Challenges of strategy implementation in Tullow company, Kenya
Abstract
Many oil and gas companies especially the BG Group Plc (British Multinational oil
and gas company) are reluctant to proceed with the drilling of exploration wells due to
lack of natural gas terms in the current model production contract which has a bias on
oil terms. Need for new, breakthrough technologies that can help find, develop and
produce more oil and gas. This creates a major a hindrance for oil and gas companies
to effectively drill oil and gas in developing economies like Kenya. The study sought
to determine the challenges of strategy implementation by Tullow Company, to
achieve this objective, the study used a case study of Tullow Company and the
primary data was collected using an interview guide that sought answers through open
ended questions gathered from the interviewees. Primary data was collected from all
the three interviewees as planned. These included departmental heads of Finance,
Marketing and Operations. Data analysis was done using content analysis. The study
concludes that the main challenges facing Tullow Company in strategy
implementation include failure to involve the local community, insecurity and
political instability. These challenges according to the findings are a key hindrance
towards the realization of strategy implementation. Poor means of communication
between the head office and the drilling points led to lack of effective coordination of
activities and information flow. To deal with these challenges, Tullow Company in
intends to engage with the local communities through training. This will enable them
to understand and cooperate with other employees of Tullow since they feel as part of
the process. Oil producing communities must feel tangible benefits both through
employment and through local tenders for goods and services. The revenue that
Kenya derives from oil must be shared out between the national government, the
county government and regional committees where the oil is found. The government
should consider reducing barriers through creating an enabling environment in order
to provide conducive environment for attracting local and international partners. This
is because investors play an important role in creating job opportunities and domestic
tourism, this play an important role in growth and development of an economy. The
study recommends that the legal and regulatory framework in Kenya should be
improved. A new version of Kenya's petroleum law was last revised in 1986.
Currently; it is being drawn up, notably in the light of new environmental
requirements this will create a new upstream regulator and strengthen a number of
other bodies, with the aim of leaving the ministry in charge of policy and creating a
petroleum directorate responsible for ensuring that companies stick to the terms of
their contracts. The existing National Oil Company (NOCK) should be the joint
venture partner with oil companies in Kenya. The study limited itself to a case study
of Tullow Company and thus the findings obtained cannot however be used to make
generalization for all the international oil drilling companies in Kenya.
Publisher
University of Nairobi