Oil And Gas Management Of SR Limited: Challenges, Analysis And Recommendations

Challenges faced by SR Limited

Describe about the Oil and Gas Management of SR Limited?

The report present a brief description of the SR Limited, an oil and gas exploration and production organization and main challenges they faced in terms of finance, drill test, field licensing, and various ethical issues (Rusco, 2009). The report is also analyzed the problem faced by SR Limited and some recommendation regarding each problem which SR faces. SR Limited has to face various problems regarding exploration and production of oil and gas (Inkpen and Moffett, 2011). SR Limited while testing their new field for exploration of oil and gas, getting confirm license for the new field and other process faces several problems which affect their business production (Anon, 2015). There outsourcing and partnership activities were affected by uncertain military attack. And it also made their workers life in danger due to which company has to stop their work for some time (Abbe, Grimes and Fowler, 2011). The recommendation mentioned in the report is after analyzing the reason behind the problems and the other causes which affects the business process of SR Limited.

SR Limited being an oil and gas company while drill well process they have to face various challenges in relation to finance, ethics, location, political disturbance and others. The main challenges faced by SR Limited as mentioned in the case study are when they have to increase their financial level for testing drill in new oil and gas fields (Ikonnikova et al., 2014). To increase business, SR Limited has to increase their expenses and expenditure cost (Chandra, 2011).  While drill test process for new fields’ organization faced several problems regarding the size of the field, drilling length for finding oil and expenditure cost (Chaudhry, 2004).The main dependency of the organization is on fossil fuels and natural fuels. So if in future fuel finishes in any one refinery SR Limited have to drill new refinery or close the production (Jacoby, 2012). The future of fuels used by SR Limited for the final product development is not which always keep their drilling and search of new fields on (Jacobs, 2011). As mentioned in the case study the main factor which can stop their process anytime is local or country government (Corrigendum, 2013). SR Limited all mechanism and process are controlled and directed by the government and this process of controlling and directing in SR Limited is as corporate governance (Abbe, Grimes, and Fowler). The corporate governance structure of SR Limited can affect the affair of their stakeholders, customers and others (Inkpen and Moffett, 2011). As mentioned in the case study the other problem faced by SR Limited while boring holes for oil and gas in UK is Corporate Social Responsibility (Corrigendum, 2013). CSR helps SR Limited to work under rules and regulation as mentioned by the government regarding oil and gas industry (Ikonnikova et al., 2014). As mentioned in the case study at Apache field both SR and Boring Holes UK have started working together (Ikonnikova et al., 2014). But after sometimes it was found that due to military attack government and the whole country is in danger which also affects the work of SR and Boring Holes UK Limited (Jacobs, 2011). As SR outsources its production work to other oil and gas organization worldwide, which sometimes make difficult for SR to manage their outsourced work (Douglass, 2011). SR plans it long term process plan taking into consideration their requirement of fossil fuels. But it may happen that the fossil fuel and renewable resources disappears which can affect SR production process (Jin and Bai, 2011). The challenges which are faced by SR Limited mainly are Limited quantity of fossil fuels, and other non-renewable resources used by them in comparison to demand and the size of their oil field (Ikonnikova et al., 2014). Oil and gas industry like SR Limited has three main business parts as upstream, midstream and downstream. Upstream is involved in exploration a production of oil and gas if the process of upstream is affected then the midstream and downstream will also be affected (Inkpen and Moffett, 2011). The problem faced by SR Limited while production and exploration of oil and gas are due to internal factors as employees, policies, rules and regulation of the company (Inkpen and Moffett). On the other hand, the external factors which may affect the production and exploration of oil and gas are the government bodies, rules and regulation of the local and other government bodies as well as the surrounding of the workplace or field.

