2025Drilling Rigs & AutomationJuly/AugustSafety and ESG

Companies take strategic looks at building in resilience amid rising supply chain complexities

Digital tools help to optimize supply chain management, but forward planning and strong vendor relationships still remain essential

The supply chain panel session at the 2025 IADC World Drilling Conference in Amsterdam on 10 June featured (from left) Ludivine Laurent Bureau, NOV (moderator); Lars Erik Dale, Equinor; Isabela Louback, Precision Drilling; Signe Martedal, Noble Corp; Michael Fry, ModuSpec; and Shane Marchand, H&P (moderator).

By Stephen Whitfield, Senior Editor

The E&P supply chain is a complex and highly specialized space, but, at the end of the day, it functions the same as the supply chain for any other industry. Operators and drillers are focused on getting what they need, when they need it, for the best price, all while managing hidden costs and operational risks.

With companies diversifying and incorporating new businesses and technologies into their portfolio and operations, the process of getting the supplies they need will continue to become increasingly complex. Developing systems and protocols to help better manage those complexities will be a continued focus for the industry.

“I don’t think that our supply chain, even as we optimize and automate it and add transparency to it, will be less complex,” said Signe Martedal, VP of Supply Chain Management at Noble Corp. “With all the things that are happening in the world, we will continue to see a very complex supply chain, and that requires different skillsets than we’ve had up to now – a more analytical and strategic skillset. That can help us turn this complexity into a competitive advantage.”

At the 2025 IADC World Drilling Conference in Amsterdam, The Nether-lands, on 10 June, a panel of industry representatives discussed the drivers that will be critical for optimizing supply chain management in the near- and long-term future.

Not surprisingly, the digital transformation weighed heavily on the discussion. Michael Fry, Director at ModuSpec, noted that machine learning algorithms can help drillers enhance their decision making around supply chains. Companies can input their equipment maintenance schedules into large language models (LLMs), and those models can work with other models tracking equipment usage.

Typically, maintenance schedules are manual inputs into spreadsheets. With machine learning, Mr Fry said, drillers and operators can effectively create their own “digital SME,” which can provide automated updates of their maintenance schedules that better match actual equipment usage. This function mitigates the risk of having unexpected shortages in equipment.

“Relying on emergency spares is not always the best way to handle business,” Mr Fry said. “Sometimes a company will think they can just get everything with a call to the OEM when the reality is there may be four other drilling contractors making that same call. (By using machine learning), we can give the OEM a forecast and tell them this is what we’re going to need based on historical usage. These systems give you the ability to validate that information.”

At Noble, the digital transformation has involved a lot of integration of enterprise resource planning (ERP) systems, Ms Martedal said. With the company engaging in a pair of significant acquisitions over the past three years – Maersk Drilling in 2022 and Diamond Offshore Drilling last year – the company has had to fold in those organizations’ ERPs to its own.

As part of the ERP merger process, Noble has reexamined its process governance protocols to optimize its supply chain management. Ms Martedal said LLMs have been useful in reviewing protocols within each ERP to help create updated process descriptions – specifically, the company has used them to review contract management and sourcing protocols.

“We’ve had to change focus to become much more process driven and data driven than in the past,” she said, noting that the company has leveraged its digital transformation to create stronger governance.

Isabela Louback, Director of Supply Chain at Precision Drilling, said she sees digitalization as a key enabler in connecting supply chain management with operations management. For instance, the company’s digital twin is a valuable resource of performance data that its supply chain can use in requests for quotations (RFQs). Earlier this year, the company used sensor data collected from a rig’s digital twin to help inform an RFQ for mud pump consumables.

“In the past, all of this information was just based on rig manager preference,” she said. “But now we have sensors providing all of this performance data. Supply chain partnered with operations, and together we were able to leverage that data in our RFQ. If technology doesn’t help you connect and integrate supply chain with your operations team, it’s not going to add value to the supply chain.”

Flexibility in compliance

Ms Louback also stressed the importance for companies to integrate its supply chain management with its compliance efforts, especially considering the shifting regulatory environment. For every one of its operating regions, a company should maintain strong partnerships with service providers and customs brokers that both understand how the industry functions and the intricacies of local legislation.

