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Best Oil and Gas ERP software in India

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Challenges in the Oil & Gas industry

The Oil and Gas industry took a massive hit during the lockdown in 2020. Statistics show that India’s Oil & Gas consumption came down to 238 million tons in 2020 from 263 million tons in 2019. But things appear to come back on track. Projections show that the oil & gas consumption in the country will be at an all-time high of 265 million tons in 2021. However, numerous challenges persist that need immediate consideration:

Equipment readability

Decreasing downtime and improving equipment reliability are two of the most critical challenges for oil and gas companies. Companies need to constantly run their equipment within the optimal range as mentioned by the Original Equipment Manufacturer (OEM), which helps boost the “Mean Time between Repair Replacement.”

The workforce is aging

The aging workforce is a massive challenge for every oil and gas company—the main reason being the high amount of risk and volatility in this sector. As a result, when experienced employees leave, companies feel the pressure of onboarding new contractors and employees. But the main problem is that they are less experienced in their jobs and unfamiliar with how processes are executed. Therefore they need a lot of training sessions before they can perform their job efficiently.

High possibility of accidents

The oil and gas industry is susceptible to various large-scale events, such as shutdowns, turnarounds, lockout/tagout, and equipment isolation events that require a lot of planning and a few days, weeks, or months to return to normalcy. Also, oil and gas companies are an easy target to large-scale accidents during shutdowns and need extra care and planning to keep employees safe.

Frequent inspections

The oil & gas industry needs facility and equipment inspection at regular intervals. These inspections require emergency response equipment, temporary structures, operational readings, moving equipment, ladders, and much more. In addition, these inspections ensure that the processes go on efficiently, that there are no communication lapses between various departments, and that full measures are taken to ensure employee safety.

Ensure spill control

Oil and gas companies need to be wary of leaks and spills as they can cause massive destruction if not controlled on time. Many cases have been reported where employees have got third-degree burns or died due to failure in delivering a quick response.

Do you need ERP software for Oil and Gas industry?

The answers to the following questions will help you know whether you need ERP software to manage your oil and gas enterprise efficiently.

  •  Are you struggling to reduce operational costs, manage resources, and finish the project within the set deadline?
  • Are you experiencing difficulties in identifying project risks and estimating the potential success of the project?
  • Are you facing problems managing different elements of onshore and offshore projects, such as finances, schedules, and inter-department communication? 
  • Do you find it challenging to gather local finance management, technical assistance, and currency exchange information?
  • Is it challenging to adhere to international compliances and local regulations?

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The oil and gas industry involves several processes, such as drilling, extraction, purification, and distribution, making it challenging to select the right enterprise resource planning software for this industry. This section will give you a detailed explanation of the features of Sage X3 ERP software for the oil and gas industry and you should implement it in your company.

1. Asset Management

The oil and gas industry involves expensive assets, such as a refinery, offshore drilling rig, and trans-national pipelines. ERP software allows oil and gas companies to check whether they are underperforming or functioning at their optimal level?

Amortization and depreciation are integral components of financial reporting, which the ERP software uses to optimize profits.

2. Financial reporting at the local and global level

The oil and gas industry follows a glocal model meaning that it has a local headquarters with subsidiaries in multiple countries. As a result, the refineries, oil rigs, and customers are spread across the planet, which increases the burden of being compliant with various taxation laws. ERP software allows oil and gas companies to provide tax details to respective tax agencies quickly and conveniently. On the other hand, a manual approach increases the probability of human-induced errors. Also, it wastes the time of the workforce that could be utilized for performing mission-critical tasks.

3. Inventory management

Oil and gas are the two most essential commodities for companies operating in this space. Therefore, every company aims to purchase maximum quantity at minimum prices to boost their profits. However, Overstocking and missing discounts can lead to significant losses in the long term. 

This sector is also precarious because it’s impossible to predict precisely where the oil exists under the ground or in the sea. Moreover, it’s also challenging to estimate the quantity of oil. Thus, oil and gas ERP software has the extra responsibility of managing variable inventories.

4. Top-notch quality control

Oil and gas are valuable products, but they also pose a severe threat to the environment. ERP for oil companies monitors the extraction, refinement, and purification processes. They also track distribution losses in solid, liquid, and gaseous forms and enable conversions between multiple units. 

Moreover, each company has varying requirements and needs to adhere to different norms and rules. Therefore, the quality control module of the ERP system ensures that companies can meet all the specified guidelines.

5. Highly accurate business Intelligence

Business intelligence is gaining ground across each business sector. It helps make accurate forecasts and determine the future conditions based on historical records, transforming market trends, changing customer preferences, and altering geopolitical conditions. 

The business intelligence feature of ERP for the oil and gas industry helps understand demand and supply relationships and stay abreast of compliance requirements.

Today, India has a massive network of 10,419 km of crude pipeline with a cumulative capacity of 145.6 MMTPA. Moreover, the gas pipeline is spread over a length of 16,226 km and is expanding rapidly. Also, India has around 600 MMT of proven oil reserves. 

In 2017, India was the third-largest global consumer of oil globally, and since then, the consumption has only gained momentum.

Some recent developments happening in this industry are:

  1. ONGC has raised USD 300 million through the External Commercial Borrowing Route.
  2. Winter grade diesel, a variant that can be used for sustaining extreme winters, has been launched.

Future of the oil and gas industry

The oil and gas industry is one of the eight core industries in India. The future of this industry looks bright and the government of India has built a comprehensive plan to build a conducive investment ecosystem. For example, the government has allowed 100% FDI in petroleum products, natural gas, and refineries. 

In his recent keynote address, Mr. Faud Al-Zayer, the head of the Data Services Dept. at OPEC Secretariat told that the oil demand is expected to rise by 1.4% per year and constitute a mind-boggling 36.5% of the world energy mix by 2030.

Another good news for India is that the government has opened avenues for foreign investors to invest around USD 300 billion in the oil and gas industry as the country eyes on reducing oil imports by 10% by 2022.

Benefits of ERP software for the oil and gas industry

Numerous challenges in the oil and gas industry need immediate focus, such as reducing the shortage of critical materials and components, observing how much each department is spending on data, staff, and infrastructure, and facilitating cross-departmental data exchange approvals. 

Here are the top benefits of ERP system for the oil and gas industry:

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