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SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

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Page 1: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

SAP’s Commitment to Interoperability

High North IO Interoperability WorkshopSeptember 16, 2008

Chuck PharrisOil and Gas IBU

Page 2: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Agenda

1. SAP Upstream Perspective2. We Get It

3. Owner Operators Already Using SAP to Tackle This Problem

4. Summary

© SAP 2007 / Page 2

Page 3: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Upstream Environment: The Battle For New ResourcesBalancing Profitability against Sustainability

FORSALE

$

DEVELOP

DISPOSE

EXPLOREAPPRAISE

PRODUCECompete for

Resources

NOC’s

IntegratedMajors

Independents

Control Resources

Harvest Mature Resources

Exploit Niche Resources

Independents

IntegratedMajors

NOC’s

Sust

aina

bilit

y

Profitability

Page 4: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Today, Many Barriers Exist to Achieve Both Profitability and Sustainability in the Upstream Oil & Gas Industry

DEVELOP

DISPOSE

EXPLOREAPPRAISE

PRODUCE

Sub-optimal portfolio of competing capital investments

Difficult to acquire, develop, and manage an aging and

tightening industry talent pool

Difficult to provide transparency and manage complex ownership and partnership relationships

Difficult to assess assets’true relative performanceto make timely disposal decision

Challenge to reduce F&D and production costs for assets with increasing complexity & remoteness

Lack of interoperability acrossproduction asset’s design to

disposal lifecycle

Unable to efficiently maximize production from existing pools

EH&S requirements disconnectedfrom normal asset operations

Page 5: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Upstream Players Can Better Balance Profitability and Sustainability by Providing …

DEVELOP

$

DISPOSE

EXPLOREAPPRAISE

PRODUCE

Interoperability across lifecycle with all constituents and their systems

Result: Reduced capital & improved asset performance

Result: Compliant and managed international relationships with competitive advantage

Ownership transparency, compliance and controls across asset lifecycle

Full visibility and analysis of capital & productivity improvement projects

Integral management of EH&S requirements along the value chain

Result: Improved safety and compliance at lower cost

Employee Lifecycle & Knowledge Management

Result: Improved productivity & safety with less HR cost

Integrated operational management of remote assets

Result: Reduced Finding & Development and lifting costs

Accuracy and transparency into asset’s relative performance in portfolio

Result: Improved ROCE, reduced risk, improved asset portfolio performance

Page 6: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Agenda

1. SAP Upstream Perspective2. We Get It

3. Owner Operators Already Using SAP to Tackle This Problem

4. Summary

© SAP 2007 / Page 6

Page 7: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

We Understand the Interoperability Objectives

Return on Assets Dashboards & Alerts

Asset Utilization: OEE, Run Time, Availability

Energy usePerformance: Quality,

Cost, Yield, On-Time

§

Safety/Compliance

§§§

Profit/Usage per Route, Plane, Media Asset etc

@

6 sigma, Lean, Reliability Teams

VARIABILITY

Inventory Days

© SAP 2007 / Page 7

Page 8: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

We Understand the Key Trends that are Driving Towards Interoperability

1. Business Performance OptimizationLeveraging of all data sources to improve quality and speed of decision making

2. From Individuals to CommunitiesCollaboration accelerates on boarding, improves efficiency and speeds innovation

3. From Businesses toBusiness NetworksFocus on core competencies enables maximum productivity

WWW

© SAP 2007 / Page 8

Page 9: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

We Understand the Current StateAsset Performance Excellence Remains Elusive

HQ

V.P. Operations

Engineering

Maintenance

Design/Engineer

Acquire

ConstructCommission

Operate

Maintain

Audit/Retire

Operations

© SAP 2007 / Page 9© SAP 2008 / Page 9

Managing Asset Lifecycle Continues to be a Disjointed, Tedious and Frustrating Process

Page 10: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

We also Understand the Goal?Integrated Processes on a Business Process Platform

v

© SAP 2007 / Page 10

Manage the entire asset lifecycle, maximize its use and productivity and ensure adherence to enterprise and regulatory procedures

Page 11: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

SAP Maximizes Asset Performance in the Process Industries across Full Lifecycle

OPERATE MAINTAINPLAN & DESIGN

PROCURE & BUILD COMMISSION RETIRE

ProcessIndustries

Design, Build and Commission

Asset Safety and Compliance

Asset Visibility and Performance

Maximize Asset Uptime

© SAP 2007 / Page 11© SAP 2008 / Joerg Koesters 11

Page 12: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Asset Safety and ComplianceClosed Loop Management of Key Operational Risks

Chief Compliance Officer (Sponsor)

