Case Study 8.1 Oiling the Wheels of Relationship Communication
The oil and gas industry consists of different activities including upstream exploration and
production, midstream transportation (via, for example, a pipeline or an oil tanker), storage of
crude petroleum products, the downstream refining of petroleum crude oil and the processing
of natural gas. Businesses operating in this sector include BP Amoco, Chevron, Elf Aquitaine,
Exxon, Shell and Total – brands that we are all familiar with – particularly because, as
consumers, we buy automotive fuel from their forecourt retail services.
Companies in the oil and gas market are renowned for being conservative, which is hardly
surprising given the harsh and remote conditions in which they work, the potentially
catastrophic environmental consequences of errors and the fact that a single unproductive day
on a platform can cost a liquid natural gas (LNG) facility as much as $25 million (Winig, 2016).
LNG platforms might have five down days a year which represents a significant annual cost,
but besides trying to reduce the number of down days, central to operators such as BP Amoco,
Elf Aquitaine and Shell is improving the productivity of equipment (assets). Extraction rates of
oil wells sit at around 35 per cent, leaving a massive amount of resource unrecovered because
existing technology makes it too expensive to extract (Winig, 2016).
Engineering businesses such as Baker Hughes (a General Electric subsidiary), Hyundai and
Schlumberger supply process equipment to a variety of industries (including oil and gas), while
pump manufacturers such as Sulzer provide components which might typically be part of an
OEM’s integrated solution for a new oil and gas installation or replacements for customers’
existing oil extraction or pipeline operations. For any engineering business, being able to
guarantee maximum productive capacity for products is a key part of the commercial narrative
when seeking to secure new business and when working with customers to manage the
