Delivering Real-Time Business Value for Oil and Gas

Delivering Real-Time Business Value

for Oil and Gas SAP Business Suite Powered by SAP HANA July 2013 Public

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2 Public

Prudent and cost-effective development of all

available energy resources requires coordinated

planning, development, and operation of complex,

capital-intensive programs. To be effective, energy

enterprises must adapt quickly to changing market

and regulatory dynamics:

Maximize production without compromising safety

Invest the right resources in the right projects

Deliver greater value while consistently reducing the cost

The real-time opportunity


The prudent energy supplier Ensure safe, efficient, and responsive operations

Maximize

production without

compromising

safety or

compliance

Optimize asset performance through streamlined and

integrated processes.

Enhance visibility into asset performance to improve

maintenance efficiency and proactively manage risk

and safety.

Invest the right

resources in the

right projects

Initiate new projects with reliable analytics and

integrated processes to support quality work on time

and within budget.

Gain insights to support fact-based investment

decisions.

Deliver greater

value while

consistently

reducing the cost

Streamline all financial functions with minimal error

rates and self-service reporting for business users.

Work with efficient and effective planning and

budgeting, detailed reporting of costs and profitability,

and quick and easy scenario analysis.


SAP Business Suite powered by SAP HANA The next-generation business platform

Real-time business

In-memory

Business

transactions

Digital

connections

Collaborative

business

Cloud Social

Big Data Mobile

One platform bringing it all together

Advanced

analytics


Industry value map for oil and gas The prudent energy supplier

IT Management

Operational Integrity

Risk Analysis and Governance

Operational Risk Management

Asset Integrity

Capital and

Spend Effectiveness

Strategy Management

Planning, Building, and

Commissioning Assets

Supplier Discovery and

Lifecycle Management

Analyzing, Sourcing, and

Contracting

Integrated Digital Oilfield

Operations

Field Data Capture and Surveillance

Integrated Planning and

Performance Analysis

Field Execution

Hydrocarbon Accounting

Hydrocarbon Supply Chain

Commodity Management

Refining and Plant Management

Hydrocarbon Supply and Distribution

People and

Talent Core Human Resources and

Payroll Talent Management

Time and

Attendance Management

Workforce Planning and

Analytics

Finance Financial Performance

Management

Accounting and

Financial Close

Treasury and

Financial Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and

Project Management IT Service Management IT Strategy and Governance

Procurement and

Order Collaboration

Commercial Sales and Retailing Environmental Stewardship

Training and Certification

Technology

Solutions

3-D Business

Visualization Consumer Experience Analytics Enterprise Mobility

SAP HANA Platform

Application Develop-

ment and Integration

Data

Management


IT Management

Operational Integrity

Risk Analysis and Governance

Operational Risk Management

Asset Integrity

Capital and

Spend Effectiveness

Strategy Management

Planning, Building, and

Commissioning Assets

Supplier Discovery and

Lifecycle Management

Analyzing, Sourcing, and

Contracting

Integrated Digital Oilfield

Operations

Field Data Capture and Surveillance

Integrated Planning and

Performance Analysis

Field Execution

Hydrocarbon Accounting

Hydrocarbon Supply Chain

Commodity Management

Refining and Plant Management

Hydrocarbon Supply and Distribution

People and

Talent Core Human Resources and

Payroll Talent Management

Time and

Attendance Management

Workforce Planning and

Analytics

Finance Financial Performance

Management

Accounting and

Financial Close

Treasury and

Financial Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and

Project Management IT Service Management IT Strategy and Governance

Procurement and

Order Collaboration

Commercial Sales and Retailing Environmental Stewardship

Training and Certification

Technology

Solutions

3-D Business

Visualization Consumer Experience Analytics Enterprise Mobility

SAP HANA Platform

Application Develop-

ment and Integration

Data

Management

1

2 3

4 5

6

7

Industry value map for oil and gas The prudent energy supplier

Highest real-time

business value

for oil and gas


Today

KPI improvements are high-level estimates and will have to be validated for each customer situation.