Keep the StakeholdersInformed and Involved

Keep the Assets Safe

COO, Chief ComplianceOfficer

KPIs:Safety RecordPublic ReputationCorporate Fines and Penalties Cost of Compliance

Keep the People Safe

Keep the Environment Safe

Plant Manager,Environmental Engineer,Chief Compliance Officer

Plant Manager, Industrial Hygiene and Safety Officer, Chief Compliance Officer

Plant Manager,Maintenance Manager, Engineering Manager

Transparency and Operational Risk

Management

Realize Corporate Safety Strategy and

Risk Management

Zero Incident

Rate

The COO and Chief Compliance Officer will drive towards a zero incident rate, reducing operational risks and improving public image as a result of providing a closed loop operational risk management system enabled by comprehensive solution that identifies, plans & executes mitigating actions, and monitors all environmental, safety,

and mechanical integrity risks in a proactive and compliant manner powered by SAP ERP, SAP Environmental Compliance, SAP EH&S, SAP Learning Solution, SAP GRC Risk Management,

Business Objects, SAP MII , SAP Mobile Asset Management and RCMO by Meridium.

Establish safety strategy, risk management, compliance policies & objectives Governance & reporting structuresManagement of Change ProcessProvide transparency to all stakeholders

Transparency on worldwide environmental legislations and internal policiesCost efficient management of complianceEnterprise wide objectives & reportingCommunity advocacyValue Proposition

Create a proactive health and safety strategy and realize it in daily operations and proceduresManage compliance and control exposure to hazardous substancesIncident management, reporting and learning

+ +=

Increase reliability of assets while decreasing maintenance costsRealization of various maintenance and safety strategiesEffective prevention of incidents that harm people or the environment

Assure Process Safety Management + Mitigate Asset

Integrity Risks

© SAP 2007 / Page 12

Page 13: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Asset Safety and ComplianceEnabling Process Safety, Standardization and Visibility

Integrates Business Processes Across StakeholdersChief Compliance Officer (Sponsor)

COO, Chief ComplianceOfficerPerformance Monitors:

Safety RecordPublic ReputationCorporate Fines and Penalties Cost of Compliance

Keep the Assets Safe

Keep the People Safe

Keep the Environment Safe

Keep the StakeholdersInformed and Involved

COO,Plant Manager,Chief Compliance Officer

COO,Plant Manager, Chief Compliance Officer

COO,Plant Manager

Chief Compliance Officer

COO

Plant Manager

Environmental Engineer

Environmental Permit, Risk, Requirement Management

© SAP 2007 / Page 13

Safe Operating Procedures,

Certificates and Training

Design/Change Assets for

Safety

Data Collectionfor Emissions, Consumption, Measurements

Corporate EHS Risks

ManagementCorporate EHS KPI Monitoring

Corporate EHS Compliance Reporting

EHS AuditManagement

Corporate EHS KPI Monitoring for Operations

Corporate EHS Risks

Management

Industrial Hygiene and Safety Officer

Maintenance ManagerEngineering Manager

EHS Compliance Reporting for Operations

Operational H&S Risk

Analysis for Work Areas

Risk Analysis for Critical

Assets

Action, Deviation and

Response Planning

Task Execution and Reporting

Environmental Incident

Management and Reporting

Operating Permits

Management

Task Execution and Reporting

Task Execution and Reporting

Task Execution and Reporting

Occupational Health

Management

Operational H&S Risk

Analysis for Work Areas

Maintenance Strategy

Maintenance Planning

Maintenance Work Orders

Permit to Work/ Lockout Tagout Management

Occupational Incident

Management and Reporting

Environmental Permit, Risk, Requirement Management

Permit to Work/ Lockout Tagout Management

© SAP 2007 / Page 13

Page 14: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

SAP has Portfolio, Ecosystem, and Platform to Meet Significant Portion of the Need

© SAP 2007 / Page 14© SAP 2007 / Page 14

Designing, Building and Commissioning

Assets

= Partner Solutions

Asset Visibility &

Performance

Maximize Asset Uptime

Asset Safetyand Compliance

Foun

datio

n

SAP NetWeaver (PI, MDM, et. al.)

SAP PLM SAP EH&S

SAP ERP (PM, PS, MM, et. al.)

