Chris Welsh presented OFS Portal’s activity to date and its likely evolution towards an Energy Supply Chain Network. OFS Portal was established in 2000 by a group of some 20 oilfield services companies*. The organization provides a standard legal framework for interoperability and digital integration to over 500 oil companies with connections to some 45 e-commerce networks. OFS Portal provides a standard catalog process (leveraging J-Catalog from OpusCapita), transaction management (with PIDX standards) and government e-invoicing with Edicom. On the subject of emissions reporting, OFS Portal is working with the PIDX ETDX workgroup to syndicate content as a catalog service. There are two approaches to emissions monitoring, ‘top-down’, rough-and-ready estimates using industry averages and ‘bottom-up’ using measurements from operations. [For more on the subject, see our report from the PIDX 2022 European Conference: Journey to Net-Zero]. The plan is to move from today’s predominantly top-down reporting to more detailed bottom-up line-item reporting by 2030. Meanwhile, a lot is going on in the e-commerce space outside of oil and gas. Some four e-commerce networks have consolidated in different geographies as follows Peppol, EESPA, EIN (all in the EU) and BPC (US). A move is now afoot to ensure interoperability with a Global Interoperability Framework (GIF). GIF is currently a talking shop but the ultimate aim is to leverage common building blocks to connect the networks. To integrate with the GIF movement, Welsh proposes a new Energy Supply Chain Network (ESCN), leveraging PIDX as an entry point to the non oil and gas e-business networks. The ESCN will provide a legal framework for oil and gas content publishing, catalog management, e-invoicing, tax and emissions reporting and a point of connection between oil and gas and the GIF community.
* OFS Portal is now supported by its members Baker Hughes, SLB, Halliburton, Weatherford, Select Energy Solutions and Well Integrity Solutions.
Todd Albers (Federal Reserve Bank of Minneapolis) provided an update from the Business Payments Coalition (BPC) and set out a roadmap to a future ‘B2B Digital Highway’. Currently, in the US, 75% of invoice delivery and processing is manual. This is costly, and hampers e-payment adoption. Some 40% of B2B payments are by check. The Business Payments Coalition started in 2011 as an industry forum that brings all stakeholders together to drive end-to-end B2B payment processing efficiency. This has led to the Exchange Framework Initiative, an operational B2B exchange framework for the US to kick-off in 2023. Longer term, the BPC/EFI will support the delivery of electronic payment and supply chain documents.
Andrew Mercer presented Baringa’s solution* for oil and gas emissions management (EM). Climate change represents an existential risk to oil and gas. Industry is under pressure from society and the regulator. Investors need to model long term climate risk. Baringa scores fossil fuel producers based on their current implied warming temperature and the changes to their business model required to align with a 1.5° target. Thus a coal producer might have a 4.5° current score that would need a 95% cut in output for 1.5°. Baringa’s scorecard for the major oils shows ENI, Repsol, TotalEnergies and BP as leaders, thanks to their announced oil production cuts. Devon, Pioneer, Suncor and ExxonMobil come last, with no reduction. But all claim net zero by 2050! As Mercer puts it, ‘there is a high degree of variance in emissions reporting across the sector, pointing to underlying issues and inconsistencies in the boundaries and methodologies applied’. The US Inflation reduction act has increases the urgency to overhaul emissions measurement, with a $900/ton (rising to $1,500) penalty on excess methane. Methane emissions measurement and reporting systems may need to be rebuilt to accommodate the new requirements. On the plus side, there is a ‘hefty carrot’ for carbon capture and biofuels.
* Baringa’s Aladdin Climate was acquired by Blackrock in 2021. Aladdin assesses climate risk, informs capital allocation, loan approvals, and portfolio monitoring and reporting in response to regulatory and investor pressures.
Charles Bryant provided more information on the Global Interoperability Framework. The GIF includes recommended practices, policies, standards and guidelines to connect existing e-business networks from EESPA, Peppol, Connect Once and BPC. The GIF recommended practices document version 1.0 was published in 2020 and is a free download. Peppol, the GIF ‘pioneer’ offers mature solutions across numerous markets and recently delivered streamlined agreements and a continuous transaction control solution for fiscal reporting. As Chris Welsh mentioned above, Connect ONCE/OFS Portal is evaluating a GIF-compliant Energy Supply Chain Network.
Ahti Allikas (OpusCapita) presented on GIF implementation in Peppol, the business network that is managed by the OpenPeppol not-for-profit, member-led international association. Peppol was launched in 2008 and OpenPeppol established in 2012. Peppol provides standard messaging, a discovery mechanism and delivery in AS4 format. More from Peppol and watch the SPDM ‘All about Peppol’ presentation by Tormod Tønnesen (Offshore Norge) and André Hoddevik, (EU OpenPeppol).
Arne Johan Larsen presented Equinor’s strategy for B2B interaction. Equinor was an early adopter of e-business-to-business transactions. Over 20 years ago, Equinor and other operators started the Trade-Ranger industry initiative. [Trade Ranger was acquired by Hubwoo (now Proactis) in the early noughties]. A 2015 initiative to reduce administration costs in Europe saw Equinor leverage the Peppol format and eDelivery infrastructure as ‘the fastest and easiest to implement for both Equinor and suppliers’. A solution was in production in under three months. Equinor is now looking to realize ‘touchless’ digital interaction with its suppliers covering electronic purchase orders, order confirmations, advance shipping and more. For an oil and gas operator, a substantial amount of procurement is not related to oil and gas, like general consumables, IT equipment, consultancy hire, etc.. Hence the interest in the emerging Global Interoperability Framework Model and the Oasis Universal Business Language (UBL) and a ‘Four corner*’ eDelivery model. Equinor has already implemented several ordering and invoicing functions including a blockchain/smart contracts application for automated service approval. This is to replacing field tickets and manual verification. Equinor is porting Peppol functionality to the US Exchange Framework and is inviting suppliers and partners to join it in the ongoing BPC’s E-invoice Exchange Market Pilot
* More on the ‘Four corner model’ here.
The OFS Portal event also heard from service providers DocStudio (Scope 3 Emissions Reporting), Sovos Saphety (multi-exchange B2B) and Halliburton, which used third part supplier EDICOM to validate and format PIDX XML invoices for submission to tax authorities.
More from OFS Portal.
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