How Oilfield Rental Software Assist in Simplifying Business Operations

The technological advancements in the oil rigging industry are expanding the business horizons beyond expectations. They are making oil extractions more economic and attracting many new players. However, to get started, those new players require various oilfield equipment. You can fulfill the increased demand for the same by building an online oilfield equipment rental platform. For this, you also need to have a few prerequisites, which include understanding of the business model, oilfield rental software and key features required.

This article attempts to outline the aforementioned and several other related parameters of the oilfield equipment rental industry to assist entrepreneurs in launching their online oilfield equipment rental platform.

Table of Contents

• Business Model of an Online Oilfield Equipment Rental Business
  – Multi-Vendor Oilfield Equipment Rental Business Model
  – Single Vendor Oilfield Equipment Rental Business Model

• Types of Equipment you Can Rent Out Through Online Oilfield Rental Platform
  – On-Shore Rigging
  – Off-Shore Rigging

• Top Players in the Online Oilfield Equipment Rental Industry
• Important Features Required in an Oilfield Rental Software
• Conclusion

Business Model of an Online Oilfield Equipment Rental Business

To understand the primary functioning of an online oilfield equipment rental platform, it is important to have a look at its business models. The business models will include the basic workflow of the rental platform, including how business owners lend oilfield equipment and what are the key operations that an oilfield rental business needs to take care of while lending equipment.

Multi-Vendor Oilfield Equipment Rental Business Model

In a multi-vendor business or online marketplace business, the business does not require to own any of its inventory. Instead, different vendors sign on the platform to rent out their equipment, whereas the marketplace owner primarily earns via rental commission. Being an asset-light business, it is easy to launch a multi-vendor business instead of a single vendor storefront.

The workflow of an online multi-vendor oilfield equipment rental business is as follows:

• Multiple vendors register themselves on the marketplace platform and upload detailed equipment listings.
• Oil companies/contractors browse those listings and add all required equipment to their cart with the help of an advanced booking calendar.
• The oil company submits a rental security deposit and necessary ID proofs along with the rental fee in order to place an order.
• The marketplace owner deducts his commission from the rental fee and adds the rest to the vendor’s eWallet. Meanwhile, the marketplace owner also takes care of the rental security. 
• On the return of the equipment, the vendor inspects the equipment for any damages and reports, if any, damages to the marketplace owner.
• The marketplace owner reimburses the vendor from the oil company’s rental security and returns the rest.
• Now, once a vendor reaches a minimum threshold amount in his eWallet, for example, $100, he can transfer his earnings to his actual bank account. Note that the threshold amount is set by the marketplace owner and the $100 here is only an exemplary figure.

Single Vendor Oilfield Equipment Rental Business Model

In this business model, the oilfield equipment rental business enlists all its equipment online. The oil rigging company visits the business’ official website and places orders. These orders do not require to be necessarily for the entire duration of the oil rigging project but can be for short fixed routines as well. Later, the rental period for the rented equipment can be extended.

The workflow of an online single-vendor oilfield equipment rental business is as follows:

• The oilfield equipment rental company lists all the equipment on its online storefront.
• The oil company browses the equipment and adds it to the cart with the help of an advanced booking calendar.
• The oil company submits a rental security deposit and necessary ID proof and workplace address in order to place an order.
• On the return of the equipment, the oilfield equipment rental company inspects the equipment for any damages and deducts an reimbursement from the company’s rental security.
• The remaining security is paid back to the oil company.

To materialize both these aforementioned business models, we recommend you Yo!Rent oilfield rental software that has been dedicatedly developed with advanced industry-specific features. As it is also fully customizable, you can make any adjustments in the software as per your business requirements.

Types of Equipment you Can Rent Out Through Online Oilfield Rental Platform

Oil rigging operations are conducted on both on-shore and off-shore sites. On-shore sites include all those operations that take place on land. Due to technological advancements and easy availability of rental equipment, oil companies now can set up a smaller infrastructure for on-shore rigging.

