The Following Is the Summary of Changes in HR and Payroll, Post ERP Implementation

1 Oil India Limited Duliajan

Ref: ERP(A) /394/2005 Date: 21.11.2005

All Heads of Department

Sub: Implementation of ERP in OIL: Changes to existing Drilling Processes

Enterprise Resource Planning (ERP) in OIL will Go-Live on 1st December, 2005 and as already communicated in different forums including the ongoing End User Training Programs, there would be various changes in the business processes which would have to be adopted in the new ERP environment.

Drilling Projects:

Some of the key changes pertaining to Drilling are mentioned below:

In present practices, TDP reflects the Company’s master plan for Drilling activities for a financial year. It reflects both Development & Exploratory drilling plan together.

In the ERP system, since a Drilling well is best suited to project system, it will be planned and executed as project. A Project has a Goal or objective that has a definite time period having a definite start and end date , contains multiple tasks with start & end dates, consume resources, money/budget and involves multiple depts. Etc.

The TDP contains information like Rig name, Location, Start & End dates/Rig cycle. In ERP system , in addition to above , information like State/Region, M/L or PEL/NEPL areas, Fields detail start & end date of each tasks carried out under different phases of Drilling well will be available.

Each Exploratory or Development well will have a 5 level Hierarchical structure as follows:

1st Level: Represents Region of Drilling wells AS(Assam)/RP(Rajasthan

2nd Level: Represents PEL/ML area under the region of say AS ( Hoogrijan ML, Naharkatia ML, Dibrugarh PEL,etc) 3rdLevel: Represents Fields under ML or PEL area (Dikom, Kathaloni, Bhekulajan, Thawrah,etc) 4th Level: Represents Well/Location under the Field (MEF- location)

5th Level: Job No wise division within a Well.(Rig-down,Rig –up, Drilling, Chemical,Pre- Production Testing, Production Testing, Civil Maintenance etc.)

Above hierarchical structure will be called WBS (Work Break Down Structure). Each objects in WBS is called WBS element. The WBS containing the Development Drilling Locations(WBS element) for a financial year will be available separately. Similarly, WBS containing Exploratory Drilling Locations will be available separately.

Thus Exploratory & Development drilling in the TDP will be available in ERP as separate projects each with separate WBS plan for the Locations by region like Assam, Rajasthan etc. 2 Drilling Location as WBS element will be available in the 4th level in both Dev & Expl WBS.

In the 5th or last level ie. Job nos as WBS element will be available. These WBS are - Rig-up, Rig-down, Drilling, Chemical, Pre-Production Testing, Production Testing, Civil Maintenance etc.

It may be noted that all the objects of the structure are called WBS elements , but the element at the lowest level normally represents Account Assignment WBS element as cost can be booked to them similar to Job nos. In post ERP, these A/c assgn WBS element will be entered in the bill payment(Service Entry Sheet), PR(indent) ,Outline agreement (CCO) document etc.

The various tasks performed under each A/c assgn WBS element will be available as Activities. For example: Rig-up WBS element comprises of tasks like- (1) Placement of Sub- base, (2) Rig up Mast etc. Similarly Drilling WBS element comprises of tasks/Activities like - (1) Spud-in, (2)conductor stage casing,(3)Cementing etc . The sequence in which all these Activities will be carried out are captured in a Network screen. A Network is nothing but a series of Activities linked in orderly sequence .

Presently Start & end date for locations are planned but not at activities levels. In ERP scenario, since each Activity has a certain duration, same has to be entered and the system will provide the start & end date in the Network screen.

Few Standard Network as model with the standard activities, Time of completion, etc will be available in the system, like - Drilling with 3 stages, Drilling with 4 stage along with material plan, cost plan etc. With the help of such Std Networks, any Development or Exploratory project plan for a financial year can be uploaded in the system quickly and efficiently.

Budgeting/Cost Planning for wage/salary, material, services(both Departmental services & Contract services ), Transport services etc are presently done in Budget proforma 3B for the RE(current year say 2005),BE(next year say 2006) & Indicative year(next to next year say 2007 financial year) by the concern Depts like Drilling, Production, Chemical, Civil ,G&R etc. Same will be carried out against the respective Activities under cost element (Cost code) for the respective Financial year by the respective Depts. Thus 3 Project Work Break Structures ie. RE(current year, say 2005), BE(next year , say 2006), INDICATIVE(next to next year say 2007) will be created at the beginning of each financial year.

After creation of Development or Exploratory WBS structure for a Financial year, the appropriate Standard Network will be attached to 5th level Location WBS element for each location WBS element. Changes where required as per the specific depth or addition of Activity and the corresponding cost plan of materials, services etc can be done after the attachment.

