Page 20 - Cost_Competitiveness
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The Institute of Cost Accountants of India
market) for their budget. performed well it is said to add value.
Technology development: The use of 2. Oil & Gas Value Chain
technology to obtain a competitive
advantage is very important in today’s Energy is the most fundamental resource
technological driven environment. that fuels the entire globe. The Energy
Technology can be used in many ways sector is of international importance and
including production to reduce cost thus is widely followed by many national and
add value, research and development to international organizations.
develop new products and the internet
so customers have 24/7 access to the The oil and gas industry encompasses
frm. a range of different activities and
processes which jointly contribute
Human resource management: The to the transformation of underlying
organisation will have to recruit, train petroleum resources into useable end-
and develop the correct people for products valued by industrial and private
the organisation to be successful. Staff customers. These different activities
will have to be motivated and paid the are inherently linked with each other
‘market rate’ if they are to stay with (conceptually, contractually and/or
the organisation and add value. Within physically), and these linkages might
the service sector such as the airline occur within or across individual frms,
industry, employees are the competitive and within or across national boundaries.
advantage as customers are purchasing The entire Industry value chain is broken
a service, which is provided by employees; into three main sections: Upstream, Mid-
there isn’t a product for the customer to stream and Downstream.
take away with them.
Upstream: This part of the value chain
Firm infrastructure: Every organisations is also called Exploration & Production
needs to ensure that their fnances, (E&P). The global E&P market is focused
legal structure and management on searching and exploration of oil and
structure work effciently and helps drive gas reserves around the planet.
the organisation forward. Ineffecient
infrastructure is waste resources, could Mid-Stream:Oil and gas produced from
affect the frm’s reputation and even E&P operations is collected and delivered
leave it open to fnes and sanctions. to a processing plant, where it is further
refned and processed. The midstream
As we can see the value chain industry stores and transports the fnished
encompasses the whole organisation. products to the Downstream industry.
It looks at how primary and support
activities can work together to help Downstream: The Downstream oil sector
the organisation create a superior industry refnes the crude and distributes
competitive advantage. If an activity is and sells the end products in the market.
www.icmai.
The Institute of Cost Accountants of India
market) for their budget. performed well it is said to add value.
Technology development: The use of 2. Oil & Gas Value Chain
technology to obtain a competitive
advantage is very important in today’s Energy is the most fundamental resource
technological driven environment. that fuels the entire globe. The Energy
Technology can be used in many ways sector is of international importance and
including production to reduce cost thus is widely followed by many national and
add value, research and development to international organizations.
develop new products and the internet
so customers have 24/7 access to the The oil and gas industry encompasses
frm. a range of different activities and
processes which jointly contribute
Human resource management: The to the transformation of underlying
organisation will have to recruit, train petroleum resources into useable end-
and develop the correct people for products valued by industrial and private
the organisation to be successful. Staff customers. These different activities
will have to be motivated and paid the are inherently linked with each other
‘market rate’ if they are to stay with (conceptually, contractually and/or
the organisation and add value. Within physically), and these linkages might
the service sector such as the airline occur within or across individual frms,
industry, employees are the competitive and within or across national boundaries.
advantage as customers are purchasing The entire Industry value chain is broken
a service, which is provided by employees; into three main sections: Upstream, Mid-
there isn’t a product for the customer to stream and Downstream.
take away with them.
Upstream: This part of the value chain
Firm infrastructure: Every organisations is also called Exploration & Production
needs to ensure that their fnances, (E&P). The global E&P market is focused
legal structure and management on searching and exploration of oil and
structure work effciently and helps drive gas reserves around the planet.
the organisation forward. Ineffecient
infrastructure is waste resources, could Mid-Stream:Oil and gas produced from
affect the frm’s reputation and even E&P operations is collected and delivered
leave it open to fnes and sanctions. to a processing plant, where it is further
refned and processed. The midstream
As we can see the value chain industry stores and transports the fnished
encompasses the whole organisation. products to the Downstream industry.
It looks at how primary and support
activities can work together to help Downstream: The Downstream oil sector
the organisation create a superior industry refnes the crude and distributes
competitive advantage. If an activity is and sells the end products in the market.
www.icmai.
