Whitepaper - Connected Project Portfolio Management in the Oil & Gas Industry

Connected
Project Portfolio
Management
in the Oil and Gas
Industry
Inspire and shape
the digital energy revolution
Run Simple

SAP Connected Project Portfolio Management Whitepaper © 2017 SAP SE. All right reserved
2
Executive Summary
Challenges in the Oil and Gas Industry
What Is Capital Project Portfolio Management?
What Is Required to Enable Capital Project Portfolio Management?
What Are Some of the Leading Practice Reports and Dashboards?
What Value Would an Organization Derive from Implementation?
How Does an Organization Decide Which Technology Platform to Use?
How Can SAP Help?
The Power of SAP S4/HANA to Enable Capital Project Portfolio Management
The End to End Process Enabled by SAP S4/HANA
Solution Capabilities by Project Type
Capital Projects
Research & Development, Innovation Projects
Information Technology (IT) Projects
Customer Successes
Final Thoughts
TABLE OF CONTENTS
3
4
5
7
8
11
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14
15
17
19
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20
21
22
25

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EXECUTIVE SUMMARY
One vital question often asked by executives dealing
with an ever-changing market landscape is,“How
should my company most effectively invest in order
to grow our revenue and capture market share,
and increase profitability?”
To sustain long-term growth, companies must manage
a number of projects at different stages of maturity.
Many organizations struggle with capturing the voice
of the customer, and translating that input into
executable projects staffed with the right resources,
while also ensuring adequate due diligence to make
certain that projects align to corporate strategy and
meet market expectations. Companies that more
effectively manage this process position themselves
for greater revenue realization, market share, and/or
profitability.
Capital project portfolio management is all about
making decisions about investment mix, matching in-
vestments to objectives and aligning them to strategy,
allocating the right resources to the right projects, and
balancing risk against performance.
Ask yourself if your company effectively:
1. Maximizes value – Resources are allocated to
maximize the value of the portfolio via a number
of key objectives such as profitability, return on
investment, and risk
2. Aligns to corporate strategy – The portfolio
reflects the company’s innovation strategy and
investment allocation aligns with the company’s
strategic priorities
3. Achieves pipeline balance – Projects are staffed
with the right number of resources in order to avoid
pipeline gridlock at any given time
4. Offers transparency – Ensures that employees
work towards the common goals and vision laid
out by management
At SAP®, our approach to enabling capital project port-
folio management is to provide a digital-ready platform
and the connected business networks necessary for
rapidly and securely executing new business models,
extending value chains, and engaging with customers,
employees, and partners like never before.
Our vision is to help the oil and gas industry digitally
transform in order to drive profitable growth, build
customer intimacy, and grow talent. This document
offers our point of view on how capital project portfolio
management must be implemented, how SAP can help,
and some of the leading practices we have seen.
The Digital Project Revolution
Enterprise Project Portfolio Management Process
1 2 3 4 5Strategy
Project
Proposal
Project
Planning
Procurement Execution Monitoring
Technology Platform

4
We see three major capital projects trends in the oil and gas industry:
CHALLENGES IN THE OIL AND GAS INDUSTRY
The New Normal
Projects are becoming more complex, remote, and expensive,
increasing the potential cost of errors or delays. The value of
accuracy and efficiency has never been higher.
The use of technology and mobile connectivity is generating new
levels of information to support decision making and optimization.
A growing share of workforce is nearing retirement, reducing
availability of skills and experience in the field.
COMPLEXITY
DIGITISATION
CREW CHANGE
Even before projects are executed, organizations face challenges in selecting the right ones, which can be
traced back to issues with portfolio management. Some of the commonly encountered issues are:
Business planning is often a financial/
budgeting exercise
Volatility and misalignment of the portfolio
with prioritised business strategies
Businesses often only look at investment
portfolios at the “total” level
The risk that seemingly balanced positions at
the “total” level are masking constraints that
are not being addressed
Scheduling is often a devolved exercise at the
discretion of line/project managers
People working on the wrong things and a
lack of productivity
Quality project plans and forecasts are often
myopic or absent
Inability to tell how much capability is already
committed
Capabilities are not organized rationally
(for example, in skills-based service lines)
Difficulty establishing a holistic view of
current and planned capability capacity
Capital project portfolio management is
often seen as a career backwater
The wrong people doing the wrong jobs and
perpetuation of existing problems
Processes often seen as bureaucratic, inflexible,
and awash with data, with multiple processes
in place that achieve the same outcome
Poor process uptake and engagement,
requiring leadership input
Capital project portfolio management seen
as an annual process, not a fundamental
management discipline
A“bow-wave” of demand whereby plans
become seasonal and poorly phased
Resulting in
Resulting in
Resulting in
Resulting in
Resulting in
Resulting in
Resulting in
Resulting in

