IBM Business Consulting Services
IBM Asset Lifecycle Management Solutions
for petroleum
Highlights
n Helps optimize project costs,
quality and cycle time by improving
contracting strategies
n Develops a blueprint for successful
asset management using industry
best practices
n Supports realtime global collaboration
with partners through a hosted solution
n Helps increase operational
responsiveness with integrated asset
management capabilities
n Leverages deep resources and
industry experience to provide a
comprehensive solution
Transforming asset lifecycle
management processes
Exploration and production (E&P)
companies commonly invest billions
of dollars to develop and maintain
assets, putting a significant amount
of capital in a constant state of risk.
And without a consistent, carefully
planned approach to control costs,
schedules and quality, E&P companies
are unable to effectively manage their
assets. Poor asset management can
lead to longer cycle times, decreased
quality, increased safety risks, higher
operating expenses and fewer
reserves extracted during the asset’s
total life. Based on a study conducted
by IBM Business Consulting Services
in 2002, this inefficiency can equate to
a shortfall of 10 to 15 percent of total
capital expenditures, with resulting
losses in the hundreds of million of
dollars. Consequently, leading E&P
companies are looking for better
approaches to more efficiently and
cost-effectively manage large capital
assets.
IBM Asset Lifecycle Management
Solutions for petroleum can help your
company reduce the costs and unlock
the business value of large capital
assets. Asset Lifecycle Management
Solutions for petroleum provides you
with industry-leading consulting to
support the development of a digital
work environment that is designed to
deliver important asset information
and data to key decision makers in a
usable format on demand. The work
environment, which can be hosted by
IBM and can be tailored to your needs,
helps reduce the development time
and implementation costs that you
would incur by creating a proprietary
solution. It also enables you to more
quickly leverage technologies that
support efficient asset management,
helping you optimize the return
on investment (ROI) from large
expenditures.
Leveraging better contracting strategies
for greater efficiency
E&P companies measure the success
of asset management strategy and
process execution by the impact that
each has on an asset’s cash flow
throughout its lifecycle. Reducing
major project development costs
while improving quality and cycle
time are all long-standing goals of
the upstream industry. Yet factors
such as geographically dispersed
assets, a complex asset portfolio, a
declining pool of skilled resources,
external influences and internal
barriers make attaining these goals
difficult. For example, assets may be
located in the extreme conditions
of the Arctic Circle, at the depths of
the Gulf of Mexico or in politically
unstable countries. And traditional
asset management practices have
not leveraged existing knowledge,
resources and materials across
projects due to siloed operating
procedures. Consequently,
E&P companies need flexible,
sophisticated asset management
strategies that allow them to
collaborate effectively, leverage
existing resources and quickly adapt
to changing business needs to
develop assets that meet or exceed
first year and lifecycle operability
targets.
IBM Asset Lifecycle Management
Solutions for petroleum can help
you increase collaboration both
internally—enterprisewide—and with
contractors to improve contracting
strategies. From better coordinating
individual project teams to managing
intercompany relationships with
contractors that provide engineering
services and support for drilling
operations, our experienced
professionals can help you put the
tools and processes in place that are
needed to drive down costs, improve
quality, reduce facility downtime and
optimize production. Proficient project
and resource management can also
help you decrease the development
schedule to hasten the time to
production.
Using industry best practices to build a
successful asset management strategy
A well-documented strategy for
asset lifecycle management is vital
to an asset’s success and should
include a change-response plan for
risk, contracting and performance
management. Asset lifecycle
management for petroleum can
develop strategies for assets that
are consistent with your corporate
policies and that can help improve
shareholder return. We can fuse
industry best practices and technology
with your unique business processes
and methodologies to create an asset
lifecycle management solution that
uses key performance indicators to
enforce business strategy objectives
based on consistent management and
monitoring. The solution also provides
the strategy and tools designed to
responsibly manage environmental,
health, safety and security risks.
Providing a hosted solution for realtime
global collaboration with partners
To reduce expenses and improve
shareholder returns, E&P companies
should cut asset development costs
through better collaboration with
partners and service companies
that are spread across the globe. A
powerful information technology (IT)
solution, which supports an asset
management strategy based on
information management and electronic
collaboration, can enable the strategy
and process execution that are needed
to improve and sustain superior
business performance.
IBM’s vision for asset management
is to provide a hosted platform for
realtime collaboration and information
management throughout an asset’s
lifecycle for those companies that do
not want to operate the system on
their own platform. In this environment,
global business partners are
linked across the value chain and
critical decisions are made based
