mySAP Oil & Gas

SCM Overview
Focus : TSW

Name
Speaker Title, SAP AG

mySAP SCM for Oil & Gas

mySAP SCM for the Oil & Gas Industry is a complete and comprehensive solution to cover the movement of bulk volumes throughout the supply chain network. It provides support for activities in all lines of business - crude, refined products & LPG, lubes, natural gas and chemicals, including services.

Upstream

Mid-Stream

Refining

Primary Distribution Network

Secondary Distribution Network

Service Station Retailing

Crude Refined Products & LPG Lubes Natural Gas Chemicals

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Oil & Gas Solution Map : SCM Main Focus Areas

Employee Relationship Management & Workforce Analytics Marketing Primary Distribution & Transport

Business Strategic Enterprise Business Analytics Intelligence & Enterprise Management Management Decision Support Upstream Exploration & Appraisal Supply Chain Planning & Optimization Development Exchange & Throughput Handling

Accounting

Joint Venture Management

Production

Disposal Secondary Distribution & Transportation Product Quality Management

Supply

Acquire, Trade & Sell

Scheduling

Inventory Management

Manufacturing

Manufacturing Planning Manufacturing Process & Optimization

Batch Manufacturing

Blending & Packaging

Sales, Service & Marketing Service Station & Convenience Retailing Enterprise Asset Management

Marketing

Contracts, Sales & Pricing

Service

Analytics

Convenience Retailing

Fuels Management

Site & Headquarter Accounting

Business Analysis & Reporting

Specify & Design

Procure & Build

Operate & Maintain

Decommission & Dispose

Business Support

Employee Life-Cycle & Transaction Management

Procurement

Financial Supply Chain Management

Environment, Health and Safety

SAP AG 2002, Title of Presentation, Speaker Name / 3

Oil & Gas Solution Map : Supply

Supply
Supply Chain Planning & Optimization
Production Forecasting (S20, S3) Demand Forecasting (S20, S84, S3) Market Price Forecasting (S20, S3) Supply Network Modeling (Nodes, Constraints etc.) (S84, S3) Simulation (S84, S3, S20) Supply Network Balancing (S84, S3, S20) Exception Handling (S84, S3) Sourcing Optimization (S3, S20) Movement & Transport Optimization (S21, S20, S3) Contract Planning (S84, S3, S1, S5) Transport Availability Planning (S84, S87, S3, S22)

Acquire, Trade & Sell

Inquiry/Quotation Management (C2, C17, S241) Purchase & Acquisition (S240, C2, S5) Sales (S240, C2, C17) Pricing (S240, C2, C17) Spot Trades (S240, S1, S12, S48, S43) Paper Trading (Hedges, Swaps, Options etc.) (C1, S241, S43, S48) Deal Capture (S241, S48) Risk Assessment & Exposure (S241, S12, S43) Open Position Reporting (S241, S48, S13) Contract History Tracking (S241, C17, S13, S87, S19) Taxes & Tax Reporting (S240, C1, )

Exchange & Throughput Handling

Exchange Partner Evaluation (Exchange Portfolio) (S3, S13, S84, S87, S85) Exchange Agreements (S240, S87) Terminalling / Throughput Agreements Handling (S240, S87) Processing Agreements (S240, S87) Fee Handling/ Repricing (S240, S87) Exchange Balance Reporting (S240, S241, S87, S85, S13) Exchange Transaction Notification (S240, S87, S85) Settlement/Netting of Exchange Agreements & Reconciliation (S240, S244) Exchange Position Reporting (S87, S84, S13, S12) Exchange Balance Projections (S244, S84, S87, S3, S20) Automatic Exchange Reconciliation (S244)
Partner Product Available

Scheduling
Nomination Management (S241) Freight Contract Management (S240, C2, S241) Bulk Scheduling (S241, S87) Transport Availability and Compatibility (S241, S87) Compartment Planning (S3, S20, S21, S87, S84) What-If Scheduling Simulations and Proposals (S241) Partner Schedule & Nomination Handling and Tracking (C2, S241, S22) Berth / Dock Scheduling (S241, S22) Contract Scheduling and Allocation (S241, S87) Pipeline Batch Scheduling (S241) Scheduler Worklist (S241)