Asset integrity (1/3) Real-time maintenance plan scheduling

Manual and error-prone process of

preselecting maintenance plans

Potential lack of objects necessary

for automatic generation of

maintenance orders

Schedule all maintenance plans

within a specific timeframe

Plan several times a day (instead of

once a week) for up-to-date

scheduling information in

maintenance operations

Improve

quality of preventive

maintenance

program

Reduce time for maintenance

plan scheduling

Maintenance plan scheduling that

consumes a great deal of time

High number of maintenance plans

that need to be scheduled frequently

Accelerate mass transactions

Preselect plans due to speed the

process significantly

Easier and more flexible scheduling of maintenance plans that leads to real-

time adjustments based on asset usage and therefore to better uptime,

fewer failures, and mitigation of production losses.

With SAP Business Suite on SAP HANA


Today


Asset integrity (2/3) Real-time spare parts planning

Decisions often based on periodic

material requirements planning

(MRP) runs and outdated

information; process done in batch

Faster replanning to allow more

frequent MRP runs in shorter cycles

Instant reaction to demand changes

and updates to the supplier

Demand information propagated

through the supply chain more

quickly

Reduce

out of stocks

Decrease

inventory and

safety stocks

Inability to replan quickly if conditions

change due to long run times

Difficult prediction of inventory

coverage for critical parts

More frequent MRP runs:

Allow reduction in inventory and

safety stock levels

Accelerate information flow to

suppliers to enable them to react to

changed planning conditions more

quickly

Faster replanning to allow more frequent MRP runs in shorter cycles.



Today


Asset integrity (3/3) Warehouse management

No up-to-date view of the inventory

situation

Need for accurate display of actual

stock to react to stock shortfalls

quickly

Time-consuming reporting on

inventory management

Real-time access to complex

inventory management data

Real-time stock insight and inventory

monitoring

High-performance inventory

management with large volumes of

documents

Higher process efficiency in adjacent

procurement processes

Reduce inventory levels by

2%–5%

Improve

Optimize

SLA with real-time

product allocation

working capital



Today


Planning, building, and commissioning assets (1/2) Project management

Project members experience long

waiting times when starting the

project and task dashboards. This

situation reduces user productivity

when working on several projects

and tasks across projects.

Updates on multiple tasks are

inefficient and time-consuming

because project team members

confirm tasks one by one to reduce

waiting times.

Searching for documents across

projects takes a very long time for a

large portfolio of projects.

The process of finding projects,

tasks, and phases by those

responsible is slow.

Faster access to my tasks and my

projects

Accelerated access to project, task,

and checklist items dashboards

Ability of project team members to

confirm times, status, and dates and

to attach documents for several tasks

at once

Increased user productivity

Accelerated search for documents

Accelerated ability to find projects or

tasks by responsible project member

Increase user productivity

Reduce

Improve

time for task

confirmation

search for

documents and

project elements



Today


Planning, building, and commissioning assets (2/2) Project management (PS)

Long wait and locking times along

business processes hinder project

execution and the flexibility needed to

react to deviations.

User acceptance is reduced due to

affected usability in handling large

amounts of project data.

Reduced waiting and locking times of

critical transactions along the end-to-

end process result in higher process

efficiency and improved employee

productivity.

Increase

user productivity

and end-to-end

process efficiency

Improve

transparency and

decision support to

take appropriate

corrective measures

in time

Real-time analysis of high volumes of

data for complex, long-lasting

projects or cross-project monitoring is

challenging due to high data

volumes.

Due to missing 360 degree real-time

transparency across applications

deviations in costs, time, resources,

or quality are seen too late in the

process.

Acceleration of project information system reporting and new project line item reporting deliver faster insights.

Early insight in deviations and risks enable timely corrective measures by highlighting deviations in real time.

