New Horizons in Management series
Edited by Janice Langan-Fox and Cary Cooper
Ronald J. Burke and Astrid M. Richardsen INTRODUCTION Oil and gas are both critical for economic performance and economic progress of several countries (e.g. UK, Norway, Nigeria, China), but having access to oil has emerged as a mixed blessing. Some countries (e.g. Saudi Arabia) became too dependent on oil and the revenues that it generated, without broadening their economic base, which becomes particularly problematic when the oil eventually runs out. In addition, both developed and developing countries with no oil became dependent on those few countries that had it. It is also getting harder to tap the oil reserves now than previously as older gas reserves run out. Drilling for oil now has become more costly because of increasing depths of reserves and riskier operations, for example, drilling in the Arctic. Despite more costly and difficult oil and gas operations, and despite recent disasters in the oil industries that have cost millions, major oil and gas producers reported large increases in their profits in the second quarter of 2010 based on higher oil and gas prices and firmer refining margins. Although large companies such as BP have lost money and will continue to pay out costs from the most recent disaster in the Mexican Gulf, the industry seems to be faring nicely. Concerns about greenhouse gases, carbon emissions and global warming are encouraging countries to become less dependent on oil (e.g. smaller and more fuel-efficient cars, electric cars, greater use of public transportation). But this transition will take considerable time,...
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