Þresented byť

Asad Dan|sh 5|dd|qu| Ŵ 1462
IMÞCk1ANCL CI 5UÞÞL¥ CnAIN MANAGLMLN1 IN CIL AND GA5 5LC1Ck
Þresented toť
MrŦ Azmat A||
Course Instructorţ 5upp|y Cha|n Management
May 2010
5upp|y Cha|n Managementť
Supplv Chaln ManaaemenL ls Lhe arL and sclence
LhaL creaLes lmprovemenL ln Lhe wav LhaL an
oraanlzaLlon flnds Lhe raw componenLs lL needs Lo
make a producL or servlce and dellver lL Lo Lhe
cusLomer aL Lhe rlahL Llme and ln Lhe rlahL quanLlLv
Lxp|orat|on lj
Þroduct|on lj
kef|n|ng lj
Market|ng lj
Consumer
5upp|y Cha|n L|nk to the C|| and Gas Industry
Break up of Oil and Gas Sector
Upstream Sector
Upstream sector is where we get crude oil and crude gas from.
These are Offshore oil and gas rigs and onshore oil and gas rigs
Downstream Sector
Downstream sector is where we refine the products and make it
usable for end customers like gasoline, jet fuel, diesel fuel,
furnace oil etc.
It also consists of storage system and pumping stations from
where we get our supplies of petroleum products like gasoline,
diesel, lubricants etc
Our Main focus in this presentation would be the
downstream sector (Pakistan State Oil) and PSO's
SWOT Analysis
ycle of Oil and Gas Sector (upstream to downstream to end user)
& 1he peLroleum lndusLrv lncludes Lhe alobal processes of exploraLlonţ
exLracLlonţ reflnlnaţ LransporLlna (ofLen bv oll Lankers and plpellnes)ţ and
markeLlna peLroleum producLsŦ
& 1he laraesL volume producLs of Lhe lndusLrv are fuel oll and aasollne
(peLrol)Ŧ
& ÞeLroleum ls also Lhe raw maLerlal for manv chemlcal producLsţ lncludlna
pharmaceuLlcalsţ solvenLsţ ferLlllzersţ pesLlcldesţ and plasLlcsŦ
& LfflclenL dellverv of oll producLsţ comblned wlLh manaaemenL of sLock
levelsţ are vlLal acLlvlLles ln order for downsLream oll buslnesses Lo proLecL
or lncrease Lhln maralnsŦ
& Supplv Chaln helps preclseţ upŴLoŴLheŴmlnuLeţ lnformaLlon on fuel levels
as well as Lhe ablllLv Lo flexlblv schedule and manaae dellverles
& Supplv chaln helps companles Lo maxlmlze proflLs bv savlna cosLs and
maklna declslons uslna skllls Leached bv Supplv Chaln ManaaemenL
ko|e of 5upp|y Cha|n |n C|| and Gas 5ector
· avlna a aood neLwork of skllled suppllers
· avlna aood neaoLlaLlons sklllsţ Cll and Cas secLor ls neaoLlaLlna all Lhe
Llme
· ueclde Lo MAkL vs 8u? eŦaŦ Cffshore rlas uLlllze Lhe aas produced Lo
make power on Lhe rlaŦ Some refenlrles produces power Lhemselves and
some buv lL from oLher suppllers
· SLrlcL compllance Lo all appllcable codes and sLandards
· lorecasLlna ls alwavs been done wlLh hlsLorlcal daLa and demand supplv
sLraLeav
· 1he supplv chaln ln oll and aas conslsLs of operaLors (oll companles)ţ maln
conLracLorsţ subconLracLors and suppllersŦ ÞrocuremenL ls performed
durlna Lhe developmenL and abandonmenL of oll and aas flelds and durlna
operaLlon of flelds (producLlon)Ŧ uurlna developmenLţ Lhe ma[orlLv of
procuremenL ls sLrucLured as pro[ecL execuLlon LasksŦ Þro[ecLs are unlque
and Lvplcallv ranae ln slze from Lhe Lens of mllllons of dollars Lo bllllons of
dollars for larae offshore new bullds
now 5upp|y Cha|n Management ne|ps Improve C|| and Gas 5ector
Integrated SuppIy Chain Network GeneraI ModeI
Integrated SuppIy Chain Network of OiI and Gas
Þak|stan| kef|ner|es
ÞaklsLan's 8eflnerv CapaclLv ÞaklsLan's 8eflnerv CapaclLv
igures in MiIIion tons per annum
CCMÞAkI5ICN CI ÞAkI51ANI CIL MAkkL1 CCMÞAkI5ICN CI ÞAkI51ANI CIL MAkkL1
WI1n WCkLDWIDL CIL MAkkL15 WI1n WCkLDWIDL CIL MAkkL15
Ma[or Þrob|ems Iaced by kef|ner|es Ma[or Þrob|ems Iaced by kef|ner|es
O Crude C|| supp|y
O Demand and 5upp|y 5cenar|o
O Def|c|t of o|| Þroducts
O Þr|c|ng keg|me for Þroducts
O Import Þar|ty Þr|ce (IÞÞ)
O LxŴkef|nery Þr|ces
!akistan State OiI
Best Symbol of
Supply Chain
Excellence in
Pakistan Oil and
Gas Sector
Paklstan State Oll as a Supply Cbaln Paklstan State Oll as a Supply Cbaln
Leaoer Leaoer
· Largest 5TORAGE, 5UPPLY AND Dl5TRlBUTlON netwok
in Pakistan.
