The oil and gas industry is a thriving multi-trillion dollar sector with no signs of going anywhere for the foreseeable future. As one of the world’s largest software providers, it’s no surprise that over 70% of the industry is powered by SAP. This large niche market has SAP-tailored upstream and downstream solutions that include operations, retail, management and distribution.
With the introduction of S/4HANA, oil and gas organisations are looking to SAP to gain better insight into their business, from drilling operations to final destinations at the petrol pump.
Oil and gas companies moving to S/4HANA
Established in 2011, Vivo Energy is a fuel retailer with over 2,100 service stations across 23 African countries. They also sell lubricants through Shell and Engen, sell petroleum to business customers, jet fuel for the aviation industry and manages non-fuel services such as car washing, shops and restaurants in partnership with chains like Burger King and KFC.
Managing all this data through multiple disparate IT systems was becoming more and more challenging as they grew, so they made the decision to implement S/4HANA to bring everything into one place and benefit from all the positives that the SAP system brings.
Vivo Energy implemented a suite of SAP S/4HANA solutions that included SAP S/4HANA Oil & Gas as well as the Retail, Finance and Supply Chain modules, alongside SuccessFactors, SAP Cloud for Customer (C4C) and SAP Integrated Business Planning. With the transformation now in place, Vivo Energy benefits from the simplicity of having a single source with truth across the entire organisation, managing inventory efficiently from end to end supported by automated product replenishment, optimizing resources across the supply chain, supporting efficient hiring, training and employee retention. On the customer side, it enabled employees to engage better with their B2B customers by having the latest information available, and enabled them address queries effectively and efficiently.
There are many other industry leaders who have implemented S/4HANA, including Shell, Schlumberger, Chevron and SAASREF in Saudi Arabia.
S/4HANA deployment options for Oil and Gas
There is an extensive collection of S/4HANA modules and components for the oil and gas industry. Some of the most notable are:
SAP S/4HANA Oil & Gas for hydrocarbon management (HPM): Integrates hydrocarbon production, maintenance, engineering, and planning.
SAP S/4HANA Oil & Gas hydrocarbon supply and primary distribution (TSW): Helps coordinating trading and scheduling activities for inventory optimization, cutting transport costs, and reducing risk.
SAP S/4HANA Oil & Gas for secondary distribution management (SDM): Provides key capabilities for automated order management and logistics from supplying terminals to end consumer, forecast and replenishment of tanks and truck scheduling and dispatch with route optimization.
SAP S/4HANA Oil & Gas for retail fuel network operations (RFNO): A solution for service stations that monitors and controls data related to cash flow and payments, fuel inventory management, replenishment and daily lessee settlement.
SAP S/4HANA Oil & Gas for upstream contracts management (JVA): Ensures the correct business partner gets invoiced for the correct amount in regards to expenditures according to shares and pre- agreements when different companies work together in a joint venture.
SAP S/4HANA Oil & Gas for upstream revenue management (PRA): Helps moderating the financial effects of bust-and-boom cycles caused by oil price. It aims to optimize profitability, reduce operating costs, provide tighter management and enforcement of credit limits, and automate cash application.
SAP also offers SAP Model Company for Oil & Gas, a pre-configured solution with best practice solutions tailored for the industry, reducing costs, decreasing risks, and accelerating adoption during discovery, exploration, and realisation activities.