There is a right way and a wrong way to share information with joint venture partners. By using a virtual private network (VPN), operators can maximize their net present value (NPV).

Partnerships and joint ventures have been part of the business landscape in the petroleum industry from the beginning. These agreements are the engine whereby risk is shared and interest is pooled to create the critical mass necessary to drill high-risk exploration wells and launch development projects. An estimated 400,000 petroleum joint ventures and partnerships exist worldwide.
Joint venture agreements, by their nature, obligate the operator to supply partners, royalty owners and a growing list of regulatory bodies with a constant flow of information. The reporting requirements can range from relatively simple well information covering a short period of time to data covering a large field development and several decades of ongoing field operations.
The information challenge
Joint venture operators are challenged to fulfill this reporting obligation while remaining focused on the primary task of producing reserves, finding new reserves and reducing the associated capital costs and operating expense. Reporting normally is a one-way push of required information to joint venture partners. It generally is considered a nonrevenue-generating activity, yet asset teams and support personnel often spend substantial time locating, compiling and sending information to partners to meet this obligation. Not only does it divert time and attention from revenue-generating activities, but the resources expended to fulfill reporting requirements often exceed the compensation the operator receives through the operating agreement.
Electronic transmission of information has provided some efficiency, especially during the past 10 years. But at the same time, these electronic capabilities have created new problems, vulnerabilities and information management challenges. The ease of electronic transfer processes, particularly e-mail with its variety of possible attachments, is allowing information to grow at a staggering rate and large volumes to be transmitted and stored in multiple locations.
Unfortunately, much of this information is rendered nearly useless because it resides on hard drives and shared network servers, where it is invisible or not readily available to those who could use it. Also, when the required information is found, the question of whether it represents the latest and most up-to-date version of the data arises. To make matters worse, multiple copies consume valuable system storage space.
Internet and intranet solutions provide convenient access and efficient storage of this information, but companies must think carefully about the resulting information security challenges. Despite the complexities, success stories are starting to emerge.
Accessing data where it resides
One petroleum company operating in several mature US basins was so mired in reporting requirements it automated the posting of information to partners through the Internet. By accessing the required information from databases via VPN connections, it changed the reporting process from a "push to the partner" process to a "pull by the partner" process. Joint venture partners were empowered to retrieve, at will, asset information to which they are entitled; they normally would receive this information through operator reports at regular intervals.
The partners can access the most current information when they need it, greatly reducing the number of special requests for information. The result to the operator has been a 15% improvement in time efficiency for the asset team, as well as a steady reduction in storage volume on the shared network drive. The information resides on a Web server, where it is stored once but accessed many times by the operator and partners (Figure 1).
One operator asset team member said, "I no longer feel like I am held hostage to another company's work processes. I used to send information to partners only to have them contact me later for another copy. Sometimes they say they can't find it, or they're not sure they are working with the right document version. Also, it's a big problem when a partner contact quits or is reassigned. Their replacement almost always requests a lot of information that I know I have already sent. Now I just send them a URL and a password and let them retrieve the information themselves."
Presenting information
Although Web technology provides a wealth of opportunities for cost and process efficiency, security and proper entitlement protocols are defining issues in selecting an Internet solution to facilitate a work process. Consider the different experiences of two managers for recent high-profile exploration wells.
Both managers enlisted service companies to distribute well information to contractors, partners and regulators during the drilling of their respective wells. On the surface one might expect similar results, but that was not the case (Table 1).
Well A. The manager of Well A rejoiced as a significant pay zone was encountered, signaling a major discovery. That joy soon turned to concern as the manager realized the critical information from the discovery was in full view of anyone with a password to the service company's Web site.
In the ensuing panic, he shut down the well information Web site to preserve the security of the information. Data confidentiality was maintained, but the manager had to revert to faxing, sending documents and files via courier and around-the-clock phone calls to relay critical information.
Management of this situation required much extra effort, when no extra time and effort should have been expended at all. It also cost the manager and his team valuable time that could have been spent planning the next steps, rather than doing damage control on previous steps.
Well B. The manager of Well B also encountered a significant show, but had a different experience with the distribution of information over the Internet. Although the same kind of sensitive information resided on the service-company Web site, the information was protected by a rigorous set of entitlements that defined what a user could access based on his role in drilling the well. Managers, exploration team members, partners, drillers, consultants, regulators, service companies and other partners all had access, but they could only view what was appropriate for
their role.
In addition, critical reference information for Well B and nearby wells also was available through entitlements. Throughout the drilling of the well, operations often were facilitated because collaboration and common reference materials were available to various members of the
exploration and operation teams.
Today the two managers are happy with their apparent discoveries, but they both face decisions on what to do with the collected well information.
Manager A has a couple of CDs that document portions of the well history, but they sit isolated from the other well and prospect information. Manager B has his information online, secure and available for access and use in planning the next well. The information also resides in a technology module that is part of a larger information management solution and can be incorporated into that solution, if Manager B so desires.
The solution
These examples are a few of many common situations where an asset team or company can exercise some control over their time to achieve greater business results.
The use of electronic joint venture solutions for distribution and sharing of information is inherently less time consuming and more cost-effective. It facilitates collaborative teamwork and results in better-informed, more timely decisions.
The increased efficiencies result in reduced cycle time, which in turn increases the project's NPV.

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