Challenges in Digital Transformation of Oil and Gas Supply Chains

The rapid evolution of information technology has significantly impacted industries worldwide, including the oil and gas sector. BP, a major player in this field, has been at the forefront of integrating digital technologies to enhance operational efficiency and competitiveness. However, despite these advancements, several challenges persist. These include technological integration issues, data management complexities, cybersecurity threats, and resistance to change within organizational cultures. This assignment delves into these challenges by examining BP's efforts to overcome them, supported by insights from relevant literature such as Mangan and Lalwani (2016) on global logistics, and Schönsleben (2016) on supply chain management. The analysis highlights the importance of strategic planning and continuous innovation in navigating the digital landscape of the oil and gas industry.

RUNNING HAED: logistics and operations for oil and gas 1
Logistics And Operations For Oil And Gas
Case Study
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Logistics and operations for oil and gas 2
Contents
Introduction.................................................................................................................................................3
Company Overview.....................................................................................................................................3
Digital Technology at BP............................................................................................................................3
Upstream technology and its critical evaluation..........................................................................................5
Role of digital technology in operational safety and supply chain...............................................................7
Critical evaluation of cloud based ERP system to enhance organisation’s methods of planning and
coordinating.................................................................................................................................................8
Main logistical and operational issues and challenges it............................................................................10
4 of the key human behavioural issues......................................................................................................10
Conclusion.................................................................................................................................................11
Recommendations.....................................................................................................................................11
References.................................................................................................................................................12

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Introduction
The oil and Gas industry is facing an intense pressure from the operational efficiencies due to the
lowering oil prices. This is to achieve breakthrough by managing performance demand in an
effective way. Digital technologies and models are important to meet the points in the oil and gas
value chain. In current situation, the oil and gas industry has digital perspective to drive
efficiencies across the industry landscape. The report primarily focuses on digital technology
used by BP in managing its operations. It describes the role of digital technology in managing
operational safety and supply chain. By considering all the factor chain and development
procedure, it is able to manage the consequent changes taking place in the production and
distribution channel.
Company Overview
BP P.L.C in a British Oil Company is located in London. It is one of the worlds 6th Oil and Gas
Company. It became the largest oil producing company in the year 2012 and the 6th major
company by capitalization. BP is coordinated vertically and carries out all the operations related
to oil and petroleum. They have a sustainable interest in the management of bio fuel and wind
energy. The changing technology has a long-term implication on the organization. Just like
many other organizations, international oil giant BP has undergone a digital transformation of its
own by relying on cloud computing.
Digital Technology at BP
BP has implemented effective cloud efforts over the last 18 months. It has gained rewards, due to
the digital technology cost savings, in an effective way by adding innovation. Technological

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changes at BP have helped in managing the changes taking place in the digital environment. The
changing use of technology and digitalization has helped in organizing the resources in the most
appropriate way. This has helped in implementing the resource up-gradation in the company in
order to gain the benefit. In order you remain competitive, it is important to implement an
effective digital technology mechanism. This will help in gaining sustainable changes in the
operations. It is important for organizing the day-to-day operations. It is the most effective way
that is used by the companies in order to gain concrete changes. This is a necessary fact that
needs to be implemented in order to coordinate the desired changes. The approach is effective
while focusing on the deliberate changes that are important for achieving the ultimate goal.
Upstream technology and its critical evaluation
Digitalization helps in imbibing effective industry’s ecosystem, by disrupting traditional value
chains and redefining roles. The new business models allow companies in leading organizational
change. By using a structured approach digitalization can be understood in order to develop
changes in a systematic way. The technology stack approach helps in exploring how
digitalization will alter the upstream oil ecosystem. It involves 5 steps in the upstream value
chain: exploration and appraisal, concept development, project definition and execution, drilling,
and production. These approaches are important from the point of view of providing structured
changes in order to gain effectiveness.

Logistics and operations for oil and gas 5
Digital technologies are significant from the point of creating better chance for the alteration of
the upstream industry. This is also helping in adapting longer-term low oil price. BP is working
efficiently in the field of digital oilfield, with a continuous focus on Field of the Future
programme, incorporating 2000km of fiber cable in the Gulf of Mexico and the North Sea. This
will enable onshore technician to directly communicate with the off-shore engineers. The digital
technology has helped in 35 collaborative environmental project deployed internationally. They
have moreover deployed a Real-time sound inspection on major assets (Saad, Mohamed Udin
and Hasnan, 2014).
The cloud, mobility, analytics and Big Data, used by the company is creating digital platforms
for oil and gas companies in order to carry out operational functions. This has helped in
managing engineering data and documents in order to seek critical information to contractors and
employees. On a long run, the companies are using the digital platform to track and trace
technologies. Holsman (2017) has very signified the growing importance of Digital technologies

