Emerging Themes in the Oil and Gas Industry in Africa

The report aims at providing an overview on certain emerging themes with respect to the oil and gas industry. The section A of the report comprised of a vivid description of the four themes with respect to the African oil and gas industry. The four themes included emerging changes in society, emerging work environments, emerging technologies and emerging industries and markets.

Running head: MANAGEMENT
Emerging Themes
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The report aims at providing an overview on certain emerging themes with respect to the oil and
gas industry. The section A of the report comprised of a vivid description of the four themes with
respect to the African oil and gas industry. The four themes included emerging changes in
society, emerging work environments, emerging technologies and emerging industries and
markets. Section B of the report explains the above mentioned themes in context of the article
and the chosen sector through practical examples. This section also discusses the challenges and
opportunities put forward by each of the themes. There are also justifiable recommendations
mentioned in this section that enables the oil and gas industry in overcoming the challenge and
remain competitive.

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Table of Contents
Section A:........................................................................................................................................3
Emerging Trends With Respect to Oil and Gas Industry in Africa.................................................3
A. Emerging Changes in the Society...............................................................................................3
B. Emerging Work Environment.....................................................................................................4
C. Emerging Technologies..............................................................................................................6
D. Emerging Industries and Market.................................................................................................7
Section B:.......................................................................................................................................10
1. Identification and critical discussion of the emerging themes relevant to the discipline and the
sector as inspired by article............................................................................................................10
2. Implications of the Identified Theme on Future of the Oil and Gas Industry in the next Five to
Ten years........................................................................................................................................13
3. Recommendations Undertaken by the Oil and Gas Industry for Ensuring Existence and
Competitiveness in the Business...................................................................................................14
References:....................................................................................................................................15

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Section A:
Emerging Trends With Respect to Oil and Gas Industry in Africa
A. Emerging Changes in the Society
According to Baffes et al. (2015), the outlook for the Africa’s oil and gas industry has
been quite positive amidst the difficult economic and the operating headwinds. The difficult
economic and the external conditions have put pressure on the oil and the gas companies to be
efficient and cost effective. Most companies have adopted lower cost environment that proved
beneficial in the present scenario of the recovering oil prices.
Christensen (2016) stated that the oil and gas companies of Africa have weathered
downturns and have capitalized on upswings and focused efforts on the newer means of reducing
cost, working and utilizing the newer technologies. Most companies have shifted focus in
restricting the portfolios with the focus on the established regions, lesser exploration and higher
value playing with the lower break even cost and the projects with lower risk and the shorter lead
times. The industry not only renewed its focus on the timing but also the budget of the delivery
projects.
Yusuf et al. (2017) stated some of the social factors that acts as the emerging trend with
the society and leads to an impact on the oil and the gas industry are as follows:
 Increase in the focus and the awareness of friendly fuels along with the decrease in usage
of the dirtier fossil fuels including coal, oil sands and the shale gas.

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 Increase in the levels of the oil and the gas consumptions till 2040 due to the increase in
global population.
 Natural gas considered as one of the cleanest fuel amongst fossil fuel.
 Presence of the national political debate amongst the gas and the oil rich countries helps
in setting a dilemma between the energy/security profits derived from protecting
environment and extraction of the oil and the gas resources.
Muggeridge et al. (2014) stated that the emerging trends in society have put up an
optimistic approach for the Africa oil and gas industry. The significant increase in the size
and the number of investment decisions have brought about a change in the industry. It was seen
that the deepwater oil was given more preference over the gas and the oil fields that offered the
highest rate of the return in attracting investment. The present oil price recovery reflected tighter
supply along with demand balance along with an indication of moving towards a globalized
supply chain in early 2020s. It has also been found that Africa is gradually having a trend
towards exploration spend (Muller-Kraenner 2015). It could thus be assumed that this trend will
continue to remain provided the higher price environment remains sustained.
B. Emerging Work Environment
In present times, the relationship with the workers, communities and the customers have
become quite an important aspect in the African oil and the gas industry. The emerging work
environment that has an impact in the oil and gas industry of Africa is as follows:
1. Ensuring Management beyond Enterprise: According to MacLean and Brass (2015),
close to 16 percent of the organizations in Africa have established and well defined policies for
hybrid workforce. Contractors have been a part of the workforce ecosystem of oil and gas

