The Impact of Oil and Gas Production in the Developing Countries - Essay Example

Impact of Oil Production on Developing World A Case Study of Algeria Table of Contents Synopsis 3 Impact of oil to the Producing Nations 3 Recommendations 4 Background 5 Attractiveness of Algeria for E&P Projects 5 Analysis and Evaluation of Strategic Options for SanawaOil Ltd 8 Implementation Plan 9 Conclusion 11 Personal Details 11 Bibliography 12 Synopsis 3 Impact of oil to the Producing Nations 3 Recommendations 4 Background 5 Attractiveness of Algeria for E&P Projects 5 Analysis and Evaluation of Strategic Options for SanawaOil Ltd 8 Implementation Plan 10 Conclusion 11 Personal Details 12 Bibliography 13 The Impact of Oil and Gas Production in the Developing Countries Synopsis Oil and gas industries are part of the most significant plants in many countries of the world. The oil and gas industries play a major role in upholding the dependency and the sustainability of a country. However, the provision of the oil and gas industry has not only reached to the beneficiaries of a specific states or nations. The benefits generated from such manufacturing industries can be incorporated in the development and sustainability of other countries. A better oil and gas plant will consider the welfare of not only the country that it is located but also the welfare and positive contributions to the developments within the community of nations. These plants should consider the existence of all E&P opportunities within the developing countries. The participation of these industries can be acknowledged through featured outcomes including development and preservation that are observed within the community of nations. The participation of a country in the business especially oil and gas exportation should not only base the country’s interest on gaining much interest or obtaining much income but also concentrate on the impacts that it would have on the environment and the community development (Agrama, 2012, pg. 56). Impact of oil to the Producing Nations Oil and gas industries can have many impacts to the environment and to the lives of the inhabitants of a certain country. The establishment of a collaboration in the business field for a specific community of nations with respect to the oil and gas exportation and importation leaves behind some impacts on the environment and the people living in the specific countries. These impacts can be either positive or negative with dependence to the way operations are carried out. Oil and gas production in the developing countries, like Algeria, builds up a strong foundation to the development strategies formulated within the country (American University in Cairo, 2011, pg. 78). It should be noted the oil business forms the backbone to all developments of a developing country. Recommendations The development of any oil producing firm in any nation will deeply peg such on the intensive and successful research and corporation to such government and the local communities where such oil are found. Contact a thorough research on finding out the available resources and the exploration and production opportunities in Algeria. The Sanawa Oil Ltd has the potential to establish a production plant in the Algerian; however, it must consider the underlying government policies and the plight of the directly affected communities and the entire nation. This would be determined by the available opportunities observed after some consultations with the state officials. Therefore, Sanawa Company should formulate a strategy that would provide the guidelines for the establishment of an oil plant within the Algerian grounds. This would find its implementation upon its acceptability by the Algeria state officials. Additionally, Sanawa Company should engage in alliances with the existing oil and gas companies in Algeria. The formation of alliances would enable consultations by the sanawa company on the backgrounds of an oil and gas plant establishment in Algeria. The production of oil and gas should be taken from a different perspective for as far as the development of a country is concerned. The company’s effort is to ensure the establishment of collaborations with Algeria oil and gas companies that would work in harmony for the improvement and the sustainability of the country. The Sanawa oil has a history of great success in securing E&P contracts in petroleum-producing developing countries alongside an increase in the price of crude oil (Vedavalli, 2007, pg. 57). Background The deployment of the military by the government of the neighbouring country inaugurated bad perceptions about the Sanawa oil and gas industry. The government deployed the military that used force against innocent community groups who protested against the lack of community development projects from the oil and gas revenues. The inhabitants of the country had laid the blame on the Sanawa oil and gas claiming that the company had influenced the intervention. The publication about this scandal has brought in much effect on the share performance in Sanawa that has lead to the reduction in the market capitalization of the company (Carta at El, 2008, pg. 45). The identification of the available options and the E&P opportunities in the country of Algeria would provide for a collaboration that would help Sanawa to increase the size of its proven reserves thereby maintaining the sustained growth and restore the reputation of the company. Attractiveness of Algeria for E&P Projects The Hassi Mouina exploration part has been extended. Presently, Statoil is assessing the technical solutions and marketable attractiveness of a prospective development. Algeria is one of the developing countries that have an oil and gas as part of their natural products. The production techniques and provision of services that take facilitation through oil and gas provides for the availability of the exploration and production for the Sanawa oil company. The value of services and technologies within the country has become an opportunity for the Sanawa oil in its exploration and production (Downey & Pratt, 2001, pg. 33). Services and