Above pertains to planning phase of a project. As and when these projects will be executed , completion of each activity along with the start date and end date are to be confirmed in the system.

The consumable required for the wells are collected first at Drilling yard and subsequently issued to respective wells. The Drilling office/Yard etc will be called Storage Locations in ERP. Materials issue , receipt etc through Stock Transfer Order , Reservation, Goods issue, Receipt, etc are being explained in the Note circulated by MM module . the existing practice can be followed through these transactions in the MM module.

Thus the material cost will be booked to the well only when Goods receipt at well is carried out. Contracts costs (classified as external services in ERP) will also be booked against 5 th level Job no after creation of Work Order against the Outline Agreement (CCO no). Bills will be paid to Contractor through Service Entry sheet (COP) .

Once a well is completed in all respect, its status will be changed to Technically complete(TECO in ERP) . When TECO status is on, New procurement against the WBS element will not be possible, however, outstanding/committed cost can be booked. The status can be reversed depending on the requirement by authorized persons only. 3 The first level of report i.e.- Shift DPR will be done through the system. Once entered the next level of report ie DIC’s LOG for the well will also be done through the system with some required field to be filled by DIC and rest of the information will flow from the DPR. All the next level reports will then be generated from the system.

All the above changes will be applicable w.e.f. December ’05 in all the locations of OIL except RP and BEP, where ERP will go live. The changed processes and practices to be followed in the ERP environment are being explained in detail to the participants undergoing End Users’ Training at Duliajan.

For any further clarification, you may please contact the ERP PS team at OIL Phone No 7172 or [email protected].

Kindly give wide publicity of the above changes amongst the Executives,employees of your department, so that the change over from the existing system to the ERP system can be done smoothly and effectively.

(SM HUSSAIN) For General Manager (ERP) 4 Oil India Limited Duliajan

Ref: ERP(A) /394/2005 Date: 21.11.2005

All Heads of Department

Sub: Implementation of ERP in OIL: Changes to existing Budget Processes

Capital Budget Process

Proposal process:

In the present practice, new Capital items for a Financial year are proposed in Proforma 2 while Review Budget proposals in Proforma 1. In ERP system these Proforma will be identified by Version followed by nos : Version-0 for current year say 2005, Version RE for Review, Version-1 for new proposals for next year say 2006.

In the present practice, Budget Heads are created by the User Departments using the naming convention XXX.XX.XX, where 1st 3 Xs represents Dept, the next 2Xs represents financial yr and the last 2Xs represents the serial number of the proposals. For example: for a Transport Department proposal in FY 2005, and Sr. no 1 is represented by TPT/05/01.

In ERP system the proposals will be called Appropriation Request (AR). It will have the naming code (also called Coding Mask in the ERP system) according to the nature of capital items. There will be two categories of AR.

1. If the proposed item would simply be procured and commissioned, it will then be represented by PI (Plug-in items). Coding mask of such items will be XX.XXXXXX.XXX. The AR type “PI” should be used. 2. If the proposed item is a construction type of capital item involving services of multiple job nos, large no. of activities, long completion time or involves multiple depts. to complete the construction etc ( For example- Construction of Pipeline , OCS/GCS construction, Building Construction, etc ) such Capital item will be carried out through Projects with Network. Coding mask of such items will be XX.XXXX.XX. Depending on the nature of the proposal, any one AR type should be selected from the table below:

CP AR for Construction Project proposals LD AR for Land procurement (Location) Project proposals LP AR for Land procurement (others) Project proposals NG AR for Production - Gas Project proposals PL AR for Pipeline Project proposals PP AR for Production - Oil Project proposals 5

For PI type of proposal, AR coding mask (Budget Head) , coding mask will be as follows :

XX.XX XX XX.XXX

Serial number, e.g. 001 for AR Region Proposal sr. FY, Departme Type, PI , e.g. no. 1 no e.g. 05 nt, e.g. for Plug- AS for for PG for ins Assam 2005 Prod Gas

For construction type of proposal (Projects with Network involved), the coding mask will be as follows:

XX.XX XX XX

Serial number, Region, e.g. 001, for AR type, Financial e.g. AS for Proposal sr. e.g. CP for year e.g. Assam no. 1 Constructio 05 for n Projects 2005-06

For pipeline type of proposal (Projects with Network involved), the coding mask will be as follows:

XX.XX .XX

Serial number, e.g. 01, for AR type, Financial Proposal sr. e.g. CP for year e.g. no. 1 Constructio 05 for n Projects 2005-06

