Logistics and Operations for Oil and Gas

Running head: LOGISTICS AND OPERATIONS FOR OIL AND GAS
LOGISTICS AND OPERATIONS FOR OIL AND GAS
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2LOGISTICS AND OPERATIONS FOR OIL AND GAS
Table of Contents
1. Logistics and Operational Management Challenges..............................................................3
1.1 Cutting the Transportation costs.......................................................................................3
1.2 Processing large quantity of information.........................................................................3
1.3 Segmented and Customised Servicing.............................................................................4
1.4 Manpower management and regulations..........................................................................4
2. Service provision of potential competitors in the Indian downstream sector........................5
3. Challenges linked to the design and delivery of the services offered by the Competitors....6
4. Supply chain economic and environmental performance of Reliance Petroleum.................7
5. Implications for HR management by Aramco in India..........................................................9
Reference List..........................................................................................................................12

3LOGISTICS AND OPERATIONS FOR OIL AND GAS
1. Logistics and Operational Management Challenges
The logistic and operational challenges that Saudi Aramco is likely to face in the
Indian downstream market are the follows:
1.1 Cutting the Transportation costs
The constant and steady growth of the fuel prices in indigenous market of India have
increased the supply chain management pricing. The supplying partners in the oil and Gas
sector now demands 15% higher payment in comparison to the was demanded 5 to 7 years
earlier. As identified by Kelland (2014), the price of transportation fuel have also increased
by 10% approximately over the last 5 years. In companion with that, the indexes of peaking
inflation works in tandem to increase the daily transportation costs in India. In the initial
phase, setting up a logistics platform including rail, ocean, and rail as well as air routes is
difficult and expensive also. This is why logistics managers have to remain well informed
about the current as well as the future orders in order to avoid the surcharges owing to urgent
deliveries (Raut, Narkhede and Gardas 2017). The cost related to transportation that Saudi
Aramco have to bear in the Indian market includes cost of maintaining a large fleet of
vehicles for delivery, cost of salaries for large number of drivers and freight management
staff, along with the on road charges and other freight related taxes.
1.2 Processing large quantity of information
In order to ensure smooth operation of the logistics network, the mangers of logistics
have to maintain a high level database including dates, volume and payment of the big array
of freight vehicles transporting oil in their favour. As Badiru and Osisanya (2016), informs,
the position of the drill in Maharashtra is situated near the coast line. Hence, the company can
use the vessels for distribution along the Western coastal states. However in east and South,
they have to use land and air routes for transmission only. Hence, the logistics management

4LOGISTICS AND OPERATIONS FOR OIL AND GAS
body of the organisation have to deal with the safety of their indigenous as well as out-
sourced staff associated with logistics, keep track of the loading and unloading of the fleet as
well as check the route maps for the shortest distance delivery. In India, Kanikdale and
Venugopal (2015), opines that last mile delivery is a big concern as communication with the
oil reserves that are mainly located in the outskirts is very difficult in India. Hence, mapping
and scouting of delivery requires a lot of resources in India. In this context, Bildirici and
Bakirtas (2014), states that the sanctioning of fuel bills for every organisation with which
they deals is very important. This requires a large quantity of manual attention and continued
labour.
1.3 Segmented and Customised Servicing
Market management is gradually becoming a multi-layered affair in India. Most of the
organisations and smaller networks as well, are using multiple supply chain. As an outcome,
one significant task of the managers is to have a database as well as understanding developed
of the major trends that is being followed in the country regarding contracting and selecting
oil and gas partners. In this context, Mitchell and Mitchell (2014), mentions that in the Indian
market, the oil and gas supply partners have ties with large corporations for providing
personalised supply. Saudi Aramco should have such potential market contracts since this
would increase their brand value as suppliers of oil and gas.
1.4 Manpower management and regulations
Managing the manpower is one of the trickiest affairs for an oil and gas corporation
that is trying to penetrate the market. Having essentially human approach towards the Indian
employees is very essential as pertaining to various parts of the country, they are adapted to
various patterns of work culture. In case if they are not treated with compassion and