An organizational structure or the Petroleum Company hierarchy varies from one company to another depending on the size and diversity of activities. A general hierarchical structure of Petroleum Company is given below.
Top Level Management
This comprises of the board of Directors who are responsible for taking the important decisions of the Petroleum Company, formulating policies, strategies and reviews performance periodically.
Middle Level Management
The president of the Petroleum Company belongs to the middle level management and he is the petroleum engineer, geologist, or geophysicist who not only serves as CEO but may also engage in closely directing exploration, development, or production activities. He also negotiates joint venture endorsements, divestitures, financing arrangements and major property procurement.
Lower Level Management
This level comprises of the Vice Presidents who heads the different departments of the Petroleum Company, such as the Exploration, Production, marketing and Administration.
Exploration department has the job of locating and acquiring oil and gas reserves. The exploration department has responsibility for locating and acquiring properties that may contain oil and gas, for conducting geological and geophysical studies, and in some companies for supervising the drilling of exploratory wells. The work of the exploration department is delegated to several sections within the department
- Vice President- He looks after the overall activities of the Exploration Department.
- Geological and Geophysical Manager: A G&G manager is responsible for the accumulation and analysis of geological and geophysical information that will help decide (1) whether leases to be obtained in an area of interest and (2) whether and where exploratory wells is to be drilled.
- Land Department Manager: A land department has two major functions: acquiring mineral properties and maintaining records of properties owned, which is looked by two sections. The Land Department Manager is responsible for overseeing the activities of the two sections.
Drilling and Production Department
An overall objective of the drilling and production department is to manage safely the company’s wells and production operations to maximize production value yet comply with applicable government regulations.
Vice President: He supervises the overall activities of the production department and all the production manager reports to him.
- Production manager: He looks after the overall operations of the drilling and production department. He is assisted by pumpers, gaungers, petroleum engineers and specialist subcontractors.
- Field clerks must be assigned for carrying out routine functions in connection with handling correspondence, originating field payrolls, and completing other routine work in the field.
The marketing department arranges the sales of the produced oil and gas.
- Marketing manager: He looks after the overall sale of the produced gas and oil.
The administrative work of the organization is divided into various sections like Personnel, Accounting, Finance, Legal, Information Systems and Public Relations.
- Vice President: He looks after the overall administration.
- Personnel Manager: He protects the interest of the employees and assists Managers, Supervisors with disciplinary actions, layoffs, terminations, transfers and promotions.
- Accounting Manager: He looks after the overall functions of the departments of equipments and supply inventory, field clerk and services, property accounting, revenue accounting, general accounting and so on.
- Finance Manager: Handles overall responsibility of the finance department.
- Public Relations Manager: He is responsible for creating campaigns to publicize and raise the profile of the petroleum company and thereby boost its sales.
The Petroleum Company has a well-organized hierarchical structure, which contributes to its effective functioning.