IMPACT AND APPLICATION OF INFORMATION TECHNOLOGY IN PETROLEUM INDUSTRY
Introduction
The world is witnessing a miracle of thought and intelligence brought about by the birth and boom of telecommunication and information technology. This innovation has promoted globalization in areas of economic, cultural and social aspects. Indeed, it can be said that information technology and telecommunications are controlling the whole process of globalization. Geographic distances between countries and regions have been reduced dramatically and the exchange of information has been rapid. Because of information technology, people around the globe can instantly access any new achievements in science, technology, education, culture and art. This has eventually led to a stronger improvement of knowledge-based development (2000).
Indeed, industries, now and in the future, needs information technology in order to develop. One of the distinguishing characteristics of the knowledge based economy is the speed with which IT and knowledge change almost instantly. This raises an urgent task for human resource training policy, supplying both knowledge and technology for people’s application. To do this, investments to develop and modernize infrastructures and conditions for free access of all social organizations and enterprises to the information technology database had become top concerns in the human resource training policies of many industries ( 2000).
Primarily, the main goal of this paper is to determine the impact of information technology to Petroleum Industry. In this research, background information about petroleum industry will be discussed as well as the discussion of the concept of information technology. This paper will also provide the Importance of Technology to Petroleum Industry,
Problem Theme
The utilization of information technology in various industries, in this case, petroleum industry and its benefits had long been discussed in literature as well as recognized by various companies. However, the application of technology is yet really evaluated in petroleum sector as compared to business industries. This then raises the concern whether IT application has the capacity to improve the operations of groups delivering social services, or whether this will only lead to complications. Naturally, petroleum industries would want to improve their products and services that they provide as well as reduce cost of operation. It is then essential to find out how information technology work in this sector and how this will be applied to achieve successful outcomes.
Research Question
In order to carry out the appropriate process for this research, the study will be guided by the following question: What is the impact of information technology in petroleum industry?
Aim and Objectives
This study aimed to determine the specific IT strategies that can increase the effectiveness in the petroleum industry. This study was conducted in order to achieve the following objectives:
· To evaluate the current practice of IT usage in petroleum industry.
· To make recommendations for a strategic plan for further IT implementation.
Background Information: Petroleum Industry
The Petroleum industry is considered to be one of the largest and powerful industries in the global market with operations encompassing every corner of the globe and with the world’s energy heavily dependent on oil and gas products ( 1997). Today, the petroleum industry composes of the global procedure of exploring, extracting, refining, transporting through oil tankers or pipelines, and marketing of the petroleum produce. Significantly, 63% of the world’s energy is said to be sustained by oil and gas products, followed only by coal with 27%, nuclear energy with only 7%, and hydro-electric with 3% (1997). Furthermore, in 1994, nearly 8000 tones of oil and gas products were consumed globally.
This industry is made up of two parts, the upstream and downstream. The ‘upstream’ sector refers to the exploration and production (E&P) of oil and gas products, whose principal steps include (in order): Exploration Surveying – Aerial Survey and Seismic Operations (1st stage); Exploration & Appraisal Drilling (2nd stage); Development & Production (3rd stage); and, Decommissioning & Rehabilitation (final stage). On the other hand, the ‘downstream’ sector deals with refining and processing of crude oil and gas products, their transportation and distribution, and their marketing. Figure 4 shows the composition of the oil and gas industry (with the inclusion of the principal steps in the E&P sector).
Figure 1: The Oil and Gas Industry Composition (Source: 2005)
Petroleum is very important to different industries and its significance to the maintenance of industrialized society and hence it is a critical concern for different countries. Its production, distribution, refining as well as retailing is noted as the largest industry in the world in terms of dollar value since the world is consuming 30 billion barrels of oil annually, having developed countries to be the arrest consumers.
Concept of Information Technology
The introduction of information technology to different work sectors worldwide has led to a number of developments. Information technology (IT) is defined as the combined principle of telecommunications and computation so as to obtain, process, store, transmit and output information in the form of voice, pictures, words and numbers. In a number of ways, information technology has been able to support the activities and operations of various work sectors and business industries from all over (1999).
The transfer of information and data from one location to another via a transmission medium for example, is one of the common benefits brought about by information technology. Probably, this advantage can easily be understood by citing message switching through electronic mail as an example. More commonly known as e-mail, the electronic mail is one of the original services on the Internet that has enabled scientists and researchers working on government-sponsored projects to communicate with colleagues at other locations. At present, e-mail has made its way as a primary means of communication not only for business use but for personal use as well (2001)..
Another important use of information technology to most work sectors is information retrieval. This feature pertains to the recovery of data stored in particular storage medium. At present, the availability of computers and various information systems help in making information retrieval less tedious and time-consuming. Aside from making the sending and receiving of information easier, information technology had also aided in making production faster. For instance, computers are now being used in several institutions and companies to do certain jobs, which people may not be capable of doing or may be too dangerous for them to handle. A computer for example may be utilized in the production of aluminum sheets to monitor the thickness of the products and report on the task at hand. If an individual is asked to perform such task in place of a computer, the worker may be subjected to certain chemicals and radiations which can possibly lead to injury.
The growing significance of creating, processing and management of information has been highly prioritized by most economies worldwide. Perhaps, this transition of resources from the traditional productive activities of industrial and agricultural workers to the handling of information of white collar workers represents one of the major changes of the century. The adoption of information technology is one of the related changes that has transformed to how modern businesses and work activities are conducted.
With the materialization of computer technology, the preparation of invoices, issue checks, tracking of the stock movement and storage of personnel and payroll record can be done by different machineries and modern technologies. The patterns of work in offices have significantly changed through the use of word processing and personal computers. Indeed, the spread of information technology has greatly affected the efficiency and competitiveness of major businesses, structure of the workforce and the economic output in general.
In working organizations, information technology has been a part of its operation and workforce. Eventually, information technology has gained the attention of the organizations’ top management. Various factors had motivated the management division of companies to employ information technology. One of which is the constant and intense competition among similar corporations. Companies had then realized that by employing information technologies in their operations, they do not only become more cost-efficient but they are also able to improve the quality of their services. Another factor that had contributed to the increased need of information technology among working organizations is the necessity for global business operations to communicate through online computerized networks. This is so as to minimize time and distance barriers.
Over the years, IT performance had significantly improved. Sharp experience curves, distributed processing and communication, and integration of alternative technologies have also made information technologies more capable of solving organizational structure and strategy issues. Indeed, information technologies have evolved over time, both in their significance and applications ( 2002).
Information technology (IT), also commonly referred to as information and communication technology (ICT) has been applied in various forms within different business industries. In the manufacturing sector for example, IT has played a significant role in enhancing supply chain management (SCM) systems. A number of information technologies had been made available to owners of business organizations for this purpose, from less-sophisticated to more advanced systems. The supply chain operations of most businesses have been enhanced through information technology mainly when the concepts of business and consumers (B2C) and business (2000).
Importance of Technology to Petroleum Industry
Recommendation
Conclusion
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