The Role of Local Capacity Development in Mitigating the Challenges Faced In Offshore Drilling

Literature Review

• The Concept Behind Local Capacity Development

According to Vincent and Stephen (2015), the concept and idea of local capacity development vary in different contexts. Meanwhile, Fukuda-Parr and Lopes (2013) describe capacity as the ability of an individual, organisation, or institution to carry out an assigned work efficiently and effectively with less dependence on external resources and continuously. Therefore, capacity development or capacity building refers to institutional development, human resource development and development of the policy environment in the government as public service organisations interact and operate with each other. Moreover, according to Merino and de Los Ríos Carmenado (2012), capacity development assists in determining the effective allocation and utilisation of human resources between competing demands. It consists of activities that strengthen people's abilities, knowledge, behaviour, and skills and enhance institutional processes and structures so that the firms can effectively and sustainably meet their goals, mission, vision, and values. However, Triana (2013) has a different view of capacity development and states that capacity development refers to several strategies that increase the effectiveness and efficiency of government performance. Further explained by Vincent and Stephen (2015) and Triana (2013), capacity is considered a deviation of strategy, including inside factors of developing capacity, inter alia, dimensions of institutional reforms, dimensions of organisational strengthening and development of human resources. Therefore, according to Vincent and Stephen (2015), capacity development has several definitions, reflecting a specific orientation or bias.

Vallejo and Wehn (2016) state that some researchers define capacity development as a process or approach toward development objectives, including building organisational or individual ability. Other researchers define it as a process or approach to reducing poverty. However, Analoui and Danquah (2017) state that CIDA (Canadian International Development Agency) defines capacity development as a strategy, methodology and approach which enhances performance at each social level, and it has no single approach or one-size-fits-all strategy for development and building. Further, organisations such as USAID strongly emphasise the significance of capacity building to enhance development results by increasing sustainability, partnership, and local ownership with donors, other local organisations, stakeholders, and the public sector (Usaidlearninglab, 2017). In contrast, MSH (Management Sciences for Health) emphasises strengthening internal organisational systems, structures, management, processes, governance, leadership and staff capacity to improve team, organisational and individual performances through capacity development (MSH., 2020).

• Benefits of Local Capacity Development

Capacity development enhances organisational efficiency, and organisations and individuals are connected to a web of interaction and social relations. A firm’s social capital is a network of associations or relationships that benefits those individuals or organisations who connect within the peers’ community (Usaidlearninglab, 2013). Further, the organisational social capital benefits flow from reciprocity, information, exchange and coordination values. According to Shams (2016), other benefits of capacity development can be seen as it assists in determining whether organisations can maintain competitive positions and whether relationships can benefit the value-creation process. Moreover, comparative performance benefit is achieved from access to untapped information and developing unique perspectives through capacity development.

According to Memphis (2019), capacity development strategies make long-term impacts as they reduce the over-reliance on outside experts as sources of solutions and knowledge for organisational problems. Hence, dependence on outsiders to solve the inside problems is reduced as capacity development encourages individuals to take action on local problems themselves. Further added by Theisohn and Lopes (2013), capacity development creates a sense of empowerment and ownership. This allows organisations to gain more control over their future development and improve their capacity to take action and envision. In addition, approaches to capacity development lead to more appropriate and feasible solutions (Memphis, 2019). However, as per UNDP (2019), capacity development can assist in addressing capacity problems, determining how to use advanced technologies that will be best for an organisation and empowering or enabling trainees to train others. Hence, team and overall organisational performance and efficiency can be achieved. World Health Organization (2015) agrees with this view. In addition, King and Cruickshank (2012) state that community inclusion benefits capacity development.

