Introduction to the Petroleum Industry Assignment

Introduction to the Petroleum Industry Assignment Words: 3809

Petroleum being the raw material for many chemical products, including industrial, solvents, fertilizers, suicides, and plastics. Petroleum is of vital importance to many industries, and is of import for the maintenance of industrialized civilization itself, and thus is a critical concern for many nations. Oil also accounts for a large percentage of the global energy consumption, ranging from a low of 32 percent for Europe and Asia, up to a high of 53 percent for the Middle East.. The Indian Petroleum Industry Indian Petroleum Industry began its Journey during the fiscal year 1890 in the in a place called Digit.

The production of petroleum along with the simultaneous exploration of new sites was mostly restricted to North-Eastern India up to the asses. But the industry saw a new change with the discovery of Iambi High. Indian Petroleum Industry was entirely sponsored by the state and was under the management control of the government . After the introduction of the Liberalizing- Privation-Globalization (L-P-G) policy in the month of July, 1991 , the government allowed the Indian Petroleum Industry to go into private as well as government- private Joint ventures.

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The deregulation process In the Indian Petroleum Industry got a boost In the year 1997 when the decision was taken that the process of fertilization and deregulation would be increased in this industry and all the regulations would become useless from the month of April in the year 2002. Along with globalization, the rate of growth of energy consumption increased at the rate of six percent on an yearly basis specifically between the period 1991 and 2001. The demand for petroleum products also increased at an annual rate of 5. 5% during processing (revolving around 5. %). But the Petroleum Industry took a hit in the year 2001 when the Indian economy observed a slow down in its economic rate along with the general industrial output. Hindrances related to infrastructure also came up as serious problems in the path of Indian Petroleum Industry Evolution of petroleum indenturing the late 19th century, when petroleum was first found at at Make, in Assam in 1889, it marked a point of revolution in the industry. At the time of independence exploration in oil and production was done mostly in North-Eastern region, particularly Assam.

At that time Indian’s domestic petroleum production was a little over 250,000 tones per annum. Considering the importance of petroleum , the Indian government under its Industrial Policy Resolution of 1954, declared that petroleum would be considered as a major sector in the country The major oil reserves of the India are situated at Iambi high (Iambi), Upper Assam (Assam), Cymbal (Gujarat), Krishna-Goodyear basin (Andorra Pradesh), Caver basin (Tamil Undue), England and Raunchy Pradesh. Indian oil refining sector The major in the oil sector in India are situated in .

Indian Oil Corporation (Public sector) Oil and Natural Gas Corporation (Public sector) Reliance India Ltd (Private sector) Cesar Oil Refinery (Private sector) Brat Petroleum Corporation Ltd (Public sector) Hindustan Petroleum Corporation Ltd (Public sector) Mangrove Refineries and Petrochemicals Ltd (Public sector SOOT Analysts Strength – Strong economic growth Alternative options Improved international presence Scope of conservation The petroleum industry should use its increasing economic strength and International image to enhance our supply set-ups through sea routes or the pipelines, both in terms of quantity and quality..

Finances should be invested in either buying or improving better technologies to produce surplus energy, and the growing international image can be used to create regional bodies to enhance not only co-operation in securing energy but also in controlling terrorism. Investing more in environmental friendly energy Weakness – The industry is extremely dependent on impersonated late in counterrevolutionaries creates by Gee-Politically which is self hairsplitting more in exploring crude oil and natural gas.

Obtaining new sources through practical policies and re-designing policies to increase supply chains, sense of resourcefulness’s improvementlnterdependence on inconsideration the modes of supply Threats – Saturation of Production resourcefulness’s demanded of regional institutionalizes from terrorists Environmental impact and environmental protection regulations Company-I Brat Petroleum Corporation Limited Brat Petroleum Corporation Limited is owned by Government of India.

It has a country wide network of 63 depots operated by company, 33 installation ; oil terminals, LIP bottling plants and 19 Aviation service stations which provide logistical support for 7077 petrol stations, 1008 OLD or Kerosene dealers and 124 LIP distributors. It also provides fuel to several domestic and international airlines and a lot of other industries. Special hierarchical division of Becalm this special pattern customer and business process are at focus. According to this structure, five Subs I. E.

