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Walking the Supplier Diversity Talk: ConocoPhillips and Petro Amigos $40 million Deal

ConocoPhillips recently selected Petro Amigos for the supply of oil country tubular goods and associated support services to the San Juan Business Unit. The agreement will effectively double the business volume of Petro Amigos – a minority-owned business that previously had about $40-$50 million turnover a year.

“Supplier diversity is more than a creed, it’s a long-term commitment and success strategy of our company,” says Debbie Adams, general manager and chief procurement officer of ConocoPhillips’ Global Procurement Services. “We actively seek out a variety of outstanding companies to partner with. The relationships we cultivate not only impact ConocoPhillips and our suppliers, but they benefit the communities where we operate and live.”

The ConocoPhillips Perspective
Prior to this major agreement, Petro Amigos handled a small tubing program and provided ad-hoc supply of oil country tubular goods to ConocoPhillips. Some members of the ConocoPhillips selection team have known Petro Amigos president Cesar Vazquez since his previous sales role with another distributor and when the team was searching for distributors of a target mill, Petro Amigos stood out as a contender.

Key factors in ConocoPhillips decision-making process included:
- Relationship with chosen mill.
- Competitive prices.
- Supplier’s commitment to meeting all support requirements.
- ConocoPhillips’ desire to diversify its supply base and provide new opportunities for qualified small, minority and women-owned businesses.

ConocoPhillips’ Supplier Diversity team played a critical role in developing this U.S. supplier diversity opportunity. In addition to promoting inclusion of diverse quality suppliers in the company’s procurement and business processes, and increasing awareness of its intangible benefits, the team works continually to identify high-prospect, high-quality suppliers classified as small, minority or women-owned businesses. Identifying such qualified suppliers early on opens up the opportunity in the decision-making process. The advanced level initiative also demonstrates the company’s “SPIRIT of Performance” – core values, including People and Innovation components, that guide ConocoPhillips’ purpose to use its pioneering spirit to responsibly deliver energy to the world.

The ConocoPhillips selection team found that, despite its confidence in Petro Amigos, it was not an easy decision as it involved changing suppliers where the incumbent supplier had performed very well.

The Petro Amigos Perspective
Since its early days, Houston-based Petro Amigos had enjoyed a longstanding, but limited relationship with ConocoPhillips. In the mid-1990s, Petro Amigos supported a supply program for the company’s Gulf of Mexico business unit and that became the foundation for the relationship. In recent years, this relationship involved “spot” business opportunities. So Petro Amigos was eager to expand this relationship and made a concerted effort to identify the needs of ConocoPhillips and submit a winning proposal that addressed all those needs.

Some factors Petro Amigos attributed for its proposal success:
- Focusing on its objective to meet or exceed what ConocoPhillips expected in a total supply provider.
- Identifying the ability to step up to the e-Commerce platform as a key determining factor.
- Putting together a professional presentation on its company and capabilities, along with their proposal.
- Highlighting its ability to reach and make decisions quickly and efficiently, a strong team of key personnel with ownership participation, and long-term plan of succession for the financially stable, minority-status company.

Both companies agreed that building upon an existing relationship and Petro Amigos demonstrating both its commitment and capabilities helped instill ConocoPhillips’ confidence in Petro Amigos’ ability as a supply partner to handle the large amount of business involved.

“Regardless of the industry, it is very difficult to unseat the current source of supply,” Petro Amigos acknowledges. “It requires change, patience and dedication to address all of the business points. Knowing your customer, its needs and expectations, and making the commitment to see the plan through – that’s what it will take to earn your customer’s support.”

Talking about earning customer support, like talking about diversifying supply sources, is something many companies do, but not many practice. With this agreement in hand, Petro Amigos and ConocoPhillips have taken a big step towards progress in supplier diversity.

About ConocoPhillips
ConocoPhillips is an integrated energy company with interests around the world. For more information, go to www.conocophillips.com.

About Petro Amigos
Petro Amigos is a distributor of all types of oil country tubulars carrying a full range of pipe sizes, weights and grades. It distributes oil field tubulars to companies primarily in Texas. Visit www.petroamigossupply.com for more information.

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