Petrochem/Utilities Industry Trends

New Electronic Standards Aim to Increase Efficiency of Oil and Natural Gas Industry Transactions

Issue Table of Contents

New Electronic Standards Aim to Increase Efficiency of Oil and Natural Gas Industry Transactions New Mission and Vision for API's PIDX Committee Information Technology - Crossing Industry Lines Global B2B E-Commerce Standardization Making It Possible

The American Petroleum Institute Petroleum Industry Data Exchange (PIDX) Committee announced the release of Extensible Markup Language (XML) standards that will allow oil field services, as well as products, to be bought and sold over the Internet. The industry can use these standards to reduce transaction costs which amount to $25 billion annually in U.S. drilling and completion services business alone, by reducing processing costs and errors.

The oil and natural gas industry has made great strides in improving the efficiency of its production, transport, refining and distribution processes through the application of advanced technology. However, when it comes to the sale and purchase of typical oil field services, such as those needed to drill and complete a well, it is still done the old fashioned way with telephone calls, paper requests for proposals, mailed bids, invoices and faxes.

The airline and automotive industries routinely conduct their transactions for parts online over the Internet, which has led to lower transaction costs. This success has been difficult to duplicate in the oil and natural gas industry because it typically purchases both parts and services together, which have variable pricing based on a number of factors such as well location, drilling environment and geology of the subsurface. The standards announced today are defined in such a way that even these so called "complex services" can be purchased online. In fact the project was called Com.Pro.Serv., short for Complex Products and Services.

"The lack of data standardization has been a major barrier to the buying and selling of complex well services online" said Jerry Hubbard, OFS Portal Vice President of Content Development and API PIDX Standards Subcommittee Chair. "With these new standards, we will be able to increase our commercial participation across the Internet using a variety of software products, which should lead to reduced transaction costs. The standards are also open, which means anyone can freely use these standards, be they oil and natural gas companies, service and supply companies, or software companies developing transaction software."

The Standards, titled API Recommend Practice 3901, consist of:

• 12 XML schema transactions for Quote Request, Quote, Quote Notification, Return Requisition Request, Order, Order Response, Order Change, Field Ticket, Field Ticket Response, Invoice, Invoice Response and Invoice Exception
  
  
• Standards for transaction forms for Cementing Services, Coiled Tubing Services, Completion Services, Logging Services for cased and open holes, Perforating Services, Stimulation Services, Oilfield Transportation Services, Well Drilling and Bit Services and Well Testing Services

The standards were designed and tested by 20 companies to ensure their usability. Halliburton Energy Services recently announced that they are compliant with these e-commerce transaction standards. The standards will be housed at www.pidx.org and will be available for interested parties to download beginning in mid July.

The diverse members of the API PIDX Com.Pro.Serv. Task Group include representatives from numerous companies:

• Steering Committee - Conoco, Exxon Mobil Corp., Halliburton Energy Services, Inc., Marathon Oil Company, OFS Portal, PwC Consulting , SAP, Schlumberger Oilfield Services, Trade-Ranger, Unocal and Wellogix, Inc.
  
  
• Contributing Members - ABB, ChannelLinx, CanOilBid, Defense Energy Support Center, RCG Information Technology, Royal Dutch/Shell Group of Companies and Weatherford International

For more information on the program, please contact Sarita Leassear-Clark, API PIDX, at (202) 682-8491 or Leassear@api.org.