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COVER STORY
CREATING WEALTH FOR THE NATION
QUANTIFYING SOCIAL
INVESTMENTS
CHALLENGES OF THE FUTURE
Dear Readers,
refuses to translate into production!
to explore and discover and the endless meetings at
barriers associate...
ALTH
HE
N
RO
VI
MENT
AS
ANCESUR
18 H AND EN HV SIA RO FE NM YEN
14 C R ES RP PO ON RS AIB IL E S TY OCIAL
CONTENTS
Cairn I...
Cairn India:
Creating Wealth for the
Nation and Securing Energy
It is a classic story of the David and
the Goliath. A youn...
3
RJ-ON-90/1
RAVVA
PR-OSN-2004/1
For more than a decade, Cairn has been undertaking pioneering activities
4
Currently we are
contributing more than
a fifth of the country’’s
domestic crude production
through our Rajasthan
fields...
design with horizontal deviated drilling
to optimise usage of land and minimise
disruption. We have been creating value
th...
The world of extractive industries has
been under a variety of pressures with a
seismic shift in terms of the way various
...
7
every step of the value chain (particularly
in the U.S.) have also added to global
competitive pressure. To differentiat...
8
They also look for and leverage on the
under-valued resources. A key shift
has been the political overtones behind
SWF i...
9
Securing energy is perhaps the
most critical challenge for India in
maintaining its economic growth rate. It
encompasses b...
11
the double dip recession fear looming
Reduction in growth forecast of US,
Europe & China (contributing 50% of
with high...
12
Drive to create O&G
workforce of the future
13
In recent days, the markets have
signalled concern about the economy.
and lagging economic indicators,
consumers, inves...
14
Quantifying Social Investments
IFC Financial Valuation
Tool and Cairn India
Discovering the past to create a better
bus...
15
the absence of any standardised
measurement matrix entails that the
impact of the social, environmental
and community i...
in the organisation but also contributions
etc. to wholly participate in the
implementation of the tool.
The two basic con...
advisory and marketing information
through the mobile phone for 10,000
farmers along the Cairn India pipeline
in Gujarat. ...
18
People, Process, Environment
Oil & Gas is considered to be an unsafe
at various stages can be a threat to the
health an...
ALTH
HE
N
RO
VI
MENT
AS
ANCESUR
AF
19
Companies are increasingly becoming
cautious about the issues concerning
environment...
Oil and Gas Companies:
Socially Connected
Social networking is booming. Facebook
has become the most visited website on
In...
21
thesametime,halfofthosesurveyedsaid
theircompaniesprohibitorrestrictthe
useofmanyofthesepubliclyavailable
tools,suchasp...
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Cairn India Limited - Cairn Connect Dec 2011

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http://www.cairnindia.com Cairn Connect is an internally created publication for all employees and stakeholders. It aims to create a common thread of communication and provide a vision to work together towards creating energy security for the nation.

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Transcript of "Cairn India Limited - Cairn Connect Dec 2011"

  1. 1. COVER STORY CREATING WEALTH FOR THE NATION QUANTIFYING SOCIAL INVESTMENTS CHALLENGES OF THE FUTURE
  2. 2. Dear Readers, refuses to translate into production! to explore and discover and the endless meetings at barriers associated with the remoteness of location and is our endeavour to reach out to people working across more shall follow, we have kept the focus on macro trends of the sector and then relating the same to our discoveries would be favourable! Do write back to us with articles/views, critical or otherwise at corporate.communication@cairnindia.com respective individuals and these views do not consult to Editor’’s Note
  3. 3. ALTH HE N RO VI MENT AS ANCESUR 18 H AND EN HV SIA RO FE NM YEN 14 C R ES RP PO ON RS AIB IL E S TY OCIAL CONTENTS Cairn India: Creating Wealth for the Nation and Securing Energy Cairn India and Vedanta Resources: Facing Challenges of the Future Drive to create O&G workforce of the future Oil and Gas Companies: Socially Connected 2 COVER STORY O Volatile Oil Markets: Securing the Future Quantifying Social Investments: IFC Financial Valuation Tool and Cairn India 1 6 PERSPECTIVE 12 H U MAN RESOURCES EALT T O T People, Process, Environment 20 SOCIAL MEDIA SA FETY EN
  4. 4. Cairn India: Creating Wealth for the Nation and Securing Energy It is a classic story of the David and the Goliath. A young E&P company daring to dream, having the vision and perseverance, was set to alter the balance of domestic energy production for India, the largest democracy in the world. Cairn has been unlocking value through discovery and development of hydrocarbons in the sub-continent for more than 15 years. We pioneered deepwater drilling in India through Annapurna. Cairn also developed one auction –– Ravva, off the coast of Andhra Pradesh. Currently we are contributing domestic crude production through our approximately 7%. The discovery of the Mangala in 2004, the largest onshore hydrocarbon discovery in India since 1985, changed the scope and the nature of the business. The enormity of the discovery, the largest in that year globally the league of organisations having a key role in the energy security hence future growth trajectory of India. Three out of the seven landmark oil discoveries made in India between 2000 and 2005 have been by Cairn and the joint venture partners. resource nationalisation amongst countries and the emergence of the new bill this year could reach $100 billion if crude prices hover in the range of $100- $120/barrel with uncertainties in supply from the Middle East. This would not only the country has experienced double digit growth in crude oil production for 2006-2007 the crude production growth was 5.6% which dipped to 0.4%,-1.8% and 0.5% respectively in the last few 2011, the production by Cairn India and Reliance led to a double digit growth in domestic crude oil production for the ’“Seven Sisters’” –– the state run oil and to the 12th plan projects a growth rate of 7% for commercial energy demand C O V E R S T O R Y 2 2
