SAP OIL AND GAS

BY PRA CAPABILITY

Introduction
The petroleum industry is usually divided into three major
components:
Upstream, midstream and downstream.
Midstream operations are usually included in the downstream
category.

Down Stream
The downstream oil sector is a term
commonly used to refer to the refining of
crude oil, and the selling and distribution of
natural gas and products derived from crude
oil. Such products include liquified petroleum
gas (LPG), gasoline or petrol, jet fuel, diesel
oil, other fuel oils, asphalt and petroleum
coke.

Up Stream
The upstream oil sector is a term commonly used
to refer to the searching for and the recovery and
production of crude oil and natural gas. The
upstream oil sector is also known as the
exploration and production (E&P) sector.
The upstream sector includes the searching for
potential underground or underwater oil and gas
fields, drilling of exploratory wells, and
subsequently operating the wells that recover
and bring the crude oil and/or raw natural gas to
the surface.

 The well is treated as Master data in SAP.

The transaction code associated with is

Joint Venture
Definition
A joint venture in the SAP System is a summarization of
cost objects whose costs are split up among partners.
A joint venture is usually lead by an operating
authority, who is responsible for the costs incurred. At
the end of a period, all of the costs incurred are split up
and allocated to the partners involved.
Joint ventures are created to keep costs as low as
possible for the operating authority and the partners.
This is achieved by distributing the costs incurred to
the participants of the joint venture.

Example
In the oil industry, new drill-holes are seldom
controlled by the oil companies alone. Instead,
contracts are made with other companies. The
contract regulates the costs incurred. This
enables the risks involved with an unsuccessful
drill-hole to be spread out over several
companies.
Of course, the anticipated profits (from a rich
drill-hole) are also distributed to the partners
involved.. However, the distribution of the profits
is not carried out by the SAP Joint Venture
Accounting solution

Division of interest (DOI)

Venture/DOI is an entity in PRA.
A "venture" in PRA in this context is a property, or piece of land. A
division of interest (DOI) is a subdivision of a venture, based on
combined product code. Each venture has one or more DOIs. Each
DOI represents an ownership interest situation separate from the
other DOIs.
The structure of the fractional ownership in the property
determines how revenue is calculated for each specific owner, and
the DOI is used to help determine that.
Example
You can have, for one company code, a venture, with two divisions
of interest. One DOI might be "DOI 00001" - oil products, and the
second could be "DOI 00002" - gas products".

 Transaction is O3U_DI1 .

 The type of owner ("interest category" is also the type of owner in

ownership).
Within PRA Ownership, there are three owner interest categories:
Working interest:
An owner in the venture/DOI who is incurring expenses to extract product
from the ground.
Carried interest:
A working interest owner, but one who is being "carried" by another
owner in the property. This situation arises when, for example, one
working interest owner decides to drop out of the expenses of operating
the venture/DOI, and agrees with another owner, that that owner will
financially "carry" his costs associated with the venture/DOI.
Royalty interest:
An owner who has an ownership interest in the venture (so can receive
revenue), but does not do any work at the venture.

Well.
An oil well is a general term for any boring
through the earths surface that is designed to
find and acquire petroleum oil hydrocarbons.
Usually some natural gas is produced along
with the oil. A well that is designed to produce
mainly or only gas may be termed a gas well.

 Well ID is Master data in SAP.

The transaction code associated with is
O3U_WL1.
The table associated with transaction code is
OIU_PR_WELL.

Life of a Well

Well Completion Number

A master record and a central entity in PRA.
A well completion is a perforation made in the
tubing of a well beneath the surface of the
ground, which allows commercial quantities of
hydrocarbon to be accessed by the well through
the tubing. There is generally more than one well
completion per well. The term well completion
comes from the fact that after the perforation is
made, the well is said to then be "complete"
(ready for production), from the oil company
point of view.

 The transaction code associated with is

O3U_WC1.
The table associated with transaction code is
OIU_PR_WC.

 Use this to create a well completion dated

record.
This transaction defines details about a well
completion that are effective within a
specified date range. This is used for situations
in which you want to create a well completion
ID specific to a set date range.

 The transaction code associated with is

O3U_WC1.
The table associated with transaction code is
OIU_PR_WC.

Business Associate

The PRA business associate is a master record, which represents a third party
having any of a variety of business associations with your company. It is
represented as a 6-character ID in the system. Business associates are participants
in a variety of PRA transactions.
The BA is linked with SAP Core vendor maintenance, and is thus either a customer
or a vendor.
Examples of business associates:
- Billing interest
- Carried interest
- Operator
- Purchaser
- Shipper
- Seller
- Transporter
Business associate is synonymous with owner in PRA. In the oil industry, business
associates are sometimes referred to as partners.

