Project Duration                   25 May 2009 to 1st July 2009                      th                                   ...
Sr. no.      Content1.           Certificate2. Preface3. Acknowledgement4. Introduction To Industry             4.1      O...
10. Ratio Analysis : Concept, Meaning & Inferences11. Suggestion12. Conclusion13. BibliographyTables    1 Major Companies ...
PREFACE          4
Financial Statement Analysis is the process of identifying the financial strength and weaknessof the organization from the...
I express my sincere thanks to my project guide, Mr. M.K. Khichi, Dy. Manager (F&A), FinanceDepartment, for guiding me rig...
INTRODUCTION TO OIL & GAS INDUSTRY                                     7
Oil       industrys   major   segments     encompass   all   the   steps   involved   in   finding,producing, processing, ...
Petroleum is vital to many industries, and is of importance to the maintenance of industrializedcivilization itself, and t...
the export of petroleum products touching US$ 18.34 billion during April-September 2008. InNovember 2008, the Cabinet Comm...
Petroleum is a naturally occurring liquid found in rock formations. It consists of a complexmixture of hydrocarbons of var...
FuelsFor decades, the oil and natural gas industry has been making affordable fuels thathave simultaneously improved the s...
Growth of the India Petroleum Industry:In the post-independence era, India grew tremendously in terms of infrastructure in...
Sharing Contracts, private parties from some of the fields are also producing gas.   Government have also offered blocks u...
MAJOR COMPANIES OF OIL INDUSTRY IN INDIA                                                 SET-UP  COMPANIESOIL             ...
COMPANIES MARKETING SETUP            COMPANIES                             MARKETING THROUGHONGC & JV                     ...
 and Nagapattinam in Tamil Nadu.Two plants have also been set up at              Lakwa in Assam and              Ussar ...
Liquefied Natural Gas (LNG)  9. Natural gas at -1610C transforms into liquid. This is done for easy storage and     transp...
countries in terms of proven gas reserves, viz. Iran, Qatar, Saudi Arabia and Abu Dhabi.     The large natural gas market ...
GAS PRICING     Prior to 1987, gas prices were fixed by ONGC/OIL. The price is being fixed by Government     w.e.f. 30.1.1...
from new fields to be developed in future by ONGC/OIL will be sold at market-              related price in the context of...
characterized by heavy labor costs. The magnitude of the project defines the structure and  equipment for installations.v ...
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33536213 gail-project-report-by-manish-soni

  1. 1. Project Duration 25 May 2009 to 1st July 2009 th Submitted To : Submitted By : Sonam Kumawat MBA-II SEM Govt. Engineering College, Ajmer Rajasthan Technical University, KotaINDEX 1
  2. 2. Sr. no. Content1. Certificate2. Preface3. Acknowledgement4. Introduction To Industry 4.1 Oil Companies (Petroleum and Oil Companies) 4.2 Petroleum, Fuels 4.3 Indian Petroleum Industry 4.4 Growth of Indian Petroleum Industry 4.5 Availability & Utilization of Natural Gas 4.6 Transnational Gas Pipe Line 4.7 Liquified Natural Gas (LNG) 4.8 Gas Pricing 4.9 Oil Cost 4.10 Oil Prices 4.11 Gas : Production & Consumption5. Introduction To Gail 5.1 Vision and Mission 5.2 Ongoing Projects of Gail 5.3 Project Supported 5.4 Existing Projects 5.5 Growth 5.6 Corporate Strategy 5.7 Business Segment Performance 5.8 Gas Availability 5.9 Business Initiative 5.10 Pipe Line Projects 2007-08 5.11 Subsidiaries and Joint Ventures6. Report on Jamnagar – Loni pipeline project7. Team of Gail8. Budget Allocation and Expenditure9. Research Methodology 9.1 Purpose of the Study 9.2 Objectives of the Study 9.3 Techniques Used in the Study 9.4 Sources of Information 9.5 Limitation of the Study 2
  3. 3. 10. Ratio Analysis : Concept, Meaning & Inferences11. Suggestion12. Conclusion13. BibliographyTables 1 Major Companies of Oil Industry in India 2 Companies Marketing Setup 3 Comparison of Production for the year 2006-07, 2007-08 4 Gas Demand Projection 5 Gas Supply Projection 6 Comparative Statement of RatiosCERTIFICATE 3
  4. 4. PREFACE 4
