Abstract:

The petroleum industry has a unique nature due to the non-renewable energy sources and commodity nature of the final product. Despite having invested billions of dollars on its information technology (IT), one could argue that the full benefits expected from such investment are yet to be delivered. This paper examines IT Governance as an effective method of optimizing the performance of these IT initiatives. Corporate disasters like Enron, Arthur Andersen, have resulted in legislation such as the Sarbanes Oxley Act in the US; raising the bar for corporate governance standards and accountability. The need for an effective IT Governance under the realm of Corporate Governance in the petroleum industry is expressed in the paper. The paper proceeds to examine IT Governance mechanisms such asdecision-making structures, alignment processes and communication mechanisms as an effective method of complying with standards and leveraging IT to maximizand sustain business advantages. Lastly, the implications for the petroleum industry are discussed and some suggestions are made to enhance the effectiveness of IT governance within the organization.