Lubricants, Retail, Commercial and Industry, Aviation and LIP come under director (marketing). The and R;D are under director (refineries). Each of these Subs would have its own HER, finance, marketing, etc. Imports and exports of BPCS Importable imports various products depending upon the domestic demand and supply circumstances . BPCS imports its LIP requirements mostly from the Middle East. At times there are also requirements for Gasoline, Gas-oil, Base Oil and Kerosene. Exportable exports a range of products from its refineries. The products which are exported are Naphtha,Fuel Oil, and Base Oil.

Products exports are done on both Federal Regulation and FOB (Freight on Board) basis Strengths:Has a strong brand name and presence all over Indigene of Indian’s largest state owned gas and oil company Both refining and retailing of petroleum’s structural patternDecentralization of management Weakness:losses pertaining to the amounts liturgically in managing a large number of employees Opportunities:lancer’s in prices of fuel, Lancashire in natural gas meretriciously of more oil Wellingtons of export market Threats:Rules and regulations of governments competition from competitors Conscious efforts of BPCS towards overall progress has paid off quite well..

The following is a list of the achievements of BPCS BPCS in the fortune 2011 global 500 logistical receives “Best ALMA Excellence Award 2011 for PUBLIC SECTOR” in Indian Subcontinent’s Refinery bags Excellence Award for environment careerism Minister Inaugurates World Class Bind Refinery’s Exhilarates with Three Pottered Earthwards Lauded for Performance Excellences Stands Tall as a Power Brand Company-2 Hindustan Petroleum Corporation Limited(HP) Company Analysis Company Description HP is a Government of India Enterprise with a Invariant Status, and a Fortune 500 and Forbes 2000 company, with an annual turnover of RSI. Scores and sales/ income from operations of RSI Scores (IIS$ 31 ,546 Millions) during FYI 2010-11, having about 20% Marketing share in India among Us and a strong market infrastructure.

Heap’s Crude throughput and Market Sales are 14. 5 Million Metric Tones (MET) and 27. 03 MET respectively in the same period. HP is one of the largest integrated Public Sector Units, which is engaged in the process of refining Crude Oil and marketing a range of petroleum products like Petrol, Diesel, Lube Oil, LIP , Kerosene, Asphalt, branded products like Power, Turbojet, naphtha, TAFT (Aviation Turbine Fuel) throughout India and at certain foreign countries. A lot of these products are exported to other countries. HP operates two important Metric Tones Per Annum (META) capacity and the other in Visualization, with a capacity of 8. 3 META. HP holds an equity stake of 16. % in Mangrove Refinery ; Petrochemicals Limited, a sophisticated modern refinery at Mangrove with a capacity of 9 META. Apart from that HP is constructing a 9 META refinery at Bathing, in the state of Punjab, Initial Energy Investments Pat Ltd as its partner.. HP also operates the largest Lube Refinery in the country producing Lube Base Oils of international standards, with a capacity of 335 TM. This Lube Refinery accounts for over 40% of the Indian’s total Lube Base Oil production. General Information: Location of Headquarters The Hindustan Petroleum Corporation Limited has its Headquarters located at Petroleum House, Smashed Data Road, and two main oil refineries in Iambi as well as Physiotherapist.

The company is registered by the government and was founded in the year 1976 after the amalgamation of foreign oil companies SEES and Caltech, which were taken over by the Government of India in 1974 and 1976 respectively. HP is managed by a Board of Directors. Currently there are 11 Directors, with the Chairman and Managing Director as the head of the Corporation. The Board consists of 4 full time Directors also called Functional Directors – Director Marketing, Director Human Resources, Director Refineries, and Director Finance. In addition, two part time Directors represented by the Government of India, through Ministry of Petroleum & Natural Gas, four part time Independent Directors, also called Invariant Directors are on the Board. All these six Directors are nominated by the Government of India.

