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Petroleum industry final


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Marketing analysis of the big players in the petroleum industry, 2013.

Published in: Marketing
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Petroleum industry final

  1. 1. Petroleum From A Marketing Perspective Øyvind Hansen, Mickey (Bar) Otterlei BØK320 Markedsføring, Høst 2013, Høgskolen i Molde
  2. 2. Petroleum Industry Portfolio We don’t need marketing really; you will buy our products anyway ▪ No need to prove our products ▪ No need to lure you into buying ▪ It is a supplier’s market ▪ You all need petroleum for transportation, medicine, agriculture, plastic products, and this is just to start with ▪ You are in our pockets Do You Have A Driving License?
  3. 3. So What Is Petroleum? Thick, flammable, yellow to black colored mixture of gaseous, liquid and solid hydrocarbons Refined natural gas, gasoline, naphtha, kerosene, fuel, lubricating oils, paraffin wax, & asphalt Fossils are pressed between crusted hot layers for millions of years It means that it will run out one day, as all natural resources when being over exploited
  4. 4. How Long Have We Used It? Babylonians Building Material Chinese Heating Egyptians mummification BUT The first oil company was established in 1858; Seneca Oil Company started drilling in Titusville Pennsylvania, And oil companies started popping out everywhere.
  5. 5. When Did Oil Become Essential?
  6. 6. A World Of Petroleum Seekers The countries who are not in the game, wish they were Those who are, have a lot of power over the rest
  7. 7. The Petroleum Giants SAUDI ARABIA • Biggest oil company in the world • 12,5 mil. barrels a day • Owned by the state of Saudi Arabia RUSSIA Gazprom: • 9,7 mil. barrels a day • Owned by the Russian government Rosneft: • 2,6 mil. barrels a day • Owned by the Russian government USA ExxonMobil • Largest publicly traded oil company in the world • 5,3 mil. Barrels a day Chevron • 3,5 mil. barrels a day • Internationally involved in exploration Lukoil • Private ownership • 2,2 mil. barrels a day But there are many more...
  8. 8. The World Leaders LUKOIL ROSNEFT 2.3 2.2 2.2 2.1 2 1.9 1.6 1.4 12.5 ARAMCO 2.3 9.7 GAZPROM 2.6 2.6 2.6 6.4 2.7 2.9 5.3 3.2 4.4 3.5 3.6 3.9 4.1 ExxonMobil CHEVRON Saudi Aramco PetroChina Chevron Total Qatar Petroleum ConocoPhillips Gazprom BP Kuwait Petroleum Corp. Petrobras Lukoil PDV National Iranian Oil Company Royal Dutch Shell Abu Dhabi National Oil Co. Rosneft ENI Sinopec ExxonMobil Pemex Sontrach Iraqi Oil Ministry Statoil Nigerian National Petroleum
  9. 9. We Control 44% Of The World’s Oil The rest of the world 53% Saudi Aramco 15% Gazprom 12% The other 18 biggest companies, and the small players we do not hear so much about ExxonMobil 7% Chevron 4% Statoil 3% Lukoil 3% Rosneft 3%
  10. 10. How Do We Play The Game? • We create joint ventures We all have businesses with the others • We outsource our marketing We have companies that do the marketing for us • By gathering information We must be updated all the time about what is going on with the other players in the market • By thinking of our PR nonstop We must take the green parties off our backs
  11. 11. Petroleum Supply Chain Exploration Crude Pipelines Production Shipping Storage Terminals Product Pipelines Trading Distribution retailer s Commercial Markets Industrial
  12. 12. Market/Product Grid A new product is spread at almost all the markets simultaneously, which means no competitive advantage to no one through here..
  13. 13. Saudi Aramco Joint Ventures 2002 2004 2005 2007 • 50% shares in Motiva (belongs to chevron), making Saudi Aramco a Co-Owner with Shell • 10% shares in Showa Shell Sekiyu K.K., a Royal Dutch/Shell refining & marketing arm in Japan. • Developing an integrated refining & petrochemical complex with Sumitomo Chemical Co. (Japan) • Agreements with ExxonMobil, Sinopec Corp & the Fujian Provincial Government of China to form 2 joint ventures: • Fujian Refining and Petrochemical Co. Ltd. (FRPC) • Sinopec SenMei (Fujian) Petroleum Co. Ltd. (SSPC), a marketing venture. 2011 • Formed the Sadara company with Dow Chemical Company (USA). 2012 • The Japanese-Saudi Yanbu Aramco sinopec refining company was founded.
