WHITEPAPER 
          
          
        TRANSPORT LOGISTICS 
          
          
        Evaluation of the effect of different logistic conditions 
          
        applied to oil supply chain 
         SAFER, SMARTER, GREENER 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                               Prepared by DNV GL – Software 
                                                               2017  
                                                               © DNV GL AS. All rights reserved 
                                                               This publication or parts thereof may not be reproduced or transmitted  in any form or by any means, 
                                                               including copying or recording, without the prior written consent of  DNV GL AS  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                
                                                                
                                                                
                                                               Table of contents 
                                                               1                                           INTRODUCTION .............................................................................................................. 1 
                                                               2                                           SUPPLY CHAIN DEFINITION ............................................................................................. 1 
                                                               2.1                                         Description of oil supply chain logistics                                                                                                                                                                                                                                                                                                                                                                                                                        2 
                                                               3                                           PERFORMANCE FORECASTING METHODOLOGY ................................................................... 4 
                                                               4                                           CASE STUDY: FLOATING, PRODUCTION, STORAGE AND OFFLOADING .................................. 5 
                                                               4.1                                         Description of digital twin                                                                                                                                                                                                                                                                                                                                                                                                                                      5 
                                                               4.2                                         Maros for performance forecasting                                                                                                                                                                                                                                                                                                                                                                                                                                5 
                                                               5                                           RESULTS ..................................................................................................................... 14 
                                                               6                                           SENSITIVITY ANALYSIS ................................................................................................. 19 
                                                               6.1                                         Sensitivity 1: Operating rules                                                                                                                                                                                                                                                                                                                                                                                                                             20 
                                                               6.2                                         Sensitivity 2: Number of ships                                                                                                                                                                                                                                                                                                                                                                                                                             22 
                                                               7                                           CONCLUSION ............................................................................................................... 23 
                                                               8                                           REFERENCES ................................................................................................................ 25 
                                                                
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                                                               1  INTRODUCTION 
                                                               The petroleum industry is separated into three major operations: upstream, midstream and downstream 
                                                               activities. 
                                                               The  upstream  operation,  also  known  as  the  exploration  and  production  (E&P)  sector,  covers  the 
                                                               exploration, production and transportation of gas and crude oil from the oil fields to processing units, 
                                                               where the final products are produced, mainly refineries and gas treatment facilities (GTF). 
                                                               Midstream operations are commonly included as part of downstream operations for much of the oil and 
                                                               gas industry. The midstream and downstream activities take place after the initial production phase and 
                                                               through to the point of sale.  
                                                               The downstream operation is a term commonly used to refer to the refining of crude oil and the selling 
                                                               and distribution of natural gas and products derived from crude oil. Such products include  liquefied 
                                                               petroleum gas (LPG), liquefied natural gas (LNG) gasoline or petrol, jet fuel, diesel oil, other fuel oils, 
                                                               asphalt and petroleum coke.  
                                                               There is an important and common area to all operations: the transportation logistics. Basically, all 
                                                               activities need to assess the level of product to be delivered. On the upstream operation, there is a need 
                                                               to supply a certain amount of the oil and gas to the processing units or onshore storage terminals – a 
                                                               failure  during  this  stage of  operation  can  directly  impact the  operation for  the whole chain. On the 
                                                               downstream operation, the transportation is even more important because the product is frequently 
                                                               delivered directly to the end user. 
                                                               Logistics play a big role in a company’s operation and are critical to the competitiveness of that company. 
                                                               The demand for products can only be satisfied through the proper and cost-effective delivery of goods 
                                                               and services. 
                                                               Nowadays, logistics  operations  represent  a  big  share  of  the  market  and  the  expenditures  on  these 
                                                               operations are in the order of trillions of dollars annually.  
                                                               Despite the recession in the United States in 2010, the logistics operations costs reached $1.2 trillion, an 
                                                               increase  of  $114  billion  from  2009.  The  number  is  even  more  incredible  when  evaluated  by  the 
                                                               contribution on the nation’s gross domestic product (GDP). The logistics participation in the US economy 
                                                               represents 8.3 per cent of the nation's gross domestic product (GDP) in 2010, compared with 7.8 per 
                                                               cent in recession-wracked 2009. 
                                                               In this scenario, where trillions of dollars are in place, even a small increase to the efficiency of deliveries 
                                                               schedules and contracts represent a large amount of money. 
                                                               2  SUPPLY CHAIN DEFINITION 
                                                               The supply chain is defined as follows (Hugos, 2011): 
                                                               “A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The 
                                                               supply  chain  not  only  includes  the  manufacturer  and  suppliers,  but  also  transporters,  warehouse, 
                                                               retailers, and customers themselves.” 
                                                                
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