Type Public (BSE: 532743)Industry Petroleum and GasFounded 2008Headquarters Ahmedabad, IndiaKey people Mukesh AmbaniProducts PetroleumRevenue 3,678.00 crore (US$ 665.72 million)Parent Reliance Industries
Location of TYPE OF FACTOR Factor Favorable UnfavorableInternal Strengths Weaknesses Leading market position Increasing long term debt Operational efficiency in Problem with the FCCU refining Strong financial performanceExternal Opportunities Threats Joint venture with NOVA Intense domestic competition Chemicals Rising petrochemical supply in the Acquisition of polyester Middle East assets of Hualon Corporation Fluctuating crude oil prices Increasing demand for Economic slowdown in India transportation fuels Growing demand for petroleum products
1. Threat of New Entrants2. Power of Suppliers3. Power of Buyers4. Availability of Substitutes5. Competitive Rivalry
1. THREAT OF NEW ENTRANTS There is thousands of oil and oil services companies throughout the world, but the barriers to enter this industry are enough to scare away all but the serious companies. Barriers can vary depending on the area of the market in which the company is situated Need Ample cash Need specialized worker
2. P OWER OF S UPPLIERS While there are plenty of oil companies in the world, much of the oil and gas business is dominated by a small handful of powerful companies.
3. POWER OF BUYERS. The balance of power is shifting toward buyers. Oil is a commodity and one companys oil or oil drilling services are not that much different from anothers. This leads buyers to seek lower prices and better contract terms
4. AVAILABILITY OF SUBSTITUTES Substitutesfor the oil industry in general include alternative fuels such as coal, gas, solar power, wind power, hydroelectricity and even nuclear energy.
5. COMPETITIVE RIVALRY Slow industry growth rates and high exit barriers are a particularly troublesome situation facing by firms. At the same time, exit barriers in the refinery business are quite high. Besides the scrap value of the equipment, a refinery that does not operate has no value-adding capability.
OIL AND GAS VALUE CHAINS Crude Oil Value Chain Exploration Production Bringing oil to the surface Using technology to using natural and artificial find new oil resources methods Refining Transportation Converting Moving oil to refineries and crude oil into finished consumers with products tankers, trucks and pipelines Marketing Distributing and selling refined products
Natural Gas Value Chain Exploration Production Using technology to Bringing gas to the surfacefind new oil resources Transportation Processing Moving gas with Treating gas to be sent topipelines and tankers markets MarketingDistributing and selling natural gas