Planned: Project execution cockpit enables project managers and employees to analyze the status and progress of one or more projects in execution from an end-to-end perspective at maximum speed with real-time data and to derive and execute actions wherever applicable.



Today


Refining and plant management Global plant performance management

Inability to gather and visualize data

from production in real time to

improve the status of manufacturing

performance within and across

multiple sites

Inability to understand where

machine maintenance issues and

bottlenecks exist in production

Need to capture the root causes for

downtime, efficiency loss, and poor

quality

Unplanned downtime, suboptimal

performance, and poor product

quality all contribute to decreased

asset utilization, poor product yields,

increased costs, and reduced

customer responsiveness

Combines quantitative performance

measures with qualitative context and

reasons for performance issues

Combines plant performance with

business context

Facilitates corrective action at the

plant level and across plants

Enables broader supply chain,

sustainability, financial, and

enterprise performance

improvements

Allows enterprise-level overall

equipment effectiveness (OEE) to roll

up plant-level OEE for enterprise

analytics and comparing assets and

performance across multiple sites

Improved return on assets,

costs of goods

sold, and product

quality

Increased

Reduced

resource utilization

and asset uptime

unplanned downtime,

changeover, and

waste by

5%–10%



Today


Accounting and financial close Entity close

Long-running processes

Time-intensive reconciliations

Limited time for analysis

Inefficiencies due to manual

processes and low automation

Missing financial excellence

results in higher cost of equity

on the capital markets

Difficulties in supporting parallel

financial reporting standards on a

global basis and in simulation of

scenarios

More time for analysis, less overtime,

or earlier publishing of financial

results through faster period-end

processes and better reconciliation

Increased efficiency through smarter

reconciliation and reporting, reducing

operating costs and improving

stakeholder satisfaction

Real-time analytics down to the

lowest level of detail – delivering

quality at source, transparency, and

process efficiencies

Minimize

time to close the

entities’ books by

50%

Reduce

Enhance

cost of financial

reporting by

40%

compliance and

accuracy by

50%



Today


Financial performance management Planning, budgeting, and forecasting

Planning performance limited to

OLAP; staged cubes for transactional

and master data

Data-load performance driven by the

amount of data extracted from SAP

Business Suite

Reporting, loading, and retraction

performance that limit planning

iterations

Drilldown within OLAP cube and drill-

through to data in SAP Business

Suite and OLTP data within standard

times

Smooth replication of master and

transactional data from SAP

Business Suite

Availability of more granular data to

support planning

Negation of Big Data challenge to

allow for faster extract and activation

times for days sales outstanding

(DSO)

Iterative planning and real-time

simulation supported through improved

performance

Improved performance for drill-down

(expand) and consolidation (collapse)

Fast drill-through and live view of

transactional data in SAP Business

Suite

Improve service level

performance

Reduce

Minimize

cycle times and

manual effort

operating costs



Today


Financial performance management Profitability and cost analysis

Data latencies and process delays

affect the ability to react to issues

and opportunities

Lack of data depth and user self-

service affect internal decision-

making

Long-running processes

Time-intensive data queries

Primarily manual data analysis

Substantial amount of effort (time

spent) not directly adding value

Suboptimal resource efficiency and

effectiveness

Timely execution of critical business

processes that supports decision

making and increases the ability to

act swiftly (insight to action) in

dynamic market environments

Critical transactions and calculations

that run quickly

Instant response times on queries

Prebuilt analytics that automate the

data analysis process

Leaner processes from data capture

through data analysis

Increased productivity through

process-optimized analytics and

mobile support


Improve service level

performance

Reduce

Minimize

cycle times and

manual effort by

40%

operating costs


Today


Financial performance management Financial and managerial reporting

Risk of noncompliance due to

unfulfilled (overruns in) audits

A lot of data; decision-relevant

information not readily available

Data analysis not supported or

automated

Long-running batch jobs and reports

Time-intensive data analysis

Large number of time-consuming,

and non-value-added processes

required to provide (access)

accurate, up-to-date information

Timely execution of compliance-

relevant validation tasks

Increased end-user satisfaction

(accurate, detailed, visualized, timely,

and actionable information)

