JANUARY/FEBRUARY 2013
Oil and gas SAFETY AND COST
Archer is a global oilfield service company that employs over 8,500 people worldwide. It currently uses FCM for its business travel. Kevin Morrison, supply chain manager at Archer (UK), tells BBT about the process
its second busiest on record and a 21st month of year-on-year growth – despite a limp economy at home. It’s no small player on the business
travel front either, with an oil and gas industry that is worth billions of pounds to the UK economy. A company like BP is estimated to spend in excess of £100 million a year globally on business travel, and companies such as Total, Sinopec, Chevron, Exxon and Conoco Philips have equally large budgets for travel. In the industry as a whole, 30 per
WHAT’S HAPPENING IN THIS SECTOR?
• New travel frontiers are opening up, including East Africa, far north- eastern Norway, Angola, Rwanda and Nigeria. Brazil is also emerging.
• The industry operates on a global scale, and travel doesn’t necessarily originate in the UK – consequently, it is a 24/7 operation, working in all time zones.
• Companies in the oil and gas sector expect the benefit of off-shore fares. Everyone has to be creative in sourcing the best local rates.
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• There is more focus on traveller security and safety, especially as oil and gas personnel travel to more hostile areas in Africa, Russia and South America.
• In the next 15 years, many senior managers in the sector will be retiring. Their younger peers will have different expectations when it comes to travel.
cent is spent on white collar travel – management, corporate and business hand-pumping and deal breaking – while 70 per cent is focused on getting people to work on-site across the globe, including oil rig engineers, platform managers and technicians, plus their support crews. “Travel in this sector is very
complex,” says Paul Jarvie, an account manager at FCM Travel Solutions in Aberdeen. “There are 15 different disciplines within crew staff alone, each travelling at different times for different reasons.” When they get to work on offshore platforms,
BP is estimated to spend in excess of £100 million a year on business travel
logistically travel management can also be difficult. “For instance employees are not permitted to carry mobile phones on oil rigs – an enforcement that can make communication with travellers difficult,” explains Anthony Drury, general manager for American Express Business Travel UK.
PROCUREMENT ISSUES Energy companies tend to procure their air tickets and hotel nights like they procure any other commodity. The same process applies for ordering head gaskets for oil wells as it does for chartering helicopters or airport taxis. Oil and gas companies increasingly put rigorous contracts and supply chain management procedures in place and expect their travel suppliers to deliver to the letter. It means that there are few ex-travel agents running corporate travel internally in this industry; instead they rely on and trust their suppliers, in whatever sector – including travel – to perform
It is important to have an open and honest relationship with your TMC. The three key priorities for us are transparency, communication and good account management. We need to feel confident that our staff’s travel requirements, comfort and safety are top priority any time of the day or night. Communication with our TMC is vital because last-minute changes in travel arrangements can impact on our operations. It is important for our TMC to understand our business so that they ensure our people are well cared for – for example, we always ensure that staff fly in premium economy to New Zealand. Safety is also very important, particularly when we are sending people to places like Nigeria. The challenge, however, is still about managing
costs. The size and complexity of our account means that we are looking to benchmark expenditure and maximise savings. Every TMC will promise you cost savings, but they don’t always deliver. In reality we are looking for the best savings and service.
and fulfil rigorous contracts. “Banks don’t sell beer and bars don’t lend money – it should be the same with travel,” Derek Massie, senior vice-president of human resources of Seadrill, told a recent GBTA symposium on oil and gas that took place in Rotterdam. Logistics and travel in the oil sector are managed by company administrators – particularly, human resource departments that use crew management software to move people around. These programmes can now direct travel management companies (TMCs) to purchase the travel needed. Certainly more tools are becoming
available, especially in the area of crew logistics, and some TMCs are integrating their booking tools into those of their oil and gas clients, in order to make their process as seamless and as smooth as possible. “If you employ a TMC for your travel, don’t duplicate that overhead cost with an in-house team to check each transaction the agent does,” says Massie. “If your agency doesn’t get the best fares and provide good service for the CEO, what are they doing for your core business – for example, the crews?” Travel is often project-driven and price sensitive. Undoubtedly there is incredible scrutiny of any TMC offering and an eye for detail on a global and geographical level is
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