For example - A Production Gas Dept Proposal for plug-in type item, the AR proposal (if presently represented by Budget head IG/05/02) will be PI.05ASPG.002, While a Capital construction type proposals like construction of GCS will have a AR proposal (if presently represented by Budget head IG/05/01) will be NG.05AS.001

While creating ARs, departments will have to enter the following data:

1. Reason for investment: New, Additional or Replacement 2. Scale of Investment: Drop down and select appropriate base on value of investment 6 3. Approval year: Enter current financial year or the next year as appropriate 4. Proposal details Justification texts 5. Requesting Cost center: In ERP, departments are represented by Cost Centers and Profit centers. Choose the correct cost center of the requesting department. 6. Responsible Cost center: Choose the correct cost center of the executing department. 7. Plant: Enter the plant of the executing department.

In the Investment Management module, the IM program structure is used for cost planning and approval of budgets for the proposals. This structure contains all the departments of OIL, called Position IDs. The Appropriation Request is to be assigned to the position IDs of the requesting department.

Example of Position ID: Transport Dept will be- OIL.CAPEX.FHQ.TRPT OIL- represents Oil India Ltd CAPEX- represents Capital Expenditure FHQ- represents Field Head Qtr, Duliajan TRPT- Transport Dept

Similarly, Production Gas Dept will have a Position ID for proposal processing by OIL.CAPEX.FHQ.PRDG.

Important Note: Proposals could be created for approval during the current year (which were not included in the current year BE) or for new proposals for next year. Care should be taken to enter correct data in the Appropriation Requests to differentiate between the two.

Difference in AR data for Current Year proposal and new (next year) proposal: 1. Current year Proposals: a. Name of the proposal (Coding mask): Enter last 2 digits of the current financial year e.g. 05 for 2005 b. Approval year (in the general data screen): Enter current financial year (e.g. 2005) c. Assignment of cost plan variant to Version: Assign the cost plan variant to Version 0 of the current financial year. E.g. Variant 1  Version 0 / 2005.Variant represents the Budgetary quotation or cost estimate. 2. New Proposals: a. Name of the proposal (Coding mask): Enter last 2 digits of the next financial year e.g. 06 for 2006 b. Approval year (in the general data screen): Enter next financial year (e.g. 2006) c. Assignment of cost plan variant to Version: Assign the cost plan variant to Version 1 of the current financial year. E.g. Variant 0001  Version 1 / 2005

Capital Budget approval process:

In the present practice, after preparation of Budget proposals in Proforma - 2, Creator of proposal/Sectional Head & HOD signs on the Proforma. For item that is to be processed/procured by other Department, same is forwarded to the Executing Dept HOD for his scrutiny & consent. The signed Proforma are then sent to GM concerned for approval. On approval by GM, same are forwarded to Planning Dept which are then compiled and put up to appropriate authorities as per DOP. Approval/Rejection is recorded on the Proforma. The approved proposals are attached to Annual Outlay plan for approval by MOP&NG. Planning Department finally compiles the approved proposals in a Capital item approved book and issued to each Dept. as intimation to their approved budget.

In ERP system, approval process up to GM level will be in the system. It is to be noted that system will not allow a Creator to be a approver either as Sectional Head or HOD/GM. The AR Creator will have to put the ID no. of the Sectional Head /HOD/GM in the AR screen and will have to start the approval process workflow. In case of item that is to be processed by other Dept, same is to be forwarded to the Executing Dept HOD for his scrutiny & consent by putting ID no of the Executing HOD. Once AR creator set the approval process workflow, the respective ARs will flow to Sectional head’s Workplace, followed by HOD and then to Executing HOD where applicable and finally to GM’s Workplace. Concern Executive will go thru the ARs in the workflow folder and shall exercise one of the options - Approve / Reject / Postpone / Keep it Pending for processing at a later time. 7

Planning Department will compile the proposals approved from GM level, and produce hard copies similar to existing Proforma and will put to Appropriate Authorities as per DOP . Finally, after approval of MOP&NG, Planning Dept will convert the approved ARs to Work Breakdown Structure (WBS) element with the same AR coding mask which will be considered as approved Budget head. A Project in the ERP system, comprises of a Work Breakdown Structure which can be of multiple levels, each lower level representing a Job number.

Job no Allotment process :

In the existing system, where single job number is required against a Budget head, Finance Department issues the job number. Where multiple job numbers for one Budget head is required, either user dept provides the cost break-up to Finance dept / or issues job numbers on the basis of cost break-up provided in the Technical justification.

In ERP, from the approved WBS element provided by Planning, (same as the AR number), User / Executing Department will create a 2nd level WBS element adding a Serial number to the WBS element which will represent the job no(s).

