Corvelle Drives Concepts to Completion

Corvelle Drives Concepts to Completion

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Corvelle Drives Concepts to CompletionCorvelle Drives Concepts to Completion

Corvelle Drives Concepts to Completion

Monitor Compliance Risks Through Data Analytics

IIA Calgary Luncheon15 September 2010

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Corvelle Drives Concepts to Completion

Yogi SchulzBiography

Partner of Corvelle Consulting Information technology related management

consulting Microsoft Canada columnist & CBC Radio host PPDM Association board member Industry presenter:– Project World - 4 years– CIPS Informatics - 7 years– PMI - Information Systems SIG - 2 years– Convergence - 4 years– PPDM Association - several years

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Corvelle Drives Concepts to Completion

PresentationOutline

Business Context Data Analytics System Development description Benefits Conclusions Recommendations Discussion

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Corvelle Drives Concepts to Completion

Business Context

Regulator publishes requirements Oil & gas industry expected to comply Some requirements relate to

measurement and reporting

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Corvelle Drives Concepts to Completion

Business Problem

Current situation:– Challenge maintaining compliance audit coverage– Suspicion of poor compliance

Goals to:– raise level of assurance over state of compliance– raise level of compliance

Approach:– Apply CSOX audit concepts to compliance audit– Improve monitoring through data analytics

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Corvelle Drives Concepts to Completion

Oil & Gas IndustryHigh-Level Data Flow

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AlbertaEnergy

FieldProductionOperations

Alberta’soil & gas

regulator

FieldData

Capture

ProductionAccounting

RevenueAccounting

FinancialAccounting

PetroleumRegistryAlberta

Corvelle Drives Concepts to Completion

Compliance AuditPhilosophy

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Trust Operator Declaration

Verify Compliance Assessment Process

“Trust, but verify”- Ronald Reagan

Corvelle Drives Concepts to Completion

Continuous auditing

A method used by auditors to perform audit-related activities on a continuous basis

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

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Corvelle Drives Concepts to Completion

Data Analytics SystemOverview

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DataExtract

ComplianceAnalytics

NoncomplianceIndicators

InputDatastores

Corvelle Drives Concepts to Completion

Data Analytics SystemData Extract

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FieldInspection

System

DataExtract

ExtractA - n

Alberta’soil & gas

regulator

Corvelle Drives Concepts to Completion

Data Analytics SystemData Analytics

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ComplianceAnalytics

Extract A

NoncomplianceIndicators

Extract B

ComplianceAnalytics

Corvelle Drives Concepts to Completion

Data AnalyticsExamples

High metering difference Production rate trending up Puzzling trends in gas flare, fuel, vent, meter

difference Gas production greater than oil production

for an oil well High or low fuel consumption

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Corvelle Drives Concepts to Completion

Data Analytics SystemReporting

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Noncompliance Indicators

Reports

OperatorReports

ProductionAudit Team

Reports

Corvelle Drives Concepts to Completion

Data Analytics SystemArchitecture

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Transform ComplianceAnalytics

DataExtract

Reports

Master

Corvelle Drives Concepts to Completion

Data Analytics System Development

Building the system - a part-time effort ACL dramatically reduces the amount of code Significant architecture, design and testing

effort

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Corvelle Drives Concepts to Completion

Benefits of ACL forData Analytics development

Cost-effective and rapid development Adaptable to change as source datastores

change Adaptable to change ACL Compliance

Analytics Routines Encapsulates expert understanding of data

relationships in complex datastores Simple validation of candidate compliance

assessment indicators

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Corvelle Drives Concepts to Completion

Benefits of ACL forData Analytics system operation

Formal, fully auditable system Fully automated operation Scalable solution

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Corvelle Drives Concepts to Completion

Business benefits of this Data Analytics activity

Assurance over the state of compliance Feedback to oil & gas operators Improved data quality for all stakeholders Comprehensive auditing Greatly increased auditor productivity Independent of skilled data analysts

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Corvelle Drives Concepts to Completion

Conclusions

Data Analytics addressed our business challenge

ACL enabled development and operation of our Data Analytics System

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Corvelle Drives Concepts to Completion

Recommendations

Investigate opportunities to employ Data Analytics within your organization

Consider ACL as the technology to implement Data Analytics

Consider ACL for batch Data Analytics applications

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Corvelle Drives Concepts to Completion

Next Steps

Identify datastores to examine Experiment to identify potential data

anomalies Design, build and test a Data Analytics system Collect dollars revealed

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Corvelle Drives Concepts to Completion

Questions &Discussion

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Can you help us

improve our compliance?Please

fill outevaluation

form

Corvelle Drives Concepts to Completion

Monitor Compliance RisksThrough Data Analytics

Corvelle Consulting700, 205 - 5 Ave. S. W.Calgary, Alberta T2P 2V7Phone: (403) 249-5255E-mail:

YogiSchulz@corvelle.comWeb: www.corvelle.com

Yogi SchulzPartner of Corvelle ConsultingInformation technology related

management consultingMicrosoft Canada columnist & CBC

Radio hostIndustry presenterPPDM Association board member

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Corvelle Drives Concepts to Completion

Bibliography

Continuous Auditing

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Corvelle Drives Concepts to Completion

Noncompliance Indicator FileRecord Layout

Noncompliance Indicator id Production Year/Month Operator BA id Facility id Noncompliance supporting data

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