The world has seen some massive oil disasters in recent years that have wiped out fragile ecosystems and destroyed the environment. Preventing such disasters is what makes efficient oil well management so important. But managing oil wells in rugged terrain in remote regions and in extreme weather conditions is not easy. That’s why the State Oil Company of the Azerbaijan Republic, SOCAR, turned to SAP for help in transforming operations and business processes and accessing the right data for quick decision making.
Replacing Paper with High-Tech
In the past, SOCAR relied on manual processes. More than 50 percent of relevant information was transmitted by telephone, and data about measurements and actual production volumes was recorded only in paper documents. It took up to 30 days to prepare reports. It wasn’t possible to generate a unified picture of production processes and repair schedules or to obtain a history of actions for each well.
To increase the pace of development, SOCAR decided to invest in innovative IT solutions. The company has been implementing a large-scale program of business transformation and business process automation based on SAP solutions since 2008. Now, with the transition to a powerful upstream oil management technology platform from SAP, which is based on industry best practices, employees can record measurements of parameters at wells and collect data from meters and measuring units in different ways including mobile devices and automated data collection. The system enables efficient management of wells, raw materials, and production control. The company’s managers receive production reports on mobile devices, increasing the efficiency and accuracy of their decision-making processes.
Digitization Impacts All Industries and Sectors
SOCAR is an exemplar of Azerbaijan’s visionary leadership in the oil and gas industry. It also demonstrates the country’s leadership in the entire public sector. The government sees the value of IT investments and is digitizing key sectors of the economy with the “Azerbaijan 2020″ program together with SAP.
The country’s entire budget runs on SAP, for example, and there are various projects running on SAP ERP and SAP HANA to reduce costs and increase efficiency in the Treasury, the Diplomatic Academy, and the Ministry of Labor and Social Protection.
Significant Improvements: Doing Business 2016
The World Bank monitors the ease of doing business in 189 economies with a project that provides objective measures of business regulations for local firms. As a result of the reforms carried out over the past year, Azerbaijan has risen to 63rd place from 80th place, improving its position by 17 points.
According to the report the main reasons for Azerbaijan’s increase in ranking include amendments to legislation on electronic registration of entrepreneurs, the digitization of foreign trade operations, and improvements to corporate governance, all key areas impacted by the government’s partnership with SAP to drive economic growth through innovation in technology.
Suleyman Gasimov, Vice President for Economic Affairs at SOCAR says the government is paying increasing attention to how it can improve the efficiency of key industries by using proven global best practices: “SOCAR is already successfully transforming business processes using the SAP platform. Now we are focused on growing our performance indicators and integrating into the world market. This new project with SAP will allow us to apply best international practices for an effective, safe and profitable extraction process.”
With the right technology and mindset it is possible to improve lives and prevent disasters.
The Disruptors is a series of short stories of customer innovation from around the world. Read more stories from The Disruptors series.
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