Valu

e Ex

tens

ions

SAP Environmental Compliance

NRX – Asset Center

SAP E-Sourcing/CLM

Work Clearance Management

Meridium - RCMO

SAP RPM

NRX – Visual Information for Plants

Open Text

Open Text

Primavera Inspire

Primavera InspireMeridium - RCMO

SAP MAM

Meridium - RCMO

SAP GRC Risk Management

Note: SAP Learning Solution applicable to all projects

Analytics (BI, Business Objects)

Adobe Interactive Forms

SAP MII

Infr

astr

uctu

re

Opt

ions

Page 15: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

SAP Understands the Power of CommunityC

olla

bora

tion

of In

divi

dual

s

Enterprise Service CommunityIdentify and define Services

Co-

inno

vatio

nof

Com

pani

es

OperationsImplementationSolution Composition

TechnologyArchitecture

BusinessProcess Design

* Not a part of the communities of innovation at SAP, but a critical element in an SAP customer’s options to work collaboratively

Indu

stry

Thou

ght

Lead

ersh

ip

Industry advisory council*

Set the focus identify trends

SAP Developer NetworkTechnical implementation

Industry standards initiativeDefine common interfaces

Enterprise Services CommunityDefine enterprise services for ES Repository

Business Process Expert communityCompose processes

User groups*Connect, learn, influence, grow

Industry Value NetworkComplete a solution with partners

Business Strategy

© SAP 2007 / Page 15© SAP 2008 / Page 15

Page 16: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Agenda

1. SAP Upstream Perspective2. We Get It

3. Owner Operators Already Using SAP to Tackle This Problem

4. Summary

© SAP 2007 / Page 16

Page 17: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

PEMEX Gas speeds Information Delivery through connecting Plant and Enterprise Systems

© SAP 2007 / Page 17

Page 18: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Asset Safety and Compliance Success Story: Valero Energy Corporation

© SAP 2007 / Page 18

HQ: San Antonio, Texas Annual Revenues: > $90 B USD (2006)Total Assets: $38 B USDNumber of Employees: Approx. 21,000Refining Throughput Capacity: 3.1 mil brls per dayNumber of Retail / Wholesale Sites: Approx. 5,800Number of Wholesale Markets: 44 U.S. states, Canada,

Latin America and the Caribbean regionWhat: Successfully deploying HSE Asset Safety and Compliance

solution across all operations to gain greater visibilityTime: Initiated in Q4 2007, to be completed by Q4 2008Goals and Objectives for Project:

Greater visibility to operations, safety and complianceSharing of best practices across operationsProactive management of leading / lagging indicatorsImproved monitoring of assets, processes, performanceIncreased visibility to portfolio, incidents, risks and operations

Page 19: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Valero Energy – High-Level Visibility Architecture for Asset Safety and Compliance

© SAP 2007 / Page 19

Page 20: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Visibility Architecture Deployment Plan for Asset Safety and Compliance

© SAP 2007 / Page 20

Page 21: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Near Real-Time Stakeholder Dashboard for Asset Safety and Compliance

© SAP 2007 / Page 21

Page 22: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

Solution Reduces Losses at the Plant, Shares Best Practices and Increases Visibility

© SAP 2007 / Page 22

Deployed at 17 Refineries, integrating:4 distinct process historiansDozens of other unique legacy systems

and databases Proprietary technologiesHighly detailed and inconsistent data Distributed environment w/sensitive

bandwidth Created visually stimulating UI

Executive Operations CenterMedia wallPlasma panoramaGraphical, colorful, meaningful display

Process Control MetricsVolume analysisInventory controlProcess safety statisticsEnergy stewardship

Page 23: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

SAP is Committed to Open StandardsMany examples of open platform success….

StandardsDevelopment

BusinessProcess

Integration

© SAP 2007 / Page 23

Page 24: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

SAP is Committed to Interoperability

Already broadest portfolio of “natively” integrated solutions that span the enterprise

We have a proven SOA platform that is being used for interoperability today

We have multiple development/delivery approaches that would facilitate delivery of Open O&M standards

We have the power of community to help drive both development and adoption

© SAP 2007 / Page 24

Page 25: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

© SAP 2007 / Page 25© SAP 2008 / Page 25

Thanks for your attention –Any questions?

Mark PyattSr. Director – Mining & Mill Products Industry Solution Marketing

SAP Global Marketing Inc.T: +1(469) 855-7127E: [email protected]

Ken EvansSr. Director - Oil & GasIndustry Solution Marketing

SAP Global Marketing Inc.T: +1 630 579-1309 E: [email protected]

Chuck PharrisSolution Manager –Refining Industry Business Unit

SAP Labs Inc.T: +1 630 696-0712E: [email protected]

Page 26: Chuck Pharris Oil and Gas IBU - POSC Caesar · SAP’s Commitment to Interoperability High North IO Interoperability Workshop September 16, 2008 Chuck Pharris Oil and Gas IBU

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© SAP 2007 / Page 26