• Challenges Faced in Offshore Drilling of Oil and Gas

Thierry (2016) states that production operations and explorations in deep waters demand modern technological and technical expertise. Moreover, continuous technological advancement is why establishing large-scale production vessels and platforms for offshore drilling of oil and gas, robotic equipment and drillships. However, as per Wangjun (2016), deepwater explorations and operations require sophisticated solutions and huge resources, so investment in billions is always needed. A drillship is a major vessel with heavy pipes and extra-long cables to drill wells underwater. These drillships require specialised vessels to enhance output and efficiency, costing up to $1 million daily (Thierry, 2016). Therefore, costs are a huge problem for offshore oil and gas drilling. Similarly, as per the study of Kelessidis (2009), the ever-increasing and continuous demand for fossil fuels, gas, and oil are the primary causes that have pushed and compelled the exploration and drilling sector into deep waters now more than 2000 meters underwater. 

Pickl (2019) states that despite many investments in renewable energy, the need for oil and gas remains in the world, even now. The world still requires at least 20 to 30 years to get freedom from the need for gas and oil. Moreover, the world is moving more towards offshore gas and oil operations and explorations due to the drying up of onshore resources. Offshore gas and oil productions and explorations have drastically changed due to developments in technologies and changes in styles of operations over the past decade (Open Ocean, 2015). Rhodes (2010) adds that retrieving and drilling oil under huge pressure includes complex operations. The pressure increases by 14.5 psi for every 33 feet, and major risks and dangers are associated with high pressures and low temperature and visibility. Moreover, extreme weather conditions and strong variability in the ocean’s direction, strength, vertical shear, periodicity and wave heights increase the load on all materials and fatigue in the long and medium term (Rhodes, 2010). In addition, obtaining images of rock and salt during operation is extremely difficult. Further, according to Vinogradov and Amaduobogha (2014), environmental costs of offshore explorations and productions add to the challenges already being faced by the offshore drilling industry as these costs result from accidental pollution, operational pollution and offshore sources’ decommissioning and decommissioning is a major to the industry and government, both, in terms of economic challenges and environmental issues.

• Importance of Local Capacity Development in Offshore Drilling

According to MOTP (2018), capacity building can be seen as a recognition of potential effects that can be both negative and positive, and it can assist in identifying gaps in institutional capacity, regulations, and public consultation mechanisms. Capacity building can strengthen the social and environmental sustainability of the gas and oil sector and provide a more transparent comprehension of social and environmental regulations. It can also strengthen a country’s ability to solve problems of offshore drilling of oil and gas (MOTP, 2018). Capacity development can help identify where training in the oil and gas sector management is required and recognise the capacity of stakeholders, including local communities, at the local and central level to solve controversies between gas and oil activities in onshore and offshore locations. Further added by Rochette and Wright (2015), the effective implementation of a capacity development programme can enforce regulations and control and monitor the development of offshore activities. Similarly, UNEP (2017) states that capacity building can enhance communication and collaboration between civil society, contracting parties, non-governmental organisations, private sectors, municipal authorities and local governments.

Furthermore, capacity development can assist in developing guidelines for the environmental management of offshore oil and gas drilling. These guidelines can be based on feasible exercises and involve the support of other nations and partners already involved in gas and oil development to implement and conduct a strategic assessment of gas and oil's environmental and social sustainability (UNEP, 2017). The capacity development strategies can ensure environmental and resource management, safety, governance and data management for offshore drilling development. However, according to Amenshiah (2019), the capacity development of human resources in the offshore drilling sector can develop their skills and enhance the training of human resources.

• Factors Associated with Local Capacity in Mitigating the Offshore Drilling Challenges

According to the study of Kobusingye and Omvia (2015), for the development and improvement of the sector, there is a need to assess those critical factors that influence significantly that particular sector. Therefore, the study of Ahmad, Farrukh, and Nazir (2015) highlights that the factors associated with local capacity development are organisational culture, individual factors, and resources. Similarly, the study of Ramzali, Lavasani and Ghodousi (2015) highlights that the process of offshore drilling also depends on rules, regulations, and organisational behaviour. Furthermore, Bilgili, Kedia, and Bilgili's (2016) study suggests that resources are important in developing local capacity. Moreover, the study of Bloomfield et al. (2018) discusses that factors of local capacity are associated with the mechanisms related to laws, regulations, and motivations that influence the behaviour of individuals or operations of an organisation.