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industry. Therefore, HR and business leaders of the oil and gas industry should manage the
relationship by:
 Working with the legal, divisional leadership and IT that would provide the contractors
with a clearer performance of the goals; secure the communication systems and proper
training.
 By remaining more involved in the selection and the sourcing of workers chosen for the
technical expertise since they does not remains subjected to the cultural norms of the full
time employees
 Formalizing the incentive programs that included all the employees.
2. Implementation of the Newer Reward Plan: In contrast to this Tordo et al. (2013) put
across that only 5 percent of the oil and the gas industry of Africa have innovative rewards and
is flexible in regard to the frequency and type, personalized to the preferences of employees and
aligned to the specific behaviors. However, in the past, the reward programs have only been
beneficial for the more tenured and the veteran employees but the present workforce puts across
different approach that includes programs related to the physical, financial and mental and the
spiritual health.
Besides, according to Small et al. (2014) it has been found that workers within the industry
faces various hazards that results in higher rate of injuries, fatalities and occupational diseases.
This has led the oil and gas industry of Africa in working towards securing a productive safe and
human centered work ambience. In trying to solve the problem and promoting safety and health
within the industry, the following the industry would undertake the following trends:

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 Government would undertake the promotion of occupational safety and health (OSH)
within the industry through adoption of purchasing practices and clarity in
communication regarding their expectations from the enterprise with respect to a
responsible business conduct.
 Workers, employers and governments in ensuring joint promotion of occupational safety
and health and decent work through collective agreements, safety and health committees,
social dialogue across the border and the global framework agreements.
C. Emerging Technologies
According to Fingas (2016), the technological factors of the oil and gas industry that
might also act as the emerging technologies of the oil and gas industry of Africa are as follows:
 Before 2020: Implementation of automation and enhanced recovery of oil
 Around 2020: Implementation of higher temperature and higher pressure drilling
and multiple stage hydraulic fracturing
 Around 2025 and Beyond: Implementation of deep water equipment and subsea
robotics, removal of hydrogen sulfide and separation of down hole water, rig less
drilling, laser drilling and improvements of directional drilling.
Chen et al. (2014) stated that emerging technologies in the robotics and automation
possess the potential of improving the operations in oil and gas industry through reduction of
cost and increase in the efficiency, speed and the safety of the process. These advanced
technologies enable oil and gas companies in accessing and obtaining products from
nontraditional and conventional sources.

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Shukla and Karki (2016) put across that robotics and emerging technologies are finding
ways into oil and gas industry of Australia thereby providing wider benefits. The vehicles
whether grounded, airborne or underwater put across unimaginable capabilities and perform
tasks faster than humans. The use of the automated equipment helps in reducing human cost and
interaction thereby providing operational efficiency and safety. These equipments provide
service in transportation, inspections and exploration along with other related service. Some of
these equipments include underwater autonomous vehicles and aerial drones that are ideal for all
the applications irrespective of the locations.
In addition to this, Gilchrist (2016) stated that Drones are also an emerging technology
that finds application in the oil and gas industry. Their flexibility, flight interfaces and the ease of
adding accessibility and sensors makes them ideal for the chosen sector. The increased number
of sensors along with better technologies has made the drones more capable. They are known for
performing surveillance, monitoring and inspections of the wider variety of offshore and the
onshore structures that help in disaster aversion and detection of problems. Some of the drones
have wider Wi-Fi internet connections and connect to the cloud thereby allowing people in
assessing or sharing data collected by the drone.
Brule (2013) stated that Artificial Intelligence and Big Data Analytics is also an
emerging technology that involves digitizing all data related to oil and gas pipelines,
infrastructure, refineries, exploration sites on single platform. The gas and the oil companies
nowadays collect massive amounts of data through thousands or hundreds of sensors on the
offshore buoys and the imaging equipment. The data gets collected with the help of different
sensors and micro sensors that remains embedded in the pipelines and the refineries, other gas
and oil infrastructure and the rock formations.

