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Occidental - bringing 12 financial systems down to 1

Friday, December 9, 2011

Occidental Petroleum, the 4th largest oil and gas company in the US, has recently embarked on a major project to consolidate 12 different financial systems down to one, said Don Moore, VP and CIO, speaking at the Oracle OpenWorld conference in San Francisco in October.

The company mainly focuses on large, brownfield or 'legacy' oil and gas assets, he said.

It has operations in North and South America, Libya, Iraq, Yemen, Oman. There are a lot of US land operations, particularly in the Permian Basin. It is the largest acreage owner in California. The company is also the leading North American manufacturer of vinyls.

The company sells everything as soon as it is produced, and has sophisticated trading systems.

With the financial systems project, 'we started 2/3 years ago realising we had many pieces of financial systems we had to take care of,' he said.

'We had an executive (before 2000) who said we didn't need a purchasing department.
In 2002 to 2003 we started rebuilding one.'

'The thing it was really driven on was project management. The number 1 thing people were concerned about is ability to manage the projects. We have 50,000 projects of some sort we have to manage.'

Other objectives included 'getting the financial information to the operations people,' he said.

'We've much improved how we're spending money. We have control of our inventory better than we ever did before. These are real dollars [of saving].'

'The data relates to the business process, not the accounting structure. The projects are driving the whole system, not the general ledger. We have a consistent set of global processes.'

'We had to clean up a lot of data.'

Occidental now has much better management of its different processes, and could run most of its processed (such as accounts or supply chain management) from one place in the world if it wanted to.

It can provide better support to its regional organisations.

It expects a range of different results from its IT systems including helping make better decisions, getting improved results and operations efficiency, extending reservoir life, getting competitive advantage, and improved performance at the drill bit. 'It's all about better, faster, decisions,' he said.

Getting a standard IT infrastructure was the most important thing we did,' he said. 'It's a foundation for delivering modern oilfield solutions. We're going to stay on a standard set of technologies.'

Another benefit of the IT systems is improved management of capital, and keeping close to predictions. 'If you say you're going to spend $9bn and you don't, that's a negative for Wall St.'

We've been leveraging our tools and techniques so we have better project management.

'A lot of work goes into our G+G data. We have a standard set of geoscience tools,' he said.

'I was in Bahrain this time last year, operations managers told me how quickly they'd brought the field up with all of these tools,' he said. 'The Bahrain government was sending letters of appreciation.'

A major recent project has been improving the company's financial management department.

The next development, Mr Moore calls the 'digital canopy', which will be providing anywhere, anytime, access to field operations systems, including asset lifecycle management, maintenance management and people safety.

Associated Companies
» Occidental Petroleum
» Oracle Corporation

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