Collaborative Principles for Business in Upstream Oil & Gas

On February 7th, CEPMLP hosted Professor Norman McLennan for the Wednesday Visiting Speaker Series.  He delivered a lecture on “Collaborative Principles for Business in Upstream Oil & Gas.”

Professor McLennan is a distinguished business professional, consultant and thought leader in the field of commercial and supply chain management whose professional industry experience spans over three decades split between the oil & gas, engineering and traditional construction sectors working in the UK, Europe and internationally.

His lecture focused on Collaborative Business Principles and why organisations need to consider collaboration. He also touched on market landscaping insight into decommissioning and the opportunities that exist in such a sector of the oil and gas industry. He schooled the audience on the importance of understanding the type of industry behaviour that ensures a greater chance of success and optimum result especially during the periods of oil price collapse.

According to Professr McLennan, oil and gas is a highly outsourced industry. About 80 percent of the expenditure in the oil and gas industry is on third-party goods and services. Therefore, there is a heavy reliance on outside companies and contractors, thus, when the oil price drops, the profit margin for the oil and gas companies drops. This circumstance tends to result in a shift in the behaviour of oil and gas companies mostly a ‘wild-west’ type of behaviour toward its contractors, hence, the need for innovative supply chain management to ensure better collaboration and optimum results.

The lecture was chaired by Dr Janet Xuanli Liao.