Ukrnaftoburinnya

PRIVATE JOINT STOCK COMPANY MINING COMPANY UKRNAFTOBURINNYA is one of the leaders among private oil and gas extraction companies in Ukraine. In 2017, it entered the top three private gas extraction companies. The company’s mission is to make a significant contribution to the development of the oil and gas complex and energy independence of Ukraine. To achieve this, investments are made in advanced drilling technologies, personnel, and management practices aimed at increasing hydrocarbon production.

The prerequisites and goals:

One of the priority directions for the further development of the company has become the comprehensive automation of management and financial business processes, planning and budgeting processes, as well as personnel accounting and payroll calculation. To address these issues, the Implementation Center CONTO was invited.

Before the start of the automation project, the company used two separate systems: one for accounting and another for document and business process management. However, over time, both systems became outdated, and their level of integration and the speed of obtaining management data no longer met the needs of the business and the level of company development.

Based on the results of the conducted survey and analysis of current business processes, it was decided to create a comprehensive information system based on the products “BAS ERP” and “BAS Document Flow”, which is built on common directories and the integration of functional capabilities of the two products.

The goals of the implementation project are:

1. Increase the level of manageability and complexity of the company’s business processes.
2. Establish a unified information space based on a single system of normative reference information.
3. Obtain management reports promptly from the comprehensive system.
4. Eliminate labor-intensive manual calculations in Excel, which carry the risk of errors and provide incorrect information for managerial decision-making.
5. Automate the process of accounting for incoming/outgoing correspondence, creation, approval, and storage of company contracts, acts, and invoices, as well as the accounting and approval of other important company documents.
6. Improve the efficiency of contract approval and compliance with contract terms and additional agreements.
7. Obtain analytical and statistical data for contracts and accompanying documents.

During the project, the organization of a comprehensive accounting environment for financial resources was carried out in the following areas: sales management, inventory management, procurement management, production management, project management (drilling and workover projects), HSE management, transportation management, accounting, tax accounting, managerial reporting and budgeting, cash management, HR management and recruitment, payroll calculation, as well as the organization of a comprehensive document management environment and normative reference information (NRI).

The new information system was put into industrial operation on January 1, 2022, automating 100 workplaces. During the preparation and launch of the system into operation, user training was conducted for accounting units, data migration from old systems, configuration of basic access rights, and environment setup according to new processes.

To build a unified software complex based on “BAS Document Flow” and “BAS ERP”, the following steps were taken:

1. Integration of the “BAS Document Flow” configuration into the “BAS ERP” configuration while preserving the full functionality of both configurations.
2. Creation of a unique subsystem for integrating configuration objects.
3. Significantly enhanced the subsystem of the standard product “BAS Document Flow”, expanding the automation capabilities of complex document routing conditions.
4. Integration of “BAS Document Flow” with external systems such as “VCHASNO”, “MEDoc”, “Smart Tender”, with the ability to use electronic signatures.

The organization of a comprehensive environment for document management and regulatory reference information proceeded along the following directions:

• Establishment of a system for managing contracts and accompanying documents.
• Centralized maintenance of the contractor database.
• Automatic completion of template documents.
• Version control with the ability to compare and track changes.
• Electronic approval/validation of documents using electronic and digital signatures.
• Tracking related documents under a contract (additional agreements, specifications, etc.).
• Generation of analytical reports based on contract and accompanying document data.
• Notification of users about important document events.
• Recording the history of collaborative work.
• Maintenance of a log for the transfer of original documents.
• Control of the sum of acts against the contract/additional agreement within their validity periods.
• Enforcement of disciplinary control.

To meet the requirements for automating procurement processes, a unique subsystem was developed. This subsystem ensures the full procurement cycle, including:

• Registration and approval of procurement requests.
• Handling tenders using the “Smart Tender” platform.
• Editing processes and monitoring compliance with procurement contract terms.
• Storage and accounting of material assets for projects.
• Analysis and reporting functionalities.

Additionally, the treasury subsystem and operational procurement budget management were enhanced and refined to optimize financial operations and ensure effective procurement management.

For the automation of natural gas trading and sales, a special subsystem was developed to provide:

• Management of commercial offers and pricing strategies for natural gas sales.
• Daily gas balance, submission, and tracking of the status of nomination/renomination.
• Accounting for finished products as goods with the ability to track the cost of batches of finished products in the accounting register.
• Complex accounting of production costs and capital investments by cost items in the production of gas, oil, and condensate.
• Requirements for specific cost accounting features of production under production-sharing agreements.

Within the scope of accounting automation, the following has been implemented:

• Significantly revised chart of accounts for accounting to expand analytical accounting.
• Three-stage accounting for gas, oil, and condensate production.
• Calculation of mineral royalties.
• Accounting for expenses related to specialized equipment and vehicles, including capital investments and equipment repairs.
• Calculation of interest on bank loans using complex formulas.
• Calculation of debt discounting.

The payroll calculation has been automated with salary reflection in the capitalization of construction projects. Personnel management includes the provision of printed forms for all operations, accessible to employees and trusted personnel for data entry. Integration of approval processes for personnel and accounting orders has been achieved through the “BAS Document Flow” subsystem.

A unique KPI calculation subsystem has been developed based on system data, with a procedure for selecting employee indicators before accruing actual bonuses.

A personnel selection subsystem has been constructed, ranging from requests for changes in staff numbers to a comprehensive employee adaptation process.

During the automation of the budgeting process, the budgeting subsystem was enhanced to provide:

• Management of “Purchase Plans for Budgeting” in terms of plan types, departments, items, projects, and nomenclature.
• Recording changes to the procurement budget using “Payment Plan Forms,” “Off-budget Payment Register,” and “Budget Adjustment Request.”
• Management of the operational payment plan using the “Payment Registry” and limiting “Cash Use Requests” with route changes for document approval.
• Obtaining data from the extended “Cash Flow Report by Days.”

Project Results

The implementation of the integrated system “BAS ERP” + “BAS Document Management” has resulted in increased efficiency, speed, and convenience in managing the Company’s business processes. This was achieved through the creation, approval, and integration of documents with other external systems used within the enterprise, all within a single information environment.

The efficiency of the accounting department has improved significantly as a result of all primary documents being entered into the system by employees responsible for their respective areas of work.

Users of the new information system now receive timely information and documents to facilitate managerial decision-making. This has led to improved executive discipline due to timely information dissemination and access to the current status of document execution.

We positively evaluate the outcomes of the implementation project and believe that its automation objectives have been achieved. We extend our gratitude to the CONTO company team for implementing the system and preparing the enterprise personnel to work within the software complex.