British Patroleum [BP], Pakistan: MIS REPORT
British Patroleum [BP], Pakistan: MIS REPORT
Union Texas Petroleum is one of the largest independent oil and gas companies based in the United States, engaged in oil and gas exploration and production overseas, with its principle operations in Indonesia, U.K., North Sea, Pakistan and other strategic international areas including Alaska, Argentina, Ireland, Tunisia and Vietnam. The company has also petrochemical interests in the United States. It was a subsidiary of ARCO, which is now a subsidiary of British Petroleum.
Union Texas was founded as a Sulphur producer in Louisiana in 1896; it has greatly expanded its scope of operation, to become an International Exploration and Production company through operations in some of the world’s premier Hydrocarbon Basins.
At the establishment time, its headquarter was in Louisiana. The Union Texas Petroleum story began with the dreams of an inventor named Herman Frasch. His dream and determination had created the UNION SULPHUR COMPANY, which became a Major sulphur producer by the early 1900s, through there day and night efforts.
Over the years, the company has greatly expanded its operation into an Oil and Gas company. British Petroleum is engaged in oil and gas operations in the U.K. North Sea, Indonesia, Pakistan and exploration activities in other strategic areas such as Alaska and has Petrochemical operations in the United States.
Union Texas Petroleum Holdings, Inc. was organized under the laws of the State of Delaware in 1982. In 1960, the company’s principal current international activities began, with its participation in a Joint Venture In Indonesia and in two consortia in the U.K. North Sea.
The East Kalimantan joint venture that produces Natural Gas, has converted into liquefied natural gas (ALNG@) facilities owned by Pertamina, the Indonesian national oil company.
In 1977, through a joint venture oil and gas exploration was started in the Badin area in PAKISTAN. In 1980, the oil production began from the Badin area, and gas production began in 1989. Currently, the Badin area production of oil and gas is 43% (i.e. 24,000 BOPD) and 9%(200 MCF/D) of the total production in Pakistan respectively.
In Pakistan, oil and gas produced by the Union Texas Operated Joint Ventures has increased significantly since 1982.In the end of 1995, the Union Texas Joint Venture in Pakistan had achieved a success rate of over 50% in its exploration program. It is considered as a high rate in the Oil and gas industry.
In the end of the 1995-year, the Union Texas Pakistan had 26 fields on stream in its Badin Operations. In 1995, it supplied approximately 37% of Pakistan’s domestic total oil Production and out of total gas production of Pakistan; Union Texas Pakistan had produced about 10%.
British Petroleum is also Operator in Eastern Sindh block and has a 70% share in this area’s production. During 1995, Union Texas Pakistan’s oil Production was about 20% higher than 1994 and gas production was a bout 4% higher than in 1994. Presently British Petroleum Pakistan’s daily oil production varies between 22000-24000 barrels per day and Gas production varies between 150-190 million cubic feet per day.
Union Texas Pakistan Incorporated (UTPI) is a joint venture between Union Texas Petroleum (Houston based) and Occidental (based at Bakers Field, California) and Oil and Gas Development Corporation (OGDC) of Pakistan.
In Badin area of the Sindh Province in South-eastern Pakistan, the company has participated through joint ventures in the exploration for, and development and production of oil and gas since 1977.
Three concession agreements have been secured for Company’s activities:
1- 1977 Concession
2- 1992 Concession
3- 1995 Concession
The government of Pakistan granted the exploration rights in the area of Badin to the Company and its co-venturers, in April 1977. The UNION TEXAS PAKISTAN is the operator of the joint venture, which includes the Oil and Gas Development Corporation. Oil and gas reserves discovered under 1977 concession continue to be produced, under leases granted by the government of Pakistan. The leases terms are 30 years from the date that they were first granted.
Through the joint venture, a three-year extension of the exploration license was granted, in 1992. It is called the Badin II concession. The Oil and Gas reserves discovered under 1992 concession would be produced under 20-year leases, which was granted by govt. The production began during 1995 and company has a 25.5% working interest. This means 22.3% revenue interest, in 1992 concession, while in 1977 concession; the company has a 30% working interest, which is 26.25% revenue interest.
