received equals the costs associated with production.
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Total Costs / Total Production Volume
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- Increasing breakeven oil prices may indicate higher production costs or lower demand for oil products.
- Decreasing breakeven oil prices could signal improved operational efficiency or a rise in oil prices.
- What are the main cost drivers that contribute to our breakeven oil price?
- How does our breakeven oil price compare with industry averages or with our competitors?
- Implement cost-saving measures such as optimizing production processes and reducing overhead expenses.
- Diversify revenue streams by investing in alternative energy sources or expanding into related industries.
- Stay informed about market trends and geopolitical events that could impact oil prices.
Visualization Suggestions [?]
- Line charts showing the trend of breakeven oil prices over time.
- Comparative bar charts displaying breakeven oil prices across different operational regions or projects.
- High breakeven oil prices may lead to reduced profitability and financial instability.
- Dependence on a single revenue source (oil) can expose the company to significant market volatility.
- Financial modeling software to analyze the impact of different cost scenarios on breakeven oil prices.
- Market intelligence platforms to track oil price trends and anticipate market movements.
- Integrate breakeven oil price analysis with risk management systems to assess the financial impact of oil price fluctuations.
- Link breakeven oil price tracking with supply chain management to optimize procurement and production processes.
- Lowering the breakeven oil price can improve the company's financial health and competitiveness in the market.
- However, reducing costs may also affect the quality of operations and the ability to invest in future growth opportunities.
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By-product Valorization Rate More Details |
The percentage of by-products from the GTL process that are captured and sold or reused, contributing to the overall profitability and sustainability of the plant.
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Indicates how effectively a company is utilizing its by-products, potentially reducing waste and creating additional revenue streams.
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Considers the percentage of by-products that are converted into valuable products.
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(Value of By-products Produced / Total By-products Generated) * 100
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- The valorization rate tends to increase over time as processes and technologies improve, indicating better capture and utilization of by-products.
- A decreasing valorization rate could signal inefficiencies in the capture and reuse of by-products, potentially impacting profitability and sustainability.
- What are the main by-products generated in the GTL process and how are they currently being managed?
- Are there any specific challenges or bottlenecks in capturing and selling/reusing by-products effectively?
- Invest in research and development to explore new markets and applications for by-products.
- Optimize processes to maximize the capture and quality of by-products for sale or reuse.
- Explore partnerships with other industries or companies to find innovative ways to valorize by-products.
Visualization Suggestions [?]
- Line charts showing the valorization rate over time to identify trends and fluctuations.
- Pie charts to visualize the distribution of by-products and their utilization methods.
- A low valorization rate may lead to increased waste and environmental impact, as well as missed revenue opportunities.
- Dependence on a single market for by-product sales can pose a risk if that market experiences downturns or disruptions.
- Data analytics platforms to track and analyze the valorization rate and its contributing factors.
- Resource planning software to optimize the allocation of by-products for reuse or sale.
- Integrate valorization rate tracking with production and operations systems to ensure by-products are captured at the source.
- Link with financial systems to accurately measure the impact of by-product sales on overall profitability.
- Improving the valorization rate can lead to increased profitability and reduced environmental impact, but may require initial investment in process improvements.
- A declining valorization rate can affect the overall sustainability and social responsibility of the plant, impacting stakeholder perceptions and relationships.
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CORE BENEFITS
- 63 KPIs under Oil & Gas
- 15,468 total KPIs (and growing)
- 328 total KPI groups
- 75 industry-specific KPI groups
- 12 attributes per KPI
- Full access (no viewing limits or restrictions)
FlevyPro and Stream subscribers also receive access to the KPI Library. You can login to Flevy here.
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Capital Cost Per Barrel More Details |
The capital expenditure required to produce one barrel of liquid hydrocarbon, a key metric for assessing the financial efficiency of GTL projects.
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Allows for the evaluation of the capital efficiency of exploration and production activities.
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Measures the capital investment required to produce one barrel of oil equivalent (BOE).
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Total Capital Costs / Total Barrels of Oil Equivalent Produced
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- Increasing capital cost per barrel may indicate rising project expenses or technological challenges.
- Decreasing cost could signal improved project efficiency, cost-saving measures, or technological advancements.
- What are the primary cost drivers contributing to the capital cost per barrel?
- How does our capital cost per barrel compare with industry benchmarks or similar projects?
- Implement advanced project management techniques to optimize resource allocation and minimize cost overruns.
- Leverage technological innovations to enhance production efficiency and reduce overall project expenses.
- Regularly review and renegotiate supplier contracts to secure favorable pricing and terms.
Visualization Suggestions [?]
- Line charts to track the trend of capital cost per barrel over time.
- Cost breakdown pie charts to visually represent the distribution of expenses contributing to the capital cost per barrel.
- High capital cost per barrel can negatively impact project profitability and return on investment.