  14. 14. SaudiAramco CSR Activities “We at Saudi Aramco are constantly seeking to enhance our positive impacts on the Kingdom’s economy, its IT communities and young people, and Schools, A wards, Stip its natural ends, Free environment. Education While supplying energy to the world is our core purpose, our sense of civic duty and mission extend far beyond running a successful business.” Ras Tanura Community Project Responsible Competitiveness Encouraging new businesses to be friendly to society, efficient and to deal fair trading ”we remain committed to reducing the impact we have on the environment”
  15. 15. Gazprom Joint Ventures 2001 • Gazprom, Rosshelf and Rosneft signed an Agreement on joint development of the Prirazlomnoye oil field located on the Pechora Sea shelf. 2002 • Gazprom, Royal Dutch Shell and ExxonMobil signed in Beijing a Framework Agreement with the Chinese gas company PetroChina 2003 • Gazprom, Rosneft and Surgutneftegaz signed the Agreement of cooperation to set up a consortium 2008 • Shareholders Agreement among Gazprom, Total and StatoilHydro on establishing the special purpose company Shtokman Development AG 2009 • Implementation Agreement setting the terms for Gazprom to acquire a 51 per cent stake in SeverEnergia among Gazprom, Eni and Enel; 2011 • Agreement on Gas Supply between Gazprom and LUKOIL; 2012 • Agreements with Japanese Far East Gas, PertroVietnam, Novatek, South Stream Slovenia and Rosneft
  16. 16. Gazprom Growth Strategies Existing products, new markets
  17. 17. Rosneft Joint Ventures 2006 • An agreement with CNPC for a joint venture in Russia, with BP for a development of the Sakhalin shelf, strategic partnership with Gazprom 2008 • Commercial oil production begins in east Siberia, with TNK-BP 2010 • Acquisition of 50% shares on Ruhr Oel GambH was reached with National Oil Company Of Venezuela 2012 • Agreement with BP regarding 5,66% Rosneft shares • Strategic cooperation with ExxonMobil and Gazprom for west Siberia joint venture • Agreement on ExxonMobil participation in Arctic research with Gazprom • Joint venture with PDVSA (Venezuela) for production of crude oil • 25 years contract was signed with INTER RAO ES
  18. 18. Rosneft SWOT Analysis Strength Weakness • Financial Performance • Assets Portfolio • Refineries Old & Not Efficient • Restricted Autonomy • Strong Domestic Rivals • Under OPEC Governing Opportunities Threats • Upgrading Refineries • Strategic Ventures with ExxonMobil • Joint Ventures in Venezuela Under Governmental Threat • Intense Competition Both Domestic & Internationaly
  19. 19. Lukoil Joint Ventures 2011 • Acquisition of 11% shares in ERG, making Lukoil owner of 60% shares in the ERG joint venture. • Agreement with the Romanian national Agency Of Mineral Resources to research the Black Sea for 80% of the shares. • Long termed partnership agreement signed with Rosneft for development, research and exploration of Rosneft sites on the Russian Shelf. 2012 • Strategic partnership with Rosatom • Aquisition of 46 stations in Holland and 13 in Belgia • Production in Venezuela as part of the national Petroleum consortium 2013 • • • • Aquiring 18,75% shares in Iraq production, from Statoil Aquiring 100% SAMARA-NAFTA Joint venture with the french SNF-SAS Aquisition of 65% shares of production and development project in Guinea, from a private Nigerian company
  20. 20. Lukoil Marketing Structure
  21. 21. ExxonMobil Joint Ventures 1999 2005 2010 2011 • Exxon and Mobil joined to create the ExxonMobil cooperative • Expanding development in north offshore field in Qatar, as part of joint venture with Qatar Petroleum • Finalizing agreement with XTO Energy Inc. for development and production of unconventional resources. • Leading a build and deployment response system to discover and capture contained oil in the gulf of Mexico as part of a joint venture with Chevron, ConocoPhillips and Shell • Joint venture with Rosneft for exploration of the Russian shelf and Siberia • Cooperation agreement with Rosneft, covering 31 million acres in the Kara Sea. Exxon Neftegas LTD, cooperation between ExxonMobil, Rosneft, Japanese company Sakhalin Oil, RN-Astra and Sakhalinmorneftegas-Shelf; & the Indian state-owned oil company ONGC Videsh Ltd.
