Upstream Sector Research Articles

The role of smart technology, managerial initiatives and human factors on sustainable manufacturing: a case study of Indonesian oil and gas workers

This study aims to analyse and determine the effect of Big Data, the Internet of Things (IoT), and physical-cyber system variables on human factors in refinery industry operators and the influence of human factors and managerial initiatives on sustainable manufacturing. The method used in this study is a quantitative method using partial least square-structural equation modelling (PLS-SEM). The respondents in this study were workers of Indonesia’s upstream oil and gas sector. The results of this study indicate that Big Data, IoT, and Physical Cyber Systems (PCS) have a positive and significant effect on the human factor. In addition, there is a significant relationship between human factors and sustainable manufacturing. Furthermore, it is also found that there is a relationship between managerial initiatives and sustainable manufacturing. However, the managerial initiative cannot moderate the human factor and sustainable manufacturing.

Evaluation and impact factors of international competitiveness of China’s cobalt industry from the perspective of trade networks

In recent years, with the development of the new energy industry, the demand for cobalt as a raw material for power batteries has been increasing. However, China itself has a shortage of cobalt resources. Therefore, overcoming poor resource conditions and enhancing the international competitiveness of the cobalt industry have become urgent issues. This paper is based on global trade data on cobalt resources from 2007 to 2020. A panel regression model is constructed from the perspective of trade networks, and Entropy-Topsis is used to construct a comprehensive evaluation index system for the international competitiveness of critical nonferrous metals. This study empirically examines the impact of the trade network characteristics of cobalt resources on international competitiveness, assigns practical significance to trade network characteristic indicators, and analyses the overall competitiveness changes in the global cobalt industry chain and its upstream, midstream, and downstream sectors. The research findings reveal the following key points: (1) In recent years, the competitive focus of the cobalt industry chain in various countries has shifted from upstream and midstream to midstream and downstream, with increasingly fierce trade competition downstream, gradually tilting toward countries such as South Korea, Japan, and China. (2) Cobalt trade competition, which was initially characterized by competition among multiple countries, has gradually become more centralized and stable, with differences in the competitiveness of various countries occurring at different stages of the cobalt industry chain. (3) Network centrality and network heterogeneity both have a significant promoting effect on the international competitiveness of the industry, while network connectivity has a significant inhibitory effect on the improvement of international competitiveness.On this basis, the study also suggests some policy implications. The purpose of the study is to enhance the international competitiveness of China's cobalt industry from a trade perspective and to investigate the developments of cobalt trade between China and the rest of the world.

Effects of operators’ strategic approach to local content and in-country spending requirements on financial performance of upstream petroleum sector firms, Ghana

Local content requirements and in-country spending mandates have emerged as crucial tools in the upstream petroleum sector, aiming to distribute socio-economic benefits derived from resource production to the general citizenry within the host economies. However, understanding how operators' strategic responses to these requirements affect firm financial performance remains limited due to data constraints. Consequently, drawing on resource dependence, social exchange, and linkage and spill-over effect theories, this paper develops a conceptual framework to elucidate the relationships among local content requirements, in-country spending, local linkage factors, operators' strategic approaches & business practices, and financial performance, including their implications. To address data limitations, a mixed-methods approach was adopted, combining content analysis of financial reports from 11 global upstream petroleum operators in Ghana and key informant interviews, with survey primary data collected via online questionnaires. This methodological triangulation enabled a comprehensive examination of how operators' strategic responses affect financial performance in the Ghanaian upstream petroleum sector. Analytical techniques used included factor analysis and Partial Least Squares Structural Equation Modeling (PLS-SEM) from SPSS and SmartPLS3, respectively. The study found that while local content requirements and in-country spending mandates do not significantly influence operator strategic approaches or financial performance, local linkage factors have a strong positive effect on strategic approaches, which in turn positively affect financial performance. Furthermore, local linkage factors partially mediate the relationship between local content requirements and strategic approaches, as well as financial performance. These findings underscored the importance of prioritizing investments in local linkage factors to stimulate industrialization and foster cross-sectorial outsourcing opportunities. The study contributes to resource dependence, social exchange, and linkage and spill-over effect theories by highlighting the role of strategic approaches and local linkages in promoting financial performance. It also offers insights for policymakers and industry practitioners, emphasizing the need to enhance competitiveness and capacity within the host economy. Additionally, the study confirms the predictive relevance of the model, indicating its robustness in explaining the dynamics of local content requirements and in-country spending mandates in the petroleum sector.

