Understand how compliance works in the Oil and Gas sector

  • 05/01/2021
  • 11 minutes

Understanding what compliance is and how it works in the Oil and Gas sector is fundamental to the reputation, transparency, growth, security and value generation of the business, in addition to several other points. This concept permeates several areas, including Oil and Gas, or O&G, has details and asks for good practices in its application.

To understand more about the procedures involved, we interviewed specialist Patricia Marques, from TechnipFMC. She brought interesting insights with the intention that the professionals of the segment remain attentive to the growing demands in the area and adapt their companies to them. We also spoke with Fernando Deveza, responsible for Wilson Sons’ Compliance agenda, who also brought his broad view on the subject.

If you want to find out about compliance in the Oil and Gas sector, be sure to check out this content!

What is compliance?

Simple put, the term compliance refers to business strategies that aim at adapting a company to the legal rules and regulations requested by regulatory bodies. In the O&G sector, this is particularly fundamental. After all, in recent years, the industry has positioned itself at the forefront in compliance worldwide.

In other words, this concept encompasses regulations, laws, policies, rules and external and internal monitoring to ensure that companies in the sector are compliant. This scope includes managers, leaders, suppliers and partners — all must comply with the laws that involve their processes.

But how important is this? The risks in the energy sector can be diverse: partnerships, customers, suppliers, competitors, etc. From a commercial point of view, understanding the risks associated with marketing and sales controls, participation in bidding processes, sales channels used by companies, geography, where it operates, country laws, regulatory issues, among others, is fundamental.

However, many other factors — which go beyond security — are essential in the search for compliance. Learn more.

How important is this process?

In addition to the direct impacts on the corporation’s image, which now has transparency, investment in compliance in the Oil and Gas sector is essential to embrace several aspects. One is the optimization of resources, so sought after by professionals in all areas.

“More and more, organizations are strongly required to adhere to the compliance agenda on the part of their suppliers and business partners, demanding that their contracts contain specific clauses of compliance with the Codes of Conduct and Anti-corruption Guide, in addition to filling out questionnaires and formal adherence to the practices recommended by companies. Therefore, having a robust compliance structure is an important condition for being well positioned in this market”, explains Fernando Deveza on the relevance of the topic.

Adapting the business to the rules and legal compliance allows expenses to be reduced, losses to be avoided and productivity to be maximized. But not only that, “we are not only looking for behavior in accordance with the laws, but also a thought that goes beyond that, where ethical and honest conduct are strongly present”, adds Deveza.

Finally, reputation is placed in focus, supporting healthy growth and linked to lower risks in all company processes.

What are the best compliance practices in the Oil and Gas sector?

According to Marques, “there are several attitudes that take organizations in the right direction”. Among the main ones we can mention:

  • specifics of each business;
  • alignment of rules and guidelines with the team;
  • knowledge of risks and standards;
  • delimitation of objectives.

However, other points prove to be important — and they are explained below.

Relationship with public sectors and other companies

It is common to relate the GCU (Office of the Federal Controller General) ordinances to good compliance practices in the Oil and Gas sector. They talk a lot about the business profile and refer them to the right knowledge to start a good process. Some points to keep in mind include:

  • partnerships;
  • number of suppliers;
  • contracts with the public administration;
  • organization’s risks;
  • governance.


This type of process is fundamental to define and disseminate requirements that guide the company. They are carried out internally and align sectors and employees around the purposes sought by the organization, which drives the teams.

“The program cannot be purely formal. Companies must, in fact, seek a culture of compliance and integrity. Decisions need to be based on compliance with the rules and in fact a voluntary motivation for organizational ethics.”, Says the professional.

Internal reporting channels

With all the requirements for compliance in the Oil and Gas sector in hand, it is possible for team members themselves to report problems and inconsistencies. When considering that the creation of an ideal program is connected to state self-regulation, any illicit behavior should be reported to those responsible. An internal channel optimizes this attitude.

How to create a compliance sector within an Oil and Gas company?

The first step in implementing functional systems in the corporation is knowledge of the risks that permeate it. The professional explains this need when stating that “the compliance literature says that it is not possible to set up an adequate corporate risk program if there is no knowledge about them. There is no fit for all. It is necessary to have the initial assessment and understand the profile of the organization”.

In addition, she points out that several methodologies can be adopted and that it is necessary to understand specific areas of the company. “They will undergo a probability and severity assessment, in case the risk materializes. Then, there will be a whole later debate on the assessment of these risks.”

Evaluate Risk Assessment (RM)

Second, the TechnipFMC specialist points out that it is necessary to use the Risk Assessment (RM). To that end, it is essential to align the company’s governance and sectors. “A compliance program is not simply a result of the legal parameters of a decree, which are meta-standards created by the State. The understanding must be greater when it comes to achieving the objective”, says Marques.

Implement an organizational culture

Finally, other points must be focused on the intention to create a system that works. In addition to those mentioned, it is important to be guided by ideals of:

  • prevention;
  • detection;
  • correction of infractions or illicit acts within the scope of the corporation;
  • constant monitoring of stakeholders and employees;
  • risk review;
  • use of technology;
  • building internal control mechanisms.

In short, compliance must be seen as part of the organizational culture. Wilson Sons makes available its Code of Ethical Conduct and Anti-Corruption Guide on its main page.

With everyone’s knowledge of what the company expects from employees, partners, suppliers and customers in an ethical conduct, its good practice is also more common. With these factors in mind, companies in the segment guarantee their integrity, act in accordance with norms and rules that promote various advantages and position businesses in the segment in the form of O&G market authorities. Invest in them!

If you want to optimize your results in the sector, be sure to know the details of the production of Oil and Gas and stay informed!