on accurate, timely information.
To deliver this highly specialized
solution, IBM has actively invested in,
developed and managed industry-
leading resources, including people,
processes and IT tools.
Improving operational responsiveness
through integrated capabilities
In today’s challenging exploration
and production environment—where
factors ranging from environmental
conditions or regulations to political
unrest to limited infrastructure
resources in various regions
throughout the world can impact day-
to-day operations—E&P companies
need the ability to sense and
respond with speed to opportunities
and change. And as a result, many
companies are turning to collaborative
asset management models. IBM,
in partnership with a major global
E&P company, has developed a
working prototype to demonstrate
the value of the collaborative asset
management platform. This prototype,
which is the foundation for the asset
lifecycle management for petroleum
solution, is based on an open, flexible
infrastructure that is designed to
enable companies to leverage their
preferred software tools for project
management, including existing
Computer-Aided Design (CAD)
applications, 3-D and 4-D viewers,
and document management software.
IBM Asset Lifecycle Management
Solutions for petroleum provides a
collaborative asset management
solution that integrates with your
business partners’ systems to deliver
software services in a security-
rich and resilient environment. The
hosted asset lifecycle management
for petroleum solution model is
usage-based, so you pay only for
the service levels that you use, and
you can easily scale the solution
up or down as business needs
dictate. The benefits of asset lifecycle
management are significant and can
potentially equate to opportunities in
the hundreds of millions of dollars by
enabling you to do the following:
• Share information among business
partners across geographically
disparate projects and assets
• Make better decisions based on
comprehensive, accurate and
timely data
• Collaborate in realtime with joint
venture partners and engineering,
Cash Flow
procurement and construction
companies on complex deepwater
developments to increase asset
quality and improve cycle time
• Use e-business collaboration
capabilities to share resources
virtually across geographically
diverse asset bases without physical
travel
Table 1: Potential development cost savings*
Estimated range Complexity of
Value source of benefit value capture
Construction and design costs 2 to 6 percent Low
Cycle time 5 to 30 percent Medium
Improved design/best practice application 5 to 30 percent Medium
Knowledge management/decision making Large High
* Based on a study conducted by IBM Business Consulting Services in 2002.
• Make and act upon decisions across you with a comprehensive asset
the value chain in realtime, based management solution from a single
on external drivers such as political source. Moreover, our track record in
unrest or oil price changes the petroleum industry demonstrates
our ability to successfully fuse
• Monitor and manage asset
business processes, data and
performance proactively over the
technology into solutions that deliver
entire lifecycle, even across value
results. Asset lifecycle management
chain partners
for petroleum can provide you with
• Adjust IT costs based on software the right people and technology at
usage and organizational needs. the right time to help your organization
manage its large capital assets.
Relying on the deep experience of a
And this can positively impact the
global team
management and performance of
At IBM, we combine a wealth of global
an asset to drive increased returns
resources, including petroleum industry
and cash flows. By relying on
experts, cutting-edge technology
IBM’s experience and end-to-end
and proven methodology to provide
Preproject
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Decommision
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capabilities, you can improve your ROI For more information
and gain a competitive advantage To learn more about IBM Business
through efficient management of Consulting Services and IBM Asset
important large capital assets. Lifecycle Management Solutions for
petroleum please contact your IBM © Copyright IBM Corporation 2004
Relying on the deep experience of a sales representative, or visit: IBM Global Services
global team Route 100
At IBM, we combine a wealth of ibm.com/bcs Somers, NY 10589
U.S.A.
global resources, including petroleum
Printed in the United States of America
industry experts, cutting-edge 02-04
technology and proven methodology All Rights Reserved

to provide you with a comprehensive IBM, the IBM logo and the e-business logo
are trademarks or registered trademarks of
asset management solution from a International Business Machines Corporation
single source. Moreover, our track in the United States, other countries, or both.

record in the petroleum industry Other company, product and service names
demonstrates our ability to successfully may be trademarks or service marks of others.

fuse business processes, data and References in this publication to IBM products
technology into solutions that deliver or services do not imply that IBM intends to
make them available in all countries in which
results. Asset lifecycle management IBM operates.
for petroleum can provide you with
the right people and technology at
the right time to help your organization
manage its large capital assets.
And this can positively impact the
management and performance of
an asset to drive increased returns
and cash flows. By relying on
IBM’s experience and end-to-end
capabilities, you can improve your ROI
and gain a competitive advantage
through efficient management of
important large capital assets.

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