Unit 6 – Coursework Example
Unit 6 al Affiliation Unit 6 Background Information British Petroleum (BP) is a multinational firm in the oil and gas sector. The company offers fuel for transportation and energy for heat and light. BP also provides petrochemical products and lubricants for engines across the globe. The company has an upstream segment that explores oil and natural gas, engages in oil and gas production and field development. British Petroleum owns and manages a number of pipelines in various parts of the world. On the other hand, the downstream business segment engages in oil refining, marketing and transportation of crude oil. The downstream segment also sells liquefied gas and gasoline. British Petroleum is likely to procure oil and gas products including crude oil and liquefied gas. BPs main petroleum raw materials that the company may outsource include olefins, ethylene, butylenes and propylene. The company may also outsource products such as metals for the construction of tankers and pipelines.
Global Contract Management Misconceptions
British Petroleum is exposed to the following misconceptions related to its global contract management activities:
A. There does not exist an international source guidance on buying and selling
The United Nations Convention on Contracts for the International Sale of Goods (CISG) guides BP concerning its procurement efforts. The reason is that BP sources most of its raw materials in the international market and some of its sources of raw materials are ratified to the CISG (Garrett, 2007).
B. Contract documentation is irrelevant to commercial contracts
British Petroleum buys raw materials in large quantities, and contract documentation is inevitable. In fact, some of its sources of supplies are in the United States whereby it is mandatory that contracts exceeding 500 dollars must have contract documentation (Garrett, 2007).
Garrett, G. A. (2007). World class contracting. Chicago: CCH.