Safeguard Mechanism reforms – how big and how much will it cost?

In an effort to reduce greenhouse gas emissions, the Australian government legislated the Safeguard Mechanism (SGM) in 2016. It is generally accepted that it had minimal impact, with no material reduction in greenhouse gas emissions resulting. In a move to address this, the legislation was amended, effective July 2023. These amendments rewrote the rules – baselines will reduce over time, the method of setting them will change, new concepts such as ‘international best practice’ will be introduced and new projects (including those already sanctioned, but not yet onstream) will be subject to tougher requirements. Our analysis will review the impact on the upstream projects currently covered by the SGM, and a select group of new projects. We will give our view on how the transition from the facility-specific to industry-average baselines impacts operators, and identify some of the potential winners and losers. Whilst first reporting is not due until the end of the 2024 financial year, there is still significant uncertainty on how the amended SGM will operate, specifically with regards to ‘industry best practice’. The paper will analyse what this could mean, and potential impacts. Is the SGM the roadmap to net zero that the industry is looking for? The work will leverage Wood Mackenzie’s asset by asset emissions data, and our unique insight into the economics of upstream developments. Ultimately, we will assess the trade-off that has been made by the Australian government – emissions for commerciality – and its long-term impact on the upstream sector.

Beetaloo or bust: the route to commercial success for an Australian shale play

There is a huge unconventional shale gas resource in the remote heart of the Northern Territory with the potential to trigger big new gas developments in Darwin, including export liquefied natural gas (LNG), and underpin the chronically undersupplied East Coast market. And yet despite this promise, the Beetaloo is not universally viewed as a viable commercial project. Nonetheless, the Beetaloo is one of the hottest topics in Australia’s upstream sector, and two of its key operators, Tamboran and Empire, are closing in on final investment decision (FID) for initial gas production. So why are many in the market still sceptical the play will work? To create a definitive answer, we investigate the key factors required to make the Beetaloo commercially viable. We will evaluate what a Beetaloo gas project could look like across a range of resource sizes, estimated ultimate recovery (EUR) from analogue production profiles, and well costs. The work aims to understand the key cost barriers and price hurdles that need to be broached for economic success. From here we can determine the full range of economic pitfalls and potential rewards that lie in wait for ambitious Beetaloo operators.

The synergistic decarbonization potential from construction industry and upstream sectors with a city-scale: A case study of hangzhou, China

How to reduce Carbon Emissions from the Construction Industry (CECI) is one of the key issues in China's efforts to achieve its “dual-carbon target”. The Carbon Emission of the building Materialization Process (CEMP) is the main source of CECI, originating from both the upstream sector and the construction industry itself. Researching the synergistic decarbonization potential and reduction pathways of the construction industry and upstream sectors can help guide sustainable development. Focusing on the city scale, this study establishes a bottom-up framework based on system dynamics and carbon intensity methods to explore the possibilities of CEMP. The framework comprises a dynamic material flow analysis module and a carbon emission accounting module. The Logarithmic Mean Divisia Index (LMDI) method is employed to elucidate the emission reduction potentials of various factors. The results show that in the case of Hangzhou: (1) Without control measures, CEMP will reach a maximum of 25.1 million tons, and a substantial scale of 14.9 million tons remaining in 2060. (2) Through synergistic decarbonization, the cumulative emission reduction over the next 40 years could reach 323.4 million tons, and by 2060, CEMP could decrease to 3.7 million tons of CO2. Achieving carbon neutrality in the construction industry still requires carbon offsets from other sectors. (3) The decarbonization potential mainly comes from controlling the new construction area and carbon emission reduction in material production process, contributing 45.4% and 36.9%, respectively. This study reveals the significant pressure faced by the construction industry in achieving carbon neutrality. It also underscores that further controlling material demand and reducing the carbon intensity of materials is a prerequisite for Hangzhou's construction industry to achieve carbon neutrality.