Inventory Management
Inventory Valuation & Transfer Pricing (C2, S87) Oil/Gas Quantity Conversions (S240, S87) In-Transit Stock Handling (C2, S87, S84) Consignment Stock (C2, S84, S87) Accounting for Commingled Stock (C2, S87) Accounting for Losses & Gains (C1, S87) Silo/Tank Management (S240, C2, S87) Inventory Planning and Scheduling (C2, S241, S87, S3) Location Balancing (S241, S87)

Primary Distribution & Transport

Deliveries to Partners (S240, C2, S87, S84) Location Receipts (S240, C2, S87, S84) Terminal Automation Systems (S240, S87, P44) Carrier Performance Tracking (C2, S13, S22, S84, S87) Handling of Transit & Regulatory Documentation (C2, S241, S13) Freight Cost Handling (S240, C2, C1) Export Handling (C2) Ticket Processing & Forwarding (S241, S240, S87) Ticket Quantity Allocation (S241, S240, S87) Measurement Comparison (S241) Laytime Calculation and Demurrage Assessment (S241, S22) Transport Performance Tracking (S241, S240, S22, S13)

Secondary Distribution & Transportation

Terminal Management (C2, S240) Terminal Automation Systems (S240, P44) Balance Vehicles/ Compartment Allocation (S240) Vehicle/Compartment Optimization (S3, S20, S21) Rebranding & Blending (S240, S3) Oil/Gas Quantity Conversions (S240) Gain & Loss Handling (S240, S87) Dispatch & Route Planning & Optimization (S240, S3) Freight Cost Handling (C2, S240) Fleet Management (S87) Handling of Transit & Regulatory Documentation (C2) Replenishment Planning (S240, S20, S21, S3) Export Handling (C2)

SAP Component Available SAP Component Available with Future Releases Future SAP AGFocus Title of Presentation, Speaker Name / 4 2002,

Partner Product Available with Future Releases Collaborative Business Map Available

Cxx SAP Component Pxx Partner Product For more information about these products, please see the tables at the end of this presentation.

Solution Landscape for mySAP SCM for Oil & Gas

APO
Demand Planning (DP)

TSW
Inventory planning

IS-Oil
Financials

APO
The areas of demand/supply planning and forecasting, as well as supply chain balancing and optimization are key functional areas addressed by APO.

Collaborative Planning

Supply/Demand Balancing

Exchanges

TSW
Supply Network Planning SNP Movement and Capacity Scheduling Contracts / Orders

Production Planning Detailed Scheduling Transport Planning & Vehicle Scheduling

Full nomination process handling

Inventory

Ticketing, Allocations and and Events Interfaces to partner Systems (e.g. Trading)

The Traders & Schedulers Workbench (TSW) covers the whole range of business requirements for Inventory Planning , Supply / Demand Balancing, Movement and Capacity Scheduling (including the Distribution Schedule), Nomination Processing, and Integration into Execution Processing, including Ticketing.

Movements

Global Availability to Promise (ATP)

Transport

IS-OIL 4.6c
The processes of order entry, contract management, exchanges and terminalling handling, inventory management, transport and movement execution will remain within the ERP (R/3 with IS-Oil Downstream) area.

Integration to TSW and IS-Oil

Integration to R/3 4.6c processing

Taxes and Duties

Usage in specific business lines (e.g. chemicals and lubes)

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mySAP SCM for Oil & Gas Business Process Coverage

Process control systems

Demand forecasting

Market systems

Production Scheduling

mySAP SCM for Oil & Gas embraces SAP and non-SAP third party solutions to cover the requirements of the oil & gas industry

Demand planning

Supply planning

Production planning

Transport planning

Information agents

Partner systems

Exchange planning

Inventory planning

System Balancing

Trading Operations

Paper Trading

Facility scheduling

Sourcing

Movement scheduling

Transport scheduling

Nomination

Carrier systems

Comparison Movement Event reporting optimization Management mySAP SCM solution mySAP SCM solution - part Third party solution Terminal Automation

Logistical execution

Financial execution

Financial reporting

External optimizers

Inspection systems

E-Netting

SAP AG 2002, Title of Presentation, Speaker Name / 6

mySAP SCM for O&G : TSW SP2 Enhancement Areas

Demand forecasting Market systems Process control systems Production Scheduling

mySAP SCM for Oil & Gas embraces SAP and non-SAP third party solutions to cover the requirements of the oil & gas industry