Accelerated key, critical-path

processes and reports

Instant response time on most data

analysis queries

Elimination of workarounds and data

latencies

End-user data analysis through self-

service means (with SAP

BusinessObjects business

intelligence solutions)


Improve service-level

performance

Reduce

Minimize

cycle times and

manual effort

operating costs

by

10%


Today


Commercial sales and retailing LoB Sales

Missed market opportunities due to

lack of visibility and inefficient

processes

Data explosion, driven by new level

of connectivity of consumers through

mobile devices and social networks

Data in disparate sources, preventing

a true 360-degree view of the

customer

Agile marketing to respond faster to

changing market dynamics and

opportunities

New analytical data-mining

capabilities on Big Data (social media

and predictive)

Near-real-time monitoring and

reporting on marketing performance

One central place for collecting all

customer data, leading to a 360-

degree view of customers in real time

Precision marketing to personalize

every interaction with the customer

Improve profitability by

0.5%

Optimize

Increase

return on marketing

investments by

15%

customer

satisfaction by

40%



Today


Commercial sales and retailing LoB Marketing

Difficulty in distinguishing profitable

customers in the customer pool

Inability to identify gaps in the sales

pipeline, leading to missed targets

Extraction of actionable information

from enterprise-wide customer data to

maximize the chance of a sale

Minimal insight into buying

preferences of customers in social-

data context

Easy identification of profitable

customers with account intelligence

analytics

Faster transaction search functions

Complete transparency into sales

pipeline based on real-time

information with unlimited drill-down

functions

Real-time analysis of Big Data to

understand buying patterns better

Real-time access and assembly of all

data including social and sales data

Increase

profitability by

0.5%

Increase

Improve

percentage of

sales reps

achieving quota by

17%

offer win rate



Today


Commercial sales and retailing Contact management with interaction center

To successfully resolve customer

issues, companies need to be able to

locate the right experts or resources

within the organization quickly,

whether they reside inside the

contact center or elsewhere.

Managers and supervisors lack

actionable reporting and visibility into

the workload of their teams.

A high volume of customer records

and interactions result in increased

search times and greater difficulty in

locating specific customer records.

With the new agent inbox based on SAP HANA, users can more easily search for relevant experts – in their own team or elsewhere in the organization – to dispatch or escalate issues to the best-suited employee roles

A new interactive work distribution

dashboard provides supervisors with

actionable insights into the workload

of their teams and employees

Searches in the interaction center are

significantly faster including account

searches, interaction history, and the

customer fact sheet

Decrease average handling

time (AHT) by

50%

Improve

Reduce

SLA compliance

service cost by

20%



Today


Procurement and order collaboration Operational procurement

Missing real-time insight into

operational procurement reporting

Lack of functions to create

operational procurement–related

reporting dynamically in a modern

user interface

Slow and costly paper-based

processes

High transaction costs

Long-running transactions while

posting documents with a high

number of line items

Frequent errors yield to maverick

spend

New configuration options for

procurement analysis

Modern and easier-to-consume user-

interface

Complete visibility into end-to-end

procurement activities

Real-time insight and easier-to-

manipulate information

Accelerated long-lasting processing

of purchasing documents

Increase transparency

Lower

Increase

procurement

operations cost by

20%

process

effectiveness


Customer cases

Indian paint

manufacturer

Support sales decision making and

corrective actions

Improve effectiveness of trade promotion

spend

Proactively track and manage customer

service level

European

petrochemical firm

Financial Performance Management:

Accelerated financial reporting measured by

increased employee productivity

Leading U.S.

chemical

manufacturer

One BW on HANA reporting for SCM real-

time planning analytics: Ability to modify

customer SLA based on profitability to

reduce inventory

Annual benefit

US$ 10.7

million

Annual benefit

$2.4 million

Annual benefit

$15 million


Next step Business scenario recommendation and value discovery workshop

SAP offers a proven methodology and approach to

discover the customer-specific business

improvement areas and quantify value potential.

