Managing innovation in oil and gas companies: A proposed framework for the management of innovation at Ecopetrol S.A.

Actually, the term innovation seems to be one of the most used in any kind of business practices. However, in order to get value from it, companies need to define a systematic and structured way to manage innovation. This process can be difficult and very risky since it is associated with the development of firm´s capabilities which involves human and technical challenges according to the context of a firm. Additionally, it seems not to exist a magic formula to manage innovation and what may work in a company may not work in another, even though in the same type of industry. In this sense, the purpose of this research is to identify how the oil and gas companies can manage innovation and what are the main elements, their interrelations and structure, required for managing innovation effectively in this critical sector for the world economy. The study follows a holistic single case study in a National Oil Company (NOC) of a developing country to explore how innovation performs in the industry, what are the main elements regarding innovation management and their interactions according to the nature of the industry. Contributory literature and qualitative data from the case study company (with the use of non-standardized interviews) is collected and analyzed. The research confirms the relevance and importance of the definition and implementation of an innovation framework in order to ensure the generation of value and organize as well as guide the efforts in innovation done by a firm. In this way based on the theoretical background, research´s findings, and in the company´s innovation environment and conditions, a framework for managing innovation at the case study company is suggested. This study is one of the few, if not only one, that has reviewed the way as oil and gas companies manage innovation and its practical implementation in a company from a developing country. Both researchers and practitioners will get a photograph of understanding innovation management in the oil and gas industry and its growing necessity in the business world. Some issues have been highlighted, so that future study can be focused in those directions. In fact, even though research on innovation management has significantly grown, there are still many issues that need to be addressed to get insight about managing innovation in various contexts and industries. Studies are mostly performed in the context of large firms and in developed countries, so then research in the context of developing countries is still almost an untouched area, especially in the oil and gas industry. Finally, from the research it seems crucial to explore the effect of some innovation-related variables such as: open innovation in third world economies and in state-own companies; the impact of mergers and acquisitions in innovation performance in oil and gas companies; value measurement in the first stages of the innovation process; and, development of innovation capabilities in companies from developing nations.

Blackcurrant seed oil for prevention of atopic dermatitis

One hypothesis for the increased incidence of atopic diseases has been that it is associated with changing dietary habits, especially the changed intake of essential fatty acids (EFAs). The metabolism of EFAs produces eiconasoids, prostaglandins and leukotrienes, which are essential to organs and play a major role in regulation of inflammation and immune response. In some studies persons with atopic dermatitis have been found to have reduced levels of EFAs. The first year of infancy as well as the foetal period are crucial for the development of atopic immune response. The composition of blackcurrant seed oil (BCSO) corresponds to the recommended ratio of EFAs n-3 and n-6 in the diet (1/3-1/4) and as a dietary supplement could, even in small doses, modify the unbalance of EFAs in an efficient way. The purpose of this study was to find out whether atopic allergies can be prevented by supplementing the diet of pregnant mothers with blackcurrant seed oil and whether it could affect the immunological balance of a child. We also sought to find out whether a blackcurrant seed oil supplementation can affect the composition of breast milk to suppress the T helper 2 lymphocyte (Th2) responses in infants. 313 pregnant mothers were randomly assigned to receive BCSO (n=151) or olive oil as placebo (n=162). Supplementation was started at the 8th to 16th weeks of pregnancy, 6 capsules per day (dose of 3 g), and continued until the cessation of breastfeeding. It was thereafter followed by direct supplementation to infants of 1 ml (1 g) of oil per day until the age of two years. Atopic dermatitis and its severity (SCORAD index) were evaluated, serum total IgE was measured and skin prick tests were performed at the age of 3, 12 and 24 months. Peripheral blood mononuclear cell (PBMC) samples were taken at the age of 3 and 12 months and breast milk samples were collected during the first 3 months of breastfeeding. Parental atopy was common (81.7%) in the studied infants, making them infants with increased atopy risk. There was a significantly lower prevalence of atopic dermatitis in the BCSO group (33%) than in the olive oil group (47%) at the age of 12 months. Also, SCORAD was lower in the BCSO group than in the olive oil group. Dietary intervention with BCSO had immunomodulatory effects on breast milk, inducing cytokine production from Th2 to Th1 immunodeviation. It decreased the level of IL-4 and elevated the level of IFN-γ. BCSO intervention did not affect cytokines in the children’s PBMC. However, children of smoking parents in the combined BCSO and olive oil group had significantly elevated levels of Th2 type cytokines IL-4, IL-5 and the proinflammator cytokine TNF. Dietary supplementation with BCSO is safe. It is well tolerated and transiently reduces the prevalence of atopic dermatitis at the age of 12 months. It can possibly become a potential tool in prevention of atopic symptoms when used at the early stages of life.