  5. 5. Financial Statement Analysis is the process of identifying the financial strength and weaknessof the organization from the available accounting data and Financial Statement. The analysis isdone by properly establishing the relationship between the items of balance sheet and Incomeand Expenditure accounts The first task of Financial analyst is to determine the informationrelevant to the decision under consideration from the total information contained in the financialstatement. The second step is to arrange information in way to highlight significantrelationship. The final step is interpretation and drawing of inferences and conclusion. Thusfinancial analysis is the process of selection, relating and evaluation of the accountingdata/Information.The financial health of a corporate enterprise is the result of many individual decisions madecontinually by its management. To draw differences about the corporate financial health,therefore, involves analyzing and interpreting the cumulative financial and economic effects ofthese decisions and judging the results through the use of comparative measures such asratios, cash flow and funds flow statements.ACKNOWLEDGEMENT 5
  6. 6. I express my sincere thanks to my project guide, Mr. M.K. Khichi, Dy. Manager (F&A), FinanceDepartment, for guiding me right from the inception till the successful completion of the project.I sincerely acknowledge him for extending their valuable guidance, support for literature,critical reviews of project and the report and above all the moral support he had provided to mewith all stage of this project.I would also like to thank Mr. I. K. Kothari, Sr. Officer (T&D) and their supporting staff and mycollege faculty Dr. Amit Sharma (Head of training & placement), and my friends for their helpand co-operation throughout our project.(Signature of Student)SONAM KUMAWATEXECUTIVE SUMMARY 6
  7. 7. INTRODUCTION TO OIL & GAS INDUSTRY 7
  8. 8. Oil industrys major segments encompass all the steps involved in finding,producing, processing, transporting and marketing oil and natural gas.The major players of this industry in India comprises of ONGC, HPCL, BPCL, IOCL, IPCL,CAIRN ENERGY LTD., ESSAR, RPL, etc.This industry includes the global processes of  exploration,  extraction,  refining,  transporting (often by oil tankers and pipelines), and;  marketing petroleum products.The largest volume products of the industry are fuel oil and gasoline (petrol). Petroleum is alsothe raw material for many chemical products, including pharmaceuticals, solvents, fertilizers,pesticides, and plastics. The industry is usually divided into three major components:upstream, midstream and downstream. Midstream operations are usually included in thedownstream category. 8
  9. 9. Petroleum is vital to many industries, and is of importance to the maintenance of industrializedcivilization itself, and thus is a critical concern for many nations. Oil accounts for a largepercentage of the world’s energy consumption, ranging from a low of 32% for Europe andAsia, up to a high of 53% for the Middle East. Other geographic regions’ consumptionpatterns are as follows: South and Central America (44%), Africa (41%), and NorthAmerica (40%). The world consumes 30 billion barrels (4.8 km³) of oil per year, withdeveloped nations being the largest consumers. 24% of the oil produced in 2004 wasconsumed in the United States. The production, distribution, refining, and retailing ofpetroleum taken as a whole represents the worlds largest industry in terms of dollarvalue. WORLDWIDE OIL CONSUMPTION 60 50 CONSUMPTION (%) 40 30 Series1 20 10 0 EUROPE MIDDLE SOUTH AFRICA NORTH AND ASIA EAST AND AMERICA CENTRAL AMERICA REGIONPetroleum exports have also emerged as the single largest foreign exchange earner,accounting for 17.24 per cent of the total exports in 2007-08. Growth continued in 2008-09 with 9
  10. 10. the export of petroleum products touching US$ 18.34 billion during April-September 2008. InNovember 2008, the Cabinet Committee on Economic Affairs awarded 44 oil and gasexploration blocks under the seventh round of auction of the New Exploration Licensing Policy(Nelp-VII). The overall number of blocks brought under exploration now exceeds 200.Oil Companies, Petroleum Companies, Oil & Gas CompanyPetroleum companies, also known as Oil companies or Oil & Gas companies, have formed akey part of the global economy for the last decade, since petroleum or crude oil has becomeour main fuel source.Not only have these petroleum companies become amongst the biggest companies in theworld, but thanks to the fundamental importance of this limited resource, they have alsobecome embroiled in a complex political world of government and national objectives,international relations - and all too often, outright war.Oil companies, among the largest employers in the world, cater to the global energy demand.Their areas of functioning can be grouped into the following:  Production: This involves the extraction of crude oil from reserves, followed by its refinement in processing plants.  Distribution: The daily distribution quota is delivered to various sectors (e.g. automobiles, agriculture, residential). This is followed by the commercialization of oil products.PETROLEUM 10
