Tuesday 20 November 2007

Unique pan-industry initiative set to streamline processes in the oil and gas industry

Oil & Gas UKs supply chain forum is today (20 November 2007) launching three new documents to simplify the contracting process between purchasers and suppliers in the oil and gas industry, offering major cost and time savings for both parties by eliminating duplication of effort and information.

The new guideline documents, known as model ITTs (invitation to tender), provide a standard layout for suppliers to follow when structuring their response to a purchasers request for services and/or equipment.

The three new model ITTs cover the areas of marine construction, topside support and well services (to be completed shortly) and complement the existing document for the drilling industry.

Ian Donaldson, chair of the Oil & Gas UK supply chain forum, explained: The new model ITTs will provide an easier and faster way to produce, issue and respond to invitation to tenders and bid packages.  Using the model ITTs is beneficial to both parties alike as operators can cut costs in the stages of tendering and evaluation and contractors in preparing their bids. We envisage approximate savings in the region of £25,000 to £50,000 per bid and given the volume of spending across the industry this will translate into savings running into millions of pounds annually.

Norman McLennan, supply chain manager with Oil & Gas UK added: The development of these new model ITTs is a further example of the meaningful pan-industry initiatives being developed and undertaken by Oil & Gas UKs new supply chain forum. The Forum was established earlier this year and comprises senior representatives from most of the major oil and gas companies and small to medium sized independent operators, the contracting community and related trade associations. The Forum embraces an ethos of collaborative working which enables it to develop and publish best practices and processes for use by the industry to minimise total cost and increase profitability.

The model ITTs are a set of products that have been developed under the auspices of the new Supply Chain Code of Practice. The Code itself is a set of best practice guidelines, which have emerged from joint efforts by industry to standardise and simplify commercial arrangements between companies. It was originally established in 2002 and includes the popular annual Share Fair event that has helped make companies buying plans more transparent to potential suppliers. It has also brought about 30-day payment guarantees and increased the use of First Point Assessment Ltd (FPAL), the industrys database of shared information on supplier and purchaser details and credentials.

ENDS

 

Britta Hallbauer

Oil & Gas UK Media Relations                      

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