Carrier selection and management : A case study on Neste Oil Retail

Service provider selection has been said to be a critical factor in the formation of supply chains. Through successful selection companies can attain competitive advantage, cost savings and more flexible operations. Service provider management is the next crucial step in outsourcing process after the selection has been made. Without proper management companies cannot be sure about the level of service they have bought and they may suffer from service provider's opportunistic behavior. In worst case scenario the buyer company may end up in locked-in situation in which it is totally dependent of the service provider. This thesis studies how the case company conducts its carrier selection process along with the criteria related to it. A model for the final selection is also provided. In addition, case company's carrier management procedures are reflected against recommendations from previous researches. The research was conducted as a qualitative case study on the principal company, Neste Oil Retail. A literature review was made on outsourcing, service provider selection and service provider management. On the basis of the literature review, this thesis ended up recommending Analytic hierarchy process as the preferred model for the carrier selection. Furthermore, Agency theory was seen to be a functional framework for carrier management in this study. Empirical part of this thesis was conducted in the case company by interviewing the key persons in the selection process, making observations and going through documentations related to the subject. According to the results from the study, both carrier selection process as well as carrier management were closely in line with suggestions from literature review. Analytic hierarchy process results revealed that the case company considers service quality as the most important criteria with financial situation and price of service following behind with almost identical weights with each other. Equipment and personnel was seen as the least important selection criterion. Regarding carrier management, the study resulted in the conclusion that the company should consider engaging more in carrier development and working towards beneficial and effective relationships. Otherwise, no major changes were recommended for the case company processes.

Membrane development for oil contaminated water treatments

The aim of this Master’s thesis study was to develop a membrane for oil contaminated water treatments. Oily wastewaters are a big problem to environment and therefore it is important to find an efficient method for their treatment. There are several treatment methods, but one of the most promising methods is membrane filtration. In the theoretical part of this study the membrane technology and polymeric membrane preparation with phase inversion and membrane modification methods was discussed. It was also told about the most important properties of the membranes. Oily waters, their treatment methods and oily wastewater sources were discussed more specifically. In the experimental part membranes from cellulose acetate were prepared and membranes were modified with two different methods. Modification methods were surface modification and polymer mixing. The modification purpose was to make membranes more hydrophilic and increase surface charge, which can reduce fouling. Membranes were characterized by determining zeta potential, contact angle, oil retention, pure water permeability, pressure-normalized flux and fouling. It were used both synthetic and real spent oil-water emulsion in membrane filtration. Surface modification resulted membranes, which had better properties than unmodified membrane. The amount of substance used in surface modification affected a lot to membrane properties, so it would be necessary to try different amounts of substance to develop the best membrane for oil-water emulsion treatment.