 The transaction code associated with is

O3UCM_BA.
The table associated with transaction code is
OIUCM_BA_LINK.
.

Delivery network number

A structure within PRA that represents the
flow of product from a well completion
through various measurement points - where
the product is measured or used, to the
product's final disposition measurement point
(final sales or custody transfer point).
The structure is built in the system by defining
connections between well completions and
measurement points.

 The transaction code associated with is

O3U_DN1.
The table associated with transaction code is
OIU_PR_DN.

Delivery Network Dated

Characteristics
Use this to define the details of a delivery
network, and to set up the way in which a
network is processed throughout the
Production, Contractual Allocation, and
Valuation components of PRA.

 The transaction code associated with is

O3U_DND1.
The table associated with transaction code is
OIU_PR_DNVD.

Delivery Network Allocation Profile

This defines the allocation rules for a particular
delivery network. The allocation rules established in
this transaction directly affect how the volume
allocation cycle processes allocations for the delivery
network specified in this transaction.
Allocation rules include details about:
The product to be allocated (note that you allocate
one product per network, as a rule).
The volume type to be allocated (see: Volume
Categories and Volume Types).
The order in which the products and volume types are
to be allocated

 The transaction code associated with is

O3U_DNAP1.
The table associated with transaction code is
OIU_PR_DNAPD
.

Delivery Network Downstream Node

The delivery network downstream node is the
measurement point to which upstream
measurement points and/or well completions
are linked

 The transaction code associated with is

O3U_DNND1.
The table associated with transaction code is
OIU_PR_NODE_DN.
.

Measurement point number

A measurement point is a point in a delivery
network where a material is measured, used, sold
(or subject to some other type of volume
disposition). The measurement point represents
a device or piece of equipment where product is
consumed, measured, observed, or calculated. A
measurement point can also be a fictitious,
logical entity created in the PRA system, and that
is required for the allocation of product in the
PRA system.

 The transaction code associated with is

O3U_MP1.
The table associated with transaction code is
OIU_PR_MP.

Measurement Point Dated

Characteristics
This transaction defines details about a
measurement point that are effective within a
specified date range.

 The transaction code associated with is

O3U_MPD1.
The table associated with transaction code is
OIU_PR_MPVD.

Measurement Point Allocation

Profile
This transaction defines allocation rules for a
given measurement point within a delivery
network.
The allocation rules determine:
The products and volume types of all
volumes to be captured at the measurement
point
The method used to capture the volume

 The transaction code associated with is

O3U_MPAP1 .
The table associated with transaction code is
OIU_PR_MPAPH (Header),
OIU_PR_MPAPD(Detail).

Marketing Group Assignments

Use this transaction to assign working interest owners in a

venture/division of interest (DOI) to marketing groups by
designating a marketing representative for each owner.
A marketing group consists of one or more working interest
owners jointly marketing a product under one or more
contracts. The major product, the venture/DOI, and an effective
date range are used to establish a marketing group. The
marketing group ties working interest owners to the contract(s).
(Each contract is assigned a marketing representative when it is
entered into the system.)
Each marketing group can have multiple contracts, but a
contract can be linked to only one marketing group.
Note that changing the marketing representative or the
purchasing representative generates a prior period notification.

 Prerequisites
The venture/DOI exists, and is checked in.
All marketing representatives exist as valid
customers.

 Integration
In the system, Ownership changes automatically
update marketing group information. If a
working interest owner is deleted, the owner is
deleted form the marketing group for the unit
property or DOI. Likewise, if a working interest
owner is added and does not already exist in the
marketing group, the owner is added to the
marketing group for the DOI or unit property.

 The transaction code associated with is

O3U_CA011 .
The table associated with transaction code is
OIU_SB_MGDH (Header) and
OIU_SB_MGDD(Detail)

Bearer Group Number

Identifies the bearer group, which is used in burdening in PRA.
"Burdening" in PRA is the process of the working interest owners
"bearing" the costs from a PRA venture for the royalty interest (RI)
owners.
A bearer bears the costs associated with exploration/development
and production. The bearer group describes the relationship
(obligations and percentage share) that each working interest
owner has to their respective royalty interest owners.
The bearer group is linked to a division of interest to indicate the
working interest owners that are responsible for paying the nonworking interest owners. The bearer group is also used to
determine working interest owners' gross revenue interest (GRI),
which is used to determine working interest (WI) owners' entitled
volumes for marketing and production.

