Oil and Gas Procurement Process and Strategies

Course Overview

This comprehensive professional development program is designed for Freshers who intend to make career in procurement, Experienced procurement professionals who believe their careers are not progressing as intended, HR professionals or Senior management in procurement responsible for implementing oil and gas procurement across upstream operations, drilling, construction, and multi-organizational contexts. The program addresses proven practices in JIT inventory techniques, strategic sourcing, and supplier collaboration where study of upstream multinational oil and gas companies showing statistically significant positive relationship between JIT and procurement performance, case study of major drilling contractor showing centralised procurement delivering over USD 22 million savings and 20 percent reduction in spending, and McKinsey analysis reporting selected operators achieving cost savings of 25-50 percent on subsea Christmas trees and 10-30 percent on ball valves through standardization and supplier collaboration.

The curriculum integrates Purchasing, Understanding Procurement Technology, Purchase Types in Oil and Gas Industry, Documentation, Supplier selection, Metrics for evaluating supplier performance, Decision-making tools, Leakage Management, Risk Management, Introduction to Supply Chain Management, Inventory Management, Negotiations, Discount Analysis, Tools and Strategies, Pricing Strategies, Know your Supplier, Logistics, and Conducting Industry Business to provide comprehensive coverage of oil and gas procurement principles, strategic sourcing methodologies, and supplier collaboration domains for achieving procurement excellence.

Why This Course Is Required?

JIT implementation and procurement performance enhancement represent critical competencies where Nigerian study showing statistically significant positive relationship between JIT inventory techniques and procurement performance measured through material availability and timeliness and cost reduction. Strategic sourcing and cost savings demand specialized knowledge where drilling contractor case showing centralised procurement with consolidated vendors and formal RFQ processes delivering USD 22 million savings and 20 percent spending reduction. Supplier collaboration and standardization require professionals with procurement expertise where McKinsey analysis reporting operators working through IOGP achieving 25-50 percent cost savings on subsea Christmas trees and 10-30 percent on ball valves with schedule reductions over 40 percent through standardized specifications and supplier collaboration.

Oil and gas procurement professionals must master procurement fundamentals including purchasing step by step and purchase requisition and statement of work and RFQ and purchase order and understanding different requirements and specifications and their types, understand comprehensive strategic sourcing frameworks including supplier selection and managing supplier information and metrics for evaluating supplier performance including inventory turn ratio and cash to cash cycle and return on sales and demand flexibility metrics and activity cycle time and decision-making tools including NPV and IRR and payback period and ROI, and apply proper supplier collaboration methods including know your supplier and information deployment and cost modelling and negotiation benefits and ensuring continuity of supply and sourcing alternatives and access to supplier innovation to ensure organizations achieve superior JIT implementation and procurement performance, enhanced strategic sourcing and cost savings, improved supplier collaboration and standardization, and competitive advantage through leakage management, spend analysis, inventory management, and continuous procurement optimization and collaborative supplier protocols.

Research demonstrates training is crucial for success, with Nigerian JIT study recommending managers in upstream oil and gas companies adopt JIT techniques and focus on critical inventory items and integrate inventory and procurement processes and pursue continuous improvement to boost procurement performance with by learning JIT and EOQ and reorder-point calculations and total cost of ownership participants gaining practical tools to implement recommendations, while drilling-contractor transformation case highlighting supply-chain and procurement staff who can analyze spend and consolidate supplier bases and design formal RFQ and contract-management processes becoming central to multi-million-dollar savings initiatives with course’s coverage of decision-making tools and discount analysis and leakage management preparing individuals for higher-impact roles, and McKinsey work stressing procurement professionals who move beyond adversarial negotiations towards collaborative problem-solving with key suppliers unlocking design optimization and standardization and risk-sharing opportunities significantly cutting lifecycle costs with by learning supplier-evaluation metrics and know your supplier techniques and cost modelling participants developing relationship and analytical skills to lead collaborative initiatives.