While this may sound straightforward, Ms Louback pointed to examples where poor relations with customs brokers have led to unnecessary costs. For instance, prior to joining Precision Drilling, she came across a job in Cameroon where her company was unable to move equipment out of the country because the broker and freight forwarder overlooked the proper documentation needed.

There was also a job in Brazil where her company had challenges with drill pipe elevators. “I remember checking the importation declaration and looking to the descriptions, and the customs broker was classifying the elevators as elevators for a building, not drill pipe elevators. The company was paying unnecessary tariffs because there wasn’t a good partner working with them. You need to have very close relations with your legal and compliance departments.”

Ms Louback also noted the importance of Precision investing in training within its supply chain groups to stay updated on changing regulations. “Compliance, for me, is all about international regulation and trade compliance. Compliance and supply chain work together – you cannot separate them. In everything we do – procurement, importation, exportation – we need to follow regulations and standards.”

Mr Fry agreed on the need for drillers to look at how regulations can affect suppliers’ ability to deliver product in a timely manner. He noted that some operators are mandating more frequent overhauls of equipment on their work sites in anticipation of potential regulatory changes. That means it’s critical for drillers to engage in more aggressive forward planning. Rather than looking at the typical five-year overhaul of equipment, drillers might need to consider 18- to 24-month intervals. Even if these plans do not result in significant upgrades, they can put the driller in a better position to adapt to changing conditions.

One example where standards impacted planning was the fifth edition of API Standard 53, he noted. Published in 2018, the revised edition of Standard 53 introduced major changes for requirements around the installation and testing of BOPs on land and offshore rigs. One change, for example, was shifting BOP requirements from the recommended working pressure of the equipment to the maximum anticipated surface pressure of the well. With operators needing to make sure their BOP stacks were configured to the new standard, drillers were left incurring unanticipated costs.

For drillers, the challenge is ensuring that their equipment offers enough reliability and performance to meet changing compliance requirements, Mr Fry said, noting that some drillers have come to “lean on the OEM” with Standard 53. That can be a costly endeavor, however, and he urged drilling companies to stay ahead by looking at the current landscape of compliance and regulations.

Building sustainability into the supply chain

Sustainability is another area that will define the evolution of the supply chain. Lars Erik Dale, VP of Drilling, Well and Intervention at Equinor, said there needs to be alignment among operators, drillers and suppliers on emissions goals as companies approach various net-zero deadlines. As an operator, Equinor has been proactive in building net-zero goals into its procurement processes.

The company’s energy transition plan, first released in 2022 and updated earlier this year, calls for a 15-20% reduction in net carbon intensity by 2030 and a 30-40% reduction by 2035. The ultimate goal is to reach net-zero by 2050.

To progress these goals, Equinor has been working with suppliers to reduce its greenhouse gas footprint, Mr Dale said. In 2023, the company joined the Carbon Disclosure Project (CDP) Supply Chain Program, which entails asking suppliers to complete environmental disclosure questionnaires assessing the environmental risks and impacts in their operations. Nearly 80% of Equinor’s suppliers had responded to the questionnaires by year-end 2024.

“We understand that there’s a global shift with net-zero right now, and we think that’s crucial for the future,” Mr Dale said. “We also think it’s important that our suppliers share the same ambitions. Even though it’s not a requirement, it’s something where we like to see that they have the necessary ambition in this area.” For Equinor, the CDP survey is a tool that can help assess if a supplier shares that same ambition.

Last year, Equinor also set out four sustainability expectations for its suppliers, including participation in the CDP. Along with that, it asked suppliers to:

Set net-zero ambitions and near-term emissions targets;

Disclose Scope 1 and 2 emissions, plus estimates of Scope 3 emissions; and

Engage with their own suppliers on emissions disclosures and net-zero plans.

Further, Equinor has been evaluating suppliers based on sustainability. Mr Dale even noted that his company does not rule out hiring suppliers at a higher cost in order to meet sustainability qualifications, although he stressed that those decisions come on a case-by-case basis. “Sometimes the CO2-friendly solution is more costly, but at the same time, it’s important for us to still look at that solution and push our suppliers to ensure that we’re working together to employ all the right solutions.” DC

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