October 7, 2022
The oil and gas sector can be very specialized. Because of this, one of the most important things to consider when choosing an oil and gas vendor is expertise in the industry.
Take energy, for example, where there’s often a distinction and focus on upstream, midstream, and downstream businesses. In the upstream space, for example, there’s even more specialization, such as oil and gas exploration companies, operators, and oilfield service contractors. These offshoots lead to nuances an inexperienced partner may not genuinely understand, exposing you to unnecessary and expensive liabilities.
It’s also essential to find an oil and gas vendor who specializes in your type of company. If you are an upstream oil and gas service company, for example, we recommend searching for a firm and broker specializing solely in the contractor space.
You should choose a broker or firm with expertise in your specific energy sector to avoid:
1. Conflicts of interest. When you fail to find an expert in this space, it leads to potential conflicts of interest. If you hire a more general broker, that broker could end up in a conflict of interest in representing you and the oil and gas company or operator, for example. This could cause a big problem when reviewing and negotiating the terms of a Master Service Agreement when the broker is representing both sides.
2. Technical ability. Expertise in the field should not be limited to the broker but their team as well. Not only would we recommend a broker who specializes in your sector, but they should also have a team of account managers, claims specialists, safety consultants, contract analysts, etc., who all know your sector.
3. Premium volumes. If you are not with a firm that has an established book of business in your sector, they will most likely be at a disadvantage when it comes to securing competitive quotes. Carriers tend to respond and work with companies that they already have a working relationship with and give them the best chance to be productive in their own endeavors.
Jacob Haralson VP, Oil & Gas Team Lead, R&Y Shareholder jharalson@rossandyerger.com 601-944-0961
Jacob Haralson is Vice President and Shareholder at Ross & Yerger and is the Oil & Gas Team Lead. Haralson specializes in Oil & Gas Services & Food Processing.