Department of the Interior, Minerals Management Service, Procurement Operations Branch, MS2500, 381 Elden Street, Herndon, Virginia 20170-4817

B -- THE CURRENT DYNAMICS OF THE OIL AND GAS INDUSTRY SOL 1435-01-00-RP-31058 DUE 021100 POC Lisa Goins-Berntsen, Contracting Officer 703.787.1359 E-MAIL: click here to contact the contracting officer via, lisa.goins@mms.gov. The Department of the Interior, Minerals Management Service intends to competitively award a contract to study the last two decades (1980-2000) of the offshore oil and gas industry in the Gulf of Mexico to gather an understanding of the current direct and indirect social and economic impacts on the region and future implications. The contract period is fifteen (15) months from the date of award. The cost is estimated to be between $130,000 and $160,000. The following information advises potential offerors how to respond and describes prospective efforts. Since the Minerals Management Service's (MMS) formation, the offshore oil and gas industry in the Gulf of Mexico (GOM) has undergone many structural, social and economic changes that have affected the human and natural environments in which the industry produces. The 1986 worldwide oil price collapse had a devastating effect on the United States' oil and gas industry. The collapse was particularly hard on the Gulf of Mexico Region (GOMR). Thousands of oil related jobs were eliminated as oil companies tried to cut costs thereby producing an indirect effect of more job losses. Hundreds of non-major oil companies went out of business while major oil companies shifted the main portion of their exploration and development activities to foreign countries where finding and lifting costs were less than in the GOM. The GOMR's economic activity suffered greatly for many years. A favorable economy, new regulations (Deepwater Royalty Relief Act, 1995) and technological advancements (3D seismic, powerful computer workstations, horizontal drilling capabilities and subsea completion methods) decreased finding and lifting costs in the late 1980's and early 1990's, allowing many oil companies to return to the GOM. While the last decade was successful due to the emergence of deepwater drilling, short-term, bottom line financing steered corporate decisions. Joint ventures, mergers, downsizing, outsourcing, and subcontracting dominated the oil industry leading to both positive and negative social and economic impacts. Non-major oil companies also assumed an increased role in GOM production during the 1990's. Access to technological advancements allowed independents to decrease their finding cost comparable to the majors and to seize shallow water opportunities. STUDY OBJECTIVES: This study has two objectives. First, to gather and review the knowledge of changes (local, national and international) to the oil and gas industry operating in the GOM since 1980 to the present. Second, to relate the significance and the implications of the above changes to the GOMR. This would include the social, economic and industry impacts. SCOPE OF WORK: The oil and gas industry is a globally competitive market; corporate decisions made in Europe have a profound effect on GOM economies. This study will focus on the GOMR with consideration given to national and international issues and regions. Approximately half of this study's research will be based on a literature review, while the other half willbe based on discussions with industry experts and representatives via in person meetings, telephone conversations and or written correspondence. A survey instrument will not be used. The tasks of this study are as follows: (1) In order to gain a clear understanding of the offshore oil and gas industry's social and economic impacts on the GOMR and their future implications, the Contractor will develop a list of critical issues to study. This list will be based on the Contractor's knowledge of the industry and preliminary research from literature and discussions with industry experts and representatives. In assembling the list, the Contractor should consider MMS' concern with offshore and onshore impacts. This includes, for example, changes to business practices, labor market supply and demand, and impacts on the laborer. The Contractor should also consider the study's budget and time constraints. The Contracting Officer's Technical Representative (COTR) must approve the completed list of study issues. Suggested research issues include, but are not limited to: globalization of the oil and gas industry; downsizing; turnkey drilling and production; increased risk management versus zero tolerance management; focus on short term planning and returns; decreased research, training and exploration and development budgets; increased roles of independents; new technologies; decreased company and industry loyalty and satisfaction; mergers and joint ventures; deepwater; outsourcing; oil price instability; Deep Water Royalty Relief; long term energy supply and demand; sources of GOMR capital funding; OPEC; onshore infrastructure requirements, changes and stress; privatization of foreign national oil companies; the diversification and different agendas of stakeholders; shallow water requirements and services versus deepwater; emergence of natural gas; influx of immigrant labor; decreasing finding and lifting costs; redistribution of personnel to Houston; availability of personnel with respect to number and skill level; increased use of cost management; insurance capabilities. This list illustrates' the range and complexity of the issues. It is not a comprehensive list, nor could the Contractor adequately consider each question implied by this list. It is the Contractor's task to develop the critical issue list for this