  5. 5. 3 RJ-ON-90/1 RAVVA PR-OSN-2004/1 For more than a decade, Cairn has been undertaking pioneering activities
  6. 6. 4 Currently we are contributing more than a fifth of the country’’s domestic crude production through our Rajasthan fields. This is helping offset India’’s crude oil import dependency by approximately 7%. for a GDP growth of 9%. This is only possible through a major supply side management. Cairn India has been a trailblazer in a lot of areas in the oil and gas sector. Over the years the organisation has built an indigenous team with the capability to execute projects across the whole spectrum of the business - be it exploration, discovery, development and production. The team is capable of executing projects with the scale of our Rajasthan development, maximise the assets like Ravva (Andhra Pradesh), applying technology to transform from gas to oil in Suvali, Gujarat and design to implementation of new lines of continuously heated and insulated pipeline from Rajasthan to Gujarat. In our stage of transformational growth with the pipeline operations bringing in the desired scale, our safety standards have been in the top quartile against global benchmarks. Our terminal in hydrocarbon facility, before connecting with the market through our pipeline is a maintained at half the global average last year. Responsibility and concern for the environment has been integrated in our operation strategy be it the usage of environment friendly completion environmental footprint or our well pad
  7. 7. design with horizontal deviated drilling to optimise usage of land and minimise disruption. We have been creating value through substantial contribution to the government exchequer with royalties paid more than USD 1 billion, direct and indirect taxes of more than USD 1 billion, government of greater than USD 5 billion in foreign exchange due to reduced The continuous growth in production and its asset base has led to increasing valuation of the company, which has ultimately enhanced shareholders wealth. The investor community and the markets have also endorsed our initiatives to create value for our shareholders as a result of which the market cap of the company has nearly doubled from USD 6bn to USD 12bn since IPO. Cairn India with the help of its joint venture partners including ONGC continues to create value and wealth for the nation and strive towards 5 imports. making the dream of India, an energy independent country - a reality. As we the organisation will keep working closely with governments and communities across the globe to develop faster, better and more cost effective solutions for the energy needs of growing economies thus enriching lives of the local populace. 30th Aug 2011 Price % chg since NIFTY 5,001 28 *Cairn India IPO on 9th Jan 2007
  8. 8. The world of extractive industries has been under a variety of pressures with a seismic shift in terms of the way various sectors like mining and oil & gas function. The hard-hat world of oil, gas and mining has become intrinsically linked to the has helped democratise the sector in markets post the 2008 downturn, traditional instruments of trading and hedging used by organisations have to be conducted in a different light. On the other hand, demand in both the sectors continue to be stoked from emerging markets in the east rather than the western countries while the supply side has been constrained due to multiple reasons of geopolitical risks, resource nationalism, complexity of development projects and location of resources across increasingly remote and unfamiliar territory. transformation in terms of cost pressures, consolidations, and nature of business as well as vertical integration, bringing about a change in the way we do business. While a lot of the public oil and gas majors, even the big guns, have been vertically integrated with their presence across the chain from upstream to downstream and/or retailing, independent O&Gs have always preferred a particular segment for their on a global scale, competition is actually increasing with the appearance of new companies from emerging economies. commercial manner, along with further privatisations in OECD countries such 6 6 PERSPECTIVE Cairn India and Vedanta Resources: Facing Challenges of the Future
  9. 9. 7 every step of the value chain (particularly in the U.S.) have also added to global competitive pressure. To differentiate from new competition, international marketing, technological capabilities to explore and produce on the most challenging frontiers and scale and scope to invest in new forms of energy. In the mining industry, there is the scramble to secure supplies of scarce resources and to gain greater control over prices of production units in an age of increasing cost pressures, while many end users of mining products have also gained control of upstream assets. Companies are also looking at other ways of achieving their integration objectives, such as combining strategic investment and off-take or partnership agreements to lower the risk associated with integration, but still investment in African Minerals with 20 year off-take arrangement. Sectors like oil and gas and mining continue to climb up the political priority list and according to a recent poll of global CEOs by PwC –– stakeholder management, sustainability issues, etc. are the key concerns of management changing economic and social priorities, governments across the globe are tightening their grip on national resources and are revisiting royalties and taxation policies. It is common knowledge that Sovereign Wealth Funds (SWFs), initially set up with oil money, heavily invests in the sector but non-commodity based SWFs are gradually increasing their exposure in the mining industry in a bid to diversify their investment portfolio. Sectors like oil and gas and mining are continuing to climb up the political priority list and according to a recent poll of global CEOs by PwC.
