What PRA Stands For..!!!

While working in one of my projects related to PRA from last 3 years, I often came across the queries and questions from many of my colleagues like

“What Exactly the PRA is??”

“If it is accounting software, then is it a sub module of SAP FI/Co?

“Where does PRA fit within the suite of solutions offered within SAP ERP IS Oil??”

Over the years working in PRA I had the opportunity to address the above queries .I will use this forum to help answer these questions; though it is just the beginning I would be enhancing this space with more info.

The first and foremost is to understand “SAP IS-Oil”.

SAP has developed the leading integrated industry solution for the entire value added chain of the Oil & Gas industry. IS Oil & Gas is a vertical industry solution specifically designed and developed for oil and gas industry. It caters all the streams of oil and gas industry namely Upstream, Midstream and Downstream.

Upstream operations consist of exploration and production of the crude oil or gas. Starting from geological survey this covers extraction of oil or gas from the reservoirs.  

Downstream operations consist of refining of the produced oil and gas and making it more commercially viable.

And Midstream operations involve transportation of the oil and gas products via different modes of transport, with pipeline being the most common one, intermediary storage and retailing.

Below mention are some Wiki links to give you more information about oil & gas industry and its operations.

Upstream: http://en.wikipedia.org/wiki/Upstream_(petroleum_industry).

Downstream: http://en.wikipedia.org/wiki/Downstream_(petroleum_industry).

Midstream: http://en.wikipedia.org/wiki/Midstream.

PRA i.e. Production and Revenue Accounting is one of 4 major solutions SAP ERP IS oil offers to the upstream industry. The other three are

1.      Joint Venture Accounting – JVA

2.      Remote Logistics Management – RLM

3.      Production Sharing Accounting – PSA

Primary task of PRA is to fulfill the production and revenue accounting requirements of Oil & Gas companies. That is to say, it focuses on accounting for the total volumes produced, determining the value of those produced volumes, and settling the financial, compliance and regulatory transactions related to those produced volumes.

The production of crude oil and gas is highly asset intensive activity. All facilities, from well heads to living quarters on off-shore platforms must be consistently maintained and kept in good working order to ensure 24×7 productions of these highly valuable resources. Data such as well test and downtime, captured via a Field Data Capturing System, serves as input to PRA. Once crude oil & Gas is produced, they must be accounted for total product volumes produced and the value of the products produced. Once volumes and values of the products are determined, they must be allocated to relevant owners (i.e. those who have an equity share in producing area). They must be allocated to sales contracts, where the oil and gas company must fulfill volumes promised to purchasers.

PRA is not a sub module of SAP FI/CO. In fact FI/CO has only one integration with PRA the Journal Entry (JE). JE as such is book keeping module which holds the financial details of each transaction concerned with revenue. PRA is an accounting software, hence its task within the life cycle of crude oil and gas production falls beyond many of the business processes whose primary focus is facilitating the efficient production of crude oil and gas and not just responsible accounting.

Below diagram depicts primary business process flow of PRA.

The main processing areas of PRA are Production, Contractual Allocation, and Valuation. Each of these areas (shown in the figure above ) have a check mark that indicates changes to prior periods of processing will generate a notification for all the effected periods to be rerun so that they are updated with the changed information.

• Ownership – permits you to set up and determine owner information, i.e. those who own the producing area and other parties who are involved in exploration and production of oil and gas wells.
• Production – utilizes allocation rule data to allocate product volumes back to originating well completions.
• Contractual Allocations – Utilizes contracts and pricing information to allocate volumetric information to contract levels.
• Balancing – Captures and tracks the differences between actual and entitled volumes and give the user a way to adjust those differences.
• Upstream Graphics – provides the navigational and graphical approach to defining all the entities and set ups necessary for performing a production allocation within PRA.
• Valuation – calculates the values of volumes allocated in production and contractual allocation. It also calculates taxes and marketing charges.
• Revenue Distribution – distributes the values, taxes and marketing charges among all stakeholders.

Valuation and Revenue Distribution are business processes applying to the solution provided to companiesoperating with within the US.

At last just to add some more information about PRA is that it was not built as a SAP designed solution, however it was acquired by SAP as PREMAS solution from PWC in 1998. Starting 1999 the PREMAS code base was converted into R/3 based ABAP product. Razorfish was the company which completed COBOL to ABAP Conversion.

Let me know if you have any specific question or any feedback by giving your comments. I will try to answer your queries as per my updated knowledge 🙂