Puuhakkeen käsittely- ja poltto-ominaisuuksien parantaminen

Nykyaikana yhteiskunta tavoittelee uusiutuvaa ja ympäristöä säästävää energiantuotantoa. Biopolttoaineiden käyttö vähentää fossiilisten polttoaineiden osuutta energiantuotannossa. Jotta biopolttoaineilla voidaan korvata fossiilisia polttoaineita, biopolttoaineita täytyy jalostaa. Tämän diplomityön tarkoituksena on selvittää puuhakkeen jalostuksen merkitystä hakkeen käytölle ja kannattavuudelle. Hakkeen kuivaamisella ja seulonnalla voidaan parantaa hakkeen käsittely- ja poltto-ominaisuuksia. Kosteuden ja tasalaatuisuuden merkitys suurenee, kun haketta käytetään pienissä kattiloissa. Pienissä kattiloissa lämmöntuotannon hyötysuhde pienenee merkittävästi kosteuden suurentuessa. Tällöin polttoaineen kulutus ja energiantuotantokustannukset suurenevat. Suuremmissa kattiloissa hyvälaatuisella hakkeella on mahdollista korvata kalliimpia vara- ja huippukuormapolttoaineita, kuten öljyä. Tällöin fossiilisten polttoaineiden osuus pienenee. Lisäksi kuivaaminen ja seulominen ovat edullisia jalostusprosesseja esimerkiksi pelletin tuotantoon verrattuna.

Energiantuotannossa talteenotetun hiilidioksidin hyötykäyttö

Hiilidioksidilla on merkittävä vaikutus ilmastoon ja suurin osa ihmisten käyttämästä energiasta perustuu hiilipohjaisiin polttoaineisiin. Energiantuotannossa talteenotetun hiilidioksidin hyötykäyttö tarjoaa erinomaisen mahdollisuuden ilmastonmuutoksen vai-kutusten vähentämiseen vaikuttamatta kuitenkaan merkittävästi käytettyihin energialäh-teisiin. CO2:n talteenottotekniikat voidaan jakaa neljään periaatteeltaan erilaiseen tyyppiin: pol-ton jälkeiseen talteenottoon, ennen polttoa tapahtuvaan talteenottoon, happipolttoon ja kemialliseen kiertoon perustuvaan palamiseen. Polton jälkeinen ja ennen polttoa tapah-tuva talteenotto edustavat eniten tutkittua ja käytettyä tekniikkaa. Hyötykäyttökohteita CO2:lla on useita, joista nykyiset merkittävimmät ovat öljyn tuo-tannon tehostus ja elintarviketeollisuus. Tulevaisuudessa merkittäviä käyttökohteita tulee todennäköisesti olemaan uusiutuvan energian varastointi synteettiseen metaa-niin/metanoliin, kemian-, paperi- ja selluteollisuuden prosessit ja vedenkäsittely.