5
REIMAGINING
What Is Capital Project Portfolio
Management?
In a connected world where every company must become a
technology company, smarter products and services will refocus
commerce on business outcomes and blur industry lines.

6
CAPITAL PROJECT PORTFOLIO MANAGEMENT OVERVIEW
We define capital project portfolio management as an
ongoing, dynamic process wherein projects and project
proposals are regularly evaluated, prioritized, and se-
lected with the goal of obtaining the greatest possible
value from limited available resources.
Capital project portfolio management sits between
business strategy and project management. Our defi-
nition breaks it down into five interdependent capabili-
ties:
1. Business Strategy – Crafting a long-term plan of
action designed to achieve a particular goal or set
of goals that will enhance shareholder value
2. Supply and Demand Balancing – Selecting the
optimal mix of projects so that the business
achieves its strategic objectives and plans
3. Capability Management – Understanding already
utilized and available capacity (people, skills, cost,
premises, sourcing strategy, environments) and
developing in line with strategy and future demand
4. Scheduling – Deploying the right skilled resources
to the right projects and escalating any resource
shortages that might put the project at risk
5. Delivery Planning – Monitoring the progress of
projects and their impact on available capacity
Each capability contains specific disciplines that need
to be mastered.
What is Capital Project Portfolio Management?
Business
Strategy
Portfolio
Management
Project
Management
SUPPLY &
DEMAND
BALANCING
CAPABILITY
MANAGEMENT
SCHEDULING
DELIVERY
PLANNING
“Doing the
Right Things”
“Doing Things the
Right Way”
People
Planning
Delivery
Work
Resource Deployment
Resource Escalation
Career Planning
Time Capture
Skills Planning
Sourcing Strategy
Training
Operating Models
Project Planning
Estimating and Forecasting
Project Governance
Budget Change Control
Portfolio Modeling
Project Commitment
Demand Impact
Assessment
BUSINESS STRATEGY
Investment Planning & Budgeting
Investment Prioritization
Demand Monitoring

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There are seven interlinked design elements that help
enable capital project portfolio management:
1. Project Definition – Defining what a project is and
when and how a project enters a portfolio and exits
it
2. Project Data – Consists of data that ties a project to
a specific business unit, the start and end dates, the
status of the current project, the investment type
(new to the world as opposed to regulatory versus
maintenance projects), the project financials, and a
subjective scoring model that helps to rank a proj-
ect against others
3. Governance – Implementing a governance model
that includes strategic investment targets, aligns
and prioritizes the new capital projects portfolio
with business strategy, and allows for conducting
project reviews to ensure the success of both the
project and the portfolio
4. Resource Management – Adequately defining
resource pools, allowing for the optimization of the
utilization of those resources and determining the
right number of projects to pursue
5. Portfolio Views – Helps your organization
synthesize and make sense out of captured data
6. Stage Gate Process – Implementing a development
process that enables high-performing, cross-func-
tional teams to make investment decisions based
on facts as opposed to opinions (this must be scal-
able to allow smaller projects or projects related to
a particular strategic investment type to omit steps
or deliverables that are called for in the stage gate
process but are not required for successful comple-
tion of the project)
7. Technology Platform – Leveraging a scalable
platform that grows with an organization
What Is Required to Enable Capital Project Portfolio Management?
1 2 3 4 5Strategy
Project
Proposal
Project
Planning
Procurement Execution Monitoring
Technology Platform
Project Definition
Do we all mean the
same thing when we
say “project”?
Process &
Governance
How do we maintain the
portfolio process and align
our project portfolio to our
business strategy?
Portfolio Scope
When and how does a
project enter and exit
the investment
portfolio?
Resource Pools
What do we need to
deliver portfolio
objectives?
Portfolio Views
How do we synthesize
this information and
conduct scenario
planning?
Project-Level Data
Qualitative Information
How do we identify projects?
Financial Information
How do we slice, dice, and
aggregate portfolio information?
Subjective Scoring Model
How should we value one
project against another?

