Managing risks and opportunities in oil and gas industry contracting chains

Project
2010

In this project we are investigating the relationships between multinational oil and gas companies and their local contractors. We focus on the environmental and social performance of local contractors and the ways in which multinational oil and gas companies ensure that sustainable development principles are adhered to along the supply chain.

We have completed two country reports focusing on Russia and Kazakhstan and more recently produced a 50-page overview report Shared value, shared responsibility: a new approach to managing oil and gas contracting chains, with an 8-page summary.

IIED has been collaborating with the World Wide Fund for Nature (WWF)-UK, WWF-Russia, SustainAbility, Engineers Against Poverty, and Kazakhstani analyst Saule Ospanova to investigate the relationships between multinational oil and gas companies and their local contractors.

Our project, which is funded by WWF-UK, focuses on the environmental and social performance of local contractors and the ways in which multinational oil and gas companies ensure that sustainable development principles are adhered to along the supply chain.

IIED's analysis has focused on two countries of the Former Soviet Union - Russia and Kazakhstan. Our conversations with national and local stakeholders and our research have aimed to identify the opportunities, challenges and trade-offs involved in building relations between multinational companies and local contractors, and the implications for sustainable local development.

We have collaborated with WWF-Russia on the publication Responsible contracting in the Russian oil and gas industry.

Project objectives

SustainAbility has been considering the experience of multinational oil and gas companies and their major multinational contractors through conversations with European headquarters and regional offices.


In December 2007, WWF-UK, IIED, and SustainAbility organised a multistakeholder workshop at Chatham House to discuss initial research findings and map possible ways forward for the initaitive over the longer term, with a view to developing initial recommendations on ways to:

  • create incentives for contractors to meet environmental and social performance standards, avoiding conflicts with budgets and deadlines
  • enhance the effectiveness of communication and collaboration between international companies and local contractors and suppliers
  • build the capacity of local contractors and suppliers for good environmental and social performance and enhanced local benefits, and
  • build the capacity of local NGO, government and research partners to monitor and analyse the situation.

Publications

Shared value, shared responsibility: a new approach to managing oil and gas contracting chains, Emma Wilson, Judy Kuszewski (2011), IIED

Shared value, shared responsibility, Emma Wilson, Judy Kuszewski (2011), IIED Briefing

Additional resources

Responsible contracting in the Russian oil and gas industry, Aleksey Knizhnikov, Emma Wilson (2010) WWF & IIED report English|Russian

Towards good practice in the oil and gas contracting chain: Kazakhstan country reportSaule Ospanova, Halina Ward, (2009) IIED  English|Russian

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