The Impact Of ICT In Nigerian Oil And Gas Sector

Project and Seminar Material for Petroleum Engineering

The Impact Of ICT In Nigerian Oil And Gas Sector


Abstract


This study was carried out to examine the impact of ICT in the Nigerian oil and gas sector with a particular focus on Shell Oil and Gas Company. The study brought to the fore critical issues relating to the ICTs prevailing in the oil industry. To achieve this objective, four research questions and two research hypotheses were formulated to guide this study. A wellstructured questionnaire was used as the major instrument to gather data from the 150 respondents in Shell Oil and Gas Company and a sample size of 109 was randomly selected using Taro Yamani formula. The data collected from the respondents was analyzed using simple percentages and ttest statistical analysis was employed for testing the hypotheses. The study concluded with some recommendations that appropriate laws should be enacted to protect Nigeria’s oil industry from foreign competitors, especially as local markets are open to outside investments and there is a need for the government to allocate special funds to its oil agencies annually or quarterly for the purchase of training facilities.


Table of Contents


  • Cover Page
  • Title Page
  • Certification
  • Declaration (if any)
  • Dedication
  • Acknowledgement
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objectives of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypotheses
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms

Chapter Two:

Review of Related Literature

  • 2.1 Introduction
  • 2.2 Theoretical framework
  • 2.2.1 Theory of Absolute
  • 2.2.2 Theory of Comparative Advantage
  • 2.3 Conceptual Framework
  • 2.4 The Nigerian Oil and Gas Industry
  • 2.5 Impact of ICT in Oil and Gas Upstream Operations
  • 2.6 SCADA Technology for Upstream Oil Operation
  • 2.7 Impact of ICT in Oil and Gas Downstream Operations
  • 2.8 ICT use by Multinational Companies in Nigeria
  • 2.9 The Nigerian economy and Oil and Gas industry

Chapter Three:

Research Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Area of the Study
  • 3.4 Population of the Study
  • 3.5 Sample Size and Sampling Techniques
  • 3.6 Instrumentation
  • 3.7 Validation of Instrument
  • 3.8 Reliability of Instrument
  • 3.9 Administration of Research Instrument
  • 3.10 Method of Data Analysis

Chapter Four:

Presentation, Analysis and Interpretation of Data

  • 4.1 Introduction
  • 4.2 Presentation and Analysis of Data
  • 4.3 Testing of Hypotheses
  • 4.4 Discussion of Findings

Chapter Five:

Summary, Conclusion and Recommendations

  • 5.1 Introduction
  • 5.2 Summary
  • 5.3 Conclusion
  • 5.4 Recommendations
  • References
  • Appendix

Chapter One


Introduction

1.1 Background of the Study

Information and communications technology (ICT) refers to all the technology used to handle telecommunications, broadcast media, intelligent building management systems, audiovisual processing and transmission systems, and networkbased control and monitoring functions. The information revolution and the extraordinary increase in the spread of knowledge has given birth to a new eraone of knowledge and information which affects directly economic, social, cultural and political activities of all regions of the world, including Africa. The Nigerian economy is currently supported by oil, which is the major nonrenewable energy source. ICTs play an important role in increasing productivity and efficiency in many sectors of the economy. With the expectation of high oil prices, the question arises as to whether increased production and more equitable distribution of useful oil and gas energy resources are possible, through the use of modern ICTs. This applies mostly to developing countries like Nigeria. Oil exporting countries try to maximize the advantages of using ICTs, while oil importing countries are interested in using oil and gas more effectively (Dike, Adoghe, &Ademola, 2013).Thus, determining the impact of ICTs in the Nigerian oil and gas sector can be used to better access the future economic development of developing countries. ICTs provide a means to improve both upstream operations (crude oil production and exploration) and downstream operations (transportation, refining of crudeoil and distribution of oil products).

