How Technology Enhances Decision Making in Oil Companies

HOW TECHNOLOGY HELPS DECISION MAKERS IN OIL COMPANIES 1
HOW TECHNOLOGY HELPS DECISION MAKERS IN OIL COMPANIES
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The City and State
The Date

HOW TECHNOLOGY HELPS DECISION MAKERS IN OIL COMPANIES 2
HOW TECHNOLOGY HELPS DECISION MAKERS IN OIL COMPANIES
Background
In the oil industry, technological innovation started in the year 1859 by one Edwin L.
Drake. Drake is remembered for having come up with a technology which would make it easier
for water and oil to be effectively separated from one another. Hence since the discovery of
Drake, in the oil industry innovations undertaken through science and force has been one of the
main forces (Larsen 2013, p.110). In the recent time, a lot of technological advancements have
been witnessed in the oil sector which has led to improved decision making, natural resource and
environmental conservation. A number of technological innovations are currently being
experienced in the oil and Gas industry which has eased the process of decision making
(Henderson Hepsø & Mydland 2013, p.10). In the early 1980's, a number of strategies and
tactics were adopted by oil companies aimed at enhancing the level of efficiency in operation,
health and safety, production potential and at the same understanding the resource reservoir.
There was a general wind of technological initiatives that were being experienced in the oil
industry during the period of the 1990's. In the recent time, Oil companies have exploited the
available technologies to effectively enhance their overall decision making capacities (Han 2017,
p.620).
Organizations and companies in a number of countries utilize various forms of
technology to effectively gain a competitive advantage in the industry of operations. Decision
making processes in the oil companies, are relatively complex and difficult and hence requires
unique technologies (Lochman 2012, p.240). Hence oil companies in the Arabian Peninsula have
invested a lot of capital to improve their overall technology capabilities which has resulted into a
number of opportunities and prudent decision making. Most economies of the Arab peninsular

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depend on oil as their main source of revenue. These countries include Yemen, the United Arab
Emirates, Qatar, Oman, Kuwait and Bahrain. For the case of countries like Saudi Arabia, oil
generates over thirty percent of the country's Gross domestic product (GDP). The oil industry is
mainly made up of three aspects which include the downstream, mid-stream and up stream.
Production and exploration activities are mainly carried out in the upstream. Pipelines and
tankers which carry crude oil to refineries are usually found in the midstream. Some of the
aspects under downstream include; retail distribution, refining, marketing through convenience
stores and gasoline stations.
Three quarters of the world's oil production is undertaken by state owned organizations
(Al 2011). Privately owned oil organizations appear in the list of the ten best corporations in the
entire Globe. The ever increasing levels of oil production has called for a need of new and
improved technology capable of promoting the efficiency use of oil resources in the
environment. A number of technologies have been developed to help in meeting energy needs at
a cost effective, safe and clean manner (Al 2010).
There has been development of new natural gas applications to ease the transportation of
liquids, Data visualization is also currently being used in the oil sector to increase efficiency and
effectiveness in the production processes, underwater hydro carbons are also being used,
inspection robotics, pipe liners, corrosion detection among others. The overall production and
manufacturing process requires an effective and efficient technology. As per the oxford
dictionary, technology is defined as scientific application of knowledge in an industry mainly for
practical needs or purposes. In the field of manufacturing, technology is defined as the utilization
of high levels of processes and technical tools in manufacturing and operations. The oil industry

HOW TECHNOLOGY HELPS DECISION MAKERS IN OIL COMPANIES 4
involves a complex network of a number of integrated operations and production processes (Al
2010).
Internet of things
From the proceeding incite, we get to understand that there has been an increasing use of
technology which has been accompanied by increasing integration of internet. In other words,
the development in technology has taken place alongside the interconnectedness of the
appliances being invented. The invention of internet started way back in the early 20th century,
which implies that there existed the interconnection of machines and appliances. However, the
term Internet of Things got its official name in around 1999 and has since then, developed an
increasing popularity. From a lay man’s understanding, internet of things can therefore be
understood as the interconnection of electronic appliances which permits the transfer of data
(Gupta Smith & Shalley 2006, p.700).
The use of internet of things has played a substantial role in providing firms with various
opportunities for business which ultimately result into improved productivity, cost reduction and
efficiency. In the current environment, managers in the oil companies make decision
justifications regarding strategy and technology basing on the level of technology advancements.
Through the utilization of technology, oil companies are able to effectively asses and evaluate
the position of technology visa- vi their overall current situation and make rational decisions
(Aramco 2008).
Statement of the problem

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Organizations and companies invest in strategies aimed at developing new technologies
in order to improve efficiency and effectiveness in there process and operations. Therefore in the
area of Arab peninsular, the oil companies have realized the importance of technological
innovation in the decision making process. Unlike other industries, the oil sector has unique
needs which have to be addressed through the employment and adaptation of new technologies
and strategies capable of improving the decision making process (Aramco 2007). Despite the
numerous risks involved in the adoption of new technology, high returns are usually yielded
when new and unique technology is employed in the oil industries in the area of Arab peninsular.
The adoption of new technology in the oil industry has paved way for the reduction exploration
risk and time wastage thus enhancing the decision making process in the oil industry.
Purpose of the research
In the current century it’s difficult for organizations to effectively operate without an
effective and efficient technology. Over the last decade a number of technologies in the oil sector
have played an important role in improving the overall decision making processes, performance
and other organizational operations. The overall management, business operations and behaviors
of oil companies and the process of production has drastically changed due to technology.
Basing on the current literature review there is evidence of the role the power of technology in
shaping the overall decision making process in the oil sector in the area of Arabian Peninsula
(Gokhale and Myers 2007). Therefore the main purpose of this research is to provide a clear
description of the role technology in improving the decision making process taking Saudi
Arabian peninsula as our case study (Grant 2013, p.120).
Research objectives

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It is critically important to investigate the role of technology in improving decision
making in the oil industry in the area of Arab peninsular. Therefore in order to effectively
achieve the goals of the research, below will be the research objectives (Walker Waterfield &
Thompson 2014, p.730).
 To determine the role of technology in the decision making process
 To identify the current technologies in the oil sector
 To identify the factors which affect technological adaptations among some
companies in the area of Arab Peninsular?
Research questions
 What is the role of technological innovation in improving decision making in the
oil sector
 What are the current technologies in the oil sector of Arab Peninsular?
 What are the factors affecting technological adaptations in the oil sector of Arab
peninsular
Literature review
Technology transfer in the oil sector
From an economical point of view, there is an increased importance of oil among the
countries in the Arab peninsula. Saudi Arabia is one of the countries that has the highest number
of the oil deposits despite having less revenue, this is attributed to the poor technology used in
the oil sector for example in drilling of oil. In the Arab peninsula most countries are considered
as developing countries, in such countries there is high variation in technology and also transfer