Is the Structure of Technology Progress in China "Green"?

This paper argues that, considering input–output linkages, microeconomic technology progress may lead to CO2 mitigation of the entire economy. We develop an environmentally extended heterogeneous agents and input-output (EE-HA-IO) model to evaluate CO2 emissions in different technology progress scenarios. We also measure the rate of technology progress in each sector in China between 2002 and 2014, with the aim of showing whether technological progress is compatible with the carbon mitigation of technological progress in each sector. In other words, whether there is an upside down phenomenon between technological progress and CO2 emission reduction. Our main conclusions include: (1) Most industries (except energy sectors) have a negative carbon footprint to technology progress. (2) Technology progress in energy related sectors and in the upstream sectors of industrial chain can be found to have a strong potential of emission increase effect. (3) From 2002 to 2007, the number of mispairing sectors gradually increased, while decreased significantly in 2008-2014. The reason behind it is that China's economic growth mode has changed.

Manajemen Risiko dengan Metode Failurea Mode dan Effect Analysis (FMEA) Produksi Mangga di PT. ABC

Mango fruit is an annual fruit that is much loved by people in Indonesia. Mango fruit has good development prospects in the future, both from the upstream and downstream sectors. Mango fruit is the main fruit in East Java. Mango production in the company experienced production fluctuations. The existence of fluctuations in production indicates there is a production risk. The company faced several problems in the cultivation process. The objectives of this study include, namely, 1) Identify and analyze risks in the mango production process. 2) Measuring risks in the mango production process. 3) Knowing the risk control strategy in the mango production process at PT. ABC. Data analysis methods used are fishbone diagrams, Failure Mode and Effect Analysis (FMEA), and Pareto diagrams. The results showed that the identification of risks in mango production found 21 causes of risk. Measuring the risk level of mango production, it was found that 14 risk causes had the risk priority number value and the highest percentage of events. Risk control strategies that can be implemented to minimize the risk of mango production include carrying out machine maintenance, scheduling mango cultivation activities, writing standard operating procedures, revitalizing garden infrastructure, and controlling production activities

Power sector decarbonisation in developing and coal-producing countries: A case study of Indonesia

Global efforts to transition away from coal within a decade encounter significant challenges, particularly in developing and coal-producing countries, e.g. Indonesia. Most current studies do not discuss the impact of coal phase-out on the upstream sector, which is important for coal-producing countries. This study aims to analyse Indonesia's power sector decarbonisation impact on the power and fossil upstream sectors. This analysis used VEDA-TIMES energy system optimisation using three scenarios: least-cost system (BAU), decarbonisation without coal phase-out (PA 1.5), and decarbonisation with coal phase-out (PA 1.5 PO). In all cases, decarbonisation will reduce the amount of coal used in energy systems. However, in a technology-agnostic transition, coal still constitutes 16% of total capacity in 2060. By this time, the coal-fired power generating assets have also transitioned to high efficiency, low emissions (HELE) technologies. CCS plays an important role in Indonesia's decarbonisation. A key implication of the coal phase-out scenario is the stranding of $9 bn worth of existing assets and an increased role for renewable energy and imported natural gas in 2035–2050, posing a notable threat to gas security within the industrial sector. In addition, the potential loss due to untapped coal reserves is estimated at $63 bn, while the cumulative net loss in the coal upstream sector amounts to $799 bn (0.26% of Indonesia's GDP and 3.7% of the coal-producing GDRP). Nevertheless, the total investment and electricity production costs exhibit negligible differences in the rapid VRE expansion, but it will reduce total investment by 24% in the low VRE buildrate.

