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FUTURE GROWTH: DHL Exel Supply Chain’s Kevin Murray is hoping to expand the company’s flourishing oil and gas division into offshore logistics activity.

Coordinating the supply chain operations of the Middle East's largest oil companies is a logistical challenge that requires dedicated resources and expert knowledge - factors that DHL Excel Supply Chain has successfully mastered over the years.

DHL Exel Supply Chain, the logistics arm of global heavyweight Deutsche Post World Net (DPWN), is enhancing its oil and gas service provision across the Middle East to meet growing demand for the efficient transportation of drilling equipment and spare parts.

Highlighting its impressive market share in the region, the group's Exel Supply Chain (ESC) division recently concluded a lucrative 10-year contract with Saudi Aramco, the world's number one crude oil producer.

The deal represented one of the largest contracts of its kind in the Middle East, where demand is particularly prevalent in countries such as Saudi Arabia, Qatar, Kuwait and Oman.

The scale of operations in these countries has grown dramatically on the back of the region's current economic boom, although ESC can actually track its local operations as far back as 1977.

Unsurprisingly, the company has flagged Dubai as a regional hub, thanks largely to its strategic location for distribution operations, with access to a large regional market covering the Middle East, Indian subcontinent, North Africa and the Caspian Sea region.

"If you divide the oil and gas business into its three distinct sectors of upstream, covering drilling and production activities, downstream, which is refining, and then major freight forwarding, covering project builds, we are now active in all of the above through the DHL family of express, freight and Excel Supply Chain operations," explains Kevin Murray, ESC's supply chain director for the oil and gas division in Europe, Middle East and Africa.

To meet the high demands and specific challenges thrown down by the regional hydrocarbon sector, Murray states the Exel Supply Chain oil division is migrating from traditional logistics to become a specialist oil and gas service provider.

That means we have a robust understanding of what the well engineers right across the region are trying to do," he says.

By managing the logistics operation on behalf of an oil company, we can add more drilling days and add much more value than a pure freight provider because this division is tailored to industry needs, and staffed by professionals with an acute knowledge of oil and gas operations.

Focussing on the Middle East, ESC is working with Saudi Aramco and PDO in Oman in upstream sectors, where it has developed processes and systems to optimise heavy equipment moves and spare parts logistics.

"Currently in Oman there are around 35 large land rigs, which are periodically broken down and moved to new sites. Each of these are a fair size and weigh up to a couple of hundred tonnes," says Murray.

As the region gears up its production capacity to meet record world demand, one of the crucial factors facing the industry is moving the huge rigs to where they will be most productive. Simply purchasing new equipment isn't always an option as the manufacturers and equipment providers are stretched to capacity and lead times are generally long.

"In Oman, the primary challenge is how to optimise these overland rig movements, because it's resource constrained. There simply isn't much spare equipment around at the moment so making the best use of those physical assets is vital," adds Murray.

Oman's oil resources are typically much more fragmented than some of the region's larger fields. However, with approximately 5.5 billion barrels of proven declared reserves, it remains an important producer in the region, and an important market for ESC.

"Recently we've started moving the rigs through the night in Oman. The key issue with working after dark is health and safety. It's a dark, hot environment, and if you stumble across unexpected problems, the remoteness compounds the safety issue too," Murray explains.

The distances involved in moving land rigs can be large, but the remoteness of the sites they are being moved from and to throws up additional hurdles to a successful logistics operation.

Road access to some of the fields in this region can be limited or non-existent in some cases, so safely moving all of this heavy equipment through the desert raises several operational challenges," remarks Murray.

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