Enhancing Oil & Gas personnel transportation. Challenges and opportunities in a fast-evolving environment

Historical overview

Oil and Gas (O&G) personnel transportation to on & offshore facilities serves as the vascular system for the beating heart of the Middle East economy. As such, onshore and offshore transport networks were designed to support a robust and continuous transfer of labour force to remote locations.

During the 2000’s networks grew in size and complexity: field expansion, intensive drilling, multimodality leveraging mainly on aviation but complemented with maritime, route flexibility, interconnectivity, availability, and service quality proliferated in a high-demand environment.

The logistic footprint of O&G companies increased hand-by-hand with the transportation costs, keeping the focus on production continuity and service coverage. However, in the advent of falling oil prices, companies have started looking at rationalization of transport networks and a reduction of logistics’ costs.

Today the sector moves toward lean, fit-for-purpose transportation solutions that maximize the synergies between exploration and production facilities coping with the sometimes disparate needs of the upstream industry.

Personnel transportation in upstream O&G was historically characterized by its robustness and redundancy, shifting now toward leanness and resources optimization.

Rationalizing personnel transportation networks

One of the main challenges faced by upstream companies is the integration of a highly-fragmented transportation network, diversified by means of transport, modes and even resources models. For instance, it is common among offshore companies to have multiple service providers for both fixed and rotary wing aircraft, vessel operators and a variety of models within each of their fleets.

ALG’s strategic approach for O&G transport network optimization (non-exhaustive)

A comprehensive review of the transportation means, infrastructure capabilities and service providers is key to ensure resources optimization

Based on ALG’s experience, the current situation can be seen as an analogy to the aircraft fleet heterogeneity in European airlines during the 80’s and 90’s. In O&G today, as in the airline industry few decades ago, the market claims for a standardization of the fleet and a comprehensive provision of transportation services that meets the business needs.

The second hurdle in the race for the optimization of transport networks is eliminating network redundancies and shifting towards service continuity.

A strategic rationalization of transport networks require a thorough understanding of resources & infrastructure capabilities as well as full vision of the business needs

Commonly, one of the main drivers for network redundancies is the low reliability of services motivated by historically high ratios of non-serviceability. Aircraft maintenance, meteorological conditions, or crew availability, are some of the causes of service interruption. In this regard, strategic improvements of transport infrastructure together with a thorough review of service level agreements can enable higher utilization rates of transport resources and diminish the need for network redundancies.

Lastly, but not least, recent experiences have demonstrated that a competitive bidding process for transport services allows the market to bring forward advanced technologies that can most cost effectively provide the required capacity, coping with infrastructure and environmental limitations. Inclusive eligibility rules should be established to increase competitive pressure to close the gap between bids and their funding needs.

Meeting international aviation safety standards

Game changer in the design and operation of personnel transport networks, the implementation of aviation international standards and recommended practices (SARPs) is currently shaping the reality of O&G logistics. Historically left aside by the Civil Aviation Authorities, the time has come for O&G companies in the GCC to assess their conformity with the aviation SARPs and engage with the national authorities to bring safety up to international levels.

Civil Aviation Authorities (CAAs) are increasing the pressure on O&G companies in the GCC to meet international air transport safety standards

In the framework on a rationalization process for air transport resources, taking into consideration the need for SARPs compliance is of paramount importance. ALG’s experience has proven that there is room for capital expenditure optimization through the alignment of transportation means with infrastructure capabilities under the umbrella of international aviation safety standards.

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ALG’s approach airports, heliports and helidecks’ conformity assessment and certification (non-exhaustive)

The challenge faced by the O&G sector strives in shaping both the transportation network and the transport infrastructure, ensuring compliance with safety standards while reducing logistic costs. To this aim, ALG proposes to carry out a comprehensive audit of air transport infrastructure (airports, heliports and helidecks) to identify infrastructure constrains, safety gaps ad potential room for upgrades at an early stage of the transportation network optimization.

Assessing the level of compliance of airports, heliports and helidecks with international SARPs is the first step to align air transport demand with infrastructure capabilities

Steps towards operational excellence

Logistics and operations managers in O&G have inherited complex and redundant transport networks. They have now the challenge to maintain the service level while reducing operational expenses. On top of it, air transport activities are being put under regulatory oversight by the Civil Aviation Authorities.

In this framework, specialized airports & ports management capabilities are growing in importance, as spare capacity diminished and turnaround times shrink. On-time performance (OTP) is becoming the KPI driving personnel transportation, while hub & spoke networks are implemented in the largest oil fields.

Planning & scheduling has also an important role in the rationalization of logistics. The sector’s traditionally high rates of ad-hoc supply are leaving room for standardized, booking-based travel management. Planning teams can benefit from state-of-the-art IT solutions originally developed for the airline and shipping line industries customizing them to suit the O&G requirements.

Sample of ALG’s Transport Network Optimization for O&G.
Sample of ALG’s Transport Network Optimization for O&G

Finally, it is highly advisable to review personnel transport networks on the basis of a business plan approach, ensuring full alignment between core-business requirements and logistics services.

About the authors
Pablo Ruiz del Real is MSc in Civil Engineering, Partner and Advisor at ALG
Xavier Esparrich is MSc in Aeronautical Engineering and MBA, Manager at ALG
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