Demo Desert Energy: oil and gas operations day

Demo Desert Energy operates onshore gas and condensate fields in Oman and the UAE with joint-venture partners. It tracks wells, production tests, gathering, treatment, lifting schedules, royalties, field services, inventory, maintenance, HSE incidents, and sales in USD. OSERP links operational readings to inventory, partner statements, revenue, cost, asset, and statutory reporting.

1. Set up fields, wells, partners, and ownership

The field master records concession, operator, country, effective dates, royalty regime, reporting currency, partners, working-interest percentages, and licence. Well records store API/UWI, field, pad, latitude/longitude, type, completion, operator, status, first production, pressure class, and safety criticality. Ownership versions preserve historic working interests after a farm-in or transfer.

Field	Demo value	Impact
Field	Desert North Block 7	Concession and reporting
Well	DN-17A	Production and maintenance key
Working interest	60% operator / 40% partner	Allocation and JV billing
Product	Sales gas	Inventory and revenue
Unit	MMBtu	Measurement and pricing
Royalty	12.5% gross production	Statutory payable
Sales currency	USD	Contract and settlement
HSE class	Critical	Permit and escalation

A well cannot be put into production without an approved completion, test, permit, and responsible operator. Suspended wells remain in history and continue to expose overdue inspections.

2. Capture production and allocate volumes

Daily production records store well, date, gross gas, condensate, water, pressure, temperature, meter, quality flag, downtime, and operator. Allocation runs record field total, well contribution, shrinkage, fuel gas, flare, stock change, measurement uncertainty, algorithm version, and approval.

On 17 September, the field produces 48,000 MMBtu gross gas and 2,400 barrels condensate. After 3% processing shrinkage and 600 MMBtu fuel gas, saleable gas is 45,960 MMBtu. The 60% operator share is 27,576 MMBtu before royalty. Every allocation is reproducible from meter readings and versioned assumptions.

3. Manage lifting, quality, and inventory

The lifting schedule header records buyer, product, terminal, nomination date, delivery window, contract, currency, quality specification, quantity, and status. Lines record batch, meter, opening/closing stock, quantity, API gravity or heating value, price basis, and destination.

Gas quality fields include heating value, sulphur, water, pressure, and test certificate. Condensate lots store tank, batch, density, temperature, quantity, and custody transfer. A quality failure places material in quarantine and blocks invoicing until disposition is approved. Tank movements record source, destination, operator, meter, and variance.

4. Apply royalties and joint-venture accounting

The fiscal regime stores royalty basis, rate, deductible costs, tax ring-fence, effective date, government share, and reporting form. A royalty calculation shows gross production, allowable deduction, taxable base, rate, payable currency, and approval. Partner statements show gross volume, operator share, revenue, operating cost, capital cost, lifting difference, cash call, and net payable.

At USD 3.10/MMBtu, operator gas revenue before royalty is 27,576 × USD 3.10 = USD 85,485.60. Royalty is calculated on the configured gross basis and posted separately from sales revenue. A partner cash call references approved work programmes and cannot be netted invisibly against a lifting invoice.

5. Procure field services and control inventory

Purchase orders record field, well or cost centre, supplier, service category, currency, mobilisation date, Incoterm, tax, safety prequalification, and approval. Lines record rig or service, quantity, rate, standby, crew, equipment, location, and milestone. Three-way matching checks contract, service ticket, and invoice.

Field inventory records item, UoM, warehouse, bin, serial/batch, hazardous class, minimum stock, critical spare flag, and well compatibility. A critical valve issue references well, work order, technician, serial, and return status. Expired chemicals and controlled goods are quarantined and require disposal evidence.

6. Maintain assets and manage HSE

Asset records include compressor, separator, pipeline, tank, cost, useful life, depreciation book, meter, inspection interval, warranty, and location. Maintenance orders store asset, failure mode, permit-to-work, isolation, parts, labour, contractor, downtime, test result, and return-to-service approval.

HSE incidents record well, location, time, severity, people, environmental impact, regulator notification, root cause, corrective action, and closure. A permit-to-work links workers, hazard assessment, gas test, isolation, supervisor, start/end, and evidence. Critical work cannot close without an approved safety checklist.

7. Sell product and settle in multiple currencies

Sales contracts store buyer, product, delivery point, quality formula, index, differential, minimum take, nomination, currency, tax, credit limit, and term. An invoice links lifting, custody-transfer certificate, quantity, price, quality adjustment, royalty, tax, and due date. USD customer receipts and AED or OMR supplier payments store transaction rate, source, timestamp, bank fee, realised FX, and revaluation status.

An under-lift or over-lift creates a statement adjustment, not an unexplained stock difference. Price true-ups reference index publication, effective period, calculation, approver, and customer notice.

8. Close the field and regulatory reports

Month-end close reconciles well readings to allocation, allocation to inventory, inventory to lifting, lifting to invoices, partner statements, royalties, purchase orders to service tickets, field stock, asset depreciation, HSE actions, tax, bank, FX, and GL. Regulatory snapshots retain production, flaring, water, emissions, royalty, safety, and licence metrics with report version and submission evidence.

KPI	Before OSERP discipline	After OSERP discipline	Improvement
Meter-to-invoice variance	2.9%	0.4%	86% lower
JV statement cycle	24 days	8 days	67% faster
Critical-spare stockouts	11%	3%	73% lower
Permit-to-work exceptions	4.6%	0.7%	85% lower
Royalty filing preparation	15 days	5 days	67% faster

Practice challenge

Create a field and ownership version, register a well, capture production, run allocation, create a lifting nomination, quarantine a quality-failed lot, calculate royalty, raise a partner cash call, issue a critical spare, complete a permit-to-work maintenance order, invoice gas in USD, settle an OMR supplier bill, revalue balances, and close the field. Explain every field, formula, permission, journal, tax result, API identifier, exception, and audit event.

Related: Fixed Asset field guide, Inventory field guide, Purchase Order field guide, AR Invoice field guide, and API cookbook.