8
Projects can be evaluated countless ways, but companies experience diminishing returns when their requirements
are redundant and overly complex. The main goal of these reports is to enable decision making with relevant and
timely information. An organization can start with as few as four or five requirements while keeping the focus on
consistency of measurement and definition.
Ultimately, the value of these reports is in the conversation, not the numbers, and managers should test
assumptions rather than create more data reflecting false precision. Some of the leading practice reports
used by companies that have implemented capital project portfolio management are:
REPORTS DESCRIPTION WHY IS IT IMPORTANT?
Allows decision makers
to see how development
investments are being al-
located across groupings
and how they compare to
strategic targets – group-
ings can include product
lines, regions, platforms,
or innovation types

• Highlights the actual contribution
percentage to projects based on the
strategic bucket they are aligned
to and compares this to the recom-
mended contribution percentage
Classic balance test,
which plots projects into
a four box grid that com-
pares the probability of
technical success with
reward
• Identifies projects based on risk and
net present value (NPV)
• Helps to determine which projects
should be executed and which should
not
»» Bread and butter – Projects that
represent the backbone of the
organization
»» Pearls – Projects with high proba-
bility of success and high NPV
»» White elephants –Projects with
low probability of success and low
NPV (should not be executed)
»» Oysters – Projects with low
probability of success and high
NPV (should not be executed)
• Determines if an organization is
spending too much time and
resources on one quadrant
35%
15%10%
20%
20%
Brand Maintenance
New to Drive Core
Product/Pack Upgrade
Expand Core
Disrupt the Market35%
15%10%
20%
20%
Brand Maintenance
New to Drive Core
Product/Pack Upgrade
Expand Core
Disrupt the Market
*Bubble size indicates
development cost.
Risk vs. Reward
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0 100 200 300 400 500
Probability*of*Technical*Success
Expected*Commerical*Contribution*(NPV*given*Technical* success,* $MM)
Risk*vs.*Reward
Bread*&*Butter Pearls
White*Elephants Oysters
Portfolio Mix and Balance

9
Funnel chart that shows
the balance of projects over
multiple phases – phases
or stages can vary from
organization to organization

• Identifies projects based on
phase or time to launch
• Assesses whether there are
enough projects in the pipeline
• Determines how many projects
per phase
• Indicates possible crunch in
resource availability if too many
projects are concentrated in
one phase or time period
Stacked column chart high-
lighting gross margin contri-
bution per quarter based on
product line
• Highlights gross margin
contribution of product lines
per quarter
Highlights resource
demand per function
over time

• Identifies capacity shortages
per quarter
• Net capacity horizontal line
shows the total resource
capacity of the organization
Quarters
*Bubble size indicates development cost.
Capacity Utilization
Expected Contribution
from Pipeline Projects
Pipeline View by Phases
or Time to Launch
Quarters
Ideate Evaluate Develop Implement Launch

10
Identifies projects based on
ROI (gross margin percent)
and capital expenditure
(Capex)
• Size of bubble shows the resources
utilized (larger bubble means more
resources are being used by that
one project)
• Identifies projects based on four
criteria:
»» High return and low Capex–
Ideal/favorable
»» High return and high Capex –
Not favorable
»» Low Return and high Capex –
Not favorable
»» Low return and low Capex–
Not favorable
Provides all data, including
NPV, project status, and
aggregate value
• Highlights all relevant project info
on one page
• Provides info on the following:
»» Total costs to date
»» NPV per project or total NPV
based on priority or strategic
buckets
»» Overall project status – Launch
date, expected revenues
Master Project Lists
Investment vs. Return
**Bubble size indicates aggregate
resource utilization.
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
0% 5% 10% 15% 20% 25% 30% 35%
Total&Investment,&$MM
Gross&Margin& %
Investment&vs.&Return
Highreturn,&Low&CAPEX
Highreturn,&High&CAPEXLowreturn,&High&CAPEX
Lowreturn,&Low&CAPEX

