SAP Looks to Tap Oil Riches

By Mel Duvall  |  Posted 2006-05-12
Software giant SAP is aiming to solidify is already strong grip on the oil and gas industry by rolling out more modules designed to automate many of the tasks involved in running complicated joint venture exploration efforts.

The German-based software company has become a powerhouse in the oil and gas industry, with practically every major player, from ExxonMobil, to Chevron, Shell, BP, Marathon, Amerada-Hess, France's Total, and Russia's Lukoil, using its enterprise resource planning system.

In fact, the oil and gas industry was among the first to roll out the company's software on a global basis. Exxon, for one, has been using the company's software to streamline its international operations since the mid 1980s (see Baseline feature Behind Oil Profits: A Look At ExxonMobil's Technology Alignment).

Now, says Peter Maier, head of SAP's oil and gas practice, the company is actively working with partners in the industry to develop modules that will automate more of their oilfield-specific practices, such as managing joint ventures and integrating third party contractors, such as oilfield drillers, into their core platforms.

"Increasingly, we will move from the back office into more of the field operations associated with the industry," says Maier. "We have a real opportunity to open up the whole solution towards more of an oil and gas ecosystem, so that we can, for example, integrate all of the various services companies into the core platform."

SAP is expected to highlight its oil and gas strategy at its annual Sapphire user conference, scheduled for May 16 to 18 in Orlando, Fla.

The company has a number of initiatives underway, utilizing its NetWeaver platform, to address a variety of key business processes in the oil and gas explorations business, such as a trading platform for oil and gas futures and the accounting for and management of emissions. In some countries, particularly those participating in the Kyoto Accord, companies may buy and sell so-called pollution credits.

It has already introduced specific modules aimed at such business processes as time sheeting to track and account for work performed by service firms, royalty accounting (to determine what royalties are owed to various government bodies and each company's share of those charges), production sharing accounting, and transportation logistics for offshore wells.