EVCMC Luanda May 8, 2013Jean Piaget University
BUILDING RELATIONSHIPS WITHIN THE OIL & GAS SECTOR
Renato AzevedoGalp Energia
1. Galp Energia at a Glance
2. Oil Value Chain
3. Upstream Segment
4. E&P Stakeholders
5. Stakeholders Management Plan
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4
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2012
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Oil Value Chain
Value ChainValue Chain
E&PE&P
LogisticsLogistics
RefineRefine
MarketMarket
LogísticsLogístics
Fuel oilFuel oil
AsphaltAsphalt
Jet oilJet oil
Diesel / GasolineDiesel / Gasoline
PetroquimicalPetroquimical
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Value Chain- Business SectorsEx
plor
atio
n
Prod
uctio
n
Tran
spor
t
Refin
ing
Distrib
utio
n
Mar
ketin
g
Stor
age
upstream
downstream
midstream
Sonangol act as regulator and operator
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E&P Project Phases
Time in years
US$
8 300
Production
Development
Appraisal
Exploration
Abandonment
Projects are typically capital intensive and have a long term. Therefore, investors and governs need assurance of return in the
long range.
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E&P Stakeholders
Concessionaire
Ministries:PetroleumFinance
EnvironmentLabor
Contractors Suppliers
Communities
Civil Society
Academy
Investors
Staff
JV PartnersE&P
Operator
Good relation with all stakeholders is essential for company’s reputation and
progress of the industry
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Council of Ministers
Sonangol E.P
Sonangol Subsidiary companies
Petroleum Ministry
Public Policies
Regulation and market supervision
Operation and results
Other Ministries
Environment Ministry
Presidency
Other oil & gas companies
Tax and labor authorities
Institutional Model – Oil & Gas Sector in Angola
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Function Ministry of Petroleum Sonangol Other
Ministries
Other oil & gas
companies
Policies
Long term planning
Coordination
Regulation
Supervision
Government share control
Operation
Training
Asset management
Results
Functional Model – Oil & Gas Sector in Angola
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Concessionaire – Operator – JV Partners Relations
• PSA - Production Sharing Agreement
• Exploration Agreement with Risk Clause
• Concession Contracts
• GSA – Gas Supply Agreement
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JV Relations - Management
• Weekly Operator-Concessionaire meetings
• Technical workshops
• Partner Operations Update Meetings
• TCM – Technical Committee Meeting
• FCM – Finance Committee Meeting
• JOC – Joint Operating Committee (also MCM)
• RTM – Review Technical Meeting
• OCM – Operating Committee Meeting
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JV Partners Relations - Rules
• JOA - Joint Operating Agreement
• Accounting Procedures
• Annual Budget and Work Program
• Services/Suppliers Contracts
• AFE – Authorization for Expenditures
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Contractors/Suppliers – Operators Relations
• Companies need to be known by Sonangol
• Services need to be recognized by operators
• Local presence is fundamental
• A local partner may be helpful
• Bidding process
• Tender Documents
• Bidders lists
• Contract award
• Master agreements acceptance
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Auditing – The Moment of Truth
• Due diligence
• JV Audit
• Concessionaire Audit
• Finance Ministry Audit
Stakeholders Management Plan
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Stakeholders Management Plan
What is Stakeholder Management Plan?
Technique used to identify and manage the key people and/or institutions that have to be won over to build the support that
helps us deliver a project successfully.
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Stakeholders Management Plan
Benefits of using a stakeholder-based approach:
1) Understand and use the opinions of the most powerful stakeholders
to shape the project in our favor at the earliest possible stage;
2) Gaining support of key stakeholders can help win more resources, thus making it more likely that the project will be successful;
3) By communicating with the different stakeholders early and frequently, one can ensure that they fully understand our needs and goals, understand our view of the benefits of the project – this means they can support us actively when necessary;
4) Anticipate reactions from the stakeholders allow us to better prepare next stages of the project and eventually build into our plan what we know we need to incorporate in order to win necessary support;
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Stakeholders Management Plan
A 3 Steps Process:
Step 1 – Identify who the main stakeholders are; Step 2 – Understand their power, influence and interests, so to know who to focus on i.e. Prioritize the Stakeholders; Step 3 - Develop a good understanding of the stakeholders identified as key to the Project, in order to know how they are likely to act so that we can work out how to win their support.
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Stakeholders Management Plan
A 3 Steps Process:
Step 1 – Identify who the main stakeholders are; Step 2 – Understand their power, influence and interests, so to know who to focus on i.e. Prioritize the Stakeholders; Step 3 - Develop a good understanding of the stakeholders identified as key to the Project, in order to know how they are likely to act so that we can work out how to win their support.
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Stakeholders Management Plan
The chances of success of a Project will improve if we invest time and effort in thinking about the best
way to manage the stakeholder's needs and expectations. Five basic concepts to keep in mind:
1. Know who really matters - Make sure that the majority of the (limited) resources are being used to communicate with the stakeholders who really matter;2. Know why those stakeholders matter and what they need or want - If one needs something from a given stakeholder, we need to be able to link our needs with their requirements;3. One size fits no one - If one wants its communication to be effective and deliver the desired outcome, we must understand the stakeholder with whom we're communicating;4. Attitudes change constantly - People change their minds all of the time; 5. Everyone is biased (including ourselves) - When managing stakeholders, rational objectivity is nearly impossible to achieve.
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COMPANY “A”
COMPANY “B”
PartnersProjecto “X”
COMPANY “A”
Competitors
Bidding “Y”
The Ethics Issue
COMPANY “B”
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The Ethics Issue
Companies relations require consistent procedures and attitude, with the following
approach:
a)Long term relationships (30 or more years);
b)Your partner also was, is or may become your competitor;
c)Your competitor was, is or may become your partner.
In other words: Remenber that
The world does not end tomorrow!