Behavior of black liquor nitrogen in combustion : formation of cyanate

The Kraft pulping process is the dominant chemical pulping process in the world. Roughly 195 million metric tons of black liquor are produced annually as a by-product from the Kraft pulping process. Black liquor consists of spent cooking chemicals and dissolved organics from the wood and can contain up to 0.15 wt% nitrogen on dry solids basis. The cooking chemicals from black liquor are recovered in a chemical recovery cycle. Water is evaporated in the first stage of the chemical recovery cycle, so the black liquor has a dry solids content of 65-85% prior to combustion. During combustion of black liquor, a portion of the black liquor nitrogen is volatilized, finally forming N2 or NO. The rest of the nitrogen remains in the char as char nitrogen. During char conversion, fixed carbon is burned off leaving the pulping chemicals as smelt, and the char nitrogen forms mostly smelt nitrogen (cyanate, OCN-). Smelt exits the recovery boiler and is dissolved in water. The cyanate from smelt decomposes in the presence of water, forming NH3, which causes nitrogen emissions from the rest of the chemical recovery cycle. This thesis had two focuses: firstly, to determine how the nitrogen chemistry in the recovery boiler is affected by modification of black liquor; and secondly, to find out what causes cyanate formation during thermal conversion, and which parameters affect cyanate formation and decomposition during thermal conversion of black liquor. The fate of added biosludge nitrogen in chemical recovery was determined in Paper I. The added biosludge increased the nitrogen content of black liquor. At the pulp mill, the added biosludge did not increase the NO formation in the recovery boiler, but instead increased the amount of cyanate in green liquor. The increased cyanate caused more NH3 formation, which increased the NCG boiler’s NO emissions. Laboratory-scale experiments showed an increase in both NO and cyanate formation after biosludge addition. Black liquor can be modified, for example by addition of a solid biomass to increase the energy density of black liquor, or by separation of lignin from black liquor by precipitation. The precipitated lignin can be utilized in the production of green chemicals or as a fuel. In Papers II and III, laboratory-scale experiments were conducted to determine the impact of black liquor modification on NO and cyanate formation. Removal of lignin from black liquor reduced the nitrogen content of the black liquor. In most cases NO and cyanate formation decreased with increasing lignin removal; the exception was NO formation from lignin lean soda liquors. The addition of biomass to black liquor resulted in a higher nitrogen content fuel mixture, due to the higher nitrogen content of biomass compared to black liquor. More NO and cyanate were formed from the fuel mixtures than from pure black liquor. The increased amount of formed cyanate led to the hypothesis that black liquor is catalytically active and converts a portion of the nitrogen in the mixed fuel to cyanate. The mechanism behind cyanate formation during thermal conversion of black liquor was not clear before this thesis. Paper IV studies the cyanate formation of alkali metal loaded fuels during gasification in a CO2 atmosphere. The salts K2CO3, Na2CO3, and K2SO4 all promoted char nitrogen to cyanate conversion during gasification, while KCl and CaCO3 did not. It is now assumed that cyanate is formed when alkali metal carbonate or an active intermediate of alkali metal carbonate (e.g. -CO2K) reacts with the char nitrogen forming cyanate. By testing different fuels (bark, peat, and coal), each of which had a different form of organic nitrogen, it was concluded that the form of organic nitrogen in char also has an impact on cyanate formation. Cyanate can be formed during pyrolysis of black liquor, but at temperatures 900°C or above, the formed cyanate will decompose. Cyanate formation in gasifying conditions with different levels of CO2 in the atmosphere was also studied. Most of the char nitrogen was converted to cyanate during gasification at 800-900°C in 13-50% CO2 in N2, and only 5% of the initial fuel nitrogen was converted to NO during char conversion. The formed smelt cyanate was stable at 800°C 13% CO2, while it decomposed at 900°C 13% CO2. The cyanate decomposition was faster at higher temperatures and in oxygen-containing atmospheres than in an inert atmosphere. The presence of CO2 in oxygencontaining atmospheres slowed down the decomposition of cyanate. This work will provide new information on how modification of black liquor affects the nitrogen chemistry during thermal conversion of black liquor and what causes cyanate formation during thermal conversion of black liquor. The formation and decomposition of cyanate was studied in order to provide new data, which would be useful in modeling of nitrogen chemistry in the recovery boiler.

Analysis and modelling of chemical looping combustion process with and without oxygen uncoupling

Effective control and limiting of carbon dioxide (CO₂) emissions in energy production are major challenges of science today. Current research activities include the development of new low-cost carbon capture technologies, and among the proposed concepts, chemical combustion (CLC) and chemical looping with oxygen uncoupling (CLOU) have attracted significant attention allowing intrinsic separation of pure CO₂ from a hydrocarbon fuel combustion process with a comparatively small energy penalty. Both CLC and CLOU utilize the well-established fluidized bed technology, but several technical challenges need to be overcome in order to commercialize the processes. Therefore, development of proper modelling and simulation tools is essential for the design, optimization, and scale-up of chemical looping-based combustion systems. The main objective of this work was to analyze the technological feasibility of CLC and CLOU processes at different scales using a computational modelling approach. A onedimensional fluidized bed model frame was constructed and applied for simulations of CLC and CLOU systems consisting of interconnected fluidized bed reactors. The model is based on the conservation of mass and energy, and semi-empirical correlations are used to describe the hydrodynamics, chemical reactions, and transfer of heat in the reactors. Another objective was to evaluate the viability of chemical looping-based energy production, and a flow sheet model representing a CLC-integrated steam power plant was developed. The 1D model frame was succesfully validated based on the operation of a 150 kWth laboratory-sized CLC unit fed by methane. By following certain scale-up criteria, a conceptual design for a CLC reactor system at a pre-commercial scale of 100 MWth was created, after which the validated model was used to predict the performance of the system. As a result, further understanding of the parameters affecting the operation of a large-scale CLC process was acquired, which will be useful for the practical design work in the future. The integration of the reactor system and steam turbine cycle for power production was studied resulting in a suggested plant layout including a CLC boiler system, a simple heat recovery setup, and an integrated steam cycle with a three pressure level steam turbine. Possible operational regions of a CLOU reactor system fed by bituminous coal were determined via mass, energy, and exergy balance analysis. Finally, the 1D fluidized bed model was modified suitable for CLOU, and the performance of a hypothetical 500 MWth CLOU fuel reactor was evaluated by extensive case simulations.