We suggest such a workshop with your

line-of-business and IT experts.

As starting point, we recommend a performance

and usage analysis of your current system.

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Thank you

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Appendix Detailed customer cases


Feasibility

Bu

sin

ess v

alu

e

Legend

Lo

w

Hig

h

Low High

Payroll on

SAP HANA

($5 million)

Annual revenue: US$100 billion

SAP HANA platform: Customer -specific

SAP HANA, applications: SAP NetWeaver BW on SAP HANA

and high-performance applications

SAP Business Suite on SAP HANA: Available today or planned

SAP HANA:

Use case

Accelerated

financial reporting

($4 million)

Well work-over

planning

($12 million)

SAP ERP on

SAP HANA

($4.5 million)

Gas

transmission

integrity

($34 million)

Real-time

procurement

planning

($45 million)

Reduction

production loss

($49 million)

Transportation

balancing

($98 million) Real-time

drilling failure

prediction

($2 million)

1

1

1

2

2

2

3

3

3

Reference $100 billion oil-and-gas company Summary validated scenarios

Legend

SAP Business

Suite on

SAP HANA

SAP HANA,

applications

SAP HANA

Platform

1 Short term

FIN: Accelerated reporting: Slow data-mining process

makes reporting a burden of resources, putting

company at risk of mistakes in publicly available

reporting

HCM:

Payroll: Centralized payroll processing for 400,000

employees within 5 days based on SAP HANA –

faster and with fewer calculating resources)

BPC: ERP: Huge volume of data coming from over 200

legal entities – very time-and labor-consuming

process

2 Medium term

SRM: Real time procurement planning: Reduced lead

time for new on-shore or off-shore oil rig plans to

procure material to start construction for

competitive advantage

SCM: Reduction production loss: Gas production and

transmission system diagnostics and monitoring to

prevent loss and fraud. There is currently no

analysis of real time transmission data in real time.

SCM: Transportation balancing : Complex time- and

labor-consuming process of balancing gas volume

transmitted over the system based on sheer

number of data points

Note: Included in business case

Phase – deployment road map SAP HANA use cases mapped to

industry value map end-to-end solutions


Reference $100 billion oil-and-gas company SAP HANA as a real-time data platform

13 13 13

95

130

98

112

0

50

100

150

200

250

300

2013 Phase 1 Phase 2 Phase 3

Costs SoH Applications Platform

$ Annual benefits, SAP HANA

Platform: $112 million

Annual benefits, applications

powered by SAP HANA: $130 million

Annual benefits, SAP Business

Suite on SAP HANA: $13 million

Estimated deployment costs

Total transition cost: TBD

In millions of USD

More information: Value engineering

Annual revenue: $100 billion

Based on actual SAP

customer engagements

SAP HANA Platform: Anything built on the platform that is customer-specific – new business processes and business models

SAP HANA, products: SAP NetWeaver BW powered by SAP HANA, high-performance apps (HPAs), and applications – mapped

to inventory value map (IVM) end-to-end (E2E) solutions

Currently available functionality (SP0, 1, and 2) – 23 scenarios mapped to IVM End-to-End Solutions and planned functionality

(all the End-to-End Solutions on the IVM are in scope)

SoH = SAP Business Suite on SAP HANA

SAP HANA Platform

SAP HANA products

SAP Business Suite on SAP HANA


Note: Use cases in the global use case repository are captured directly from customers and internal innovation sessions

and may not be completely validated.

