PPDM Work Group Proposal

Authorization For Expenditure

This Project is Proposed pending funding and volunteers.

The process of managing Authorization For Expenditure (AFE) is core to practically all E&P companies. Authorizations For Expenditure (AFEs) are typically raised by companies to provide a draw down against the broader capital budgets in relation to specific projects and account for the budget, projected field costs and actual costs based on a standard chart of accounts which depends on the type of project. AFEs are typically circulated between all concerned parties for review and approval prior to capital expenses being accrued. The process of managing AFEs also includes the working interests of partners in joint ventures which are so typical in the upstream sector of the oil and gas industry.

The current PPDM 3.8 and 3.9 data models lack the detail necessary for storing details of AFEs and their associated chart of accounts. For example: the various tangible and intangible costs for executing a project along with salient information regarding the status and timing of the expenditure plan.

The requirement is to extend the PPDM 3.9 data model to capture the AFE information that engineers and finance people typically use for reviewing and approving major capital projects as well as tracking costs associated with the execution of such projects in the field.  The desired outcome is for the PPDM data model to support the capture and management of the key information required to analyze and optimize capital spending and provide sufficient information for operating companies to feedback into their planning loop for continuous improvement in cost efficiency.

Industry Resources

  • People:  This workgroup is open to any PPDM Association member.  Expectations will be specified in the charter.
  • Funding: is needed as specified in the charter that will be developed next.

Interested?  Here’s what comes next

PPDM workgroups are launched and operated in accordance with “the PPDM Way”. If you are interested in this workgroup, please email projects (projects@ppdm.org).

  • Ideas for workgroups are originated by PPDM members through dialogue with PPDM.
  • A proposal outlining the idea is circulated among PPDM members. (this is that document)
  • Members who are interested in participating contact the PPDM Office. This group will compose the workgroup charter.  The charter will define the scope, deliverables, time frame, cost and resource needs for the workgroup.
  • The PPDM Board of Directors approves the workgroup charter.
  • Members agree to fund and resource the workgroup as needed.
  • The workgroup kicks off and completes the deliverables outlined in the charter.