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System Expected to Reduce Costs, Improve Competitiveness

PR 331 / 3 October 1997

Oracle Corp. has announced that Shell Exploration & Production company, a
division of Shell Oil Company, has gone live and completed its second
month's close on the Oracle Energy Upstream application suite. Oracle
Energy Upstream, an integrated suite of business software applications
specifically designed for the oil and gas exploration & production, trading
and transportation industries, is expected to help Shell reduce costs
through process improvements while improving flexibility, accuracy and data
access. Shell Services Company, with the assistance of Oracle Consulting
Services, has implemented the system in New Orleans and Houston for more
than 30 offshore platforms in the Gulf of Mexico and plans to roll out the
system to some 20 additional onshore locations.

Shell selected Oracle because it provides a vendor-supported set of
industry-tailored applications with the flexibility to handle rapidly
changing business conditions. Shell, like most of the industry, has been
using legacy systems designed thirty years ago when much of the industry
was regulated, including prices. Today, in the free market, prices
fluctuate on a daily basis and competition has increased while margins have
decreased in the face of rising cost and price pressures. Oracle Energy
Upstream provides Shell with online access to information it needs to react
quickly to changing business conditions to maintain profitability in the
oil and gas commodity business environment.

Shell Services Uses New System to Reduce Costs, Solve Year 2000 Problems
Shell Services' Oil and Gas Financial Services practice, E&P's accounting
outsourcer, expects Oracle Energy Upstream to help reduce costs through
substantial process improvements as well as the additional flexibility to
have more of the business reflected in the software, so staff can focus on
higher-value tasks. For example, the legacy systems handled oil accounting
separately from gas accounting, necessitating separate accountants for each.

Oracle Energy Upstream allows Shell to merge those processes so a single
accountant can handle an entire field. Oracle Energy Upstream also allows
flexibility in setting up complex business rules to enable such practices
as multi-tier pricing. In addition, Oracle Energy Upstream is Year 2000
compliant, sparing Shell the cost and effort of upgrading its legacy
systems for the millennium. Long term, Shell looks forward to the
capability to provide Oracle Energy Upstream over the Web to enable easy
access to the applications from any location, no matter how remote.

Improved Efficiency and Data Integrity; Better Decision Making
Shell also expects Oracle Energy Upstream to improve the efficiency and
data integrity of its systems. Because Shell's previous legacy systems
were relatively inflexible, organisational changes were difficult to
implement, and many processes had to be handled manually using spreadsheets
and multiple copies of data that had to be kept reconciled. Oracle Energy
Upstream improves data access and accuracy through the use of a single
integrated database for all data input and storage. The system also
provides validation of input data, automatic data conversion among multiple
units of measure, and automated processing for prior-period adjustments.

By moving from the mainframe to client/server, Shell is also moving from a
batch environment to a more integrated online environment. Instead of
being driven by a schedule, accountants now have the flexibility to operate
on their own time and can run "what if" scenarios to test the effects of
changing business rules on revenue. Individual oil fields can run their
data independently of all the other fields if they need information quickly.

"What we're trying to do is make the skills more generic so we don't have
the added expense, time and effort of training somebody with some very
specific capability that they would not need anywhere else," said Terry
Morgan, Oil & Gas Financial Services Manager, Shell Services Company.
Claude Pichot, Project Manager, Shell Exploration & Production Company,
added: "As the industry moves off legacy systems to client/server, we have
every expectation that Oracle Energy Upstream will continue to be on the
leading edge."

Shell Services Company is an entirely separate company within the family of
Shell Oil companies, providing a full array of business process operations
and consulting for the energy industry. Shell Services' Oil and Gas
Financial Services practice (EnForm), using the Oracle application suite,
offers complete oil and gas financial process solutions for the energy
companies and has proven to be one of the most cost effective oil and gas
financial service providers in the industry as defined by recent API
measurements.

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