The oil and gas industry is a mix of large companies that generate more income annually than some countries’ GDP and small operators that own companies with only a handful of employees. What they hold in common is a need to be as efficient as possible within their budgets. However, the approach and needs for a 5,000 employee publicly-traded company compared to a 5 person family-owned business are distinctly different. In this interview clip from The Crownsmen Podcast, our President Don Toews lays out three ways a large oil field operator differs from a small one when purchasing equipment plus one bonus tip that applies to both.
Large Companies Often Buy in Exact Multiples vs Small Companies Buy Single Units
One obvious difference between small vs large oil companies is sheer volume. A large oilfield company might need 36 matching pumps for their pipeline where a small oil and gas company might need one or two. Although it is worth mentioning than larger companies often have spur lines that can offer more flexibility in their purchasing decisions.
Large Companies Have Specs vs Smaller Companies Have Range
Often the larger companies will have detailed specifications for the pumps and engines they require. It is common to see 80 pages or more of specs from a larger company because they are dealing with multiple stakeholders including banks, insurance, engineers, and various departments of their company. Small companies often only have 1-2 decision-makers so you will be dealing directly with them and have the opportunity to find the range of equipment specifications they can work within while still getting the equipment they need.
Large Companies Have Set Budgets vs Small Companies Have Needs
Similar to large companies having exact specifications on equipment vs smaller ones having more range, budgets are often approached differently for large and small energy companies. Large companies often have set annually or quarterly budgets to match up with equipment specifications while smaller operators are often more focused on the results they need and budget and will consider an older piece of equipment that meets their needs but at a lower cost. In fact often larger companies are required to purchase new equipment because of stakeholders’ interests.
Everyone Wants Respect
Don points out that one key is giving everyone respect. Large companies have requirements that they must fulfill as part of a larger overall strategy and maintain stakeholder relations vs small companies that often don’t have teams of engineers and experts so they require a more hands-on approach in choosing the right equipment. Both their needs are central to sustaining and growing the businesses they operate. Understanding those needs and how they differ will give you a competitive edge in building long term relationships with companies of any size in the oil and gas industry.
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