  11. 11. Petroleum is a naturally occurring liquid found in rock formations. It consists of a complexmixture of hydrocarbons of various molecular weights, plus other organic compounds. It isgenerally accepted that oil, like other fossil fuels, formed from the fossilized remains of deadplants and animals by exposure to heat and pressure in the Earths crust over hundreds ofmillions of years. Over time, the decayed residue was covered by layers of mud and silt,sinking further down into the Earth’s crust and preserved there between hot and pressuredlayers, gradually transforming into oil reservoirs.The oil and natural gas industry shares a keen interest in the policy issues arena. As demandfor energy to keep our homes, vehicles, and businesses running continues to increase, sodoes our advancement in technology, allowing us to provide safe, reliable, and affordableenergy. While serious challenges face our nation on a variety of fronts, oil and natural gasindustry representatives remain actively engaged with government leaders to ensure informeddecision making so the energy needs of tomorrow are met.Exploration and Production Exploration for and production of oil and natural gas are the production of oil and natural gas are the first steps in delivering gasoline to your car, heat to your home, raw materials to business and industry, fertilizer to farmers fields, and for many other aspects of daily life. Many people areunaware of the important role that oil and gas exploration and production play intheir daily lives. Without successful exploration and continued production, ournation’s energy security and the economic prosperity that goes along with it will becompromised 11
  12. 12. FuelsFor decades, the oil and natural gas industry has been making affordable fuels thathave simultaneously improved the standard of living for American families andcontributed to a cleaner environmentIndia Petroleum IndustryThe India Petroleum Industry is a case in point for exhibiting the giant leaps India has takenafter its independence towards its march to attain a self-reliant economy.During the Independence era of 1947, the India Petroleum Industry was controlled by foreigncompanies and Indias own expertise in this sector was limited. Now, after 60 years, the IndiaPetroleum Industry has become an important public sector undertaking with numerous skilledpersonnel and updated technology that is comparable to the best in the world. The vim and theachievement during these years is the growth of productivity in petroleum and petroleum-based products. Even the consumption has multiplied itself nearly 30 times in the post-independence era. An important advancement in the petroleum industry came with the Industrial PolicyResolution, 1956 which signified the promotion of growth of industries. The ONGC, originallyset up as a Directorate in 1955, was transformed into a Commission in 1956. In 1958, theIndian Refineries Ltd., a government undertaking, came into existence. The Indian OilCompany (IOC), also a government undertaking, was set up in 1959 with the purpose ofmarketing petroleum-related products. Indian Oil Corporation Ltd. was formed in 1964 with themerger of the Indian Refineries Ltd. and the Indian Oil Company Ltd. Presently, 17 refineriesoperate under the India Petroleum Industry. 12
  13. 13. Growth of the India Petroleum Industry:In the post-independence era, India grew tremendously in terms of infrastructure in thepetroleum industry, which in turn helped increase the production of petroleum and petroleum-related products.  During 1947-57, 3 refineries were set up in Mumbai and Vishakhapatnam by transnational oil corporations doing business in Indian  During 1957-67, another 3 refineries were established in Guwahati, Barauni, and Koyali by Indian Refineries Ltd. During 1967-77. 2 more were set up in Chennai by Iranian companies and in Haldia by Indian Oil Ltd.  During 1977-87, 2 more refineries were commissioned. The one at Bongaigaon was the first to have an amalgamated petroleum refinery-cum-petrochemicals unit. The other was established at Mathura.  During 1987-97, 2 more were set up at Nagapattinam and Mangalore. During 1998-2007, refineries at Panipat and Numaligarh were set up.AVAILABILITY & UTILISATION OF NATURAL GAS 1. Natural gas has emerged as the most preferred fuel due to its inherent environmentally benign nature, greater efficiency and cost effectiveness. The demand of natural gas has sharply increased in the last two decades at the global level. In India too, the natural gas sector has gained importance, particularly over the last decade, and is being termed as the Fuel of the 21st Century. 2. Production of natural gas, which was almost negligible at the time of independence, is at present at the level of around 87 million standard cubic meters per day (MMSCMD). The main producers of natural gas are Oil & Natural Gas Corporation Ltd. (ONGC), Oil India Limited (OIL) and JVs of Tapti, Panna-Mukta and Ravva. Under the Production 13
