Similar to just about every other business, the oil and gas industry has experienced a series of ups and downs in 2020. Oil prices plummeted—hitting a 30-year low—as demand shrank both quickly and dramatically. The oil and gas industry will emerge from the COVID-19 outbreak to an altered world looking for new, less-volatile energy sources.
The oil and gas track at ASUG Best Practices: SAP for Industries featured thought leaders in the industry addressing the shifting landscape. Attendees heard about how energy companies like Shell, ConocoPhillips, and Chevron are leveraging new technology to not only grow their business but also face the industry’s hurdles head-on.
Diversifying Energy Portfolios
Throughout the online event, a top theme at many sessions was the need for oil and gas companies to begin finding new revenue streams.
“Major oil and gas companies are making major investments in alternative sources,” said Benjamin Beberness, vice president and global head of the Oil and Gas Industry Business Unit at SAP. “Sustainability is at the core part of their business.”
In a later session, Beberness discussed how oil and gas companies can excel in the “new normal” created in the wake of COVID-19. He talked about how companies in this sector are seriously broadening their revenue portfolios by financing renewable sources of energy—including solar and wind power.
It will be interesting to see how SAP customers in the oil and gas sector leverage the company’s technology not only to modulate alternative energy investments and manage current assets and revenue streams but also to monitor their carbon footprints moving forward. At SAP SAPPHIRENOW Reimagined, the software company unveiled a carbon emissions accounting system as part of its Climate 21 initiative.
Managing Oil and Gas Enterprise Data
One of the key themes throughout the entire event was how to maintain and get the most from enterprise data. Data maintenance is a vital topic in nearly every industry. But, in the oil and gas sector, it’s of the utmost importance that companies have fast and reliable access to their data.
Monika Mangla, program manager of central finance at Chevron, walked attendees through the digital transformation of the company’s finance systems and capabilities. One of the digital strategies behind this undertaking including bringing data transparency across the organization. Additionally, Mangla discussed the importance of ensuring there was buy-in for a common data model.
Another session focused on how ConocoPhillips improved testing with a data sync manager from EPI-USE Labs. Jamie Donohue, IT functional consultant at ConocoPhillips talked about some of the instances where EPI-USE Labs’ tool has helped the company with its testing. One of these use cases was the ConocoPhillips’ PRA (product and revenue accounting) road map, which used the data sync manager. The new function allows the oil and gas company to copy product, sales, revenue, and ownership accounting data. During the testing process, the company was able to copy important data so that users would not be shut out of the system. This helped alleviate some of the lost productivity associated with implementing new solutions and conducting efficient testing.
Evert Ruijs, lead design authority at Shell, gave a presentation focused on how Shell prepared its data as it geared up to implement SAP S/4HANA. This is a massive move that will take place over the next decade and will see Shell moving from 30 different ERPs to SAP S/4HANA. “The data model is at the core of what we are trying to achieve,” he said.
Ruijs said that SAP S/4HANA will help Shell “drive a more integrated and streamlined data model.” He indicated that this process was an opportunity for the iconic company to reconfigure its data. So far, the company has been reevaluating its data model piece by piece. It also is using data standards from across the entire industry to inform its model.
An On-Time, On-Budget Virtual SAP S/4HANA Rollout
For many companies, the COVID-19 pandemic came at one of the worst possible moments: right in the middle of implementing a new SAP solution.
In October 2019, C&J Energy Services and Keane Group merged to form NexTier Oilfield Solutions. The new company partnered with Accenture to implement SAP S/4HANA. The 14-week rollout began at the beginning of 2020, right as the COVID-19 outbreak was starting. Despite this, the company was able to achieve a successful virtual rollout that came in both on time and budget.
Similarly, Catarina Ceitil, shERPa project director at Galp, broke down the company’s journey to SAP S/4HANA. This process began in May 2018, with what Ceitil described as “a blank page,” before the company landed on SAP S/4HANA. Galp partnered with SAP, Deloitte, and IBM to accomplish the project—called shERPA—using a greenfield implementation. The implementation processes began in April 2019. But, COVID-19 struck right in the middle of the testing phase. This caused Galp to push its initial go-live back a month, to May 2020. Like NexTier, Galp moved its project online, which presented some issues. Making use of daily checkpoints and status meetings, along with webinars to share project updates to the 120-person team, Galp successfully accomplished its implementation.
Leaning on Automation for Low-Cost Growth
Throughout the event, attendees also heard about the importance of automation, and how oil and gas companies are using technologies like machine learning and robotic process automation (RPA). Beberness noted that these solutions help companies minimize costs while increasing employee productivity.
“[Automation] is the new frontier everyone is seeking,” he said. “These manual processes are getting in the way of being agile.” He encouraged oil and gas companies to investigate automation as a way to increase growth at a low cost.
One of the final sessions of the event featured a conversation focused on RPA. Jennifer Stevens, IT program manager at Marathon Oil Company, led a conversation with Rashad Flintroy, RPA solution architect and bot controller at Occidental Petroleum; Daniel Woelfel-Monsivais, RPA lead modeler at Occidental Petroleum; and Jason Townsend, director of Application Development Services COE at ConocoPhillips.
All four presenters said their companies began using RPA in their finance or accounting departments. “That’s the area where a lot of automation can occur with redundant work,” said Woelfel-Monsivais.
The COVID-19 pandemic influenced these company’s use of automation. Flintroy said it has encouraged Occidental Petroleum to speed up its use of automation. “[The virus] has actually ramped our RPA group up,” he said. We have people who had too much on their plate so they were looking for something like RPA to help people take things off their plate.”
Watch all of the oil and gas sessions on demand, along with the rest of ASUG Best Practices: SAP for Industries.