Contractor Management Strategy

The Evolution of Contractor Management in the Oil and Gas Industry

Interacting with contractors at hazardous production facilities is one of the key risk areas for any extraction company. When dozens of contractors and hundreds of their employees are simultaneously present at a field, classic control methods stop working. A systematic approach is required, integrating safety requirements at all stages: from tender procedures to daily control on site. In his presentation, Alexey Mosyagin, Head of the Industrial Safety and Occupational Health Department of an oil production enterprise, analyzes in detail the architecture of such a system, built on the integration of best international practices and strict admission control.

Multi-Stage Admission System: From Tender to Site

Using his company as an example, the speaker shows how to build barriers against unscrupulous contractors even before work begins. The process starts with ranking contracts by risk level (high, medium, low) and assigning responsible curators. This allows differentiating requirements and focusing resources on the most hazardous areas.

Key admission stages:

• Prequalification at the tender stage: The contractor must confirm compliance with HSE criteria, scoring at least 80 points. For high-risk contracts (e.g., construction and installation works involving 50 or more people), a technical audit of the material base is conducted. This screens out companies not ready to meet strict requirements.
• Standard HSE agreement: A mandatory annex to the contract, fixing requirements, critical violations, and penalties. Signing this document often becomes a filter, after which some contractors refuse to participate in the tender, realizing the requirements are unfeasible for their level of safety culture.
• Two-stage site admission: The first stage is a documentary check (analysis of the hazard register, licenses). The second stage is an actual check at the field using a 50-item checklist (orders, instructions, training, PPE, equipment). Only after successfully passing both stages is the contractor admitted to work.

Control and Motivation Tools on Site

After the contractor is admitted to the site, a system of continuous control and engagement comes into play. An HSE specialist is assigned to each contract, accompanying the contractor at all stages.

The presentation details the tools used:

• Penalties and proactive measures: If critical violations are identified, work is suspended. Fines can be replaced by proactive measures, such as purchasing higher-quality PPE, which stimulates the contractor to invest in safety rather than just paying penalties.
• 5S system and continuous improvement: Implementation of workplace organization principles (5S) and a system for submitting safety improvement ideas ("I have an idea") with non-material motivation (points, prizes). This engages contractor employees in the process of creating a safe environment.
• Simultaneous Operations (SIMOPS) management: Using a distance matrix to prevent conflicts during parallel execution of hazardous works (e.g., prohibiting hot work within a 400-meter radius during reservoir penetration).
• Internal training on safety standards: Conducting three-day training for contractor engineering and technical personnel with the issuance of coupons, as well as briefings for workers on proactive practices ("5 minutes of safety", "stop, think, act").

Ranking and Integration of Vision Zero and 5Z Concepts

To evaluate the effectiveness of working with contractors, a ranking system is used, conducted every six months. It includes a reactive block (violations, fines) and a proactive block (application of safety practices). Falling into the "red zone" means termination of cooperation after the contract ends.

The speaker emphasizes the importance of integrating international concepts. Joining Vision Zero (zero injuries) and 5Z (maturity level assessment) allows cascading safety principles to contractors and subcontractors, forming a unified culture. Annual assessment according to the seven golden rules of Vision Zero and the development of improvement action plans ensure continuous system development.

What you will learn from this webinar:

• How to build an effective contractor prequalification system at the tender stage?
• What criteria to use for ranking contracts by risk level?
• How to organize a two-stage admission of a contractor to a hazardous production facility?
• How to apply penalties to stimulate proactive actions by the contractor?
• How to integrate Vision Zero and 5Z principles into work with contractors?
• How to act in non-standard situations when admitting unqualified contractor personnel?