  14. 14. Sharing Contracts, private parties from some of the fields are also producing gas. Government have also offered blocks under New Exploration Licensing Policy (NELP) to private and public sector companies with the right to market gas at market determined prices.3. Out of the total production of around 87 MMSCMD, after internal consumption, extraction of LPG and unavoidable flaring, around 74 MMSCMD is available for sale to various consumers.4. Most of the production of gas comes from the Western offshore area. The on-shore fields in Assam, Andhra Pradesh and Gujarat States are other major producers of gas. Smaller quantities of gas are also produced in Tripura, Tamil Nadu and Rajasthan States. OIL is operating in Assam and Rajasthan States, whereas ONGC is operating in the Western offshore fields and in other states. The gas produced by ONGC and a part of gas produced by the JV consortiums is marketed by the GAIL (India) Ltd. The gas produced by OIL is marketed by OIL itself except in Rajasthan where GAIL is marketing its gas. Gas produced by Cairn Energy from Lakshmi fields and Gujarat State Petroleum Corporation Ltd. (GSPCL) from Hazira fields is being sold directly by them at market determined prices. 14
  15. 15. MAJOR COMPANIES OF OIL INDUSTRY IN INDIA SET-UP COMPANIESOIL Assam, RajasthanONGC Western offshore and in other statesIPCL www.ipcl.co.in Vadodara, Nagothane (near mumbai) ,Dahej (Narmada estuary in bay of Khambhat) Rabale, Navi Mumbai (catalyst manufacturing facilityHPCL www.hindustanpetroleum.com/hp.aspx Mumbai Refinery (Maharashtra), Visakhapatnam RefineryIOC www.iocl.com/business_refineries.aspx Guwahati, Barauni, Koyali, Haldia, Mathura, Digboi, PanipatIOC Chennai Petroleum Corporation Limited (CPCL)- ChennaiSUBSIDIARIES Narimanam BRPL- BongaigaonBPCL Mumbai (Mahul)BPCL Numaligarh (Assam) Refinery Ltd (62.9% of the share)SUBSIDIARIES Kochi Refineries Ltd (Kerala)(BPCL holds 66.04% of the share)MANGALORE www.mrpl.co.inREFINERIES AND Kuthethoor P. O. Via Katipalla, Mangalore 575030, IndiaPETROCHEMICAL LTD. (MRPL)[under ONGC]RELIANCE www.ril.com/eportal/businesshome.htmlPETROCHEMICA Jamnagar: Situated on the north-west coast of India, the integratedLS refinery-cum-petrochemicals complex of Reliance is located in the state of Gujarat at village Motikhavdi, Taluka - Lalpur, District - Jamnagar. Hazira: The Reliance Industries Hazira complex near Surat in Gujarat is situated on approximately 1000 acres land near the banks of river Tapi and manufactures a wide range of Polymers, Polyesters, Fibre Intermidiates and Petrochemicals. Patalganga: On the banks of the river Patalganga, 70 kms from Mumbai. 15
  16. 16. COMPANIES MARKETING SETUP COMPANIES MARKETING THROUGHONGC & JV GAILOIL OIL ITSELF(EXCEPT RAJASTHAN THROUGH GAIL)CAIRN ENERGY LTD ITSELFGSPCL ITSELFUTILISATION OF NATURAL GAS 5. The gas produced in the western offshore fields is brought to Uran in Maharashtra and partly in Gujarat. The gas brought to Uran is utilised in and around Mumbai. The gas brought to Hazira is sour gas which has to be sweetened by removing the sulphur present in the gas. After sweetening, the gas is partly utilised at Hazira and the rest is fed into the Hazira-Vijaipur-Jagdhishpur(HVJ) pipeline which passes through Gujarat, MadhyaPradesh, Rajasthan, U.P., Delhi and Haryana. The gas produced in Gujarat, Assam, etc; is utilised within the respective states. 6. Natural Gas is currently the source of half of the LPG produced in the country. LPG is now being extracted from gas at  Duliajan in Assam,  Vijaipur in M.P.,  Hazira and Vaghodia in Gujarat,  Uran in Maharashtra,  Pata in UP 16
