Introduction – The Case for Offsite Automation

In modern refineries, Offsite Operations — Oil Movement & Storage (OMS) — manage the flow and storage of crude, intermediates, and finished products across tanks, pipelines, process units, ships, and trucks. These operations typically involve 80–90 discrete tasks every day, ranging from crude transfers to product loadings.

When handled manually, OMS operations are complex, labor-intensive, and prone to costly errors. The relief from these labor-intensive tasks that an integrated OMS automation system can bring is significant. Outdated systems can drain profitability — for example, a 250,000 bbl/day refinery can lose over $12 million annually due to inefficiencies.

By contrast, an integrated OMS automation system, particularly when combined with blending control, can transform operations — delivering measurable gains in quality, yield, safety, and inventory management. This case study draws on multiple refinery examples and insights from Dr. Suresh S. Agrawal’s white paper to examine the Return on Investment (ROI) of automating OMS and blending operations, exploring both tangible benefits and intangible advantages, as well as implementation best practices.

Understanding the Complexity and Challenges of OMS Operations

Before quantifying ROI, it is essential to understand the scale and diversity of OMS tasks. In a typical refinery:

• Around 75% of OMS activities involve transferring oil between tanks, processing units, trucks, and ships.
• These transfers are spread across several operational areas, such as crude handling, aromatics, gasoil, gasoline, and truck terminals.
• Daily movements average 80–90, but the mix of tasks can fluctuate significantly.

Each movement — whether pumping crude from a tank to a unit or loading a ship — involves multiple steps, including valve alignment, pump startup, level monitoring, and safe shutdown.

When performed manually, these steps present multiple failure points:

• Product contamination from incorrect valve line-ups.
• Quantity losses from failing to drain water or miscalculating tank volumes.
• Scheduling delays leading to demurrage charges for ships waiting at berth.
• Inefficient tank utilization, forcing higher working inventories or new tank investments.

A notable challenge is that 45–50% of OMS task types occur infrequently (less than once every two months). This “long tail” of uncommon operations increases the risk of operator error because staff must recall procedures they rarely perform.

How OMS Automation Solves These Pain Points

An integrated OMS automation system centralizes and coordinates the entire oil movement and blending process. Key capabilities include:

• Real-time monitoring of tank levels, flow rates, and equipment status.
• Automated valve and pump control to ensure correct line-ups.
• Sequencing and scheduling tools that optimize the order of transfers.
• Integration with blending control systems for precise product quality.

These capabilities eliminate guesswork, enforce standard procedures, and reduce manual intervention, directly lowering both operational risk and financial loss.

Tangible Benefits – Quantifying the ROI

Dr. Agrawal’s research, based on data from nine refineries, shows the potential for significant annual savings from integrated OMS automation. These savings can range from $5 million to $8.5 million (with blending automation) and from $3 million to $5 million (without blending automation).

Table 1. Typical Annual Benefits from OMS Automation (K$ per year)

*Savings vary depending on refinery configuration and baseline inefficiencies.

High-Impact Savings Areas

1. Crude Blending Optimization – $2.5M to $3M/year By blending crudes and intermediates to exact specifications, refineries can maximize yields and avoid costly quality giveaways. For example, eliminating the unnecessary vapor pressure margin in gasoline saved one refinery $2 million per year.

2. Quality and Quantity Giveaway Reduction Tight control of properties like diesel flash point or gasoil cloud point can save $ 500,000 to $1 million annually. Accurate metering also prevents losses due to mismeasurement.

3. Logistics Optimization Automating lineups and schedules reduces ship waiting fees by approximately $ 100,000 per year and enables opportunistic spot crude purchases worth $ 300,000 per year.

4. Energy and Utility Savings Avoiding unnecessary circulation and halving slop oil generation can save approximately $ 190,000 per year in reprocessing costs.

5. Manpower Efficiency Automation can reduce overtime, redeploy staff to higher-value tasks, or avoid headcount increases, resulting in potential savings ranging from tens of thousands to over $1 million per year.