Oil refining and marketing: SAP NetWeaver on SAP HANA for

downstream financial reporting Oil and gas

Business context and goals

Improved cash and liquidity management

Business challenges

Predict cash flows to manage collections, risk, and short-term borrowing in real time

Process innovations

Interactive analysis of both inbound and outbound operating and capital cash-flow data in several

dimensions

Access to payment history at customer, partner, product, asset, and geographic level

Contribution of SAP HANA

Increased flexibility for use:

Drastic improvement of the response time of the system

Sharp reduction in the risk of delays in the availability of daily report

Ability to ensure the availability of large volumes of data reduction of operating costs

Value drivers and key performance indicators

DSO, DPO, FTE IT efficiency, and FTE business efficiency

Innovation scope

SAP HANA, products (HPAs and apps)

End-to-end (E2E) solution

Oil and gas – financial performance

management

Value potential 3

Feasibility 2

Low High

1 5

Low High

1 5




Global energy company – payroll on SAP HANA Oil and gas


Centralized payroll processing for 400,000 employees

Business challenges

Current payroll regulation requires this process to be finalized within first 5 days of the month.

Doing so for 400,000 employees within 5 days requires huge calculating capacity and lots

of work.

Process innovations

Centralized payroll processing for 400,000 employees within 5 days based on technology of SAP

HANA – faster and requires fewer calculation resources


Requirements for performance and large volume of data


Productivity increase for HR and finance:

Improved compliance with regulations on payroll processing

Improved employee satisfaction because of erroneous payroll reduction

Innovation scope

SAP Business Suite on SAP HANA (now and

in the future)


Oil and gas – core HR and payroll

Value potential 3

Feasibility 4

Low High

1 5

Low High

1 5




Global energy company – SAP ERP on SAP HANA Oil and gas


Accelerated financial processes to speed up financial closing and improve performance

Business challenges

Intense labor needs to process a huge volume of data coming from over 200 legal entities

Desire to improve accuracy and timeliness significantly

Process innovations

Centralized data collection and processing can simplify and speed up financial processes

significantly


Data volume and requirement to processing speed


Increased productivity of finance function

Selling, general, and administrative expenses reduction

Innovation scope


in the future)


Oil and gas – financial performance management

Value potential 3

Feasibility 4

Low High

1 5

Low High

1 5




Global energy company – gas transmission system integrity Oil and gas


Real-time analysis of equipment diagnostics data to forecast equipment reliability and plan

maintenance based on the state of the equipment

Business challenges

Despite multiple real-time measurement of equipment parameters, this data is not analyzed in

real time. Maintenance is conducted according to a fixed schedule or based on the results of

periodic diagnostics. As a result, opportunities to optimize maintenance costs or increase

equipment availability are lost

Process innovations

Real-time analytics of huge data volume and predictive analytics to analyze the state of

equipment, make conclusions about its state, and plan maintenance accordingly


Analysis of huge volume of data in real time


Maintenance cost reduction:

Equipment and asset availability increase

Risks of equipment breakdown reduction

Personnel efficiency increase

Innovation scope



Oil and gas – asset integrity

Value potential 3

Feasibility 3

Low High

1 5

Low High

1 5




Global energy company – instant balancing of gas transported Oil and gas


Accelerating the process of balancing gas volume transmitted through the system to prevent delays in

customer billing, reduce multiple discrepancies and a lack of clarity in the invoices, and costs for

reconciliation; accelerate customer payments; and increase customer satisfaction

Business challenges

Complex time- and labor-consuming process of balancing gas volume transmitted through the system

based on the sheer number of data points

Delays in customer billing, multiple discrepancies and a lack of clarity in the invoices, high costs for

reconciliation, late customer payments, and low customer satisfaction

Political tension around gas trading

Critical for the core business, COO area, supply chain execution, and finance; some instances require

involvement of the government for resolution

Process innovations

SAP HANA is uniquely positioned to help customer simplify and accelerate transmitted gas balancing,

speed up invoicing, and bring clarity to the process

Solution is based on SAP HANA and involves significant CDP. The solutions, including process mapping,

data collection, processing algorithms, and results interpretation should be developed from scratch, which

drives the complexity and costs of the project. Risks include delays or failure of the project, but the risks will

not affect customer’s core business negatively.


