Docstoc

Enhanced Production Audit Program

Document Sample
Enhanced Production Audit Program Powered By Docstoc
					          Introduction to the
Enhanced Production Audit Program




                 ISA
            January 25, 2010
Outline


   EPAP Goals

   Overview of EPAP

   Implementing EPAP

   Question Period


                        Enhanced Production Audit Program
                                                        2
New Directive 076

   Title: “Operator Declaration Regarding
    Measurement and Reporting
    Requirements”
   Effective January 4, 2010
   Directive available for download at:
    www.ercb.ca
   Operator’s Handbook

                            Enhanced Production Audit Program
                                                            3
Two Main Goals

   Raise level of assurance over
    compliance with ERCB measurement
    and reporting requirements


   Raise level of compliance with ERCB
    measurement and reporting
    requirements

                          Enhanced Production Audit Program
                                                          4
EPAP Overview
5 Major Components

   Declarations

   Controls & Evaluation of Controls

   Compliance Assessment

   Action Items

   Escalation

                           Enhanced Production Audit Program
                                                           6
Declarations

   State key operator assertions
   Involve senior executives
   Report evaluations at a summary level
   Create through EPAP system



Declaration does not require perfection
                           Enhanced Production Audit Program
                                                           7
Controls &
Evaluation of Controls


   Every well-managed business operates
    controls


   EPAP is based on operators evaluating
    their measurement & reporting controls


                           Enhanced Production Audit Program
                                                           8
Overview of Relationship

 Evaluation of Control

                         Assesses

       Control

                         Monitors

  Business Process

                           Enhanced Production Audit Program
                                                           9
Oil & Gas Example

For sample of Well Tests,
examine review of the log
                         Assesses

  Review Well Test log

                         Monitors

   Conduct Well Tests

                            Enhanced Production Audit Program
                                                           10
 Compliance Assessment

    Based on Compliance Assessment
     Report
      Contains Registry and FIS data
      Available monthly


    Basis for regular contact

Indicators are not noncompliance events

                               Enhanced Production Audit Program
                                                              11
Action Items

   Some contacts become action items


   EPAP system provides support
     Documents discussion and actions
     Communicates to operator
     Provides basis for follow-up


     Action items are enforceable

                            Enhanced Production Audit Program
                                                           12
Escalation

   More information requested on:
     Controls
     Evaluation procedures
     Evaluation results


   Controls-based audit


   Substantive audit
                              Enhanced Production Audit Program
                                                             13
  Connection to D-019
     Lack of progress
       Assistance
       Education


     Lack of co-operation
       No or inadequate response
       Failure to submit a declaration


Directive 019 Enforcement is avoidable
                                 Enhanced Production Audit Program
                                                                14
   EPAP Philosophy



   “Trust, but verify”
         - Ronald Reagan




Trust          Operator Declaration
Verify         Compliance Assessment Process
                                Enhanced Production Audit Program
                                                               15
EPAP Approach


   Use of judgment


   Focus on collaboration


   Continuous improvement takes time
     Operators will need support



                              Enhanced Production Audit Program
                                                             16
Implementing EPAP
       Implementation Schedule
Phase                        Planned Dates

Directive 076 took effect     January 4, 2010

Implementation Phase

  Trial declaration period            2010
  First declaration period            2011

Ongoing operation            From January 2012

                                Enhanced Production Audit Program
                                                               18
Implementation Activities - 1

   Select your declaration month
   Meet with senior executives
   Build understanding of the controls-
    based audit approach
   Build understanding of current work
   Deliver a communication presentation
    about EPAP

                           Enhanced Production Audit Program
                                                          19
Implementation Activities - 2

   Create an evaluation plan
   Strengthen business processes and
    controls
   Perform trial evaluations of controls
   Act on the Compliance Assessment
    Report


                            Enhanced Production Audit Program
                                                           20
Implementation Resources

   Questions:
     www.ercb.ca
     epap@ercb.ca
     Assigned PAT member
   IMG – Industry Measurement Group
   CAPPA – Canadian Association of
    Petroleum Production Accounting
   IIA – Institute of Internal Auditors
                             Enhanced Production Audit Program
                                                            21
Future EPAP Related Events

   CSHM Conference – April 2010

   IMG EPAP Course – later in 2010

   EPAP Industry briefing – later in 2010

   CAPPA Conference – October 2010



                            Enhanced Production Audit Program
                                                           22
Question Period
Common Misconception

    Low Compliance
   Assessment scores


       = ≠
    High Compliance

                Enhanced Production Audit Program
                                               24
Indicators of Deficiencies
in Controls
   Amendments
   Compliance assessment report
   Voluntary self-disclosures
   Field inspections
   Audit findings
   ERCB Volumetric Noncompliance
    Report
   Provisional assessments
                           Enhanced Production Audit Program
                                                          25
Suggestions for Continuous
Improvement
   Recent production audit findings
   Recent field inspection findings
   PAT Top 10 or 20 list of audit findings
   ERCB Noncompliance Report
   Integration
   Schematics and drawings


                            Enhanced Production Audit Program
                                                           26
Suggestions for Continuous
Improvement
   Data quality enhancement initiatives
   Review current practices
   Perform self-inspections
   Review the findings of internal audits
   Review the findings of recent joint
    venture audits


                            Enhanced Production Audit Program
                                                           27
Suggestions for Continuous
Improvement
   Review noncompliance event list
   Review items on the current ERCB risk
    matrix
   Review the Registry warning report
   Review Provisional Assessments
   Synchronize property setup among:
     Production accounting system
     Field data gathering system
     Financial accounting system Production Audit Program
                               Enhanced
                                                        28
Suggestion for Industry
Cooperation
   Participate on IMG subcommittee
   Participate on CAPPA subcommittee
   Work with Registry to implement
    enhancements
   Work with PA and Field Data Gathering
    software vendors


                          Enhanced Production Audit Program
                                                         29
Eventually, all operators will

   be aware of their state of compliance
    with ERCB requirements
   have the infrastructure in place to
    mitigate risk of noncompliance
   raise their level of compliance




                            Enhanced Production Audit Program
                                                           30

				
DOCUMENT INFO