SAP JVA Benefits

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SAP Joint Venture

Accounting (JVA)

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S

So l u t

o l u t i o n M a p

i o n M a p

Suppliers & Suppliers & Partners Partners Customers Customers & Channels & Channels Exploration & Exploration & Appraisal Appraisal Development & Development & Production Production Hydrocarbon Hydrocarbon Supply & Gas Supply & Gas Transmission Transmission Refining & Refining & Manufacturing Manufacturing Primary Primary Distribution Distribution Terminal Terminal Management Management Secondary Secondary Distribution Distribution Commercial Commercial Sales &

Sales & RetailRetailinging

Upstream

Exploration and Appraisal

E&P Contract Management

Liquid and Gas Production

Allocation and Settlement

Supply, Transmission & Trading

Bulk Supply Chain Planning and Optimization

Bulk Supply Chain Operations and Scheduling

Bulk Supply Chain Execution and Settlement

Bulk Supply Chain Reporting and Analytics

Physical Oil and Gas Commodity Trading

Oil and Gas Paper Trading and Risk Management

Refining & Manufacturing

Refining Operations

Lubes Manufacturing Operations

Sales Planning and Account Management

Hydrocarbon Products Tr

Hydrocarbon Products Transportatioansportationn

Downstream Marketing & Retailing

Marketing Planning and Execution

Opportun

Opportunity to ity to CashCash

Customer Service

Terminal Management

Service Station Fuel Management

Convenience Retailing

Enterprise Asset and Service Management

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In the oil and gas industry, certain

In the oil and gas industry, certain ventures are considered high risk,

ventures are considered high risk,

demanding extensive capital investment and a long payback period. To

minimize risks, companies develop partnerships called joint ventures.



A joint venture consists of an

A joint venture consists of an operating partner (operator) and one or

operating partner (operator) and one or

more non-operating partners, who combine monetary or personnel

resources to share a

resources to share a project’s expenses and revenues.

project’s expenses and revenues.



The operator manages the venture, arranges venture a

The operator manages the venture, arranges venture activities, and

ctivities, and

maintains accounting records. The operator remits venture expenses,

collects revenues, and distributes these to the partners, according to

collects revenues, and distributes these to the partners, according to their

their

What is SAP JVA?

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SAP designed JVA especially for joint venture operations.

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SAP JVA captures

SAP JVA captures all expenditures and other joint venture transactions by

all expenditures and other joint venture transactions by

using functions from Financial Accounting (SAP FI), Controlling (SAP CO),

Asset Management (SAP AM), Materials Management (SAP MM), Plant

Maintenance (SAP PM), and Project System (SAP PS).

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By working closely with customers and implementation partners, SAP

ensures that JVA facilitates eff

ensures that JVA facilitates efficient management of joint ventures.

icient management of joint ventures.

What is SAP JVA?

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

SAP JVA is the only SAP solution that allows you to track venture

expenditures on a venture by venture and part

expenditures on a venture by venture and partner by partner basis.

ner by partner basis.

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SAP JVA allows y

SAP JVA allows you to view

ou to view venture information in r

venture information in real time, not

eal time, not just

just

at period end.

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Using proven SAP FI-Special Ledger functionality as its basis, SAP

JVA ensures accurate c

JVA ensures accurate calculations and reporting of venture activities

alculations and reporting of venture activities

Why SAP JVA?

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SAP JVA is f

SAP JVA is fully integrated with:

ully integrated with:

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Financial Accounting (SAP FI)

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Controlling (SAP CO)

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Asset Management (SAP AM)

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Materials Management (SAP MM)

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Production Planning (SAP PP)

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Plant Maintenance (SAP PM)

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Project System (SAP PS)

allowing you to capture all joint venture transactions by using

standard SAP functions.

Why SAP JVA?