Course Objectives

Upon successful completion, participants will have demonstrated mastery of:

• Aiding participants new to procurement to learn the basics of purchasing in an oil and gas context, from requisitions and statements of work to RFQs and purchase orders.
• Helping delegates understand and apply key procurement facets such as JIT inventory techniques, EOQ and reorder point calculations, supplier evaluation metrics, leakage management, and spend analysis to improve procurement performance.​
• Enabling experienced professionals to see how strategically managed procurement including centralised sourcing, formal RFQ processes, and data driven decision making can support organizational strategy and deliver substantial cost savings.​
• Supporting professionals to realize business goals by using supplier collaboration, standardization, and total cost of ownership analysis to reduce lifecycle costs, improve material availability and timeliness, and strengthen supply resilience in volatile oil and gas markets.​
• Master oil and gas procurement excellence and drive JIT implementation, strategic sourcing, and supplier collaboration success to deliver measurable improvements in cost savings, schedule reduction, and procurement performance.

Master oil and gas procurement excellence and drive JIT implementation and cost savings success. Enroll today to become a Certified Oil and Gas Procurement Professional!

Training Methodology

This interactive Oil and Gas Procurement Masterclass Training program comprises the following training methods:

The training framework includes:

• Lectures
• Seminars and presentations
• Group discussions
• Assignments
• Case studies and functional exercises
• Workshops developing strategic sourcing and JIT implementation skills
• Hands-on exercises practicing EOQ calculation and supplier evaluation
• Practical demonstrations with RFQ scenarios and negotiation techniques
• Instructors are experienced professionals and subject matter experts
• Use of examples and case studies to make comprehension simpler
• Use of tools such as graphics and videos and pictures making learning easy and fun
• Instructors maintain momentum and progression of session

This immersive approach fosters practical skill development and real-world application of oil and gas procurement principles through comprehensive coverage of procurement principles, strategic sourcing methodologies, and supplier collaboration with emphasis on measurable JIT implementation and cost savings and supplier collaboration benefits.

This program follows the Do-Review-Learn-Apply model, creating a structured learning journey that transforms traditional procurement approaches into professional oil and gas procurement excellence.

Who Should Attend?

This Oil and Gas Procurement Process and Strategies Course is designed for:

• Freshers who intend to make career in procurement
• Experienced procurement professionals who believe their careers are not progressing as intended
• HR professionals or Senior management in procurement
• Supply chain professionals in oil and gas
• Drilling contractors
• Materials management specialists
• Inventory control professionals

Organizational Benefits

Organizations implementing oil and gas procurement training will benefit through:

• Significantly enhanced JIT implementation and procurement performance through comprehensive training delivering measurable returns where Nigerian study showing statistically significant positive relationship between JIT inventory techniques and procurement performance including material availability and timeliness and cost reduction exactly what training teaches
• Better strategic sourcing and cost savings through drilling contractor case showing centralised procurement transforming decentralised supply chain into data-driven organization delivering over USD 22 million in identified savings and more than 20 percent reduction in materials and supplies spending as organizational benefits highlighted in training
• Improved supplier collaboration and standardization through McKinsey analysis reporting selected operators working through IOGP achieving cost savings of 25-50 percent on Christmas trees and 10-30 percent on ball valves with schedule reductions of more than 40 percent by standardizing specifications validating course content
• Strengthened competitive advantage through comprehensive understanding of oil and gas procurement principles, strategic sourcing methodologies, and supplier collaboration that enable superior procurement excellence

Studies show that organizations implementing comprehensive oil and gas procurement training achieve significantly enhanced delivery outcomes as research confirms drilling contractor implementing Management Control System with formal RFQ process achieving 25 percent cost reduction equating to USD 1 million in one area by reducing mobilization and travel and ancillary charges and Supply Chain gaining organizational stature enabling proactive collaboration reinforcing course’s emphasis on strategic procurement, better organizational outcomes through JIT evidence demonstrating significant positive correlation between JIT inventory technique and material availability with correlation coefficient of 0.451 and very strong positive correlation with timeliness at 0.832 and moderate positive correlation with cost reduction at 0.403, and improved competitive positioning as oil and gas procurement approach enables better supplier relationships while organizations benefit from experts sharing current developments in field of procurement along with all that can be done new in field opening circuits for participants to see all that is unaccomplished and possible, this being source of great ideas and inspiring to participants experiencing boredom in jobs, after training sessions participants experiencing change in thinking leading to new behaviors and enhanced skills, and more aware and skilled manpower putting Organization on fast lane to progress and improvement.

