WHAT IS SAP IS OIL AND GAS?

These days many of the Oil & Gas companies apply ERP for their company, such as: Exxon Mobile,
Reliance, BP,Shell, BPCL,Aramco Overseas etc. SAP has developed an industry solution for the oil and
gas industry (SAP IS-OIL), featuring tools and automated processes designed especially for this sector
that we don’t have in SAP R/3 standard. The SAP solution integrates the entire oil and gas value chain —
from wellhead production to the service station. I want to share my 4+ years of experience in this field
debriefing about functionalities of SAP IS Oil.

The potential benefits of SAP IS Oil solution are including Improved barrels of oil equivalent
(BOE) production, Lower operating costs, Reduced incident rate and finding cost, Higher return on capital
employed (ROCE),Lower capital development costs, Reduced days of sales outstanding (DSO),Improved
on-time delivery.

Normally, Oil companies implemented and have FI-CO (financial controlling) MM (material management)
SD (sales and distribution), TR (transportation). Companies in every country execute the same functions
and solutions with FI, because it depends on regulations or policies of that particular country. However,
business process is different from companies and also industry for example the processes of apparel or
poultry industry are different than Oil and Gas Industry.

SAP IS Oil contains two major components:

Upstream: In Oil and Gas industry initial investment is very high for locating the source for crude oil and
then getting the permission from the government of the particular country where that source lies and then
extraction of the oil, no single company all along cannot bear that expenses so it involves big joint
ventures and the material (crude oil) is explored i.e. from underground source to aggressive storage to
refineries. This is called upstream and this covers joint venture accounting, and all the finance related
stuffs.
 Oil and Gas Business Processes

Downstream: This includes the refining, storage, transportation, pricing, Logistics, measurement and
retailing of final oil and gas products existing core R/3 sales and distribution a lot of changes has been
done fordownstream oil and gas functionality.

It’s difficult to discuss all about a specific industry in one post and I hope that this will help you come
closer to SAP IS Oil.