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What Value Would an Organization Derive from Implementation?
Optimize Portfolio
• Reduced percentage of misaligned projects
• Portfolio aligned to corporate strategy
• Decreased exposure to risk
Increase Investment Value
• Increase in average NPV of the portfolio
• Informed decision – objectivity in project selection
Increase Throughput
• Savings in portfolio operation costs
• Reduced reporting costs
• Reduced time to market
Lower Resource Costs
• Increase in resource utilization
• Reduction in contractor headcount/costs
Improve Delivery Performance
• Reduction in projects delivered late/over budget
• Reduction in project management costs
By implementing capital project portfolio management, an organization can reap the following benefits:
COMPANY PERFORMANCE
(Source – SAP Performance Benchmarking)
KEY PERFORMANCE INDICATOR
Average Performers Top 25% Performers
Average Deviation of ROI (in %) 5.50 1
Capital Projects on Time, Budget, and Scope (in %) 77.30 85
% of Approved Projects with Business Case 88.98 100
Resource Utilization Rate (in %) 78.80 85
Capital Project Administration Cost (% of rev) 0.82 0.11
Project Audit Cycle Time (in days) 4 1
Project Manager Headcount Cost (% of project
administration cost)
70.20 62.20
Time Spent on Capital Project Reporting (in %) 14.20 10
Traditionally, we have seen companies performing between the average and top 25% of performers following
the implementation of capital project portfolio management:

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Organizations should take a holistic approach when deciding which technology platform to use.
Requirements should be looked at using two broad categories:
1. Functional
2. Technical
There are six functional requirement categories to consider when deciding whether to implement
a particular technology platform:
FUNCTIONAL REQUIREMENT CATEGORY KEY QUESTION(S) TO ASK
1. Idea and Demand Management
How well does the technology platform process demand
and ideas for new work? How well is the prioritization
process implemented?
2. Portfolio Management
How well does the technology platform support the
creation of new portfolios and the analysis of existing
portfolios? How is the portfolio budget management
process implemented?
3. Program and Project Management
How well does the technology platform support the
creation of new projects and the management/tracking
of existing projects? How well does the tool represent and
track (hierarchical) interdependencies?
4. Financial Management
How well does the technology platform support the cre-
ation, tracking, and management of costs and budgets?
How flexible is the financial reporting across various proj-
ects, programs, and units?
5. Resource and Time Management
How well does the technology platform support resource
forecasting, allocation, and time tracking?
6. Stage Gate Management
Can existing standard processes be customized within the
technology platform?

13
There are six technical requirement categories to consider when deciding whether to implement a particular
technology platform:
TECHNICAL REQUIREMENT CATEGORY KEY QUESTION(S) TO ASK
1. Reporting
How well does the technology platform support the customiza-
tion and personalization of dashboards, charts and diagrams,
custom reports, and report templates; searching and filtering
functionalities; saving customized reports; multiple export
formats; e-mail alerts; KPIs; and financial reporting?
2. Accessibility and Security
How well does the technology platform enable access
restrictions and allow for the flexibility of security concepts,
accessibility via the Web, and support of single sign-on?
3. Localization and Languages
How well does the technology platform enable the use of
multiple currencies, regional calendars, and region support,
as well as the calculation of exchange rate effects?
4. External Interfaces
How well does the technology platform integrate with other proj-
ect management tools such as MS Project and Outlook/LDAP,
export to common desktop applications, and integrate with
common financial applications, help desk applications, require-
ments management tools, and Web portals for publication?
5. Modularity and Adaptability
How easy is it to configure and/or customize the technology
platform?
6. Document Management
How easy is it for the technology platform to store documents,
workflow integration, and standard interfaces for document
management systems?

14
IMPLEMENTING
How Can SAP Help?
SAP supports digital oil and gas companies with a digital core,
business networks, supply chains, and the Internet of Things (IoT).

