Partnering for oil

Shores of success The successful handling of Shell’s shore management requirements has established Allcargo as a top performer in the niche area of oil & gas logistics

About a 100 km from Mumbai’s shores lies an ancient rift in the ocean floor, which bears rich fields of petroleum and gas. One of these is the Panna-Mukta-Tapti oil field, jointly owned by India’s state-owned Oil and Natural Gas Commission (ONGC), and private sector entities Shell(formerly British Gas) and Reliance Industries. The area is rife with oil rigs which mine the precious black gold and pipe it back to shore.

If running an oil rig is a highly complex activity, a large part of the job involves managing the shoreside operations. Shore management is a niche industry, which involves handling multiple tasks, from bulk handling and transportation of chemicals, cements, crude oil, drills, pipes, etc to management of heavy equipment, vessel charters and warehouses, to sea, rail and road logistics and workforce management.

Allcargo, a pioneer in delivering integrated and customised logistics services to customers, has partnered Shell to handle the shore management services for the Panna-Mukta-Tapti operation.

The mandate for Allcargo was to provide logistics support for all movement of materials required for on-going operations, such as production, well service activities, drilling, development and other project activities in the field. These materials needed to be received, verified, stored and loaded on to the Off-shore Supply Vessel (OSV). The scope of work typically requires managing the OSV handling jetty, providing open and covered storage facilities with infrastructure to make pipe assemblies, facilitating dry bulk and mud mixing storage facility, managing the oilfield equipment maintenance facility and setting up communication network.

“For Allcargo, providing project and engineering solutions is a key expertise area. However, the Shell shore management project was an entirely new engagement. In all, Allcargo was supposed to provide 23 different services under one service contract,” says Captain Sandeep Anand, CEO, projects and engineering solutions, Allcargo Logistics.

The contract covered a number of Allcargo competencies, as well as some new ones added specifically for the client. The capabilities included warehousing, yard management, chemical storage, jetty operations and lifting equipment. And it also covered areas such as security services, food service, CHU maintenance, third party audit, ensuring legal and statutory compliance, facility administration, people management i.e. HR and industrial relations, and even provision for a paramedic and an ambulance.

The project was a huge responsibility and a matter of pride for the company, and yet it was a calculated risk for the logistics company to take on the management of the entire gamut of shore activities for an oilfield,” says Samson Frank, project head.

What was especially daunting was that Allcargo had to get into activities such as customs handling and port activities for a large number of items. Not a part of Allcargo’s core business, the company took on the management of multiple vendors so that it could offer a unified, seamless solution to Shell. Vendor management itself became a critical component in maintaining the efficient functioning of the oil field.

The Shell contract is a huge and shiny badge of honour for Allcargo. Although shore management service providers can be found in developed markets, the prestigious Shell contract was the first win for an Indian company. “In India, oil refinery companies still prefer to deal with different vendors for different services. The unification of services under one umbrella was not only a first for Allcargo, but also in India,” says Captain Anand.

For the past two years, Allcargo has been doing all that was required and more. It’s expertise and excellence led Shell to confer Allcargo with the ‘Best Ethical Code’ Award in 2016. The award was for efficient management by Allcargo in ensuring an accident-free tenure. Allcargo deployed the highest safety standards on the project.

In many ways, the Shell project has opened up a new vista of opportunities for Allcargo. One of the benefits is that learning from this experience can be applied to similar projects. For instance, the strict safety standards established for the oil & gas industry can be adapted to other industries such as chemicals. The smooth running of the Shell project has established Allcargo as a highly competent integrated service provider for the oil and gas sector.

What Allcargo provided as shore management services

  1. Managing the OSV handling jetty
  2. Providing open and covered storage facilities
  3. Infrastructure to make pipe assemblies
  4. Facilitating dry bulk and mud mixing storage facility
  5. Managing the oilfield equipment maintenance facility
  6. Setting up a communication network
  7. Warehousing and yard management
  8. Chemical storage facilities and oversight
  9. Lifting equipment and services
  10. Security services
  11. Food service
  12. CHU maintenance
  13. Third party audit, ensuring legal and statutory compliance
  14. People management i.e. HR and industrial relations
  15. Provision for paramedic and ambulance

Quick Bytes

The arrangement with Shell was India's first-of-its-kind shore management services project.
Allcargo provided 23 different services bundled together in one service offering.
Shell conferred Allcargo with Best Ethical Code Award in 2016.