Kebijakan Pemerintah Dalam Penentuan Kontrak Gross Split Sektor Minyak Dan Gas Di Indonesia

As a solution to the problem of the Cost Recovery production sharing contract system, the Government of Indonesia through the Ministry of Energy and Mineral Resources issued Regulation of the Minister of Energy and Mineral Resources of the Republic of Indonesia Number 08 of 2017 concerning Gross Split Production Sharing Contracts. This new regulation is motivated by the low number and length of time it took for oil and gas reserves to be discovered, accompanied by Non-Tax State Revenue (PNBP) for the upstream oil and gas sector which continues to decline. The Gross Split production sharing contract scheme also offers a reduction in bureaucracy in investing which is expected to attract investors to carry out exploration and exploitation in Indonesia. This study aims to analyze the legal principles related to Gross Split regulations in the aspect of improving the investment climate for upstream oil and gas and analyze the new role of the Oil and Gas Special Task Force as an institution appointed by the state to exercise control and supervision of the activities of Cooperation Contract Contractors in Sharing Contracts.

From limit values to carbon budgets: Assessing comprehensive building stock decarbonisation strategies

Several countries are moving towards imposing mandatory limit values that consider the life-cycle greenhouse gases emissions (GHGE) of new construction projects. While they offer valuable guidance towards low-carbon practices, they may not be sufficient to ensure the building activities alignment with ambitious climate goals. To do so, it is imperative to integrate all stock-level activities dynamics and consider the evolving nature of limit values influenced by the decarbonisation efforts in the energy and industry sectors.This article introduces a methodological framework designed to explore the potential evolution of the dwelling stock GHGE, with the ultimate goal of assessing their alignment with climate objectives. By using a national building stock database, alongside drivers of stock-level activities and scenarios for the decarbonisation of upstream sectors, it facilitates the creation of multiple scenarios and the calculation of yearly and cumulative Whole-Life Carbon (WLC) emissions.France is taken as a case study to investigate the compatibility of its recent implementation of climate and sectoral policies. The findings suggest that prioritising the elimination of fossil fuel usage emerges as an optimal strategy for decreasing operational GHGE. Regarding embodied GHGE, the more ambitious the scenario, the greater its relative contribution, potentially accounting for up to half of the WLC emissions by 2050. In addition to the ambitious transformation of energy-inefficient dwellings, the deep decarbonisation of energy carriers and construction materials plays a pivotal role in the overall decarbonisation of the dwelling stock, while sufficiency measures significantly impact embodied GHGE.

The heterogenicity features revealed based on the regional and sectoral carbon metabolic system: An empirical analysis of heavy-polluted cases in China

The Chinese government has made a positive response and policies to address global climate change, regions and sectors has become more important in reducing carbon emission. This study used the indicator of carbon emission intensity to evaluate the reduction effect of carbon emission of heavy-polluted regions and sectors, and also their features in China. The results indicated firstly, the aggregated carbon emission intensity of regions was primarily influenced by their embodied added value. From 2012 to 2015, the regions’ embodied added value increased more than 2 times. Secondly, the embodied carbon emission of the manufacture of chemical products sectors in regions were dominated by emission implied in metabolic path length greater than five, which took the proportion of more than 30% of emission. This showed that emission reduction policies for heavy-polluted sectors should focus on controlling the emission implied in trading with downstream sectors, and also demonstrated that the heavy-polluted sectors drove the reduction of carbon emission of other sectors. Thirdly, the carbon emission of heavy-polluted sectors in coastal regions fell due to implementing the carbon emission trading scheme policy, while heavy-polluted sectors in the inland regions radiated to their upstream and downstream sectors. This study analyzes regional and sectoral carbon emission reduction effect and provides theoretical and practical bases for urban development.

Comparative analysis of petroleum products from artisanal refineries and standard products

Comparative analysis of petroleum products from artisanal refineries and standard products

Downstream Cross‐Holdings and Upstream R&D: A Comment*

According to Hu et al. [Journal of Industrial Economics, 70(3), pp. 775–789], downstream cross‐holdings are permissible based on the social welfare standard if the investment technology in the upstream sector is highly inefficient. However, the conclusion of that paper relies on a definition of downstream producer surplus that is not so commonly found in the literature. After using a more commonly found definition of downstream producer surplus, this note demonstrates that downstream cross‐holdings have detrimental impacts on both consumer surplus and social welfare, emphasizing the need for efficient and effective regulations on downstream cross‐holdings in Hu et al. [Journal of Industrial Economics, 70(3), pp. 775–789] type economy.