Empower your organization with oil and gas procurement expertise. Enroll your team today and see the transformation in cost savings and supplier collaboration!

Personal Benefits

Professionals implementing oil and gas procurement training will benefit through:

• Deeper understanding of JIT-EOQ-TCO mastery and implementation capability through Nigerian JIT study recommending managers in upstream oil and gas companies adopt JIT techniques and focus on critical inventory items and integrate inventory and procurement processes and pursue continuous improvement to boost procurement performance with by learning JIT and EOQ and reorder-point calculations and total cost of ownership in course professionals gaining practical tools to implement those recommendations and becoming recognized as cost-and performance-focused procurement specialists
• Enhanced spend-analysis-RFQ mastery and savings-initiative leadership through drilling-contractor transformation case highlighting supply-chain and procurement staff who can analyze spend and consolidate supplier bases and design formal RFQ and contract-management processes becoming central to multi-million-dollar savings initiatives with course’s coverage of decision-making tools including NPV and IRR and payback and ROI and discount analysis and leakage management and procurement-strategy execution preparing individuals to take on those higher-impact roles and accelerate careers
• Stronger collaborative-problem-solving and lifecycle-cost reduction through McKinsey work on supply-chain collaboration stressing procurement professionals who move beyond adversarial negotiations towards collaborative problem-solving with key suppliers unlocking design optimization and standardization and risk-sharing opportunities that significantly cut lifecycle costs with by learning supplier-evaluation metrics and know your supplier techniques and cost modelling and negotiation strategy in course participants developing relationship and analytical skills needed to lead such collaborative initiatives
• Advanced expertise in oil and gas procurement, strategic sourcing, and supplier collaboration
• Enhanced career prospects and marketability in oil and gas procurement, supply chain management, drilling contractor operations, and strategic sourcing sectors with professionals gaining skills in JIT implementation, spend analysis, and collaborative procurement
• Ability to gain learning fundamentals of procurement
• Skills to achieve going further to learn skills that are effective but are rarely mentioned in organizations
• Knowledge to develop ability to accelerate career progression

Course Outline

The course will cover the following fields in detail:

Module 1: Purchasing

• Understanding Purchasing step by step
• Understanding Purchase requisition, Statement of work, RFQ, Purchase Order
• Understanding different requirements of the Purchase order
• Approval workflows and authority limits
• Basic checks to prevent leakage and errors

Module 2: Understanding Procurement Technology

• Enterprise resource planning
• Electronic data interchange
• Inventory Management systems
• Fleet Management systems
• Linking ERP to procurement KPIs
• Basic data accuracy and master-data rules

Module 3: Purchase Types in the Oil & Gas Industry

• Requisitions
• Standard PO
• Contracts
• Purchasing cards
• Travel and Entertainment (T&E)
• Catalogue ordering
• Material requirements planning (MRP)
• System-generated orders
• When to use each purchase type
• Controls and risks for each method

Module 4: Documentation

• Understanding specifications & their types
• Understanding specification traps
• Standardisation of specs to reduce cost
• Supplier clarifications and deviations log

Module 5: Supplier selection

• Selecting a supplier
• Managing supplier information
• Prequalification and due diligence
• Basic supplier risk flags

Module 6: Metrics for evaluating supplier performance

• Inventory turn ratio
• Cash to cash cycle
• Return on sales
• Days sales Outstanding
• Fixed asset turnover ratio
• Return on assets
• Interest coverage ratio
• Demand Flexibility metrics
• Activity cycle time & TAKT time
• Higher production flexibility
• Product Development Metrics
• On‑time delivery and quality scores
• Simple supplier scorecard summary

Module 7: Decision-making tools for the high-cost decisions of the Oil & Gas Industry

• Decision-making Tree
• Make or buy decisions
• Internal rate of return
• Real options reasoning
• Net present value
• Payback period
• Pareto method
• Profitability index
• Return on investment
• Total cost of ownership view
• Sensitivity and scenario checks

Module 8: Leakage Management in Oil and Gas

• Spend Analysis | An Introduction and Understanding
• Understanding deployment of spend analysis for greater benefits/savings
• Common leakage points and quick wins
• Tracking realised vs. negotiated savings