Analysis of the problem faced by SR Limited

SR Limited while exploration and production of oil and gas have to face various problem due to internal and external factors. The internal factors due to which problem arises are the policies, rules and regulation of SR Limited regarding their business, partnership and outsourcing (Inkpen and Moffett, 2011). As per the case study, SR Limited was unable to get the license for the fourth field in Hetty due to their insufficient expenditure cost decided by them (Ikonnikova et al., 2014). The cost which SR decided for testing field and drill test was not sufficient and further due to insufficient cash they were unable to raise expenditure limit (Jacobs, 2011). The financial capacity of SR was weak in comparison to other organization working for exploration and production of oil and gas (Inkpen and Moffett, 2012). As mentioned in the case study, SR Limited is not sure about their financial support for conducting the test of the three fields (Abbe, Grimes and Fowler, 2011). The limited amount of fossil fuel and renewable energy resources in the future can affect the production of oil and gas (Jacoby, 2012). If suppose in future fossil fuel or renewable resource stock or production ends then either SR Limited  have to search new field for oil and  gas drilling or have to stop their production completely (Jin and Bai, 2011). SR Limited outsources their work to other oil and gas industry so that the workload is reduced by sometimes the work is not completed within the allocated time which affects both SR Limited and other production (Jin and Bai, 2011). The main reason mentioned in the case study, which affect the production and exploration of oil and gas in SR Limited are political interference, change in rules and regulations of government (Jin and Bai, 2011). In the case study, it is discussed that one of the companies with whom SR Limited used to work was affected due to military attack on the area (Corrigendum, 2013). The main problems which SR Limited has to face are due to their corporate governance, corporate social responsibilities, financial capability and others (Kolosova, 2011). As discussed in the case study, the SR Limited so not properly make the estimation regarding licensing, exploration and production process which later on affects the SR Limited business process (Norwood, 2014). Before starting any new work, every organization should make their business process plan properly. As represented in the case study, SR Limited did not have any proper plan regarding their work process and estimation which every time affected their work (Lebedko, 2014). The problem faced by SR Limited  while licensing was due to their insufficient cash availability for payment, which affected testing process of different new fields and drill well process which they have to conduct before production of oil and gas starts (Abbe, Grimes, and Fowler, 2009).

As a management consultant of SR Limited, the recommendation for the above-discussed problems are first of all SR Limited should work on increasing their financial capability. So that they do not face licensing problem in future due to lack or insufficient finance (Corrigendum, 2013). Financially SR can be strong by keeping some amount of cash in safe for future use or in case or crisis (Lun, 2013). SR Management should try to keep their employees work in a team as per the rules and regulation decided by SR Limited Management (Oil & Gas Monitor, 2015). When SR Limited undergoes the negotiation process, it should be done in ethical way. Oil and gas production is dependent on fossil fuels and renewable energy resources (Inkpen and Moffett). So to perform continuous work in future SR Limited should try to keep some amount of fossil fuel in safe (Kolosova, 2011). And avoid the wastage of resources during production, organization should train their employees for this (Norwood, 2014). Organization should always perform their work in ethical manner and evaluate the positive and negative effect of their business process on surrounding and society (Oil & Gas Monitor, 2015). As mentioned in the case study, business process of SR Limited was affected by the military attack. It represents that oil and gas exploration, and production is dependent on government as well as the other government bodies (Rusco, 2009). SR Limited should try to work with coordination with both local government body and other (Oil & Gas Monitor, 2015). The suggestion regarding coordination with government bodies is that SR Limited should always plan their business process by taking into consideration all the government bodies (Abbe, Grimes and Fowler, 2011). Before deciding any site or field for oil and gas drilling SR Limited should analyze location, size of the field, involvement of government bodies and society in that area and other factors (Rusco, n.d.). SR Limited should try to work as per the step process i.e. when drill test of field is required they should do it otherwise the production cycle of oil and gas will be affected (Kolosova, 2011). SR Limited should always try to focus on the initial processes like planning regarding their work, business environment, policies, expenditure cost and others (Rusco, 2009). If SR Limited had estimated their cost for exploration, productions, outsourcing and other process involved in production and exploration (Rusco, 2009). Then at the time of the drill testing and licensing they would have not faced financial and ethical problem (Rusco, 2009). Suppose SR Limited has to start drill well process in any new location so before starting the process they should analyze different factors as cost of land, surrounding of field. And then later on decide availability of the fossil fuel and natural resources, coordination of government and local bodies, availability of a transport so that the resources and final products can be outsourced, rules and regulation of government regarding that specific field, and other factors (Rusco, 2009). The long term plan or future plan developed by the organization should be in favor of their workforce, company profit share, stakeholders and economy (Chaudhry, 2004). Long term plan should be done by taking into consideration availability of renewable resources and fossil fuels used in the production of oil and gas (Sharma, n.d.). SR Limited should try to influence their workforce as a team for better performance. On the other hand, SR Limited should try to provide their employees security in oil and gas production areas so that they are influenced automatically towards the company.