 The following are the bearer group types:

- Carried bearer group (links WI owners with
CI owners)
- Royalty bearer group (links WI owners with
RI owners)

 The transaction code associated with is

O3U_BG1.
The table associated with transaction code is
OIU_DO_DO and OIU_DO_BGUC_WK.

Product Balancing Agreement

The PBA represents the legal document, signed
by owners, that specifies how imbalances will be
processed. An imbalance is the actual volume or
energy minus the entitled volume or energy
during one sales period.
In order to enter a PBA number, the DOI XRef
type must be set as Default. Only one PBA can
exist for each well completion / product code
combination.

 Transaction code to maintain the PBA against

WC/MP is O3UBL01_WORKPLACE

Joint Operating Agreement

The Joint Operating Agreement (JOA) groups Joint Ventures (JV's).
Especially in the US market, large numbers of JV's occur. Within the JOA,
the partners agree on their shares of ownership (equity groups) and the
rules to apply for overhead calculations.
The agreement is applicable for every JV which belongs to the JOA.
There can be any number of JOA's within one company code and any
number of JV's within one JOA. One JOA can only belong to one company
code and a JV to only to one JOA.

An equity group which is maintained on the JOA level is displayed within

the JV maintenance transaction once the equity group is assigned to an
equity type. The assignment takes place on the JV level.

Joint operating agreement class

JOA's are grouped in classes which can be
defined by the user. Each JOA class has a
number range which can require an internal or
external number. The class of the JOA must
exist before a JOA can be created within the
class (customizing function). The class of the
JOA cannot be changed after the JOA has been
created.

JOINT OPERATING AGREEMENT (JOA)

Formal contractual agreement

Specifies conditions of Joint Venture
Defines partner shares (working Interest)
Describes rules for sharing profit & loss
Specifies penalties

JOAs are grouped in classes which can be identified by the user.

Example

OP - Operated JOA
NP - Non Operated JOA
CP - Corporate JOA

Each JOA class has a number range which can have an internal or external number.

The JOA class must exist before a JOA can be created within the class.

The JOA class cannot be changed after the JOA has been created.

 Joint Operating Agreement (JOA)

A JOA is a formal agreement that specifies the conditions for a joint
operation. This covers the interests of the partners and their properties, as
well as overheads and penalties.
Joint Venture
This is an association of two or more partners, formed to share a ventures
risks, costs, and revenues. Each partners share is proportional to their
undivided interest in the venture.
Equity Type
The JOA has different development stages, such as engineering and
design, construction, and production. Different partners participate at
each stage. JVA manages the different stages by using equity types. An
equity type explains a particular association of partners. This definition
may be related to time, phase or purpose and is linked with a specific
equity group.

 Equity Group
An equity group represents an association of venture partners and their
interests. An equity group may consist of all or some of the venture
partners.
Joint Venture Partner
This is a partner mentioned in the JOA with an undivided interest in a
venture. One partner, called the operator, manages the operation. The
remaining non-operating partners share expenses and revenues.
Recovery and Billing Indicators
You assign a recovery indicator to a cost object to indicate whether or not
expenses, posted using the cost object, are billable to JVA partners. You
assign billable costs to the appropriate partners. Non-billable expenses are
assigned to the operator. Billing indicators are assigned to billable postings
and identify the type of posting involved, including cash call, normal
expenditure, and audit adjustment.

There are five types of joint ventures or Venture types. Each type is used to identify
a different form of ownership. The venture types are described in the following
table:

Operated (no tax)

Operated by the company managing SAP JVA
Allows carried interest (CI) or net profit interest (NPI), partner, and suspense
processing
You can not add a tax to this type of venture
Operated (with tax)
Operated by the company running SAP JVA
Neither CI/NPI partner nor suspense processing is allowed for this type of venture
You can assign a tax code
Cutback calculates tax charges to venture partners, based on the tax setting for the
company in the SAP JVA configuration

Non-operated venture
Company managing SAP JVA holds a non-operated venture share
This is billed by the operator for its share of venture expenses
Non-operated on-billing
Company running SAP JVA sells part of its non-operated share of the venture to
third parties.
Company running SAP JVA distributes portions of the billings it receives from the
venture operator to the partners in its non-operating share, in effect acting as an
operator toward these third party partners
Corporate venture
Company running SAP JVA holds a 100% interest
Only one default corporate venture and equity group exists in a JVA company
Expenses booked in the SAP JVA company without SAP JVA information, such as
venture and equity group, are assigned to the corporate venture and equity group
by default
Your system administrator sets this up in configuration

 Transaction code for Creating JOA is

GJA1.
Table is T8JU.
Transaction code for Creating JVA is
GJV1.
Table is T8JV.