This interview analysis is sponsored by Arkestro and was written, edited, and published in alignment with our Emerj sponsored content guidelines. Learn more about our thought leadership and content creation services on our Emerj Media Services page.
The oil and gas industry faces significant challenges in managing supply chains, mainly when operating in remote and hard-to-reach locations. According to a study presented at the 2019 International Conference on Industrial Engineering and Operations Management, key issues include logistical complexities, health and safety risks, and the need for robust infrastructure to support operations in such areas.
Additionally, the environmental impact of oil and gas operations is substantial. The International Energy Agency reports that in 2022, these operations accounted for approximately 15% of total energy-related greenhouse gas emissions globally, amounting to 5.1 billion tonnes of CO₂ equivalent.
Significant contributions to global emissions underscore the pressing need for the industry to adopt more sustainable practices and reduce its carbon footprint.
Emerj Senior Editor Matthew DeMello recently sat down with Salamatu Mahamadu, Global Procurement & Sourcing Director – Completions and Well Intervention at Baker Hughes, and William Seagrave, SVP of Product Solutions at Arkestro, to talk about the oil and gas industry’s unique operational challenges.
Together, the contributors emphasize the importance of reducing its carbon footprint through sustainable practices, supplier collaboration, and advanced technologies.
Baker Hughes is a global energy technology company that provides products and services to the oil, gas, and industrial sectors, focusing on making energy safer, cleaner, and more efficient. Arkestro is a tech company that provides clients with a predictive orchestration platform that leverages machine learning and data science to optimize procurement processes.
Their unique experiences enriched the conversation by blending strategic thinking with practical solutions, offering a comprehensive view of navigating a complex, unpredictable global landscape.
We bring you two key insights from their conversation:
- Collaborating across supply chains to drive sustainability: Building partnerships with suppliers and their networks to manage costs, reduce carbon footprints, and demonstrate measurable progress on sustainability goals while addressing industry-specific challenges.
- Prioritizing data relevance for effective AI implementation: Selecting and prioritizing relevant data for AI-driven supply chain improvements, urging leaders to avoid information overload, and ensuring that AI-generated insights align with business objectives
Guest: Salamatu Mahamadu, Global Procurement and Sourcing Leader for Wells Completion & Interventions at Baker Hughes, Baker Hughes
Expertise: Strategic Supply Chain, Contract Management
Brief Recognition: Salamatu Mahamadu is the Global Procurement & Sourcing Director at Baker Hughes, leading procurement teams to ensure supply reliability and manage multi-level suppliers. She has been with the company since 2006 in various leadership roles. With a law degree from the University of London, she has expertise in developing global strategies, driving startups in remote areas, and optimizing major projects for competitive positioning while advancing supply chain maturity.
Guest: William Seagrave, SVP of Product Solutions, Arkestro
Expertise: Supply Chain, Procurement, Sales Execution
Brief Recognition: William Seagrave is the SVP of Product Solutions at Arkestro. In his over 30-year career, he has launched new products, creating new revenue growth exceeding $10 billion in annual sales. He has multi-industry experience with product lines, including supply chain, manufacturing, procurement, financial services, biotechnology, enterprise applications, big data analytics, networks, and others.
Collaborating Across Supply Chains to Drive Sustainability
Salamatu opens the conversation, highlights the oil and gas industry’s critical role in global economies, and emphasizes sustainability as a core focus of its operations. She acknowledges the industry’s significant impact and stresses the importance of balancing this role with environmental responsibility.
While adopting sustainable practices often involves higher costs, particularly for suppliers adhering to sustainability guidelines, Sala explains how Baker Hughes works collaboratively with suppliers to manage these expenses by leveraging modern systems and processes to reduce costs without compromising sustainability goals:
“We do understand that getting our suppliers to be sustainable in what they do by following sustainability guidelines is going to be expensive in some cases. So, we work with our suppliers by understanding the cost impact of those sustainability initiatives and how we support using modern systems and processes to drive costs down while still being sustainable.
So, for us, it goes beyond just what we want to do and is more important to what our customers want us to do and what the countries we operate in require us to do. Overall, it’s our company’s conviction to be a more responsible corporate citizen wherever we operate.”
— Salamatu Mahamadu, Global Procurement and Sourcing Leader for Wells Completion & Interventions at Baker Hughes
The company’s sustainability initiatives, she mentions, are driven by customer demands, the requirements of the countries it operates, and its commitment to being a responsible corporate citizen. Operating in over 120 countries, She believes the company takes a leadership role in sustainability by systematically reducing its carbon footprint and prioritizing environmentally conscious practices across its supply chain, production, and distribution.
