Oil and Gas Management - Essay Example

Oil and Gas Management Oil and Gas Management Introduction Management is a core to all business organizations. It can be instrumental in planning, coordinating, organizing, directing and controlling human and all the other resources. Thus, it is necessary for each business entity, firm and industry to have in place a well organized management. It can be instrumental in accomplishing its long and short term objectives. Oil and gas is an essential industry in the United Kingdom. It needs to be properly managed because it has vital contributions to make in the society. This paper presents a candid and critical analysis of the management of oil and gas. Oil and Gas Industry The oil and gas is a sector that exclusively deals in the drilling, processing and supply of oil and gas products. In other words, it is the chief source of energy resources that can be used for manufacturing petrol, diesel and gasoline. These can in turn be used for manufacturing a wide range of products including soap, paints, ink, dye, petroleum jelly, antiseptics, nylon products, motor cycle helmets, fertilizers, candles, plastics, tooth pastes, just to mention, but a few. As a nation, UK is endowed with oil deposits that supply it with liquid, solid and gaseous hydrocarbons including ethane, methane, propane, pentane and butane (Matveichuk 2004). To reap benefits from these resources, the sector should be properly managed. If this is done, it will be much possible to get adequate energy resources to be used within UK and even exportation to other countries. Besides, it is a highly lucrative sector that employees a total of 500,000 people. Out of this number, 380,000 work in the oil and gas exploration while 100,000 of them deal in the exportation of oil and gas products to different parts of the world (Hill & Wood 2009). Lastly, the oil and gas sector is a chief source of revenue because it makes contribution of £ 10 billion to the government in the form of taxes. If not properly managed, all these benefits might not be enjoyed. Management of Oil and Gas Industry Actually, oil and gas is a lucrative and large sector that has involves many people. It employs both skilled and semi-skilled professionals that include engineers, managers, technicians, sales and marketing personnel and subordinates. All these collectively play a very significant role in the sector. They are concerned with discharging duties pertaining to geological exploration, welding, maintenance, oil drilling, scientific and technical assistance, finance, logistics, sales, human resources, safety and risk management. In other words, whereas oil and gas experts deal with exploration, prospecting, drilling and processing of crude oil, the managers and other executives coordinate and control the day to day activities within the sector (Gomez-Mejia et al. 2008). Meanwhile, the junior staffs deal with sales, marketing and the provision of other technical services that might be essential at any given time. These activities that need to be managed well at all times because they can determine the success and prosperous future of the oil and gas sector in the country. Management Styles in Oil and Gas Sector The oil and gas is a dynamic sector that requires an objective and focused team of managers. However, its complexity implies that it has an elaborate management hierarchy that incorporates the non-executive Board of Directors, executive managers, middle level managers and the subordinate staff. The other important stakeholders in the oil and gas sector are shareholders, clients, general public, trade unions and the government (Gomez-Mejia, LR, et al. 2008). Apart from possessing professional qualifications in their area of expertise, the managers in the oil sector should be dynamic and flexible experts who have a sound knowledge on human resource management, technical, practical and leadership skills necessary for the management of the employees and any other resources at their disposal. For all of these to be accomplished, there needs to be good management styles and strategies as discussed herein: Democratic Management: This simply refers to a type of management in which the manager grants the employees an equal chance to actively participate in the decision-making process. Democratic management can be an appropriate style to be used in the oil and gas sector. When using this style, the manager does not assume an authoritative role, but allows the employees to air their views when making certain important decisions that affect them. In this case, the communication process is not unilateral, but flows both from the manager to the employees whenever necessary. This can happen since a democratic leader is concerned about the interests and welfare of the employees. Such leaders feel it better to include the workers in the major decision making processes because it can help in motivating and boosting their morale (Copp, Jean & John 2007). This kind of management style can be used when the management decides to make significant changes in the production, and technology processes. If such decisions are introduced without involving the input of the employees, they may not be properly implemented as the employees would feel excluded. Autocratic Management: This is a management style in which the manager assumes a full authority and makes unilateral decision without incorporating the contributions of the employees. Even though the oil and gas sector can be efficiently managed using the democratic style, circumstances might compel the management to resort to autocratic management style. Meaning, the manager can make organizational decisions without necessary involving the employees. In the oil and gas sector, a manger can turn to be autocratic when implementing work ethics, legal requirements, safety and taking stern measures against any risks that might face the organization in the course of its operations. However, while doing all these, the manager should effectively communicate it to the employees and explain to them the essence for taking such steps. If this happens, the employees would not be demoralized, but would be motivated because their interests are put at heart (Gomez-Mejia, LR, et al. 2008). Junior works need to be treated with lots of respect because they are stakeholders who make important contributions towards the achievement of the organization’s goals. Without them, no success can be realized. Therefore, even if autocratic style is adopted by the management, it should only apply when dealing with crucial issues. In essence, these management styles can be relevant in the management of oil and gas sector. As those who are entrusted with the management of the sector, the top management should be very much concerned about the welfare of employees. Deliberate steps should be taken to motivate them at all times. Without a stable and well-functioning Human Resource Management (HRM) department, the oil and gas sector can not be sustainable. It needs to be established so as to be concerned about the welfare of employees because it is the best way of motivating them to improve their productivity (Matveichuk 2004). The other important thing to do in the sector is strategic planning and risks management. As a sensitive sector, the management should be very much concerned about occupational safety and strive to introduce new policies aimed at protecting the employees, clients and the public from dangers emanating from inflammable products like petrol and gasoline (Mabro 2006). If this is properly done, the sector would have a good reputation in the eyes of the general public. Conclusion Actually, oil and gas is one of the major sectors that need to be properly managed. Unlike UK, not all countries are endowed with the oil and gas deposits. Therefore, to reap optimal benefits from it, measures should be taken to properly manage the prospecting, exploration, drilling, processing, marketing, selling and exportation of oil and gas products. Rather than employing a team of highly qualified and experienced professionals, the sector should have a dedicated management that is capable of making rational, realistic and smart decisions aimed at a proper utilization of the resources, motivation of employees and risk management. This is the only way through which the oil and gas sector will outshine other industries and efficiently contribute towards the growth of economy. Bibliography Copp, D, Jean H, & John ER, 2007, The Idea of Democracy. Cambridge University Press, Cambridge. Gomez-Mejia, LR, et al., 2008, Management: People, Performance, Change, 3rd edition, McGraw-Hill, New York. Hill, PJ, & Wood, GV, 2009, Geology of the Forties Field, U.K. Continental Shelf, North Sea in Giant Oil and Gas Fields of the Decade:1968–1978, AAPG Memoir 30. American Association of Petroleum Geologists, Tulsa. Mabro, R, 2006, Oil in the 21st century: issues, challenges and opportunities, Oxford Press, London. Matveichuk, AA, 2004, Intersection of Oil Parallels: Historical Essays, Russian Oil and Gas Institute, Moscow. Read More