Payback Period A $4–6 million investment in OMS and blending automation often returns $2–3 million per year, achieving payback in 1.5–3 years.

Intangible Benefits – The Strategic Payoff

While the financial ROI is compelling, many of the most transformative benefits are qualitative:

• Enhanced Safety: Early detection and prevention of spills, leaks, and overfills protect both people and the environment.
• Operational Agility: “Just-in-time” movement capability ensures rapid response to market or production changes.
• Quality Assurance: Off-spec batches can be isolated immediately, avoiding larger disruptions.
• Better Collaboration: Real-time data improves coordination between operations, supply, and marketing teams.
• Asset Longevity: Equipment is used more efficiently, reducing wear and extending service life.
• Regulatory Readiness: Compliance with changing fuel specifications and environmental regulations is easier to achieve without major infrastructure modifications.

These factors often tip the balance in favor of automation, even when the purely financial payback is modest.

Real-World ROI – Case Examples

1. European Refinery – $2M/year: OMS automation enabled precise gasoline blending to vapor pressure specs, saving $2M annually.
2. Gasoil Blending Upgrade – $1M/year: The improved blending process freed kerosene for jet fuel sales.
3. Spot Crude Trading – $300k/year: Faster scheduling allowed acceptance of opportunistic crude shipments.
4. Demurrage Savings – $100k/year: Improved ship readiness, reduced wait times, and avoided grade mix-ups.
5. Inventory Optimization: One site avoided building new tanks by improving utilization, while another reduced excess stock by 3,000 tons, saving $ 60,000 per year.
6. Slop Oil Reduction – $190k/year: Leak detection and process tightening cut waste in half.
7. BPCL Mumbai – $0.5M/year: A new OMS/blending control system reduced quality giveaways by up to 20%.

Measuring ROI – The Cost-Benefit Analysis Approach

Before committing to an automation project, OMS recommends a benefits study lasting 4–12 months to establish a baseline. Key steps:

1. Data Collection: Record timing, source/destination, volumes, and planned vs. actual results for each transfer.
2. Incident Tracking: Identify and value loss events, such as contamination, lineup errors, spills, demurrage, giveaways, and excess energy use.
3. Benefit Quantification: Assign dollar values to improvements in workforce, logistics, quality, and inventory.
4. Cost Estimation: Include instruments, control hardware, software, and engineering costs.
5. ROI Calculation: Compare annual benefits with project costs to determine payback, NPV, and IRR.

This analysis also guides phased implementation, focusing first on high-value, high-frequency operations.

Best Practices for OMS Digital Transformation

• Include Blending in Scope: Projects that integrate blending with OMS control consistently show higher ROI.
• Start with High-Impact Areas: Early wins build momentum and internal support.
• Integrate with Enterprise Systems: Connecting OMS with DCS, LIMS, and planning systems creates a unified operational view.
• Leverage Analytics and AI: Use data for predictive maintenance, anomaly detection, and proactive quality control.
• Embed Safety and Compliance: Automated audit trails and restricted control paths reduce regulatory and operational risk.
• Plan for Continuous Improvement: Treat OMS automation as a living platform, adding sensors, refining algorithms, and expanding scope over time.

Future Outlook

As fuel specifications tighten and energy transition pressures mount, modern, flexible OMS systems will be essential. The ability to adapt quickly — whether to process a new crude type, produce a new fuel grade, or respond to market shifts — will increasingly define competitiveness.

Refineries that invest now will not only secure immediate cost savings but also build the agility, safety, and compliance capabilities necessary for long-term success—those who delay risk falling behind in efficiency, profitability, and market responsiveness.

Conclusion

Automating oil movement and blending through an integrated OMS platform delivers multi-million-dollar annual savings while enhancing safety, compliance, and operational flexibility.

The most successful projects begin with a rigorous benefits study, target high-impact areas, and phase implementation for maximum early return on investment.

In today’s refining environment, the cost of inaction is often greater than the investment required. With the right strategy, OMS automation can transform a complex, risk-prone operation into a streamlined, future-ready system — a true cornerstone of refinery digital transformation.