Upstream oil is made up of operators responsible for the exploration and production of hydrocarbons and the oilfield service industry that helps maintain it. The oil servicing business thrives as a symbiotic part of the industry.
It’s a familiar story, a workover is called to bring production back to normal. The invoice arrives a month later and needs to be verified. The pumper will rely on his ability to recall the specific event as the only way to verify the invoice. Without much or any details to confirm the invoice, you pay for it anyway. With a little data, this is where oil companies can make sure they are not overpaying for services. Tracking the service when it happens will bring assurance to the invoice and prevent fraudulent billing.
Due to the lack of transparency between operators and service providers, fraudulent billings are common in the industry. If your pumper provides the price rate and time worked when the expenditure is ongoing, you can confirm the invoice and its validity. Verifying expenditure is necessary to prevent fraudulence and can be achieved by tracking daily expenditure.
Streamlining expenses help determine the cost-effectiveness of the expenditure. Recording expenditure this way lets you compare workovers and pinpoint where might be overpaying for them without needing to search through multiple invoices.
Oil prices vary every day so it is necessary to adjust accordingly, especially in the downturn. A market analysis tool lets operators compare service costs with the market average. Though lifting costs and payouts are essential in making cost-effective decisions, having options for affordable service providers is essential.
Leveraging the vendor list will find services and rates based on your search location. Although most companies do not prioritize finding new servicers for their operation, finding new servicers can reduce expenditure by up to 60%. With a service finder tool, Petrofly helps oil producers by providing them new servicers to ensure lower operational costs. These tools leverage expenditure data to impact your bottom line.
Operators need transparency with their oilfield services and tracking expenditure is an effective method to provide it. Expenditure data can also be used to make sure operators are not being overcharged in today’s industry. For instance, using a service tracker to record time spent on the workover by the servicing crew will determine the actual time worked during a workover. This data can be used to verify the workover time on the invoice.
Operators want to trust their service providers, and service providers want to prove they can be trusted. As the complete production management software, Petrofly manages production and operational expenditure together to create that accountability. Petrofly can track expense data as it is happening to ensure accurate billings. This provides the appropriate and much-needed transparency between operators and their oilfield service providers. The downturn is an opportunity for the industry to innovate and thrive together.