(XX.XXXXXX.XXX.01, 02, 03 ---etc) represents the Job nos.

PI.05ASPG.002  WBS element (approved budget head TPT/05/02- office equipment) PI.05ASPG.002.01  Job no with description 45/3601(1 no FAX m/c) PI.05ASPG.002.02  Job no with description 45/3602(1 no Photocopier)

As per the cost break-up asked by the user department, Planning Department will allocate the Job number amount. System will not allow the job number amounts to exceed the approved budget amount. The procurement process like creating PR etc, will require the WBS element (for the job number) .

STO, Goods issue, receipt, Contract services, Service entry sheet etc will have to be processed from these Job no WBS elements. These processes are explained in the MM process note issued separately. A brief description of the different procurement process is given below: a. Direct charge Capital items against job number (WBS element): On receipt of procurement items against PO, MM dept will issue the Capital items directly to WBS element against which PR/PO was attached and will be considered as consumed. b. Non-stock materials procured for Projects: In case the items on receipt will not be consumed immediately or there is possibility of surplus items after completion of project, like say Pipes, Coating-Wrapping materials, valves etc, same has to be processed in the PR as plant stock item instead of Capital item. On Goods Receipt these materials will come into Plant stock. User Dept will then able to receive the materials through STO to their Storage Location (Departmental Go-down). Then through the process of Reservation and Goods Issue, user department can carry out consumption as and when required to WBS element. c. Stock materials: these materials will be procured as normal Plant stock and the User Dept will then able to receive the materials through STO to their Storage Location (Departmental Go-down). Then through the process of Reservation and Goods Issue, user department can carry out consumption as and when required to WBS element.

Review Budget proposal processing :

Review Budget is carried out in Proforma 1 in the existing practice. In ERP same will be identified by Version RE in the WBS elements.

The actual cost incurred till march of the current year are provided by the Finance Dept. Based on the data respective Expenditure are put in the Review budget. Status of budget heads like Closing of job no., Supplementary or surrender etc are also proposed in Review budget. However, for approval of supplementary proposal, separate format is used for each Budget head separately. Proforma-1 reflects merely the status of individual proposal. 8

It is to be noted that in ERP system, cost booking will not be allowed to exceed the Job no WBS element amount. It will therefore be mandatory for user dept to obtain Supplementary budget approval before incurring the actual cost. However, the system has been configured to allow cost to accept upto 10 % increase against overall budget amount.

Supplementary budget requirement for current year: For supplementary amount requirement against a Budget head WBS element in current year say 2005, user dept will copy the cost plan of the WBS element from Version-0 to Version- RE. (Equivalent to supplementary budget format). Additional amount required will be put up as proposal in the Version-RE by the user department. Planning Department will take a print out of the same along with the required papers/adding text in the technical justification. On approval of same by the management, Planning department will put the approved amount to respective WBS element.

Annual Review: For annual Budget Review of the sanctioned WBS elements in 2005 to be proposed in 2006, User Dept will copy all the Budget head WBS elements to RE version in 2005 approval year and will make necessary changes there. Planning Dept will take a print out of the changes in RE version and obtain approval /to put up in annual outlay.

New Capital Item Proposals: Appropriation Requests are to be created by the user departments in version 1 in current year. Care should be taken to create the ARs naming. Planning Department will create a new approval year say 2006 and will provide the approved budget amount against each Budget head WBS elements as carry forward budget. Cost plan, Budget will also be copied to new year as carry forward. Also new proposals put up in Version-1 in 2005 approval year but meant for 2006 will be made available in Version-0 in 2006 for expenditure.

Kindly give wide publicity of the above changes amongst the Executives,employees of your department, so that the change over from the existing system to the ERP system can be done smoothly and effectively.

(SM Hussain) For General Manager (ERP)

GGM All GMs 9 Oil India Limited Duliajan

Ref: ERP(A) /394/2005 Date: 21.11.2005

Head of Department (Geophysics)

Sub: Implementation of ERP in OIL: Changes to existing Processes in Seismic survey

Seismic Survey process : Present practices :

Based on the Forward Seismic Plan and depending on the available resources and capacities/logistics, targets are fixed and the areas/blocks are identified for execution either by internal or external resources. After identification of the blocks and areas for survey for a financial year it is assigned to Party Managers/Contractors. Respective Party managers (2D and 3D) compiles cost estimates in the budget planning in proforma 4A. For carrying out works through contracts , Management approval is taken for the contract values. Department raises the indent and Contracts are awarded through tendering process. Materials required for the parties are procured similarly. All the procured items are kept in the stores of Geophysics department and whenever requirements come from the field parties it delivers to the respective parties. Inventory is maintained by the Geophysics department .