  10. 10. 8 They also look for and leverage on the under-valued resources. A key shift has been the political overtones behind SWF investments, with SWF route being often used to lead the charge by foreign government to secure national resources. In such evolving times for both the sectors, the acquisition of a majority stake in Cairn India by Vedanta Resources plc provides the perfect platform to build the natural resource champion of the resource champion’” are some of the energy philosophy and aspirations. major to foray into oil and gas, while this acquisition puzzled many. While about gas, received in inheritance and built over ore miner, inked a deal with Petrobras and entered oil sector in 2007 to reduce mining costs and currently holds stake in more than 20 exploration blocks. Vedanta has always shown an appetite for strategic inorganic growth - acquiring an asset and then scaling it up for better returns, tending mostly towards vertical integration in terms of taking supply leadership to optimise the performance of existing assets. Their focus is on leveraging the low cost of production, and in a lot of the acquired assets, infusing them with new energy to increase production by many multiples. years and jump in revenue by 100 per cent, while in Sesa Goa, the production has gone up post acquisition by Vedanta, by 115 per cent and the reserves by 75 per cent in three years. Its focus is on organic and inorganic growth strategy for bulk commodities and base metals. In Cairn India, Vedanta Resources has gained exposure to a new sector with a top 20 non OECD E&P organisation. Cairn India brings to the Vedanta stable more than a decade of credibility with pioneering efforts in the sector in the sub-continent, landmark discoveries, reputation for technological adaptability and innovation, exploration success records, appetite for growth and new avenues of business (midstream) with a measured risk approach, which has more often than not borne fruits, project execution and delivery skills, and sound corporate responsibility practices with In Vedanta Resources, Cairn India has a majority shareholder and owner, who ambitions across various segments of the oil and gas business, spanning multiple geographies and helping leverage international markets. top global oil and gas entity, offering unique value added solutions to cater to energy requirements of emerging economies across the globe with a deep footprint in only select markets - and million tonne plus annual production business in copper and zinc and more than 2.6 million tone for aluminum while more than doubling its iron ore output in excess of 50 million tone - underscores the growth momentum, which can be achieved despite economic pressures and geopolitical risks, hence being targeted for the next couple of years. Stakeholder management, corporate reputation, and the ability to deliver in challenging times will be the key to synergising and creating a natural resources champion entity for the future. Vedanta is not the - gas, received in inher-
  11. 11. 9
  12. 12. Securing energy is perhaps the most critical challenge for India in maintaining its economic growth rate. It encompasses both physical supply and (International Energy Agency) four major concerns - Availability;; Deliverability;; Affordability and Sustainability. dependence which was about 50% in the over 75% of its crude oil requirements –– creating serious concerns on the supply security. Compounding the above stability of the country with oil import bill rising to approx. USD 100 billion in 2010-11. The globalisation of economy in the recent years has brought new opportunities, more interdependence along with larger group of risks. International oil market in the current world is affected by events ranging from broad based macroeconomic picture;; geo-politics;; weather to dynamics of fundamentals supply/demand. After recovering from the global recessions, recent months have witnessed several events like French Strike;; Middle East North Africa (MENA) Japanese Earthquake & Sovereign credit crisis in US & Europe impacting the international oil prices. Oil prices rose to $125/bbl plus in April, however receded subsequently due to COMMODITY TRENDS Volatile Oil Markets: Securing the Future Energy is pivotal to economic growth and as India, country with GDP of over economy and the fourth largest energy consumer, marches into the league of top economies in the world, the need for energy, to secure the needs of current as well as future generation, would grow exponentially. As compared to US & 22 barrels & 9 barrels of oil a year, an average Indian burns close to 1 barrel a year –– representing the fact that there is substantial upside for improvement economy expands. 10
  13. 13. 11 the double dip recession fear looming Reduction in growth forecast of US, Europe & China (contributing 50% of with high unemployment & weak economic data is forcing authorities to come up with more income generating policies and get economies on a meaningful growth trajectory. Market uncertainty is evident from the wide forecast of oil prices by International participant going into next year. While most research divisions crude prices in 2012 due to tight supply demand fundamentals, Citibank in its latest forecast has predicted $86/ year placing importance on the credit events. Uncertainty & volatility of this magnitude creates further challenges in ensuring a stable and secure energy atmosphere. Ensuring supply security remains an extremely challenging task for the Government as dynamic global environment have a pro-founding impact on the economy and energy sector. In this situation, increasing the domestic production and reducing the import reliance is an important element for ensuring supply security. which is now accounting for more crude production, has contributed security and bringing economic to savings of foreign exchange and is now responsible for the delivery crude production from its operated assets across the country. - Varun Gujaral Commercial and New Business