In contrast, off-shore oil rigging takes place on sea surface and thus is more challenging. Setting up an oil rig underwater is an intimidating task for many entrepreneurs. However, using quality equipment can assist in managing all types of rigging operations. On-shore and Off-Shore oil rigging involves the following type of equipment:

On-Shore Rigging

The site preparation for on-shore rigging involves the leveling up of land, creating a rectangular pit for working, digging a well for drilling purpose and a reservation pit for disposing waste such as mud and rubble. All these operations require the following oilfield rental equipment:

• Oilfield Trucks
• Solids Control Equipment
• Well Control Equipment. 
• Crawler Rigs
• Rotary Drill Rigs
• DTH Drill Rigs
• Top Hammer Drill Rigs

Off-Shore Rigging

While the solid and waste control equipment remain the same in off-shore rigging, it is the type of rigs and the efforts to set up the complete infrastructure that make off-shore rigging more challenging. Below are some types of rigs that can be set up for off-shore rigging purposes:

• Barge Rigs
• Submersible and Semi-Submersible Rigs
• Floaters
• Drillship
• Platform Rigs
• Compliant Towers

Top Players in the Online Oilfield Equipment Rental Industry

The following groups are leading the online oilfield equipment rental industry. However, they face a strong competitive environment with an increasing scope for many new entrants to enter and establish their place in the industry in different regions throughout the world.

Important Features Required in an Oilfield Rental Software

To help you effectively launch and manage your oilfield equipment rental business, Yo!Rent rental software has the following features:

Request-for-Quote Module: Oilfield equipment requirements can be very complex and stretched for a long period of time. Between this time, or if we say rental duration, the equipment may require maintenance, servicing or replacement. While all such requirements are handled under a contract-based business model, a dedicated Request-for-Quote (RFQ) module can also help online oilfield equipment rental businesses in accepting and negotiating complex rental orders along with their associated terms.

Rent Plus Sell: The demand for certain equipment in the oilfield industry is repetitive. Instead of renting such equipment again and again, your clients may prefer to purchase them. The same will be the case in operations where oil rigging operations may last over years. Instead of paying a recurring payment, clients will prefer to buy the equipment at a more economic one-time payment. Thus, to meet purchase requirements, your oilfield equipment rental platform should have the feature to rent out and sell equipment as well.

Advanced Booking Calendar: Regular business softwares and eCommerce softwares fail to facilitate rental softwares as they lack the basic functionality to accept rental dates and do invoicing for a rental order. A booking calendar is capable of doing both. Instead of going for a calendar plugin or third-party integration, we recommend selecting a software that comes with an in-built booking system.

Document Verification: Renting out expensive oilfield equipment is not easy for any entrepreneur even after having insurance. So, to ensure equipment safety and comply with statutory requirements, your oilfield equipment rental business software should also support a document verification feature. With the help of this feature, you can collect the address proofs and identify proofs of all your customers.

Rental Security Management: Along with document verification features, rental security management features will also assist you in ensuring equipment safety. With the help of these features, you can collect rental security from customers at the time of checkout and use it for various purposes, for example reimbursing any damages, deducting late return charges or collecting fines for violation of terms and conditions.

Late Return and Late Cancellations: Both late returns and late cancellations are not good for a rental business. While late cancellations result in the loss of order processing costs, the former limit the capacity of the business to fulfill the next order. Thus, to overcome this problem, your oilfield rental business software should have features to define and levy return and late cancellation charges.

Rental Agreement and eSign: In a multi-vendor oilfield equipment rental marketplace, different vendors can also have their own terms and conditions. To apply those conditions, you will require a rental agreement management feature. Complemented with an eSign feature, clients can sanction those terms and conditions directly on your online rental marketplace.

Bulk Volume Discount: Oil rigging operations are very comprehensive, due to which an oil company may require various types of equipment in bulk quality. Instead of manually handling bulk volume requirements, with a volume discount feature, you can easily profile pre-defined volume discounts on a percentage or fixed-rate basis.

Conclusion

Having understood the business model and after selecting the right oilfield equipment rental software, the ideal approach to begin with your business operations is to start networking with oil companies and related people in your industry. After gaining the first few customers, you can expect the business to grow. Other factors on which you can count on for business growth are a competitive pricing policy, customer satisfaction and marketing. All these will help you develop a structural base for your online oilfield equipment rental business and are bound to show results over time.