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D. Emerging Industries and Market
According to Salman and Atya (2014), the oil and gas industry of Africa gradually
emerges in upstream space due to the higher cost of the project and subdued prices. In the
meanwhile as the oil major repositions itself in developing the new gas and oil project within
Africa, opportunities emerges for the local participation in the downstream sector of Africa.
However, with the increase in the population of the continent along with the growing income and
employment, there lies an expectation in seeing rapid increase in the domestic demand for the
refined products. Al-Fattah (2013) stated that the downstream operators of Africa acquire the
expertise and capital for becoming the upstream investors of future. In contrast to this, Brown
(2014) stated that the energy deficit of Africa coupled with the continued exploration of
discoveries shows how the African oil and gas market would experience a growth for the next
twenty years.
According to Mitchell and Mitchell (2014), the oil and gas industry Africa experienced
fast growing markets as the emerging trends. The enhanced cost of the gas and the oil
production helps in building the production and the refining capability within the fast growing
markets. As many of the newer finds have been in the fast growing frontier and emerging
markets, the rapidly growing consumer and infrastructural opportunities added to the rationale of
locating newer oil and gas developments in the continent.
The Africa oil and gas landscape experienced widespread and rapid change. Recently, it
has been observed that Kenya and other African countries have been the oil importers as they did
not have any gas reserves. Nevertheless, host of newer findings entering into the production
across the Kenya, Ghana, Mozambique, Mauritania, Uganda and Tanzania have boosted the sub
Saharan traditional upstream players of Africa. For instance, Senegal experienced investment

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from the oil exploration companies like Cairn Energy and Kosmos Energy that led to the
discovery of the largest offshore deposits of gas between the neighboring territorial waters of
Mauritania and Senegal. Khatib (2014) put across the opportunities of North African oil and the
gas resources by putting forward the example of Algeria that exported almost 60 percent of its
oil to Europe.
The SWOT analysis of the oil and the gas industry of Africa are as follows:
Strength
1. Maximum number of refineries located in
the higher growth and the higher demand areas.
2. Stronger Distribution Network
3. Having considerable presence in the foreign
market.
Weakness
1. Presence of volatility in the crude oil market
2. Burden of subsidy
Opportunity
1. Increase in the demand for the oil
2. Easier process of buying
3. Having their own pipelines
Threat
1. Entry of newer foreign players
2. The supply of crude oil and the prices
3. Privatization of the oil and the gas industry
and Africa.
Figure 1: SWOT Analysis of Oil and Gas Industry of Africa
Source: By Author

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.

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Section B:
1. Identification and critical discussion of the emerging themes relevant to the discipline
and the sector as inspired by article
The emerging themes relevant to the sector and discipline and inspired by the article
include:
1. Emerging changes in the society: In context of the article, Peter Schwartz has
mentioned various emerging changes in the society that enabled him in predicting the future of
the Shell. However, in context of the oil and gas industry of Africa it can be said that the oil
price towards the pre-collapse level, proved beneficial for the industry outlook. According to
Araújo (2014), it became vital for the companies in avoiding the trap of the cost inflation since it
could eat the profitable gains arising from rising prices of the oil. Maintaining the capital
discipline with further improvement in the productivity will put forward sustained results in the
industry. In spite of the positive developments, the oil and the gas industry faces persistent and
numerous challenges around the talent shortages, political instability, regulatory uncertainty,
fraud and corruption and the lack of the infrastructure. Despite the challenges, Africa put across
ample opportunities in form of demand for unexplored hydrocarbon fuelled mostly by
urbanization, population growth and emergence of the middle class.
For example, an insight into the regulatory developments and its impact into the oil and
the gas industry of Africa portrayed that the regulatory uncertainty continue to act as the key
barrier in developing the oil and the gas industry of Africa. However, there have been certain
positive developments that demonstrated that the governments have been quite reactive towards

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the new environment. For example, certain notable improvements include the withdrawal of the
Amendment Bill to the Mineral and Petroleum Resources Development Act (MPRDA) along
with the plans for splitting the oil and gas from mining through the formulation of different
legislation.
2. Emerging work environment: In the article, Peter Schwartz admitted to have
experienced two different scenarios when he joined in as the senior vice president of a software
service firm known as Sales force. He admitted that while working at petroleum firm shell he
thought ahead of 30, 40 and the 50 years while the time frame became shorter in a high tech
firm.
However, Lindøe, Baram and Renn (2013) stated that the globalized oil and gas industry
works towards securing a productive, safe and human centered working ambience with standard
of the welfare consistent with technological and the social development within the sector.
For example, DNV GL works towards systematic and integrated approach for addressing
the work environment in operations and design in order to support the industry goal. DNV GL
comprises of a globalized network of the work environment specialist across company who
possesses broader experience from wider range of the disciplines and industries. The company
has a working environment that serves towards safety management. The competency of the
company in the industry operations, technical design, cognitive sciences, psychology and
physiology can help in understanding the means of designing and managing the work
environment of the organization. It is believed that good working environment is achieved
through the balanced understanding of the risk and the optimization of the contextual factors that
has an influence on the human performance.

