Table of Contents
Summary and the key identification.
Application of the theory.
Clarity of expression and presentation.
The oil and gas industry is considered to be the largest and one of the most important industries across the globe. The reason why it is stated as the most important industry is it is directly or indirectly linked with every individual's life making it a necessary component needed to live our lives. In the global economy the two most watched commodities are crude oil and natural oil which in a way has a huge contribution in building up the global economy. When it comes to employment the industry of oil and gas has over thousands of workers across the globe as well as makes billions of dollars in a year in this industry (Aung, 2017). This industry covers all kinds of businesses like transportation, heating, electricity and so on. This industry uses pipelines or usually a tanker for the transportation of crude oil, natural oil and the refined products. Other than transportation this industry also deals with the purification or rather refining of the products which is mostly refining crude oil and natural oil. There are a lot of things that are to be taken care of while working in the industry of oil and gas as it becomes very dangerous at times in these industries. A maintained pipeline is one the major things that has to be taken care of to maintain the thermal conductivity and to avoid leak in the pipeline as a minute leak in the pipeline can turn out to be a huge loss for industries in the oil and gas field (Grasso, 2019).
The industry dealing with oil and gas has majorly covered the world and the global network of the tankers used, the pipeline and all the refineries makes consumption of the oil and gas more into knowledge (Nurfadilah & Daryanto, 2018). The prices have actually become quite vulnerable in the upcoming years due to which a global recession is expected in this industry. As this industry plays a vital role in terms of the global economy it is very important to closely keep an eye on the figures and development procedure of the industry. All these companies compete on an international level as the overall turnover of each company is taken nation wise and compared accordingly as in every country the oil and gas industry is very closely related to economic growth of that country. Thus if the company does better, then the economic health of the entire nation is considered to be at a good place.
There are various factors or rather components that are to be taken care of in the oil and gas industries. Some of the key components are discussed below:
Oil and gas industries have one of the useful tools for making strategy and to evaluate potential opportunities, threats and risks and that is five Porter's framework .
There are five theories related to this model which in a way effects or rather the way they are applied in this industry are as follows :-
The oil and gas industry has widely taken over the world and its functioning as well. Both these elements are considered to be a necessity for the living and our day to day activities therefore in one way or the other we all are dependent on the products manufactured by these industries (Bueno, Solis et al. 2018). Crude oil and natural gas are the main components that are extracted and then developed by these industries by refining and purifying them so that it can be used by general people. Starting from the transportation to the gas required for cooking in our houses these industries deal with all these necessary items that are needed by us. So it is seen that the consumption of petroleum has grown for about 4.5% making it one of the products in demand (Heim, Kalyuzhnova et al. 2019). Evaluating the prominent trends and issues coming up in the oil and gas industry should also be taken care of very nicely so that the businesses are aware of the wider macroeconomic as well as the environmental risks related to it. Political risks are also taken into consideration as this industry is highly related to the economic condition of every nation and the increase or decrease in the growth rate of this industry can widely affect the economic health of a country. The oil and gas industry is highly facing the increase in demands for all sorts of operation and business therefore it is creating a social and environmental pressure on a lot of oil and gas companies (Naranjo, Lozada et al. 2018).
The oil and gas industry is such that brings a lot of business and profit to the company as it comes under one of the basic things needed to run our day to day lives. In every aspect be it for personal use or in the business segment these things are required in many activities. In the personal uses it can be the LPG that is used in most of the houses for the cooking purpose as well as the fuels used in the vehicles that we use. So in a way we use transportation every single day and cook food making it an important component used in our daily lives (Ekhator, 2016). When it comes to the business the machines used in big industries require fuels, even for the transportation and the huge amount of electricity and heat required in some of the industries get a contribution from the oil and gas industry at a very large extent. The documents required in this industry are very important because in such industries legal issues are brought up at very high range. Claiming and clarifying about the property or rather target field when the working would take place should have correct documents and approval so that the company does not face any kind of problems once the workers start working in that field. For extraction of the oil a huge set is required with a large amount of labour therefore a lot of money is invested. So the companies make sure that no laws and legal issues come up once the work starts. Planning and keeping everything in the proper place is very important. Presentation in any business is actually one of the most important factors that affects the functioning of the industry or the company (Kannan, Su et al. 2018). The way the company builds itself and presents itself is the way one can identify how promising that industry is. Being one of the necessities it is important for them to present themselves in a way that the consumer is sure about the things they are proving. For an industry like this being independent and valuable is a key factor. Value basically means whether the customer is interested in buying the thing or not. In the development of this industry it includes the activities that are performed which is drilling, shipping, the designing of pipelines, the different tools required for installation, and the other equipment and services required. As a consumer everyone knows and understands the implication of the high pricing of oil and the same place the gasoline prices also increases and gasoline is a necessary purchase for the most of the households due to which they have to spend less on other goods and services. As explained how the prices of oil affects households and businesses it becomes easy to understand how oil prices have an immense effect on the macro-industry. Thus increase in oil prices can also lead to the growth of the economy leaving their effects on the demands and supply on other goods and services other than gas and oil.
