Introduction
Statoil UK is a branch of the multinational corporation that has Norwegian roots and is headquartered in Stavanger, Norway. It is a petroleum company with numerous operations worldwide, including the UK branch (Statoil, 2017). Its revenue numbers earned it a tag of being the world’s eleventh-largest oil and gas company in 2013 (Helman, 2013). The branch in the UK has numerous activities, including offshore wind projects, upstream operations on the continental shelf,f and natural gas and crude oil trading sales. According to the company, the gas turbine provides one-fifth of the UK’s total demand, which offers a reliable and lower-carbon option for power generation. The company's offshore wind business has the potential to provide electricity to over 5 million homes in the region alone. Demand for Statoil products such as natural gas has been on the rise, mainly due to the overall hike in the number of people opting for it over coal for energy production. This change in demand, according to the annual report, rose from 29.5% to 42.4% in 2016, which was quite commendable when it comes to sustainability (Statoil, 2016).
The company’s responsible management efforts have not been short of commendable because millions of dollars have been put to reduce carbon emissions in its energy provisions. An example is the massive investment made for the Batwind project that combines both floating wind turbine technology and battery storage. This specific initiative is one that is channeled towards providing people with reliable energy sources that are cheap and environmentally friendly at the same time. An example of success in the initiative aimed at ensuring low carbon emissions is the Bakken onshore gas field that reported a reduction of CO2 flaring volumes by 15% in 2016 as compared to the previous year (Statoil, 2016). A milestone by the company is the fact that the overall emission outcome is 30% less than it was in the year 2011. As of 2017, the overall investment in the area of responsible business is an excess of $2.3 billion, where most of the recipients are offshore facilities. Statoil has ensured that most of the money is used to develop wind farms and innovative floating platform technology that facilitates wind power generation in the deep waters. Such initiatives are directed to the objective of the company in the long run to shun from environmentally harmful sources of energy,y such as crude oil that has high levels of carbon emission. Methane gas is one component of natural gas that forms part of the greenhouse gases that cause climate change. Therefore, the company also has plans in place to ensure that it is capped at a sustainable level in the manner in which COs are addressed.
The oil and gas industry is the one that receivesthe most scrutiny when it comes to responsible management. Responsible management can be defined as the manner in which organizations and individuals seek to balance the interests of the world to prosper for the benefit of present and future generations. Some scholars understand this as the process towards sustainability, which is more of a destination than a process. Sustainable development, on the other hand, is the process by which individuals and firms attain sustainability (Flint, 2004). The topic of responsible management has gained much reputation in the present day as institutions seek to ensure that the carbon footprint is well understood and upheld. As the oil and gas sources continue to decline, some parts of the world are recording substantial levels of reserves, meaning that there are still more years to come before they are depleted completely. With this in mind, the O&G industry ought to have responsible management frameworks to ensure that the future is well assured through environmental care.
Challenges faced by Statoil regarding responsible management
Offshore technology has come a long way in asserting development in the O&G industry, but in the same light, it poses serious environmental problems. Mishaps in the channels of conducting exploration cause detrimental accidents that lead to pollution that comes in the form of hydrocarbon leakages and oil spills. The leakages, regardless of their scale,e lead to immense problems for the marine ecosystems that form part of the 3Ps principle. Researchers have it that there is clearid relationship between the oil and gas accidents and the lack of sustainable practices. In the past, accidents such as the Oil Rig Fire in 1988 were widely popular,r showing the intense scale in which catastrophes related to the field can cause (////). It also revealed to the companies involved the risks present in the instances of failure in their systems.
Statoil as a company desires to have a low carbon footprint in the environment, something that could be commended by any analyst in the field. However, the take is on the manner in which the initiatives brought forward will affect the company. Some operations end up damaging the reputation of the company, which, according to Adeoson & Ganiyu (2013), is quite important when in business. However, Statoil can be termed as upright when responsible management is concerned, even though the process to it is not quite straight and easy. Just like any other firm, there are challengestos responsible management that the heads of the firm need to understand and abate if sustainability is to be achieved. One major challenge is the issue of risk management, which is quite significant when companies try to change their outlook on business and remain in it. Statoil, for example, is focused on providing energy solutions for the common people in a manner that ensures reliability and effectiveness. When the issue of cutting down on crude oil comes in because of its high carbon footprint, it becomes hard for the company to operate, regardless of the vision of sustainability. Being in business involves risks that need to be countered in the best-case scenarios that yield good for the company in question. However, a business is only present if it grows and makes a profit, so if that isn’t happening, the firm cannot achieve its objectives when it comes to responsible management.
