ABSTRACT: Exploration Technology Strategy and Centralized Management Systems

Bulletin Vol. 88 (2004), No. 13 (Supplement)

AAPG Annual Meeting
Dallas, Texas
April 18-21, 2004

Bahorich, Mike¹, Lisa Stewart¹, Mike Cavanaugh¹
(1) Apache Corporation, Houston, TX

Exploration technology has provided significant value to oil and gas companies. At Apache, our technology strategy is to be a smart shopper and purchase off-the-shelf technology at the right price. We strongly consider the market leader but in some cases prefer to influence technology providers to deliver needed products and services. Our focus has been on proven cost-effective technologies such as 3-D seismic. We monitor promising new technologies from competitors, research labs, service companies, universities, societies, and venture capital firms and begin using and learning about these technologies before they are clearly superior to existing technologies. We strive to effectively transfer technology through multiple channels including champions, functional email lists, technology notes, discipline meetings, and peer review.
Centralized management systems with real-time feedback offer tools for effective capital allocation and provide a basis for yearly incentive awards. At Apache, most decisions are made at the local level but measurement is done at the corporate level. About 80% of Apache's reserves are audited by an outside engineering firm providing further structure to internal systems. This focus on results helps provide a sense of urgency. Exploration risk analysis is one of the management systems that has provided significant benefits to Apache over the last five years, especially for focusing technology spending on appropriate problems.