The study of Punzo et al. (2017) mentions that different NGOs, governments, and professional organisations have developed certain initiatives to prevent and mitigate negative impacts caused by offshore drilling. Staff development is a major factor associated with local capacity development in the oil and gas sector (Kark et al., 2015). Staff development must be intensified to improve the processes of offshore drilling. Furthermore, training, planning, and management of local development are other factors that can improve offshore drilling operations. According to the study by Chenghua (2016), training and management of local development at a government level can strengthen human capacity. Staff audit is another factor that is responsible for mitigating the challenges of offshore drilling. Therefore, conducting staff audits and determining areas for improvement by identifying the shortfalls and excess capacity can effectively mitigate the challenges of offshore drilling (Amenshiah, 2019). Similarly, recruiting qualified persons suitable for improving staff operations can be considered a major factor limiting the challenges associated with offshore drilling operations (Cordes et al., 2016). Furthermore, identifying the necessary information and knowledge from past experiences can enable offshore drilling to operate safely and remove challenges that might occur in the future. However, the study by Ablo (2015) argues that the process of local capacity development for offshore drilling has not been institutionalised.

The factors of local capacity associated with organisational culture can be used to mitigate the challenges related to offshore drilling. According to the study by Cordes et al. (2016) factor system, dependency is a key aspect of the offshore drilling processes, often based on organisational behaviour. Therefore, local capacity can be developed at an organisational level according to the situations and environment surrounding the offshore drilling operations Ramzali et al. (2015). Therefore, the factor of organisational culture for local capacity can ensure the mitigation of challenges associated with offshore drilling and its activities. Furthermore, factors of local capacity for the improvement of offshore drilling operations can be associated with the role it performs in the local system and the capability to handle change for effective performance.

• Challenges for Local Capacity Development in Facilitating Offshore Drilling

According to the study by Chenghua (2016), one of the most crucial factors faced in the capacity development for offshore drilling is the capacity of the location or the environment of the offshore drilling process to meet the capacity development goals. Similarly, the study of Rui et al. (2017) mentions that capacity development in many poor environmental conditions often fails despite increased financial funding required for local capacity development. According to the study by Vincent and Stephen (2015), capacity development is considered a major challenge due to increased funding for technical cooperation and capacity building. Furthermore, the study of Bilgili et al. (2016) also mentions that capacity development processes in developed regions face challenges related to the training and development of individuals to perform drilling operations. Still, the challenges are often limited and depend on the individual's competency level. However, according to the study by Hagelsteen and Burke (2016), local capacity building in developing or underdeveloped nations is challenging for offshore drilling processes, often caused by weak local ownership and a lack of appropriate development methods for local capacity. According to the study of Kark et al. (2015), different sets of actions linked with offshore drilling present various challenges associated with the outcomes of local capacity building. 

The study of Ovadia (2016) suggests that only limited oil and gas sectors have initiated local capacity development to improve their processes, and most offshore drilling processes made no efforts to create sustainability in their processes. The study of Rui et al. (2018) mentions that local capacity building and development require a proper understanding of the skills, knowledge, and education to create sustainability in offshore drilling operations. Therefore, Kirat's (2015) study highlights that providing education to the workforce in developing countries for offshore drilling is challenging for capacity development. Furthermore, poor organizational culture, lack of resources, and the balance of power also challenge local capacity development in the oil and gas sector (Punzo et al., 2017).

