WorldOil.com rolls out RFQ and negotiation capabilities

By Staff -- Purchasing, 7/13/2000

WorldOil.com, an e-commerce portal for the oilfield services industry, recently added RFQ and online negotiation functionality to its catalog-based Net marketplace.

First launched in 1996, the site featured the content ofWorld Oil magazine, a publication dedicated to the upstream exploration and production end of the energy marketplace. On March 31 of this year, the site went live with an online version of the 80-year old Composite Catalog of Oilfield Equipment and Services, long known in the offline world as the "Bible" for oilfield products and services buyers.

In its first month, WorldOil.com chairman and CEO Lorne Baine says the Composite Catalog received an average of 3,500 daily visits, with 72,000 pages viewed, on average, per day. In early May, the site became interactive, allowing buyers to request multiple quotes for bids, to negotiate back and forth, and to close transactions electronically.

Asked how this fits with the Internet-based trade exchanges being developed by large oil companies, Baine says they aren't necessarily in competition. "They're working to automate their materials and MRO buys. They're targeting the 'rope, soap, and dope' types of products and services they use daily. The buying of engineered products and services for drilling is a far different matter, requiring any number of complex products and services."

In the works, Baine says, are software templates-configurators-that will allow people on the buy side to create rigorous, complicated RFQs online. The templates will cover, from the engineer's perspective, "everything that needs to be done in order to drill an oil or gas well." Upon receipt of these RFQs, Baine says oilfield services companies will refer to their extensive knowledge databases to determine how they want to bid on various projects. The templates, he says, will ensure that buyers receive comparable bids back from suppliers.

"Assuming we do this successfully," Baine says, "I think the other oil-industry related trade exchanges are going to be very happy to work with us, rather than against us." In fact, he says a big piece of WorldOil.com's strategy is to link up with other Net markets aimed at different parts of the industry production stream.

According to Mark Hood, marketing director, buy-side, with WorldOil.com, the Composite Catalog covers "a nice broad cross section" of the global supply base for oilfield products and services. "This is an incredibly fractured market, so we'll never have all suppliers listed. But most major U.S. suppliers have a presence in our catalog. We can say with confidence that we have enough to create healthy markets."

Still, Hood notes that not every supplier represented in the Composite Catalog has yet agreed to respond to RFQs generated at the WorldOil.com site. "We're still in process of finalizing the way this will work. Right now, buyers can go in and create RFQs. The site responds with a list of suppliers that provide the types of goods or services in question and who have registered to quote online."

As it works to bring more suppliers into the fray, Hood says WorldOil.com will also be endeavoring to make the catalog more interactive or e-commerce capable. "Right now, buyers who access the catalog essentially see online versions of companies' marketing brochures. The catalog is rich in detail, offering pictures, blowout and cutaway diagrams, but it does not yet encompass the types of attribute-driven stock keeping descriptions that make it e-commerce ready." WorldOil.com will accomplish such major enhancements, Hood says, by partnering with companies specializing in e-catalog creation and aggregation.

Sources of revenue for World-Oil.com are several, according to Baine. Much like the Yellow Pages, suppliers pay a fee to be listed in the catalog. The catalog also offers 3,700 advertising locations. WorldOil.com has, as well, a nascent services division focused on helping suppliers code their catalogs and better describe what they're selling. Transaction fees, Baine says, are under downward pressure for all Net markets. "We assume the margins are going to become increasingly thin, so we plan on moving to a simple flat-fee based model for accessing our value added RFQ templates and so on." Another source of revenue is the advertising sold against the company's existing stable of print and online magazine content.

In addition to its evolving RFQ functionality, WorldOil.com announced two new content partnerships at the beginning of May, one with Simmons & Company, the other with Spears & Associates. Simmons, an investment banking firm specializing in the energy services industry, now provides six of its most recent industry research reports online at WorldOil.com as well as weekly crude commodity price summaries. Spears, a market research-based consulting company to the industry, provides weekly information updates including industry news and commentary. Users will soon be able to purchase additional Spears reports online at WorldOil.com.