As the name suggests, KPIs help organizations define their performance parameters and see that they are being achieved satisfactorily. They vary from industry to industry. KPIs have to align with the overall goals of the company. KPIs should be selected carefully. They should be quantifiable and actionable.A close at key performance indicators for Oil Industry will bring us to financial indicators that are used to assess the financial well being of an organization. In the oil industry, costs are primarily related to finding, development and exploration activities. Revenues come from the sale of oil and gas. Therefore, production costs, oil exploration costs, finding and development costs and gross refining margin can be used as the primary performance indicators.Internal process perspective helps in finding out the efficiency of an organization-s internal processes and operations. Amount of oil spills, flaring, natural gas processing as per the standards and the efficiency of use of energy at plants and refineries can act as appropriate measures for finding out the said performance.A very important factor in deciding the success of a business is its customers. It is necessary that the business is seen in a positive light by the customers it serves. It can be easily achieved by the image it portrays by engaging in social investment activities and taking initiatives to reduce the number of fatalities and injuries of its staff and striving to maintain good relations with its business partners.Another major pointer to an oil company-s performance can be its environmental initiatives. KPIs to measure it can include the company-s initiatives to reduce green house gas emissions, zone depleting emissions, freshwater use and properly manage the waste generated.
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Companies involved in carrying out Oil production are to make huge investments in buying and installing heavy equipments. Also, a workforce of equally competent people has to be prepared to utilize those devices appropriately and beneficially. Add on to this, the requirement of complying with the legal norms of the state in the field of Oil procurement.
This sector of Oil manufacturing has a role to play in a nation's economy also, thereby adding to the reasons for ensuring a proper tracking way to be employed.
Such aspects bring in enough complications in the Oil production sector to make it necessary for introducing a monitoring tool. This makes up for an immediate need to construct a 'performance management tool'. One such answer can be Balanced Scorecard i.e. BSC. This device via the KPIs (Key Performance Indicators) engraved on it provide a means to evaluate the processes of Oil digging on the basis of a number of factors 'that count'.
To decide for the metrics that will actually reflect the movements of Oil industry, a detailed analytical study needs to be done. After getting over with this job, regular following of these indicators should be done to keep the operations within control and correct wherever things go haywire.
This is the actual scorecard with Oil Production Indicators and performance indicators. The performance indicators include: oil production, finding and development costs, gross refining margin, production costs per barrel, oil exploration costs, customer perspective, injuries, fatalities, joint ventures success rate, social investment, internal processes perspective, spills, flaring, energy intensity, natural gas processing, environmental perspective, green house gas emissions, ozone depleting emissions, freshwater use, waste disposal.
Download a trial version of Oil Production Evaluation Balanced Scorecard or purchase a full version online.
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