Executive Editors of
Evaluation & Engineering alternate writing the Executive Summary.
This issue's summary is by Alan Johnson.
In an editorial a few months ago, I
discussed with you my views on applying the appropriate level of detail in our
work. Since then, I have been planning a follow-up editorial on the levels of
detail required of us by our companies or clients. I have often found myself
railing against the strictures applied by the so-called “80:20” or “fit for
purpose” guidelines and the resulting limitations that I perceive they put on
my scope of work. My initial intention had been to write an eloquent indictment
of such shortsighted approaches; however, on more considered thought, I
recognize that some degree of balance is required.
In a commercial industry such as ours,
the required level of detail represents how much the organizations we work for
are prepared to pay, or how long they are prepared to wait, for our results. It
also represents the value that those organizations put on the work we do. Such
considerations perhaps do not apply so strongly in the more academic fields,
but in a commercial world, they will never be entirely absent.
When I worked as an independent
consultant for a few years, this was also less of an issue for me; consultants
and, to some extent, service companies can take a shorter-term view and should
be happy to deliver what has been agreed with the client. Indeed, I have sat on
the other side of the fence, waiting for results from a “perfectionist”
consultant who has missed his delivery deadline by trying to cram, say, 2
months of work into an agreed 3 weeks.
In working for a number of different
operating companies, I also have come to recognize the need to take a
longer-term view, such that a little extra time spent on one study can also lay
the foundations for future work, without the whole process having to be visited
again, at greater eventual cost.
Returning to the famous “80:20” rule,
this expression resulted from the work of the 19th century Italian economist
Vilfredo Pareto, who observed that in Italy, 80% of the wealth was held by 20%
of the population. This principle has been found to apply in many economies and
is based on an observed power-law relationship between cumulative value and
cumulative percentage of the population (Ball 2004). As such, this principle
has potential for application in other fields, such as management, where the
famous maxim that 80% of the value is gained from 20% of the effort is often
As an aside, I wondered whether it might
also apply to petroleum reservoirs, with perhaps 80% of the productivity being
gained from 20% of the reservoir rock. In the example I checked, I found that
20% of the productivity (in terms of permeability thickness) came from less
than 5% of the rock, this probably being the result of a limited number of
high-permeability streaks. Nevertheless, this may be an area worthy of further
In my own area, petrophysics, a second
oft-quoted maxim is that 60 to 70% of petrophysical work is data preparation,
log shifting, editing joining, and core-data integration; it is only the last
30 to 40% of the effort that produces any external value at all. This can lead
to conflict between the need for securely founded analyses and the
commercial/time pressure to achieve these at minimum cost and with realistic
As I said before, my first reaction to
any limitation on what I see as my technical integrity tends to be direct
opposition, which, from the other side of the fence, is probably regarded as
unrealistic perfectionism with no regard to realistic deadlines. The eventual
solution must lie in some form of compromise, one which goes to neither
extreme. I now believe the answer lies in the realistic management of
uncertainties. My original university degree was in physics, where, in all
experimental work, a result is not complete without a detailed analysis of its
The oil and gas industry is, by its
nature, highly uncertain. Indeed, it is almost a miracle that we are able to
achieve the levels of accuracy that we do. In any analysis, the progress from a
1-day quick estimate to a full-blown study of perhaps many months, the gain is
not so much in the actual result, which may end up as a higher or lower value,
but in the reduction in uncertainty and the resulting increased confidence in
the final answer.
The key message, therefore, in the
dialogue with the users of our results, be they decision makers or just the
next stage in the data flow, is to quantify and articulate the price, in terms
of reduced confidence level, that must be accepted for a less-than-complete
answer. Very often, for a quick decision, this price will be acceptable, but in
other cases the required level of accuracy may well support more extensive work
than originally envisaged.
In this edition of the journal, we have
10 excellent papers covering a wide range of subjects, within which you may
find ideas that not only help reduce the uncertainties in your work, but also
perhaps help you to work more effectively and achieve even more in the
high-value 20% time portion of your projects.
Ball, P. 2004. Critical Mass: How One
Thing Leads to Another. London:Random House Ltd.