The oil and gas industry is the means for Nigerias economy
The oil and gas industry is the means for Nigerias economy. The upstream oil and gas industry remains the most important sector of the countrys economy.
by BP 2012 estimated that Nigeria had oil reserves of 37.2 billion barrels at the end of 2011, equivalent to 41.4 years of current production and 2.25 % of the worlds reserves while the country produced an average of 2457.3 thousand barrels of crude oil per day in 2011, which represented 2.93% of the world (MBendi, 2013).
According the BP Statistical Energy Survey 2011, Nigeria had 5.29 trillion cubic metres of gas. However, a poor infrastructure has affected the distribution of the gas. It flares 75 percent and re-injects 12 percent of the gas produced. However, the country wanted a zero percent flare by 2010. The government also intended to increase revenues from export of gas by 50 percent.
The countrys downstream oil and gas industry also has important roles in the sector. However, it faces a myriad of challenges, such as fire, poor management, corruption, sabotage, vandalism, and poor maintenance. As a result, such refineries have never operated above 40 percent capacity (MBendi, 2013).
Therefore, the country cannot meet the internal demand for oil and gas, and it has turned to imports in order to supplement the shortage. The country has an active petrochemical industry based on its refining abilities and demands.
The current situation of Nigeria is risky for production and proper management of the sector. For instance, Nigeria experiences political unrest, border problems, and inadequate funding from the government coupled with corruption. Such problems have affected the promotion of best practices in the oil and gas industry of Nigeria.
Information technology in the oil and gas industry
Technological developments in the oil and gas industry have transformed the sector in advanced areas like the US (NaturalGas.org, 2011). There are innovations that have changed the oil and gas industry in many OPEC member states. Consequently, the roles of technology in oil and gas industry, particularly in explorations and productions have had deep impacts on the potential of the sector.
The applications of information technology (IT) and other innovations in exploration and production of oil and gas have equipped the sector with the required practices and equipment for continuous efficiency in production of oil and gas to meet the world demands.
The aims of the IT and other innovations are to ensure safe exploration and production and environmental friendly practices. Usages of such technologies in exploration and production aim to mitigate challenges that arise from unconventional sources of natural gas like shale rock.
Specifically, agendas of IT in the oil and gas industry have been to provide superior and integrated database with high-end visualisation and communication capabilities for oil and gas information management.
Such innovations are also useful in managing petroleum geological information and improving observation of the sector. The overall aim is to improve production through efficient drilling quality that protects the environment, and reduce costs.
Some major oil and gas firms like Chevron, Shell, Mobil, and BP also work in Nigeria. They have applied information technology in their practices in the sector. The involvement and activities of these firms remain extensive and critical for the success of the countrys oil and gas industry. Therefore, it is fundamental to understand the impact of information technology in the oil and gas industry in Nigeria.
The cost of oil and gas exploration in Nigeria is high due to a myriad of challenges in the sector. For instance, there is a slow rate of gathering data that are fundamental for seismic activities, reservoir characteristics, and monitoring.
Moreover, availability and sharing of data are also challenges in the sector. As a result, the cost of drilling has increased. However, IT in the industry should enhance efficiency, protect the environment, eliminate emissions, and improve identification, mapping, and understanding of source rocks.
This study aims to indentify impacts of information technology in the oil and gas industry of Nigeria.
Specifically, the study shall show how adoption of information technology in the oil and gas industry in Nigeria has affected various areas.
To investigate the effect of information technology on cost of production
To assess the level of efficiency as a result of adopting information technology in the industry
To highlight impacts of information technology on risk mitigation and management in the oil and gas industry
To investigate effectiveness of information technology in production processes
To assess the environmental impacts of adopting information technology the oil and gas industry of Nigeria
These are the most critical considerations for the use of information technology in the Nigerian oil and gas industry.
Relevance of the research
Limited data exist on the impact of information technology in the oil and gas industry in Nigeria. However, data should be available in the volatile oil and gas industry of Nigeria that faces many challenges. Besides, the increase in demands for oil and gas has created opportunities for advanced practices in the sector.
