Oil & Gas Strategic Operations Management - Example

OIL AND GAS STRATEGIC OPERATIONS MANAGEMENT Name: Institutional affiliation: Course Code: Date: Abstract Initial operations management in all sorts of organizations irrespective of the field they operate in is always faced by challenges. When it comes to the oil and gas industry there are a lot of factors that are to be considered when it comes to the allocation of resources in developing countries. Oil and gas are valuable resources whose allocation and exploration is faced by several challenges especially in developing countries. Some of the main problems faced in the initial operations management of oil and gas include politics and finance. This because oil and gas have high revenues which will include a lot of politics and vested interests from different quarters of the government. Aside from this general view, the environment and environmental factor play a major role in affecting the initial operation involved in the exploration of oil and gas in developing countries. The environmental factors affecting oil exploration especially in developing countries, have been stated to be among the core reasons why exploration in these countries has been a little difficult and slow. Introduction Before any initial step is taken on any mining operation there are several factors that are evaluated before the resource is explored. In developing and developed countries, the returns from exploring the resource play a key concern in whether the resource will be explored or not[Sti05]. Gas and oil exploration are considered to among some of the profitable resource exploration activities that a country can invest in. This being true, there are some factors that inhibit initial operations management in the exploration of these resources in developing countries where the revenue is much needed for development. In as much as the exploration of these resources will be beneficial for developing countries, the environmental concerns have always been a major concern in initial operations management. Before any project is flagged off, the environmental impacts of the project as well as the mitigation plans in place have to be vetted before the go ahead is given[Ber01]. This is to ensure that the project will not have negative impacts on the environment. Question Looking at the global scene it can be said that most of the economies in the world are driven by the oil and gas industry. This means that the discovery of oil is a point to celebrate for both the developed and developing countries. This is because the mining of oil and gas has great financial gains for a country. From this analogy one wonders why developing countries have discovered oil and gas yet the initial operations have never been able to start. In as much as the trade is lucrative, there are some construct that guide the exploration of oil and gas[Ber01]. The constructs are there to make sure that the environmental effect of the mining will in no way be of negative impact. It is from this paradox the contents of this paper seek to find out, with regards to exploration of resources in developing countries, to what extent are environmental factors a prevailing concern in initial operations management? The paper will focus on how oil and gas implications on the environment pose a major concern for any initial operations in the exploration of oil and gas. It can be seen that environmental factors play a major role in the authorization of initial operations in the oil and gas exploration. Relevant literature Like all other businesses, the oil and gas industry is faced with problems that hinder initial operations and operations management. One of the main factors affecting the development of the oil and gas industry in developing countries is the impact of the exploration on the environment. Environmental factors pose as a major issue for concern in oil and gas exploration because at most times the operations are faced by objections from the government, the public and at most times from lobby groups focusing on the environment. When looking at the exploration of oil and gas the potential impacts that the exploration has on the environment is always a deciding factor on the next step of action. Each process in the mining has its own negative impacts on the exploration which if not mitigated will lead to an imbalance in the ecosystem. The risks involved with oil explorations mostly revolve around the risks it poses to the environment. Exploration activities with potential risk to the environment The exploration of oil and gas has financial benefits for both developed and developing countries. For this reason, there ought to be more exploration in developing countries but this does not seem to be the trend. This is because environmental factors mostly the negative impacts of exploration are of more concern to the financial returns. The mining process that can be used all have a negative impact on the environment hence affecting the exploration process in developing countries. Fracking Fracking is one methods that is used in the exploration of oils and gas and yet it faces a lot of criticism against its use due to the supposed environmental effects[Kin]. Research in developed countries is not as developed as that in developing countries hence denying these nations a chance to try out new technology because they are not aware of its environmental implications. Fracking is the process of fracturing the earths bedrock with high pressure water and chemical to allow for the natural gas to be released out through the well[Kin]. Initial operation using this method in the exploration of oil and gas has been an area for main concern in both developed and developing countries due to the environmental factors involved. Operations near Blackpool were halted after two earthquakes accrued near the site[BBC15]. It is these risks that have led environmentalists in South Africa to state the government allowance of fracking in Karoo is irresponsible[Dav131]. The environmentalists argue that the process cannot be allowed because of the impacts on the environment and life whenever it is used[Dav131]. Seismic reflection or acquisition Looking at the process of seismic acquisition in the exploration of oil and gas, there several reasons why it opposed in some quarters due to its impact on the environment. Seismic acquisition uses the principle of waves and seismology to understand the composition of the earth’s surface[McC001]. Thorough exploring the contents of the surface then initial operations on acquiring the found oil and gas can start. This process like any other human process has an impact on the environment posing a challenge to its initial operations. For example, in developing countries like Tanzania where some oil and gas discoveries have been made offshore, seismic survey will be required to study the topography of the sea bed. In a recent study to study the environmental