  14. 14. 12 Drive to create O&G workforce of the future
  15. 15. 13 In recent days, the markets have signalled concern about the economy. and lagging economic indicators, consumers, investors and businesses are searching for some bright spot in the market. Many believe that the oil and gas industry, which has consistently shown strength during this lengthy economic downturn, has the potential The industry, while shows promise, is faced with its own challenges and uncertainty. In addition to the existing challenges relating to global energy security, long term sustainability and the uncertainty surrounding the investment framework, the oil and gas industry will face ’“new’” challenges. Future energy demand is expected to grow substantially and the sector is in need of massive investment –– not just capital. In order to meet the demand, the industry will explore, develop and produce oil and gas in increasingly severe conditions. The ability to plan and execute large-scale, complex development projects requires a highly yet professionals with the required skill- set are a scarce commodity. Over the last few decades, average age of workforce in Indian upstream oil and Whether one believes it is the result of normally occurring competition, attrition, aging or restructuring, one theme permeates the current discussion around human capital: how to develop, deploy, and connect employees through This issue has become particularly workforce, combined with a diminishing pipeline of new and experienced talent. To guard against corporate brain drain, companies need to formulate effective strategies to attract and engage the to help lift the economy if the right energy policies are in place. generation is not all. It is also about managing existing talent and developing the periodic table of talent. International Oil Companies (IOCs) are facing a real challenge that may have an impact on expansion and growth plans, a challenge that requires commitment, cooperation, investment and new approaches in developing, managing and retaining the talent pool. There are many issues that call for an their strategies in the face of slowing NOCs and IOCs avoid ranging back and forth between skill shortage and skill and IOCs joining forces, learning lessons The challenge facing NOCs and IOCs sustainable long-term solutions to manage workforce demographics, both in boom and bust times. Partnership between NOCs and IOCs can contribute to addressing the Collective collaboration and coordinated cooperation between government, academic and industry on the various issues related to curricula, employment and social policies, and programme term than isolated initiatives. environment operational challenges will to develop skilled personnel, manage costs and develop new technology. This situation creates new challenges and new uncertainty, but also new opportunities for cooperation and partnership between NOCs, IOCs and services companies, to share risks, technology advances and invest in R&D. requires commitment, cooperation, investment
  16. 16. 14 Quantifying Social Investments IFC Financial Valuation Tool and Cairn India Discovering the past to create a better business for extractive industry including oil and gas. It is this dichotomy of synergising the past with the future, by adhering to regulatory frameworks, balancing investor expectations and striving to create value for all stakeholders, dealing with the sentiments which surround ’“national resource’”, all this while operating in the most remote of regions across countries with state of the art technology. Gaining the trust, cooperation and partnerships of communities in these frontier regions often becomes a business necessity to ensure uninterrupted operations and business activities. Since the riches of the subsurface are often found in the poorest and most remote of regions, organisations invest a sizeable portion in distributing the fruits of hydrocarbon development to the resident communities, trying again to balance this need for developing energy resources with the pace of development of the local communities. of community engagement initiatives is not often appreciated or understood by companies. Oil and gas is a sector which offers a myriad range of activities, all seemingly disconnected but bound around a common product –– the crude oil or the gas! The range of activities range from the or oil services company person on the rig of summer, to a community engagement or social responsibility specialist implementing programmes in remote regions, to the oil trader surrounded attendant –– seemingly diverse persons united by the same product. The same paradoxes are also prevalent in costs. While most are aware of the almost perpetual windfall gains in the oil business, one overlooks the risk capital deployed during exploration time running into hundreds of thousands of dollars per day in remote onshore or offshore areas! Fraught with such inherent contradictions, it is imperative to have a strategic approach for designing and implementing community development programmes in order to ensure that they deliver the desired results of community support, mitigate risks, and help in the unhindered growth of business.