• Literature Gap

According to the study by Cordes et al. (2016), offshore drilling processes require improved operations and sustainability for their workforce. Furthermore, the oil and gas industry is also known for its major contributions to the economies on a large scale (Ovadia, 2016). Therefore, the gap in the literature identified in this study is that the previous research effectively mentions the process and impact of offshore drilling; still, the information regarding the local capacity development for the mitigation of challenges faced during offshore drilling is limited due to the research area being diverse and demanding an organized approach adequate research is required for the mitigation of challenges that are encountered during offshore drilling. Furthermore, a lack of awareness among oil and gas companies also prevails because of a significant gap in the literature (Mirimoghadam and Ghazinoory, 2017). Similarly, the gap in the literature is considered significant because of the increasing environmental repercussions caused by offshore drilling and the need to develop appropriate local capacity to mitigate such challenges.

• Theoretical Framework

The study applies the use of the theory of change. According to the study by Mayne (2015), the theory of change is based on the outcomes developed from the critical thinking, assessment, and application of different initiatives and platforms proposed to assist the change in its framework. The study of Douthwaite and Hoffecker (2017) also mentions that the theory of change is actively applied to international development programs by the majority of governments, development agencies, civil organizations, and internationally known non-governmental organizations that are created to support the outcomes of development and capacity building in different industries and sectors. In the case of this study, the theory of change is related to capacity building and development in the offshore drilling process. The theory of change can be considered relevant to the study because the offshore drilling process impacts a country's political, social, and economic conditions that require change.

According to the study by Hayes (2018), the factors affecting change are essential for improving a certain sector. According to the study of Capeto et al. (2017), for the strengthening of offshore drilling, process change is required, which can be implemented through local capacity development. Furthermore, Chenghua's (2016) study also highlights that local capacity development is integral in improving operations in any institution or sector. Similarly, the study by Li et al. (2016) mentions that offshore drilling in the oil and gas sector faces different challenges associated with the economy, trust, and sustainability. Similarly, Kark et al. (2015) also state that drilling operations in the offshore sector are considered challenging for workers and staff due to increased exposure to harsh environments in remote areas. Therefore, the study by Rui et al. (2017) discusses that for efficient drilling operations in the offshore sector, skilled and trained professionals from a wide range of backgrounds are required for improved local capacity. Therefore, applying the theory of change for local capacity development in the oil and gas sector will enable the sector to improve resources, finances, project development, and policies for offshore drilling.

• Comparative Analysis

 Comparative analysis differs from non-comparative investigation in that it tries to arrive at conclusions ahead of single cases. It explains any differences and similarities between the objects' analysis and the relationship between the objects against their contextual background (Schneider and Wagemann, 2012). The comparative analysis encompasses many essential, strongly closely linked operations. More specifically, comparative analysis allows for a better understanding of one's social structure by contrasting its familiar structures and regimens with those of other structures (Legewie, 2013). 

 Comparison increases our knowledge of other structures, traditions, and trends of reasoning and behaving, illuminating our political relationship frameworks and enabling us to objectively contrast them with those of other countries (Thiem and Dusa, 2012).  The comparison makes it possible to evaluate hypotheses in various situations and to determine the nature and importance of such phenomena, thereby leading to the development of a widely applicable theory(Thiem and Dusa, 2012).   The analogy often has unique scientific benefits among these general benefits (Schneider and Wagemann, 2012).  To take full advantage of these benefits, it is important to compare the concepts of study based on a specific theoretical context and to use similar conceptualizations and methods to do so. Comparative research emphasises the causal importance of the social framework for communication outcomes and seeks to explain whether the structural context significantly forms contact processes in various environments(Legewie, N., 2013).

• Chapter Summary

The literature review of this study is based on the area of research which focuses on the role of local capacity development in mitigating the challenges faced in offshore drilling. Therefore, the literature review thoroughly introduces the research area and discusses the concept behind local capacity development. Furthermore, the literature review provides benefits associated with local capacity development and discusses the challenges faced in the offshore drilling operations of oil and gas. The literature review chapter also describes the importance of local capacity development in offshore drilling. The factors associated with local capacity mitigating offshore challenges are also discussed in detail. Furthermore, the literature review also details the challenges for local capacity development in facilitating offshore drilling. The literature also briefly discusses the literature gap present in the research and the theoretical framework appropriate for the study.