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in transforming corporate functions like finance, HR, supply chain, marketing and procurement.
The change in the IT has a higher impact and reduced costs in order to gain competencies.
Secondly, the digital technology is been deployed at the world’s first Life of Field Seismic array
at Valhall. They are harnessing power with the help of seismic and geologic data in order to
recover oil and gas. The digital technologies has enabled in integrating the process data from
multiple sources in the most efficient way. BP has materialized the union of cloud computing,
sensors, advanced analytics, machine-generated algorithms in order to gain opportunities
(Schönsleben, 2016). The Connected Upstream is BP’s international intelligence network; by
adding on the experience with cutting edge digital technologies. Their aim is to gain intelligent
monitoring in order to understand what’s happening at any given time. This technology is also helping
in prediction. It is helping in optimization in order to drive performance in safety and productivity
(Yusuf et al 2013).
Intelligent monitoring
BP is also using the intelligent monitoring in order to know precisely what’s going on at any
given time. The company is primarily focusing on intelligence technology extensively
incorporated into offshore operations (Grant, Wong and Trautrims, 2017). This helps in bringing
in effective benefits in terms of safety and operations:
 BP’s proprietary data lake has more than 1 petabyte operational data
 99.5% of inspection data is operated well in one single system, allowing to track
performance and trends internationally(Digital technology.2017)

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 The Distributed fibre optics technology used by the company, help in detecting precise
location while entering the well and provide solution at an early stage.
 BP is using self-directed underwater vehicles and drones to inspect pipelines and
infrastructure. This has helped in resolving the environmental issues in the best possible
way.
Role of digital technology in operational safety and supply chain
Digital technology has helped in optimization of resources in the best possible way. This has
helped in managing the resources in a well-effective way. This technology has helped in
connecting Upstream in order to enable operational safety across the process. This has helped in
the subsurface, to assess potential risks and opportunities (Broersma, 2017). BP has evaluated
‘digital twin’ technologies in order to manage the ideas and actions before going live on actual
facilities and operations. All these facilities have widely helped in predicting intervention and
their impact on the overall process. The digital technology has helped in managing the previous
data in an appropriate way. This is important from the point of view of making decisions. The
optimisation system is a tool that is used to predict most favourable operating conditions in order
to maximize production (Michel, 2017). The Centre for elevated Performance Computing, with
the proprietary TDRM™ reservoir simulation software, has helped in making quick decision. It
is important from the point of view of supply chain management and safety. The Plant
Operations Advisor, partnership with GE, has helped in the live field trial in the Gulf of Mexico.
This has gradually helped in reducing unplanned downtime by evaluating operational data
(Milaković, et al 2014).

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The Connected Upstream has helped in paving a path to the remote operations. This is important
from the point of view of carrying out routine offshore tasks. These tasks will be completed by
using automation and robotics (Alazzani and Wan-Hussin, 2013). This is related to combining of
efforts in the best possible way in order to organize digital experience. It is moreover important
for enhancing the power of digital with the experience and expertise of people The Wells
Monitoring Centre in Houston, has helped in bringing information and know-how regarding a
project. The Advisor console is important from the point of view of gaining an effective role in
Oman to reduce the drilling time. This has helped in enabling the real-time information on
important parameters
Critical evaluation of cloud based ERP system to enhance organisation’s methods of
planning and coordinating
The changing technology has helped in shaping both the large and small sized energy companies.
Most of the benefit has occurred in the vacuum due to the restricted connectivity. This has
helped in gaining significant growth in the Oil and Gas Industry (Tordo, et al 2013). The
modular computing at BP is creating an independent ground for the business enterprise in
managing the large sized data. This has provided with an ample of opportunity to collaborate the
operations in order to ain the effectiveness in the operations. The current technology has helped
in managing the data in order to procure information in the best possible way. This is an
effective way through which the planning process can be managed. An organization can handle
critical issues taking place in order to stimulate the continuous work. This process is important in
gaining effective goals in order to procure effectiveness (Ahmad, et al 2013). In order to manage
the data and organizing the system and Procedure, BP has very well coordinated the functions