1995 CONCESSION: –
The 1995 concession provides that the exploration license will be extended for three one-year periods beginning January 1995, subject to satisfying certain minimum work requirements. In 1995 concession, the Union Texas will explore for and develop oil and gas fields in approximately 1.6 million acres in the Badin area. The Company has 25.5% working interest and 22.3% revenue interest. During 1995, the company drilled 12 exploratory wells in the Badin concessions, out of which five were discoveries. The discoveries include one oil field, one oil and gas field and three gas fields.
THE EASTERN SINDH CONCESSION: –
In April 1995, the company signed a concession agreement with govt for which the company was granted an exploration license in December 1994. The concession agreement and the exploration license provide the company with the right to explore for oil and gas for an initial period of three years, with an option for three extensions of one years each, and upon a commercial discovery, the right to apply for a 20-year lease with the Pakistan government. The company has 70% working interest in the concession and exploration license and the company is the operator.
Management of Information Systems represents a major functional area that is as important to business success as the functions of accounting, finance, operations management, marketing, and human resource management.
A few decades back MIS was not considered to be of any importance to a system for it to be successful, but with time managers and decision makers have recognized the contribution of Information System to proper operation of an establishment to be of major importance. It is now an important contributor to operational efficiency, employee productivity and morale, and customer service and satisfaction. It is major source of information and it provides support needed to promote effective decision making by managers.
Information System is an important ingredient in developing competitive products and services that gives an organization a strategic advantage in the global marketplace. It is the major part of the resources of an enterprise and its cost of doing business, thus posing a major resource management challenge. This is where the need for proper Management of Information Systems comes in and provides a vital, dynamic, and challenging career opportunity for millions of men and women.
British Petroleum, formerly known as Union Texas Pakistan Inc. has excellently made use of Information System to their best possible advantage. In this report we will try to give a short overview as to how BP manages its Information System.
There are basically five major areas of Information System knowledge needed by all types of business users, which is outlined in the framework above. UTP also follows the same basic format to perform its operations.
Management Of IS
This area deals with the managerial challenges of information Technology. The challenges of effectively and ethically managing the resources and business strategies involved in using information technology at the end user, enterprise and global levels of business. Management is all about allocating and arranging for resources and cooking up strategies. It works with the help of various support systems, which help is managerial decision making.
There are three Management Support Systems.
- Management of Information Systems.
- Decision Support Systems.
- Executive Information Systems.
Management of Information Systems
This basically deals with pre-specified reporting for managers. BP depends heavily on its information systems, therefore it is very important that everything goes accordingly, or else one little hitch can cause a lot of damage. They have a widespread network of information system, which stretches from their fields in Khashkeli, Badin to there headquarter in Bahria complex which hosts one of Pakistan’s most sophisticated equipments and advanced technologies.
The whole cycle is pretty simple and yet complicated. We can start relating it like a one-day story. The systematic relation below can serve the purpose.
FIELD PUMPS: It all starts at the fields, where BP’s experts and workers spend most of their time in research and exploration. Special wires placed underground, emit certain kind of rays that analyze the soil and collect seismic data and transmits it directly to their well-equipped vans close by. The raw data is processed and transmitted to the headquarters.
HEADQUARTER’S RECEIVING DEVICES: At the headquarters in Karachi, they have a microwave-receiving device (VSAT), which is like a satellite dish, receives the transmissions from Badin. Microwaves are used because Badin does not have any efficient PTCL services.
IN-HOUSE WORK: Now the information necessary has reached its destination. All the rest of the work is done in-house. They have a very sophisticated LAN system in-house, which is all protected by Firewall, a technology that ensures safety from hackers. The information that flows in is basically about the oil and gas contents of that area. This data needs to be further processed for it to make sense. BP does not really have customers, but they work in collaboration with certain partners, like the Government of Pakistan. All partners needs to be equally informed about the proceedings daily. Quarterly reports are also sent to the regional headquarters at Dubai in the Middle East.
PROCESSING: Handling the data is basically the system’s job. BP has system engineers to take care of all proceedings and make sure that nothing goes wrong. If the system fails, they have back up ready at all times. They cannot afford to loose any time on any particular day as it can cost them millions. They use SUN, Compaq and IBM servers, with the help of which, the engineers handle the LAN’s data processing. Details of the maintenance of their systems are given later in this report.
FINANCIAL DEALINGS: Citibank handles most of BP’s financial affairs, like issuing cheques to clients and handling financial reports on company connectivity. They also need to remain in touch regularly for day-to-day proceedings. Details of filing and other MIS activities are given in Maintenance of MIS later in the report.
