New market creation for material management in E&P sector oil field warehouse and services: Pioneering convergence

Abstract

Exploration and Production activities for oil and gas in India have gained momentum with the launch of NELP and changes in the Government regulations. This has led to enhancement of the allied services related to the E&P – logistics and warehousing of the equipments and materials required for carrying out these activities. There is an unarticulated need of the industry to provide a holistic approach to the material management and logistical requirements exclusively for the Oil & Gas industry. Oil Field Warehouse and Services (OWS) is a pioneer in identifying this market gap and developing a business model which is highly successful as can be seen from its operations. The objective of this CCS was: • To study the new market that has been created for material management • To study the business model of OWS and identify the key success factors that have enabled it to be the sole SEZ based material management company • To study the external environment and its effect on new entrants to the sector OWS being the only company operating in this domain, this CCS shall treat OWS as a primary case study to identify its key success factors for its operations and the reason for its inimitability by any other company since it has been there since 2006 and no other participant has entered this market even though it is highly profitable. We studied the E&P industry and its needs related to the material management. Next step was to study the Logistics industry and find out its Critical success factors and also study the warehousing industry with the same objective. These studies were conducted specific to the material requirement for the E&P sector. There was a possibility for new market creation which could enhance the efficiency of the E&P operators besides making the material management hassle free for them. This opportunity was taken up by OWS and we studied its genesis, the challenges and the key drivers for its success. We have conducted primary research in our CCS as we had access to the individuals at OWS. Our conclusion from this study has been that OWS is a “Pioneer in Convergence” who has created a market space by sheer identification of an opportunity and has successfully converted it into a feasible and viable business.