PRA is called Production Revenue accounting and the product is designed to support Upstream Oil business process.
Marketing Costs – Marketing costs are the costs involved in taking a product to market, they are deductions from the price paid for product for items such as transportation, handling, gathering, compression, etc.
Marketing costs are created at the contract, contract / measurement point, or contract / well completion level.
Prerequisites for Creating Marketing Costs:
• Valid Contract
• A venture
• An approved division of interest
• Either a well and well completion or a measurement point, if applicable
Marketing costs can be setup as a deduction or reimbursement amount, you also enter a rate which is a rate per volume. It specifies the amount per measurement unit that the system multiplies by the volume in order to obtain either the deduction or reimbursement amount in Valuation. The rate must be used in a marketing reserve word before it can be used in Valuation. After the required marketing cost reserve word(s) are entered in the valuation formula(s), the Valuation batch process performs the actual deduction or reimbursement in order to carry out the marketing cost calculation.
Pricing- PRA Pricing functions capture the pricing data required to value oil and gas sales, and are also used to set up formulas, oil price postings, and gravity pricing adjustment tables. Pricing functions can be used for fixed as well as formula-based pricing. In PRA we use EP01 to enter fixed pricing data and use condition records to enter prices for each Material and effective date, user has to select the level to which the condition record will apply (either measurement point or well completion or Material), prices are entered in the rate field along with the currency and effective date of the pricing as shown below.
Formulas-Formulas define how the system values a product. They provide the means for the system to value any volume type or disposition being maintained in sales, production, on-lease, off-lease, etc. Formulas are a critical component of the valuation cross reference relationship providing the ability for the system to use production and revenue allocation information; contract, pricing, and marketing cost/reimbursement information; and ownership and accounting information.
Formulas are also used to calculate deducts for marketing costs as spelled out in the Contracts and Pricing DCA and they also calculate royalty pricing in cases where pricing for royalty differs from the actual sales price. It specifies the amount per measurement unit that the system multiplies by the volume in order to obtain either the deduction or reimbursement amount in Valuation. The rate must be used in a marketing reserve word before it can be used in Valuation. After the required marketing cost reserve word(s) are entered in the valuation formula(s), the Valuation batch process performs the actual deduction or reimbursement in order to carry out the marketing cost calculation
Valuation Cross Reference-A valuation cross reference represents an effective-dated link by product.
The link includes:
• Entities from Production – delivery networks, measurement points (MP), wells, and well completions (WC)
• Marketing groups from Contractual Allocations
• Entities from Ownership – unit properties, divisions of interest (DOIs), DOI to MP Cross Reference, and DOI to WC Cross Reference
• Approved contracts and approved formulas
Settlement diversity – Settlement diversity occurs when one or more owners in the DOI needs to be handled differently than the other owners in the DOI regarding the contract. For example, one owner could be paid a price different than the price paid to the other owners, or a particular owner could be paid on a sliding scale basis.By identifying settlement diversity owners on the DOI, a different formula can be tied specifically to these owners using Settlement Diversity forumula.
Using SD formula setup you can assign a different price for the royalty owner compared to that of Workign interest owner. Settlement Diversity is integrated with valuation cross-reference (which designates the settlement entity, such as delivery network, venture, contract, well, and so on) and ownership setup. For example, to be viable an owner must be in a DOI associated to the venture in the VCR. VCR, ownership, and SD setups are independently effective dated. To avoid the complexity of managing effective dates across the three setups, the SD setups are allowed to be maintained independent of the related VCR and ownership setups.
Check Input – The Check Input application area processes payments received from third party purchaser or remitter remittance statements into the SAP Oil and Gas system and involves the standardization of data (editing and translation of purchasers’ data into the necessary standard data types and formats so that it can be processed).
Payments can be processed automatically, through CDEX, or they can be entered into the system manually. Further, there are options to process payments for recording income, expenses, and royalty payments for non-material interests. Check Input allows you to define formats that represent the remitter’s check stub layout in order to facilitate data entry. Further, Check Input utilizes batch data input to organize and process information.
Check Input automated processing:
• Credits accounts receivable and debits cash clearing
• Creates valuation input
• Suspends line correction – errors are automatically suspended, then automatically reprocessed upon completion of master data set up. A write – off process is also available to remove unwanted or non-material errors.
• Supports intercompany receivables with cash transfers from affiliated companies and makes the corresponding intercompany journal entries.
• With the Check Stub Data Exchange (CDEX) interface , Check Input receives check detail and processes payments from purchasers electronically
Check Layout – The Check Layout allows you to define formats that represent a remitter’s check stub layout in order to facilitate the recording of the check data to accounting output. There will be one layout for CDEX and at least one for other checks. For non-CDEX checks, we’ll try to create a standard template that works for most checks received. We can create one-off layouts for checks that don’t meet the standard template. The check layouts will be manually created in PRA.
Remitter Layout Cross Reference – The Remitter / Layout Cross Reference ties a remitter to a check layout number. The remitter can be tied to multiple check layouts but one has to be designated as the default. This assignment must be established before the layout can be accessed in other Check Input transactions
Remitter / DOI Cross Reference – The Remitter / DOI cross reference ties a remitter to a Venture/DOI or AP Measurement Point. This cross reference is effective dated if a remitter changes for a particular venture.
