Time-Based Cost Allocation in the Oil and Gas Industry

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Oil and gas prospecting involves the deployment of highly experienced and expensive engineers in remote and uncomfortable places. They’re typically working on a number of potential oil or gas fields at the same time. Or rather, each may spend some hours or days on one field, and then some hours or days on another, doing seismography or other forms of wizardry.

oil platform

Often such oil and gas fields are explored by joint ventures, each of which may be owned in different proportions by a number of different investors. It is essential therefore that costs should be distributed fairly across each of them. This ‘fair allocation’ of employee-related costs is usually based on the time that each engineer reports against each field.

SunSystems is an excellent financial system for oil and gas companies. It has the flexibility to deal with both local statutory reporting (which may be based on a statutory chart of accounts and will certainly involve many different kinds of tax report in local currency), and with corporate reporting (which may be based on a corporate chart of accounts, may require corporate accounting policy adjustments, and may involve translation into a foreign currency). SunSystems also contains a module for the automatic redistribution of costs against nominated entities (these may, for example, be departments, or projects, or, for that matter, oil and gas fields).

But SunSystems doesn’t include a timesheet module.

systems@work’s time@work fills this gap with a browser-based timesheet module that can be accessed by users whether they’re in the office or at large, using their PCs, Macs or mobiles.

t@w

Engineers record time against individual projects, in this case projects related to oil and gas fields, and at the end of each month or accounting period, time data are exported from time@work into a SunSystems Memo account (where the Project code in time@work is represented by a transaction analysis code in SunSystems). SunSystems Corporate Allocations module can then be used to pick up all the costs related to each engineer and to allocate them across projects in proportion to the time spent on each, based on values in the Memo account.

systems@work’s time@work is used by many international petrochemical companies:

  • OMV
  • Lekoil
  • Afren
  • Addax Petroleum
  • E.ON
  • Enquest
  • JKX
  • KBC
  • Lundin
  • Oryx
  • West African Ventures
  • Seplat Petroleum
  • Gazprom
  • Dana Petroleum

time@work can also be used for the capture of employee expenses, with authorised expenses being automatically transferred to SunSystems, where  reimbursement can be initiated. Expenses can also be imported from electronic credit card statements.

It can also be used for scheduling and planning the allocation of staff to projects.

It’s relatively easy to implement, since it’s configurable software rather than software modifiable at source code level. It’s simple on the surface and therefore easy to learn and use, and yet flexible and powerful as an analytical tool.

Contact me if you are interested.

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