Introduction
Oil and gas industry plays an important role in the global economic environment by providing a source of energy required to manufacture various goods and services. It is one of the leading sectors in the global market and often influences the prices of goods and services offered by companies. Currently, the oil and gas industry is undergoing significant changes due to the changes in the business environment such as the need to adopt sustainable business processes and production ( Kelland, 2014) . In essence, the sector is experiencing changes in the technological advancement, risk and regulations. As the industry is undergoing significant changes, the player in the industry depends on the technology to support their operation and remain competitive in the market ( Finšgar & Jackson, 2014) . The analysis of the industry indicates that technology is the key to its competitiveness and helps supports its role in the economies of every nation.
Competetive Environment
The analysis of the competitive environment of an industry can be used to determine the profitability and attractiveness of an industry. It considers various factors that range from the size of the industry to the number of rival firms competing in the market. Currently, approximately four billion metric tons of oil is produced annually on the world markets. Nearly, thirty percent of the amount of oil generated in the global economy is produced in the Middle East region. The United States and Saudi Arabia are the global leading producers of oil with each of them responsible for about 13 percent of the world production. Russia is the third largest economy in terms of oil and gas production with over 12 percent of the total oil production.
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There are numerous players in the oil industry each controlling significant market shares. The notable leading companies in the gas and oil industries in the global market include Saudi Aramco from Saudi Arabia, Sinopec, China National Petroleum Corporation, Petro China both from China and ExxonMobil from the United States ( Yusuf et al., 2014) . The five companies control significant share in the oil industry and generate high revenues as compared to other rival companies.
The oil and gas industry has been experiencing changes in the pricing, demand and sales over the years. Over the past few years, there has been a decline in demand for oil and gas products which eventually resulted in low prices. The decline in the demand for the oil and gas products can be attributed to the increase in demand for green energy sources. There is high price sensitivity in the oil and gas industry. The slight changes in the prices can lead to significant changes in the prices of products and thus affects the level of national income of countries and economic growth.
Industry Environment
The industry environment of an organization is composed of factors that can either directly or indirectly affect the company. Majority of these factors originates externally the organization's environment and in most cases are beyond the control of companies. The oil and gas industry environment can be assessed using various factors that include the customers, the suppliers, market stability and the regulatory concern and key issues.
The oil and gas industry is composed of many customers that include individuals and companies. The presence of many customers in the industry reduces the purchasing power of buyers. This means the customers cannot influence a majority of the decisions in the industry such as the prices, quality and quantity. On the other hand, there are few suppliers in the industry since the oil and gas are available in specific countries. Ideally, the suppliers have strong trade union such as OPEC which that can use to influence many of the marketing decisions. This means that the suppliers have a strong influence on the prices, the number of products and quality of the products. It is worth to note that the sector has strict legislation and laws that govern all the players in the industry.
Financial Aspects
Currently, the oil and gas industry has few capital projects that are being implemented due to the price collapse in 2014 ( Silvestre & Gimenes, 2017) . Furthermore, the industry is facing pressure on the implementation of a new project that is cost-effective and meets the schedule. IT continues to play an important role in oil and gas companies towards its growth and sustainability in the global market. In essence, the industry considers digitizations as the primary factor that can ensure its growth and productivity. Due to this, many companies heavily invest in IT to make them remain competitive. According to recent statistics, the global IT spending in the oil and gas sector is approximately $ 40 billion and is expected to rise over the coming years.
Applications & Technologies
Oil and gas industry is under significant pressure to earn high returns using sustainable and safe production techniques. The players in the industry need to ensure productivity, asset reliability, and performance while having appropriate measures to manage the ever-growing demand and the intense competition for the access to oil reserve ( Speight, 2014) . The industry uses various forms of application and technologies to bolster their performance and includes computer systems that are applied to control and manage various operations. One of the common systems in the oil and gas industry is the PI system which is manufactured by the OSIsoft, LLC. The PI system is the application system used for the management of real-time data. In oil and gas industry, the PI system connects operations, sensor-based data and the individuals who use the data to manage the efficiency of oil production and processing.
Another form of technology applied in the oil industry is the nanotechnology. Nanotechnology can be used in the oil and gas industry to improve the possibilities for the development of the stranded and conventional gas and oil resources. Furthermore, it is used in this sector to improve the drilling process as it makes it easier to separate gas and oil in the reservoir.
Standards As They Apply To Technology
The oil and gas industry applies international technology standards. The digital technology that is applied in the industry is sourced from some of the competent companies in the IT industry. The standards are set by the relevant certification bodies that include IT experts and some environmental bodies. In essence, the IT that the companies in the industry used to improve their operations is user-friendly and has limited effects on the environment. Adhering to the IT standards can ensure that the companies in the industry achieve sustainable development as well as enhance the level of productivity.
Trends and Innovation
Significant changes are taking place in the oil and gas industry with regards to information technology sector. Many of the current information technology focus on achieving sustainability in the sector and enhancing production ( Shukla & Karki, 2016) . The industry aims at reducing the cost of production and improving its profitability. As a result, new production techniques are being implemented in the industry to improve the profitability and efficiency. Some new technology in the industry includes digital labour where many companies are starting to use the robots to perform some of the critical functions.
The main factors that shape the oil and gas industry include the interest of the customers and new innovation. The taste and preference of customers keep on changing the level of technology enhances. The primary interests of customers to obtain the products from the industry at low costs. As a result, the companies in the oil and gas sector should devise the ways that can make them produce at low cost and reduce the prices charged by the customers ( Sabet et al., 2018) . Besides, the customers are increasingly becoming environmental sensitive and thus are a need for the products that are environmentally friendly. This means the players in the industry should ensure that they meet the expectation of the customers by engaging in sustainable business practices.
Conclusion
The oil and gas industry is undergoing significant changes in the marketing environment. The changes in the oil and gas industry are necessitated by the changes in the business environment. Information technology is critical towards improving the performance and productivity of the company. Many companies are digitalizing their operation such as drilling and excavation to increase efficiency, reduce cost and improve profitability. This huge investment in technology by the oil and gas companies is a suggestion of the importance that digitalization plays in this sector.
References
Finšgar, M., & Jackson, J. (2014). Application of corrosion inhibitors for steels in acidic media for the oil and gas industry: a review. Corrosion Science , 86 , 17-41.
Kelland, M. A. (2014). Production chemicals for the oil and gas industry . CRC press.
Sabet, A. H., Agha, M., & Heaney, R. (2018). Value of investment: Evidence from the oil and gas industry. Energy Economics .
Shukla, A., & Karki, H. (2016). Application of robotics in onshore oil and gas industry—A review Part I. Robotics and Autonomous Systems , 75 , 490-507.
Silvestre, B. S., & Gimenes, F. A. P. (2017). A sustainability paradox? Sustainable operations in the offshore oil and gas industry: The case of Petrobras. Journal of Cleaner Production , 142 , 360-370.
Speight, J. G. (2014). The chemistry and technology of petroleum . CRC press.
Yusuf, Y. Y., Gunasekaran, A., Musa, A., Dauda, M., El-Berishy, N. M., & Cang, S. (2014). A relational study of supply chain agility, competitiveness and business performance in the oil and gas industry. International Journal of Production Economics , 147 , 531-543.