Silicon-containing species in used lube oil re-refining

Nowadays, the re-refining of the used lube oils has gained worldwide a lot of attention due to the necessity for added environmental protection and increasingly stringent environmental legislation. One of the parameters determining the quality of the produced base oils is the composition of feedstock. Estimation of the chemical composition of the used oil collected from several European locations showed that the hydrocarbon structure of the motor oil is changed insignificantly during its operation and the major part of the changes is accounted for with depleted oil additives. In the lube oil re-refining industry silicon, coming mainly from antifoaming agents, is recognized to be a contaminant generating undesired solid deposits in various locations in the re-refining units. In this thesis, a particular attention was paid to the mechanism of solid product formation during the alkali treatment process of silicon-containing used lube oils. The transformations of a model siloxane, tetramethyldisiloxane (TMDS), were studied in a batch reactor at industrially relevant alkali treatment conditions (low temperature, short reaction time) using different alkali agents. The reaction mechanism involving solid alkali metal silanolates was proposed. The experimental data obtained demonstrated that the solids were dominant products at low temperature and short reaction time. The liquid products in the low temperature reactions were represented mainly by linear siloxanes. The prolongation of reaction time resulted in reduction of solids, whereas both temperature and time increase led to dominance of cyclic products in the reaction mixture. Experiments with the varied reaction time demonstrated that the concentration of cyclic trimer being the dominant in the beginning of the reaction diminished with time, whereas the cyclic tetramer tended to increase. Experiments with lower sodium hydroxide concentration showed the same effect. In addition, a decrease of alkali agent concentration in the initial reaction mixture accelerated TMDS transformation reactions resulting in solely liquid cyclic siloxanes yields. Comparison of sodium and potassium hydroxides applied as an alkali agent demonstrated that potassium hydroxide was more efficient, since the activation energy in KOH presence was almost 2-fold lower than that for sodium hydroxide containing reaction mixture. Application of potassium hydroxide for TMDS transformation at 100° C with 3 hours reaction time resulted in 20 % decrease of solid yields compared to NaOH-containing mixture. Moreover, TMDS transformations in the presence of sodium silanolate applied as an alkali agent led to formation of only liquid products without formation of the undesired solids. On the basis of experimental data and the proposed reaction mechanism, a kinetic model was developed, which provided a satisfactory description of the experimental results. Suitability of the selected siloxane as a relevant model of industrial silicon-containing compounds was verified by investigation of the commercially available antifoam agent in base-catalyzed conditions.

Regime-Switching in the Impact of Oil Price Shocks on Stock Market Volatility: Evidence from Oil-Importing and Oil-Exporting Countries

Research has highlighted the adequacy of Markov regime-switching model to address dynamic behavior in long term stock market movements. Employing a purposed Extended regime-switching GARCH(1,1) model, this thesis further investigates the regime dependent nonlinear relationship between changes in oil price and stock market volatility in Saudi Arabia, Norway and Singapore for the period of 2001-2014. Market selection is prioritized to national dependency on oil export or import, which also rationalizes the fitness of implied bivariate volatility model. Among two regimes identified by the mean model, high stock market return-low volatility regime reflects the stable economic growth periods. The other regime characterized by low stock market return-high volatility coincides with episodes of recession and downturn. Moreover, results of volatility model provide the evidence that shocks in stock markets are less persistent during the high volatility regime. While accelerated oil price rises the stock market volatility during recessions, it reduces the stock market risk during normal growth periods in Singapore. In contrast, oil price showed no significant notable impact on stock market volatility of target oil-exporting countries in either of the volatility regime. In light to these results, international investors and policy makers could benefit the risk management in relation to oil price fluctuation.

