STRATEGY FORMULATION

&
IMPLEMENTATION

ASSIGNMENT

Submitted to: Submitted by:

Prof. Ashutosh Khanna Daksh Aneja
(19PGDMHR12)

PGDMHR Program

(2019-2021)

International Management Institute, New Delhi

(2019-2021)
 CONTENTS
PGDMHR Program .............................................................................................................................. 1
(2019-2021)......................................................................................................................................... 1
VALUE CHAIN .......................................................................................................................................... 3
Upstream – Exploration and Production ............................................................................................ 3
Midstream – Transportation and Storage .......................................................................................... 4
Downstream – Refining and Retail Markets ...................................................................................... 4
BIG DATA & OIL INDUSTRY ...................................................................................................................... 5
Why Big Data in Oil Industry? ............................................................................................................. 5
Big Data’s Focus in Oil Industries ........................................................................................................ 5
Key Benefits of Big Data Analytics for Oil Companies......................................................................... 5
KEY AREAS THAT BENEFIT WITH BIG DATA ............................................................................................. 6
Security ............................................................................................................................................... 6
Maintenance and Performance ......................................................................................................... 6
Production .......................................................................................................................................... 6
New Prospects .................................................................................................................................... 6
OPPORTUNITIES ...................................................................................................................................... 7
THREATS .................................................................................................................................................. 7
 VALUE CHAIN

The three facets of the value chain are:

Upstream – Exploration and Production

Companies in the upstream sector are also called “Exploration and Production
(E&P) companies”. These companies are primarily involved in identifying and
assessing potential Oil & Gas producing blocks, drilling exploratory wells,
devising Field Development Plans (FDPs) & developing infrastructure in
economically viable oil fields to produce commercial quantities of hydrocarbon .

Few Key Challenges in the Upstream Sector

• It is highly regulated by governmental agencies

• Getting new exploration fields involves heavy upfront investment
• The uncertainty of seismic and geological data failing to translate into a
commercially viable FDP could lead to a financial loss for an E&P
company. The upstream companies may recover partial or no investment
• Human resource utilization is critical for an E&P company
Midstream – Transportation and Storage
Companies in the midstream sector are typically involved in transportation of
hydrocarbon. The various modes of transportation include pipelines, maritime,
rail and road transportation, depending on the type of product being
transported.

Few Key Challenges in the Midstream Sector

• The Midstream companies rely heavily on operations of upstream
companies
• Pipeline maintenance & other logistics involved require skilled human
resources that strain midstream companies’ finances

Downstream – Refining and Retail Markets

Companies in the downstream sector are involved in the process of refini ng,
marketing & selling. These companies transform & refine crude oil into a variety
of derivative products such as liquefied petroleum gas, gasoline, jet fuel, diesel
oil, other fuel oils etc., which are in turn, sold to different end -users.

Few Key Challenges in the Downstream Sector

• Downstream companies being the last in the value chain would have to
pay a premium for their raw materials
• Although, crude prices & other external factors determine the prices of
various fuels & petroleum products
• End consumers tend to associate price fluctuations in the refined
products with downstream companies’ pricing policy. Downstream
companies face the supply vs. demand problems first-hand with
customers
 BIG DATA & OIL INDUSTRY

Why Big Data in Oil Industry?

• A big size industry reigning today
• Bulk of data spread across geographies
• Incessant need to extract the best information

Big Data’s Focus in Oil Industries

• Collect and process data gathered, over a period of time"
• Data due to drilling of wells latest findings by experts
• Make it user friendly with more sophisticated features
• Collect huge sensor data from the numerous oil wells
• To manage and monitor the assets

Key Benefits of Big Data Analytics for Oil Companies

• Get the best of information about the valuable customers and prospects
• Help enterprises create more of clients from prospects
• Provide a valuable view into the market condition and peer actions
• Grasp the changing pulse of the market
• Increase operational efficiency
 KEY AREAS THAT BENEFIT WITH BIG DATA

Security
• Identify any type of security lapse
• Real time analytics to show possible solutions
• Early identification of drilling or exploration mishap
• Health & safety of oil rigs and drill can be ascertained

Maintenance and Performance

• Figure out health of equipment from the huge amount of sensor data
• Identify machines responsible for failure/shutdown
• Preventive maintenance - safe and non-hazardous measures

Production
• Helps increase in recovery of oil from wells
• Adjusts pre-defined production schedules
• Acts as a medium to collate data like production, drilling & maintenance
• Predict, forecast, and look beyond...

New Prospects
• Provides a large amount of geographical spread information
• Easy task for field managers to extract possible oil fields
• Increase geo width and reach
 OPPORTUNITIES

• Reduction in Cost and risk due to Automation

• Energy Saving
• Process Efficiency
• Analysing and predicting/estimating market demand
• Workplace safety
• Predictive analytics can reduce downtimes and maintenance costs of refining
equipment
• Automated systems leading to improvement in logistics efficiency and asset
management
• Market Trend Analysis and Sentiment Analysis for Marketing and Sales Campaigns
• Choosing most effective distribution Channel and Supply Chain in terms of cost and
profitability

THREATS

• Cyber Security
• Huge maintenance Costs
• Hiring data scientists in the competitive world
• Large amount of data creates problem in data storing, handling and analysis of the
same
• Any small mistake in data or information might impact the entire process.
• Transition toward automation/data driven company is a complex, costly and time-
consuming
• Learning and development of existing workforce