Logistics and operations for oil and gas 9
through cloud computing technology. This is important for managing the efforts in order to
arrange effectiveness in the operations. This is important enough for developing interest in the
most appropriate way by managing the units located at the different places. This is important for
managing the effectiveness in order to manage sustainable objectives. BP has evaluated ‘digital
twin’ technologies in order to manage the ideas and actions before going live on real facilities
and operations. . The digital technologies has enabled in integrating the process data from
multiple sources in the most efficient way (Badiru and Osisanya, 2016; Harrison, 2006). The
Wearable technology and industrial mobile devices helps in collaborating in a better manner. 3D
printing is helping in managing spare parts in order to manage the tools and technology. The
continuous changes in the Virtual or digital representation have helped in managing the 3D
scanning technology. There is a continuous use of predictive analytics and automation in order
to enlarge throughout the value chain (Seifarth and Boush, 2013).
Main logistical and operational issues and challenges it
The digital technology has created issues in managing the logistical operations. It is difficult for
the operational manager to manage the work in an effective way. There is an extreme level of
pressure on aligning the functions in an appropriate way for the team. . The changing technology
has a long-term implication on managing the logistical functions. The employs might face issue
in implementing the changes in the best possible way (Mangan and Lalwani, 2016). There can
be issues in implementing the changes at the different units located across the world. There is a
possibility that the organization may fail in achieving the targets in order to manage the functions
in a systematic way. Just like many other organizations, international oil giant BP will face the
consequences due to digital transformation. The cloud computing technology will require an

Logistics and operations for oil and gas 10
effective training and development functions in order to organize the efforts in a well-defined
way.
4 of the key human behavioural issues
1. The primary objective of introducing a change is to stimulate effectiveness in the age of
digital transformation. There can be issues regarding the implementation of technology at
different unit. The cloud computing and ERP technology will be taking time in
implementing the effective knowledge and work among the employees located at the
different places. Employees will be facing issues while implementing the changes at the
different unit. This is important from the point of view of gaining an effective insight.
2. Employees might resist changes taking place in the organization. It is a general human
behavior to implement changes in the daily routine. There can be issues in implementing
the changes in the most appropriate way.
3. The employees might take time in understanding the process. There is certain restriction
in managing the work within the time-period. It is important enough for managing the
changes in the best possible way (Armstrong and Taylor, 2014).
4. There can be significant impact on the organizational performance due to the changes in
the digital technology. Employees might face difficulty in imbibing the changes
according to the process. This is significant from the point of view of deploying
effectiveness in the company. The key behavioural issues might affect the organizational
growth and sustainability on a long run.
Conclusion

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To conclude, the digital technology has completely transformed the scenario due to the change in
the oil and gas sector. There is a need to implement an effective technology system that helps in
up-grading the mechanism. It is important from the point of view of growth and development
taking place in the sector. With high paced changes in the technological sector, there is an
ongoing need that requires an appropriate mechanism. In order to manage the changes it is
important to embrace changes to look for hidden sources of value. The report focus on the key
issues, this sector faces while HR are recruiting and retention. Digital technology has made a
significant impact on the oil and gas companies to arrange an effective system in order to
manage the requirements.
Recommendations
It is recommended to provide with an effective training and development process. This will help
in managing the changes in an easy way. The oil and gas sector might face issue in operating the
work for which they require an effective cloud computing and ERP software. There is a
continuous necessity to manage the changes by organizing the efforts in the best possible way by
implementing symmetrical changes.
References
Ahmad, N.K.W., de Brito, M.P., Rezaei, J. and Tavasszy, L.A., 2017. An integrative framework
for sustainable supply chain management practices in the oil and gas industry. Journal of
Environmental Planning and Management, 60(4), pp.577-601.

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Alazzani, A. and Wan-Hussin, W.N., 2013. Global Reporting Initiative's environmental
reporting: A study of oil and gas companies. Ecological Indicators, 32, pp.19-24.
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Badiru, A.B. and Osisanya, S.O., 2016. Project management for the oil and gas industry: a
world system approach. CRC Press.
Broersma, M.2017. Dreamforce 2017: Salesforce Names Google As ‘Preferred’ Cloud Partner
Online. Available at: http://www.silicon.co.uk/cloud/bp-innovation-it-cloud-216091?
inf_by=5a028a28671db8226f8b4bc9 Accessed on: 6 November 2017
Digital technology.2017. Online. Available at:
https://www.bp.com/en/global/corporate/technology/technology-now/digital-technology.html
Accessed on: 6 November 2017
Grant, D.B., Wong, C.Y. and Trautrims, A., 2017. Sustainable logistics and supply chain
management: principles and practices for sustainable operations and management. Kogan Page
Publishers.
Harrison, M. 2006. BP: Big problems for oil giant. Online. Available at:
http://www.independent.co.uk/news/business/analysis-and-features/bp-big-problems-for-oil-
giant-413933.html Accessed on: 6 November 2017
Mangan, J. and Lalwani, C., 2016. Global logistics and supply chain management. John Wiley &
Sons.