How Essar Oil Achieved Operational Excellence

In order to achieve a single version of truth across its value chain with real-time performance management KPIs, the company leveraged operations intelligence solutions.

Essar has a global portfolio of onshore and offshore oil and gas blocks, with about 35,000 sq km available for exploration. They have about 700,000 bpsd (barrels per stream day) of global crude refining capacity (Vadinar+Stanlow). In marketing, the company operates a network of over 2,100 retail outlets across India, with another 2,600 under various stages of commissioning. Essar Oil is the first private company in India to enter the refined products marketing sector. The oil company has a pan-India network of 1,700 retail outlets and plans to open approximately 5000 retail outlets by 2017. Business challenges The company’s major focus is on two key areas of operations -refining and marketing. To gain relevant insights from across these domains, take informed decisions and respond quicker to challenges, they needed a solution. After setting up a 20 MMTPA refinery, the company wanted to maximize returns from the high-complexity refinery through operational excellence. Measuring, monitoring and improving on the KPIs across the complete value-chain of the refining business (crude to product) was a mammoth task. Besides, they were facing some technical challenge such as direct integration to Level 2 systems of refinery (DCS, OPC, etc.), SAP R/3 System to populate data and bring them into a central system maintained in Excel, Word, email, pdf, etc. They wanted to steer clear of manual Excel-based reports being circulated across the organization. The management wanted to view dashboards on mobile and a provision for self-service BI for Adhoc Analysis to reduce dependency on IT for data and reports. Also, sales force on the go wanted to track their performance on either tablet or mobile. Solution deployed In order to achieve ‘single version of truth across value chain’ with real-time performance management of organization-wide KPIs, EOL implemented the oil and gas specific analytics tool from Siemens XHQ across four key business transaction systems: SAP ERP, Aspen Tech’s Manufacturing Execution System, Commodity trading platform of ‘The Bulldog’ and a set of custom-made Microsoft technology-enabled solutions. The data generated from these systems is approximately to the tune of 1.5 TBs. ‘Siemens XHQ provides operational and business data in real time. The solution gets them single coherent view and timely picture of a situation. Information from different system/sources come together in a meaningful way. XHQ builds real-time and actionable views of desired KPIs for respective business functions,’ says Vikas Prabhu, CIO, Oil, Gas & Retail at Essar Energy. However, Siemens XHQ did not have mobile compatibility as well as self-service BI functionality which confined users for performing any detailed ad-hoc analysis and build customized reports on the fly. In order to provide real-time visibility of retail business performance and customers to business on mobile and enable them to take prompt decisions, a Retail Command Center project was initiated. Key KPIs and static reports were delivered through a data visualization tool Datazen, SSAS and SSRS to top management whereas analysts were provided Power Pivot for ad-hoc analysis. With the growth in retail business, the requirements for predictive analysis, social media analysis and unstructured data analysis have evolved which they plan to tackle by leveraging advanced analytics tools such as R in near future. Command Center was divided into two sub-projects: Refinery Command Center and Retail Command Center. The costs incurred to for the development and implementation are Rs 36 lacs and Rs 20 lacs respectively. “Using Siemens XHQ, we have integrated whole refinery business value chain key KPIS of EOL on a single platform to provide single version of truth to the key stakeholders, says Vikas. Benefits achieved EOL by migrating from SAP BI to Siemens XHQ saved cost under different heads which ultimately lead to following cost saving in a year’s time.

  1. Development & support cost saving per year - Rs 30 Lakhs
  2. Server cost saving (assuming server life of 3 years) - Rs 23 Lakhs
  3. Incremental license cost saving per year - Rs 25 Lakhs
  4. Total benefits per year - Rs 1.98 Crore
  5. Increased cost saving per barrel of oil produced (USD/Barrel) - 0.003
Plus, efforts of 2/3 man-days to collate data from different source system and build Excel-based reports were reduced with automation of dashboards. Employee productivity has improved as delay due to dependency on MIS and IT team was eliminated. This helped both MIS and IT team to focus on other critical projects. Standardization and streamlining of processes with the help of process flow charts and real-time tag information improved operational efficiency of complex refinery and maximized production output thereby reducing production cost. Number of incidents were reduced by taking pro-active preventive measures based on the historical incidents data which improved safety levels at refinery. With the help of clear visibility and timely notification of critical equipment maintenance cycle the equipment components were serviced on time thereby reducing equipment failure and maintenance cost. Achievements They have built an internal team with Siemens XHQ expertise which ultimately led to cost-saving cited above. They covered 100+ KPIs of company’s balanced scorecard and those monitored by functional heads and their line managers. “We are the first Oil & Gas Company to implement Datazen within an organization, says Prabhu. After the successful implementation of Siemens XHQ in India Refinery, AOL is now planning to implement the Refinery Command Center at Essar Oil UK Refinery.


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