  17. 17.  and Nagapattinam in Tamil Nadu.Two plants have also been set up at  Lakwa in Assam and  Ussar in Maharastra in 1998-99.One more plant is being set up at :Gandhar in Gujarat.Natural gas containing C2/C3, which is a feedstock for the Petrochemical industry, is currentlybeing used at Uran for Maharashtra Gas Cracker Complex at Nagothane. GAIL has also setup a 3 lakh TPA of Ethylene gas based petrochemical complex at Auraiya in 1998-99.Natural Gas Allocation & Supply Scenario 7. As against the total allocation of around 118 MMSCMD, the gas supplies by GAIL is of the order of 63 MMSCMD spread over about 300 major consumers. Around 32% is supplied to the fertiliser sector, 41% to power, 4% to sponge iron and the balance 23% (including shrinkage) goes to other sectors. 8. Around 8.5 MMSCMD of gas is being directly supplied by the JVs/private companies at market prices to various consumers. This gas is outside the purview of the Government allocations.OPPORTUNITIES FOR IMPORT OF NATURAL GAS TO INDIA THROUGHTRANSNATIONAL GAS PIPELINES.  Iran-Pakistan-India (IPI) Pipeline Project  Myanmar-Bangladesh-India Gas Pipeline Project.  Turkmenistan-Afghanistan-Pakistan (TAP) pipeline 17
  18. 18. Liquefied Natural Gas (LNG) 9. Natural gas at -1610C transforms into liquid. This is done for easy storage and transportation since it reduces the volume occupied by gas by a factor of 600. LNG is transported in specially built ships with cryogenic tanks. It is received at the LNG receiving terminals and is regassified to be supplied as natural gas to the consumers. LNG projects are highly capital intensive in nature. The whole process consists of five elements:- 11 Dedicated gas field development and production. 11 Liquefaction plant. 11 Transportation in special vessels. 11 Regassification Plant. 11 Transportation & distribution to the Gas consumer. LNG supply contracts are generally of long term nature and the prices are linked to the international crude oil prices. However, the LNG importing countries in recent times had started asking for medium/short term contracts with varying linkages.LNG Imports to India 2. The LNG trade started in mid 60s and has increased rapidly. In 1992 it was around 80 Billion Cubic Metres (BCM) per annum and crossed the 100 BCM mark in 1996. World trade in LNG is currently in the range of 150 BCM. The major exporting countries of LNG are Algeria, Qatar, Indonesia, Malaysia, Australia, whereas, the major importers are Japan, South Korea, Taiwan and Western Europe. 3. Geographically, India is very strategically located and is flanked by large gas reserves on both the east and west. India is relatively close to four of the worlds top five 18
  19. 19. countries in terms of proven gas reserves, viz. Iran, Qatar, Saudi Arabia and Abu Dhabi. The large natural gas market of India is a major attraction to the LNG exporting countries. In order to encourage gas imports, the Government of India has kept import of LNG under Open General License (OGL) category and has permitted 100% FDI.LNG Projects 4. Petronet LNG Limited (PLL), a JV promoted by GAIL, IOCL, BPCL and ONGC was formed for import of LNG to meet the growing demand of natural gas. PLL has constructed a 5 MMTPA capacity LNG terminal at Dahej in Gujarat. The terminal was commissioned in February 2004 and commercial supplies commenced from March 2004. 5. Shells 2.5 MMTPA capacity LNG terminal at Hazira has been commissioned. Dabhol LNG terminal (total 5 MMTPA capacity, with about 2.9 MMTPA available for merchant sales) may also become operational by 2006 subject to availability of LNG for the project. LNG terminals at Kochi in Kerala, Mangalore in Karnataka and Krishnapatnam/Ennore in Tamil Nadu are also under active consideration and may fructify in next 4-5 years time. 6. The price of LNG for the Dahej project is linked to the JCC crude oil price. It has a fixed price for the first five years, and a floating floor and ceiling price thereafter. At present the selling price of LNG in Gujarat is $4.87/MMBTU (Rs. 8777/MCM) and outside Gujarat is $4.88/MMBTU (Rs. 8800/MCM). At this price, LNG is comparatively cheaper than alternative fuels/feedstocks e.g. naphtha, Furnace Oil, LSHS, Light Diesel Oil, LPG, etc. 19
  20. 20. GAS PRICING Prior to 1987, gas prices were fixed by ONGC/OIL. The price is being fixed by Government w.e.f. 30.1.1987. The price of APM gas of ONGC and OIL was last revised effective 1.7.2005. The salient features of the revised pricing order effective 1.7.2005 are as follows:-i. ONGC and OIL produced about 55 MMSCMD APM gas from nominated fields. The determination of producer price for this gas will be referred to the Tariff Commission. Till the Commission submits its recommendation and a decision is taken thereon, the consumer price of APM gas will be increased from Rs.2850/MCM to a fixed price of Rs. 3200/MCM on adhoc basis. ii. It has been decided that all available APM gas would