In response, Bill shares the importance of collaboration and active end-to-end engagement in sustainability efforts and draws a contrast between different industry challenges. He shares an example of working with a green-focused company facing societal criticism due to its suppliers’ poor carbon performance, emphasizing how supply chain issues can impact a company’s overall carbon index. He highlights the importance of coordinated efforts to build a greener ecosystem, even while acknowledging the inherent environmental challenges of the oil and gas industry.
He also underscores the value of collaboration throughout the supply chain, including suppliers and their suppliers, to automatically measure and showcase progress on carbon reduction and other societal goals.
Salamatu, in response, stresses that AI can help manage large datasets and identify areas of improvement, which is crucial for tackling inefficiencies and aligning efforts to meet sustainability goals.
Prioritizing Data Relevance for Effective AI Implementation
Salamatu stresses the transformative potential of AI for industries like oil and gas while highlighting key considerations for effective implementation. She agrees with Bill on the importance of quality data inputs, as the outcome of AI analytics heavily depends on the data provided.
She further notes that AI enables the quick analysis of massive datasets, facilitating decisions and improving supply chain efficiency by centralizing and streamlining data across geographies. However, she warns about the risk of information overload and stresses the need for leaders to prioritize what data and outcomes are critical.
Sala also points out that while generative AI (GenAI) can process and analyze data effectively, leaders must critically evaluate AI-generated insights to ensure alignment with their intentions and goals. She underscores the challenges of adapting to AI-driven changes, including the costs and resistance to change, which can hinder progress. Finally, She stresses that adopting AI and sustainability models must be approached as deliberate investments, requiring clear commitments, timely execution, and alignment between stated goals and actions.
She also addresses the perception that the oil and gas industry lags in adopting AI and technology, explaining that this has changed significantly, especially in recent years. She highlights how events like COVID-19 and the energy market downturn have driven companies to invest deliberately in robust, technology-enhanced supply chains to ensure reliable delivery to customers and countries.
“So, gone were the days when the oil and gas supply chain was all about hold and hope to deliver. Today, we literally run end-to-end, from a customer need to a supply capability model. So that is how we run our supply chain today, at least in the space where I find myself.
So, where could there definitely be a lot of work to be done in some of the areas, around the supply chain, around manufacturing in general, and in oil and gas companies? In the last five years, there has been significant growth in technology enhancement and adaptation in both tier-one and tier-two level suppliers. Their journey continues, and so do customer expectations.”
— Salamatu Mahamadu, Global Procurement and Sourcing Leader for Wells Completion & Interventions at Baker Hughes
Bill agrees with Salamatu and contrasts the unique challenges of supply chain management in the energy sector with those in industries like pharma and life sciences. He highlights key differences, including the massive scale, complexity, and manufacturing needs of the energy industry compared to pharma.
He emphasizes that pharma operations are typically situated in well-established urban areas with robust infrastructure, university support, and resources. In contrast, the energy industry often operates in remote, challenging locations, such as deserts or regions like Angola, where maintaining an efficient supply chain is far more difficult.
Within that explanation, Bill stresses the logistical complexities and unique demands of managing supply chains in such environments, which differ significantly from the needs of biotech or life sciences companies.
In the end, Salamatu acknowledges Bill’s point about the similarities between oil and gas and pharmaceutical spaces. In turn, she also shares seeing the unique challenges that oil and gas companies face due to the remote and often inhospitable locations where they operate, such as deserts and deep oceans.
Sala then goes on to highlight factors like geopolitical disturbances, distance, and limited resources, including access to electricity and the Internet, which complicate operations. These challenges underscore the need for the oil and gas industry to be highly resilient in order to effectively serve customers and meet the demands of the countries where they operate.
Salamatu’s earlier point about the transformative role of AI and centralized data in improving supply chain efficiency, combined with the logistical challenges discussed here, suggests that data plays a critical role in overcoming these hurdles. Specifically, the lack of robust infrastructure in such remote locations would make the effective use of prioritized, high-quality data even more essential for decision-making and operational resilience.
Companies must focus on leveraging data to enhance operational efficiency, improve supply chain transparency, and reduce carbon emissions. A report by Boston Consulting Group talks about prioritizing high-value use cases as critical for driving data-driven transformation in the oil and gas sector. It stresses that effective data prioritization allows organizations to address inefficiencies, minimize environmental impact, and maximize value across the supply chain.
