BHP Billiton switches on new payment system

Mining and resources giant BHP Billiton has implemented a new electronic invoicing solution for oil and gas upstream services based on the American Petroleum Institute's (API) Petroleum Industry Data Exchange (PIDX) standards.

The new system, from Quadrem, connects directly to BHP Billiton Petroleum's SAP system, and enables the oil and gas operator to pay invoices faster while complying with corporate contracts, according to the company.

Yusuf Dalal, BHP Billiton Petroleum's world drilling finance advisor, said the company is dramatically reducing the time it takes for engineers to reconcile invoices without having to make significant changes to business processes.

"Additionally, Quadrem's automatic download to SAP eliminates five to six business days of work at the front-end of the procure-to-pay process," Dalal said. "These and other efficiencies, including the time saved using electronic delivery rather than regular mail, are enabling us to make important process improvements and compress payment cycles."

Dalal said BHP Billiton began meeting its goals within the first month after implementation.

BHP Billiton Petroleum began piloting the invoicing solution in October with customers Schlumberger and Halliburton, which were directly integrated end-to-end, and GlobalSantaFe, which used a supplier's Web portal. After seeing successful results during the pilot phase, BHP Billiton Petroleum aims to bring on 75 suppliers in the Gulf of Mexico.

Additionally, the company is evaluating a rollout of the invoicing solution to its operations in Australia, Trinidad, and the UK.

Using the solution, suppliers receive orders for services from BHP Billiton Petroleum's SAP system and send invoices through the Quadrem platform, leveraging a central catalogue of approved service items. The invoice is stored in the platform and a "proforma invoice" is sent to BHP Billiton Petroleum.

Once the proforma invoice is approved, the platform releases the invoice, which is automatically loaded into BHP Billiton Petroleum's SAP system for final payment. According to Quadrem, payment approval cycles are traditionally inefficient for oil and gas companies, because upstream services involve so many variables. Other functionality includes attachments and discrepancy reporting for both planned and unplanned items, and an audit trail for all changes, approvals and discrepancies.

Quadrem CEO Charles Jackson said BHP Billiton has been an important customer "for years, on the mining side", and has experience with its ability to deploy effective supply chain solutions globally.

"As we've expanded our offering to the oil and gas industry, they and their suppliers have been instrumental in helping us resolve the challenges of complex services procurement that are common in oil and gas," Jackson said. "We've developed a solution that works with and builds upon BHP Billiton's SAP infrastructure."

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