Point of View

Greater efficiency, lower costs: how tech can transform oil and gas logistics


As I write this, WTI is at US$85 and Brent is at US$90 a barrel [1]. With those kinds of prices, it is easy to forget the pressure to control costs and show improved returns.

But we all know that this pressure isn't going away. The difficulties of attracting new investment put cost control and reduction permanently on the agenda for the long term [2]. Also more cost optimization strategies are required, instead of short term cost reduction initiatives to ensure sustainable operations in the long run.

With drilling costs rising [3] and labour shortages looming [4], oil and gas producers need to find ways to make their fields more efficient and productive. Logistics is a major item that tops most cost optimization themes and operators looks for many avenues to get the logistics optimized and make outcomes more predictable.

One way to do this is by using the latest technology to optimize the operations, streamline logistics process and ultimately bring down the costs drastically. This involves optimizing the end-to-end logistics including everything from workforce logistics, material logistics, s people-on-board and accommodation management for covering both onshore and offshore operations. 

What challenges can technology help you overcome?

Anyone running a large oil or gas extraction site knows how complex and challenging it can be to ensure that the right people and materials are always exactly where they need to be.

Often, there isn't a single system in which operators can see every stage and relevant detail of either the people or material supply chains. And there certainly isn't a single pane of glass in which they can check all the relevant details that enable and optimize these supply chains.

Has everyone got the right, up-to-date, travel documents? Have sufficient boats or helicopters been planned into the schedule for the necessary re-supply trips? Have the different loads been prioritised properly? Have all requirements been captured?

No one wants to hand in accounts for the quarter showing that transport costs were 10% higher than planned, or that production suffered because key staff weren't on site when planned. The goal is to have logistics and travel planned and streamlined not just for the next shift pattern, but for months and even years ahead — with a system flexible enough to dynamically accommodate new variables and demands as they arrive, so you can always maintain peak performance.

So, what can technology do to help?

A single interface for all site logistics

The latest oil and gas logistics platforms offer a single interface, through which planners can see all of their ongoing and planned supply operations. At a glance, they know what resources they have available, who and what is being moved, and which loads have the highest priority.

If we're talking about people, this would mean being able to see at a glance, which scheduled flights and other providers staff were booked to travel with. But it also means having an instant overview of travel and other relevant requirements for everyone who need to travel to and from sites or between sites, taking into account all relevant regulatory, legal and jurisdictional requirements.

Has everyone got up-to-date visas, passports and other relevant certifications (their BOSIET certification, for instance, or an up-to-date offshore medical certificate)? If not, the platform should be able to alert both the staff member and relevant managers, so the matter is dealt with long before the planned travel date.

Digitization can also help improve the effectiveness of materials logistics. At its most basic, digitizing the supply chain through a modern logistics platform captures all the resources — helicopters, boats, personnel and so on — available to the logistics manager. It also captures the nature, urgency and turnaround time for all required supply shipments. Any good platform should also take into consideration logistics constraints on weather, disruptions, HSE compliance etc,

Using AI, the system can then help the logistics manager precisely match resources to need in a way that maximizes efficiency but also — for instance by increasing vehicle utilisation — whether the vehicle in question is a helicopter, a boat, a truck or something else entirely — and planning routes to minimise redundancy — cuts both the costs and the emissions associated with oil and gas logistics operations.

Even this isn't the end of the potential gains oil and gas operators can realise by digitising their end-to-end logistics operations. The next generation of oil-and-gas logistics platforms will interface with all the databases and other sources of information relevant to transport and logistics.

For example, the logistics platform might connect to the systems running predictive maintenance, staffing, catering, medical care — and so on. Based on a range of inputs, including planned needs but also historical baselines and predicted future turnovers of maintenance parts, staff and other loads, the logistics platform would use AI to create an optimised logistics plan across all sites and different domains (people, materials, etc.)

Using continually updated information on current and planned needs, as well as historical baseline data, the logistics platform would help schedulers constantly optimize to deliver the best possible balance of cost, availability and performance.

By implementing a modern, end-to-end integrated logistics platform now, operators not only reap the benefits of greater efficiency and cost control today. They also put themselves on the path for integrated logistics planning and predictive maintenance and scheduling tomorrow.

What next?

IBS Software is a leading SaaS solutions provider to the energy industry globally, managing mission-critical operations for customers in the oil and gas sector. Using platforms such as IBS iLogistics, oil and gas operators can realise a near-instant increase in efficiency and cost effectiveness, while also putting themselves on the fastest-possible adoption path for the innovations of tomorrow.

Find out how IBS Software can help you develop the best practices and implement the technologies you need to streamline and optimise your human and material logistics operations.


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