be supplied to only the power and fertilizer sector consumers against their existing allocations along with the specific end users committed under Court orders/small scale consumers having allocations upto 0.05 MMSCMD at the revised price of Rs. 3200/MCM. This price is linked to a calorific value of 10,000 K.cal/cubic metre. However, the gas price for transport sector (CNG), Agra-Ferozabad small industries and other small scale consumers having allocations upto 0.05 MMSCMD would be progressively increased over the next 3 to 5 years to reflect the market price. iii. The gas supplies through GAIL network to non-APM consumers will be at the price at which GAIL buys from JV producers at landfall point, subject to a ceiling of ex-Dahej RLNG price of US$3.86/MMBTU for the year 2005-06. For the North- East region, Rs.3200/MCM considered as the market price for the year 2005-06. iv. The price of gas for the North-Eastern region will be pegged at 60% of the revised price for general consumers. Thus, the consumer price for the North-East region will increase from the existing price of Rs.1700 to Rs.1920/MCM. v. Subject to the determination of producer price, based on the recommendations of the Tariff Commission, any additional gas as well as future production of gas 20
  21. 21. from new fields to be developed in future by ONGC/OIL will be sold at market- related price in the context of NELP provisions. Oil CostsOil costs include expenditure on exploration, extraction, refining and transportation. The oilindustry is highly capital intensive. The investment to revenue ratio is about 8% for the entiresector and approximately 17% for oil producing companies.The demand and supply cycle also introduces volatility into the oil trade. Demand grows onaverage by 2% each year, but will spike with economic growth and political threats, and dropwhen recession hits. The lifespan of any oil field is about 15-20 years and requires significantupfront capital investment. Hence, in order to meet the escalating demand, oil companies haveto continuously search for new fields and take calculated risks in their development based onexpected oil prices over the lifetime of the oil field.Oil Costs: TypesThe major types of oil costs can be categorized as:v Exploration costs: The costs associated with exploration vary significantly, depending upon the scope of a particular project and the region. The exploration stage includes the cost of conducting geological surveys and scientific studies (both preliminary and advanced). Even unsuccessful explorations involve the cost of seismic programs and drilling dry wells, which can vary between $5 million and $20 million. Drilling expenses are the most dominant factor, which could be as high as several millions of dollars.v Development costs: These include the cost of developing the extraction site, such as surface installations, subsea installations and other production units. This stage is also 21
  22. 22. characterized by heavy labor costs. The magnitude of the project defines the structure and equipment for installations.v Treatment costs: Crude oil has to be refined for obtaining oil products. The setting up of refineries requires huge installations. Also, the refining process includes heavy machinery, which adds to the cost of oil in the international market.v Transportation costs: The oil industry is one of the biggest consumers of steel required for export pipelines and tankers. There are more than 10,000 oil tankers in the world, with some of them having a capacity of 350 million tons. For an offshore site, export pipelines have to be laid down, whereas an onshore oil field uses oil tankers. Transportation costs are less for countries that produce oil by themselves. There it includes only the cost of transporting oil from the shore to the refinery and further to the distribution centers. However, for countries that import oil, transportation also includes shipping of the refined oil.Apart from these visible costs, there are several indirect costs, such as hiring equipment ofproduction, consumables at oil sites and services.Oil PricesA review of historical oil prices shows that oil displays wide price swings when markets sufferfrom scarcity or oversupply. The price cycle of crude oil ranges from a small duration to severalyears.Major Events: Historical Oil PricesFrom 1948 to 1970, oil prices remained stable at around $3 per barrel. A major developmentwas the formation of OPEC in 1960; consisting of Iraq, Iran, Saudi Arabia, Kuwait andVenezuela.v Oil Crisis (1973-1978) 22

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