Health and safety risks are apparent in the oil and gas industry because of the nature of operations involved. The importance of humans in the work sites is evident because they form part of the production function. In an article by Prior (2010), it is revealed that going green actually costs more than staying the same. In offshore operations, the frequency of accidents is common,n meaning that companies need to offer even more compensation for the individuals who end up working there. When added to the matrix of expenses, it is evident that as the company tends to do better in terms of responsible management, its pockets require more depth to cater for the added costs. Additionally, safety and health measures need to be heightened when encroaching offshore setting as per the safety standards in the sector (Roach, 2012). With increased requirements for their workers, companies are further required to cater to the procedures that seek to foster sustainability. It is then true that any attempt to lower the carbon footprint requires companies to have more financial reserves to enable just that. If companies are unable to cater for these added risks, then their operations are halted by the agencies that govern the exploration into marine resources, for example. One such organization is the Center for Biological Diversity, which is found in the United States and deals solely in monitoring offshore operations of the oil and gas companies (Center for Biological Diversity, 2017). Failure to uphold both the health standards that are specified by the different jurisdictions might lead to an accrual of penalty charges that the company needs to offset.
Information systems in innovation for attaining sustainability
We as humans are dependent on the natural environment for our day-to-day activities, rendering it a critical element to our very existence. Companies such as Statoilarer are part of the social organization that contributes actively or passively to the worsening as well as enhancement of it. Firms are at the forefront of adopting environmental management strategies that seek to counter the climate change consequences that have resulted from previous negligence. Statoil, for example, is among the multinational corporations that have spearheaded the evolution from using non-renewable energy sources to ones that are renewable and hence beneficial to the environment as a whole. As discussed earlier, massive investment has gone into the initiatives that seek to enhance offshore operations of renewable sources of energy, such as wind power. Withtheses developments, Statoil hopes to have a good score on the carbon footprint as well as increase the number of individuals demanding their provisions. The European Union is quite strict when it comes to GHG emissions by giving a cap of 20% for all the companies that operate in the region by 2020 (European Union, 2017). Statoil has done a lot in achieving that because it is at 15%, five percent shy of the benchmark. With the developments still yet to be realized, there is room for the inclusion of information systems in the quest for excellence in sustainable development. But where do business information systems come into play?
Few studies have tried to incorporate the aspect of business information systems on sustainability and the way in which it can counter the challenges present. It is even rarer for researchers to conduct studies on the elements of operational risks and information systems. When organizations adopt new strategies to counter the health problems their operations pose, it is prudent to have relevant data that will facilitate modelling of channels of action, etc. (Karim, 2011). Sharing of information is the core principle that governs business information systems because it is structured in a framework that hopes to yield solutions from an array of inputs. Numerous companies have already adopted the environmental management systems that require information to monitor, evaluate, and improve the baselines of inputs and outputs in any form of industry. Bringing this perspective into the O&D industry, the need for information is the same because a firm like Statoil needs to come up with ways to move from dependence on crude oil to providing only renewable energy to its consumers. One challenge that mostly affects the company is the issue of change and the effects it might have on the reputation as well as the provision to its clients. If Statoil does not embrace the importance of data in research, then the effort it has slotted for the next 20 years or so will become fictional stories.