Module 9: Risk Management in the high-risk business of the Oil & Gas Industry

• Use contracts to transfer risks to your contractors/clients
• Using tenders to mitigate risks
• Contract Management
• Risk register and risk owners
• Basic mitigation plans for key categories

Module 10: Introduction to Supply Chain Management

• Bullwhip effect
• Need for supply chain management
• Role of procurement inside the supply chain
• Supplier collaboration for stability

Module 11: Inventory Management

• What are inventory costs?
• Functions of Inventory
• Types of Inventory
• Just-in-Time
• Total cost of ownership
• Introduction to Inventory control:
  • ABC analysis
  • Economic Order qty
  • Computing EOQ
  • Computing EOQ with discounts
  • Calculating Reorder Point
• Identifying critical spares vs. routine stock
• Linking JIT and service-level targets

Module 12: Negotiations

• Preparing for negotiations
• Strategic approach to negotiations
• Setting targets and walk‑away points
• Using cost models in discussions

Module 13: Discount Analysis | The Tool & How it Works

• Introduction to Discount Analysis
• A Deep-Dive into Discount Analysis
• Comparing spot vs. term discounts
• Avoiding “false” savings in bundles

Module 14: Tools & Strategies

• Procurement process:
  • Data collection Stage
  • Determining material valuation (data & cost evaluation techniques)
  • Procurement strategy formulation and execution
  • Non- traditional approaches
• Making of Procurement – Strategy & Execution
  • Aligning strategy with business and category goals
  • Monitoring strategy execution results

Module 15: Pricing Strategies | An Introduction & Understanding

• Cost‑plus, market‑based, and index‑linked pricing
• Managing price volatility in oil and gas

Module 16: Know your Supplier

• Information Vs deployment
• Cost modelling
• Benefit during negotiating
• Ensuring continuity of supply
• Sourcing alternatives
• Help in strategic endeavours
• Access to supplier innovation
• Process Improvement
• Can change the Purchase Manager’s image in the Organization
• Supplier segmentation (core, leverage, bottleneck)
• Joint improvement and standardisation projects

Module 17: Logistics

• Introduction to logistics
• Introduction to transportation
  • Road
  • Air
  • Sea
• Concepts explained
  • Bill of exchange
  • Letter of credit
  • Mates receipt
  • Bill of lading
  • Freight forwarder
  • customs house agent
  • Marine Insurance & Types
• Introduction to Warehousing & its types
• Incoterms Explained
• Choosing optimal mode and Incoterms
• Coordinating delivery with JIT requirements

Module 18: Conducting Industry Business

• Introduction to business process reengineering
• What processes should be re-engineered?
• Reason, why start-ups record remarkable growth & established firms, do not
• Business process reengineering in procurement
• Identifying waste in current procurement flows
• Simple roadmap for procurement change projects

Real World Examples

Upstream multinationals in South-South Nigeria – JIT and procurement performance

Implementation: A comprehensive study of 24 upstream multinational oil and gas companies operating in South-South Nigeria examined the relationship between Just-in-Time (JIT) inventory technique and procurement performance. The cross-sectional survey design research collected data from Operations, Procurement/Logistics, and Marketing Managers of upstream multinationals, measuring JIT inventory technique implementation through timely delivery to minimize inventory holding costs, collaboration with suppliers to synchronize production schedules, maintaining lean inventory by minimizing excess stock, and using technology to monitor real-time inventory levels. Procurement performance was measured using three dimensions: material availability (ensuring necessary materials meet production demands, maintaining adequate safety stock, collaborating with suppliers for consistent supply, and having contingency plans), timeliness (ensuring timely delivery from suppliers, setting and meeting procurement deadlines, tracking supplier on-time performance, and prioritizing urgent requests), and cost reduction (achieving savings through effective strategies, negotiating favorable terms, implementing cost-saving initiatives, and balancing cost with quality).​
Results: Statistical analysis using Pearson’s Product Correlation Coefficients revealed statistically significant positive relationships between JIT inventory technique and all three procurement performance measures: moderate positive correlation with material availability (r=0.451, p=0.000), very strong positive correlation with timeliness (r=0.832, p=0.000), and moderate positive correlation with cost reduction (r=0.403, p=0.001). The study found existence of significant relationship between JIT inventory technique and procurement performance and concluded that JIT inventory technique significantly relates to procurement performance of upstream multinational oil and gas companies in South-South Nigeria. Study recommended that managers adopt JIT techniques, focus on critical inventory items, integrate inventory and procurement processes, integrate advanced demand forecasting techniques with JIT system to improve material availability and timely delivery, and pursue continuous improvement to boost procurement performance exactly the kind of inventory-management and procurement-alignment practices taught in this course.​