  22. 22. ExxonMobil Growth Analysis Our leading business segment and money maker: We spend a fortune over this  The chemicals give us high profitability while the investment is comparatively low  Conventional Oil/Natural Gas Exploration & Production Chemicals Gas Exploration & Production, Unconventional E&P Refinery & Manufacturing Power & Coal Transportation Eventually we do have hopes for this section, because we expect it to become profitable in a few decades We really don’t like getting our hands dirty, so.. Why transport oil or refine it when there are others that can do it for us?
  23. 23. ExxonMobil Market Offering
  24. 24. Chevron Joint Ventures 2001 • Merged with Texaco to create ChevronTexaco Corporation • Joint venture with Phillips66 “The chevron Corp. & Phillips Petroleum company” 2005 • Changed name to Chevron Corporation, acquired Unocal Corp. (Union Oil Company Of California) 2006 • Joint venture with Los Alamos National Laboratory 2011 • Acquiring Atlas energy for 3,2 billion dollars 2013 • Interest in the joint-venture of Angola LNG, along with Sonangol with a 22.8% interest and subsidiaries of Total, BP and ENI, each with a 13.6% interest. • Joint-venture arrangement with the Nigerian National Petroleum Corporation (NNPC). • Chevron’s China subsidiary has entered into production sharing contracts (PSC) with China National Offshore Oil Corporation (CNOOC)
  25. 25. Chevron Market Offering The South African Customer Value The New Zealand Customer Value Same Products, different continents
  26. 26. What About Norway? • Statoil has operations in 34 countries, and 23000 employees • Production of 2,1 million barrels per day, operating 7 pipelines • The 3rd biggest sales company of crude oil in the world • 500 retail stations in Norway, with a market share of 34% • Joint agreement with NAF, which gives 500000 members discounts on fuel • Statoil are marketing 2 gasoline types and 1 type of diesel • They market bioethanol E85 as well, which consists of 85% ethanol and 15% gasoline • All the Statoil’s have added up to 5% biofuel to the regular gasoline and 7% to diesel
  27. 27. How Much Of It Do We Have
  28. 28. Why Is CSR So Important? In 1989, the Exxon Valdez spilled 750000 barrels into the ocean, because of an unprofessional crew and insufficient equipment and safety regulations. 20 years after
  29. 29. The Worse Oil Spills In History 1 1991 - Gulf War – Kuwait, 10,3 mil. barrels burned by the Iraqis 5 1991 Liberia’s tanker ABT Summer, next to Angola, 1,92 mil., an explosion 2 1980 - Ixtoc I Oil Well (owned by PEMEX) – Gulf of Mexico, 3,3 mil. pressure imbalance 6 1983 – Norwuz oil field, 1,9 mil. colission with a supertanker. 3 1979 - Atlantic Empress/Aegean Captain, 2,2 mil. After collision between the 2 ships next to Tobago. 7 1983 - Castillo de Bellver, Spanish tanker caught fire, 1,8 mil. 4 1992 - Fergana Valley, Usbekistan, 2,1 mil. 8 1978 – Amoco Kadiz, 1,6 mil. Crew lost control of the ship
  30. 30. While Oil Giants Use CSR: Monitor Petroleum Companies Go Green Use Green Technologie s Recycle Create Safety Regulations
  31. 31. Our Conclusions The petroleum industry is using one of earth’s resources and is a risk to our future Petroleum is needed in many other industries and we cannot simply stop using it It is the mean for motoric activities in so many areas, that we must conclude: We have no choice but to buy it It is and will be a vendor’s market CSR, Market Offerings, PR, and any other mean of being «nice» to us does not matter and is not really needed – they got us in their pockets. The real game is among themselves, and this is the only thing that matter to them
  32. 32. Bibliography 1. Strategic and Financial analysis In The Oil 18. Industry, Dejan Talevski, Andre Diogenes De lima 19. 2. Global Gas and Oil Industry, IRC 20.,com 3. CSR in Saudi Arabia, Oslo University, Faculty Of 21. Theology, Magnus Gravem 22. Oil and gas reality check 2013, Delloite 4. 23. The gas to liquids GTL markets, 2013 - 5. 6. 7. 8. 25. 9. 26. 10. 2023, 24. The global oil industry, Kelley Sheehan, Kailyin Young, Caleb Ganzer, Caroline Bobrecki 11. 27. 12. 28. 13. 29. 14. 15. Everything you need to know about the oil and natural gas industry industry and taxes, API Energy 16. 17. oil-gas-exploration-production.html 30. 31. THE 20 LEADING COMPANIES IN SHALE GAS 2013, Competitive Landscape Analysis, Visiongain * 32. 33. 34.