technologies in the country have been offered at an expensive rate due to the state of the oil industry. Improvements in service delivery and technology as well as reduction in the prices of crude oil and natural gas among the producing countries including Algeria have created the opportunity in the country where Sanawa can offer the services at a reduced price. Reducing prices of the technologies and services within Algeria will encourage the oil and natural gas producing industrial players to seize the opportunity and improve their exploration and production deeds while at the same time reducing their costs (Sinha at El, 2007, pg. 86). The petroleum industries in Algeria have always labelled their services and technologies expensive; nonetheless, their demand is still high. These specific factors ensure the success and efficiency of the exploration and production processes for the Sanawa Oil Ltd. The formation of some alliances with Algeria would form the bases for the Sanawa’s development and improvement. Lowering of prices in this sector has also attracted new investors that expand their operations within the country and supports the exploration and production wheel. Anybody cannot undermine the necessity and the vitality of technology in the recent days; this is because technology paves way for the exploration route that enables arriving at new areas that were unattainable. The advancement in technology within Algeria in the current days has had much contribution to the development of a 3D seismic research that previously used to be 2D. This enables more accurate in data of reserve capacity of each well as pointed out by a petroleum expert. More than ten drilling methods have been developed in a period of ten years because of the advanced technology (Schiffrin and Bisat, 2004, pg. 102). The availability of these techniques, for instance, the horizontal drilling techniques that can enable drilling for up to the depth of twenty five thousand feet or more of exploration and production opportunity for the Sanawa Oil Ltd. These techniques facilitated by the advancement of technology within the country of Algeria would provide much efficiency in the establishment of oil producing plants meant for the expansion of the Sanawa Oil. The expansion of the industry in the grounds of Algeria leads to its expansion and growth that would restore the reputation of the company. The development of oil plants under the Sanawa industry would find strong bases within the Egypt grounds (Collins, 2003, pg. 87). Competition between the American and the Chinese rig manufacturers has heightened in Algeria. The Chinese manufacturers have occupied the market with extraordinary technologies in the production of their rigs. However, although the Chinese’s rigs are of less quality, they have gained much popularity and utility in many countries. On the other side, the American rigs are of greater quality but are more expensive compared to the Chines rigs. Due to their quality, the American manufacturers are quite expensive. This has made the petroleum industry to prefer the Chinese rigs for the Americans. The availability of the varied drilling techniques and rigs in Algeria provides for an opportunity for the establishment of an oil plant within its ground. This makes it an attractive country for the Sanawa Oil Ltd which intents to establish more plants to boost its economy and expansion (United Nations Conference on Trade and Development, 2008, pg. 90). Technology is an essential factor in attracting the exploration and production processes and is meant to boost and improve the production and calculate the reserve volumes and each well. With such big mandates, the laws of safety, health, and environment have set regulations since the site preparations necessitate the utility of special technologies that are installed either in production facilities or in equipment. These are required to ensure the personal safety and avoid all possible violations of the degree of the environment before carrying out any operations. The HSE, the health, safety and environment programs in Algeria have provided for the total safety and protection of all workers and the relevant stakeholders within the country. The establishment of an oil producing industry within the country would be facilitated through the implementation of a health and safety program. The availability of HSE is therefore an attractive figure for the Sanawa Oil Ltd (Agyeman at El, 2003, pg. 23). The effective discoveries in Algeria are significant steps for our growing upstream business in sanawa. The victory of Rhourde Yacoub and our resolution to continue further drilling portrays our commitment to invest in striking projects in Algeria. Analysis and Evaluation of Strategic Options for SanawaOil Ltd Technological advancements in Algeria have been hindered by the lack of investments that tends to vary from one drilling type to another. For example, offshore drilling is more expensive compared to onshore. Therefore, the ministry is presently opting to lure more investments from other countries that would intensify the exploration and production actions within the offshore fields that would generate more promising manufacturing records. The ministry portrays its willingness to sign terms of agreements with any foreign investors that would determine a specific time plan for exploration and production with the hope that the majority of the foreign investors would bring the latest technologies into grounds to speed up the exploration and production wheel in Algeria. The ministry therefore provides a significant option for any nation that wishes to expand its production through making some foreign investments. On the evaluation of the option of the Sanawa Company to establish an oil and gas company in Algeria, the option would serve them right due to the availability of the opportunities for exploration and production within the country. The Sanawa Oil Ltd should therefore sign an agreement with the ministry so that it can utilize the attractive opportunity for their business expansion in Algeria. Through the establishment of an oil plant in