Data Gumbo Blog

Getting Rid of Invoice Engineering is Possible

Aug 12, 2020 8:33:55 AM / by Andrew Bruce

Whether hot and dusty, freezing cold or perched over saltwater, a constant geolocationally-agnostic task at hand is that stack of paper tickets and invoices that proliferates across the desk of the ‘company man.’ With years spent in college and various training courses to responsibly manage the safe construction of productive wells, paperwork can feel a Sisyphean side chore — with two to three hours a day spent stamping tickets. In 2020, this waste of time — not to mention resources — is beyond undesirable and no longer necessary.

Around 85 to 90% of services performed on-site could be moved to automated contract execution to track the delivery of goods and services performed. To do so, both buyer and seller will need to identify agreed sources of data to feed a smart contract, which is essentially a codified version of a natural language contract broken into computer script.

Blockchain and smart contract technology can be leveraged to rid the industry of paper tickets and paper-based thinking in invoicing and payment processes.

Applications of Technology
Several examples of manual, paper-based deliveries imperative to site productivity that can be automated right now using existing sensors and data sources from the drilling site include:

  • Diesel Fuel
    Whether delivered by vessel or truck, fuel delivery measurements can be automated by using a temperature-adjusted meter as the fuel hits a rig’s tank providing access to real time, digital settlement information for fuel delivered.

  • Rental Tools
    Service providers must track the location of their tools for billing purposes, just as oil companies look for invoices based on either levels of service or per tool daily charges. By combining the data available in both of the counterparties’ systems, rental tool data can be tracked to a site by trucking manifest, GPS or RFID technology with time in the hole tied to bit depth from rig information and the BHA section of an IADC daily toursheet.

    Field tests have shown that using these types of sources for automation yields a 98% accuracy rate compared to the current manual methods. Instead of spending weeks or months getting to finality the parties have updated charges daily. Furthermore, immutable data can be shared with project participants in the format they need: broken down by tool and product line for a service provider and in a consolidated service line item for an operator.

  • Cost Reimbursables
    For frequent cost reimbursable items such as EDR, forklift rentals, shaker screens, etc., charges are often binary or clearly prorated. As a result, the use of simple checkboxes in a digital morning report or IADC signed by a company man can serve as evidence enough for billing automation. This ensures the service provider gets paid for the extra services and operators only pay for what their personnel confirm occurred.

  • Paper Tickets
    Electronic field ticketing systems have become extremely affordable and flexible as of late. Many of the companies that exist today provide a free iOS app and charge a few pennies or dollars a ticket, while allowing service companies to configure tickets to whatever their particular services offerings are. Tickets can then be either signed on a device in the field or workflowed to the appropriate signatory. Even in this manual process, the digital results are much easier to track, consume and pay from then triplicate paper tickets.

Moving to Automation
Automated smart contracts are not going to solve every aspect of billing issues on-site. But they can certainly relieve the burden of busywork on an operator’s representative and the service providers. By alleviating the mundane tasks of stamping tickets and processing paper invoices, technology can serve as a boon to better streamline resources and the time for that of the company man.

 

Topics: Blockchain, Oil & Gas, Smart Contracts

Andrew Bruce

Written by Andrew Bruce