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Contractor effective performance management system

UDK: 658.562:622.276
DOI: 10.24887/0028-2448-2019-3-18-21
Key words: contractor, efficiency, oilfield services, rating, performance, system
Authors: A.S. Isakov (Rosneft Oil Company, RF, Moscow), E.M. Liron (Rosneft Oil Company, RF, Moscow)

Rosneft Company in its daily activity is dealing with huge number of contractors. Contractor is a company that is hired by Customer represented by Rosneft Oil Company in this case to perform certain operations in accordance with the concluded contract and for agreed payment. It is obvious that Customer is expecting the work to be performed at a certain quality level, safety level and on time. However we see in practice that for various reasons these expectations are not met. This has led to the necessity to develop a uniform system to evaluate quality of operations and contractor performance and decide on further interaction with this company. The Upstream Oil and Gas Production Department Operational Potential and Efficiency Division jointly subsidiaries has developed and implemented in the Company Contractor Effective Performance Management System (CEPM). Rosneft has received a tool allowing to compare external and internal contractors on a single scale without any reference to a region of activity. CEPM covers almost all main oilfield services: capital and current workover, hydraulic fracturing, coil tubing services, bottom-hole treatments, perforation and blasting operations, geophysical surveys of wells in cased boreholes, geophysical surveys of wells in open boreholes, tubing repair services, technological motor transport services. The purpose of CEPM is to ensure transparency of rating process, develop open system for contractor performance evaluation, and define clear interaction rules for industry partners at oilfield services market. Contractors are rated based on CEPM data. Rating process creates efficiency competition among contractors motivating them for high performance.

References

1. Kak “Salym Petroleum” povyshaet effektivnost' upravleniya kontraktami (How Salym Petroleum improves contract management), URL: http://www.up-pro.ru/library/strategy/outsourcing/kontrakty-salym.html

2. A pattern of constructor selection for oil and gas industries in safety approach using AND-DEMATEL in a Grey environment, URL: www.nabi.nlm.nih.gov/pubmed/29091017

3. Driving operational performance in oil and gas, Ernst & Young, 2015, URL: https://www.yumpu.com/en/document/read/55871092/driving-operational-performance-in-oil-and-gas

4. Dubey M., Performance-based contracting improves project execution, Oil & Gas Journal, 2015, V. 113, pp. 48–51.

5. Kozhevnikov A., Uilson E., Upravlenie podryadchikami v neftegazovoy otrasli Rossii kak faktor ekologicheskoy bezopasnosti (Contract management in the Russian oil and gas industry as a factor in environmental safety), Moscow: Publ. of WWF Russia, 2010.

6. Kholopova L., Perfection non-stop (In Russ.), Sibirskaya neft', 2018, V. 156.

7. Five principles of the TNK-BP contracting philosophy (In Russ.), Ekspert Sibir', 2012, no. 42, URL: http://expert.ru/siberia/2012/42/pyat-printsipov-filosofii-kontraktovaniya-tnk-vr/.

8. Zorina S., Sample efficiency (In Russ.), Sibirskaya neft', 2018, no. 156, URL: https://www.gazprom-neft.ru/press-center/sibneft-online/archive/2018-november/2067580/

Rosneft Company in its daily activity is dealing with huge number of contractors. Contractor is a company that is hired by Customer represented by Rosneft Oil Company in this case to perform certain operations in accordance with the concluded contract and for agreed payment. It is obvious that Customer is expecting the work to be performed at a certain quality level, safety level and on time. However we see in practice that for various reasons these expectations are not met. This has led to the necessity to develop a uniform system to evaluate quality of operations and contractor performance and decide on further interaction with this company. The Upstream Oil and Gas Production Department Operational Potential and Efficiency Division jointly subsidiaries has developed and implemented in the Company Contractor Effective Performance Management System (CEPM). Rosneft has received a tool allowing to compare external and internal contractors on a single scale without any reference to a region of activity. CEPM covers almost all main oilfield services: capital and current workover, hydraulic fracturing, coil tubing services, bottom-hole treatments, perforation and blasting operations, geophysical surveys of wells in cased boreholes, geophysical surveys of wells in open boreholes, tubing repair services, technological motor transport services. The purpose of CEPM is to ensure transparency of rating process, develop open system for contractor performance evaluation, and define clear interaction rules for industry partners at oilfield services market. Contractors are rated based on CEPM data. Rating process creates efficiency competition among contractors motivating them for high performance.

References

1. Kak “Salym Petroleum” povyshaet effektivnost' upravleniya kontraktami (How Salym Petroleum improves contract management), URL: http://www.up-pro.ru/library/strategy/outsourcing/kontrakty-salym.html

2. A pattern of constructor selection for oil and gas industries in safety approach using AND-DEMATEL in a Grey environment, URL: www.nabi.nlm.nih.gov/pubmed/29091017

3. Driving operational performance in oil and gas, Ernst & Young, 2015, URL: https://www.yumpu.com/en/document/read/55871092/driving-operational-performance-in-oil-and-gas

4. Dubey M., Performance-based contracting improves project execution, Oil & Gas Journal, 2015, V. 113, pp. 48–51.

5. Kozhevnikov A., Uilson E., Upravlenie podryadchikami v neftegazovoy otrasli Rossii kak faktor ekologicheskoy bezopasnosti (Contract management in the Russian oil and gas industry as a factor in environmental safety), Moscow: Publ. of WWF Russia, 2010.

6. Kholopova L., Perfection non-stop (In Russ.), Sibirskaya neft', 2018, V. 156.

7. Five principles of the TNK-BP contracting philosophy (In Russ.), Ekspert Sibir', 2012, no. 42, URL: http://expert.ru/siberia/2012/42/pyat-printsipov-filosofii-kontraktovaniya-tnk-vr/.

8. Zorina S., Sample efficiency (In Russ.), Sibirskaya neft', 2018, no. 156, URL: https://www.gazprom-neft.ru/press-center/sibneft-online/archive/2018-november/2067580/


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