Statoil has already started the change to renewable sources of energy, but research has it that even the best courses of action tend to be unsuccessful in the end (Statoil, 2016). Why? Mainly because of companies disregarding the operational risks that are involved in trying to develop something new within their operations (Bebbington & Gray, 2016). It is quite apparent that information creates value in organizations, meaning that the information systems act as a tool to ensure that companies attain their objectives. In this case, Statoil desires to have more renewable sources of energy and, at the same time, ensure that its costs do not eat into its entire revenues because of investing in green technology. While this issue cannot be entirely abated because of the theoretical nature of the solution, it suggests the applicability of intelligence systems in crafting measures that enable sustainability. By analyzing cross-disciplinary data, organizations such as Statoil that focus mainly on the exploration and production of energy can gain valuable insight by focusing on the sets of Intel from physics and non-physics data. Infrastructure investment is critical in this step of using information systems adapted to more renewable sources of energy, andStatoil needsd to be at the forefront. The supply chain in the industry is quite large and is dependent on the downstream players, where Statoil belongs. Without adamant principles thseekort to make use of information systems, the situation of information sharing to yield better practices cannot be achieved. When the supply chain does not constitute the change, then it becomes very hard to embark on the sustainability journey. So the information systems ensure that the supply chain is included, as well as given a platform to key in information into the puzzle that is sustainability.
Financial considerations need to be done accurately to detail what to do and what not to do for Statoil. It might be a bad idea to invest in operational technologies such as the OIS when the allowance is not provided for in the budgetary allocations of the company. According to the company reports, it expects up to 25% of the research funds allocation will be devoted to new energy solutions and energy efficiency by 2020 (Statoil, 2016, p. 9). It has already set out a new energy fund in which it hopes to invest more that $200 million to solely tackle the problem of alternative energy. Of this allocation, the most will be driven towards research, which will entail gathering information. This point itt,t itis where the business information systems come into play because they link research and theoretical frameworks. Statoil’s regional chief technology officer states in a publication by the company that technology is essential to the company for it to discover and develop more projects, and at the same time reduce the cost and carbon emissions. Digitalization is occurring at a fast rate in the O&G industry as more companies are seeing the potential of creating new solutions out of the available information. Therefore, an effort by the company should be placedont procuring information systems that will serve the company good in the road towards sustainability.
Another information system provision to counter the operational challenges by Statoil is the occupational health and safety management system. It is a system that holds more than just health and safety programs because it also houses standards, records, systems etcetera. There are certain components of the information systems when it comes to reducing the health and safety challenges in a company such as Statoil. One in the management, leadership,p and commitment which applietoor the executive administrators. It seeks to establish policies and resources to lead and implement the requirements of the program in general. Health and safety training and instruction are also housed in the system,m which seeks to bring clarity to the responsibilities and duties of the different participants in operations. Unlike traditional ways of enhancing safety, the information systems approach ensures that workers are qualified to tackle the security problems that might arise. One unique aspect of the information systems is the fact that they can be crafted based on the needs of the company to bring out the best scenarios (Zhu & Zhou, 2008). So in this case, it can be formatted to deal with the issue of data sharing with research as well as enhance health and safety standards.
References
Adeoson, L. P. K. & Ganiyu, R. A., 2013. Corporate reputation as a strategic asset. International Journal of Business and Social Science, 4(2), pp. 220-226.
Bebbington, J. & Gray, R., 2016. An account of sustainability: Failure, success and a reconceptualization, Chicago: Center for Social and Environmental Accounting Research.
Center for Biological Diversity, 2017. International.
European Union, 2017. EU Emissions Trading System( EUETS), Brussels: European Union.
Flint, R. W., 2004. Sustainable development: What does sustainability mean to individuals in the conduct of their lives and businesses? In: Handbook of Development Policy Studies. New York: Marcel Dekker, pp. 67-87.
Helman, C., 2013. The World's biggest oil companies, 2013.
Karim, A. J., 2011. The significance of management information systems for enhancing strategic and tactical management. Information systems of technology and management, 8(2).
Prior, A., 2010. The Hidden cost of going green.
Roach, J. A., 2012. International Standards for Offshore Drilling. New York, s.n.
Statoil, 2016. Annual report, Stavenger: Statoil.
Statoil, 2016. Sustainability Report 2016, Stavanger: Statoil.
Statoil, 2017. Statoil United Kingdom.
Zhu, H. & Zhou, M., 2008. Roles of Information Systems: A Survey. IEEE Transactions on Systems, Man, and Cybernetics, Part C (Application and Reviews, pp. 377-396.