Major drilling contractor – USD 22 million savings from supply-chain transformation

Implementation: A case study of major land-based and offshore drilling contractor describes how company overcame inefficiencies caused by decentralised and underdeveloped supply chain organisation. Rapid expansion and acquisitions had led to fragmented supply chain with five separate procurement organisations operating in silos, resulting in lack of coordination, inefficient ad-hoc sourcing processes with unqualified suppliers, and missed cost-saving opportunities. Company partnered with Renoir Consulting to transform operations into world-class supply chain by installing improved Management Control System (MCS) incorporating effective operating metrics and KPIs providing senior management with weekly reports on initiatives and savings, establishing formal RFQ (Request for Quotation) process for key commodities and services previously procured ad hoc, reducing supply base and consolidating catalogues and vendors and contracts, and increasing Supply Chain involvement with other essential functions to foster cross-functional integration. Implementation involved setting standards for weekly alignment meetings within centralised Supply Chain organisation and with Inventory Control Specialists in field, introducing metrics to track sourcing and fulfilment activities, and centralising planning and scheduling for Structural Audits previously managed ad hoc by rig managers without comprehensive cost understanding.​
Results: The transformation delivered over USD 22 million in identified savings and achieved more than 20 percent reduction in spending on drilling materials and supplies, demonstrating power of integrated data-driven approach to procurement. By establishing more formal RFQ process, project team achieved 25 percent cost reduction equating to USD 1 million in one area alone simply by reducing mobilisation, travel, and ancillary charges through tightening controls. Supply Chain gained organisational stature enabling proactive collaboration with engineering and operations teams for long-term value creation, with cultural shift enabling supply chain to facilitate critical aspects of supply chain management. Client now operates with world-class supply chain equipped to navigate market volatility and drive continuous improvement, illustrating impact of leakage-management, spend-analysis, and strategic-procurement techniques covered in this course and demonstrating precisely the strategic-sourcing capabilities developed in this course.​

Joint industry projects via IOGP – Standardisation and supplier collaboration

Implementation: McKinsey analysis cites joint industry projects led by selected oil and gas companies in cooperation with International Association of Oil & Gas Producers (IOGP) that worked to harmonize performance, safety, and design requirements for subsea equipment commonly used across industry. Traditional oil and gas procurement involved designing installations from scratch for each new project with bespoke specifications based on individual experiences rather than established performance-parameter requirements, leading to complicated unique material specifications and manufacturing procedures including multiple special inspections, repeated testing, and one-off documentation requirements significantly increasing costs. IOGP-led collaborations focused on defining functional requirements for equipment types, harmonizing requirements and interfaces to provide basis for standardizing designs of equipment installed on new projects, and moving from adversarial zero-sum negotiations to collaborative problem-solving with key suppliers to tap into their design expertise.
Results: Joint industry projects showed potential cost savings of 25 to 50 percent on Christmas trees and 10 to 30 percent on ball valves, as well as schedule reductions of more than 40 percent, demonstrating how standardised specifications, supplier collaboration, and strategic procurement core themes in this course can deliver dramatic improvements across oil and gas value chain. Industry-wide analysis showed collaboration could unlock five-year industry-wide savings of USD 90 billion to USD 240 billion on purchases of commonly used exploration and production equipment, representing approximately 20 percent total cost reduction with reductions in project execution time ranging from 20 percent to more than 40 percent. Success cases included TechnipFMC developing standardized stock equipment 30 percent less expensive than customized equipment and deliverable in less than half the time, validating this course’s emphasis on knowing your supplier, cost modelling, supplier-led innovation, and collaborative procurement strategies as routes to large sustainable cost and schedule improvements and demonstrating how procurement professionals who move beyond adversarial negotiations towards collaborative problem-solving unlock significant value.

Be inspired by leading oil and gas procurement achievements. Register now to build the skills your organization needs for JIT implementation and cost savings excellence!