SAP Ecosystem Powers Collaboration and Innovation Among Oil and Gas Industry Customers and Partners

Oil and Gas Industry Value Network Joins Existing Seven IVNs to Bring Together Customers and Partners to Address Industry Pain Points

WALLDORF, Germany - January 30, 2007 - Continuing to deliver on a commitment to drive community-based innovation and support the adoption of the SAP NetWeaver® platform, SAP AG (NYSE: SAP) today announced its eighth industry-focused collaboration effort, the industry value network (IVN) for oil and gas. As the undisputed leader of business solutions for the oil and gas industry, SAP has expanded the successful IVN model to bring together a network of independent software vendors (ISVs), systems integrators (SIs) and technology vendors with SAP and executives from leading oil and gas customer companies to solve customers’ most pressing business challenges through the creation and improvement of industry-relevant business processes. The IVN for oil and gas joins existing IVNs in the banking, chemicals, consumer products, high tech, retail, public sector and forest and paper industries.

“Today, achieving leading-edge innovation requires the input of more than one business entity and IT vendor,” said Bob Martin, SAP integration project manager, Conoco Phillips and chairman of the SAP Oil & Gas Global Industry Advisory Council. “The SAP Oil & Gas Global Industry Advisory Council sees industry ecosystem collaboration supported by SAP’s industry value networks as the way of the future. The IVN for oil and gas can achieve customer value by leveraging the web of expertise, solutions and capabilities to address our most pressing business challenges. We see promise in this unique approach to enable us to increase our productivity and supply chain performance, lower total cost of ownership and provide a new level of interoperability and standards.”

Joining Forces To Address Needs of Oil and Gas Companies
The existing SAP Oil & Gas Global Industry Advisory Council includes 17 companies—all major integrated oil companies, large national and midsize thought leaders—such as Conoco Phillips, Holly Corporation, Petrobras, Statoil and Tesoro. The members of the advisory council will work with SAP and partner IVN members to build new solutions for the oil and gas industry. To date, IVN members include Accenture, HP, IBM, Implico, KSS, LogicaCMG, Meridium, NRX, Quorum Business Solutions, TechniData, Triple Point, Vendavo and others. IVN members will collaborate to deliver solutions and integration scenarios to address industry-specific pain points including the need to maintain assets and secure or grow reserves to meet the world’s increasing demand for energy. Oil and gas companies are faced with addressing these fundamental challenges as their business environment becomes increasingly complex and changes rapidly due to growing geopolitical uncertainty, limited access to new resources, globalization and the changing influence of national oil companies.

To help accelerate development of software innovations necessary for this industry to address such challenges, members of the IVN for oil and gas are initially collaborating on the focus topics of the digital oil field and the hydrocarbon supply chain. For these focus topics, the IVN members are working together to deliver solutions for integrated exploration and production, land lease management, real-time gas allocation management, asset life-cycle management, secondary distribution and terminal management, commodity trading, and price optimization and margin management. By delivering pre-integrated, standard, end-to-end solutions and services based on a common technology platform, SAP NetWeaver, the solutions resulting from the IVN collaboration will help customers avoid costly integration projects.

Collaboration Between Customers, Partners and SAP Already Paying Off
SAP’s IVN concept of community collaboration is already paying dividends for IVN members, in projects with customers and partners.

SAP and Triple Point Technology are working with the Holly Corporation, an independent petroleum refiner and marketer, and other SAP oil and gas customers on a front-to-back office solution integrating Triple Point’s real-time trading and risk management systems (Commodity SL) with SAP logistical software to enable companies to optimize the procurement, marketing and trading of commodities.

“The resulting solution of our close collaboration with SAP and Triple Point Technology is exactly what we have been seeking to integrate our trading and risk management functions seamlessly with all of our back-office and other operations managed by SAP,” said Mark Evans, director, SAP Projects, Holly Corporation. “By combining market-based financial valuations with physical movements and taking advantage of real-time data, we can now make buy/sell decisions that enhance profit and give us a significant competitive advantage. This unique multi-vendor approach, embodied by the IVN, will play a critical role in addressing our needs and providing the innovation and integrated end-to-end solutions we need for being successful. We see the IVN initiative as a true catalyst and enabler for increased customer value.”

In other initiatives of the IVN for oil and gas, SAP has worked together with Implico and Accenture on a series of projects in the areas of secondary distribution management and the digital oil field, respectively.

The volume and price volatility experienced in the secondary distribution of the value chain can lead to station run-outs, poor fleet utilization and expedited deliveries. Implico has collaborated with SAP to design and deliver a packaged solution that not only addresses these issues but does so in a rapidly deployable and predictable cost manner. The resulting applications, SAP® Oil & Gas Secondary Distribution and Implico OpenTAS, have already delivered improved inventory management, reduced transportation expenses, increased sales and reduced days sales outstanding for several companies within the industry.

“While our initial collaboration with SAP has already delivered some key innovations, we see the IVN initiative providing the necessary framework and foundation of network collaboration to drive the next level of innovations for the industry segment we serve,” said Thomas Ernst, managing director, Implico. “We are excited about these new development and market opportunities that the industry value network provides to partners.”

The digital oil field is both a solution and a problem, producing more data than ever before. It is critical for oil and gas companies to make the most of all that new information. SAP and Accenture teamed up to accelerate the well delivery process and efficiently manage well maintenance operations. Accenture and SAP will continue working together in the IVN for oil and gas to enhance the solution to include support for additional functions for the integrated upstream oil and gas value chain.

SAP’s Open Ecosystem Encourages Co-Innovation
As part of its platform strategy, SAP is building an open ecosystem to drive adoption of enterprise service-oriented architecture (enterprise SOA); foster co-innovation between SAP, customers and partners; and deliver value for all participants. Building on its deep industry knowledge and diverse community of partners and leveraging SAP NetWeaver as a platform for product and service innovation, SAP and its ecosystem are driving new dimensions of collaboration—turning breakthrough ideas into innovative solutions for customers.

“With the IVN for oil and gas, SAP and its partners are bringing unmatched industry expertise, best practice business processes and platform leadership—plus the overall power of the ecosystem—to tackle and solve our customers’ most critical business challenges,” said Holger Kisker, vice president, oil & gas industry business unit, SAP. “Together with our partners, SAP is driving innovation, interoperability, standards and thought leadership for our customers. Most importantly, the IVN further empowers customers to be active participants in the SAP ecosystem and key contributors to innovating new business processes relevant to their individual needs.”

About SAP for Oil & Gas
SAP® for Oil & Gas is a solution set that combines mySAP™ Business Suite applications with tailored functionality to meet the unique needs of companies specializing in exploration, production, refining, distribution, trading, marketing, and sales of petroleum-based products. This solution portfolio offers best practices for adaptive supply chain management, efficient enterprise asset management and improved customer relationship management. Based on the open architecture of the SAP NetWeaver® platform, SAP for Oil & Gas enables seamless integration of business processes and third-party systems

About SAP
SAP is the world’s leading provider of business software*. Today, more than 38,000 customers in more than 120 countries run SAP® applications—from distinct solutions addressing the needs of small businesses and midsize companies to suite offerings for global organizations. Powered by the SAP NetWeaver® platform to drive innovation and enable business change, SAP software helps enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP solution portfolios support the unique business processes of more than 25 industries, including high tech, retail, financial services, healthcare and the public sector. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at www.sap.com)

(*) SAP defines business software as comprising enterprise resource planning and related applications such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

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Kelly Schwager

SAP AG

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