Recommended
More Related Content
What's hot
What's hot (18)
Similar to Bargaining power in oil industry, states or mncs?
Similar to Bargaining power in oil industry, states or mncs? (20)
Recently uploaded
Recently uploaded (20)
Bargaining power in oil industry, states or mncs?
- 1. Critical Analysis of Global Business Environment in the Oil Industry GROUP MEMBERS Linda Boahemaa Apraku Yiting Lu Jingxian Bian Yanrong Zhao Yu Han Siao 8332710 8319607 8325354 9062175 8602749
- 2. Outline Key features of the oil industry Main players and trend in the oil industry Challenges of the oil industry Strategies Conclusion and recommendations Reference Q&A
- 3. KEY FEATURES OF OIL INDUSTRY Highly engage with global economy Majority of the world’s oil is owned by state from non-Western countries (Fryans 2009) Capital intensive Technology intensive A mix of private and stated-owned firms (transnational) Bargaining power between states and Multi National Corporations(MNCs). Source: Dicken (2015)
- 4. Source: Dicken (2015) BARGAINING POWER BETWEEN MNCS AND STATES
- 5. WHO ARE THE MAIN PLAYERS? Source: from energydigital.com (2017) 0 50 100 150 200 250 300 350 400 market share Top 5 oil companies in the world based on market share ($) Exxon Mobil (US) Petro China (China) Chevron (US) Total (France) Sinopec (China)
- 6. GROWTH OF THE OIL INDUSTRY Source: Maestro et al. 2018
- 7. CHALLENGES
- 8. High transportation and extraction cost involved e.g. Large oil companies have to invest $680 billion a year to maintain current production levels Source: Dicken (2015)
- 9. High competition and sustainability of the oil industry
- 10. Fluctuation of oil prices Source: Sharabura et al. (2018), World Bank (2018) World GDPOil price Financial crisis
- 11. Political instability Change in government and their policies IRANUSA Obama Trump
- 12. STRATEGIES
- 13. Vertical integration Development of new technology
- 14. Concentration on oil production in the short term Diversification into other energy sources (Go beyond petrol) in the long term
- 15. OPEC should take responsibility to keep oil prices stable OPEC should keep a good balance between the demand and supply of oil E.g. supply exceeds demand, oil prices fall E.g. demand exceeds supply, oil prices rise Source: Trefis (2018) SupplyDemand
- 16. Enter new market in developing countries The vital role of OPEC
- 18. Population by Region Unit: millionsSource: from OPEC WOO 2018, Table ES 1 5.9 billion to 7.4 billion (population) Demand of overall energy
- 19. Energy Demand by Region Increasing demand in developing countries Source: from OPEC WOO 2018, Table ES 3 Unit: million barrels of oil equivalent a day (mboe/d)
- 20. Developing countries primary energy demand by fuel type Unit: million barrels of oil equivalent a day (mboe/d) mboe/d Growth(%pa) 2015 2020 2030 2040 2015-2040 Oil 40.1 45.1 54.1 61.7 1.7 Gas 21.2 25.7 36.8 47.6 3.3 Other renewables 1.9 3.5 8.5 14.5 8.5 Source: based in OPEC WOO 2018, Table 2.4 Renewable energy demand
- 21. Unit: million barrels of oi l equivalent a day (mboe /d) Source: from OPEC WOO 2018, figure 3.11 Oil demand Average oil demand growth
- 22. Merge with other renewable companies Cooperate social responsibility (CSR) BP/Shell are the leader of CSR (Fryans 2009) Reduce emission of CO2
- 23. REFERENCES Dicken, P. (2015) Global Shift: mapping the changing contours of the world economy. 7th edn. London: Sage Publications Maestro, A., Branson, D., Biscardini, G. and Morrison, R. (2018) Oil And Gas Trends 2018- 19 [online] available from <https://www.strategyand.pwc.com/trend/2018-oil-gas> [20 November 2018] Sharabura, S., Handscomb, C. and Woxholth, J. (2018) The Oil And Gas Organization Of The Future [online] available from <https://www.mckinsey.com/industries/oil-and-gas/our- insights/the-oil-and-gas-organization-of-the-future> [20 November 2018] Trefis (2018) OPEC's Influence On Oil Prices Waning [online] available from <https://www.forbes.com/sites/greatspeculations/2017/06/02/opecs-influence-on-oil-prices- waning/#313d6a5e4eb0> [23 November 2018] WOO 2018 (2018) available from https://woo.opec.org/chapter.html?chapterNr=2 [23 November 2018]
- 24. Frynas, J. (2009) "Corporate Social Responsibility In The Oil And Gas Sector". The Journal Of World Energy Law & Business 2 (3), 178-195 WOO 2018 (2018) available from <https://woo.opec.org/chapter.html?chapterNr=1&tableID= 54> [23 November 2018] WOO 2018 (2018) available from <https://woo.opec.org/chapter.html?chapterNr=2&tableID= 9>[23 November 2018] WOO 2018 (2018) available from <https://woo.opec.org/chapter.html?chapterNr=3&chartID= 47>[23 November 2018] WOO 2018 (2018) available from <https://woo.opec.org/chapter.html?chapterNr=3&chartID= 39>[23 November 2018]
- 25. THANK YOU
Editor's Notes
- As you can see here below that the value chain of oil industry from exploration to consumption. Here, we focus more on extraction and transportation. Extracting oil involve a lot of capital such as good machaine to get oil out of ground. Other would be cost of transportation. You can easily see that there are three to four processes engaged with transportation before consumption.
- has impact on the oil industry E.g. US and Iran
- like China where the oil is highly demanded and the government is stable in coordinating and unifying the policies on oil exporting from member countries to other states
- Royal Dutch/Shell and BP have specifically been recognised as leaders in corporate citizenship worldwide. They spearheaded major international CSR initiatives such as the Global Compact and the Global Reporting Initiative (GRI). They have become significant players in renewable energy and have professed to combat carbon dioxide emissions in order to minimize their contribution to global warming. But other companies appear to have done less.