Supply Chain Performance Measurement: The Green Supply Chain Operation Reference (SCOR) Approach

Purpose: This study aims to design metrics and implement supply chain performance measurements of upstream textile companies in Indonesia using the Green Supply Chain Operation Reference (SCOR) perspective approach. Methods: The design and measurement approach uses Green SCOR based on metrics developed by APIC. The weighting of level one and level two assessment metrics using the Analytical Hierarchy Process (AHP) method is based on the results of questionnaires from 20 upstream textile companies spread across the island of Java. Results and discussion: The main findings show that supply chain performance in the upstream sector of textile companies in Indonesia can be classified as good if measured using a supply chain performance metric design with the Green Supply Chain Operations Referendum approach. Opportunities to improve performance in the plan, source, make, delivery, and return aspects using Green SCOR's best practices in the textile industry. Implications of the research: The study's limitations did not include the financial aspects of the company, so it cannot provide a complete picture of the company's supply chain performance. Originality/value: The knowledge gained from this study is an important reference for managers of upstream textile companies to improve the company's green supply chain performance in the future. Managers can set improvement priorities based on the results of performance measurements on the dimensions of reliability, responsiveness, flexibility, and environmental aspects based on the metrics designed by the researcher. In addition, the design of this metric can be used by companies in the medium and downstream textile industry to improve the overall green supply chain performance of the textile industry.

Application of Machine Learning Modeling for the Upstream Oil and Gas Industry Injury Rate Prediction

Introduction: Yearly, the International Labor Organization report indicates many workplace accident occurrences. The degree of the happenings depends on the workplace environment setting and the incident regulatory measures implemented. By the nature of its work environment, the oil and gas upstream sector is susceptible to high incident rates. In the current fierce business competition and practices, improving productivity, quality, and other processes, such as Safety, is vital. Implementing well-designed safety procedures is the key to managing and reducing the risk level of workplace incidents. Methods: Recently, the application of Machine learning (ML) modeling for accident/injury prediction has been reported in the construction, mining, transport, and health sectors. Likewise, the objective of this paper was to implement three machine-learning-based models to predict injury rates in a drilling operation. The petroleum safety authority of Norway provided the datasets. First, the dataset was pre-processed, and then the selected features and target dataset were used for the modeling. Finally, the model prediction and performance accuracy analysis were performed. Results: Results showed that multivariable regression (MVR), Random Forest (RF), and Artificial Neural Network (ANN) machine learning algorithms-based models predict the test data with R2 values of 0.9576, 0.793, and 0.97036, respectively. Conclusion: As the common saying goes, 'prevention is better than cure.' For this, implementing methods such as improved work processes and Health, Safety, and Environment (HSE) mitigation procedures, workplace injuries, and accidents allow for reducing the risk level of workplace injuries. The application of integrated machine learning tools, along with carefully built-in workplace accident database implementation, will provide early detection and possible remedial precautions that can be taken to prevent workplace injuries/accidents/fatalities. However, extensive research and development are required to deploy the method in real life. Combining Machine Learning modeling and carefully designed safety measures is vital for successful and robust predictive tools.