study. (2) The Contractor will collect and document literature relevant to the study. This includes trade, industry and scientific journals, books, working papers, newspaper articles and Internet sites. A minimum of 200 annotated references is required. (3) The Contractor will analyze and summarize the above collected literature highlighting the impacts and implications to the GOMR and to the oil and gas industry as a whole. (4) The Contractor will develop a contact list of oil and gas industry experts and representatives to discuss the changes that have occurred in the oil and gas industry during the last twenty years (1980-2000) and their implications to the GOMR. (5) Using the findings from the literature search,the Contractor will communicate with the above contact list via in person meetings, telephone conversations, and/or written correspondence to discuss the study issues. (6) The Contractor will keep a log of the above meetings. A record of each meeting will include the date of the meeting, who was present, where the meeting took place and an accurate chronicle of what was discussed. A copy of the log will be included in the study's reports. If the contact's confidentiality becomes an issue, an alternate form of reporting will be developed by the Contractor and approved by the COTR. (7) The Contractor will summarize and analyze the industry meetings placing emphasis on the major changes that have occurred in the industry and how they have affected the GOMR, the current concerns of the industry and future implications for the industry and the GOMR. (8) The Contractor will synthesize the findings from the literature review and the industry meetings. A descriptive history and time line of relevant events will be produced. (9) The Contractor will analyze and report the combined results of the research process. Detailed descriptions will be prepared of the study issues, relevant industry relationships (onshore and offshore), and the direct and indirect impacts of the study issues with respect to the GOMR. In addition, the Contractor will indicate future implication of the study issues. (10) Based on the data analysis, the Contractor will prepare a list of future GOMR oil and gas industry issues and the appropriate research methods for studying them. (11) The Contractor will prepare technical reports and scientific publications to disseminate and communicate the findings, results, and advances resulting from this study. (12) After the award of this contract, the Contractor will receive MMS' annotated social science bibliography. This is an electronic source of approximately 1,600 references and 200 annotations. The Contractor will review the literature collected for this study (a minimum of 200 annotated references) froman objective point of view and produce a focused and structured annotated bibliography to add to and conform to MMS' bibliography CAPABILITY STATEMENT: In order to compete for this contract, an offeror must demonstrate that they are qualified to perform the work by submitting a Capability Statement. The Capability Statement must describe in detail: (1) the qualifications and specific experience of the key personnel who will have primary responsibility for performing and or managing the project. You must provide information on which task(s) each key personnel will perform and the rational for that assignment. (2) the organization's experience with this type of work and a description of the facilities to be used; and (3) specific references (including project identifier and description, period of performance, dollar amount, client name and telephone number) for previous work of this nature that the organization and or key personnel has completed within the last two years or is currently performing. Also include any negative references and a rebuttal explanation. References will be checked to validate the information provided. Descriptions of key personnel should include their familiarity and understanding of OCS activities and the resulting social and economic impacts on the Gulf of Mexico Region. EVALUATION FACTORS: Each Capability Statement will be evaluated based on the following factors: (1) The skill, abilities, education, professional credentials and experience of the proposed key personnel. People's skills and experience will be evaluated in light of the tasks they will be performing. (2) The experience and past performance of the organization, including number, size, location of projects and complexity of similar projects completed by the proposed project team and organization. Past performance includes adherence to budgets and schedules, effectiveness of cost control, the acceptability of previous products delivered, effectiveness of program management and the offeror's willingness to cooperate with customers in both routine and unexpected matters. Following the review of all Capability Statements submitted, those offers judged most qualified to successfully perform this contract will be provided additional written proposal instructions. HOW TO RESPOND: Offerors must submit by 5:00 P.M. EST, February 11, 2000 the original Capability Statement and three (3) duplicate copies to Ms. Lisa Goins-Berntsen, Contracting Officer, Minerals Management Service, Procurement Operations Branch, 381 Elden Street, MS 2500, Herndon, VA 20170-4817. Nine (9) additional copies must be submitted to Ms. Connie Landry, Procurement Coordinator, Minerals Management Service, Gulf of Mexico OCS Region, 1201 Elmwood Park Blvd., MS 5431, New Orleans, LA 70123-2394. Timeliness of receipt of any submission will be determined by the time received in the Procurement Operations Branch in Herndon Posted 01/21/00 (W-SN417555). (0021)

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