15
HOW CAN SAP HELP?
The SAP S/4HANA® Enterprise
Management solution helps
organizations build the next-genera-
tion business suite by providing:
1. Innovative in-memory database
2. New architecture and data
models
3. Renewed applications
4. New user interface (UI)
technology
5. Cloud and on-premise
deployment models
6. Native integration
Within the SAP S4/HANA ecosys-
tem, the SAP Enterprise Portfolio
and Project Management package
enables customers to manage a
wide range of portfolio and project
types using a single platform. As
a result, your organization will be
able to:
1. Take advantage of a new data-
base model – Enable easier con-
sumption using analytical tools
like Microsoft Excel, SAP® Busi-
nessObjects ™ Lumira software,
and more; external tools can
access SAP Enterprise Portfolio
and Project Management data
via core data services
2. Reduce complexity – Eliminate
duplicate functions (for example,
merge projects, initiatives, and
portfolio items) in a single entity
and/or enable use of one project
lifecycle management (PLM)
document management system
3. Remove obsolete features/
integration for lower total cost
of ownership (TCO) – Get rid of
Portal Knowledge Management
and Collaboration Rooms, cFold-
ers, SRM integration, and others
4. Simplify application object
models – Leverage the capa-
bilities of the SAP HANA® plat-
form, and/or use “insert only” or
cross-application CDS views
5. Make use of a comprehensive
new SAP Fiori® user experience
(UX)-based user interface –
Select roles like project manager
and project team member
6. Integrate new SAP cloud solu-
tions – Migrate products from
SAP Success Factors®, SAP®
Fieldglass®, Concur®, SAP®
Ariba®

16
TYPICAL CURRENT STATE WITH SAP S4/HANA
• Strategy, planning, and reporting done using dis-
parate third-party tools such as Microsoft Excel,
PowerPoint, etc.
• Scheduling done using Oracle Primavera or
Microsoft Project, without any integration back
to the SAP ERP application
• SAP S/4HANA real-time project analytics for
accurate portfolio decisions
• SAP Fiori applications simplify access to project
information for business users
• Live tracking of financial project KPIs by
leveraging SAP HANA in-memory technology
• Direct and accurate access to financial and logis-
tical project information – logistical processes
synchronized with project management
• Optimized object model for reduced mainte-
nance effort of project and portfolio information
• Better utilization of project resources through
digital core into HR
HOW CAN SAP HELP?
Here are the differences between a typical system used by customers and SAP S4/HANA:
We believe SAP S4/HANA can help oil and gas companies transform their businesses, stay competitive, and
deliver on business imperatives. An organization’s inevitable transformation to digital will spark the need to
reprioritize the portfolio and budget, execute new types of projects, and improve collaboration with the entire busi-
ness network. The SAP concept of one unified business suite will allow for:
1. Higher consistency across business processes and lower IT TCO with greater flexibility
2. Improved insight and control for the entire investment portfolio
3. Reduction in project risks

17
HOW CAN SAP HELP?
Companies use SAP Enterprise Portfolio and Project
Management to provide a single platform that covers all
the specific characteristics for each of the project types
detailed below. At the same time, common components
can be shared across the different business areas to
establish one central project repository, helping compa-
nies gain a holistic picture of all projects running in the
enterprise. SAP categorizes projects in three ways:
1. Capital Projects – These are typically large, long-
term projects and are often seen in asset-intensive
industries such as utilities, oil and gas, and chem-
icals. These companies usually have the need to
invest in new production facilities or technologies
where the break-even may only be reached after
being in business for decades. Managing project
budgets and monitoring the overall project costs
against the initial estimations is therefore key to
ensuring the profitability of these long-term invest-
ments. Integration into the logistics of a company’s
enterprise resource planning (ERP) system ensures
the procurement of materials and services planned
and available according to the project schedule.
Capital projects for oil and gas can be grouped into
three main types: engineering construction proj-
ects, major maintenance projects, and well and field
development projects.
»» Engineering construction projects include
the design and construction of platforms,
refineries, and pipelines. These projects are
typically handled by major engineering con-
struction companies such as Fluor, Bechtel,
Kiewit, KBR, and many others.
»» Major maintenance projects include activities
such as shutdowns and turnarounds for plants
and refineries. For producing oilfields, major
maintenance can include activities such as
large well workover projects.
»» Well and field development projects are
highly complex projects that involve evalua-
tion and development planning. Evaluation
includes estimating the initial volume of oil
and gas in the reservoir; simulating the
reservoir fluid flow behavior to estimate the
number, type, and location of wells to optimize
the field production; and assessing economics
based on forecasted production revenue and
estimated development costs. Development
planning establishes the number of wells to
be drilled to reach production objectives, the
recovery techniques to be used to extract the
fluids within the reservoir, the type and cost of
installations, the separation systems for gas
and fluids, and the treatment systems needed
to preserve the environment.
2. R&D, Innovation Projects – These are mainly rel-
evant to an R&D organization looking to build and
launch new products into the market. This could be
the case for an oilfield services company designing
a new measurement service or a new downhole
pump. It could also be relevant to an operating
company innovating on new ways to fracture wells.
3. Information Technology (IT) Projects – IT orga-
nizations are often faced with a limited number of
resources but a huge number of requests requiring
new IT solutions, maintaining installed applications
or fixing incidents, or providing support. Therefore,
IT organizations usually establish project gover-
nance processes that allow them to prioritize differ-
ent requests according to strategic importance and
deliver projects following standard processes and
templates.