Algeria, the Sanawa Oil Ltd would have obtained a new field that would help in increasing its size and the maintenance of its sustained growth and restore the reputation. This would foster much formation of alliances between the Sanawa Company and the country of Egypt (Ibrd, 1991, pg. 70). Some petroleum sectors in Algeria were explored forty years ago. This provides for an opportunity to deploy technology in re-exploring these sectors. The Algeria petroleum sector therefore is taken as an outstanding opportunity for the Sanawa Company. Recognizable production quantities are generated and more reserves are proved using technology. This also helps in the protection of the environment from pollution. There have been the developments of new technologies that diminish the undesirable effects of the drilling liquids on the environment. However, the liquids are one of the main services within the drilling sector and are known to cause distractions in the nearby environment. Algeria petroleum industries have been using these new technologies with respect to the other oil and gas companies. This drilling fluid technology gives way for the exploration in new areas like the agricultural areas and the touristic sites where drilling activities are expelled to protect the environment. The designers of the empirical research in Algeria and the directional drilling techniques have provided opportunities for the re-exploration of wells and areas, where results have been found negative over the past. Due to the new opportunities that the new technology offers, the finance and cost remains the same barriers that face its growth. Unluckily, the economic decline affecting all industrial sectors in the world leading companies to demolish the opportunity of low prizes for services and strengthen their activities (Currier and Dorraj, 2011, pg. 67). Implementation Plan In order to restore the reputation of the company, the Sanawa oil company and its boards have the mandate to strategize its plans so that it establishes an outstanding investment in the grounds of Algeria. Using the observed opportunities for exploration and production, the Sanawa Company has an opportunity to invest in Algeria (Hoffman, 2006, pg. 44). As a service company, the Sanawa company will strategize its modification plans for their pricing so that they can survive with the economic insufficiency that has encouraged many companies to abolish the opportunity of little service prices as well as intensifying of their activities. The Sanawa Company is planning to bring approximately eight million dollars drilling apparatus to the local markets for a period of six months, which would generate higher incomes in return in spite of the economic crisis. Absolutely, the company considers the modification of the pricing strategy and the start of the control of all costs since all operators within the area have reduced their activity. The Sanawa Company has had some strategies that would enable it to establish an investment in the country of Algeria so that it can secure its opportunity for the improvement and the expansion of its economic activities and developments. Lowering its prices for the services and technologies required by the people of Algeria would secure its market for its products and therefore enhance its productivity following higher sales of products because of the increased demand by customers (Mytelka and Boyle, 2008, pg. 51). The company would also provide its latest services and technologies to the Algerian petroleum area in spite of the negative effects of the economic crises. The portable NORM cleansing units and jet pumps are the company’s latest services that aim at enhancing high oil production on top of other special offshore facilities for early production. The company has plans to obtain some rigs from the Chinese markets that would assist in drilling for about fifteen thousand feet at an affordable price of twenty four thousand dollars. Although the Chinese rigs have been made from low quality, it would be the best for a try-out event of the petroleum sites of Algeria (Mytelka and Boyle, 2008, pg. 99). The implementation plan requires many resources that call for total devotion to the work. The company has plans to utilize the least amount of money possible to facilitate the implementation of its plans. The company also requires utilizing the improved technology to enhance its exploration and production operations within Algeria. The availability of the regulations of Health, Safety and Environment protect the investors from Sanawa and therefore facilitates its operations in the petroleum sectors. The company will only intensify to the offshore drilling with respect to the agreements with the ministry. This gives a challenge to the implementation of the company’s strategy since the offshore drill is extra costly that the onshore drilling. In order to overcome this challenge, the company will revisit its accounts and its productivity in all branches from other countries. In doing that, the company will secure enough funds that would cater for the implementation plans. The Sanawa Company is much delighted with the progress of our drilling success that would build production as well as reserves in Algeria. The company looks forward to developing more relationship with all oil and gas sectors that will allow us to diversify our efforts of exploration into new areas. Conclusion The development of an oil plant in Algeria by the Sanawa Company will have many positive impacts to the Algerians. The implemented strategy will cause sustainability and development of community projects that will be facilitated through oil and gas products. The company is looking forward to building an alliance with Algeria as well as within the community of nations. Summing up all these significant of these projects initiated by Sanawa, the project will post the productivity and economy of Algeria. Personal Details Signature and Date: Name: Date (DD/MM/YYYY): Bibliography AGRAMA, H. A. (2012). Questioning secularism: Islam, sovereignty, and the rule of law in modern Egypt. 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