Exchange Agreement in Oil industry achieved through SAP?

[Former Member]

Hi,

Can somebody please ellaborate on the how the exchange agreement process is acheived in SAP?

Steps with transactions would be helpful. Are there multiple scenarions for the same?

Thanks in adavance!

Regards

[Former Member · Accepted solution]

Hi,

In SAP there various types of Aggrement

Buy/Sell aggremnt:- Where two business partner exchange there product and total amount is paid immediately after goods recpt.

Borrow/Loan Aggrement: In this case partner supply the product to his tradings partner customer.

Eg. If Bharat petroleum has godown in Mumbai and HP has in Pune then HP provide fuels to BP customer in Pune and BP provide Fuels to HP customer in Mumbai. Here only exchange fees get settled at end of the month.

For that they have a long term aggrement.

Throughput/terminalling Aggrement: Here You can use third party transaction for exchange the product.

[Former Member]

Hello ,

Hope the Information Below will clear - THE BUILDING EXCHANGE AGREEMENT IN SAP...

Following points should be noted while creating exchanges in SAP,

1. Enter the exchange agreement in SAP (Tcode O3A1--- Create exchange agreement). The SAP exchange agreement consists of an exchange header, one or multiple sales contracts and one or multiple purchase contracts. Exchange agreement has to have both Purchase and Sales contracts. The movement type could be bulk or Rack.

2. The first piece is the exchange header. The exchange header is the agreement number for the contract. The header is what links the exchange receipts and exchange deliveries pieces together

3. The exchange header tells the system whether the agreement is a buy/sell, Terminaling or exchange

4. The header also has some administrative data like the start and end dates for the agreement

5. The second piece is the sales contract(s). The sales contract looks like a normal SAP sales contract and stores the exchange delivery terms of the agreement. Again, the exchange delivery is the product that Chevron is giving to the partner

6. The design calls for one sales/purchase contract for each rack location on the agreement. All bulk locations will be on the same contract

7. The sales contract contains information such as the materials to be delivered, the mode of transportation, locations to deliver from, pricing data

8. This would include creating the condition records which is a transaction code outside of the create contract transaction (Tcode for creating Sales Condition is VK11, use appropriate key combination)

9. The third piece is the purchase contract(s). The purchase contract looks like a normal SAP purchase contract and stores the exchange receipt terms of the agreement. Again, the exchange receipt is the product that Chevron is getting from the partner

10. The purchase contract contains information such as the materials to be received, the mode of transportation, locations to receive from, and pricing data

11. This would include creating the condition records which is a transaction code outside of the create contract transaction (Tcode for creating Purchase condition is MEK1, use appropriate key combination)

12. In order for the differentials to calculate properly the condition types need to be entered on the sales and purchase contracts

13. When creating the sales and purchase contracts make sure that the condition records are being recognized and pulled into the documents

14. Process orders in SAP.

Thanks,

Amit c kulkarni.

[Former Member]

Currently I looking into Exchange Plan software where they are picking only SALES type of contract for their planing. Why they are doing so. Any business functionality behind it?

[Former Member]

IS-OIL functionality establishes a link between sales and purchase contracts by means of the Exchange Agreement. It is an agreement between two oil companies (exchange partners) on the trading of product at different locations. Exchange usually refers to a long term agreement between companies (exchange partners) where one party will make available certain products at certain locations in exchange for like or unlike products at various other locations where the other party may not have refining facilities

The exchange agreement also entitles the customer of an exchange partner to

lift product from own location. It is possible to group several purchase and sales contracts in a single exchange agreement.

Buy/Sell Agreements:

Is an agreement between two companies to purchase or sell product (Buy/Sell Agreement). In this type of agreement there is a product charge as well as other taxes and fees associated with the sale or purchase of the product. Product is purchased or sold and settled on an individual transaction basis. Accounting entries are the same for buy/sell transactions as for stand alone purchase or sales. Typically a buy/sell agreement is done when there is an economic reason to receive and deliver approximately the same volumes at two locations. Creating a buy/sell agreement allows for the ease of tracking the receipt verses the delivery.

Borrow and Loans:

Borrow/Loan Agreement is the SAP term used synonymously with Exchange agreement.

Borrow/Loan refers to an arrangement whereby one party borrows or loans product with another party outside of a standing arrangement. These type of transactions normally occur in times of crises where repayment may not necessarily physically take place at the same depot. Difference is that the product changes ownership.

Throughput/Terminaling Agreements:

The product inventory is owned by Company who is using this type of agrrement, but the facility is owned by the 3rd party and COmpany(owner) is purchasing throughput/storage services represented by the various fees paid to the partner. The product is owned by the 3rd party, but the facility is owned by company

[Former Member]

I'm also not very strong on Exchanges. this link may help you

http://help.sap.com/saphelp_erp2005/helpdata/en/4d/85bd57ed152f4aa12146e391fd5999/frameset.htm

//Kiran