Logistics plays a vital and extremely complex role within the oil and gas industry. The role of logistics is more important to the oil and gas industry than it is to any other sector or industry. Logistics in the oil and gas industry involves strict compliance to regulations, adherence to extensive safety procedures, the use of special equipment, and the use of multiple modes.
Logistics is especially important in the oil and gas industry because of its financial vulnerability in the event of complications. In addition, the oil and gas industry is arguably the world’s most important on a macroeconomic basis; some countries predicate much of or even almost all of their national revenue on this industry. The industry depends on the timely delivery of materials in order to stave off severe ramifications.
Logistics in the Oil and Gas Industry
Logistics in the oil and gas industry is primarily focused on the reduction of costs and the improvement of core business functions. Logistics suppliers which are specialized in this sector usually enable oil and gas businesses to gain access to desired talent and technology. However, it is often challenging for these businesses to gain such access because resources are becoming scarcer, the industry tends to operate in remote locations with difficult environmental conditions, and physical and financial risks are extremely high.
Logistics specialists who have much expertise in the oil and gas sector will be able to fully understand the industry’s unique needs and challenges. By working closely with customers, they will be able to help customers optimize the intricate supply chains of the industry. Through this improved management of logistics-related matters, the associated oil and gas companies will become more able to focus on their core activities.
This high level of industrial importance is a key reason why logistics students should consider entering the oil and gas industry. The industry is perpetually in need of people skilled in all matters related to logistics. Someone with considerable knowledge of logistics understands much about upstream supply, explorations, and operational onsite services. These are areas which are important for any oil and gas business. Therefore, by managing the entire supply chain, a logistics expert will ensure that these crucial energy products reach customers as and when desired.
Logistics Services in the Oil and Gas Industry
The logistics services which are performed in the oil and gas industry serve oil and gas businesses in any location and of any size. Some of the key logistics services for oil and gas businesses include packing, domestic distribution, heavy lift services, order management, and even export customs clearance.
Providers of logistics services in the oil and gas industry must also become familiar with integrated IT systems. They are important tools for handling and monitoring the delivery of all goods. Through these systems, those involved in logistics will be able to perform services such as chartering, warehousing, and cargo management. Clients will be able to know about the status of the goods they will receive through proper use of these systems.
All logistics services ought to fulfill international standards such as ISO 9001, ISO 14001, and ISO 45001. Given the physical volatility of oil and gas products, it is crucial that these standards are met. A competent logistics graduate will ensure that these services meet such standards, allowing services to go exactly according to plan and facilitating the smooth and timely delivery of oil and gas products.
Logistics Activities for Different Operation Types
Logistics students who plan on entering the oil and gas industry ought to know that logistics activities within it can be divided into two distinct categories. These categories are related to traditional operations and exploratory operations. Traditional operations involve the use of vertically-built wells and rigs while exploratory operations involve the use of hydraulic fracturing, also known as fracking.
The main logistics activities related to traditional oil and gas operations are trucking and warehousing. Often, logistics providers work with oil and gas producers’ exploration and production teams at a particular site to coordinate production. They also audit incidents and help local carriers adhere to safety and regulatory compliance requirements. Many oil and gas companies prefer to use local carriers instead of large contractors for greater cost efficiency. Due to the complexity involved, some large oil and gas sites utilize dozens of logistics providers at the same time.
Most of the logistics activities surrounding exploratory operations involve sourcing and organizing the assets required for extraction. This is because fracking is an extremely complex and costly process. The extraction of oil and gas by way of fracking requires horizontal drilling, charging the fueling mechanism to create fractures, and inserting much sand and water to open the fractures and thus retrieve the oil or gas within them. Logistics providers must find ways to mobilize large and expensive pieces of equipment so that a site can be prepared for fracking.
Despite the challenges associated with these logistics activities, logistics students should not be overly concerned about them. Any reputable degree or diploma programme will provide a logistics student with all the information and knowledge required to succeed when working with either traditional or exploratory oil and gas operations. Thus, a logistics graduate can face the issues which lie ahead with confidence.
Ranaco Education & Training Institute’s Diploma in Logistic & Supply Chain
Should you be planning to study logistics, Ranaco Education & Training Institute offers the Diploma in Logistic & Supply Chain programme. This course lasts for two years and six months providing graduates with fundamental knowledge about logistics and its role in the delivery and supply of all goods – including those in the oil and gas industry. Logistics methods and strategies are also covered in great detail.
The opportunity for an excellent logistics career in oil and gas awaits you. Do consider joining us – we would truly enjoy having you here as a student.