· 5torage FaciIities Capacity: mllllon tons .
· 5torage of the Country OveraII
· 3 OutIets.
· %bese outlets are equlppeo wltb convenlence stores buslness
centers |nternet taclllty ano CNG taclllty
· 16 moblle quallty-testlng unlts .
· PSO also caters to tbe tuel oemano ot tbe lnoustrlal consumers
tbat lncluoes power generatlon rallways sugar te×tlle ano steel
mllls.
· PSO operates at alrports ano serves 4 oomestlc ano 1
lnternatlonal alrllnes unoer lts tecbnlcal/ commerclal llcense
agreement wltb Alr %otal |nternatlonal.
· PSO partlclpatlon ln Allama |qbal Alrport Labore ls 1.
PSO MARKL% SHARL PSO MARKL% SHARL
O Wblte Oll Market wltb 59
O 8lack Oll Market wltb 9
PSO
59%
Others
41%
PSO
79%
Others
21%
%he White OiI segment incIudes Gases, Kerosene,
DieseI and Jet OiI that are purified fueI.
%he BIack OiI segment represents the products,
which are Iess purified and used in mostIy
industriaI sectors.
Oìl ond Gos lndustry Anolysìs Oìl ond Gos lndustry Anolysìs
Current scenar|o of o|| and gas |ndustry
PSO SALLS uslng supply cbaln PSO SALLS uslng supply cbaln
tecbnlques tecbnlques
4

1
110
121
11
135
195
12
20
199 1999 2000 2001 2002 2003 2004 2005 200 2007
Sales in billions (Pak. Rs.)
Protltablllty ot PSO ln mllllon (Pak. Protltablllty ot PSO ln mllllon (Pak.
Rs.) Rs.)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Aovertlsement ano Promotlonal Aovertlsement ano Promotlonal
L×penoltures PSO vS Sbell L×penoltures PSO vS Sbell
1
20
1
22
200 2007
PSO Shell
Distribution & FIeet Distribution & FIeet
Managenent Managenent
(5trong distribution network) (5trong distribution network)
O 5 Strong %ank Lorry Fleet along wltb
tralneo orlvers
O 3 Rallway Wagons
O 4 Lubrlcant Dlstrlbutors
O Plpe Llnes
5torage 5torage
· PSO bave M% Storage capacltles wblcb ls
representlng tbe 1 ot total storage ln tbe Paklstan
· lnventory Turnover Rate (P5O V5 5heII)
21 21
23
2
23
20 20
19 19
17
15
1 1
14
24
1
2000 2001 2002 2003 2004 2005 200 2007
PSO Shell
New V|s|on keta|| Cut|ets New V|s|on keta|| Cut|ets
· ÞSC beaan lL new vlslon 8eLall CuLleLs (nv8C) ln Lhe vear 1999 Ŧ
· CNG Iac|||t|es
· 1odav Lhere are more Lhan 400 CnC sLaLlons LhrouahouL Lhe counLrvŦ Shell
ÞaklsLan ls provldlna Lhe CnC faclllLv aL onlv 68 ouLleLsŦ
· NonŴlue/ ketoi/ Out/ets
· 1he nonŴluel 8eLall ueparLmenL ls responslble for all Lhe nonŴfuel faclllLles
aL Lhe reLall ouLleLsŦ ÞSCţ belna an oraanlzaLlon commlLLed Lo provldlna
value added servlces Lo lLs cusLomersţ has faclllLles aL lLs sLaLlonsŦ 1hese
lncludesţ
· Conven|ence 5tores (CŴ5tores) ƹ64
· 8us|ness Centersƹ16
· Internet fac|||t|esƹ600
· Auto Car Washes
· 1here ls one car wash each ln Lhe Lhree ma[or clLles ln ÞaklsLanŦ
· karachl
· Lahore
· lslamabad
VaIue Chain VaIue Chain ~~ P5O P5O
5WOT AnaIysis of P5O 5uppIy Chain 5WOT AnaIysis of P5O 5uppIy Chain
Network Network
O Market Sbare ot ls one tbe maln strengtb ot PSO.
