AJOT Digital Edition
Issue #583 | Forest Products

Cover of issue-583.png

Forest Products

View Issue #583 Now!

2014 Media Kit
  • Share this article:

Dynamic growth in oil and gas sector creates an open market for logistics providers

By: | at 12:51 PM | Channel(s): Transport Intermediaries  

​This is, in part, due to the emergence of substantial E&P activity in new locations which acts to drive up logistics spend. Ti’s new report,Oil and Gas Exploration and Production Logistics 2013, identifies double-digit growth in the E&P logistics spend in Russia, Latin America, Africa and Asia Pacific for 2012. In Europe and the USA the market grew by 8% and 8.5% respectively.

In addition, the role of the largest oil companies, known as ‘Super Majors’ has declined as a proportion of overall activity, with independent companies becoming more adventurous in discovering fields and adopting technologies. The added complexities of new discoveries and new geographies as well as a disproportionate rise in logistics costs in the industry have created an attractive, open market for logistics service providers.

Therefore, the market for outsourced logistics in the conventional oil and gas sector is growing faster than the already impressive expansion in the sector as a whole. To compound this, the logistics demands of ‘non-conventional’ oil and gas resources are very different from those of conventional wells, whether they are on-shore or deep-sea. The potential here for logistics service providers is vast.

The variable nature of the market’s supply chain is reflected in the specialist competencies shipping companies and LSPs offer the oil and gas industry. Thomas Cullen, Senior Analyst at Ti and lead author of the report suggested, “The oil and gas E&P sector continues to be highly attractive in terms of overall growth. However, logistics providers should consider the distinct logistics requirements of different market segments. It is a specialist market which rewards focus and commitment, but the growth prospects are variable depending on the type of logistics service provided,” said Cullen.