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Engineering judgment · 3 min read

An imbalance is a question, not automatically a loss

Separate timing, inventory, measurement uncertainty and physical loss before giving a difference a financial meaning.

ESTIMATE · RECONCILE · REVIEW

Start with comparable quantities

An inlet and outlet may disagree because they use different periods, reference conditions or inventory boundaries. Before interpreting a residual as physical loss, align the measurement basis and account for stock movements, internal consumption and recorded dispositions.

Keep numerical reconciliation separate from physical explanation. An allocation factor closes an accounting model; it does not prove where a difference originated.

Make uncertainty visible

A calibrated measurement and an aging well estimate do not offer the same evidence. In a simplified uncertainty-weighted model, estimates with larger independent error variances absorb more of a reconciliation adjustment. A proportional model distributes it by estimated volume.

Neither method is universally correct. Correlations, physical constraints and allocation agreements matter. Our engineering scenario compares simplified approaches while holding the corrected custody total fixed, making the consequence of the method visible.

Establish the operational value

Track how quickly reviewers identify suspect readings, missing stock movements or period mismatches. Measure unresolved exceptions and the time required to explain them. Verify any actual volume recovery separately.

HCF360’s uncertainty narrative is strongest when reviewers can see which quantities were measured, which were estimated and why an adjustment was assigned. An explicit decision is more useful than a silently absorbed residual.

The value to establish

More focused investigations and fewer unsupported conclusions about missing production.

Editorial guide · Hydrocarbon Flow 360. Numerical examples are synthetic. Methods, agreements and operating constraints must be reviewed for the actual facility.