Globalization as a Complex Interactive Process Impacting and Structuring the World Petroleum Industry

Globalization as a Complex Interactive Process Impacting and

Structuring the World Petroleum Industry

I. Introduction

Globalization is a worldwide phenomenon where previously national markets are linked and integrated to create a global market. This occurs both within specific industries as well as those industries becoming embedded within a global economy larger than the sum of the domestic economies which were its original constituent parts. The oil and gas or petroleum products industry is examined as an example of these linkages. We examine the petroleum industry first with respect to its production or supply side, the demand side, and a worldwide pool of labor which is its most fundamental basis. To really grasp globalization in its most expansive sense and true context one should look not just at its economic side, but also at the governmental, sociocultural, and technical sides of this phenomenon. The way in which these different dimensions and sphere of globalization interact and flow into one another explains how it is that changes in one side of a global industry can spread across and influence other dimensions. The interactions and linkages between different dimensions of a global whole and also of a global industry show how change can occur so suddenly in the ways we have observed in the past few decades.

As domestic economies and national markets achieve integration with one another we see a broad global process resulting in an increasingly rapid exchange of products, capital, and labor over national boundaries happening at a much larger scale and with a quicker pace never seen before. While international trade has occurred since almost the beginning of human civilization, the amount and complexity of international exchange has expanded in the last three hundred years and continues to do so at an increasing rate. The entire undertaking of imagining, designing, fabricating, marketing, and the distribution of services and products currently occurs as a multinational process, decentralized across national borders. An information technology thought leader states that cross-border linkages how we need to comprehend this phenomenon: what we call globalization is really “the likelihood of supplies, products and consumers to have access to one another from anywhere in the world” (Watkins 2012). Information and how it flows through people and organizations is the first aspect of this process we must comprehend. Workers across the world laboring together within and across borders then transform these information flows and assemblages into new innovations in technical knowledge: “efficiency increases associated with co-located teams have driven the oil and gas industry to establish information technology infrastructure scattered all across the world” with than ultimate end of “[s]haring information and integrating those remote teams with other technical experts in the organization” (Watkins 2012). When we consider what we are really talking about when we discuss globalization first we must understand that it is such a broad concept in thought as well as a complex process in global realty that to generalize about globalization cannot achieve all that much for us past a certain point. One must look at a specific industry such as oil and gas products and then show how that industry and its processes are transformed into something worldwide in scale and scope. That will give us a much better ground-up understanding of how globalization as a bigger phenomenon occurs. We will then have to think through and modify the ways in which we see how that industry exists, functions, and is changing within a global context, as part of a global totality. The oil and gas industry with respect to how we explore, produce, refine , and distribute petroleum products is an excellent case study for how global processes happen, interact, and then combine to transform what happens in an industry, in how it not only produces something but in how it organizes itself and creates knowledge and new linkages across borders.