Other Month end Steps for PRA
Accounts Receivable workplace review and recon
Check input for operated and non operated properties
Run Payment process pay Royalty Interest Owners
Run JIB Payment process and pay Working interest owners
FICO Month End Process for Oil and Gas
Execute PPA Interface
Load SABRIX Sales Tax Rates
Load foreign currency rate
Close AP and MM for Close Month and open next Month
Manual SKF loads
Settlement for projects Allocations Run
JV Cutback Activities
CUTOFF All non billable revenue, cash postings, outside operated JIBs
JV Billing, Netting, Dunning Activities
Final Adjustments for the Business Units
Canadian PRA Basics
One of the key functions in CPRA is Product Allocation (PA). This section discusses the process steps for using the Product Allocation Workbench or PA Workbench. The PA workbench provides the functions for performing the processes of Alignment, Balancing and Allocation. The transaction code to launch the PA Workbench is /CPRA/ALLOC_WP_PA. Execute transaction /CPRA/ALLOC_WP_PA to launch the PA Workbench. Then select following Volume categories.
CPRA Product Allocation, Revenue, and MD/TD
In this option only residue gas is used that is coming from the same owner as the “should’ be source at the consumption point.
This field determines if an entry created via this prioritization rule should be considered a purchase scenario or a normal transfer of residue gas.
GJ Swap Process Introduction
GJ Swap Process is executed as the last step of Product Allocation.
For this process, you should maintain a set of master data for a facility as dated information.
Master Data NGL Material that will participate in the GJ Swap Process Facility Owners
The NGL materials that have been maintained as part of master data will participate in this process.
All the non-facility owners having Available for Sales for these NGL materials have to give up their energy and volume and will receive an equivalent amount of Residue gas energy or volume.
The facility owners who will participate in the GJ Swap process are maintained in the master data as described above.
These facility owners will receive the NGL energy or volume and will give up an equivalent amount of Residue gas energy or volume to the non-facility owners.
Defines volume types that are calculated by the system. The alternative volume type is the manually-maintained volume types.
Fuel (F) Defines product dispositions (volume types) that are considered fuel consumption volumes. These can be calculated by the system based on operating hours and consumption or firing rates of the device, or by providing the volumes.
Upstream Fuel (U)
Defines product dispositions (volume types) that are considered fuel consumption volumes (for the scenario where stream is measured after fuel consumption). These can be calculated by the system, based on operating hours and consumption or firing rates of the device, or by providing the volumes.
Sales (S) Defines product dispositions (volume types) that are considered to have been sold. Note that calculated production is determined at a well level based on the volume type categories: CALCULATED PRODUCTION = Fuel + Inventory + Non Sales + Sales – Lease – Receipts
Defines volume types (VT) that are considered to have been received from an outside source – from another well on the same lease, from a well on another lease, from a plant, facility, or a third party. This VT does not include the portion of a product disposition produced by the well. Transfer (T) Defines volume types that are used for transfer dispositions.
Defines volume types that are considered non-final product disposition volume types (plant total PVR is an example of “other”). This VT is not considered to be part of “calculated production,” but its volume needs to be captured. This VT has little effect on PRA processing.
Receipts (R) Defines volume types that are considered to have been received from an outside source – from another well on the same lease, from a well on another lease, from a plant, facility, or a third party. This VT does not include the portion of a product disposition produced by the well.
Fuel Credit (C)
Fuel credit is a negative fuel volume which is allocated as other fuel volume at component level. Since fuel volume is a negative number, it increases the well theoretical volume (available for sale)
If the calculation method is Complex Sliding Scale, then it is mandatory to enter calculation parameters in the following fields:
Royalty Price Type
Royalty Payment Price Type
Royalty Factor %
Roy Quan Comp ID
Double-click the entered ALV row to maintain Calculation Parameters.
If the calculation method is fixed, then it is mandatory to enter calculation parameters in the following fields:
Royalty Price Type
Royalty Payment Price Type
To maintain values for Royalty Quantity Component ID in SPRO, go to ->Industry Solution Oil & Gas (PRA) ->Canadian PRA->Revenue Accounting->Maintain Royalty Quantity Component.
To maintain values for Royalty Price Component ID in SPRO, go to ->Industry Solution Oil & Gas (PRA) ->Canadian PRA->Revenue Accounting->Maintain Royalty Price Component.
Following steps are for gas. FHMT process for oil is explained in the previous sections.
FHMT Unit Value Calculation Process for Gas can be performed at either Facility Level or Well Level. To choose either, maintain Customizing for the same. For details, refer the customizing guide section FHMT Unit Value Calculation.
Double-click on an existing row or select a row and choose Display Details buttons. The system displays the run details as show in the following figure.
If the calculation method is Simple Sliding Scale then it is mandatory to enter calculation parameters in the following fields:
Royalty Price Type
Royalty Payment Price Type
Min Royalty Rate %
Max Royalty Rate %
FHMT unit value calculation workplace can be used for calculating the unit value based on production year, company code and product type.
The transaction code for FHMT Unit Value Calculation workplace is /CORA/FHMT_UV_WP
The system displays FHMT UV Workplace selection screen as show in the following figure.
PRA Terms and Terminology
Area Network – An area network is a network of delivery networks. Area Networks includes network links which are directed, effective dated and link facilities with each other.
Associated Gas – Natural gas which is found with deposits of petroleum dissolved in the oil or as a free cap gas.
Available for sale AFS – Quantity of product available for processing at a gas plant or facility.
Battery BT – A system or arrangement of tanks or other surface equipment receiving the effluents of one or more wells prior to delivery to market or for other kinds of disposition. A battery may include equipment or devices for measurement and for separating effluents into oil, gas, or water.