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Detailed joint venture data capture in real time

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Cash calls to/from partners

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Partner billing for venture expenses and revenues

SAP JVA Features and Benefits

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Joint Venture Data Capture

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 Captures and codes all transactions, including vendor invoices, Captures and codes all transactions, including vendor invoices, inventory movements andinventory movements and

allocations, with an option to produce balanced venture books allocations, with an option to produce balanced venture books

Cash Calls

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 Request cash payments from partners for future Request cash payments from partners for future venture operationsventure operations

SAP JVA Functions

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Allocations

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 Distributes billable and noDistributes billable and non-billable costs (such as facility, pn-billable costs (such as facility, payroll, and related expenses)ayroll, and related expenses) toto

cost centers or projects throughout the allocation cycle cost centers or projects throughout the allocation cycle

Multi-Currency Processing

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 Supports the multi-currency needs of typical venture activitiesSupports the multi-currency needs of typical venture activities

SAP JVA Functions

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Cutback

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 Cutback allocates all operating costs, carried Cutback allocates all operating costs, carried by the operator during the accounting period,by the operator during the accounting period,

to the non-operating partners, according to their equity shares. This process

to the non-operating partners, according to their equity shares. This process typically occurstypically occurs at the end of the accounting period after all

at the end of the accounting period after all transactions are posted.transactions are posted.

Suspense Processing

SAP JVA Functions

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Partner Netting

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 Partner netting allows you to calculate the sum of a partner’s open expenses and cash callsPartner netting allows you to calculate the sum of a partner’s open expenses and cash calls

within the venture to a single re

within the venture to a single residual entry of outstanding expenses. You can then post thatsidual entry of outstanding expenses. You can then post that entry to the partner’s accounts receivable acc

entry to the partner’s accounts receivable account for billing.ount for billing.

Asset and Material Transfer

SAP JVA Functions

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SAP JVA Functions

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SAP JVA Functions

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Joint Operating Agreement (JOA)

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JVA Business Objects:

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SAP JVA Business Objects: Five

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Cash Call Processing

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Equivalent to down payments or pre

Equivalent to down payments or pre payments

payments

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Can be issued for future months

Can be issued for future months (Reclassification)

(Reclassification)

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Request and cash receipts carried f

Request and cash receipts carried forward to billing process

orward to billing process

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Integrated with Accounts Receivable and Accounts Payable

V

Veennttuurree JJVV00000011 EEqqGG AA0011 FFCCuurrrr NNOOKK

Partner

Partner FFCCuurrr Ar Ammtt LLccuurrr Ar Ammtt J

JVVGGBBUU11 660000 0000 4466 7744 Partner Shares

Partner Shares

Cash Call Request:

FI FI Document Document

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Gross to venture/projectGross to venture/project

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Net to Net to venture/project/partneventure/project/partnerr

Accounts Accounts Rec Rec.-.- CaCashsh Calls Calls Partner A Partner A Accounts Accounts Re

Rec.-c.- CasCashh Calls Calls Partner C Partner C 100 100

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Cancel Anytime. JV Billing JV Billing Ledger Ledger Billing Billing JV Integration Mgr. JV Integration Mgr. Statement Statement Exp. Suppl Exp. Suppl Expenditure Expenditure Detail Detail Inv. Suppl Inv. Suppl Detail Detail

Joint Venture Billing

Internal Internal Allocations Allocations … … Costs Costs Orders Orders Payroll Payroll Vendor Vendor Invoices Invoices Accounts Accounts Receivable Receivable JV Summary JV Summary Ledger Ledger Cutback Cutback Partner Partner … …

JV Billing creates

various customized

billing documents to

send to your JV

partners

JV Integration Mgr. JV Integration Mgr.