impact of seismic reflection, it was found out that the waves have affect marine life by disturbing habitats and even the survival of some species[Oku15]. The sounds of the waves have shown negative impacts on whales, squids and other marine life. The feeding of the grey whale was altered due to the sounds of the seismic testing waves. Poor development in technology and resources in developing countries have hindered exploration in this field and that is why it is until recently that there were resources enough to necessitate exploration. When the process is used in land, a lot of vegetation has to be cleared to allow room for the setup of equipment and work stations. Before any seismic activity is conducted the government must employ the consultation of a seismic company to assess the potential damage to the environment. In populated areas, the governments must look at the habitat disturbance that is caused by the exploration. For the process to be successful on land there has to be careful planning and assessment to make sure that all the risk factors are properly evaluated. Mitigation of the environmental risk factors related to seismic acquisition in developing countries poses a challenge in the exploration of gas and oil because of poor planning and lack of funds for the governments to employ seismic companies. General environmental factors causing concern for initial exploration of oil and gas Generally, there are some basic environmental factors that affected the process of initial exploration oil and gas in developing nations. One of the main areas of concern when it comes to oil exploration in developed countries is the mitigation and preventive measures that have been put in place in case of an oil spill[Rob10]. Oils spills occur when there is a release of petroleum or petroleum products on land or in the sea. When oils spill occur offshore they have more adverse effects on the habitats and ecosystems of marine lives. For example, the BP oil spill affected the lives of most marine animal like the African penguins off the coast of South Africa[Sar10]. It took more than a thousand volunteers working for months in order to be able to save the penguins[Sar10]. The impact on marine life and the environment make initial operation in developing countries a little more difficult because of the already poor environmental management institutions. For example, the Ongoni people of Nigeria have been faced with the adverse effects of oil spill since most of their land constitutes to be barren due to continuous oil spills that affect crops and vegetation in the area[Joh16]. These risks have led for other countries like Kenya to be more reluctant on exploration due to the environmental concerns. Global warming is an international concern among environmentalists due to its impact in climate and climate change. The flaring off of natural gas into the atmosphere is one of the processes in the drilling of oil whether inland or offshore. In a recent study, it was found out that Ongoni is one among the most polluted places in the world[Wal13]. The poor management of the gas release in the developing nation of Nigeria has led to the production of more than 30 million tons of carbon dioxide and more than 10 million tons of other natural gases into the air making Nigeria one of the biggest contributors to global warming[Wal13]. Other nations in the need of exploiting this resource find environmental factors as a prevailing concern in the exploration of oil and gas. Discussion From an evaluation of the relevant literature it can be seen that environmental factor have a key role to play in the initial operations management in the exploration of oil and gas in developing nations. Aside from the monetary motivation that comes from the trade, it can be seen that more emphasis is put on the effects the exploration will have on the environment rather than the income from the exploration. It can be said that exploration and allocation of oil and gas cannot be done without the proper evaluation of the environmental implications of the project. If approved, it will mean that all environmental risks have been assessed and accounted for in the evet that they occur. The current outlook on global warming also presses more on environmental concerns associated with oil and gas exploration making environmental factor the center stage for any operations related to the exploration of these resources. Methodology In the selection of material for the study, the paper focused on the use of secondary data on the topic and other studies related to the topic. Qualitative and quantitative methods were used in the development of the study because they work together to complement each other. An evaluation of mining activities in developed and developing countries was used as a way to draw the line of difference between the two. Environmental impacts associated with the exploration of these resources would help in seeing their significance in the approval or disapproval of a project. through an evaluation of all these perspectives the paper was able to draw the relationship between exploration and environmental factors. Collection method The process of data collection in a study plays a central role in legitimizing the study. The study mostly used secondary data from journals, studies, articles among others. This was to help in building the content drawn from different sources so as to find the underlying correlation when it comes to environmental factors. Secondary data proved helpful because it gives for room or improvement unlike their methods of data collection. Analysis method and limitation of study After getting the data from secondary sources the paper used qualitative and qualitative analysis focusing on descriptive studies that would help bring about an understanding of how the two main parts of the research question correlate to each other. Poor developments in the field of research in developing nations made is difficult to find content that directly relates to the exploration of oil and gas in developing countries. Few examples made it difficult to extrapolate results so as to represent a wider scope of study. Conclusion From the discussion of the paper it can be said that environmental factor play a key role in the initial operations management in the exploration of oil and gas in developing nations. The risks involved with exploration are so serious pushing for more concern in relation to the exploration of these resources. It can be said that as much as they hinder initial operations, they play a key role in ensuring the safety of the environment and the nation in the long run. Bibliography Sti05: , (Stijns, 2005), Ber01: , (Berman, 2001), Kin: , (King, 2012), BBC15: , (BBC, 2015), Dav131: , (Smith, 2013), McC001: , (McCauley, 2012), Oku15: , (Okuthe, 2015), Rob10: , (Robertson & Krauss, 2010), Sar10: , (Martel, 2010), Joh16: , (Vidal, 2016), Wal13: , (Walsh, 2013), Read More