The influence of supplier assessment in the termination of oil and gas exploitation and production contracts in Brazil

Authors

  • Cleison Antonio Pinto Administrator at Petróleo Brasileiro S.A. – Petrobras
  • Danilo Soares Monte-Mor Professor at Fucape Business School
  • Jedson Pereira Pinto PhD Student at University of North Carolina at Chapel Hill

DOI:

https://doi.org/10.17524/repec.v10i1.1336

Keywords:

Supplier Performance Assessment, Service Contract Termination, Oil and Gas Exploitation and Production

Abstract

The supplier performance assessment literature shows that the prior identification of contracts considered unsatisfactory may prove crucial to the maintenance of a company, especially in sectors with high operational and environmental risk and significant investments, such as the oil and gas exploitation sector. Although considered important, contract termination has been little studied in the Brazilian oil segment, due to the small number of firms operating in the sector and restricted access to information from these companies. This article aims to reduce this gap by analyzing what service assessment criteria most influence contract terminations in the Brazilian sector of oil and gas exploitation and production. Therefore, the assessments of service contracts terminated between 1/1/2006 and 12/31/2014 by a business unit active in oil and gas exploitation and production located in Brazil were analyzed using logit regressions. In the resulting database, 273 contracts were found that include all specialized services in the activity, totaling 19,613 ratings. The results indicate that the Term and Logistics criteria reveal the greatest influence on contract cancelations of the sector activities. In addition, by segregating the analysis by specialty, it was found that different specialties have different requirements and therefore different contractual arrangements. These results empirically corroborate the theoretical discussions in the literature about the importance of compliance with contractual obligations, especially with regard to the negotiated deadlines.

Author Biographies

Cleison Antonio Pinto, Administrator at Petróleo Brasileiro S.A. – Petrobras

M.Sc. in Business Administration from Fucape Business School

Danilo Soares Monte-Mor, Professor at Fucape Business School

Ph.D. in Administration and Accounting from FUCAPE Business School

Jedson Pereira Pinto, PhD Student at University of North Carolina at Chapel Hill

M.Sc. in Accounting from FUCAPE Business School

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Published

2016-03-31

How to Cite

Pinto, C. A., Monte-Mor, D. S., & Pinto, J. P. (2016). The influence of supplier assessment in the termination of oil and gas exploitation and production contracts in Brazil. Journal of Education and Research in Accounting (REPeC), 10(1). https://doi.org/10.17524/repec.v10i1.1336

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