Key Performance Indicators as an Instrument of Achieving Strategic Indicators of Oil and Gas Producers

Abstract

The papers addresses the issues of KPI system use with respect to achieving oil and gas producers’ target strategic indicators of development and operation. Background to key performance indicators system implementation in oil and gas producers is explained. It is demonstrated that key performance indicators structured in terms of distinguished prospects of Balanced Scorecard allows achieving milestones because of their use both at all levels of management hierarchy and production and technological chain. For this purpose results of recommended instruments implementation in world major companies are given. In the course of literature review it’s shown that KPI and BSC not only promote the company’s strategy realization but allow choosing from possible strategies the preferred one. The paper reveals strong interrelation of KPI with other management instruments: BSC and budgeting as well as expediency of their joint use. Approaches to KPI selection, its classification and sequence of project development regarding KPI and BSC implementation are examined. In the framework of preparatory stage of key performance indicators selection for the oil and gas company, its goals decomposition and also structuring in terms of main business segment - extraction of oil - are represented. Results of academic and research study are given. They involve explanation of current prospects of BSC of territorial department of crude oil production: finances, production, ecology and staff; definition of specific goals and development of key performance indicators for each of stated prospect. DOI: 10.5901/mjss.2015.v6n3s3p19