JOINT VENTURE, TECHNOLOGY TRANSFER AND THE PERFORMANCE OF NIGERIAN OIL AND GAS INDUSTRY

Purpose: The objective of this study is to examine joint venture, technology transfer on the performance of Nigeria's oil and gas sector between 1981-2021. Theoretical Framework: It is indisputable that the Nigerian oil and gas sector is not at peak performance when compared to what is obtainable from its peers in the Organization of Petroleum Exporting Countries (OPEC) (Iheukwumere, 2021; OPEC, ASB 2020). One of the factors responsible for the abysmal performance is ineffective and incoherent technology transfer management through joint venture arrangements (Odusina, 2022). Therefore, there is a need to empirically investigate the impact of joint venture arrangements on Nigeria's oil and gas sector production which lacks sufficient research. Methodology: The ex-post facto design was used where data were collected through secondary sources on the aggregate output of the joint venture companies and the total yearly output of the upstream sector of Nigeria’s oil and gas industry represented the performance of the Nigerian oil and gas sector in the period 1980 to 2021. The collected data were analyzed using the Quantile Autoregressive Distributed Lag (QARDL) approach to test for short and long-run impacts. Findings: The study revealed that there is a significant impact of joint venture arrangements on oil and gas production in both the short run and long run. Research, Practical & Social Implication: The study therefore recommends that policymakers and industry stakeholders should carefully evaluate the terms and conditions of joint ventures to ensure their alignment with the goals of maximizing oil and gas production. Originality/Value: The use of joint venture as a proxy for technology transfer in the production of oil and gas in Nigeria and use of secondary data between 1980-2021 for joint ventures is an eye-opener for further exploration of the study areas in oil and gas production management, particularly in the area of technology transfer, which lacks sufficient research.

An urban emergy footprint: Comparing supply- and use-extended input-output models for the case of Vienna, Austria

Urban activities currently consume 75% of global final energy demand, which is expected to increase given absolute and relative population growth in cities. Assessments of both producer (upstream) and consumer (downstream) ecological and socioeconomic impacts of urban inter-industry exchanges are needed to reduce energy consumption and resource use behind the industrial footprints of cities. Environmental extensions in the input-output analysis are designed from the user side perspective, focusing only on commercial energy supply and use. This study introduced emergy-evaluated supply-extended and use-extended carbon footprint models for Vienna and compared their empirical and conceptual implications. Emergy-evaluated footprints of Vienna's urban consumption were estimated by combining industrial and systems ecology approaches as per the research question, based on previous investigations of GHG emissions and energy supply- and use-extensions. Results showed that the ranking of footprints of final product categories is sensitive to the evaluation method, with products of extractive and manufacturing industries differing by more than 10% depending on whether emergy or carbon evaluation is chosen. The emergy-based comparison further reveals that for products of extractive industries, the difference between use and supply extension results can be more than 20% as opposed to carbon-based comparison with the difference between supply and use extension results for services not even amounting to 5%. Future studies could address the over-estimation of direct energy supply to the economy, under-estimation of product and service, inconsistency in standard use-extension design, and challenges in assembling emergy-evaluated supply and use extensions. Fundings are relevant for unified responsibility assessment of upstream and downstream sectors without prioritising structural features.

Research on fully automatic analysis methods for hydrogen energy

An ion chromatograph equipped with an anion exchange column was used to study the analytical methods for total halides and formic acid in hydrogen fuel. An automatic sampling method was established and compared with the manual injection method. A good linear relationship was observed between the peak area and concentration (r2 = 0.999), with a relative standard deviation (RSD) of less than 3% and a detection limit of the instrument at 0.01 mg/L. The experimental results indicate that this method has excellent repeatability and high sensitivity, enabling fully automatic analysis of total halides and formic acid content in hydrogen energy. This provides a fully automatic online analysis solution for the quality of hydrogen energy in the upstream, midstream, and downstream sectors.

Volatility transmission between upstream and midstream energy sectors

This research studies volatility dynamics of the returns to upstream (exploration and production) and midstream (pipeline and storage) energy (oil and gas) sectors over time and across sectors. We find significant structural breaks in volatility of upstream sector returns possibly triggered by major events, while no breaks are detected in the midstream sector. These results indicate the midstream sector is fairly insulated from major events relative to the upstream sector. Results based on a bivariate generalized ARCH model, which controls for breaks, indicate that the conditional variance of the upstream sector is significantly more affected by midstream volatility than vice versa. This finding could be due to the fundamental difference in functions performed by the midstream and upstream sector firms. These patterns in volatility dynamics have practical significance for financial market participants.