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Case Study: PETRONAS Carigali Incorporates Merak Capital Planning and Merak Peep for Portfolio Management
Challenge
PETRONAS Carigali Sdn Bhd (PETRONAS Carigali) was looking for a system that would effectively assist in formulating its annual strategic and corporate planning business cycle, and provide optimized project portfolios and a seamless integration to its existing economic system using one corporate data repository.
Solution
Schlumberger Information Solutions (SIS) implemented a portfolio management system incorporating Merak Capital Planning strategic portfolio management software integrated with PETRONAS Carigali’s existing Merak Peep economic evaluation and decline analysis software, using a common data repository.
Results
The consolidation of data in a common data source streamlines the workflow, resulting in considerable time savings in data preparation and management, increased productivity, and the ability to compare today’s corporate portfolio with potential future portfolios.
Optimal portfolio solutions
With more than 300 projects worldwide and counting, PETRONAS Carigali, the operating company of Petroliam Nasional Bhd (PETRONAS), was looking for a system that would effectively assist it in formulating its annual strategic and corporate planning business cycle. This task includes the consolidation of all its project economics data, and the creation of optimal portfolios consisting of base and notional projects that would meet its short-term and long-term corporate goals. In addition, the system would provide the ability to view key business indicators in quick graphical views and to perform "what-if" analyses comparing today’s corporate portfolio with potential future portfolios.
While PETRONAS Carigali’s existing spreadsheet system was able to analyze project economics data, the system did not provide optimal portfolio solutions. It did not allow users to incorporate consolidations or the complex business rules of the oil and gas industry into spreadsheet calculations. Furthermore, the spreadsheet was unable to incorporate business requirements that are common in production sharing contracts, dependencies between existing assets and projects, capital, production, and cash flow constraints. PETRONAS Carigali was seeking a system that would provide optimized project portfolios and a seamless integration to its existing economic system using one corporate data repository, all of which would save time for the strategic and business planners.
Customized, strategic portfolio management system
With the support and commitment of PETRONAS Carigali, SIS implemented a portfolio management system incorporating Merak Capital Planning strategic portfolio management software. This system was integrated with PETRONAS Carigali’s existing Merak Peep economic evaluation and decline analysis software, using a common data repository. SIS also customized graphical outputs and software extensions. With the direct link from Merak Capital Planning to Merak Peep, a variety of what-if scenarios can be calculated and then optimized according to corporate constraints and goals.
With this system in place, PETRONAS Carigali is able to view its business portfolio at a glance and perform in-depth dynamic analysis according to the corporate and industry environment. The portfolio management system assists PETRONAS Carigali by providing more informed analysis in its corporate decision making. This is achieved by generating and analyzing the optimal portfolios in Merak Capital Planning that have passed PETRONAS Carigali’s goals, constraints, and business requirements. Capital Planning optimizes portfolios by using a genetic algorithm iteration method which allows planners to model complex, non-linear scenarios that are frequent in the oil and gas marketplace.
By taking advantage of the powerful and extensive data mining capabilities of Merak Capital Planning, PETRONAS Carigali is able to slice and dice its data, graphically viewing vital information on key performance indicators such as production, investments, and cash flows, calculated at the lowest business unit level or rolled up to the highest PETRONAS Carigali corporate level. This is achieved by customized charts and graphs that further personalize the solution to PETRONAS Carigali’s needs.
Dynamic planning tool facilitates forecasting
Information from the customized outputs is easily extracted and extensively used in presentations to PETRONAS Carigali management showing the performance of PETRONAS Carigali ’s assets. Based on these outputs, PETRONAS Carigali management has a graphical view of its assets’ forecasted performance and is able to formulate shortto long-term business strategies. It is also designed not only to forecast future performance (look forward analysis), but also to review the actual performance of the projects (look back analysis).
In addition, the system plays a key role in PETRONAS Carigali’s annual business cycle to perform portfolio planning in an iterative and dynamic way. This is performed by modifying goals and constraints in Merak Capital Planning to seek different optimal portfolios.
Moreover, the consolidation of data in a common data source streamlines the workflow between the Strategic Planning Department and the Department of Economics, resulting in considerable time savings in data preparation and in data management, and increased productivity.
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