Marianne Walcot, Co-Founder of Progressive Technology Solutions, shares her insight and experience of working with Africa's oil & gas companies to streamline business processes and how making some business process changes can free up senior management to focus on the time-consuming business of discovering oil.
As we are all well aware, exploration and production in Africa's hydrocarbon territories have been affected by low oil prices and companies across the oil and gas value chain are looking for ways to achieve cost savings and efficiencies, as they come under pressure from shareholders and investors to tighten their belts.
This historic and protracted collapse of the oil price has encouraged companies to adapt and reflect on their operations and we are seeing a seismic shift in our sector globally; and Africa is no exception. There has been a push for simplification of tax regimes in host countries, tighter contractual provisions covering PSA's and licensing and an increased willingness for partnerships between industry players themselves and with Governments of oil producing countries.
This will all work to create a business environment of certainty, speed and consistency but what can your company do be more nimble and responsive? We believe at Progressive, that the solutions are often simple and easily achieved with a little expert advice and guidance.
Streamlining Means Survival
Restructuring, cost cutting and adaptation has become order of the day, as much needed capital expenditure/ investment faces indefinite delays. We have developed a five point plan to help our clients achieve this with financial accounting systems, supply chain and enterprise asset management software solutions. Designed to handle the critical needs of oil & gas organisations, applications include task management, safety protocol and asset optimisation, this plan is aimed solely at upstream oil & gas issues, to increase speed of deployment and reduce operational costs:
Automate your manual activities and this will save time and money immediately. This can be achieved in financial reporting, purchasing items and managing assets. For example, an asset management system allows you to schedule downtime for maintenance that works with your team's shifts and thus avoiding costly reactive maintenance. This is especially important in remote locations where parts can take weeks to order.
Your IT infrastructure onto a private cloud and in return for a small licence fee you receive system and application requirements, on-going support and managed updates. This will also provide flexibility so that you can scale up as your demands increase.
Even small companies can outsource back office operations so that you can focus on the core business. This means you gain access to specific skills and expertise and you can also dial up and down as your business requirements change.
4. Pool Resources
Where strategy and decision-making always needs to stay within the company, transactional processing with clear inputs and outputs is easily transferable. Back office functions can be shared for example, if there are two oil companies operating in the same area.
5. Stick to the Template
When designing and implementing business solutions, a significant amount of time can be wasted on non-standard requirements, where specific aspects have to be custom-built. Often, adapting a standard process around your chosen solution is a cost effective and efficient approach and if you are using a supplier with specific oil & gas experience, you should find that they have best-practice E&P frameworks already in place.
Case study: Impact Oil & Gas
Impact Oil & Gas is an independent oil & gas company dedicated to discovering new potential in underexplored sedimentary basins offshore Africa. It has emerged as a leader of exploration in African frontier acreage, and proudly, one of Progressive's clients.
Their growth has been rapid and with that business processes needed to adapt quickly to accommodate their new reality.
When a company grows at speed, as Impact has, organisational change can be quite overwhelming. Impact was operating in a number of new regions, as a result of acquiring assets in the African continental margins. Their existing finance solution, a basic bookkeeping system, was no longer fit for purpose and made financial reporting difficult. There was also a need for multiple currencies and financial reporting in various countries. Impact were also being slowed by many manual processes which we wanted to eradicate. The assets had also become fully operational and JV accounting was necessary.
We identified Infor SunSystems Financials as the best fit and Impact appreciated our depth of knowledge and experience of both SunSystems functionality and the E&P sector. We provided a consultant to work full time with Impact's small finance team to really get under the skin of their requirements and challenges and successfully implemented SunSystems for them. The Impact finance team is a lot happier as a result, completing reporting cycles, revaluations, management and asset reporting on a monthly basis. They have quality data coming straight from the system, with little need for manual work. Customised reports are produced, and they can easily fulfil key requirements for now and the future, such as Join Venture accounting and multi-currency reporting. We continue to support the team with report updates, ad hoc questions and changes as the company grows. In addition, we will spend time with the team to review processes to identify any potential efficiencies and improvements.
We are proud of our work with Impact and like to think we saved them time and money to focus on their core business. That is what we do best.
“We were really impressed with Progressive. Their professionalism, knowledge and experience of oil & gas shone through from the first meeting. This understanding of our industry enabled Progressive to provide recommendations and resolutions to challenges so that we really got the most out of our SunSystems solution.” Robert Wilde, Finance Director, Impact Oil & Gas
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