OAO LUKOIL is Russia’s leading oil company. The company specializes in oil and gas exploration and development and the manufacture and sale of petroleum products.

LUKOIL Overseas Holding Ltd. is a constituent part of Russia’s largest oil company, LUKOIL, and represents its interests in the area of international oil and gas production. LUKOIL Overseas Holding Ltd., which includes more than 70 subsidiaries, is involved in 25 projects in ten countries.

Project goal

The main project goals were assurance of quality, efficiency, harmonization of processes of drawing up and analyzing consolidated budgets of LUKOIL Overseas Holding Ltd, and generation of corresponding reports.

Solution

IBS was contracted to implement the project. The choice of contractor was influenced by IBS’s extensive experience in designing similar systems for large holdings and successful cooperation with LUKOIL Overseas within the framework of a project to implement an accounting reporting consolidation system.

The budget reporting consolidation system is based on software products of SAP AG, which are the corporate standard for LUKOIL’s information systems; the accounting reporting consolidation system in particular is built on them. The shared product platform is designed to simplify the planned integration of both systems.

Output

At present, the consolidated budget is generated in the information system in automatic mode on the basis of budget reports of the company’s subsidiaries. A single format for making budget reports based on Microsoft Excel workbooks has been developed for them, and rules for providing budget data have been worked out. Consolidation rules developed within the framework of the project are used to generate reports, and special algorithms are employed to classify budget items and exclude internal turnovers. The system automatically sends the generated consolidated budget to the subsidiaries.

The system is also capable of generating analytical reports, allowing the user to obtain the necessary information in various analytical sections and with differing levels of detail. In particular, this capability can be used to analyze how a change in structure or the incorporation of new companies affects the consolidated results. The system supports an unlimited number of budget models and consolidated budget versions. At present, the system can generate 167 routine reports and about 20 analytical reports.

The project to design a budget reporting consolidation system at LUKOIL Overseas Holding Ltd. was carried out by a combined design team of IBS and the customer over a period of a year. Future plans include integration of the accounting reporting and budget reporting consolidation systems, which will allow implementation of plan-actual analysis in the system, remote system access from regional subsidiaries for data loading and examining reports, and generation of supplementary analytical reports.

Customer Feedback

According to Anatoliy Samiullin, IT Manager of LUKOIL Overseas Holding Ltd., “the project has made it possible to accomplish two primary tasks: harmonizing the process of drawing up and analyzing consolidated budgets and substantially improving the quality of budget reporting. Routine information processing operations are automated as much as possible, which guarantees correctness of the reporting data. In addition, we expect that the data warehouse implemented within the framework of this project will become the foundation for creating a unified information environment.”