Oil companies in particular adopt ICTs to improve the efficiency and effectiveness of their operations, as well as to aid management decision making. This helps to strengthen their competitive positions in rapidly changing environments. Environmental, organizational, and technological factors are creating a highly competitive business environment in which customers are the focal point (Efraim, Dorothy, Ephraim, James, 2009). Furthermore, these factors can change very quickly. Thus, the growth of any company is tied to retaining loyal customers, improving productivity, reducing costs, increasing market share, and providing timely organizational response (Matthew, Luka & Frank 2012). ICT is a major tool for dealing with these issues. Due to the degree of uncertainty in today’s competitive oil industry, oil companies in Nigeria are operating under increasing pressures to produce more with minimum resources. In order to succeed in this dynamic environment, oil companies must undertake innovative activities such as improving operational processes and continuously reviewing competitive strategies. ICT has a high impact in oil and gas operations. For example, in upstream operations ICTs and related technologies may provide possibilities for expanding proven crude oil reserves, improving the rate of crudeoil extraction from existing wells, and providing further means to discover new wells (UNCTAD, 2006).

A growing number of corporate organizations have recognized the high potential of information and communication technologies (ICTs) to contribute to national and social development. Information and communication technologies have a critical role to play in development efforts around the world. There was a time when the benefits of applying ICT in fighting poverty and promoting economic growth were not widely understood. Many in the developing community questioned how communication technology could be used to alleviate such dire challenges as starvation, homelessness and lack of basic education and health services. Recently, this view has given way to an understanding of ICT as an essential component of boarder efforts to harness the free flow of information, accountability and economic development in the world. In recent times, both the developing countries and the international communities have started taking concrete actions to incorporate ICT into their economic policies and development agenda (Kunti, 2006).

Therefore, the researcher considered it necessary to investigate the impact of Information and Communication Technologies (ICTs) in the management of the Nigerian Oil and Gas industry in Nigeria. The advent of information and communication technologies has a huge impact on the way organizations of all types and users perform their work (Kunti, 2006). What has become known as the Information and Communication Technologies (ICTs) revolution has improved efficiency and effectiveness in most sectors of the economy. By allowing organizations to create and analyze important new information, it changed the way major decisions were made (Rocheleau, 2009).


1.2 Statement of the Problem

Considering the enormous benefits that are experienced with the impact of ICT in Nigerian oil and gas sector, the Nigerian economy still experiences some obstacles or hindrances in the effective and efficient use of the ICT resources in the sector. Today, ICT acquisition and implementation is facing a lot of problems. This research work is being conducted to expose some of the inhibiting factors that are hindering the impact of ICT in the management of oil sector in Nigeria.

Therefore, the trust of this study is on the nature of magnitude of the adoption of Information and Communication Technologies in the management of the Nigerian Oil and Gas Industry. It is increasingly recognized that the development, adoption of ICTs are key determinants to the success or failure in the management of the Nigerian Oil and Gas industry. In this study, it became pertinent to find out if Oil and Gas industries are capable of developing technologically in its operational activities in the context of the policies and institutional arrangements that have assisted the advanced countries to achieve technological capability in the management of the industry.


1.3 Objectives of the Study

The main objective of this study is to examine the impact of information and communication technology in the Nigerian oil and gas sector.

The specific objectives include:

  1. To evaluate the impact of ICT in the Nigerian Oil & gas sector.
  2. To evaluate the output of the Nigerian oil & gas industry as measured by operational efficiency.
  3. To examine the nature and degree of adoption of innovative technologies in enhancing future prospects.
  4. To evaluate the acceptability of ICT in the oil & gas industry.

1.4 Research Questions

The following research questions were stated to guide this study:

  1. What is the impact of ICT in the Nigerian Oil & gas sector?
  2. What is the output of the Nigerian oil & gas industry as measured by operational efficiency?
  3. To what extent does the nature and degree of adoption of innovative technologies enhance future prospects?
  4. Has the acceptability of ICT in the oil & gas industry increased productivity in Shell Company?

1.5 Research Hypotheses

To achieve the objectives of this study, the following hypotheses were formulated to guide this study:

Hypothesis 1
  • H0: There is no significant difference between the impact of Information and Communication Technology and Nigerian Oil & gas sector.
  • H1: There is a significant difference between the impact of Information and Communication Technology and Nigerian Oil & gas sector.
Hypothesis 2
  • H0: There is no significant difference between the acceptability of ICT oil & gas industry and increase in productivity in Shell Company.
  • H1: There is a significant difference between the acceptability of ICT oil & gas industry and increase in productivity in Shell Company.

