Helping Regulators Stay on BudgetWed, 01/21/2015 - 17:40
Within the oil and gas industry, discussions about budgets revolve almost entirely around public and private companies, with the ebb and flow of global markets being mirrored by the rise and fall of investments. Although widely seen as being among the most important of industry overseers, regulators do not receive anywhere near as much guidance for their fiscal management. Enter Resource Energy Solutions (RES), a Canadian company with a long history of providing data management and integration software for the oil and gas industry. “Our market niche is managing budget and CAPEX control. We also manage daily activities and costs in the field, from construction, to drilling, workovers, facilities, and pipeline information, before integrating all of these factors into a full solution,” says Trent Marx, President of RES. The company counts on two pieces of software to provide this integration. AFE Manager (Authorization for Expenditure) provides robust internal controls over capital spending. This service is backed up by Wellman, which ensures a key reporting and cost management system across all aspects of oil and gas projects. RES then integrates these results into its financial accounting system, to provide precise information about what oil and gas companies or regulators are spending on a day-to-day basis. The success of these solutions is proven with AFE Manager, which has alone been used to track US$29 billion in annual spending by oil and gas companies around the world. “Our biggest advantage is being proactive in cases of overspending or when additional budgets are required to finish a project. For example, if a company has a US$10 million project that is set to last 90 days, our software can easily track the timeframe, or precise expenditure, throughout any given period. We can alert a company as to whether it spent half its money after 45 days, or if it has already used 75% of its budget, while also pointing out where the problems lie. Additionally, we can indicate when and where more money will be needed to complete a project, whether it be drilling a well or constructing a new facility,” states Marx.
Although AFE Manager and Wellman used to be primarily targeted toward E&P companies, RES soon hit upon the fact that these solutions would also work well for regulators. The company was first approached by the Indonesian government to build its first solution that was tailored for regulators at SKK Migas, the country’s upstream regulator. The deal gave RES a lot of visibility in the Asia-Pacific Region and it has since been hired by companies in Thailand, Australia, and beyond. Marx is now looking to offer the same service to CNH in Mexico. Beyond this, he believes that the Energy Reform will see many companies entering Mexico without the tools that RES has to offer. “It is a very good time for our company right now, despite the fact that there is less activity because of budget cuts. Companies need better cost management solutions now more than ever,” explains Marx. RES first entered Mexico two years ago, when it chose a partner and reseller in Matyep, a longstanding service provider to PEMEX. The local knowledge of Matyep has helped RES make inroads into a new market. “A year ago, projects were put on hold and no decisions were being made by PEMEX. This delayed the process but now that we have an understanding of Round Zero and Round One, we can start moving forward again,” he concludes.