| Details: | Speedier payment of invoices and the wider use of industry-wide standard contracts in the oil and gas supply chain are needed according to PILOT - the industry-government initiative working to secure the long-term future of the oil and gas industry in the UK.
These are the main findings of a survey carried out by the Department of Trade and Industry (DTI) last November which aimed to test initial compliance with the Industry's Supply Chain Code of Practice which was introduced in March 2002.
The findings are published in a new report launched by the Energy Minister and PILOT chair Stephen Timms at the Progressing Partnership Share Fair in Aberdeen today. The report provides valuable information on current supply chain practices in the UK.
Commenting, Stephen Timms said:
"I am very encouraged to see that there is broad compliance with the Supply Chain Code of Practice in the industry, but there is room for improvement. I am looking forward to working with industry in my new role and discussing this and other issues to help build a better future for the oil and gas industry in the UK."
The survey is believed to be unique to the UK oil and gas sector, reflecting the importance being placed by both the industry and government on securing the Code's adoption industry-wide.
The 2002 survey covers 24,000 contracts, representing a total value of some £8 billion. Key findings are:
· Compliance with the Code of Practice is generally greater on higher value contacts (ie in contracts worth more than £300,000);
· The publication of named individuals within company procurement departments is encouraging, with both purchasers and suppliers in agreement that this is happening;
· The "Share Fair" formula which provides UK operators and contractors with a platform to communicate their activity plans has proved highly successful, attracting excellent attendance and positive feedback.
Areas targeted for improvement in 2003 include:
· the payment of invoices within 30 days;
· wider use of industry-wide standard contracts;
· greater use of the services provided by First Point Assessment (FPAL) Ltd, including performance feedback both from suppliers to purchasers and from purchasers to suppliers.
Clive Fowler, chairman of PILOT's Supply Chain Code of Practice implementation workgroup, said:
"The focus of the industry workgroup this year will be to lift the level of compliance among the 78 companies already signed up to the Code as well as targeting a further 500 businesses to secure their support and participation."
Action plans are in place for each priority area and progress will be made throughout the year and fed into the PILOT process.
The survey will be repeated on an annual basis to monitor the future progress of the Code's implementation across the sector. |
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