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Cancel Anytime. CO CO To Affiliate: To Affiliate: INVOICE INVOICE FI FI A/P A/P FI FI Document Document

Affiliate

Affiliated

d Inter-Compa

Inter-Company

ny Setup

Setup

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Cutback creates A/P entries

to operator on the books of

the affiliated partner as

con

configu

figured in S

red in SAP JVA

AP JVA and

and

SAP FI

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Gross cash calls create A/P

entries on the books of the

Inter-Company Ventures

Cutback

Intercompany Intercompany Processing Processing

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Cancel Anytime. Enterprise Enterprise Business Business Asset Asset Asset Asset Management Management Management

Management PurchasingPurchasing

Purchasing Purchasing & Supply & Supply & Supply & Supply M MMM Management Management Support Support Human Human Human Human Res. P

Res. Payrolayrolll

Res. P

Res. Payrolayrolll H

HRR PPSS _Projects_Projects_Projects_Projects

Business Business Business Business Planning Planning Planning

Planning ControllingControllingControllingControlling AccountingAccountingAccountingAccountingFinance &Finance &Finance &Finance &

IIMM CCOO FFII

Regulatory

Regulatory Information Data WarehouseInformation Data Warehouse Non-RegulatedNon-Regulated

Information Information Information Information Management Management Management Management Network

NetworkPPSS _{Network Provisioning}_{Network Provisioning}ServiceService RevenueRevenue

P PMM Q QMM E ECC Asset Asset Transfers

Transfers GoodsGoodsIssuesIssues CutbackCutback

P PPP Joint Joint Partner Partner Billing Billing

Asset and Material Movements

JVA JVA JVA JVA MM MM AM AM FI FI AM AM

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Stock help corporate or per venture

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Stock prices

 Moving average charged to venture and operatorMoving average charged to venture and operator

 Current replacement price (CRP) invoked to add Current replacement price (CRP) invoked to add stock handling feestock handling fee



Plant or valuation definition

Joint Venture Billing

CRP CRP Company Company Company Company Inventory at Inventory at Moving Moving Average Average Price Price

Plant to Cost Center,

Plant to Cost Center, Order, Project, Asset

Order, Project, Asset

Material Management Features

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JV Partner Auditing

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 Gross billable/all by venture/accountGross billable/all by venture/account

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 Gross billable/all by cost Gross billable/all by cost objectobject

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 Gross billable/partner net by cost objectGross billable/partner net by cost object

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 Gross billable/all by cost object foreign currencyGross billable/all by cost object foreign currency

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 Gross billable/partner net for JIBGross billable/partner net for JIB

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 Remaining cutback by cost objectRemaining cutback by cost object

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 Posted suspense overviewPosted suspense overview

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 Gross non-operated by cost objectGross non-operated by cost object

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 Venture/equity group/billing indicatorVenture/equity group/billing indicator

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 Partner/billing indicatorPartner/billing indicator 

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Online transaction for incoming invoices

for non-operated ventures

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 Input forms, defined Input forms, defined in JVA configuration, coin JVA configuration, control the layout ofntrol the layout ofthe input screensthe input screens 

 Input form includes the SAP coding block information (account, cost object,Input form includes the SAP coding block information (account, cost object,

asset)

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Incoming cash calls are handled with the cash call

functions

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Non-operated venture processing is f

ully integrated with SAP

Non-Operating Ventures

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Main Features

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Balanced books by venture

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Venture specific bank accounts v. cent

Venture specific bank accounts v. central disbursement account

ral disbursement account

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Funding currency defined for each venture

Bank reconciliation and switching

Cash and Banking

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Integrates with FI, MM, and AM, which streamlines workflow and greatly

reduces errors

Key Drivers:

Maximize Assets, Minimize Overhead

SAP JVA Business Benefits

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

 No part of this presentation may be reproduNo part of this presentation may be reproduced or transmitted inced or transmitted in any form or for any purany form or for any purposepose

without the express permission of SAP AG. T

without the express permission of SAP AG. T he information contained herein may be changedhe information contained herein may be changed without prior notice.

without prior notice.



 Some software products marketed by SAP AG and its distributors contain proprietary softwareSome software products marketed by SAP AG and its distributors contain proprietary software

components of other software vendors. components of other software vendors.

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