Marked domestic production increases have resulted from hydraulic fracturing in combination with horizontal drilling in major shale plays across the country. With those gains has come a renewed emphasis on the importance of proper measurement and verification processes.
The custody transfer (i.e., the sale) of crude oil from producers to purchasers is often accomplished through a LACT (Lease Automatic Custody Transfer) unit. As the custody transfer point, LACT deliveries should not only be measured and reported as accurately as possible, but they should be verified. Historically, LACT operations have been highly dependent upon the tanker truck driver for correct, conscientiously submitted data. However, recent advances in hardware, software, telecommunications, and information technologies allow leading-edge instrumentation to not only control and monitor LACT unit operations, but to instantly prepare and distribute electronic delivery tickets for each completed transfer, and then to webize the data for easy access, analysis, and archiving. When combined with relevant information from other sources, such as ancillary monitoring equipment, laboratory analyses, and field test reports, comprehensive system intelligence may be compiled.
This timely electronic gathering of information, in conjunction with advanced hydrocarbon measurement software systems, permits rigorous verification of the custody transfer...including preparation of balances across the production and delivery transfer points. With such tools and data, experienced analysts can readily identify and generally reconcile unacceptable gains or losses, whether due to bad data, leaks, measurement errors, improper accounting, or even fraud or outright theft.
Verification of crude oil custody transfer is a vital process whose time has come. Regardless of the price per barrel, be sure that you're accurately accounting for every sale, with an infrastructure and data repositories that can provide for a full supporting audit trail. For assistance in preparing and implementing the relevant policies and procedures, be sure to contact a highly specialized crude oil measurement specialist to assess the most advanced, cost-effective solutions available for verifying crude oil sales.
"To attain knowledge, add things every day. To attain wisdom, subtract things every day."
~ Laozi, Chinese philosopher