To tender, re-negotiate or partner: Strategies for contracting service companies
The contracting of oilfield service companies by petroleum exploration and production operating companies is different than the contracting of civil engineering, construction or other project-oriented contractors. The relationship between operating companies and oilfield service companies has had a long and unique history which has evolved since the first oil wells were drilled over a century ago. The process of contracting service companies by operating companies for petroleum exploration and production work can be split into three distinct stages: (1) decide what it is that should be contracted out and what should be kept in house; (2) determine the method to use to select the contractor(s) to perform the work; and (3) agree to the contractual structure to best reflect the relationship the operating company and the service company with to initiate and maintain. As there are ongoing changes to the business structures and corporate thinking of both operating and service companies, there are also evolving changes to what are considered core businesses and the methods of selecting and contracting service companies by operating companies. Operating companies are recognizing the high costs of tendering for contractor services in terms of personnel time and administrative effort, and are relying more on negotiating and rolling-over existing contracts with their suitable, capable contractors. Partnering, in its many forms and levels, is increasingly being recognized as a useful method to get better work done at cheaper overall costs.
- OSTI ID:
- 113403
- Report Number(s):
- CONF-941131-; TRN: 95:022539
- Resource Relation:
- Conference: Asia Pacific oil and gas conference: regional growth - meeting the change, Melbourne (Australia), 7-10 Nov 1994; Other Information: PBD: 1994; Related Information: Is Part Of Asia Pacific oil and gas conference: Proceedings; PB: 715 p.
- Country of Publication:
- United States
- Language:
- English
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