Promoting a culture of safety

I am a director of CIPS and I have a team in Dubai which is focused on improving the professionalism of the procurement teams across the MENA region through education programmes, membership of the Institute and assessment of good working practices. Particularly in the oil and gas sector, we work closely with a lot of the companies that operate in this region, and it is an industry where we get a large percentage of our membership numbers and deliver many development programmes.

What are the rules for procurement and supply for the oil and gas industry?

The oil and gas industry is highly regulated and safety standards are applicable in every aspect of operations. Safety standards in turn regulate the quality and reliability of equipment, and need to translate into sound procurement practices for design, qualification, purchase, testing, installation, inspection, maintenance, repair and eventual disposal of assets. In addition, the management of supply chains is critical in oil and gas operations, and reliability of delivery of parts to worksites on shore and off has to be optimised to prevent expensive downtime, adapt to site requirements and improve efficiency. Sustainability issues in the supplier base also need to be monitored and addressed to reduce their impact on the environment.

What are the latest trends?

This is a very dynamic sector and multiple factors are always affecting it in different ways. The recent reduction in the oil price is clearly having an impact on investment decisions and is driving a real focus on production costs. The sector is volatile with political, supply, aging fields, new fields, and currency considerations affecting the sector. I think that the overriding trend that we will see is the increasing reliance on stringent procurement best practices and the scrutiny of supply chains to deliver efficiencies and risk free supplies. Consequently, I think that we will see purchasing and procurement officers playing a more strategic role in the planning and leadership of organisations in the oil and gas sector.

How has the industry in the region done over the past one year?

It has done very well, and in this region, we have seen the numbers of our members more than double over the last year. This is largely because companies and organisations operating in the oil and gas sector are consistently operating using sound procurement processes for safety and for care for the environment.

Are you seeing any indications of businesses being affected by the oil price slump? 

Given the volatility of the price changes, all businesses will be affected in one way or the other. In this region, however, there are commitments already in place to increase production, and the cost of production remains more competitive than in other parts of the world. Nevertheless, we anticipate that there will be an emphasis on optimising operations using more advanced technology to improve efficiency and supply chain logistics.

What should we expect in 2015?

Our overall predictions for 2015 are optimistic. We see the foundations that were set in the recession years creating strong building blocks for growth. Although this region is dependent on oil revenues, long-term commitments, technological innovations and efficient exploration and production will combine to ensure growth in capacity and improved efficiencies. For our Association, we anticipate that as organisations look to improve their procurement practices and the reliability of their supply chains, our membership will continue to increase and applications to our courses and qualifications will see consistent growth.