Demand planning

Supply planning

Production planning

Transport planning

Information agents

Partner systems

Exchange planning

Inventory planning

System Balancing

Trading Operations

Paper Trading

Facility scheduling

Sourcing

Movement scheduling

Transport scheduling

Nomination

Carrier systems

Comparison Movement Event reporting Management optimization SP2 enhanced area SP2 enhanced partial area Third party solution Terminal Automation

Logistical execution

Financial execution

Financial reporting

External optimizers

Inspection systems

E-Netting

SAP AG 2002, Title of Presentation, Speaker Name / 7

Brief History of TSW

TSW on 4.6c(2) : FN. EXPANSION Supply Chain, Nomination, SPW (Rundown), Planning Engine, Ticket, Worklist, Trading Interface, APO Integration, Location Balancing, 3-Way Pegging, Distribution Schedule, Berth Scheduling, Fleet Management, Freight Contracts, What-If Pop-Up & Clipboard, Forecasting Supply Chain, Nomination, Rundown, Planning Engine, Ticket, Worklist, Trading Interface, APO Integration Supply Chain, Nomination, Rundown, Planning Engine, Ticket, Worklist Supply Chain, Nomination, Rundown, Planning Engine, Ticket, Worklist Supply Chain, Nomination, Rundown, Planning Engine, Ticket, Worklist

TSW on 4.6c(1) : FN. EXPANSION

TSW on 4.6b : FUNC. UPGRADE

TSW on 4.0b : TECH. UPGRADE

TSW on 3.1h : FOUNDATION

SAP AG 2002, Title of Presentation, Speaker Name / 8

TSW : Functional Environment

Ticketing
Balancing
Stock Projection Worksheet Laytime / Demurrage Freight Contracts

What-If

Berth Scheduling

Worklist

Nomination

Scheduling

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Trading & Systems Interface

Location Tanks

Transport System Partner role Fleet Mgmt

TSW Master Data R/3 interface APO interface

Partner interface

TSW : One view of the daily process ...

Worklist Scheduling

Nomination
Fax/ Print/ Idoc Partner

Stock Projection

Replenishment Planning/APO

schedule

Ticket

LIS Info Structures

Postings

Contract

Order

Delivery/ Shipping Notification

Bulk Shipment

Goods movement

SAP AG 2002, Title of Presentation, Speaker Name / 10

SCM : Simplified functional component landscape

Trading Interface
Stock Projection Worksheet
What-If Simulation

Berth Scheduling

Ticket Processing

Contract Planning Location Balancing Partner Nomination Demand Planning

Legend TSW Component Other Component (e.g. APO, IS-Oil, BW)
SAP AG 2002, Title of Presentation, Speaker Name / 11

Nomination

Logistics Execution

3-Way Pegging Distribution Schedule

Transfer Generation
Optimized Network Balancing

Financial Execution

Operational Back Office Freight Contracts

Supply Chain Management : APO

Solution News
APO 3.0 : First robust APO release ; APO 3.1 : First APO release with Oil & Gas content (master data, enhancements to TPVS, CIF for TD and nominations, O & G planning books in DP and SNP ; DP is recognized as having general applicability for process ; SNP has potential in chemicals, lubes and gas cases ; PP/DS in lubes and gas ; TP/VS we cannot recommend at this stage for bulk primary or secondary)

APO 3.1 : Available as GA since end 2001 APO 4.0 : Tentative availability in mid 2003 there is no additional Oil & Gas specific content in APO 4.0 (e.g. missing: contracts and in-transit in SNP)

Release Strategy

Customer Update

Live : Pennzoil (US) with DP & SNP for lubricants and consumer business On the way : Saudi Aramco (SA) for their In Kingdom business DP, BHP Billiton (NL) using both DP and SNP with IS-Oil and TSW, ExxonMobil Chemicals (Singapore, US) with all main modules across the board

APO is (for O&G) a developing solution Its strong points currently would be DP and its increasing integration with an oil-based execution system (IS-Oil)

Value Proposition

Proposed Strategy

Good potential/fit for lubes / chemicals / gas cases For petroleum position together with TSW Use ExxonMobil and Pennzoil as process-industry cases

