How do I Track Remote Inventory

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When oil volumes are sent to processing/cleaning/treating facilities, they are not always fully sold in the same month (due to volume flow-through restrictions or just late deliveries).  For government reporting and balancing purposes, these volumes have to be shown as fully delivered, but we want to book revenue only for the portion that’s truly sold.

If, for example, our operated battery delivered 100.0 m3 to the Cleaning facility and only 80.0 m3 was sold; we need to show deliveries of 100.0 to the Cleaning facility, track ownership of the 20.0 m3 of inventory at the Cleaning facility and book revenue for the 80.0 m3 that was actually sold. 

To track remote inventory in Metrix, we first require a Remote Inventory Battery be set up.  This facility is required so we can distinguish between the volume transferred and the volume actually sold.  So, using our original example, the sending battery will transfer 100.0 m3 to the Remote Inventory battery (for Petrinex reporting if required), the Remote Inventory battery will deliver 80.0 m3 to the Cleaning facility (so we can book revenue for this sale), and we retain 20.0 m3 inventory at the remote inventory battery (for sale in a future month).

To set up the Remote Inventory Battery:

• Ensure the Petrinex Facility flag is set up

  • Yes: a disposition will be created on the volumetric submission

  • No: the receipt created by the cleaning facility operator will create my disposition

All other Petrinex flags should be set to No as no Petrinex reporting is necessary

• No wells are linked as no battery production is expected 

• We suggest naming the Remote Inventory battery differently so that it is easily identifiable within Explorer, i.e. Remote Inventory (add a meaningful identifier here)

• Put the battery on production and attach it to the control group.  Since the oil battery (sending battery) will need to transfer to the Remote Inventory battery, the transfer needs to be added in the Control Group schematic (battery à remote inventory battery)
  
  

In the Battery Balance screen for your operated battery, configure a transfer to the Remote Inventory battery that represents the full volume that was sent to the Cleaning facility.  Doing this will show the correct movement of oil on your Petrinex reports. Using a Transfer disposition type also retains full ownership of volumes.

Then, in the Battery Balance screen for the Remote Inventory battery, add a delivery going to the Cleaning facility that represents the true sales volume at the Cleaning facility.  You need to calculate and populate the Battery Closing Inventory (total receipt volumes less delivery volumes) as there is no production at the Remote Inventory battery.  This sales volume should be priced and revenue will be booked at the Remote Inventory battery.  Any remaining inventory is tracked at the battery/well/ownership level to properly sell in future months.

Possible Scenarios:

Although the Cleaning/treating facility operator may provide you with sales and inventory volumes by well, most companies choose to track the remote inventories at the battery level.  This satisfies government reporting and simplifies market masters when the inventory is sold.  Additionally, the inventories are usually fully sold in a few months’ time which tends to balance out the well level. Because some clients may need to track remote inventories at the well level, we’ll touch on both scenarios below.

If you have multiple operated batteries delivering to the same cleaning facility, several options exist:

 1. Create a Remote Inventory Battery for each Battery that has remote inventory.

• Each battery transfers the full volume to the Remote Inventory battery.  At the sending battery, the Market Master for the Transfer to the remote inventory battery should be set up as Revenue Received No with the reason ‘Facility Transfer’.   

• With this option, there is only one receipt into the remote inventory battery and one delivery from the remote inventory battery. 

• The Market Master can include all participants and are simpler to configure.

2. Many operated batteries deliver to the same Remote Inventory Battery and multiple dispositions to the Cleaning facility are configured, each one will match the actual battery volumes sold at the Cleaning Plant.

• Each battery transfers the full volume to the remote inventory battery.  At the sending battery, the Market Master for the Transfer to the Remote Inventory battery should be set up as Revenue Received No with the reason ‘Facility Transfer’.   

• From the Remote Inventory battery, you will create a separate delivery to the Cleaning facility for each battery with that batteries’ sale volume.

  • With this option, there are multiple receipts into the remote inventory battery and multiple deliveries from the remote inventory battery.   

  • The Market Master set up for each delivery would need to specify the related battery.

3. Many operated batteries deliver to the Remote Inventory Battery and only one total disposition to the Cleaning facility is configured to match the total volumes sold from all batteries.    

• Each battery transfers the full volume to the Remote Inventory battery.  At the sending battery, the Market Master for the Transfer to the remote inventory battery should be set up as Revenue Received No with the reason ‘Facility Transfer’.   

• From the Remote Inventory battery, you will create one delivery to the Cleaning facility for the total sales volume from all batteries

  • With this option, there are multiple receipts into the remote inventory battery and only one delivery from the remote inventory battery. 

  • If you are tracking inventory/sales at a battery level and need to match volumes provided by the cleaning facility operator, the Market master set up for the delivery (Allocation Method: User Input) would contain separate purchaser sequences per battery and the battery volumes would be entered into the nominations screen (User input screen).

  • If you are tracking remote inventories per well and need to match volumes provided by the cleaning facility operator, the Market master set up for the delivery (Allocation Method: User Input) would contain separate purchaser sequences per individual well and the well volumes would be entered into the nominations screen (User input screen).

The Remote Inventory handling within Metrix provides the flexibility to address many scenarios.