DECISION SUPPORT SYSTEMS
There are not many decisions to be taken at BP. Since it is an organization with clearly defined goals and specific operations, the managers and decision makers usually face specific problems that require well structured planning and programmed decision-making. There is not much uncertainty as there are no competitors of the company who can pose to be a problem because each oil exploring company in Pakistan is assigned a certain area to explore. So not much support is required to take decisions. Most of BP’s work is done in-house surrounded by all necessary equipments, thus there is very little interaction with the outside environment, which has no role in its proceedings whatsoever.
The only outsider who plays a significant role in BP’s life cycle is the Government of Pakistan. But even then the Government tries its best not to cause much trouble, as it is the most profit making organization in Pakistan and it plays an important role in Pakistan’s economy.
EXECUTIVE INFORMATION SYSTEM
An executive information system is nonexistent in BP, as there is not much role for an executive to play. Therefore no information from outside is required. However, they do keep in touch with modern trends related to their business and keeping constant touch with their headquarters in England does this. Executives do exist in headquarters, but that is beyond the scope of our research.
OPERATION SUPPORT SYSTEMS
This category supports three major divisions and they are:
- Transaction Processing Systems
- Process Control Systems
- Enterprise Collaboration Systems
Transaction Processing Systems: This system processes business transactions. As mentioned before Citibank the official financial manager of BP. Citibank takes care of all financial transactions caters to this job. The in-house employees do other business transaction as in paper work. Hired legal consultants handle legal formalities.
Process Control Systems: This system takes care of industrial processes as in all heavy equipment handling. There is a warehouse, which is used for storage of all such equipments.
Enterprise Collaboration System: This is all about team and workgroup collaboration. The BP offices have cubicles equipped with Pentium-IIIs and Hewlett Packard scanners and printers. They mainly use DEL computers, and SUN, Compaq and IBM servers support the strong intranet. When one system fails another takes over. They have fast links through IMD Internet connections, Nokia Firewall, voice over IP and landmark systems. All engineers are well aware of what is going on and where.
BP Oman has heavily invested in producing a common business system in global application. In conjunction with Oracle this expertise is now being marketed to other industries that face similar challenges in a global market.
In information technology, BP has moved to a common operating environment (COE) where PC’s anywhere in the world can link into and communicate with BP Amoco group’s extensive database and communications network and access to information is available at the touch of a button.
Management of business and technical issues are addressed through functional networks, which are kept alive through the ‘Intranet, BP’s internal Internet. BP in Oman, enabling expertise to be shared throughout the BP AMOCO GROUP, has exploited the communications revolution to the full.
This sums up the processes used and how everything works out at BP. Information Systems also use:
Along with resources and technologies to collect, transform and disseminate information in an organization.
BP has its own independent LAN and WAN which are taken care of by their communication engineers and network engineers. The company now has fast link Internet connection (about 1MB). The laid for these networks is the CAT5, Lucent and AT&T. VSAT network links are used for data and voice communication. The company has 24 hours Internet connection. The company communicates with its on the field workers through VHF radios using wireless microwave technology. It is through these networks they communicate with their on the field workers and with the rest of the world. The company also has a VPN (Virtual Private Network) connecting it to Dubai and Britain. This method of communication is cost effective.
The servers used by the company are of Dell, Sun and Compaq. Previously they used to have IBM servers. They use Pentium III 700MHz personal computers of the same companies. The printers and scanners used are of HP and Dell.
The company is heavily dependant on the use of computers; therefore a wide range of software is used for different computer applications. The company has Cisco base WAN setup; database maintenance is through Oracle; drilling information and exploration data handling is through Landmark software; operating system used on the personal computers is Microsoft Windows; Nokia firewall; voice over IP(which is self-implemented); Unicentre TNG is a knowledge based system used for end users; advanced help systems has been recently developed; Foxpro, Java, Developer 2000 software is also used; cold fusion is used for web based applications.
As mentioned earlier, all data comes from the fields at Badin.
People, as in human resources, are the backbone of this organization. It is their dedication and hard work that keeps BP going. They have all kinds of people ranging from programmers, engineers, and system analysts to scientists. Programmers develop programs which are applicable to business needs and that collect raw data into appropriate fields. In BP there are computer engineers who are responsible for the maintenance and development of the existing computer systems, network engineers who handle the WAN and the LAN networks, telecom engineers who are responsible for handling telecommunication within the company. There is a lot of cross-functionality of the people there. In short there is a place for every kind of a person, as long as he is good at what he does. If a company introduces a new kind of software, sometimes, the software company then sends its trainers to train the end-users in BP.