SAP AG 2002, Title of Presentation, Speaker Name / 12

Supply Chain Management : TSW

Solution 4.6c SP1 :Included extensive updates to SPW and Nomination 4.6c SP2 : Significant updates, revisions and new functionality in all areas News At SP2 level, TSW covers crude and products business for both pipelines and marine.
TSW 4.6c SP1 : GA available since April 2002 TSW 4.6c SP2 : GA available December 2002 Release TSW will be integrated in the O&G R/3 Enterprise Add-On with Extension Set 2.0, Strategy end 2003 Live : CITGO (US) Refined Products business (with SAP-BW as well) ; TFE (France) Customer Crude Pipeline Scheduling Pilot; STUSCO (US) Refined Products and Trading On the way : ChevronTexaco (US) Refined Products & Update Execution ; TFE (France) Refined Products NominatonBusiness Nomination Aramco & Execution ; Saudi (SA) Out of Kingdom Export Sales mostly marine ; STUSCO (US) Domestic Crude Pipelines and Marine ; Transpetro (Brasil) Terminal and Pipeline Handling ; BHP Billiton (NL) Mining Operations Unique solution in this market sector Strong integration to both R/3 solutions incl. APO as well as external, such as Value trading and refinery process systems Proposition Built to wide-scope industry defined requirements Position TSW as key operation handling planning to execution link Proposed Use breadth of customers to show flexibility and solution strength Strategy Absolute strength in bulk operation is key to making later optimization and planning systems really work
SAP AG 2002, Title of Presentation, Speaker Name / 13

Supply Chain Management : IS-Oil

Solution News
IS-Oil : Already strong breadth of industry standard solution components 4.6c SP2 :Lean Transport Management simplifying and adding strength to the TAS and TPI interfaces ; Terminalling solution handling the terminalling business for providers (fee handling etc)

4.6c SP2 : GA available end 2002 As part of IS-Oil fits in with the overall strategy to integrate solutions into R/3 Enterprise Extension Set 2.0 at end 2003 On the way : Lean Transport Management Shell (Europe) ; Productive: Terminalling STUSCO (US) since Aug. 1st, 2002

Release Strategy

Customer Update

LTM interface enables up to the minute information to be provided from TAS systems (inventory positions, rack liftings) for planning and scheduling This interface is also unique in its level of coverage and integration with R/3 Terminalling is as important as exchanges, and SAP can make this as much a standard as with EXG in all respects

Value Proposition

Proposed Strategy

Follow up on Shell and STUSCO successes stories to promote solution Increase penetration with usage of SCM interfaces TPI, TAS Push customer terminalling business to use new SAP solution

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Key SAP Oil & Gas SCM Takeaways

For most players in the Downstream market sector, the management and operation of the bulk supply network is the key to achieving bottom line returns across the company. The requirement is to turn optimum plans into accountable revenues through excellence in scheduling and execution.
In 2002 SAP has therefore developed, with input from major O&G sector partners, a uniquely comprehensive solution to meet these requirements TSW.

With ever increasing pressure on revenues, TCO is a major factor for CEOs and CIOs in these companies. For COOs having a system that really performs across boundaries is the key.
Both of these requirements are best met by a system that is as fully integrated as possible. SAP already has the deserved industry reputation as being the integrated solution provider, this naturally applies to our SCM solutions too.

Investing in new systems can be a significant risk, both in terms of costs as well as in terms of business effectiveness. Having a software partner with a track record of delivery and support is now a key factor in making solution selection decisions.
SAP now has a presence in around 80% of all oil companies Worldwide. With nearly 20 years of experience in the oil and gas sector, and an unparalleled record on solution delivery, this is a strong factor in solution decisions.

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Key SAP Oil &Gas SCM References

With our ever expanding portfolio of integrated SCM solutions, including those in the key areas of turning plans into revenue-generating reality, SAP is able to state the following major market players as example references :

STUSCO (Shell Trading U.S., formerly Equiva Trading Co.)

Worlds largest Oil Trading Company

Saudi Aramco
Worlds largest oil producer

These are quoted as examples of both the strength of our solutions, that such major players are committing their key business streams to SAP, as well as the comprehensiveness to cover such diverse business models.

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