EFFECTIVE STAKEHOLDER RELATIONSHIP MANAGEMENT IN THE OIL & GAS SECTOR: A CONCEPTUAL AND REVIEW PERSPECTIVE

Abstract

Effective stakeholder relationship management (SRM) is imperative for the sustainable operation of companies within the oil and gas sector. This review provides a conceptual framework and review perspective on the strategies, challenges, and outcomes associated with SRM in this industry. The oil and gas sector operates within a complex web of stakeholders including governments, local communities, investors, employees, suppliers, and environmental organizations. Building and maintaining positive relationships with these stakeholders are essential for securing operational licenses, maintaining social license to operate, and fostering a conducive environment for business continuity. Drawing from existing literature, this review elucidates the key components of effective SRM in the oil and gas sector. Firstly, proactive engagement and communication emerge as fundamental strategies. Companies need to identify stakeholders, understand their interests and concerns, and engage with them transparently and consistently throughout project lifecycles. Secondly, fostering mutual value creation is crucial. Companies must seek win-win solutions that align their business objectives with stakeholders’ interests, thereby promoting long-term partnerships and trust. Thirdly, robust grievance mechanisms are necessary to address conflicts and grievances promptly and fairly, preventing escalation into legal or reputational crises. Despite its importance, SRM in the oil and gas sector faces several challenges. These include inherent power imbalances between companies and stakeholders, socio-political tensions in resource-rich regions, and the dynamic nature of stakeholder expectations. Additionally, the sector operates in a volatile market environment characterized by fluctuating oil prices and regulatory uncertainties, further complicating SRM efforts. The outcomes of effective SRM in the oil and gas sector are multifaceted. Beyond mitigating operational risks and enhancing reputational capital, it contributes to fostering social license to operate, facilitating access to capital and talent, and promoting sustainable development in host communities. Effective SRM in the oil and gas sector requires a proactive, value-driven, and adaptive approach. By integrating stakeholder considerations into strategic decision-making processes, companies can navigate complex socio-political landscapes, mitigate risks, and create shared value for all stakeholders involved. Keywords:  Management, Oil and Gas, Conceptual, Perspective, Relationship.