Smart Logistics Strategy to Enhance Sustainability in Oil and Gas Industry

The oil and gas market in Southeast Asia is expected to register a compound annual growth rate (CAGR) of over 4% during the forecast period. The implementation of smart logistics is an innovative solution that can maximize productivity and reduce operational costs. With advanced technologies such as the Internet of Things (IoT), big data, and information-based management systems, companies in this sector can track and manage the flow of goods and information in real-time.

Amidst the challenges faced by the oil and gas industry, the implementation of smart logistics can help optimize the supply chain, from exploration to refining and distribution. For example, Indonesia, which has significant oil and gas reserves, plans to double its refining capacity and increase upstream activities to offset declining output from aging fields. By using smart logistics solutions, companies can be more efficient in managing production processes, minimizing waste, and improving security in shipping. Therefore, the implementation of smart logistics not only improves operational efficiency in the oil and gas market but also contributes to the sustainability and competitiveness of companies in an increasingly competitive market.

However, there are challenges to be overcome, such as declining crude oil reserves and lack of investment in the upstream sector, which could hamper the growth of the market. Nevertheless, countries such as Brunei, Vietnam, and Myanmar have great potential in the oil and gas industry across all sectors: upstream, midstream, and downstream. This could be a significant opportunity for the oil and gas market in Southeast Asia. In addition, Indonesia is expected to dominate this market due to the construction of many new refineries, which will increase the country’s oil production and processing capacity.

Southeast Asia Oil and Gas Market Trends

The downstream sector is predicted to dominate the oil and gas market in Southeast Asia as demand for refined products from the chemical, petrochemical, and transportation sectors increases. With the region’s population expected to grow by around 13% by 2030, the need for more petroleum products will become increasingly urgent. According to the BP Statistical Review of World Energy 2022, Singapore has the largest refining capacity in the region, reaching 1,461 thousand barrels per day in 2021, followed by Thailand, Indonesia, Malaysia, Vietnam, and other Southeast Asian countries.

With the increasing demand for petroleum products and countries’ efforts to achieve energy independence, downstream infrastructure in Southeast Asia is expected to expand rapidly in the coming years. Indonesia, Malaysia, Brunei, Singapore, Thailand, Vietnam, and the Philippines are planning to expand existing refineries or build new ones. Malaysia, for example, has invested heavily in refining activities over the past two decades and is now able to meet most of its domestic demand after relying on refineries in Singapore for years. Three large integrated petrochemical complexes (IPCs) have been built in Malaysia, namely in Kerteh, Gebeng, and Pasir Gudang-Tanjung Langsat. Countries such as Brunei and Vietnam are also expected to secure several EPC contracts in the downstream sector in the near future. For example, in August 2022, PetroVietnam announced plans to build an oil refinery with a crude oil processing capacity of 24 to 26 MT/year in Ba Ria Province, Vung Tau, southern Vietnam, with a total planned investment of USD 18.5 billion for two phases of construction.

Indonesia Expected to Dominate the Oil and Gas Market

Indonesia has proven oil reserves of 2.5 billion barrels and proven gas reserves of 49.7 trillion cubic feet as of 2021. With a diverse geographical profile, Indonesia has 60 sedimentary basins, of which 36 have been fully explored in Western Indonesia, and 14 basins are producing oil and gas. These significant oil and gas reserves drive research and production activities, which are expected to stimulate the oil and gas market during the forecast period.

Although Indonesia’s oil production in 2022 reached 834 thousand barrels per day—down from 858 thousand barrels per day the previous year—the country is ramping up upstream activity to offset declining output from aging fields. The Indonesian government has also announced plans to double its refining capacity by 2025, targeting 2.2 million barrels per day. This plan will result in significant refinery and petrochemical plant construction and upgrade projects. For example, in January 2023, Indonesia’s Energy Ministry announced plans to offer ten oil and gas working areas, including one block in the South China Sea, as part of an effort to boost energy production and make new discoveries. With a target crude oil lifting capacity of 1 million barrels per day and gas lifting capacity of 12,000 million standard cubic feet per day by 2030, Indonesia is expected to become the oil and gas market leader in Southeast Asia during the forecast period.

Optimizing Oil Production through Smart Logistics

Essential oil production requires the application of smart logistics concepts to optimize the complex supply chain. This process combines agriculture and industry, with challenges such as short raw material shelf life and the need to harvest in certain conditions. By using innovative technologies such as Enterprise Resource Planning (ERP), Warehouse Management System (WMS), and Radio Frequency Identification (RFID), the industry can improve operational efficiency, reduce delivery times, and ensure compliance with transportation standards. The implementation of smart logistics allows for real-time tracking and better management of resources, thus maintaining the quality of raw materials throughout the production process.

In an effort to improve the efficiency of the logistics system, the focus on smart logistics also includes market research, development of new technologies, and product quality control. With this approach, the essential oil industry can adapt quickly to market needs, minimize losses, and increase customer satisfaction. The integration of advanced technologies in smart logistics not only improves production performance but also creates better conditions for sustainable growth in the essential oil sector.

TransTRACK: Optimization Solutions for the Oil and Gas Industry Supporting Smart Logistics

In the highly competitive and ever-growing oil and gas industry, the need to improve efficiency and productivity is a top priority. TransTRACK is here as an innovative solution that can optimize the supply chain in this sector by supporting the implementation of smart logistics. With integrated advanced technology, TransTRACK offers a variety of features specifically designed to meet the needs of the oil and gas industry.

One of the main features of TransTRACK is a real-time fleet monitoring and management system. With the ability to track vehicle positions and delivery conditions in real time, companies can ensure that every delivery is carried out on time and in accordance with safety standards. In addition, TransTRACK provides in-depth data analysis, allowing companies to identify patterns, analyze performance, and respond to changes in market demand quickly. Thus, decisions made become more data-based, reducing risk and increasing operational efficiency.

TransTRACK also allows integration with other management systems, such as warehouse management systems (WMS) and transportation management systems (TMS), to create a coordinated and efficient supply chain. The application of Internet of Things (IoT) technology and big data in TransTRACK helps companies to collect and analyze information in real time, thereby increasing transparency and reducing downtime. With TransTRACK support, the oil and gas industry can not only optimize their operations, but also contribute to sustainability and competitiveness in an increasingly complex market.