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Alaska Division of Oil and Gas moves to electronic data collection, reporting This is the biggest internal change outgoing Director Ken Boyd has seen in his 10 years with the state Kristen Nelson PNA News Editor
There have been major changes in the oil and gas industry in Alaska over the 10 years Ken Boyd has been with the Division of Oil and Gas.
But, he said in an August interview after he announced that he would be leaving the division, there were also important things going on behind the scenes, notably the replacement of paper reporting with electronic transactions.
Behind the scenes, said Boyd and Bill Van Dyke, the division's petroleum manager, the royalty accounting system has been updated to receive information from the state's oil and gas producers electronically.
“This is one that just doesn't have any sex appeal, but it's really important to me,” Boyd said. “It's called EDI, electronic data interchange.”
The Legislature funded computers and some programmer time, “and the payoff is in progress,” Boyd said.
When he started in the division all of the royalty reporting from the companies came in on paper and had to be keyed into the division's accounting system. Work on revising the division's oil and gas royalty accounting system began in the mid-1980s, but “the technology wasn't really right until six or seven years ago,” Boyd said. Industry was already buying equipment electronically, so paying royalties electronically was just another step. Internal system rebuilt The division has been working on two parts of its royalty accounting system, Van Dyke said. “One is just our internal accounting system and that's OGRAS, Oil and Gas Royalty Accounting System. And we had an old sort of custom-built, hardwired program. Like a commercial data base… It was just sort of a hand-built accounting system.”
The division converted the oil and gas accounting system to an Oracle database, a popular commercial database system, Van Dyke said.
The process took five years, and the switch to Oracle took place a couple of years ago, he said. As a result, it is possible to query the database and produce reports.
“Now the economists can use it and the auditors can use it. And so this data is readily available to other folks in the department and other folks in the state,” he said.
While the division was converting to Oracle the companies continued to submit data on paper, both monthly reports and revisions.
“You get an original report each month by company, by pool,” Van Dyke said. “But then you may get revisions for 12 months, that same month. So it's literally going to be thousands of revisions a month, per company.”
Once the division got its accounting system project under way, “then we decided we really wanted to implement an electronic reporting system.”
“So now, instead of submitting a couple hundred pieces of paper each month for the royalties for production from the previous month, plus maybe a thousand pieces of paper for revisions … the goal is, the long-range goal is that they will submit everything straight over the wire.
“It will all come in electronically.”
Van Dyke said there are national standards for those files established by the American Petroleum Institute. Some submissions totally electronic “And some companies are there,” he said. “Like for instance Marathon.
“Everything comes over using EDI. They don't submit one piece of paper, one disk, anything.”
Other companies are in the middle, he said. They file using the new formats, “but they basically do it using … spreadsheets and then they send it to us either by e-mail or on a disk.” The spreadsheets are a template “and then we have to upload those into the system. But still,” he said, “there's no paper involved.”
“And we still have some reports coming in by paper.” The companies that are in paper mode are either testing the spreadsheet way to move data or planning to go straight to EDI.
“So everybody is at least some way down the road. Some companies are just further than others,” Van Dyke said.
“And the merger and reorganizations and acquisitions and company restructuring have slowed down some companies relative to others.”
The paper reports the division used to get are going away, but “not completely gone. We're still getting some supplemental reports and some backup reports on paper.” Revisions are tougher for companies, Van Dyke said, because it's been hard for some to get their prior year data converted. Agreements required The division signed electronic commerce agreements starting in 1998. These agreements, he said, “are like a contract between us and a payer or reporter that says here's how we're going to do this electronically and if you file electronically that meets your obligation to file.”
The agreements were necessary “because when you get something electronically you don't get a paper receipt. There's no one's signature on it. And the companies are concerned, legitimately concerned, that they don't want to get hit saying they didn't file a royalty return this month, when it did come in over the wire.”
Most of the electronic commerce agreements, which spell out the protocols and standards and define what constitute filing, were signed in 1999, Van Dyke said.
The division now has the same data by pool and by company and by lease that the Alaska Oil and Gas Conservation Commission and the Department of Revenue have.
Supplemental reports are still keyed in, but next year the division plans to begin scanning those documents.
“And some of it doesn't even get keyed in because of the nature of the reports,”Van Dyke said.
“So they still go in the file. But if we can scan them in and then be able to archive them and retrieve them then we'll store them electronically. And then someone doing an audit or doing some research would have access to all the information.”
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