In ERP :

In the ERP system, since Seismic survey is best suited to project system, it will be planned and executed as project. A Project is defined as Goal or objectives that has to achieve within a defined time and having definite start and end date and also contains multiple tasks with start & end dates, require resources like- manpower, money/budget, equipment, etc , involves other Depts. etc.

A project has a hierarchical structure which can be used to analyze cost, budget, target quantity etc. To know the amount of say budget or GLKM etc planned/spent in a financial year for a region on 2D/3D surveys, in various ML/PEL/NEPL areas or in the blocks or areas within these ML/PEL areas, active elements can be created in the ERP project and structured in a hierarchical order. These hierarchical elements together with their levels are called Work Breakdown Structure(WBS), while the elements are called WBS element.

Our Seismic Survey projects will have a 4 level hierarchical structure as follows: 1st Level: Reprsents Region(Assam-AS, Arunachal-AR, NEF etc) 10 2nd Level: Represents Survey Type (2D / 3D) 3rd Level : Represents Block/Area ( e.g Borbil Deroi Block, Digboi areaetc) 4th Level: Represents PEL/ML Area(Moran ML, Borhat PEL etc)

Above structure is an example of Work Break Down Structure(WBS) and the elements like Assam/Rajasthan/AP or 2D/3D , ML/PEL etc are WBS elements. It may be noted that the lowest level ML/PEL although covers a larger area but yet it is kept below or lower than the Block which covers a smaller area. The reason for such structure is to take care of situations where a block falls under more than one ML/PEL areas. Cost can be booked directly to the respective shared areas of the two ML/PEL as per actual.

Although all the objects in the structure are called WBS elements , but the lowest level WBS element normally represents our Job no or Account Assignment WBS element inpost ERP to book cost against task carried out under it. These A/c assgn WBS element will be required to mentioned in bill payment document /Indent/PO etc. Cost booking to a WBS element can be controlled by releasing /non- releasing status.

For each financial year such structure will be created by the regions i.e.- one structure for Assam in 2006-07 , similar way for Rajasthan, AP, Nagaland, NEF etc. In case, the annual target is not completed in a financial year same WBS structure can be maintained for posting costs in the next year. Various Reports will be available in the system to display cost at different levels. The tasks that are performed under survey such as - Reconnaissance survey, Construction of camps, steps in awarding seismic Contracts, indent to receipt of materials like explosives etc can be captured in the system as activities . These activities can be linked in the sequence by which they are executed in a Network . The system will help to schedule the start and end dates of activities. However, duration required to complete an activity shall have to be entered in the system by the Project Manger of each block/areas. If there is a delay in one activity , the subsequent completion date of the project can be predicted for the delay in the Network system. Thus a Network is nothing but a group of Activities linked in sequence and helps to display the flow of work, forecast Completion date etc.

Budgeting/Cost Planning for material, services (both Departmental services & Contract services ), Transport services etc are presently done in Budget proforma 4A-1 for various years. Cost plan for Materials & contracts will be carried out on the WBS element by Cost Element (cost code) .

Above pertains to planning phase of a project. As and when these projects are executed , completion of each activity has to be confirmed either by putting the end date or by duration.

The consumable required for the Area/Block will be required to draw thru the system by providing the A/c assgn WBS elements. There will be various transactions like Reservation, STO, Goods issue , Receipt , Outline Agreement, Service Entry sheet etc. These functions are being explained in the note circulated by MM module.

Once the targeted seismic plan for a particular Block/Area is completed in all respect, its status will be changed to Technically complete(TECO in ERP) . When TECO status is on, cost booking for any new procurement from the WBS element will not be possible, however, outstanding/committed costs can be booked. The status can be reversed depending on the requirement by authorized persons only.

Daily Progress Reports and others :

Daily Progress Report is used to monitor the daily progress of survey performed by each party. This report forms the baseline for further reporting and analysis . Presently, DPRs are 11 prepared in hard copies on daily basis. In ERP, same DPR data entry format will be available in the system screen for data entry. Reports like Weekly, Monthly, Quarterly, Yearly progress will also be available in the system. Project Completion Report will be available by entering party no & date range for all the projects once these are technically closed. Party Wise Explosive Consumption Statement will be available in the system by entering the Party No. and date range in the system screen.

Kindly give wide publicity of the above changes amongst the Executives, employees of your department, so that the change over from the existing system to the ERP system can be done smoothly and effectively.

SM Hussain For General Manager (ERP)

Copy: GGM All GMs