7 common challenges

in the oil & gas industry

and the one solution you can rely on to overcome them

OIL, GAS & PETROCHEMICALS

7 common challenges in the oil & gas industry

OIL, GAS & PETROCHEMICALS

Is your current
planning system
solving problems?
Or causing them?

In the oil and gas industries, spreadsheets and point

solutions reduce your ability to be competitive. These
were never intended to solve and cannot be used
to manage large, integrated and complex planning
puzzles.

Limit your ability to react effectively to change

Your industry is dynamic. Change is constant.
Traditional planning solutions may alert you when
changes occur, but offer little support in helping
you decide what to do next.

Traditional solutions also fail to address industryspecific challenges. Instead, they:

Ignore your requirements

When planning solutions cant incorporate all the
rules, requirements and constraints that govern your
operations, the burden of keeping track of everything
falls to your planner. The likelihood of introducing
errors increases.

Limit your visibility

Point solutions and spreadsheets address isolated
processes instead of treating the supply chain as
an integrated whole.
Delay the delivery of information
With little or no integration between planning
solutions and other systems, planners must wait
for updates and revise plans manually.

Supply chain planning & optimization

7 common challenges in the oil & gas industry

OIL, GAS & PETROCHEMICALS

Identify the
planning
gaps

Does your current system:

Yes

No

1. Allow you to optimize your supply chain, resource utilization and production schedules?
2. Generate plans to mitigate risk, provide the best return for capital expenditure, and
minimize environmental damage?
3. Address all strategic, tactical and operational planning challenges?
4. Help you tackle industry-specific challenges such as fluctuating feed stock or product
prices, changing legislation or the shortage of skilled workers?
5. Prepare you for all eventualities and minimize the impact of disruptions?
6. Support your planners with fast calculations, decision support, alerts and
intuitive visualizations?

A no to any of these questions indicates that your solution is not doing enough for you. More than three negative
answers indicate that your system might be holding you back.
Read on to learn what a yes to all these questions could mean for your company.

Supply chain planning & optimization

7 common challenges in the oil & gas industry

OIL, GAS & PETROCHEMICALS

Planning solutions
for all horizons
SCP&O solutions make it possible
for Oil & Gas companies to make
the best decisions across all
planning levels.

Exploration

Transportation

Refining & Petrochemicals

Distribution

Marketing

Building of new production

facilities
Annual delivery plans (ADP)
Plant maintenance

Vessel purchasing
and chartering
Pipeline building and leasing
Rail car purchasing and
leasing

Buying or selling
refineries
Building or upgrading
refineries
Turnaround planning

Terminal and
warehouse location
Network investments
Annual contracts

Demand forecasting

Project scheduling

Production plans

Cargo planning

Feedstock purchase

Product sales and purchases

(Supply planning,
Sales and operations
planning)

and maintenance
Staffing

ADP maintenance

Primary distribution
planning
Secondary
distribution planning

Weekly/Days
ahead

Equipment utilization

Yearly/Years
ahead

(Strategic planning,
Annual delivery
planning)

Monthly/Months
ahead

(Production planning)

Daily/Hours
ahead
(Scheduling)

Which reserves to develop

Production

Project planning, budgets

and forecasts
Equipment and workforce
requirements

Equipment requirements

Job assignment

Reassigning tasks

Spot cargoes

Production optimization
Well optimization

Production scheduling
Off-take coordination

Vessel chartering

Production rates

Fleet management

Crude blends

Pipeline batching

Product blends

Rail car and train assignation

Jetty scheduling

Pipeline scheduling
Rail car scheduling

Unit operating parameters

Receiving and blending

crudes
Operations scheduling
Blending and shipping
products

Gas station location

Exchange agreements

Component sales and

purchases
Exchanges

Primary logistics
scheduling

Demand forecasting

Truck routing

Stock replenishment

Inventory management

Pricing

Supply chain planning & optimization

7 common challenges in the oil & gas industry

OIL, GAS & PETROCHEMICALS

Perfect-fit
planning in
action

Challenge 1: The future is uncertain

You are about to enter a 20-year contract to supply LNG
to China. You need an effective strategic plan. You have
to predict trends for the next two decades, knowing that
demand, prices, regulations and technology change
from one period to the next. A false assumption could
cost your company billions of dollars.
The Quintiq response: Scenario-based strategic
planning.
You create and compare a range of scenarios, including
possible production profiles, shipping costs and price
forecasts. Armed with this knowledge, you negotiate a
contract that guarantees an acceptable profit margin
and is equipped with appropriate pricing safety valves
to allow for price changes.
Evaluate multiple scenarios against your business
objectives.

Challenge 2: The present is

unpredictable, too
Youre presented with a lucrative spot opportunity.
You have just a few hours to decide whether you can
accept it. This means looking at your existing cargo
commitments. A 1:1 diversion provides the simplest
solution to your problem, but it is perhaps not the
most profitable. You need a quick, easy way to explore
more complex configurations in order to free up capacity
and maximize profits.
The Quintiq response: Interactive shipping
optimization.
Your planning solution generates a revised plan based
on real-time information and your specific business key
performance indicators (KPIs). Youre now able to decide
immediately whether or not to accept the spot opportunity.
Arrive at swift decisions on whether you can accept
lucrative spot opportunities.