18
HOW CAN SAP HELP?
To help aid the execution of the above types, SAP also defines an end to end process that takes a project from
strategy to execution:
The purpose of having a standard process is to control
the transition from one phase to another by checking
mandatory deliverables and evaluating the progress and
outcomes of each phase. SAP enables each phase with
different capabilities that are part of the SAP Enterprise
Portfolio and Project Management package.
1. Vision & Mission
2. Define Corporate Goals
3. Set Strategic Initiatives
4. High Level Budget Planning
1. Identify Business Opportunities
2. Risk Assessment
3. Rank Project Proposals
4. Budget Planning
Strategy
Project
Proposal
Project
Planning
Procurement
Execution
Monitoring
1
2
3
4
5
1. Structure Project
2. Schedule Tasks and Activities
3. Manage Milestones
1. Plan Internal/External
Resource Demand
2. Schedule Purchase Orders
3. Track Availability of Resources
1. Phase Approvals
2. Project Accounting
3. Time Recording
4. Milestones
1. Progress Tracking
2. Budget Control
3. Plan vs. Actual
Capital Project Portfolio Management
Capital Shutdown, Turnaround,
and Outages
R&D and Innovation Capital
Owner
3rd
Party
EPC
Owner
3rd
Party
EPC
Owner
3rd
Party
3rd
Party
Owner
3rd
Party
Customer
Executive
Management
Portfolio
Management
Project Types
Project
Management
Operations
Management

19
BUSINESS IMPERATIVE SOLUTION CAPABILITIES VALUE TO THE ORGANIZATION
HOW CAN SAP HELP?
SAP defines value and solution components depending on the project type while following the end to end process
as defined in the previous section.
1. Capital Projects –
• Describe and estimate
investments
• Track and monitors execution
• Manage project risks
USER INTERFACE
• Central project repository
• Long-term financial planning
• Integrated project management
• Cost and schedule tracking with
SAP Fiori applications
• Integration to procurement and
plant maintenance
SOLUTION COMPONENTS
Maximize Capital
Investments
Portfolio Dashboard Project Specific Dashboard
Financial Planning Dashboard Risk Dashboard

20
USER INTERFACE
SOLUTION COMPONENTS
HOW CAN SAP HELP?
1. R&D, Innovation Projects –
• Identify opportunities to develop
new products
• Align product innovation with
corporate strategy
• Effectively commercialize new
offerings
• Idea management
• Portfolio management
• Project management
Manage Innovation
Idea Management Idea Evaluation

21
HOW CAN SAP HELP?
3. Information Technology (IT) Projects –
• Select IT projects that will meet the
organization’s strategic goals
• Monitor the execution and
progress of IT projects
• Ensure the availability of human
and financial resources
• Establish project governance process
• Project planning and scheduling
• Resource management
• Task confirmation (SAP Fiori)
• Solution manager integration
USER INTERFACE
SOLUTION COMPONENTS
Maximize Business
Transformation Projects
Capacity Planning Task Confirmation

22
VALERO
Industry Classification • Downstream
Background
• HQ: San Antonio, Texas
• Oil and gas downstream
• World’s largest independent refiner
• 15 refineries
• 2.9 billion barrel/day
• 22,000+ employees
Customer Pain Points
• Create a standard model for engineering work requests
• Minimize redundant systems
• Simplify work processes and reduce manual report generation
• Improve capital and maintenance budget stewardship
SAP Solution(s)
• SAP Portfolio and Project Management 5.0 for capital projects and the
SAP IT Portfolio and Project Management rapid-deployment solution
• Capital forecast/budget management in SAP Portfolio and Project Man-
agement
• Automate AFE document based approval process
• Request approval framework built on the SAP Business Workflow tool
• Capacity and resource management (SAP IT Portfolio and Project Man-
agement rapid-deployment solution)
• Integration with OpenText
• Rolled out SAP Portfolio and Project Management to all 15 Valero
refineries by Q3/2015
Benefits Realized
• Offered one system to manage projects requests and approved projects
• Increased resource utilization on project based work from 30% to 38%
HOW CAN SAP HELP?
Customer Success