  17. 17. 15 the absence of any standardised measurement matrix entails that the impact of the social, environmental and community investments cannot be investment for social initiatives also posed Not being able to maximise the full potential/impact of the investment Not being able to compare the investments Not being able to advocate, communicate, support and justify the investments Not being able to prioritise investment options initiatives Awareness about such investments within organisation and cross- functional collaboration Tinto are the organisations with whom IFC collaborated extensively to come up with the Sustainability Planning and Financial Valuation Tool. The model was piloted on a couple of projects like the SMS programme initiated for farmers in partnership with Reuters along tangibly measured in business language. longest heated and insulated pipeline in the world) and the mobile health van programme in Rajasthan. various problems like:- ““Through this tool companies can develop metrics to guide their community investments and translate community program outcomes into company value, in terms that are understood by the market –– risk reduction, productivity gains, savings, return on investment, and enhanced reputation. An additional incentive is that high-performing environmental and social programs are increasingly seen as a proxy for effective business management. According to Multilateral Investment Guarantee Agency (MIGA), a World Bank political risk insurer, they would reduce insurance premiums for an operation that demonstrates rigorous risk management.“” Cairn along with Newmont and Rio –– Excerpt from IFC article on Valuing Returns on Sustainability Investments.
  18. 18. in the organisation but also contributions etc. to wholly participate in the implementation of the tool. The two basic concepts comprising the tool are direct value creation and indirect investments through community risk mitigation which involved steering clear of risks which could result in delay of construction, production postponement, planning, legal action, etc. The process involves rigorous stakeholder analysis, traditional The tool has been designed in a way to supplement the traditional discounted cost of manpower, etc.) while the latter the quality of social investments simulation (algorithms which utilise repeated random samplings to compute results) to arrive at a net value accrued to the company. with Reuters involved providing crop 1616
  19. 19. advisory and marketing information through the mobile phone for 10,000 farmers along the Cairn India pipeline in Gujarat. This programme not only helped maintain a continued relationship with the farmers but ensured that the communication was two way. mobile phones inform the organisation about breaches in pipeline security with pilferage, leakage, sabotage or other maintenance issues. So while the SMS programme helped increase the income of farmers through the price advisory, the farmers were also able to act as the pipeline reporting contact for the company. So both the modes of value creation and value protection was security personnel. cases of pipeline security were reported by farmers, thus preventing sabotage, leak, and damage to the pipeline, cost of $2 million for the company. The second project studied was one which involved access to preventive and curative healthcare –– the mobile health 17 van. The van operated and traveled to 64 villages in and around the Cairn project area in Rajasthan. The FV tool was able to calculate and ascertain that this the company as the alternative to setting up 15 clinics to provide similar services to the concerned population. The farmers could also through their Another key saving was in terms of mandays for workers from the village. With the van servicing the local village populace, loss of manhours/days due to illness of village workers were minimised and made negligible. The same FV tool could be applied holistically to quantify the returns of various other CSR programmes and provide a direction to implement future it also helped the company by providing an effective replacement for pipeline management support and commitment, an attitude for cross-functional support management, etc.) and developing requisite expertise like value drive Stakeholder Analysis 1 Risk Quantification 5 Traditional Investment Analysis (MPV) 2 Quality of Sustainability Investment 6 + + + + Value Protection (Indirect benefit) 3 Monte Carlo Simulation 7 Value Creation (Cost benefit analysis) 4 Net Value to Company From Sustainability Investments + = Source: IFC Article
  20. 20. 18 People, Process, Environment Oil & Gas is considered to be an unsafe at various stages can be a threat to the health and wellbeing of not just people working on site, but also the communities Good governance is the only way one can ensure an economic climate which is favourable not only to investments, but also well being and sustainability of people and environment that we come in contact with. We, at Cairn, are committed to protecting the health, safety and wellbeing of people working on our sites, people who come in contact with our operations and the health and sustainability of environment that we operate in. ’‘ Our Corporate Responsibility Management System (CRMS) lays down detailed guidelines and procedures that support the delivery of our commitment values and our approach to business. Respect: for people, communities, the environment, the rule of law and human rights;; Relationships: we believe that building strong, open and lasting relationships with our stakeholders is not merely a social responsibility but is vital to achieving our business goals;; and Responsibility: We recognise our responsibility to ensure our actions do not harm people, the environment or society. While we follow the highest level of international codes and standards in our upgrade them. The nature of the work involves some inherent risks and facing challenging environments. We strive to make sure that everyone associated with our work goes back home in the evening exactly the way he/she arrives at the work in the morning. Our goal is to create a healthy, supportive working environment that can help reduce absenteeism due to fatalities. comprehensive one, wherein all the process and procedures, to effectively laid down. This system ensures that the policies are implemented across various activities through design, implementation, operations, monitoring and reporting as it is based on the implementation in progress for the Rajasthan operations. We take precautions to avoid accidents or pollution incidents, and all our operations have rigorous procedures, equipment and emergency teams in place to training is mandatory for all visitors to the site to ensure their safety.