Studies in information technology can help in developing the oil and gas industry in Nigeria by providing a basis for drafting technology policies and procedures for the industry. Therefore, the research shall provide useful information for oil and gas firms, government agencies, industry stakeholders, and researchers in the oil and gas industry.
Review of available literature
Studies about the use and impacts of information technology in the oil and gas industry of Nigeria are rare. Currently, there has been growing attention for alternative energy that can replace fossil fuels. However, the oil and gas industry has changed its practices in order to meet challenges of providing clean and cost-effective energy.
In this regard, the use of information technology has been the most important element in the dynamic oil and gas industry because it has assisted in mitigating the environmental impacts and increasing efficiency in exploration, production, and supply of oil and gas (Edwards, Ishaq and Johnsen, 2010).
At the global level, the oil and gas industry is diverse because of various government policies, uneven distribution, and technological capabilities of workers.
Players in the oil and gas industry have expressed their concerns about external risks, which may disrupt the oil and gas industry. For instance, Thales notes that exploration and drilling activities have become dangerous in many oil fields, including Nigeria (Thales, n.d).
Therefore, the need for advanced physical and data security is paramount. Moreover, field operations also need risk assessment in order to mitigate risks. The process needs recognition of potential risks, the creation of boundaries, evaluation of security consequences, and developing business recovery plan.
The oil and gas industry participants also note that industry characteristics are important for planning. For instance, oil and gas firms require abilities to operate in volatile frontiers, they need new skills and knowledge, understand dynamic government regulations, and the need for hydrocarbon fuels.
Moreover, the changes and competitive industry has favoured national oil companies. As a result, multinational firms face challenges of energy source availability as focus shifts to new oil fields and emerging markets.
A number of changes that affect the oil and gas industry require firms to act now in order to position themselves for future operations.
Solutions to these challenges are in leveraging information technologies in order to enhance development of vibrant oil and gas resources, improve recovery from current fields, eliminate environmental challenges, and find alternative sources of energy. Clear strategies for mitigating such challenges require a focus on information technology.
First, develop performance management in the oil and gas business units, costs, assets, and various processes based on best practices within the field. Second, the information technology should address the enterprise-wide risks by developing governance systems that can continuously recognise and control various risks in the firm and various locations.
Third, information technology should in the industry. This can happen through creating value to the environment, enhancing quality, and enabling cost reduction strategies. Third, the solution should also focus on people management.
The aim is to align the right personnel with the right goals, activities, and processes. Information technology has to enhance decision-making in these processes (Roge, Rydl and Simpson, 2004). Finally, the effective use of information technology should assist the industry to create adaptive business model, which can integrate various value chains, operation units, technologies, and partners.
This section provides the framework of collecting the required data to meet research objectives. Howe and Eisenhardt note that in the final analysis, methodology must be judged by how well it informs research purposes, more than how well it matches a set of conventions (Howe & Eisenhardt, 1990).
In this regard, these authors argue that the research methodology must provide data that answer the research questions, has coherent background assumptions, and methods applied work well enough to provide credible results.
We have various methods of addressing data collection in a study. These methods address both design and measurement challenges in a study. In this research, we shall apply both qualitative and quantitative methods to gather the required data. Qualitative approach shall address non-numerical factors of impacts of information technology in the oil and gas industry in Nigeria.
Thus, it and interpretative information. On the other hand, quantitative research shall address numerical information from . It shall permit the researcher to have high-levels of confidence in making normal inferences (Trochim, 2006).
Target of research
This research targets managers in information technology departments in government agencies, private oil and gas firms, and industry stakeholders in Nigeria. This group has valuable information about the application and impacts of information technology in the oil and gas industry.
Data collection method
The study shall utilise a variety of data collection methods. Survey questionnaires shall provide the researcher with the flexibility of using telephone, mail, Internet, or paper to gather information from various respondents. In addition, there shall also be interviews by telephone where appropriate.
The aim of the interview is to get information in in-depth about impacts of IT in the industry. The researcher may also use Web survey tools like e-mail or online in order to save costs and time.
The researcher shall ensure validity of measurement tools i.e., all research instruments shall measure what they purport to measure. Thus, the study instruments are specific to the study.
The researcher shall use these approaches in order to gather data from sufficient respondents.