Study On The Cost Budget Management System Of The Oilfield Enterprises

In recent years, the contradiction between supply and demand of domestic oilresources is growing and the internal and external environment has deteriorated. Thereducing reserves of crude oils, increasing difficult of exploitation, as well as thecompetitive pressures from the international oil companies are making theprofitability of oil companies and the capacity for sustainable development besignificantly affected. The shortcomings of our country’s traditional cost budgetingsystem exacerbated the crisis. In the context of gradually extending of reservoirmanagement philosophy, the cost management model of oilfield block was proposedand it has attracted more and more attention. As the core of cost management, theresearches on cost budgeting management are of great significance for cost efficiencyand enhancing the capacity of sustainable development of our country’s oilfieldcompanies.Based on the above background, this paper first gave a brief introduction of thebudget management theory and cost budget management theory.Then departure fromthe analysis of status quo of the oilfield enterprises’ costs budget management, itpointed out the problems lying in the oilfield enterprises’ cost budget management,based what some sound advices were put forward on the oilfield enterprises’ costsbudget management system. On budget management organization system, the paperchanged the traditional model of organizational structure which based on the divisionof functions, and built a "Oilfield Company_Oil Production Plant_ReservoirManagement Area_Operating Layer”four levelsnetwork of organizations inaccordance with the the reservoir business philosophy."Reservoir Management Area_Operating Layer”was the main responsibility of the cost budget management, basedwhich a pyramid_shaped budget management network was built. On budgeting,budget preparation content was improved by building a “production_traffic_cost_effective "budget index system. Improve the budgeting means, give the priority tozero_based budgeting whith the other several budget methods combined, makingbudget by sub_systems. On budget analysis and control, implement the prior approval of the source control, build a monitoring network in the whole process of control,make regular analysises and adjustments after the control, and put the control to thedepth of production systems and links.On budget evaluation and incentive, this paperproposed the establishment of performance evaluation mechanism which combined,rights and responsibilities, making the budget targets as part of the KPI (keyperformance indicators) indicators with strict appraisal hard cash.At last, the paper putforward some views and recommendations on the safeguards of the costs budgetimprovements’ practical application in the oilfield enterprises. The new cost budgetmanagement system has a certain theoretical and practical value in terms of budgetmanagement, provide useful reference for further study of the budget managementand decision_making of oil production plant.