In this day and age in the Oil and Gas industry, new frontiers are rare. The world was shocked when Apache announced the Alpine High finding in Texas. After almost 200 years of folks searching for oil and gas reserves, there just aren’t that many places left to go. However, a little further south of Texas, a new frontier is coming online as Mexico auctions off its fields to foreign investment in its series of “Rondas.” From start-ups to the traditional powerhouses, an entire industry has been revitalized. Hundreds of companies are flooding into the Mexico with both operational and technological needs to satisfy the unique regulatory environment in Mexico. To account for those needs, Capgemini’s preconfigured SAP READYUpstream (RU) solution has been modified specifically for the Mexican market. Those localizations are detailed below:
- Addition of Upstream Operations Management (UOM) – By taking the RU foundation and adding one SAP’s latest products, we now have the ability to follow volumes from the well source and compare to planned production to identify deferment. Better insight into the well’s production allows for quicker operational and financial decisions.
- Preconfiguration of Production Sharing Accounting (PSA) – Based on the laws establish by the Comisión Nacional de Hidrocarburos (CNH), an ERP serving E&P companies producing in Mexico requires the ability to establish Production Sharing and Licensing agreements and track recoverable costs. SAP’s PSA module, integrated with JVA, provides those benefits with a flexible reporting framework to give further insight into well production.
- Modification of Joint Venture Accounting (JVA) – Here in the US, we’re used to Operators incurring well development costs and turning around and billing their partners for their share of those costs. Internationally, that’s an unfamiliar model. So we’ve modified the RU solution to accommodate venture banking, multiple billing basis (cash, expenditure and invoice based billing), and multiple currencies to address the challenges of international partnerships.
New frontiers bring with new challenges. For E&P companies beginning or adding to operations in Mexico, those challenges are magnified by an industry opening up to outside companies for the first time. By taking a proven solution like Capgemini’s READYUpstream solution and updating it for the local Mexican market, some of those challenges can be met.