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3. Emerging technologies: In the article, Peter Schwartz, puts across a discussion on one
of the emerging technologies where a department store scans the retina of a famous personality
as he enters the stores after which the holographic assistants of sales started addressing him by
name thereby offering personalized advertisements and suggestions. The article portrays, similar
application of technology has been found in a store in San Fracisco, Amazon in Seatle campus
and in Alibaba in Huangzhou.
In this context, Speight (2014) states that hardware tools such as autonomous vehicles,
robots and drones makes use of wider variety of the sensors for collection of the real time data
on the oil and the gas fields, infrastructure and wells. It has also been found that as an adoption
of emergent technology, the company has been using artificial and analytical intelligence
solutions for processing of the data. This allows them with better abilities in making better
decision that works faster than the humans.
For example, robots have been designed for oil, gas and the petrochemical industry and
not only possess the capacity of withstanding extreme conditions but also have the ability of
doing tougher jobs that includes lifting up the oil rigs for speeding up the operations. These
robots also possess the capability of inspecting pipelines and various infrastructures along with
beaming the real time images for controlling the room and the field managers.
4. Emerging Industries and Market: In the article, Peter Schwartz tried to portray that
industry and markets are constantly emerging. It has been found that a woman without a target
app is offered a 10 percent off on bill for installing it. According to Darkwah (2013) stated that
the trick for surviving this rapid emerging workplace and world lay in the art of learning. In fact
it represents the ruthless curiosity regarding the competition, industry and the world around.

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For example, it has found that in the context of the oil and gas industry exploration
helped in transforming the energy outlook of the continent and holds a relevance to the
globalized energy markets. With the traditional oil and the gas giants like the Angola and Nigeria
added, it helped Africa to emerge as the next bigger gas energy and oil. This view usually
accords with longer term energy projections issued by Shell, Exxon Mobile and BP.
2. Implications of the Identified Theme on Future of the Oil and Gas Industry in the next
Five to Ten years.
The implications of the theme including the opportunities and challenges on the future of
the oil and gas industry in the next five to ten years are as follows:
1. The evolution towards renewable energy along with diversified supplies led to the
creation of challenges and opportunities for ensuring security of global energy
infrastructure: According to Sen and Ganguly (2017), as the renewable energy becomes part of
energy portfolio with the rapid gaining of the market share, they put forward benefits like the
diversification of the energy mix with the distributed generation increasing at fast pace
worldwide with the rise of the installed capacity rise to more than the double in the coming
decades. In contrast to this, Hafeznia, Pourfayaz and Maleki (2017) stated that the transition and
diversification of the energy portfolio puts forward newer challenges that requires changes in the
business of electric utility along with the regulatory policies for ensuring reliable and secured
supply.
2. Digital disruption in the creation of newer opportunities and threats: According to
Jacquet (2014), technology has been instrumental in realizing the intelligent grids and the
interconnected assets. Brittingham (2014) however stated that digitization not only enhanced the

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possibility of the cyber attacks but increased the proximity and interconnectivity of the energy
systems that led to the rippling effects of conflicts on the energy market and the prices.
3. The re-balancing of the Energy Supply and Demand Led to the Newer Global
Energy Order for Security: According to McCauley (2017), the recent fall in the oil prices
have resulted in significant shift of the wealth from the oil exporters to the importers. On the
other hand, Baffes et al. (2014) stated that, development of the unconventional sources of the oil
and the gas led to economic slowdown in the emerging markets that contributes to the price
adjustments against backdrop of the general shift in the patterns of the energy supply.
3. Recommendations Undertaken by the Oil and Gas Industry for Ensuring Existence and
Competitiveness in the Business.
The recommendations include:
1. It is recommended that the oil and gas companies in Africa should focus primarily on
the operational excellence, capital expansion and expenditure, creation and restructuring of
newer organizational designs, ensure technology and regulatory compliance and ensure
technology based infrastructure.
2. It is also recommended that the oil and gas business of Africa should have its focus on
the repositioning of the portfolios and thereby focus on the sustainability trends through pursing
increasing number of lower carbon activities

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