Corvelle Drives Concepts to Completion Corvelle Drives Concepts

Corvelle Drives Concepts to Completion Corvelle Drives Concepts to 1

Monitor Compliance Risks Through Data Analytics IIA Calgary Luncheon 15 September 2010 Corvelle Drives Concepts to 2

Yogi Schulz Biography q Partner of Corvelle Consulting q Information technology related management consulting q Microsoft Canada columnist & CBC Radio host q PPDM Association board member q Industry presenter: – – – Project World - 4 years CIPS Informatics - 7 years PMI - Information Systems SIG - 2 years Convergence - 4 years PPDM Association - several years Corvelle Drives Concepts to 3

Presentation Outline q Business Context q Data Analytics System q Development description q Benefits q Conclusions q Recommendations q Discussion Corvelle Drives Concepts to 4

Business Context q Regulator publishes requirements q Oil & gas industry expected to comply q Some requirements relate to measurement and reporting Corvelle Drives Concepts to 5

Business Problem q Current situation: – Challenge maintaining compliance audit coverage – Suspicion of poor compliance q Goals to: – raise level of assurance over state of compliance – raise level of compliance q Approach: – Apply CSOX audit concepts to compliance audit – Improve monitoring through data analytics Corvelle Drives Concepts to 6

Field Production Operations Field Data Capture Oil & Gas Industry High-Level Data Flow Financial Accounting Alberta’s oil & gas regulator Revenue Accounting Production Accounting Alberta Energy Petroleum Registry Alberta Corvelle Drives Concepts to 7

Compliance Audit Philosophy “Trust, but verify” - Ronald Reagan Trust Operator Declaration Verify Compliance Assessment Process Corvelle Drives Concepts to 8

Continuous auditing q A method used by auditors to perform audit- related activities on a continuous basis q Changes the audit paradigm from periodic reviews of a sample of transactions to ongoing audit procedures that test 100 % of transactions resulting in timely and comprehensive insights into risk and control issues Corvelle Drives Concepts to 9

Data Analytics System Overview Input Datastores Data Extract Compliance Analytics Corvelle Drives Concepts to Noncompliance Indicators 10

Data Analytics System Data Extract Alberta’s oil & gas regulator Corvelle Drives Concepts to Field Inspection System Extract A-n 11

Data Analytics System Data Analytics Extract A Extract B Corvelle Drives Concepts to Compliance Analytics Noncompliance Indicators Compliance Analytics 12

Data Analytics Examples q High metering difference q Production rate trending up q Puzzling trends in gas flare, fuel, vent, meter difference q Gas production greater than oil production for an oil well q High or low fuel consumption Corvelle Drives Concepts to 13

Noncompliance Indicators Data Analytics System Reporting Operator Reports Production Audit Team Reports Corvelle Drives Concepts to 14

Data Analytics System Architecture Master Data Extract Transform Corvelle Drives Concepts to Reports Compliance Analytics 15

Data Analytics System Development q Building the system - a part-time effort q ACL dramatically reduces the amount of code q Significant architecture, design and testing effort Corvelle Drives Concepts to 16

Benefits of ACL for Data Analytics development q Cost-effective and rapid development q Adaptable to change as source datastores change q Adaptable to change ACL Compliance Analytics Routines q Encapsulates expert understanding of data relationships in complex datastores q Simple validation of candidate compliance assessment indicators Corvelle Drives Concepts to 17

Benefits of ACL for Data Analytics system operation q Formal, fully auditable system q Fully automated operation q Scalable solution Corvelle Drives Concepts to 18

Business benefits of this Data Analytics activity q Assurance over the state of compliance q Feedback to oil & gas operators q Improved data quality for all stakeholders q Comprehensive auditing q Greatly increased auditor productivity q Independent of skilled data analysts Corvelle Drives Concepts to 19

Conclusions q Data Analytics addressed our business challenge q ACL enabled development and operation of our Data Analytics System Corvelle Drives Concepts to 20

Recommendations q Investigate opportunities to employ Data Analytics within your organization q Consider ACL as the technology to implement Data Analytics q Consider ACL for batch Data Analytics applications Corvelle Drives Concepts to 21

Next Steps q Identify datastores to examine q Experiment to identify potential data anomalies q Design, build and test a Data Analytics system q Collect dollars revealed Corvelle Drives Concepts to 22

Questions & Discussion Please fill out evaluation form Can you help us improve our compliance? Corvelle Drives Concepts to 23

Monitor Compliance Risks Through Data Analytics Yogi Schulz Partner of Corvelle Consulting Information technology related management consulting Microsoft Canada columnist & CBC Radio host Industry presenter PPDM Association board member Corvelle Drives Concepts to Corvelle Consulting 700, 205 - 5 Ave. S. W. Calgary, Alberta T 2 P 2 V 7 Phone: (403) 249 -5255 E-mail: Yogi. Schulz@corvelle. com Web: www. corvelle. com 24

Bibliography q Continuous Auditing Corvelle Drives Concepts to 25

Noncompliance Indicator File Record Layout q Noncompliance Indicator id q Production Year/Month q Operator BA id q Facility id q Noncompliance supporting data Corvelle Drives Concepts to 26