World class oil and gas operating companies apply supply chain management to minimize the risks of investment costs overrun, delays and future higher operating costs of field development projects. Supply chain is a cross-functional approach to plan the flow of goods and services required by a project, based on its front end loading (FEL) specifications, in order to meet business objectives with a successful execution and total satisfaction of the final customers. This paper presents lessons learnt from modeling the supply chain of a steam-based thermal enhanced oil recovery (EOR) heavy oil field development project in Kuwait.
A critical building block of a supply chain model is the supply-demand matrix, which is prepared using information about the needs of the steam-based thermal EOR assets (natural and physical) and identification of requirements organized in segments, around capital, technology or manpower categories. A preliminary identification was made about local capabilities to meet these requirements.
A work breakdown structure from the front-end engineering design was used to generate a supply-demand matrix with materials including special needs such as energy, water and logistics. The model allows the identification of critical requirements and the information to design alternate options to reduce the risk of lack of supply. One practical result is a map with all required suppliers classified according to the type of goods or services, and the specifications or scope of work for selecting a contracting strategy.
Supply chain modeling provides a best practice to meet the demand of goods and services of complex heavy oil steam-based thermal enhanced oil recovery projects. It would help to guide the process of building capabilities in Kuwait oil industry for this type of recovery technologies, which will play a critical role in long-term business strategy.