This is an independent, publicly-traded oil and natural gas company operating hundreds of vertical and horizontal wells in one of the most resource-rich oil basins in the world, the Permian Basin. The company is headquartered in Austin, Texas.
It relies on more than 500 third-party parties to perform often challenging exploration and production activities, work that requires highly skilled expertise. But, verifying the qualifications and safety readiness of scores of third-party contractors and managing their ongoing compliance is increasingly challenging, demanding support from advanced technologies and industry expertise.
Unlike the company’s previous supply chain and risk management partner, Veriforce understands its unique needs and delivers a customized solution that empowers the company to manage risks across its entire supply chain.
Recognizing a Need to Drive Safety and Risk Management
This oil and gas company spends $1.6 billion dollars in capital expenditure on lease operating expenses related to its extensive drilling program and employs nearly 500 contractors at any given time.
“We rely heavily on our contractors and recognize them as the greatest source of risk for our company,” said its Risk Manager. “We need to ensure that the people doing business on our behalf align with our brand and our corporate values. Needless to say, risk management and safety standardization are top priorities.”
The company also faces heavy pressure in Environmental, Social, and Corporate Governance (ESG), requiring it to choose contracting companies that are carbon neutral to continually qualify to purchase insurance.
When you’re trying to establish effective policies, finding a strategic partner to help in managing third-party and vendor risks is essential.
Risk Manager for Oil & Natural Gas Company
While the company invests heavily in drilling technology, it recognized a need to ramp up its back-office technology to better manage that data, engage with contractors, create efficiencies, and mitigate risks. “We needed to evolve our program into an enterprise risk management solution that would create safer, healthier places to work and also help to create a culture in the Permian Basin that is focused on community,” said its Risk Manager.
In 2016, the company overhauled its contractor management program by first examining its database of nearly 30,000 business associates, including landowners, vendors, and purchasers.
“As a company, we grew so fast that we quickly became inundated with data points—payment information, vendor numbers, and maybe a contract that you could or couldn’t find,” he said. “Nothing was centralized or categorized.”
To help understand and manage that data, the company partnered with ISNetworld. But, when its CEO asked for a detailed report of its approved vendors and ISN’s solution couldn’t produce it, the company’s Risk Manager knew it was time to look for an alternative solution.
In 2017, the company selected Veriforce as its contractor management solution provider. Since making the switch, the company’s insurance compliance has shot up to 96 percent—more than a 60 percent jump— and its TRIR scores continuously trend downwards. What’s more, the company’s culture and its dedication to health and safety has been renewed, creating safer workplaces for all involved.
“Veriforce, including its CEO, took the time to understand our needs,” said the company’s Risk Manager. “We spent a lot of time together in whiteboard sessions, examining our business at the highest level, and creating systems and processes to better monitor the people we rely upon to do business.”
Since making the switch, the company’s insurance compliance has shot up to 96%, more than a 60% jump.
Veriforce worked closely with the company’s HSE teams to create policies, standardization, insurance provisions, and standard operating procedures, including integrating valuable third-party data with the company’s internal vendor management systems, to help it manage third-party risk from the highest level view, down to complex details. It also integrated its contractor management platform with Salesforce, a tool that the company relies on to collaborate with its vendors to mitigate credit risk.
“Veriforce helps us establish a culture of safety and compliance, and the consistency that it brings is what makes a safe place to work,” he said.
The company’s Risk Manager concludes: “My job is to look at risk from a 30,000-foot view. As a true partner, Veriforce enables me to do that by centralizing important data and empowering those in the field to hire and enter into statements of work with the confidence that they have all of the information that they need to accept responsibility. Our teams get it—Veriforce is a resource we can rely on.”
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