ENP Technologies

Business value of Hydrocarbon Accounting

Hydrocarbon Accounting is facilitated by PDMS, the Production Data Management System. A key component of Industrial IoT (IIoT) for oil & gas services, PDMS enhances your ability to manage your digital oil field through true information management, cloud applications, and digitalization.


The Production Data Management System (PDMS) is required to collect, validate and aggregate field data (production volume and operating parameters), back-allocate production data to wellheads (well completions) and feed processed data through the flow network into RA (Revenue Accounting) daily. The data received from Process or Historians will handle other data components like crude oil and condensate dispatch volumes with quality parameters, chemical receipt, and consumption.

PDMS is like the real-time data historian that collects data from the DCS and LIMS databases. As the field development continues, the number of wells online and corresponding measurements increase proportionately. This increase facilitates tracking and reporting estimated production volumes from wellheads to custody transfer points. Finally, the validated daily volume is published under the consolidated upstream production and revenue accounting system through graphs, charts, reports, and flow-grids.

Data Validation and Reconciliation

The critical part of the flow is to validate data at every stage. The underlying PDMS (DCS, Historian) have validation checks on engineering data limits and basic filtering. That includes a quality filter (analog, value, timestamp check) and consistency in units (e.g., USC, SI) and range (e.g., MMSCMD, etc.). Generic limit check for high and low limits within configurable range for the tag value with related trends.
If the tag value exceeds the range, then corrective actions are performed by comparing or using the last good value. If required, manual entry can be validated for errors. Such values have to be validated daily for production allocation. This is performed under that change management process.


The hydrocarbon accounting software is taken into Revenue, Income, Expenditure, Assets, and Liabilities. We can account for hydrocarbon produced, internal use, hydrocarbon-flared/ re-injected, and sold, with statements generated for internal and external reporting based on well, field, and block-wise.

The production and sales quantities flow from PDMS into the Sales and Distribution Module of ERP. Accordingly, hydrocarbon accounting and allocation orders are generated based on the sales agreements or contracts with the customers. ERP then generates the sales invoices, and consequently, sales are credited, and the customer’s ledger is debited, showing as receivables. That provides the results for income booking.
Regularly – Daily/ monthly allocations for inventory & production of crude oil i.e. digital solutions for oil and gas, condensate, Sales/dispatch figures are recorded, validated, and organized for statements/ reports. Based on requirements, previous period adjustments are allowed. Finally, ensure that allocation reports for hydrocarbon are available in energy units (MMBTU) for uniform reporting.

The expenditure is on account of consumption of materials and expenditure on account of services. Work Orders or Purchase Orders are placed on the vendors for the provision of services and supply of goods. Goods Received Note is raised when the Goods are received. The material is taken into the inventory, and consequently, when the same is issued for consumption, it is transferred to the respective material consumption account (expenditure account).

Services are provided by the vendor, and service entries are passed by the functional groups. The service entries specify the usage of the service. While the service entry is passed expenditure account is debited, and the liability account is credited. Thus liability recognized is adjusted as the accounts payable processes the invoice. Based on the entries, profit is generated, and balance expenditure on account of the other expenses entered.

Report and Forecasting

Based on the current performance analysis (daily hydrocarbon allocation), future forecasts can be estimated (production forecast numbers). Reporting supports the decision-making process of management. Analyze the profit potential versus actual. Help to measure internal practice against the best practice. Adapt the competitive positioning and strategy. Analyze the product and process improvement areas for cost reduction. This is to understand and help in the process of reserve estimate, its useful life, salvage value, and financing policy.

Integrating Digital Manufacturing Processes

Moving from an analog system to a digital system can be a complex process, but with the use of IT outsourcing and a managed service provider, your company will find it much easier to adapt.
The production allocation software holds the key to a more productive and more efficient business, while IT solutions and digital information management will revolutionize the way you work – Industry 4.0 is here, and you can access the benefits right now.
To find out more about how our IT Managed Services can help your company, please get in touch with us today.