´SWAP PRACTICE IN OIL

AND GAS INDUSTRYUSED IN SCM FOR CUTTING COST INVOLVED IN LOGISTICS.µ
By, Vijay Thilak S.T. Nitin Kapil Sharma Pawan Preet Kaur

CONTENTS 
      

SCM CHALLENGES FACED BY OIL AND GAS INDUSTRY IN SCM SWAP SWAP HISTORY PRESENT SCENERIO CLASSIFICATION CASE STUDIES MODEL

SUPPLY CHAIN MANAGEMENT (SCM)
Supply Chain Management is about managing the flow of information, materials, services and money across any activity, in a way which maximizes the effectiveness of the process. 

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com/aspenOne .Source : http://aspentech.

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Anxiety regarding collaboration and information sharing between supply chain partners.      . Long transportation lead times. Limitations of modes of transportation.CHALLENGES FACED BY OIL AND GAS INDUSTRY·S SCM Produced in limited region and demand is all over the world. Very high transportation cost and in transit inventory.

. Petroleum industry has found that one way of outsourcing is to ally and collaborate with competitors.SWAP/Exchange    systematic cooperative reciprocal barter or exchange Outsourcing of logistics functions.

.Gulf) ´ The Achnacarry Agreementµ Practice highly institutionalized. not much revealed to academicians Subject of exchanges remained arcane and mystery .Mobil.A brief history«       Systematic Exchanges .SWAP .Texaco.1952 (Exxon.Chevron. International Oil Cartel case.monopolizing petroleum commerce Illegal trade Federal Trade Commission cases includes. includes..

SWAP Today«       Legalized business Answer to the sky rocketing supply chain costs Bridges demand supply gap to some extent Optimizes the resource utilization (sharing) Brings countries together Avoids duplication of facilities .

SWAPPING BUSINESS.BROAD CLASSIFICATION OF SWAP 1. 2. ASSET SWAPPING. SWAPPING SHIPMENT. . 3.

ASSET SWAPPING  Two companies share or buy assets of each other. . Both companies offload unwanted divisions in return for assets that fit more closely with their core businesses.   Cost cutting.

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E.an attractive growth market. Valuable brands ² ARAL along with $1.    BP Realize full value of Ruhrgas.4 billion (biggest petrol-retailing petrolbusiness).ON has strengths on downstream side but lacks backward integration in its import.    E. Important markets ² Germany. storage & long distance delivery system.5 billion along with Ruhrgas. .CONTD«. Got $5.ON GASGAS.

BP E.ON .

. Reduce transportation cost. Fast reaction to business opportunities across the world. 2. inventory cost and lead times.Shipment swapping  Competing oil and petrochemical companies form supply chain alliances when delivering commodities to customers. 1.

GAZPROM LNG Shipments Pipeline gas MED LNG & GAS GAZ DE FRANCE .

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Getting business in LNG supply sector. . GAZPROM  GAZ DE FRANCE    Foreign market for future growth (Europe).CONTD«. Optimal use of capacity. World wide recognition.

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Gazprom In billions of USD Gaz de France In billions of euro .

Business swapping      IOCIOC-TATA MOTORS TIE UP TASS(TATA Authorized Service Stations) in IOC outlets IOCIOC-Fuel management system designed for TATA motors Tata spare parts sold in IOC outlets In turn ..Tata motors recommend IOC·s SERVO for their commercial vehicles .

Baku .SWAP arrangements between countries Iran holds strategic position  Much of the recent activity involving Iran and Caspian hydrocarbon exports has focused on swap arrangements between countries.  swap arrangements provide economic alternatives to pipeline proposals such as the Baku-Ceyhan and TransCaspian routes.

CONTD«. whereas Northeast Iran needs gas  Turkmenistan has no easy access points  Iran option offers a much lower cost as compared with existing routes to the Black Sea. .  Eastern Turkmenistan is gas-rich and oilgasoilpoor.

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Conclusion & Recommendations:     In conclusion we would offer a brief caution to the uninitiated who would venture into the hybrid economic. Our explorations have yielded special insights into this complexity. multifaceted domain which needs be approached with care.legal domain of Exchanges: economicIt is a complicated. Similar awareness is essential for the analyst intent on serious work in this field. .

Defining the SWAP Model Strategic vs Tactical Temporal vs Spatial LongLong-term vs Mid term vs Short term Local vs Regional vs Interregional Domestic vs International Crude oil vs Refined products Storage terminal vs Transportation terminal Bulk terminal vs Whole sale distribution terminal Simple vs Complex .

Game theory 2. Operations research 8. Optimization Theory .Tools identified to implement the model Tools & Disciplines 1. Logistics 6. Econometrics 7. Location theory 5. Spatial Competition 4. Regional economics 3.

Relevant Legal Areas            Joint venture Market sharing Market stabilization Division of territories/markets Oligopoly Exclusive dealing Tying agreements Requirement contracts Price discrimination Foreclosure Barriers to entry .

(2001. August).org http://www.com http://www.uh. S. BP-Veba Oel asset swapping with 23). (2002.com Schwartz. BPE.I.ON. (2000.edu/ Haberman. Newsletters of Rigzone.bp. July 23). Milmo.egr.ogj. Newspaper Articles( The Hindu. B.. Economic Times ) Oil and gas journals. .factsonfuel.References           http://www. D. April 19) http://www.

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