The plunge in oil prices has impacted different industries in different ways. In the offshore oil and gas industry, this has manifested in the form of a renewed focus on improving operational efficiency and reviewing logistics to ensure that mobile offshore drilling units do not face downtime for the lack of enough lubricant supply.
This aspect becomes even more important against the backdrop of the following estimates: There are well over 350 offshore rigs in the world, show estimates published in 2015. Over the next two to three years, the total number of offshore rigs will rise, hovering around 500. Despite several environmental hurdles, offshore drilling activity will maintain its current pace – but not noticeably gather steam.
Browse Offshore Lubricants Market Report with Full TOC at http://www.transparencymarketresearch.com/offshore-lubricants-market.html
Thus, the demand for offshore lubricants will continue to rise thanks to drilling activities moving offshore in view of depleting onshore oil and gas reserves. This trend is corroborated by a recent study conducted by Transparency Market Research. The analysts of the firm estimate that offshore lubricants will constitute a US$183.50 million market by the end of 2020. The market had a valuation of US$110.86 million in 2013. If these growth estimates do hold true, the global offshore lubricants market will post a compounded annual growth rate (CAGR) of 7.07% from 2014 to 2020.
Ensuring Steady Supply of Offshore Lubricants Poses Key Challenge for Mobile Offshore Drilling Units (MODUs)
MODUs are used by producers to extract underwater oil reserves by drilling wells in the sea or large lakes. Offshore rigs don’t merely drill for oil; they also process and store oil and gas until it is transported to an onshore location via a marine vessel. By virtue of conducting operations several miles off the shore, MODUs are also faced with a unique challenge: Ensuring that they are able to maintain uninterrupted access to lubricants formulated specially for offshore drilling activities.
This concern is further compounded by the disparate offshore lubricants required for each major marine application. This is because drilling in deep water can expose MODUs to vagarious weather and temperatures, which demand varying levels of viscosity, wear resistance, and thermal stability from offshore lubricants.
How can MODUs manage Offshore Lubricant Logistics better?
Several major MODUs rely on a global product and service supply agreement (SSA) over multiple offshore lubricant suppliers. A SSA helps create a centralized management system and takes the complexity out of managing multiple suppliers. However, in scenarios where MODUs choose to opt for multiple suppliers, having a comprehensive ERP makes is crucial. This helps streamline activities in multiple stock keeping units (SKUs). But the flip side of such a logistical arrangement for offshore lubricants is the increased administration and logistics costs. In the long run, this compromises the buying power of an offshore rig operator.
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In the context of international operators, the standardization of offshore lubricants assumes even more importance. By opting for more standardized solutions, companies can eliminate the time and efforts consumed in managing multiple suppliers – especially when relocating the rig and ancillary operations to another location. That’s because a new location comes with its unique characteristics and brings up the need for offshore lubricants that are compatible with the same.