Analysis of huge volume of data


Sales volume increase, improved customer satisfaction, improved visibility and transparency, and

increased market capitalization

Decreased DSO

Innovation scope

SAP HANA Platform (customer-specific)


Oil and gas – hydrocarbon supply and

distribution

Value potential 5

Feasibility 3

Low High

1 5

Low High

1 5




Global energy company –transportation and production loss Oil and gas


Real-time analysis of gas transmission system diagnostics and monitoring to prevent loss and

fraud

Business challenges

The data about the transmission system is collected hourly, but there is no way to analyze it in

real time currently. As a result, huge opportunities in preventing losses and fraud are lost.

Process innovations

Given the performance and capacity to work with real-time data of SAP HANA, the company can

now analyze network diagnostics data instantly, assess potential losses, and make relevant

decisions on abnormal situations in the system


Analysis of a huge volume of data real time


Production losses decrease:

Improved risk management

Increased asset utilization

Improved employee effectiveness

Innovation scope



Oil and gas – operational risk management

Value potential 4

Feasibility 3

Low High

1 5

Low High

1 5




Oil and gas – sustain the competitive advantage of the

trading business Oil and gas


Need for better-informed trading decisions

Business challenges

Delay in getting data to analyze trading performance

Process innovations

Reduced time to get trading actual data


Accelerated Big Data analysis in trading process


Reduction in lost revenue due to lack of visibility and what-if analysis to limit exposure and

improve trading efficiencies

Innovation scope



Oil and gas – SAP HANA Platform

Value potential 4

Feasibility 4

Low High

1 5

Low High

1 5




Oil and gas customer – real-time prediction of drilling failures Oil and gas


It is estimated that the stuck drill problem alone costs the oil industry in the hundreds of millions of dollars every

year. Even when all precautions are taken, a stuck pipe may occur. For example, to free a differentially stuck drill

string, the driller must overcome the restraining force of the drilling fluid, which pushes the drill string against a

permeable formation. The drill string (drill pipe or collars) will soon become imbedded in the filter cake opposite

the permeable zone if corrective action is not taken as soon as the sticking situation is noticed.

Business challenges

Predicting a stuck pipe is a very technical exercise: Data is being collected on many channels at the site of the

drilling operations and historic data is also available Today, the process is not analytical, with a prediction based

on the drilling crew’s experience and skill. Decisions based on data involve measurements of torque, drag,

weight on bit, mud flow, equivalent circulating density, weather, and the like. Te size of the rock fragments in the

drilling mud, vibration, and other visual and sensory input also play an important role in the decisions.

Process innovations

Respond rapidly to changing drilling conditions: Implementation of an analytical control system that alerts the

drilling crew to stuck-drill events. Enable truly real-time prediction by sensing and responding to failure with low

latency. Improve automation and execution speed and the efficiency of drilling operations and reduce drilling

cost. Avoid lost revenue due to down-time of a drill rig during the remediation process.


SAP HANA will enable customers to detect and predict upcoming events and potential failures in real time and at

unprecedented speed to enable corrective action. Data from multiple sources including the drill string, earth

model, historical data, and so on are aggregated into SAP HANA and predictive analytic models. Pattern re-

cognition, simulation, and event processing can be defined flexibly to works on real-time and historical well data.


Drilling efficiency improvement

Innovation scope



Oil and gas – field execution

Value potential 5

Feasibility 3

Low High

1 5

Low High

1 5




Oil and gas customer – well work-over plan optimization Oil and gas


Upstream companies face constant challenges (equipment failure, well under-performance, and

other well-servicing requirements) to maintain the hydrocarbon production from wells according

to plan. When liquid loading occurs in wells in a producing field, the operator needs to find an

optimum schedule for performing a work-over service (like swabbing) that optimizes the revenue

loss and work-over cost against the potential production gains subsequent to the work-over

operation.