  21. 21. ALTH HE N RO VI MENT AS ANCESUR AF 19 Companies are increasingly becoming cautious about the issues concerning environmental protecting, including air, land and water quality. Most of it is due to the heavy regulations and compliances. These regulations continue to evolve. For example, the (EPA) greenhouse gas reporting rule was and production sector on November 8, 2010 and requires companies to report their 2011 greenhouse gas emissions beginning in March 2012. We at Cairn have been committed to minimising the impact of our business on the environment. We introduced stringent measures, from initial impact assessments to waste management, and, in the event of any unplanned incident, have put in place comprehensive emergency response and oil spill contingency plans. Our approach to each new project includes undertaking Preliminary Environmental Impact Assessments (PEIAs), Environmental Impact Assessments (EIAs) and Social Impact Assessments (SIAs), to minimise any potential impacts of its activities recognition from time to time. This year, the Rajasthan operations won nine safety awards in the 24th Mine Safety Awards organised under the aegis of the DGMS, Rajasthan. Environment According to the ’‘Ernst & Young the climate debate will continue to complicate the strategic decision- making of oil and gas companies across the industry.’” Today, climate change and sustainability issues are a key component of corporate agenda. The stakeholders are as much interested and passionate about these issues as they are about the compensation. S ETY EN
  22. 22. Oil and Gas Companies: Socially Connected Social networking is booming. Facebook has become the most visited website on Internet population visit social networking or blogging sites. Social networking is facilitating business and personal relationships, with individual sectors now starting to cotton on to the potential of information sharing via these channels. Gartner predicts that by 2014, social networking services will replace e-mail as the primary vehicle for interpersonal communications, including knowledge and information management for 20 percent of business users. AccordingtoastudybyMicrosoftand Accenture,nearly75%ofoilandgas professionalsseevalueinusingsocial mediaandcollaborationtoolsat technologyatacorporatelevel.Thestudy whichsurveyed275professionalswithin international,nationalandindependent oilandgasandrelatedcompanies,found thatsocialmediaandcollaboration communications, 20
  23. 23. 21 thesametime,halfofthosesurveyedsaid theircompaniesprohibitorrestrictthe useofmanyofthesepubliclyavailable tools,suchasphoto-sharingandsocial networkingsites. networking sites, such as www.energy- networks.net, www.oilandgascommunity. com, www.hsee.co.uk and www.oilpals. com. These are facilitating knowledge and information management. Energy is a highly regulated industry, and its companies are required to make information available to their work forces manner. Cloud computing, public instant messaging systems and internal social networks allow for more cross- changing face of technology. technologyadoptionisprimarilya companies that are using social media tools for other purposes. Chesapeake Energy has successfully implemented stream that posts current job openings, interacts with followers and offers career advice to nearly 2000 people. On the other hand, the oil and gas industry itself boasts of various social opportunity to communicate via social networks to media, Gulf Coast residents and businesses affected by the spill, concerned citizens, and employees. industry from social media is most likely the increased productivity, thanks to improved collaboration and knowledge- sharing between workers. These elements are important for driving revenue, cutting costs and contributing to the health and safety of workers (Oil and Gas Collaboration Survey 2009) barriers while keeping up with the industry.

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