Full presentation from the 2013 SAP Best Practices for Oil & Gas conference. Examines leading practices for architecture and design based on the PBF Energy case study. Authored by Yael Urman and Kent Landrum.

1. A collaboration of:
Integrating ETRM and ERP Systems
Yael Urman
PBF Energy
Kent Landrum
Opportune LLP

2. Introduction & Overview
Part I – ETRM and ERP Integration
• The Need and Challenges
• Where to Draw the Line?
Part II – The PBF Energy Example
• The Project
• The Solution
• Lessons Learned and Next Steps
Questions & Discussion
What We’ll Cover

3. Introduction & Overview
PBF Energy
PBF Energy (“PBF”) is one of the largest independent petroleum refiners and
suppliers of unbranded transportation fuels, heating oil, petrochemical feedstocks,
lubricants and other petroleum products in the United States. PBF currently owns
and operates three domestic oil refineries and related assets, which were acquired
in 2010 and 2011. PBF’s refineries have a combined processing capacity, known
as throughput, of approximately 540,000 bpd, and a weighted average Nelson
Complexity Index of 11.3.
PBF Energy has been live on SAP since the 2011 implementation that was
featured in a SAP Customer Success Story.
Yael Urman
Title: Director of Applications
Role: Solution Delivery & Support

4. Introduction & Overview
Opportune LLP
Founded in 2005, Opportune LLP is an independent consultancy focused on the
energy industry. We are led by seasoned professionals with senior executive
experience in major energy and consulting firms. We serve clients throughout
North America and Europe. Using our extensive knowledge of all sectors of the
energy industry, we work with clients to provide comprehensive solutions to their
operational and financial challenges.
Practice areas include corporate finance, complex financial reporting, process and
technology, strategy and organization, dispute resolution, enterprise risk, tax and
outsourcing.
Kent Landrum
Title: Director, Process & Technology
Role: Program Manager

5. Part I – ETRM and ERP Integration
Slide 5

6. Slide 6
The Need for E/CTRM & ERP Integration
Reasons Companies Integrate E/CTRMs and ERPs
• Clients with an existing ERP footprint that require power
& flexibility of a dedicated E/CTRM solution
• Companies with a “best of breed” IT application strategy
• Mainframe, Midrange, or custom solution replacement
• M&A Situations

7. Physical Operations Domains Settlement and Accounting Domains
Slide 7
Sample E/CTRM and ERP Functional Mapping
Market Data
Quotes
Curves
Trades
Other
Contract
Admin
Contract
Generation
Distribution &
Approval
Amendment
History
Contract
Reporting
Credit Approval
Trading
Strategy & Plan
Pricing Strategy
Trading
Optimization
Trade Entry
Deal Reporting
& Analytics
Risk
Management
Position
Keeping
Mark‐to‐
Market &
Exposure
FAS Reporting
Dodd‐Frank
Compliance
Scheduling
Feedstock
Planning
Schedule
Development
Nominations &
Confirmations
Transportation
Management
Monitor,
Simulate,
Reforecast
Actualization
Ticketing &
Actualization
Inventory
Reconciliation
3rd Party
Inventory
Exchange
Reconciliation
Book to
Physical
Pricing &
Invoicing
Price
Determination
Secondary
Costs
Tax
Determination
Invoicing
Operational
Accounting
P&L Reporting
A/P Matching
Account
Mapping
Accounting
Interfaces
Working Capital
Forecasts
Compliance
Reporting
Integrated
Financials
Balance Sheet
Income
Statement
Legal
Consolidation
Supply & Trading Domains
E/CTRM System ERP System
Battleground

8. Slide 8
Challenges of E/CTRM and ERP Integration
Some Common Issues Faced
• Technology and Architecture Differences
• Data Model Differences
• Calculation Differences
• Timing Differences

9. Slide 9
Where to Draw the Line?
Deal Capture Scheduling Actualization Settlements Accounting / GL
Option 1
Option 2
Option 3
Option 4
E/CTRM
E/CTRM
E/CTRM ERP
ERP
ERP
ERP
E/CTRM
Draw the Line at “Natural Breaks” in the Process
• After deal capture and/or contract generation
• After scheduling and actualization
• After billing and invoicing