Business challenges

Limited ability to apply the knowledge from historical work-overs and arrive at optimal work-over

plan. Limited ability to react fast and communicate with service providers for changes to work-

over schedule.

Process innovations

Analyze historical data on previous work-overs using statistical techniques and use this

knowledge to predict behavior of planned work-overs. Arrive at the optimal work-over plan for

servicing multiple wells in the field and communicate with service providers.


Analyze historical data on previous work-overs using statistical techniques and use this

knowledge to predict behavior of planned work-overs. Arrive at the optimal work-over plan for

servicing multiple wells in the field and communicate with service providers.


Reduce work-over operations cost as a percentage of revenue

Innovation scope



Oil and gas – field execution

Value potential 5

Feasibility 3

Low High

1 5

Low High

1 5




Oil and gas production – real-time planning to procurement Oil and Gas


Reduce lead time from new on-shore or off-shore oil rig plan to procure material to start

construction or maintenance

Business challenges

Long lead time from planning and maintaining an asset to material procurement and supplier

engagement could bring a competitive disadvantage

Process innovations

Evaluate new asset or strong maintenance operations during the planning phase based on time

to procure material and possible costs


Real-time data analysis and streamlined process


Increase effectiveness in project realization and reduce time to market for new oil and gas

discoveries

Increase asset utilization

Increase strategic supplier relationships

Innovation scope



Oil and gas – planning, building, and

commissioning assets

Value potential 3

Feasibility 3

Low High

1 5

Low High

1 5




Service spend analytics for upstream oil and gas Oil and gas


This company currently uses a workflow tool for entering service vendor invoices and processing

them. The system is inefficient, since nearly 10% of the invoices fail the check and manual

checks are required, resulting in errors and inefficiencies, redundant effort, and increased spend

volumes.

Business challenges

Large volumes of data are collected during this process and are not being used for any analysis

or improvement. The scale of the problem is huge, since nearly $7 billion of spend is tracked

using the system, and a 10% manual intervention translates to opportunities for cost saving and

improved efficiency.

Productivity loss because the entire audits is manual and time-consuming.


SAP HANA can help analyze service contracts in real time and conduct root cause analysis of

noncompliance. SAP HANA could also help optimize workflow by assigning the tasks to

contractors more efficiently.


Reduced billing in accuracies and premium service contract payments

Advanced drill-down functions to identify the root cause of the problem

Better reporting and auditing

Innovation scope



Oil and gas – strategic sourcing and

contracting

Value potential 4

Feasibility 3

Low High

1 5

Low High

1 5




Oil and gas – inventory availability Oil and gas


All of the company’s departments and managers need to obtain up-to-date information and

analyze available supplies and materials on a day-to-day basis. Some 700 employees analyze

inventory and make decisions daily.

Business challenges

With up to 75,000 articles in circulation and requiring distribution, analysis is a major challenge.

Decisions had to be made based on inaccurate inventory data, which affected operations and

inventory levels.

Process innovations

Sped up inventory availability reporting allowed real-time material inventory analysis.


Analysis of huge volumes of inventory data


Inventory turnover

Innovation scope


in the future)


Oil and gas – strategic sourcing and

contracting

Value potential 4

Feasibility 4

Low High

1 5

Low High

1 5




Oil and gas producer – accelerated financial reporting Oil and gas


Company has allocated massive resources to create financial reports company-wide

Business challenges

Slow data-mining process makes reporting a burden of resources, putting the company at risk of

mistakes in publicly available reporting.

Process innovations

Accelerate data mining, analysis, and financial reporting for a better financial decisions


SAP NetWeaver BW on SAP HANA for fast data access


Employee productivity

Innovation scope



Oil and gas – Financial Performance

Management

Value potential 2

Feasibility 5

Low High

1 5

Low High

1 5

Delivering Real-Time Business Value for Oil and Gas

Technology

internal innovation

sap affiliate

sap business

gas business

lifecycle

frequent mrp

gas strategic

surveillance