Contract Implementation for Oil Companies Essay

593 Words3 Pages
Oil and Gas production has always been a necessary commodity from oil exploration to offshore drilling. Theses explorations have led to feature developments that have the major oil companies hiring contractors to help complete the scope of work. A few reason maybe the scope of work is larger task than expected or it requires very skilled workers. However, when introducing subcontractors, one must understand that contract that is necessary to fulfill the actual work. And within the contract there are certain stipulations that must be followed from contract compliance, deviation and change/track implementation. Understanding the contract is very important this will help the oil companies with setbacks to financial cost, production or other…show more content…
As stated by Jones et al. (2006) “Reexamining the relationship between owners and suppliers, which involves rethinking the contractual framework and increasing the level of constructive cooperation so that both parties can jointly address current and future concerns.” Although, setbacks are sometimes inevitable it also good business to reevaluate suppliers if they can’t perform the task necessary oil and gas companies can either modify or terminate the contract to help avoid legal issues or any breach of contracts. It is also necessary to track any changes that have been implemented. Contract management can be challenging but it would high complex if contract were not met. Given the flux environment of oil and gas there are many variables that feed into the contract changes. Whether it be added supplier, added countries, changes in product production track and changes can help with risk management and help with any issues and solutions that are necessary with in the contract to help keep limited liabilities at all levels. Good contracts are one managed and reevaluated when necessary agreements do not meet with required scope of work. I would improve the deviation and changes that occur within a contract to be reevaluated every six month or to follow suite with the contract agreement at hand by supplier and company. This could cut down any unnecessary work and help reevaluate the scope of work and any financial cost. The best part of
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