The oil and gas industry operates through a global supply chain that includes domestic and international transport, trading, shipping, ordering, and inventory visibility and control.
Last week, the government created a disruption in the entire oil and gas supply chain when it instantly moved from the Open Tender System (OTS) to a purchase plan based on Government-to-Government tendering.
Kenya selected Saudi Arabia Oil Company (Saudi Aramco), Abu Dhabi National Oil Company (Adnoc) and the Emirates National Oil Company (Enoc) to supply the country with petroleum products on credit for nine months, with an extended credit period of six months.
Experts in the oil and gas supply chain have warned that the sudden shift from OTS to Government to Government is bound to be disruptive for local companies, and for them to survive the new tendering system, they have to invest in technology, more so Systems Applications and Products in data processing (SAP).
According to Martin Waireri, the Managing Director at Goldvein Solutions, a Kenyan company dealing in SAP, local oil marketers have to now up their game since government to government agreements will mean a change in how petroleum products are taxed, shipped meaning that the overall cost will also now oscillate to a delicate balance.
They must quickly align with this sudden shift through their SAP systems. Kenyan oil and gas companies are unique in how they work. Without the application of the latest technology, especially SAP, it would be impossible to have flawless import of oil from the desert wells of a county like Saudi Arabia to the Kenyan consumer.
Oil must be tracked from the day it is pumped into well ships, onwards to the day it is sucked into the Kipevu Oil Terminal, to being transported by Kenya Pipeline Company’s (KPC) labyrinth of pipelines to inland depots.
Mr Waireri said that oil and gas companies must be careful in their application of SAP for this import process to be flawless.
“At Goldvein solutions, we have come up with the ‘SAP business 1’, a locally customized SAP system for oil companies. Even as oil companies adopt SAP, they have to adopt it at a favourable cost. Our solution is the time used to implement SAP by an oil company is reduced, which as a direct impact on the cost,” said Waireri.
“Through collaborations with the Cloud, we eradicate the need for a company to invest in expensive IT infrastructure such as servers – the physical hardware, the operating system and the human resource to operate the server. All this is a cost eliminated by Cloud. We have been able to partner with Microsoft on this. It is a solution that oil and companies need as they cut costs while embracing the government-to-government agreement.”
Chris Mathenge, the Goldvein Sales Executive, also emphasized the urgency for oil companies to adopt SAP.
“To be cost-effective, companies have to adopt SAP. Locally we push SAP not only to oil and gas companies but also to companies in manufacturing, construction and even distribution and wholesale. Small and Medium Enterprises (SMEs) too have to adopt SAP,” he said.
Antony Wamae, an SAP Consultant and tech lead said SAP will give businesses especially those in the oil and gas industry great visibility.
This article first appeared on Standard Media, Kenya.