Selvitys erilaisten mäntyöljynkeittoprosessien toiminnasta

Työn tavoitteena oli tutustua eri mäntyöljyprosessien toimintaan. Sulfaattisellun valmistuksessa syntyy sivutuotteena mäntyöljyä. Se tuo lisätuottoa sellutehtaalle. Nykypäivänä mäntyöljyn valmistukseen on kiinnitetty yhä enemmän huomiota uusien jalostusmahdollisuuksien vuoksi. Mäntyöljyä syntyy, kun mustalipeän pinnalta kuorittu suopa palstoitetaan sopivalla hapolla. Suopa koostuu puun uuteaineista eli hartsi- ja rasvahapoista sekä saippuattomista aineista. Suopa pitää erottaa mustalipeästä mahdollisimman hyvin, jotta se ei aiheuttaisi ongelmia sellutehtaan eri prosessin vaiheissa. Suopaa voidaan erottaa mustalipeästä säiliöerotuksena, sentrifugeilla tai hydrosykloneilla. Suovan palstoitusprosessi voi olla erä- tai jatkuvatoiminen prosessi. Jatkuvatoimisia prosesseja ovat: sentrifugi-, säiliödekantointi- ja HDS-prosessi. Mäntyöljyä voidaan käyttää kemianteollisuuden raaka-aineena tai siitä voidaan jalostaa biodieseliä. Tämä biodiesel on niin sanottua toisen polven biopolttoainetta eli se ei sisällä ravinnoksi kelpaavaa raaka-ainetta. Nykypäivänä markkinoilla on sekä eräkeitto- sekä jatkuvatoimisia prosesseja. Suovan erotussäiliöiden rinnalle on tullut uusi sentrifugeilla tapahtuva suovan erotussysteemi.

Determinants of capital expenditures: Evidence from oil and mining sectors in Russia

This master’s thesis investigates the significant macroeconomic and firm level determinants of CAPEX in Russian oil and mining sectors. It also studies the Russian oil and mining sectors, its development, characteristics and current situation. The panel data methodology was implemented to identify the determinants of CAPEX in Russian oil and mining sectors and to test derived hypotheses. The core sample consists of annual financial data of 45 publicly listed Russian oil and mining sector companies. The timeframe of the thesis research is a six year period from 2007 to 2013. The findings of the master’s thesis have shown that Gross Sales, Return On Assets, Free Cash Flow and Long Term Debt are firm level performance variables along with Russian GDP, Export, Urals and the Reserve Fund are macroeconomic variables that determine the magnitude of new capital expenditures reported by publicly listed Russian oil and mining sector companies. These results are not controversial to the previous research paper, indeed they confirm them. Furthermore, the findings from the emerging countries, such as Malaysia, India and Portugal, are analogous to Russia. The empirical research is edifying and novel. Findings from this master’s thesis are highly valuable for the scientific community, especially, for researchers who investigate the determinant of CAPEX in developing countries. Moreover, the results can be utilized as a cogent argument, when companies and investors are doing strategic decisions, considering the Russian oil and mining sectors.

Flow in porous media of oil-water systems

Fluid flow behaviour in porous media is a conundrum. Therefore, this research is focused on filtration-volumetric characterisation of fractured-carbonate sediments, coupled with their proper simulation. For this reason, at laboratory rock properties such as pore volume, permeability and porosity are measured, later phase permeabilities and oil recovery in function of flow rate are assessed. Furthermore, the rheological properties of three oils are measured and analysed. Finally based on rock and fluid properties, a model using COMSOL Multiphysics is built in order to compare the experimental and simulated results. The rock analyses show linear relation between flow rate and differential pressure, from which phase permeabilities and pressure gradient are determined, eventually the oil recovery under low and high flow rate is established. In addition, the oils reveal thixotropic properties as well as non-Newtonian behaviour described by Bingham model, consequently Carreau viscosity model for the used oil is given. Given these points, the model for oil and water is built in COMSOL Multiphysics, whereupon successfully the reciprocity between experimental and simulated results is analysed and compared. Finally, a two-phase displacement model is elaborated.