Oil and gas companies must move to the latest digital technologies to add transparency to their supply chains. In this way, they can improve operational and eco-efficiency.
Digital transformation of the supply chain reduces process costs and increases sales. While many industries have enjoyed these benefits, the oil and gas industry is on a journey to adopt digital technologies such as:
- Cloud computing
- Advanced analytics
- Artificial intelligence (AI)
The oil and gas industry can also achieve similar results. But now, it’s in the early stages.
If today’s e-commerce market were to function with this lack of inventory visibility and friction, there would be a fraction of $9 trillion. This is the bitter reality today for oil and gas supply chains.
There are a few dominant players in the oil and gas industry. But the reality is that the industry is made up of thousands of smaller players.
- They either drill for oil and gas from wells (producers) or via pipelines.
- They transport goods from remote locations to market hubs and refineries (mid streamers) or refine crude oil into petroleum products.
- They use them as fuels and feedstocks to manufacture chemical products (refineries).
As a result, commodities can change ownership up to 11 times as they move through the supply chain from source to refinery.
Errors in measurements:
A bigger challenge is the usability of existing inventory data. Energy companies make many measurements of raw material quality and quantity at various points in the supply chain. However, due to the cost of data transfer, data has traditionally been sequestered at remote manufacturing sites.
Data is also “chaotic” than in any other industry. This typically includes sensor contamination and uncalibrated errors caused by measurements taken at great distances by scientists using sophisticated scientific instruments.
Finally, while it is technically possible to measure some inventory characteristics, this may not be practical. Either the equipment is too expensive for widespread use, or the lack of qualified field service personnel to maintain the equipment makes it impractical. The result is gaps in inventory data.
In short, there is no complete, accurate, and verifiable system for recording inventory in this complex supply chain.
A universal data layer for the oil and gas industry
To modernize the management of oil and gas supply chains, companies can leverage technologies and approaches that have transformed other industries. For example, most warehouses and distribution centres continuously send up-to-date inventory data to a central repository.
Similarly, oil and gas companies can now use high-speed 5G broadband to cost-effectively connect remote facilities that previously relied on expensive and slow satellite data links.
Four Steps of data collection:
Additionally, data is consolidated into a single repository in the cloud for easy access. The first step is monetization. However, oil and gas inventory data presents unique challenges and requires four specific steps to make the data actionable.
- First, organizations must collect data directly from native data sources. This includes unstructured data in paper form, spreadsheets, databases, and data formats from SCADA (Supervisory Control and Data Acquisition) systems. Forcing energy companies to engage in data engineering and transform bespoke data into standardized formats creates significant friction points.
- Next, you must validate your data and correct any erroneous sensor readings or manual entry errors.
- Third, you will need to supplement your data to fill in the gaps. Users also add third-party data, such as market prices, to help discover additional insights.
- Finally, data structures must be auditable so external parties such as customers, partners, investors, and regulators can trust them.
To accomplish these four steps, energy companies must combine data engineering, data science, and physical science to address the unique challenges of oil and gas supply chain inventory data.
The result of these four steps is a universal data layer that can serve as a single source of truth for various business functions to develop top insights and recommended actions.
More efficient supply chain
A complete, accurate, and auditable inventory record of the oil and gas supply chain can bring economic and environmental benefits to a business.
Energy companies’ trading teams can now fully market the value of their product attributes and transact transparently and efficiently. Producers who use analytics to identify potential buyers for their crude and natural gas compositions can demand higher prices. Based on market demand, buyers can now dynamically blend raw materials to produce blends that yield the best margins.
Role of operational teams:
Operations teams can improve the efficiency and effectiveness of handling and transporting goods to execute transactions. With better inventory levels and attribute visibility, facilities can operate at higher throughput and consistently produce higher yields. Additionally, out-of-spec products, a traditional source of hidden margin losses, can now be rejected before companies store them.
Finally, energy companies can reduce the environmental impact of oil and gas production, transportation, and processing. Oil and gas supply chain companies can mitigate these fugitive emissions by understanding the sources and locations of “product loss” in the form of greenhouse gas emissions (such as methane and carbon dioxide).
Demand for “green” energy commodities is rising. It is enabling energy companies to generate new revenues from responsibly sourced products. As part of the energy transition, oil and gas companies must improve operational and environmental efficiency.
The energy industry has an opportunity to adopt the latest and proven digital technologies and practices that can increase supply chain transparency and unlock new sources of financial and environmental, social, and governance (ESG) value.
Prismecs Oil and Gas Supply Chain Services:
Prismecs has built a team with the diverse experience that E&P teams need to get the job done right. No part is too small or complicated for our power generation and supply chain specialists.
Our geoscientists and petroleum engineers provide oilfield services at the level required for E&P operations, including professional trading services. So, call us today at 18887747432 for the most efficient supply chain services in the oil and gas field!
Whatever your service needs, our goal is to optimize your efficiency, uptime, and operational productivity. Prismecs enables smarter operations across all oil sectors from Angola to the Permian Basin. You can also write us your queries at firstname.lastname@example.org