Karakudukmunay (SAP ERP)

At the present stage of development of the oil and gas industry of Kazakhstan, problems of effective integration of domestic enterprises into world economy and creation of the modern systems of management on the basis of information technology implementation are relevant. Implementation of the integrated corporate information system (CIS) is a difficult, but relevant task, one of bases of successful development of the oil and gas companies. Such system allows owners and to company management timely to obtain reliable information about activity of the company and its divisions, to exercise effective control earlier others to make the decisions leading the company to the leader's position on the segment of the market. A way of implementation of corporate information systems the Karakudukmunay LLP company went over with success, and it is ready to share the experience.

What everything began with

In 365 km on the northeast of the city of Aktau the Karakuduk field is located. For the first time oil on it was detected in 1972, industrial development began only in 1998. 5 years later, in 2003, the first million tons of oil was extracted. In January, 2011 the saved-up production was 8 million tons. Karakudukmunay LLP which is operating company "Lukoil Oversiz" is engaged in mining. With arrival of Lukoil company at the end of 2005 in "Karakudukmunay" the new stage of development began. The implementable large-scale program of drilling, hardware upgrade and permanent optimization of technologies allowed to provide the level of annual production exceeding 1.4 million tons. Preserving of the reached rates of development and increase in efficiency of the company required implementation of the advanced information technologies. The strategic partner regarding implementation and maintenance of corporate systems of management selected Parma Telecom company. Projects of informatization in the company began in 2006 with system implementation of management of oil and gas assets (SUNA). A system provided support of the interconnected business processes which are key for management of an oil and gas asset: preparation and decision making, summary scheduling and control with costs planning on each project, risk management, financial and economic modeling, information management and strategic planning (Roadmap). In SUNA the Working program containing all significant controlled tasks for the three-year period with the detailed summary schedule for a year forms (including all investment program, large operating costs and projects).

The innovation component of an implementation project of SAP ERP

Documentary to record the operational management decisions made by heads, in ISU special system messages in which the information describing and justifying the made decisions is structured are used. Further information is used for control and assessment of activity of heads. At each level contractors fix solutions in ISU using special system messages. The culture of work with documentation of decision making in "Karakudukmunay" was imparted by regular work in ISU. It allowed to pass from total administration control to control on deviations. Formalization of managerial procedures was one of the main innovation components of an implementation project of SAP ERP.

ASUP in Karakudukmunay LLP In 2008 in the company the pilot project "The automated control system for production of Karakudukmunay LLP (ASUP) was implemented. It is the first project of this sort for Lukoil Oversiz Holding, however, despite complexity of a task, at the beginning of 2009 ASUP was successfully put into commercial operation. The functionality of ASUP first of all is directed to the solution of production tasks in production, preparation and delivery of products, and also on management of drilling and repairs of wells. In 2010-2011 in Karakudukmunay LLP the large-scale project on integration of information systems ISU and ASUP based on the integration SAP product PI is executed. During the project of integration the end-to-end business processes united in group of the business scenarios "Operation of Fields" were simulated. Within "Operation of fields" are selected "cross-system" functionality: Management of drilling, Maintaining a well stock, Management of operation of fund, Management of geological and technical actions, Management of researches on wells, Maintenance of reservoir pressure, Delivery of oil and gas, the Analyst and the reporting. Systems in the automated mode exchange data (during the project 22 intersystem interfaces are developed and configured), thanks to what duplication of data entry in the different systems is excluded, maintaining normative handbook data is unified and centralized. The high level of reliability of the entered information increases quality of the made management decisions. The key role in successful development of the ISU project and implementation of ASUP was played by the former deputy CEO for production – the chief engineer of the CR, now the chief engineer of KF LOS in Astana Andriy Schaefer.

The effects gained from implementation of corporate information systems

Based on wide use of information systems in the CR the integrated system covering the main stages of lifecycle of an asset and all main business processes – from purchases before oil delivery is created. The company gained considerable effects of the implemented management systems which sources are:

• justification and transparency of budgets of TORO of the production services, thanks to existence in a system approved and the approved standards of expenditure of the resources necessary for carrying out TORO;
• operational adjustment of necessary purchasing amounts of services and materials which, for example, led to reduction in cost of construction of the GPP in comparison from estimate for 10 % and also to reduction of term of construction, from planned 13.6 months to 10 months;
• accounting in the module TORO of all nomenclature of items of equipment and technical places created base for qualitatively new level of analytics of production processes and service, a possibility of maintaining plans and the strategy of repairs and, as a result, reduced number of failures and duration of equipment downtimes;
• the organization of work in the single integrated system allowed to reduce the general time of obtaining the analytical information required for decision making and to increase labor productivity (as confirmation to that is preserving of number of staff of management personnel, when entering new production capacities);
• decrease in stocks in a warehouse (up to 20% in value term for the first "postproject" year), at the expense of the operational analysis of a remaining balance of materials and the equipment in a warehouse, control of terms of turnover, identification and implementation of illiquid assets
• reduction of cost of well-drilling, due to daily work with the Working program that allows to control a drilling adherence to deadlines precisely.

The ready-made industry solution and examination of the consulting company are key factors of the successful project, decrease in its risks, increases in efficiency of implementation and return from use of an information system. It is important that the organization of Competence Center allowed to prepare highly qualified specialists from among the staff of the company and also graduates of local higher education institutions which provide support and development of a system, training of new employees, methodological providing in "Karakudukmunay".

Oil & Gas of Kazakhstan 4, 2011 magazine