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

1. Petroleum
From A Marketing Perspective
Øyvind Hansen, Mickey (Bar) Otterlei
BØK320 Markedsføring, Høst 2013, Høgskolen i Molde

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. 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. 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. When Did Oil Become Essential?

6. A World Of Petroleum Seekers
http://labs.wnstnsmth.net/worldoil/
The countries who are not in the game, wish they were
Those who are, have a lot of power over the rest

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. 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. 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. 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. Petroleum Supply Chain
Exploration
Crude
Pipelines
Production
Shipping
Storage Terminals
Product
Pipelines
Trading
Distribution
retailer
s
Commercial Markets
Industrial

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. 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. 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. 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. Gazprom Growth Strategies
Existing products, new markets

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. 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. 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. Lukoil Marketing Structure

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. 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. ExxonMobil Market Offering

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. Chevron Market Offering
The South African
Customer Value
The New Zealand
Customer Value
Same
Products,
different
continents

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. How Much Of It Do We Have

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. 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. While Oil Giants Use CSR:
Monitor
Petroleum
Companies
Go Green
Use Green
Technologie
s
Recycle
Create Safety
Regulations

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

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