Agile Delivery of Business through Integrated Planning, Application of Minimum Functional Objective and Digitization
Authors: Ussenbayeva K. , Munbayev T. , Skopich A. , Utebaeva D. , Chalak A. , Iskakov E. , Zhumagulov K. , Akimkulova U. , Shomirov R. 
Published: November 2024

During the recent period of a challenging business environment that included significant impact of the global pandemic, a leading energy producer in Western Kazakhstan initiated work to reset the business with clear priorities of maintaining safe and reliable operations and safely delivering major capital projects in execution phase. To support these objectives the annual Integrated Business Plan (IBP), introduced internally by the Strategy, Planning, and Business Performance (SP&BP) department, adopted an agile delivery model guided by a minimum functional objectives (MFO) methodology, significant cross-functional collaboration, and prudent reservoir management. Digitization of the IBP process helped enable agile delivery of an asset development plan to ensure the business remains robust in any environment and thrive through pandemic and deliver value for shareholders and the Republic of Kazakhstan.

Asset development planning is experiencing structural cost increases driven by inflationary pressures on the wages, field facility and drilling procurement costs. Existing and future investments require additional spend not previously planned. As a result, the planning process focused on funding only the most competitive wells that complement the integrated production capacity management plan which includes gathering system debottlenecking of existing field facilities.

The IBP strategy is based on the core MFO principle to identify the lowest cost solution that maximizes returns. MFO is a bottom-up approach to quantify an incremental value for each future investment. The intent is to develop a robust and optimized near- and long-term portfolio that efficiently extends the production plateau, decreases the cycle time, and maximizes the value of the asset by building on the existing development plan currently in execution.

Implementation of digital solutions enables faster evaluations and speeds up the decision making. The organically developed solution automated the business case evaluation by linking rig and non-rig schedules, plant flowback schedules, production forecasting, and decision analysis models. The integrated evaluation and analysis can use all available schedules and data points – wells, drilling pads, rig and non-rig units, and costs, etc. – can automatically test a large number of scenarios and enable the identification of the optimal solution that maximizes production and economic value of a selected fleet of rigs and development schedule.

One of the key outcomes of the agile IBP scrums was a rig utilization strategy that has been significantly optimized by dropping from 5 rigs to 2 rigs while maintaining or improving business value. Over the past two years the business plan further optimized the business plan delivery with only 1 rig long-term without diminishing business value. The current plan also maintains the scenario of a second rig line, depending on market conditions and enables strategic learnings for future reservoir development.