Gazpromneft-Nefteservis (Oil Service)

The project started in February 2008 and was realized during the year.

The following results were achieved:

• The unified standards of financial and tax accounting (according to the requirements of the Russian legislation and own accounting policies) were developed and deployed in all 9 enterprises. The transparency and quality of accounting were improved. That helped form an information foundation for making decisions and further system development.
• All processes of treasury management were under the effective control including supervision of the Management Company.
• The budget model and core financial structure of all enterprises belonging to the Holding were automated and unified improving the reporting quality of planned and actual data. The level of details for budgets was increased (to the level of activity type as well as manufactory/member).
• Automated data consolidation in the centralized database was fulfilled (data exchange takes place every hour). The unique security subsystem was realized. It allowed users to customize their access rights to the data.  

Gazpromneft-Nefteservis (Oil Service) and preconditions for good project realization

Gazpromneft-Nefteservis (Oil Service) LLC was established in 2007 as a subsidiary of Gazprom Neft JSC that unites all oil service assets of the Holding. The company consists of 9 enterprises that offer a wide range of services related to the oil service sphere. The main activity of the company is oil and gas field development service that includes well-boring, well workover and servicing, geophysics, oil-field equipment rebuilding, construction of roads, and freight services. The company employs more than 15,000 professionals.

The main objective of the company is to be a leader in technologies, quality and efficiency of services in the sphere of petroleum production service. The strategy of the enterprise implies achievements of the leading positions on the oil service market in Russia and its focus on services in drilling, well workover and servicing, and geophysics. Today the company also plans to expand into new regions and market segments, enhancing its competitive advantages.

In order to achieve the strategic goal, the company’s management adopted a strategy of developing a unified automated accounting system that allows for data consolidation among all enterprises of the Holding.

At the time of the inception of the project, there was an automated accounting system in all enterprises of the oil service block. But that software was absolutely outdated and worked in the MS DOS operating system. The architecture of the programme was modular that needed the same data entering in different system modules.

To solve this problem, 1C-Rarus was chosen. This company has many years’ experience in the realization of complex corporate projects and is great at deployment of any solutions developed on 1C-Enterprise platform.

Having analyzed all possible alternatives and taken into consideration the information strategy of Gazprom Neft JSC, 1C:Manufacturing Enterprise Management was chosen as the main software solution for the project.

Project Results

1. Financial and Tax Accounting

• The unified standards of financial and tax accounting (unified accounting policy, unified chart of accounts and unified reference lists for analytics) were developed and deployed. The centralized system of unified normative reference base prevents data duplication and makes it more reliable at all enterprises belonging to the Holding.
• Financial and tax accounting (according to the requirements of the Russian legislation and own accounting policies) was automated. The tax accounting for its further exporting to the tax authorities in electronic form was also automated.
• The module of prime cost calculation was developed. It allowed having more detailed accounting and analyzing actual cost of services provided in dimension of wells and other objects. The system provides opportunities to calculate prime cost of rendered goods/services automatically posting the document. The time needed to prepare financial and tax accounting was reduced to 1-2 days.
• Direct posting of agent’s transactions in the area of mutual settlements without necessity for using transit accounts was realized.
• Settlements with partners were automated. Double and triple mutual settlements are posted. The system allows monitoring repayment of debts, generating reconciliation reports according to over 5,000 partners.

2. Cash Management

• The whole cycle of cash management was automated. It includes different spheres of management from planned budget of cash flows to the actual execution of payments in the “Bank-Client” system.  
• The system enables to create documents in 1C:Manufacturing Enterprise Management and export them automatically to the bank payment system without their repeated creation. Thus, it helps to reduce accountants’ working hours by 10%.
• The technology of cash assets processing management was realized.
• Mechanisms of coordination taking into account matrix of authority distinctions were also enabled.
• Electronic accounting of agreements was automated. That admitted keeping electronic copies of all documents in the system and allowed reducing time needed for checking register for a history of payments to 1-2 hours.

Business planning, Budgeting, managerial reporting

• The budget model and core financial structure of all enterprises were unified.
• The processes of preparation and harmonization of all planned data of the budget were automated.
• Exchange rules of actual data accounting for income and expenses-operating budget were customized.
• The mechanism of amendments to the management accounting using the method “accruals” (accumulation) was realized.
• Consolidation of planned and actual data and elimination of intra-group transactions were automated. Time needed for preparation of consolidated financial statements was reduced to 1-2 days.
• Multifunctional analysis became possible. It enables drilling down method to the source accounting document.

Plans of system development during 2009-2010

• Completed automation of the full budget model with the technology of continuous planning.
• Improved users’ skills with the help of additional trainings.
• New level of quality in preparation financial statements according to the requirements of US GAAP.
• Reduces terms of reporting preparation because of the functional optimization of system modules operation.
• Use of developed methodology for system deployment to other enterprises of Gazprom Neft JSC.
• Integration with the private system of consolidation and reporting of Gazprom Neft JSC.
• Management of the full circle of company’s logistical support.
• Automated personnel administration and payroll calculation on the 1C platform.