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Optimising downstream operations

Hydrocarbon Engineering,

Oil and gas companies are faced with a number of challenges and difficult decisions when it comes to planning their downstream operations. These include the turbulent international and local political climates, changes in market supply and the subsequent price volatility of gas and derived products’ markets. The real time global connectedness of those international markets also poses problems as well as the variable demand both across and within the developing and developed economies. These modern day challenges give rise to the need for a new approach to the planning and optimisation of oil and gas companies.

Senior management are responsible to take care of long term strategic, as well as real time decision making on a daily basis, against this macro environmental backdrop that could result in huge profits or losses for the business. Analysing these market changes will help businesses predict potential risks and make decisions. However, decisions should be made using with a complete understanding of its supply chain operations, including where latent potential hides within downstream operations and how to unlock this potential in order to benefit from market forces such a price fluctuations.

Oil and gas companies are not unfamiliar with the concept of planning and optimisation. However, they have historically applied it locally, applying it to individual parts of the downstream chain. Optimising stages individually, has often led to impressive results within each unit, but ultimately this approach has prevented companies from getting the maximum benefit out of the whole stream as there is a lack of visibility across the value chain.

Oil and gas firms are turning to supply chain planning and optimisation specialists to provide innovative planning and optimisation solutions which allow them to consider the entire value chain as a whole, including the various production stages of the downstream as well as complete upstream process regardless if these stages are managed by different companies. By looking at each of these processes individually and then as a whole, oil and gas firms are able to achieve operation efficiency across the entire process, with no loss of granular detail at any point along the chain.

Quintiq is a supply chain planning and optimisation specialist that operates in the oil and gas industry. In the last decade it has worked with leading oil and gas providers in the Middle east. Its innovation lies in its ability to calculate many different industry factors such as delivery and contractual commitment, production schedules, price fluctuations and indeed all constraints which affect downstream planning processes such as demand; sales and operations; inventory management, annual delivery and distribution. Its many oil and gas customers have a unique confidence to make informed decisions with real time data of its complete business operations.

Maximising profit margins while minimising operating and capital costs in today’s volatile global marketplace remains the core objective at every stage of operation. Optimisation has made a significant (positive) impact to the decision making process and subsequently profit margins.Given the nature of the industry and the ever changing and unpredictable backdrop of industry, political and environmental forces, taking control and optimising downstream operations makes perfect sense.

Written by Ian Tootell, Senior AccountExecutive, Quintiq's Oil & Gas Unit. 

Edited by Claira Lloyd

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