- Significant cost fluctuations may indicate financial instability or inefficiencies within the project.
- Cost estimation software such as Aspen Capital Cost Estimator (ACCE) to accurately forecast project expenses.
- Project management platforms like Oracle Primavera or Microsoft Project for efficient cost tracking and resource management.
- Integrate cost per barrel analysis with project scheduling and resource allocation systems to align financial and operational planning.
- Link cost per barrel data with procurement and supply chain management systems to optimize purchasing decisions and supplier relationships.
- Reducing capital cost per barrel may lead to improved project economics and financial performance.
- However, aggressive cost-cutting measures could potentially compromise project quality and long-term sustainability.
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Capital Expenditure (CAPEX) More Details |
The total funds used by a company to acquire or upgrade physical assets such as plants, property, and equipment, informing investment strategy.
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Provides insight into the company's investment in maintaining and growing its asset base, which can indicate growth potential.
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Considers funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, or equipment.
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Total Expenditure on Physical Assets (excluding operational expenses)
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- CAPEX tends to increase during periods of industry expansion or when companies are investing in new technologies or infrastructure.
- A decreasing trend in CAPEX could indicate a more conservative approach to investment, potential economic downturn, or a shift towards operational efficiency.
- What specific projects or assets are driving the majority of our CAPEX?
- How does our CAPEX compare to industry peers or historical benchmarks?
- Regularly review and prioritize capital projects to ensure alignment with overall business strategy.
- Consider alternative financing options or partnerships to fund large capital expenditures and reduce financial strain.
- Implement robust project management and cost control processes to minimize cost overruns and delays.
Visualization Suggestions [?]
- Line charts showing CAPEX trends over time.
- Stacked bar charts comparing CAPEX allocation by asset type or business unit.
- Excessive CAPEX without commensurate returns can lead to financial strain and reduced profitability.
- Underinvestment in CAPEX may result in outdated infrastructure, reduced competitiveness, or operational inefficiencies.
- Enterprise resource planning (ERP) systems to track and manage capital projects and expenditures.
- Financial modeling and analysis tools to evaluate the potential return on investment for proposed capital projects.
- Integrate CAPEX tracking with financial planning and budgeting processes to ensure alignment with overall financial goals.
- Link CAPEX data with asset management systems to monitor the performance and maintenance of acquired assets.
- Increasing CAPEX may lead to short-term reductions in profitability but can drive long-term growth and competitiveness.
- Reducing CAPEX may free up resources in the short term but could result in deferred maintenance and decreased asset quality over time.
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Carbon Conversion Efficiency More Details |
The percentage of carbon from the natural gas feedstock that is converted into liquid products, with higher rates indicating less carbon waste or emissions.
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Highlights the effectiveness of processes in utilizing carbon, which can inform carbon management strategies.
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Measures the percentage of carbon in feedstock that is converted into valuable products.
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(Total Carbon in Products / Total Carbon in Feedstock) * 100
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- An increasing carbon conversion efficiency may indicate improved technology or process optimization.
- A decreasing rate could signal operational inefficiencies or the need for emissions control measures.
- What specific steps in the conversion process contribute to carbon waste?
- How does our carbon conversion efficiency compare to industry standards or best practices?
- Invest in advanced catalytic technologies to improve carbon conversion rates.
- Implement process modifications to minimize carbon byproducts.
- Explore carbon capture and storage (CCS) solutions to reduce emissions.
Visualization Suggestions [?]
- Line charts showing the trend of carbon conversion efficiency over time.
- Comparison bar charts of carbon conversion efficiency across different production facilities.
- Low carbon conversion efficiency can lead to increased environmental impact and regulatory scrutiny.
- Failure to address carbon waste may result in reputational damage and stakeholder disapproval.
- Environmental monitoring software to track and analyze carbon emissions and conversion efficiency.
- Process simulation tools to optimize conversion processes and identify improvement opportunities.
- Integrate carbon conversion efficiency data with environmental management systems to align with sustainability goals.
- Link with production planning systems to ensure efficient resource allocation and emissions control.
- Improving carbon conversion efficiency can lead to reduced environmental impact and potential cost savings.
- However, changes may require significant capital investment and process adjustments.
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In selecting the most appropriate Oil & Gas KPIs from our KPI Library for your organizational situation, keep in mind the following guiding principles:
It is also important to remember that the only constant is change—strategies evolve, markets experience disruptions, and organizational environments also change over time. Thus, in an ever-evolving business landscape, what was relevant yesterday may not be today, and this principle applies directly to KPIs. We should follow these guiding principles to ensure our KPIs are maintained properly:
By systematically reviewing and adjusting our Oil & Gas KPIs, we can ensure that your organization's decision-making is always supported by the most relevant and actionable data, keeping the organization agile and aligned with its evolving strategic objectives.