Aung, T. S. (2017). Evaluation of the environmental impact assessment system and implementation in Myanmar: Its significance in oil and gas industry. Environmental Impact Assessment Review, 66, 24-32. Retrieved from: https://www.researchgate.net/profile/Thiri_Aung4/publication/317510043_Evaluation_of_the_environmental_impact_assessment_system_and_implementation_in_Myanmar_Its_significance_in_oil_and_gas_industry/links/59dec81f458515376b2a12b8/Evaluation-of-the-environmental-impact-assessment-system-and-implementation-in-Myanmar-Its-significance-in-oil-and-gas-industry.pdf [Retrieved on: 01.10.2020]
Nurfadilah, D., & Daryanto, W. M. (2018). Financial performance analysis before and after the decline in oil production: Case study in Indonesian oil and gas industry. International Journal of Engineering & Technology, 7(3.21), 10-15. Retrieved from: https://www.researchgate.net/profile/Samer_Adham/publication/322889011_Membrane_applications_and_opportunities_for_water_management_in_the_oil_gas_industry/links/5f59e762299bf1d43cf920e3/Membrane-applications-and-opportunities-for-water-management-in-the-oil-gas-industry.pdf [Retrieved on: 01.10.2020]
Grasso, M. (2019). Oily politics: A critical assessment of the oil and gas industry’s contribution to climate change. Energy Research & Social Science, 50, 106-115. Retrieved from: http://www.marcograsso.info/wp-content/uploads/OG-for-website.pdf [Retrieved on: 01.10.2020]
Oyewunmi, O. A., & Olujobi, O. J. (2016). Transparency in Nigeria’s oil and gas industry: Is policy re-engineering the way out?. International Journal of Energy Economics and Policy, 6(3), 630-636. Retrieved from:https://dergipark.org.tr/en/download/article-file/361664 [Retrieved on: 01.10.2020]
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Heim, I., Kalyuzhnova, Y., Li, W., & Liu, K. (2019). Value co‐creation between foreign firms and indigenous small‐and medium‐sized enterprises (SMEs) in Kazakhstan's oil and gas industry: The role of information technology spillovers. Thunderbird International Business Review, 61(6), 911-927. Retrieved from: https://onlinelibrary.wiley.com/doi/pdf/10.1002/tie.22067 [Retrieved on: 01.10.2020]
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Pirogov, S. P., Cherentsov, D. A., & Gulyaev, B. A. (2016, October). Prospects of applying vibration-resistant pressure gauges in the oil and gas industry. In IOP Conference Series: Materials Science and Engineering (Vol. 154, No. 1, p. 012013). IOP Publishing. Retrieved from: https://iopscience.iop.org/article/10.1088/1757-899X/154/1/012013/pdf [Retrieved on: 01.10.2020]
Kannan, P., Su, S. S., Mannan, M. S., Castaneda, H., & Vaddiraju, S. (2018). A Review of Characterization and Quantification Tools for Microbiologically Influenced Corrosion in the Oil and Gas Industry: Current and Future Trends. Industrial & Engineering Chemistry Research, 57(42), 13895-13922. Retrieved from: https://www.researchgate.net/publication/327949297_A_Review_of_Characterization_and_Quantification_Tools_for_Microbiologically_Influenced_Corrosion_in_the_Oil_and_Gas_Industry_Current_and_Future_Trends [Retrieved on: 01.10.2020]
Naranjo, J. E., Lozada, E. C., Espín, H. I., Beltran, C., García, C. A., & García, M. V. (2018). Flexible architecture for transparency of a bilateral tele-operation system implemented in mobile anthropomorphic robots for the oil and gas industry. IFAC-PapersOnLine, 51(8), 239-244. Retrieved from: http://folk.ntnu.no/skoge/prost/proceedings/ifac-oogp18/OOGP18/0020.pdf [Retrieved on: 01.10.2020]
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