Some of the challenges that have been identified in the industry that cause the need to change include the lack of proper interaction between industry players, the Oil and Gas Authority (OGA) and the government. Without concerted interactions between the three bodies, there is no action towards increased competitiveness, improved efficiency and profitability(Buckley, 2015). As such, the industry faces continuous challenges in achieving desirable levels of sustainability. Furthermore, the lack of adequate legal and operational behavior as well as constructive commercial practices has led to the challenges currently faced by industry players.
The Need for Sustainability Programs
Therefore, sustainability means that the oil and gas industry will have better overall operational efficiency. There is need for higher standards of environmental conservation when dealing with the mining industry. Higher regulation in this area and the adoption of environmental sustainability practices means that there is more protection of the environment in which the companies operate in. In addition, extraction industry players including the gas and oil industry exposes workers to extremely risky working conditions. Sustainability practice means that the company is able to exercise more caution and safety practices with regards to the working conditions of the workers. Further afield, there is need for emergency procedures and the cultivation of a safety culture among workers.
Sustainability also means that there will be trends towards innovation that guarantee better practice within the field. Recycling of materials, reuse of waste materials as raw materials or energy sources for other industries can be a good way to put innovation into good use. Lastly, the industry needs transparency. With the need to fill sustainability forms for industry players, there is need for higher transparency for industry practices to determine loopholes in daily operation (Rogers, 2013).
Take, for example, BP in the UK which is a main major oil and gas player in the industry. The company has faced some of the challenges that have been highlighted above. In response to these challenges, the company has developed various strategies to ensure that challenges are mitigated. In line with the companys mission statement, the company aims to create more opportunities, replenish energy sources and seek further opportunities in the industry all objectives of sustainable development.
As such, the company has explored various options with regards to the issue of sustainability. Most industry players have implemented an integrity policy within their operations so that a situation similar to that of the BP Oil Spill disaster could be averted. Therefore, openness and transparency are the key principles of operation within the industry. The company has also looked into cost and emissions reduction by the use of new technologies in the area of mining. The reductions of methane emissions, which are up to 21 times more potent than carbon dioxide in the greenhouse effect, have been reduced following regulation(Rogers, 2013). Target reductions on fuel prices are achieved through the implementation of such practices.
Flowing from the use of recent technologies, the company has been able to engage in corporate social responsibility efforts in a bid to give back to the community from the proceeds of the better returns. Environmental concerns that have been addressed through the use of efficient technologies ensure that there is overall conservation of the immediate environment where the company is in operation. Furthermore, the company has engaged itself to train the labor market in a bid to expand to offshore locations. This ensures that the local skilled workers in the industry can enjoy training and value-addition programs courtesy of the company for the benefit of the entire industry and offshore industry players. Furthermore, the need for reducing worker exposure to risk is catered for in value addition programs, ensuring that the high rates of worker fatalities in the industry is reduced.
Mutual benefit programs are implemented for the purpose of furthering the interests of a sustainable future for the company. Considering the market volatility, the company has engaged in multiple partnerships and mutual trust pacts to ensure that the company can beat unstable market trends with ease. Furthermore, relationship interaction with the customers ensures that the demand for the goods and services of the company remain constant and consistently rising. Understanding of market indicators has also been accomplished, with the company ensuring that the financials of the company remains in check and within profitable margins.
Furthermore, competency and management programs have been implemented. Most companies view a failure of the company to achieve satisfactory levels of stability as a failure on the part of the management. Project management is thus one of the key structures that have been reevaluated in the oil and gas industry in a bid to reduce concerns associated with incompetency. Sustainable competition is derived from the ability to have great project management skills, and putting those skills to good use in the context of normal business operations. Value-based leadership schemes have also been taken into consideration. Considering the industry variables, there is need to employ specific values in dealing with daily practice. Values such as transparency, safety, innovation among others ensure that the industry is maintained at efficient levels of operation (Oladipupo, 2006).
The considerations for sustainability have been made following the need to exercise value-based leadership in the oil and gas sector. Following large-scale flaunting of regulation in the past, the cleaning up act of the oil industry comes in to ensure that there is overall safety and efficiency in the course of operations in the sector. Knowledge-based theory of management of oil and gas firms has been adopted (Grant, 1996). Operating from the basis of knowledge of certain risks and rewards, the management style in the industry has changed to one encouraging values such as safety, efficiency and transparency for higher returns (Oladipupo, 2006).
Sustainability practices have become widespread in the oil and gas industry following heavy regulation on the industry, especially because of the high cost of general negligence. The forces of change have caused market players in this area to review techniques that ensure the oil and gas industry can continue safe production for people all over the world, while the industry remains afloat. These are some of the steps implemented that show the strides that oil and gas industry players have instituted to improve sustainability.
Buckley, L. (2015). UK oil and gas industry needs to change. Retrieved February 22, 2016, from Energy Live News: http://www.energylivenews.com/2015/09/07/uk-oil-and-gas-industry-needs-to-change/.
Grant, R. (1996). Toward a knowledge-based theory of the firm. Strategic Management Journal , 109-22.
Oladipupo, A. (2006). THE IMPACT OF VALUES- BASED LEADERSHIP AND CORPORATE GOVERNANCE ON ORGANISATIONAL PERFORMANCE. Retrieved February 22, 2016, from St. Clement's University: http://www.stclements.edu/grad/gradosiy.pdf.
Rogers, J. (2013). 4 signs of sustainability from oil, gas and mining companies. Retrieved February 22, 2016, from Green Biz: https://www.greenbiz.com/blog/2013/11/05/4-sustainability-trends-oil-gas-mining.
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