10. Scenario Overview
Integration Scenario: After Deal Entry
Traders enter deals into E/CTRM system and after verification or confirmation the
trade is sent to SAP creating a Contract and/or Order.
Advantages & Benefits
• Allows for trade P&L in E/CTRM system
• Straightforward, one way interface
• Minimizes number of correction and
cancellation scenarios
• Maintains complete SAP document flow
• Minimizes disruption to downstream SAP
processes like Credit or Treasury
Disadvantages & Costs
• Must map between two different, complex
pricing engines
• Real-time scheduling and actualization data not
available in E/CTRM for position keeping
• Limited secondary cost information in E/CTRM
• Credit information not available in E/CTRM at
deal entry
• Requires duplication of market data feeds
Recommendation: Utilize for minimalist E/CTRM footprints for a limited number
of lines of business.

11. Scenario Overview
Integration Scenario: After Actualization
Deals are entered, confirmed, scheduled, and ticketed in the E/CTRM system
and then interfaced to SAP creating Orders.
Advantages & Benefits
• Allows for trade P&L in E/CTRM system
• One-way interface
• Utilizes only E/CTRM pricing engine
• Real-time position keeping possible in
E/CTRM
• Sends only “stable” trade data to SAP
• No duplication of market data feeds
Disadvantages & Costs
• Certain processes like split orders, partials
delivery, etc. require complex interface logic
• Corrections will sometimes require actions in
both systems
• Credit and Treasury have limited forward view
• Credit information not available in E/CTRM at
deal entry
Recommendation: Consider in cases concerning a broad, mature SAP footprint
that also demand robust position, exposure, MTM, VaR, etc.

12. Scenario Overview
Integration Scenario: After Invoicing
Deals are entered, confirmed, scheduled, ticketed, and invoiced in the E/CTRM
system and then interfaced to SAP creating AR, AP and GL entries.
Advantages & Benefits
• Allows for trade P&L in E/CTRM system
• One-way interface
• Utilizes only E/CTRM pricing engine
• Real-time position keeping possible in
E/CTRM
• Simple cross-system correction process;
cancel and rebill
• No duplication of market data feeds
Disadvantages & Costs
• Doesn’t leverage SAP’s native cross-module
integration
• Credit and Treasury have no forward view
• Credit information not available in E/CTRM at
deal entry
Recommendation: Use in the case of limited SAP footprint (e.g. – Financials), for
“outlier” lines of business, or in rapid M&A situations.

13. Slide 13
Where to Draw the Line?
Solution Recommendations
• Cleanse your master & reference data
• Integrate to support business processes not someone’s
favorite report
• Try minimize the back-and-forth between systems
• Avoid synchronous cross-system calls
• Carefully consider your company’s IT delivery & support
core competencies

14. Part II – The PBF Energy Example
Slide 14

15. Vision & Purpose
Implement a commercial solution for PBF to eliminate the
organization’s dependency upon 3rd Party Partnerships
and Agreements for core Procure-to-Pay and Order-to-
Cash business processes and other Commercial
functions.
The PBF Energy Example – The Project

16. Business Challenges
• PBF Energy did not have a complete Commercial
business organization designed, staffed, trained, and in
place
• The Company had no existing IT origination-to-
settlement solution or necessary support infrastructure
• PBF was dependent on expensive Agency & Transition
Services Agreements as well as other temporary
commercial constructs
The PBF Energy Example – The Project

17. Business Scope
• Crude supply and refined products marketing for the
Toledo refinery system as well as LPGs,
petrochemicals, and lubes marketing for Delaware City
and Paulsboro
• Modes of transport include pipe, truck, rail, and barge
• Trading, Contract Admin., Risk, Scheduling,
Actualization, Invoicing, Credit, and Tax
The PBF Energy Example – The Project

