Collaborative mechanism of project profit allotment in petroleum engineering service chain with customized integration

Huiping Ding, Xiangbo Chen, Kuanhai Lin and Yunbing Wei

International Journal of Production Economics, 2019, vol. 214, issue C, 163-174

Abstract: The framework of implementing oilfield project is viewed as an engineering service chain consisting of serial different links supplied by multiple service providers in their specialized technical fields. It is the challenge for an oilfield project proprietor to ensure the consistency of accountability for quality performance of engineering services and acceptance of time limit for the project. This paper, from the view of general contractor as a group company, focuses on the tradeoff analysis of two different business strategies that are independent integration strategy and customized integration strategy, in which the factors affecting their comparative advantages are studied. The mechanism of how to distribute project profits between members of the engineering service chain is investigated. Our findings show that the optimal solution presents win-win profit distribution through the negotiation of outsourcing prices between the general contractor and multiple service providers (subcontractors) under coopetition strategy which characterizes the development trend of petroleum industry.

Keywords: Service chain; Petroleum engineering service; Profit allotment; Customized integration; Project management (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:214:y:2019:i:c:p:163-174

DOI: 10.1016/j.ijpe.2019.04.002

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