Supply chain planning & optimization

7 common challenges in the oil & gas industry

OIL, GAS & PETROCHEMICALS

Challenge 3: Last-minute requests

A compressor has malfunctioned on a customers oil
rigs in the Gulf of Mexico. You receive an urgent request
for a fully equipped crew to carry out emergency
maintenance. The race against time begins. The planner
needs to know quickly if qualified field service engineers
are available, where the required equipment is located,
and how quickly the engineers can be mobilized to the
emergency area, based on current assignments and
their present locations.
The Quintiq response: Disruption management and
dispatching.
Your planning solution gives you a complete overview of
all available resources, including a list of employees
scored according to criteria such as skills, experience,
availability and current location. An intuitive interface
enables you to form a crew, pair them to the right
equipment and create an optimal plan that satisfies all
constraints and requirements.

Challenge 4: Its time for a new

schedule
A serious malfunction forces an unexpected refinery
unit shutdown. You need a workable alternative schedule.
You dont have time to think about how these changes
will impact processes up and down your supply chain.
All you can do is solve the problem in front of you. The
consequences will have to be dealt with later.
The Quintiq response: Interactive refinery
optimization.
Your refinery-wide model helps you determine shortterm adjustments to the crude feed mix, unit operating
parameters and product blend recipes. Youre able to
take into account nominated feedstock receipts and
product shipments, enabling you to reduce the effect of
disruptions along the supply chain.
Minimize the impact of disruptions.

Challenge 5: Is the price right?

You have the opportunity to purchase a distressed
crude cargo at a fixed price. Should you purchase the
cargo and how much should you pay? You only have
minutes to make this multi-million-dollar decision.
The Quintiq response: Supply and distribution
planning.

Within a few seconds the system will tell you whether:
You have the capacity to receive and store the
crude cargo
You have the refining capacity to process it
There is demand for the additional products created
It will have a negative impact on refinery yields
and margins
You make a decision, confident that it is the right one.
Remove risk from snap decisions.

Get real-time decision support.

Supply chain planning & optimization

7 common challenges in the oil & gas industry

OIL, GAS & PETROCHEMICALS

Challenge 6: A stroke of good but

disruptive luck
Unexpected supply problems for a competitor lead to
much higher demand for your fuel products. This is bad
news for your competitor but potentially great news for
you. How can you best take advantage of this opportunity?
The Quintiq response: Integrated primary and
secondary distribution planning and scheduling.
You look over inventory forecasts at the refineries and
terminals, and make any necessary revisions to your
production plans. Once you update the new demand
forecast for each product grade at each location, your
solution determines the best way to supply additional
products to your new customers.
Respond quickly and effectively to changes in demand.

Challenge 7: The domino effect

A vessel is stuck in port waiting for a replacement part.
The consequences of this delay extend far beyond one
trip and can potentially be very costly. Delays on future
voyages could result in heavy penalties. Youll be late on
a delivery to a customer whom you want to keep happy.
Sailing faster and paying more for fuel doesnt solve all
your problems. Should you charter another vessel instead?
All your options come with a downside.
The Quintiq response: KPI-based planning.
Your companys key performance indicators (KPIs) once
merely measured reported performance. Now they drive
your decision-making process. Your KPIs are updated in
real time so you can instantly see the consequences of
every decision. KPIs that measure the plan also drive the
optimization. Soon you have a new plan that you can
execute with confidence.

Strengthen your
competitive
advantage
To overcome your business challenges, you need more
than a traditional planning and scheduling point solution.
You need an integrated decision-support system that
covers the entire value chain across all time horizons. The
system must enable planners to understand a situation
and take action quickly and effectively. It must integrate
smoothly with business systems and processes. It must
also enable collaboration throughout the enterprise and
with supply chain partners and customers.

Make decisions that advance your business goals.

Supply chain planning & optimization

7 common challenges in the oil & gas industry

OIL, GAS & PETROCHEMICALS

About Quintiq
Quintiq's revolutionary supply chain planning and
optimization (SCP&O) platform enables enterprises
to improve efficiency at every stage of the supply
chain journey. It powers end-to-end planning and
optimization of personnel, resources, and processes
in a single planning environment, across all planning
horizons. Many of the world's largest and most
successful enterprises rely on Quintiq to achieve
their business goals, strengthen their competitive
advantage and create new revenue streams.
Established in 1997 and growing rapidly, Quintiq
has a global presence with dual headquarters in the
Netherlands and the USA, a global development center
in Malaysia, and offices around the world. Quintiq's
software is in use in over 80 countries worldwide.

Offices: www.quintiq.com/locations
Email: info@quintiq.com | Web: www.quintiq.com

Supply chain planning & optimization