O Company reputatlon ln tbe lnoustrlal sectors aoos tbe strengtbs tor PSO.
O Proouct quallty ls also strengtb especlally ln lnoustrlal sector.
O Servlce quallty llke plastlc caros ano non-tuel actlvltles aoos tbe value.
O Dlstrlbutlon & Fleet network wblcb covers 1 country retall network ls tbe key eoge on PSO
lts competltors.
O Promotlonal actlvltles aoo value ln brano awareness ano attractlon ot new customers.
O |nnovatlon llke Auto Car Wasb belps PSO to oltterentlate wltb lts maln competltors.
O Storage capaclty wblcb bolos ot total storage capaclty ot tbe country ls also key aovantage
over lts competltors.
O %ecbnlcal skllls ln Fleet management are anotber strengtb tor PSO.
O vlslonary capable leaoersblp aoos value to PSO strengtb llke tbelr NvRO operatlons.
O Flnanclal Stablllty wltb strong reserves palo-up capltal aoos tbe trust ot stakeboloers.
O Proouct llne wlotb aoos long range ot prooucts tor more revenue opportunltles.
O Castrol brano attlllatlon wltb PSO aoos strengtb ln terms ot brano awareness.
O Relatlons wltb Government one ot tbe key strengtb ot PSO ln oroer to get legal protectlons.
5trength 5trength
0okn0ss0s 0okn0ss0s
· Lost & Dlssatlstleo customers are major weakness ot
PSO as tbey are causlng tbe perceptlon ot lnettlclent
PSO.
· Olo retall outlets are major weakness tor PSO as
tbey are not enougb capable to compete tbe Sbell
Calte× or %otal outlets.
· Untralneo statt at outlets ls causlng lnettlclent
servlces. %ralnlng requlreo
· Ouallty assurance ls not so ettectlve to bullo tbe
lmage ot ¨Ouallty & Ouantlty¨.
Opportunìtì0s Opportunìtì0s
· Atgbanlstan's Market ls tbe blggest opportunlty tor OMCs ln
Paklstan.
· De-regularltles ot Oll lnoustry ln Paklstan aoo tbe
opportunlty to tlll tbe oetlclency ln tew sectors ot
petrocbemlcals markets.
· L×port Opportunltles ot 8lack Oll Prooucts ls also aoolng
tbe opportunltles by e×portlng 8lack Oll prooucts wblcb ls
taclng oowntall oue to tbe lntroouctlon Gas Oll.
· |noustrlal & %raoe growtb ln Paklstan ls also tbe opportunlty
tor PSO as tbey are aoolng revenues ln Power sector tbat ls
tbe major customer ot PSO.
%r0ots %r0ots
· Rlsk ot torwaro lntegratlon ot Suppller ls tbe key
tbreat tor PSO ano otber OMCs ln Paklstan. As
tbe e×ample tbe PARCO wbo ls one ot tbe maln
POL proouct suppllers to OMCs aoopt tbe
torwaro lntegratlon strategy by lntroouclng lts
own OMC wltb lts new buslness alllance %O%AL
ano nameo lts OMC as %O%AL-PARCO.
·
· Rlsk ot Dlversltlcatlon ln tecbnology ls also a key
tbreat tor PSO as oue to new tecbnology useo ln
lnoustrlal sector are causlng oecllne ln partlcular
POL prooucts.
Iuture of C|| and Gasť
C|| are gas are not dep|et|ngţ the methods to extract|ng them
are gett|ng comp||catedŦ
1he easy way out to save env|ronment and not consum|ng
every natura| resource we have to |ook for a|ternate energ|es
for our requ|rements
%hank
You

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