An overview of BP’s Human Resource Management will also demonstrate how BP handles other sectors of its establishment. The Human Resource Information System of British Petroleum shows how well organized its information system is, and we can consider this example as a model of how the other Information Systems are managed.
HUMAN RESOURCE INFORMATION SYSTEM
HUMAN RESOURCE MANAGEMENT
The management of various activities designed to enhance the effectiveness of an organization’s workforce in achieving organizational goals.
HUMAN RESOURCE INFORMATION SYSTEM
Human Resource IS, are information systems that supports human resource management such as recruitment, selection, hiring, job placement, performance appraisal, training and development. Now a days, however, they are very particular about whom they are letting loose on their equipments, as the machines are too expensive for trial and error learning. So they are appointing Cisco trained people to further train other employees.
FLOW OF HUMAN RESOURCE INFORMATION SYSTEM IN BP
Different managers from various departments send their request to Human Resource department need for employees for the required post. Human Resource Department then conducts a job analysis and then floats an advertisement. Then they take interviews plus they provide the candidates with Job description and Job specifications. After selection process they get a formed filled which contains all the information about employee, which is then transferred to the HM-I software, which will be discussed below. The required fields of the HM-I are filled and the candidate is then a part of the company.
The Human Resource department undertakes all this process, which is responsible for the activities related to employees.
INTRODUCTION OF HUMAN RESOURCE SYSTEM
British Petroleum currently has about 549 employees, which includes 376 employees on fields (Badin district and Golarchi area) and rest in Karachi and Islamabad (headquarter) bases. In order to keep track and support Human Resource activities, British Petroleum bought a package called HR-I (Human Resource I).
Human Resource I:
This package was bought by the company in early 80’s, which was developed by Managerial Software Development Corporation (MSDC). Currently the MIS department of the company because of the developer’s hard to reach factor does the update process and various up gradations. Right now it is running on Pentium-III’s having Windows 2000 systems installed.
Although it seems that for a company having 549 employees there wouldn’t be such need for a Human Resource Information System but British Petroleum is having a lot of advantages as their major workforce is out in field.
There is not very much addition in database on day-to-day basis as there is not very accounts department uses much recruitment but it and also for the purpose of leave application and other employee related activities.
FEATURES OF HR-I:
HR-I keeps track of following information related to employee:
- Date of Birth Employee’s date, year and place of birth.
- Education His entire education background starting from his school life to his university life.
- Internships During the employee’s education his place of interships
- Past Jobs Their past job related experience with addresses.
- Training Different sort of training and courses during their jobs.
- Spouse Information about spouse and ID card number.
- Kids Number of kids plus their schools and date of birth.
- Parents Employee’s parents and their ID card numbers.
Employee’s Personal Information:
- ID card number His Identification and Passport numbers.
- Years of job Number of years he has been in the company.
- Job Designation His current post in the company.
- Salary Amount he is paid as salary.
MAINTENANCE OF INFORMATION SYSTEM
British Petroleum uses software called MAXIMO from Project Software Development Incorporation. This software is totally ORACLE based running on PENTIUM-III’s with Windows 2000 systems. Before BP, Engro Chemicals, ICI Chemicals and other large companies were also using the same software. It is considered to be all in one type of software that consists of all the maintenance required in business.
The authorized dealer of this software in Pakistan is Oratech Corporation who has setup this software in BP. It is on 3 CD’s and need to be installed on a powerful server.
STRUCTURE OF MAXIMO
It consists of 12 modules. Each module contains itself a vast variety of tools and information.
Following are nine modules whose activities are briefly defined and will be discussed in detail later in report.
- WORK ORDER : Maintains all the information related to Work Order
Such tracking and reporting.
MAINTENANCE : Maintains preventive activities for machines and tools.
- INVENTORY : Keeps information about Inventory.
- EQUIPMENT : Keeps track of equipment and tools and alerts the user
For changes at the required time for the maintenance.
- PURCHASING : This module helps to keep track of Purchasing activities.
- PLANS : Keep the user and managers organized with plans and helps
to enhance and further make new plans.
- LABOR : Keep database about the Labor and provides Human
Resource Management activities.
