Investigating sustainable procurement in the oil and gas industry

The People: Susan Rice, process engineer, ConocoPhillips (UK)

The Project: The project investigated current procurement methods in the oil and gas industry and researched the general industry view on procurement, to come up with recommendations on implementing sustainable practices. Its findings were also communicated to the wider profession.

Susan interviewed nine oil and gas industry professionals for their views on sustainable development, immediately finding a great diversity of opinion. She also sent questionnaires to 66 organisations to learn about their procurement methods in an effort to understand the industry view on sustainable procurement.

The Results: Susan found that the oil industry is playing catch-up to a wider business shift towards more sustainable procurement, and has yet to fully factor in risks to reputation, cost and community.

Most of her interviewees believe that it is important to buy products that have been produced in a sustainable manner, particularly in their home life, but feel there is a lack of products and information available from an industry perspective.

To date, the industry has focused on the direct environmental impact of products, and is yet to really explore the impact of their sourcing. Some interviewees attributed this to a lack of ‘buyer’s knowledge and experience.’ Despite this, many large organisations have made public commitments towards more sustainable operations. Minimising impact is a more visible achievement than merely improving procurement. Susan found that lack of supply and a risk-averse culture have also slowed the adoption of sustainable procurement.

The project found that there are a number of different tools, metrics and databases to measure and assess procurement, which prevent clients and operators from making informed decisions regarding the suppliers that they work with. FPAL (a cross-industry procurement body) suggested that their supplier questionnaire could be developed to include much more information on ethical sourcing.  They are in the process of introducing corporate social responsibility to their supplier questionnaires, and Susan’s project outlined the case for further development in this area.

The Value: Susan highlighted the importance of the procurement issue to the industry and offered a way forward to FPAL with the development of their survey criteria. Whilst developing the FPAL questionnaire would be a step in the right direction, to be fully effective it must incorporate more detailed supply-chain histories and life-cycle impacts on local communities. Incorporating these considerations could create a competitive advantage for early-movers. Along with presenting the project to FPAL, Susan also contributed publications to Offshore Engineer and tce today, and the project was presented to an IChemE group.

Susan said:

“The E21C project has been a valuable experience for me and has greatly increased my awareness of sustainable development.”