1.6 Significance of the Study

The significance of this study cannot be overemphasized, when one considers the resultant effects of inadequate access of Information and Communication technologies in the Nigerian Oil and Gas Industry. The study will help to put the theory of adoption of ICTs into practical application. This process might help to verify the claims of the theory and consequently come out with the strength and weaknesses of the theory. This study is hoped to break an academic exposure, thereby closing a gap in academic literature and as such a major contribution to knowledge. The study is also significant because it will create much needed awareness of adoption principles as a management concept that the management of Nigerian Oil and Gas industry should embrace in order to improve the quality of their services.

This study is also important as it encourages the spirit of the adoption of new approaches that undoubtedly provide longterm benefits and enhance local prospects and development. The outcome of this study would serve as a blue print for policymakers and stakeholders to chart the right course of action on the development of ICTs facilities and infrastructure in the oil sector. In addition, the study is expected to provide the basis for comprehensive information on the process of acquisition, availability and use of ICTs gadgets in the oil and gas industry.


1.7 Scope of the Study

The study is concerned about the impact of information and communication technology with specific reference to Shell Oil Company, Nigeria. The study will look at ICT impact in oil and gas sector and its upstream operation in Nigeria.


1.8 Limitations of the Study

As it is expected with written work of this kind, the completion of this project was not possible without problems encountered in the course of writing this project which includes difficulties in obtaining relevant and uptodate information, data due to Nigeria’s poor nature of data collection and storage facilities. Also, the dwindling state of the economy has made it difficult for people to save and thereby little capital accumulation for investment.

Finally, the Nigerian government, oil and gas sector and nonoil sector should use the recommendations of this research to provide and adopt the use of ICT to enhance the operations and provide better services to both government and shareholders of the company.


1.9 Definition of Terms

a) Information and Communication Technology:

Information and communications technology (ICT) refers to all the technology used to handle telecommunications, broadcast media, intelligent building management systems, audiovisual processing and transmission systems, and networkbased control and monitoring functions.

b) Computer:

Is an electronic device capable of taking input, processing it, and produces the output in a predefined form.

c) Technology:

Managing the applications of science recovery.

d) Information:

This is defined as processed data; data is n0t information until it is given some meaning by way of definition.

e) Internet:

This is an international networking of computers through which any one at any place in the world has access to information needed.

f) Information Technology:

Information Technology (IT) is the automation of processes, controls, and information production using computers, telecommunications, software and ancillary equipment.


Chapter Five


Summary, Conclusion and Recommendation

5.0 Introduction

This chapter is really focused on the discussion, conclusion and giving proper recommendation on the research topic: the impact of ICT in Nigeria oil and gas sector.


5.1 Summary

The purpose of the research the impact of ICT in Nigeria oil and gas sector was aimed at the following

  1. To evaluate the impact of ICT in the Nigerian Oil & gas sector.
  2. To evaluate the output of the Nigerian oil & gas industry as measured by operational efficiency.
  3. To examine the nature and degree of adoption of innovative technologies in enhancing future prospects.
  4. To evaluate the acceptability of ICT in the oil & gas industry.

Few questions were asked for the purpose of the study concerning the impact of ICT in Nigeria oil and gas sector which includes:

  1. What is the impact of ICT in the Nigerian Oil & gas sector?
  2. What is the output of the Nigerian oil & gas industry as measured by operational efficiency?
  3. To what extent does the nature and degree of adoption of innovative technologies enhance future prospects?
  4. Has the acceptability of ICT in the oil & gas industry increased productivity in Shell Company?

After the analysis, we found out the following:

  1. There is a significant difference between the acceptability of ICT oil & gas industry and increase in productivity in Shell Company.
  2. There is a significant difference between the impact of Information and Communication Technology and Nigerian Oil & gas sector
  3. We were also able to find out that the responses of the respondents with the highest percentages were positive.

5.2 Conclusion

We therefore conclude that ICT plays a very important role in the growth and development of the oil and gas sector in Nigeria through:

Improvement of workers skills and the production output of the oil industry in Nigeria.


5.3 Recommendation

After all said and done on the research work we recommend that ICT acceptability should be made criteria for employment in the oil and gas sector in Nigeria. The government should help implement the use of ICT in most of the oil sectors of Nigeria. In our world of today, ICT is the order of the day as it provides good information of our environment and help to improve communication all over the world.


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