QHSSE for Sustainable Procurement... a way forward in Oil and Gas sector


Currently India’s Energy consumption is amounting to 638 million tons of oil equivalents (mtoe) against World Energy consumption of 12000 mtoe which is 4.4% of World consumption making it fourth largest energy consuming nation. Additionally India’s growth rate of energy consumption is 6.8% which has placed ‘Energy’ at the core of India’s economy.

When we discuss ‘Energy basket’ of India, Oil & Gas energy continues to be the second largest component in Energy basket of India (next to Coal energy), even though there are growing efforts of adding other energy mix in the basket and shares more than 35% in the total energy demand. Even today Oil and Gas constitute largest component in India’s import bill to the tune of 70% of crude oil demand and 30% of gas demand being imported. Environmental pressures are shifting India’s energy consumption pattern from Coal based to gas based & renewable energy based sources with oil still remains as second most preferred energy source making hydrocarbon energy as one of the top energy portion.

The size of the oil and gas industry in India is USD 160 billion in the Year 2015-16 and 25 to 30 percent of this goes under procurement. Considering today’s scenario of oil & gas industry, cost optimization during procurement is of prime importance. But in cost optimization during procurement, companies are forced to compromise in quality, in lowering safety & environmental benchmarks and reducing research & innovation spending. Can these optimize procurement cost or add up to ‘total project cost’ by increasing risk, lowering efficiency and only shifting cost component to heavy maintenance side?

Thinking in long term, sustainable solution to this is calculating ‘Best value for money’ for the entire project. QHSSE (Quality, Health, Safety, Social responsibility & Environment) can be applied as a measuring tool for sustainability and more emphasis on project execution without cost over run, time over run and focus on enhancing every single QHSSE component can lead to sustainable procurement for Best Value for money. Sustainable procurement through entire supply chain can help in penetrating sustainability deep into last chain of manufacturing. Taking forward this approach, procurement will not be just a function but as an art to manage right mix of contractors, suppliers and service providers who adopt sustainable ways to gain maximum efficiency, minimum risk with focus on QHSSE. QHSSE portfolio of services in Sustainable procurement from CAPEX & OPEX stages of project can help in achieving below direct benefits keeping stakeholder’s gain and Contractor’s gain at its core. 

Going a long way, this approach can bring win-win situation by way of:

  • Every day up gradation in quality performance
  • Cost optimization
  • Within schedule management
  • Reduced unsafe incidents
  • Environmental commitment
  • Retaining talent pool of the country
  • Efficient management of taxpayer’s money
  • Total value for money- a stakeholder’s gain

QHSSE is a small investment for a big gain in sustainability. Consider QHSSE as Systematic Investment Plan (SIP) for a long term benefit in Oil & Gas cycle.

Sustainable procurement with QHSSE checks are ‘The Best Value for Money’ (BVM principle of United Nation’ procurement policy) to oil & gas project stakeholder and also to entire contractors/subcontractors associated with the project.

 Bureau Veritas, created in 1828, is a global leader in Testing, Inspection and Certification (TIC), delivering high quality services to help clients meet the growing challenges of QHSSE (quality, health, safety, environmental protection and social responsibility) through its 1400 offices and more than 69,000 employee bases with revenue of EUR 4.5 Billion.

Visit bureauveritas.co.in to view entire range of QHSSE services to Oil & gas industry.

Article by Swarupa Deshpande,

Oil & Gas Market leader, Bureau Veritas India Pvt. Ltd. 


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