Exxon As Exxon engages in the discovery, extraction, refining and retailing of petroleum, a wide range of technologies are used to help it perform its business and compete. Some of these functions are outsourced to other companies that serve the oil industry, but the base technology for exploration involves a variety of equipment for evaluating whether there is oil in the ground at specific locations -- drills, sonar and other sensory equipment. Extraction requires highly complex hard technology, driven by software, that can drill into the earth and bring oil to the surface, no matter what the prevailing conditions at the surface are. At the fore of modern technology is software that enables real time monitoring of all data on wellhead conditions, flow through pipelines and the status of mechanical systems. This software seeks to minimize loss, maximize efficiency and to reduce downtime (Elatab, 2012).

Oil reservoirs tend to be pressurized and flammable, so considerable technology is required in order to perform this task safely. Refining technology is the next set of technology, and refineries will through various means of removing impurities from the oil and refining it into its different usable forms. Techniques such as fracking have enabled companies to extract greater amounts of reserves...

Typically, new technologies diffuse quickly through the industry, especially since many individual tasks within the above processes are outsourced to third-party contractors. Usually, there are more opportunities to license a powerful new technology than could be had by making incremental gains over the competition. Further, many new technologies driving the industry have been developed by smaller, specialist companies that then later market to oil companies -- eliminating the opportunity for sustainable competitive advantage for Exxon or any of its rivals, for that matter.
When Exxon does develop proprietary technology, patents are the pathway for protecting such technology. A patent gives the creator of a new technology the exclusive rights to use that technology for a set period of time, typically 17 years in the U.S. (Sherman, 2015). Patents are typically filed in a number of different countries, but it can be difficult to enforce patent protection in some regimes. However, in Western nations, patent protections are strong, and enforceable. Exxon would then be able to either prohibit…