18. Technical Scope
• Implement OpenLink RightAngle
• Develop the following custom integration:
o Market data interface with ZE Power ZEMA
o BOL interface with TopTech and BDS
o Yield accounting interface with AspenTech Advisor
o Extract to excise motor fuels tax compliance solution
o Various upload/download-type interfaces
o Interface to SAP Financials for AR and AP
The PBF Energy Example – The Project

19. The PBF Energy Example – The Project
Benefits Accrued
• End Transition Services
• Exit Agency Agreement
• “In-source” Commercial
• IPO Readiness

20. Integration Scenario
After Invoicing
Deals are entered, confirmed, scheduled, ticketed, and invoiced in
the E/CTRM system and then interfaced to SAP creating AR and AP
entries.
OpenLink RightAngle SAP Financials
Enter Trade
Generate
Contract
Schedule Actualize Invoice Post AR/AP Apply Cash
Slide 20
The Solution – Where the Line was Drawn

21. Slide 21
The Solution – Where the Line was Drawn
Solution Architecture
RightAngle Outbound
SQL
.NET
Process Payables
Process Sales
Extract Invoices
Stage Payables
Stage Sales
Gather All Invoices
Generate XML XML

22. Slide 22
The Solution – Where the Line was Drawn
Solution Architecture
SAP Inbound
ABAP
Load Staging Table
Park Receivables
Park Payables
Post Receivables
Post Payables
XML
Perform Mapping

23. Slide 23
The Solution – Where the Line was Drawn
Challenges Faced
• Rounding and precision differences
• Payment Terms and determining net due date
• 999 Line Item limit
• Mass Delete of Parked Documents
• Where best to put Reference information (e.g. – BOL #)?
• Alternative UOMs
• Characteristics to derive PA Segment (e.g. – Plant)

24. Slide 24
The Solution – Add-on Integration Items
Secondary Cost Integration
• Enables to generate and capture secondary cost within Right
Angle at the time of product movement
• Cost elements are interfaced electronically from Right Angle to
SAP
• Enables to identify, review, and pay the invoices with minimal
manual interaction from SAP

25. Slide 25
The Solution – Add-on Integration Items
Credit
• ETRM integration to DTN Enhanced Credit Module (ECM)
o ECM enables to manage credit for rack customers at the terminals
o Includes interface for outstanding AR from Right Angle to ECM
o Assumes payment is made on invoice due date
• Allocation Viewer (AV) – Enables the customers to review their
allocation and available credit
• SAP-to-ETRM: Credit Relief
o Provides payments received from customers from SAP to SRA
o Enables accurate and timely AR information in ECM and AV

26. Slide 26
The Solution – Lessons Learned
Long-term Benefits
• RightAngle and SAP are fully synchronized – one version of the
truth
• Customers have real-time visibility on their actual allocation
• Full control on payments (paid and received)
• Credit management automation: accurate, reliable, on-time
• SOX compliant process

27. Slide 27
The Solution – Lessons Learned
Ongoing Supportability
• The support teams (SAP and ETRM) didn’t take full responsibility
on the interface (the problem is always with the other system…)
• Offshore team was not able to solve the real-time issues (different
time zone, miscommunication with Commercial)
• Reactive approach – firefighting

28. Slide 28
The Solution – Next Steps
System Improvements in Mind
• Increase the frequency of the interface – from twice a day to
every 2 hours
• Full automation of AR process: from the bank to SAP invoices.
Currently the AR information is one business day old.
• Increase the frequency of the bank interface to SAP and from
SAP to RightAngle

29. Slide 29
The Solution – Next Steps
Support Organization & Processes
• Include interface support in the Managed Services Agreement
with our SAP support partner (Currently managed as staff
augmentation)
• Moving Interface Support Offshore
• Automate interface monitoring: RA-SAP and SAP-RA

30. Slide 30
Questions & Discussion

31. A collaboration of:
Yael Urman
PBF Energy
yael.urman@pbfenergy.com
Kent Landrum
Opportune LLP
klandrum@opportune.com