- CALENDERS : Keeps scheduling of works to be performed and keep track
that it would be done at which sites and field.
- RESOURCES : Maintains a database of current and future resources.
- CUSTOM APPS : Software has enhancement to run custom apps while
- SETUP : To maintain the process and procedures of MAXIMO.
- UTILITIES : Other utilities such as Calculator etc.
A detailed discussion about the modules is given below.
Work Order defines that how a job will be performed and what should be done on Job, also includes that what will be terms and condition of the job and what will be and will not be expected.
Work Order has following four options in MAXIMO
I WORK ORDER TRACKING:
This feature enables user to track a particular work order by searching it using various attributes and keys.
II AS BUILT QUANTITY:
This feature is for the marketing department, which allows them to relate work order with inventories.
III QUICK REPORTING:
Producing reports is a major feature of MAXIMO, which enables managers and other hierarchical staff to make decision regarding work orders quickly and efficiently.
IV WORK MANAGER:
This is an intelligent agent, which enables novice program users to enter work order efficiently and effectively.
It has been found in industries that a small part replacement and maintenance can prevent huge losses and can cause a company to work efficiently. Let us take an example of a LATHE machine. Only by changing its cutting edge quarterly can prevent its grooves not to break.
In this module date and time can be set on which it will alert users for pending preventive maintenance.
Inventory can play a major role in a company. If the inventory of the company is not kept properly, it will cause the company to suffer a lost financially. Inventory system should be proper so that there would be no duplication of stock and other parts and equipments.
We observe five options for Inventory in MAXIMO.
This option keeps track of the parts of machines being used in the company so that at the time of replacement there wouldn’t be any need for search of that part.
II INVENTORY CONTROL:
This option keeps and maintains database of the entire inventory in hand.
III ISSUES AND TRANSFERS:
This option keeps track of all the issues to a particular department or division and all the transfers of machineries or equipment from one department to another.
IV ASSET CATALOGUE SETUP:
Keeps track of all the assets currently the company has.
Equipment requires most of the maintenance activities in the company. In bigger companies like BP, keeping track of equipment and machines is a very important factor as the company has a wide range of machine components ranging from small meters to large purification plants.
I LIST OF EQUIPMENT:
Contains and maintains the database of equipment company has.
II SPECIFICATION OF EQUIPMENT:
Contains information about the parts and components of machines.
III DRAWING OF EQUIPMENT:
Contains drawings of machines currently being used, which includes pictures of components and parts.
IV PART NUMBER:
Keeps and maintains database of part number of various components and accessories of a particular machine.
Maintains database of various manufacturers of different machines being used in the company
As we are aware of the fact that in big and multinational companies there is a lot of purchasing and it becomes difficult to keep track of all purchases after sometime because it takes lot of energy and dedication to write each and every purchase on a ledger or a entry book. In order to automate the record keeping process this feature is being provided in this software to make it efficient and easy.
I ORDER NUMBERS:
Keeps track of all orders, their description and numbers.
Name of Manufacturer whom which the product is purchased from.
Cost of bringing the specific product to the required workshop, field or site.
IV PART NUMBER:
Part numbers of those products being purchased.
Companies such as BP, Engro and ICI, planning plays an important process to make them active and stay in market. Thus this feature helps companies to plan the future in order to achieve their required goals.
I JOB PLANS:
It maintains plans related to job activities and orders. Manager use this feature in order to plan for the job and then give orders to his subordinates to work according to plans and procedure.
II SAFETY PLANS:
This includes those safety procedures, which a manager keeps in his mind during the planning process such as when and where to use helmets, safety boots, masks etc.
Labor plays an important part in any company. They are the key members without which a company can never run and operates. Upper management itself is nothing for the operation process but it is the labor that keeps the company in operation.
This option allows management to enter the qualification and other desired information of the employee in the database.
This includes all the information related to employee such as his age, id card number, past experience.
It contains information about the coming holidays and shifts of different employee such as where are they going to be appointed after a certain period of time or whether they are going to do day shifts or will it be night shifts.
This feature let the management to track what resources the company currently has so that they could get the required resources when necessary. Resources include companies from where they could get information or stuff, equipment, tools and other items.
This feature allows running custom application and other customized software while working on MAXIMO.
This is a feature which is only accessible to top level management and software operator or MIS department of the company. It allows various features such as setup of different screens, access to whom, how much and what.
Contains external features such as calculator, notebook, drawing pads etc.