23
NIGERIA LNG LIMITED
Industry Classification • Liquefied Natural Gas (LNG)
Background
• Founded in 1989 with HQ in Port Harcourt, Nigeria
• Owned by multiple shareholders
• Has grown from an annual cargo count of 5 in 1999 to over 300 cargoes
per annum in 2015
• Fourth largest LNG plant in the world, owns fleet of 24 LNG carrier ships
• Supplies over 80% of cooking gas (LPG) in Nigeria
• Need for formal stage gate control
• Align strategy to projects executed
• Integrate standard portfolio management process and annual capital
budget
• Capitalize assets accurately
SAP Solution(s)
• SAP Portfolio and Project Management 5.0 for planning and monitoring
of capital and maintenance projects
• Real-time information (projects, cost, dates, and status) on NLNG
Capex portfolios
• Integrated portfolio management – from idea to detailed activity
schedule and to assets
• SAP PS for Project Control and Integration with SAP MM/SRM, FICO
• Integration to Primavera P6
Benefits Realized
• Calculate and report work package and project earned value
• Annual budget aligned with project portfolio
• Improved governance performance
HOW CAN SAP HELP?
Customer Success

24
BASF
Industry Classification • Chemicals
Background
• HQ: Ludwigshafen, Germany
• Largest chemical producer in the world
• 6 integrated production sites
• 390 other production sites
• 112,000+ employees
• €4 billion annual investment budget
• 1.000 engineering projects
• €2.5 billion maintenance projects
• Need for global cross-project reporting
• Monitoring of global strategic KPIs
• Standardization of engineering and manufacturing processes
• Provide transparency to optimize project steering
SAP Solution(s)
• SAP Portfolio and Project Management 6.1 for site engineering
and large capital projects
• Central engineering project management system
• Project management information and reporting system
• One single tools for project administration
• Integrated with Microsoft Project and Primavera
Benefits Realized
• Centralized project repository
• Harmonized system and processes
• Consolidated view on financial and capacity resources
• Shorter processing time for month end reporting
HOW CAN SAP HELP?
Customer Success

25
TRANSFORMING
Final Thoughts
The journey to the digital energy network begins with a capability
analysis and results in a business transformation agenda.

26
HOW CAN SAP HELP?
Lessons Learned from Implementations
In summary, implementing capital project portfolio management allows an organization to gain the required
top-down and bottom-up visibility. That said, here are 10 lessons we learned while implementing capital project
portfolio management:
1. Before embarking on a capital project portfolio management implementation, build and maintain executive
alignment – Answer the question,“Why do we want to do this?”
2. The end solution must have something of value for everybody
3. If an implementation is going too slow, anecdotes send signals to the rest of the organization
4. Data breeds a desire for more data – Plan to improve accuracy over time
5. Keep the solution criteria list short and simple
6. Ensure a business-driven approach to system implementation
7. Make a plan to deal with the impact of “shining the light” on current practices
8. Communicate project value and rationale, and tie it to corporate strategy
9. Provide for ongoing training, process management, and continuous improvement
10. Generate cross-functional involvement and maintain political balance
Most importantly, implementing capital project portfolio management is not a project – it’s a journey.
… to manage daily project operations and maximize the value of their capital projects
350+ oil and gas and mining companies rely on SAP …

Authors:
Ashwin Menon
Industry Value Advisor Expert
Ashwin.menon01@sap.com
Ken Landgren
Director – Oil and Gas
ken.landgren@sap.com
Renato Zadro
Solution Owner – Enterprise Portfolio
and Project Management
renato.zadro@sap.com
Adam Duran
Solutions Management – Enterprise Portfolio
and Project
Management and 3D Visual Enterprise
adam.duran@sap.com
www.sap.com/contactsap
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