Customer

Understanding the "Customer" in Oil & Gas: Beyond the Usual Definition

In the oil and gas industry, the term "customer" goes beyond the traditional buyer-seller relationship. It encompasses a wider spectrum of stakeholders with varying roles and responsibilities. Here's a breakdown of how the "Customer" is defined in specific O&G contexts, along with their responsibilities:

1. The External Customer:

Definition: The traditional customer who purchases oil and gas products or services. This could be a refinery, a power plant, or a distributor.
Responsibility: They are primarily concerned with the quality, quantity, and delivery of the product or service.

2. The Internal Customer:

Definition: A department or team within an oil and gas company that relies on another department's work. For example, the drilling team is an internal customer for the engineering team who designs drilling rigs.
Responsibility: They play a crucial role in providing feedback, defining requirements, and ensuring the project aligns with their operational needs.

3. The Project Customer:

Definition: This refers to the individual or team directly responsible for accepting deliverables within a specific project. They are typically a representative of the company or department that commissioned the project.
Responsibility: They are responsible for reviewing project deliverables, approving them, and ensuring they meet the project specifications. This can be a critical decision-making role that influences project timelines and budgets.

4. The Regulator:

Definition: Government agencies, like the Environmental Protection Agency (EPA) or the Bureau of Safety and Environmental Enforcement (BSEE), have a significant impact on oil and gas operations. While not traditional customers, their regulations and approvals are critical for project success.
Responsibility: They ensure compliance with environmental regulations and safety standards. Their requirements can significantly impact project design, implementation, and even approval.

5. The Community:

Definition: Local communities impacted by oil and gas operations, including residents, businesses, and indigenous groups.
Responsibility: While they may not be direct customers, their concerns and input can influence project development and implementation. Addressing community concerns fosters trust and can help secure social license to operate.

Key Takeaways:

The "Customer" in oil and gas is multifaceted and dynamic. It involves external stakeholders, internal teams, regulatory bodies, and even the local community.
Understanding the specific responsibilities of each "Customer" is crucial for project success. Clear communication and collaboration are vital for ensuring everyone's needs are met and projects are delivered effectively.
Incorporating diverse perspectives and considerations from all "Customers" can lead to more sustainable and socially responsible oil and gas operations.

By recognizing and acknowledging the diverse "Customers" involved in oil and gas projects, companies can foster stronger relationships, ensure compliance, and achieve long-term success in this complex industry.

Test Your Knowledge

Quiz: Understanding the "Customer" in Oil & Gas

Instructions: Choose the best answer for each question.

1. Which of the following is NOT considered a "customer" in the oil and gas industry?

a) A refinery purchasing crude oil b) A drilling team requesting engineering support c) A local environmental group concerned about air pollution d) A team of engineers designing a new drilling rig

Answer

d) A team of engineers designing a new drilling rig

2. What is the primary responsibility of an "external customer" in oil and gas?

a) Ensuring project deliverables meet specifications b) Providing feedback on project design and implementation c) Obtaining regulatory approval for the project d) Purchasing oil and gas products or services

Answer

d) Purchasing oil and gas products or services

3. Which "customer" plays a crucial role in defining project requirements and ensuring alignment with operational needs?

a) The external customer b) The internal customer c) The project customer d) The regulator

Answer

b) The internal customer

4. What is the key responsibility of a "regulator" in the oil and gas industry?

a) Providing funding for oil and gas projects b) Ensuring compliance with environmental and safety regulations c) Marketing and distributing oil and gas products d) Conducting research on new oil and gas technologies

Answer

b) Ensuring compliance with environmental and safety regulations

5. How can oil and gas companies foster trust and secure social license to operate?

a) By prioritizing profits over community concerns b) By ignoring local community input c) By addressing community concerns and fostering open communication d) By relying solely on regulatory compliance

Answer

c) By addressing community concerns and fostering open communication

Exercise: Identifying "Customers" in a Scenario

Scenario: A new oil and gas company is planning to build an offshore drilling platform in a coastal region. They are working with a team of engineers, contractors, and environmental consultants. They also need to obtain permits from the Bureau of Safety and Environmental Enforcement (BSEE) and approval from the local community.

Task:

Identify the different "customers" involved in this scenario and their specific roles and responsibilities. Explain how understanding each customer's perspective can contribute to the project's success.

Exercice Correction

In this scenario, the "customers" are:

**The External Customer:** This would likely be the company that will ultimately purchase the extracted oil and gas. Their responsibility is to receive a high-quality product delivered on time.
**The Internal Customer:** This would be the engineering team, contractors, and environmental consultants who are responsible for the project's design, implementation, and environmental impact assessment. Their role is to ensure the project meets technical specifications, budget requirements, and environmental standards.
**The Project Customer:** The company's project management team would be the project customer, responsible for overseeing the entire project and ensuring it meets all requirements.
**The Regulator:** The BSEE is a key regulator in this scenario, responsible for ensuring the project complies with safety and environmental regulations.
**The Community:** The local community in the coastal region is a crucial stakeholder. They may have concerns about the project's potential environmental impact, noise pollution, or economic benefits.

**Understanding each customer's perspective is crucial for project success:**

**External customer:** Meeting their needs ensures long-term business success.
**Internal customer:** Effective collaboration with internal teams ensures a well-designed and implemented project.
**Project customer:** Their expertise in managing the project helps keep it on track and within budget.
**Regulator:** Compliance with regulations is essential to avoid costly fines and delays.
**Community:** Addressing their concerns fosters trust and ensures the project has a positive impact on the region.

By effectively engaging and collaborating with all these "customers," the company can create a successful project that meets their needs while promoting sustainability and social responsibility.

Books

"The Oil and Gas Industry: A Comprehensive Guide" by David Hughes: Provides a broad overview of the oil and gas industry, including its stakeholders and business practices.
"Upstream Oil & Gas: Exploration, Development and Production" by James Sweeney: Focuses on the upstream side of the industry, outlining exploration and production activities that involve various types of customers.
"Strategic Management of Natural Resources: A Global Perspective" by Jeffrey K. Liker & John K. Pinto: Explores the strategic management of natural resources, including considerations for stakeholder engagement and community relations.

Articles

"The Changing Landscape of Oil and Gas Customer Relationships" by Deloitte: Examines how the customer landscape is evolving in the oil and gas industry, including the growing importance of digital technologies and sustainability.
"Building Trust with Communities in the Oil and Gas Industry" by World Resources Institute: Highlights the importance of community engagement and social license to operate in the oil and gas sector.
"Engaging with Stakeholders: A Guide for Oil and Gas Companies" by the International Energy Agency: Provides practical guidance on stakeholder engagement for oil and gas companies.

Online Resources

American Petroleum Institute (API): API offers various resources on industry standards, regulations, and best practices.
International Energy Agency (IEA): The IEA provides comprehensive data and analysis on the global energy sector, including the oil and gas industry.
World Resources Institute (WRI): WRI focuses on sustainable resource management, with resources relevant to the oil and gas industry.
United Nations Environment Programme (UNEP): UNEP addresses environmental issues, including the impact of the oil and gas sector on climate change and biodiversity.

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