This paper explores the collective actions operators and oilfield services companies can take with local communities to promote long-term operational stability using a case study from a mature oilfield in the Latin American region. When the current operator became the license holder, it also took ownership of all community-facing responsibilities. In the years that followed, the company signed a long-term commercial agreement to co-manage three blocks with specific project management responsibilities for the preparation of the field development plan, drilling campaigns, and facilities construction. Following social due diligence during the business development phase, the company prioritized allocating time for analysis and planning to establish its own community liaison team. The priority was to align responsibilities and interfaces with the operator, while establishing structured long-term plans for community engagement, local content, and social investment. With an operational footprint covering over 1200 km2 and over 80 indigenous and settler communities with a diversity of backgrounds, operational activities had to be managed sensitively. In creating its own community liaison team, with limited responsibilities for direct interface with communities, the company focused on implementing fundamental and risk-based controls from its social management system. The company focused on building a culture of respect for communities, mapping areas of potential sensitivity, managing tier 2 contractors’ social and environmental performance, optimizing local content by prioritizing local supplier participation and development and ensuring worker hiring processes are perceived as fair and transparent, and implementing a strategic social investment program along with the operator. Collaboration between the operator and company can lead to improved community well-being, operational stability and improved business performance. The paper highlights the importance of social performance integration across the oil and gas industry value-chain. It provides insights into the practical application of the 2018 IPIECA community liaison officers’ team building and management guidance from a company perspective.
This paper outlines an oilfield services company's approach to supporting local economic development in areas surrounding an oilfield project in the Latin American region. The paper describes how the company identified local community needs and committed resources to contribute to sustainable economic improvements. Both the community and the company benefit from local economic development. Communities benefit from the stimulation of robust and varied local business enterprise development, which helps to improve local employment opportunities. The company benefits include meeting regulated local content targets. A long-term view of developing the local economy was taken. The oilfield services company partnered with the operator to promote learning and fund programs to build local workforce capacity. The company also partnered with businesses in collaboration with local authorities, educational establishments and non-governmental organizations. To understand the community needs, the company worked with the operator to prepare an inventory of relevant community assets for economic development, and map stakeholders such as educational establishments, NGOs, local contractors and registered business associations, which constituted the baseline. Rather than taking the lead on the project, the company adopted a multi-stakeholder process to development involvement of the local communities. This approach allowed the project to benefit from the various stakeholder contributions for example social investment, training, capability building and know-how transfer. This collaborative approach enabled the company to develop and implement a targeted local economic development plan for the area of operations. The paper describes the company framework, assessment approach and design of specific initiatives to promote local economic development. The paper demonstrates how a risk and outcomes based approach can be used to progress towards the UN Sustainable Development Goals (SDG 4, 8) that are most relevant to a company's operations.
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