The oil and gas industry operates through an expansive, global supply chain. It includes both domestic and international ordering, shipping, trading, transport, as well as inventory control and visibility. This involves many other supply chain elements, including material handling, distribution of refined energy products, and import/export facilities. An experienced professional in the field, Paul Favret mentions that the oil and gas supply chain is broadly divided into three segments. While the upstream segment is responsible for finding and producing natural and crude oil, it is the midstream segment that is responsible for handing over the storing, processing, and transportation of energy commodities. The downstream segment additionally features natural gas distribution companies, oil refineries, and more.
Paul Favret briefly mentions the digitization of oil and gas industry supply chain
Owing to the several complex steps associated with energy logistics, transportation, and processing, the oil and gas supply chain can be a bit complicated. However, it is important to make improvements in it owing to the rising global competition.
The operations of diverse streams of oil and gas production can be enhanced by technologies like
- Internet of Things (IoT),
- and even blockchain, among others.
For instance, digital systems can be useful in
- mitigating risks,
- optimizing warehouse inventory strategies,
- monitoring the logistics of transportation,
- boosting the customer experience,
as well as aiding to make sure that the best possible procurement processes are in place.
The oil and gas sector has a long term and large scale impact of Digitalization. As emerging technologies provide ways to connect supply chains, facilitate cost savings and boost productivity. With the pressure from environmental concerns and the post pandemic need to future proof industries, while simultaneously ensuring economic security, digitalization can be an effective solution for balancing productivity with both environmental and financial gain.
Internet of things, digital twins, blockchain, and data analytics are being highlighted as technologies. That would be able to streamline downstream oil and gas supply chains in particular, while cutting down emissions and costs involved in the process. On the other hand, new exploration tools and autonomous machines are answering questions of how to access elusive deposits in upstream operations.
Even though the oil and gas sector has traditionally depended on fundamental logistics activities like warehousing and trucking, their supply chains have become considerably complex with growth in operations. Paul Favret says that this invariably brings a new set of challenges. Paul is an accomplished oil and gas executive. He underlines that with its growing complexity, the sector needs to ramp up. Its processes in terms of production, exploration, and refinement activity. Digitalization can be the answer to addressing the broad scope of challenges. Associated with the oil and gas supply chain, so that it can become a well-oiled machine. Harnessing digital solutions in oil and gas supply chains will provide significant returns. For instance, operators can use remote sensor imaging to accurately analyze more areas.