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One Oil Rig, Two Hurricanes, And BI

Occidental Petroleum uses performance management to forecast how soon it can cost-effectively get a facility up and running in the twin wakes of Katrina and Rita.
Three weeks later, it all happened again. Hurricane Rita approached the northern Gulf, going ashore on the Texas-Louisiana border at Category 3 strength. This time Horn Mountain was evacuated a little more quickly, Austin says. But Houston -- where his office is located -- was also evacuated, and it remained unmanned for a day and a half. No analyses were performed during that time.

Occidental managed to come through with an answer a little later nonetheless. This time the rig was down for six days, for a loss of $11 million.

After production resumed, before-and-after analyses showed that TM1 had been 90 percent accurate in its projections, Austin says. The main advantage afforded by the software is that Occidental didn't have to wait until the end of the month to know how much Horn Mountain's idleness was costing, Austin says.

"Without it, knowing when to hire the contractor would have been guesswork, and it would have taken a month to realize the results of being down," he says.

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