Recommendations

Conclusion

By the above discussion, it can be concluded that SR Limited is oil and gas exploration and production organization which currently is facing several problems regarding their finance, surrounding, in sourcing and long term and other internal and external factor (Chaudhry, 2004). As mentioned in the case study, SR Limited is completely dependent on fossil fuels and renewable resources and if in future they get exhausted the production will be affected (Sorrentino et al., 2010). There is a brief explanation of the various reasons which affect the production and exploration of SR Limited oil and gas (Inkpen and Moffett). As a management consultant, the recommendation and suggestion mentioned in the report are after analyzing the whole scenario of SR Limited present in the case study (Anon, 2015).  The major problem as mentioned in the case study is the financial ability of SR Limited due to which managers of organization are unable to decide whether they can conduct test and drill well process completely or not (Sorrentino et al., 2010). Above report is having brief analysis of the problem faced by SR Limited during their production and exploration process of oil and gas.

References

Abbe, O., Grimes, S. and Fowler, G. (2011). Decision support for the management of oil well drill cuttings. Proceedings of the ICE – Waste and Resource Management, 164(4), pp.213-220.

Anon, (2015). [online] Available at: https://beyondeconomics.files.wordpress.com/2009/09/corporate-governance-in-the-major-oil-companies_-searle-may2010.pdf [Accessed 11 Mar. 2015].

Chandra, K. (2011). What is an ethnic party?. Party Politics, 17(2), pp.151-169.

Chaudhry, A. (2004). Oil well testing handbook. Amsterdam: Elsevier/Gulf Professional.

Corrigendum. (2013). Party Politics, 19(2), pp.377-377.

Corrigendum. (2013). Party Politics, 19(5), pp.851-851.

Douglass, L. (2011). Conclusions: Long-term management of Lennox-Gastaut syndrome: Future directions. Epilepsia, 52, pp.28-28.

Ikonnikova, S., Browning, J., Horvath, S. and Tinker, S. (2014). Well Recovery, Drainage Area, and Future Drill-Well Inventory: Empirical Study of the Barnett Shale Gas Play. SPE Reservoir Evaluation & Engineering.

Inkpen, A. and Moffett, M. (2011). The global oil & gas industry. Tulsa, Okla.: PennWell.

Jacobs, A. (2011). Governing for the long term. Cambridge: Cambridge University Press.

Jacoby, D. (2012). Optimal supply chain management in oil, gas, and power generation. Tulsa, Okla.: PennWell Corp.

Jin, Z. and Bai, Y. (2011). Sustainable Development and Long-Term Strategic Management: Embedding a Long-Term Strategic Management System into Medium and Long-Term Planning.World Future Review, 3(2), pp.49-69.

Kolosova, O. (2011). Problems of salaries management in oil and gas companies. EoR, pp.167-175.

Lebedko, A. (2014). Scope of state involvement in the management of oil and gas complex. OGBUS, (1), pp.397-411.

Lun, Y. (2013). Oil transport management. London: Springer.

Norwood, G. (2014). Profiting from Property in a Recession. Hoboken: Taylor and Francis.

Oil & Gas Monitor, (2015). The Top Six Issues and Opportunities Facing the Oil and Gas Industry in 2013. [online] Available at: https://www.oilgasmonitor.com/top-issues-opportunities-facing-oil-gas-industry-2013/4080/ [Accessed 11 Mar. 2015].

Rusco, F. (2009). Federal oil and gas management. [Washington, D.C.]: U.S. Govt. Accountability Office.

Rusco, F. (2009). Oil and gas management. [Washington, D.C.]: U.S. Govt. Accountability Office.

Rusco, F. (n.d.). Oil and gas management, continued attention to Interior’s human capital challenges is needed : testimony before the Subcommittee on Energy and Mineral Resources, Committee on Natural Resources, House of Representatives.

Sharma, D. (n.d.). The outsourcer.

Sorrentino, M., Arsie, I., Di Martino, R. and Rizzo, G. (2010). On the Use of Genetic Algorithm to Optimize the On-board Energy Management of a Hybrid Solar Vehicle. Oil & Gas Science and Technology, 65(1), pp.133-143.