INNOVATION AND RISK MANAGEMENT

 INNOVATION AND RISK MANAGEMENT1
INNOVATION AND RISK MANAGEMENT
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INNOVATION AND RISK MANAGEMENT2
Table of Contents
Title page……………………………………………………………………………………1
Table of contents…………………………………………………………………………….2
Introduction………………………………………………………………………………….3
Definition of Terms…………………………………………………………………………..4
Global energy…………………………………………………………………………………5
Environmental Development………………………………………………………………….5
Analysis……………………………………………………………………………………….6
Challenges……………………………………………………………………………………7
The Company…………………………………………………………………………………7
Advantages……………………………………………………………………………………8
Disadvantages………………………………………………………………………………..9
Impact of Innovation…………………………………………………………………………9
Structure………………………………………………………………………………………10
Recommendations……………………………………………………………………………13
Conclusion……………………………………………………………………………………14
References…………………………………………………………………………………….15
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Introduction
The oil and gas industry is mainly involved in the exploration of potential oil fields, its
extraction, subsequent refining into the various products, and transportation to the silos and the
eventual marketing to the end users. This is the biggest industry in terms of revenue.
The operations are usually divided into two;
1. Upstream
2. Downstream
Petroleum is the major source of energy for all of the world’s economies. Oil and petroleum
products consumption is estimated to be at around 30 million barrels. It is important for the oil
and gas companies to always continue to innovate and develop new products so as to increase the
customer satisfaction through increased machine efficiency. Over the past any technological
improvement has brought subsequent change in the productivity and the overall energy sector of
any country. Changes are very dynamic and competitive thus there is a great need for the players
in this sector to undertake them with a lot of caution to ensure that all the risks associated with
the innovations are taken care of.All these innovations come with their fair share of risks and it is
the duty of the management to make good decisions as regards to the investment they make
towards such innovations. 
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Definition of terms
a) Creativity
This is bringing into existence something new in most cases an idea that can be
shown in many different ways.
b) Innovation
This is applying a new and better solution to solve a new or old requirement,
satisfy needs that have not been articulated or some shortages in the current market.
c) Invention
Invention is a unique process, method or composition of doing things. It is mainly
involved in making improvements in products or process so as to make them more
effective and efficient in result production.
d) Business development
These are activities and processes done with the intention of creating, exploiting
and implementing opportunities of growth between many business entities. It is mainly
composed of commerce, business and organizational theory.
Reasons to be creative
Creativity brings about progress in any industry or business and progress is business growth.
The oil and gas industry is not to be left behind in terms of creativity. The two main areas of
creativity in this industry are;
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1. Global energy
Most of the world’s energy with the exemption of geothermal power is either
directly or indirectly sourced from the sun. The oil and gas companies have in the recent
past been putting more effort in making this global energy more effective and efficient.
Total launched its low fuel emission named evolution in 2007. This fuel was meant to
ensure that consumer used lesser fuel to take them further. It brought with it another
advantage which is lower carbon emissions to the atmosphere. The fuel was meant for
any engine that operates on unleaded fuel.
2. Environmental development
The environment in the past has been affected widely by the activities of the
various oil companies. Events that oil spills in the oceans have been for a long time been
a common phenomenon with the oil companies. This spills affect the both the flora and
fauna of the oceans. For instance the total company in the year 1998, the total oil and Gas
Company was fined a fine for the partial responsibility they carried in Brittany. The other
common accident that is commonly associated with oil and gas companies is the
explosion and fire break outs that are in the recent past very common with their storage
and refinery facilities. Apart from causing a large number of deaths of both the workers
and neighboring communities, it results to a wide spread air pollution that takes quite a
long time to disperse or take care of. Still on total oil and Gas Company, one of their
chemical storage plants exploded in 2001. It is quite obvious the amount of
environmental pollution an explosion of a chemical plant would cause.
INNOVATION AN