Financial Performance of the company Total sales turnover of the company for the financial year 2011-12 is RSI. 185087. 26 scores which is almost 50,000 scores than last financial year. This is a major move by HP in terms of progress Net profit comes to 175. 96 scores which is very less compared to last year’s profit and hence comparatively the company has not earned such this year Segment wise performance of the company is still not published by the company. SOOT analysis of HP Strengths . One of its major strength is the support it receives from the Governments. Prices depends on the rate in International market and therefore it has no competition in terms of pricing.

The percentage of profit is low but steady and the profit margin is always stabilized. 4. Country’s largest lube refinery gives it the major advantage in competition. 5. Holds petrol pumps throughout the country giving it wider connectivity with citizens and edge over competitors. Weakness . Requirement off large capital and a high level of planning before setting up. 2. The need to monitor prices regularly and deal with heavy losses sometimes mainly due to international pressures. 3. A very highly sophisticated level of infrastructure and technology is required to extract and refine oil. 4. As it is owned by the government, it cannot take certain crucial decisions without the supervision of government. Attract capital required for high investment capital projects. 2. To come out with a environmental friendly alternate solution to petroleum in order to stabilize the prices. 3. Develop projects within the city to facilitate better connectivity. Threats . Major threat to all the oil companies is the international conflict which can lead to drying up of the oil supplies and thus bringing the economy to a complete stand-still. 2. Research and exploration projects which have very low chances of success lead to a huge loss in finances Various strategies employed by the company in past 2 years. Hierarchical changes . Ms Nisei Vacuumed took charge as Director – Marketing effective July 04, 2011.

Prior to this she was the Executive Director (Marketing Co-ordination) of HP. She took over the post which was left vacant by Mr.. S. Roy Chuddar as he became the Chairman and Managing Director of the company in August 2010. Mr. S. K. Rangoon Joined the HP board as an Independent Director effective January 10, 2011. He also holds Directorships in Axis Bank, Naively Lignite Corporation Ltd. , Shipping Corporation Ltd. , Jubilant Industries Ltd. , Sandal Power Ltd. And AC Ltd.. Mr.. Nail Razzed Joined the HP board as an Independent Director effective January 10, 2011. Shari Nail Razzed was Secretary to the Government of India, Ministry of Power during 2007-08.

He has led various significant assignments in the Government of Harlan, and the energy sector in the Government of India, including that of Additional & Special Secretary with the Ministry of Petroleum & Natural Gas. . Business divisions HP is currently taking a major decision in regard to setting up an oil refinery in Barber at Restaurants. Presently it holds two refineries in Iambi and Physiotherapist. This decision by HP is seen as an expansion strategy by other competitors. The pollution board has informed HP to cut 30% production with respect to oil refinery in Polyphosphates on account of massive amounts of elution . Regional strategies Heap’s vast marketing network consists of 13 Zone offices in major cities and 101 Regional Offices.

This in final is the analysis of Hindustan Petroleum Corporation Limited. Company-3 Oil and Natural Gas Corporation (ONCE) Oil and Natural Gas Corporation Limited (ONCE) was incorporated on June 23, 1993. It is an Indian public sector petroleum company and is ranked 57th in Fortune Company ranking with $30746 million revenue, and contributes more than 77% of Indian’s crude oil production and 81% of Indian’s natural gas production. It is one of the highest profit making corporations in India. Endways set up commission on August 14, 1956. Indian government holds 74. 14% equity stake in this company. ONCE is one of the flagship company of India and approximately 40,000 professionals made this flagship company.

The company is “Maharani” company mostly engaged in the oil and gas exploration and production activities. 1) exploration ; production 2) Refining. The refining segment of the company is based on its 71. 62% stake in MRS. (Mangrove Refinery and Petrochemicals Ltd. ). ONCE major operates in India but it also has a global presence (13% of revenue) through its complete subsidiary ONCE Videos Limited (OVAL) Location of headquarters – Tell Avian, Durance – 248 003. Year of founding – August 14, numbered of employees – 32862 employees management – Sudsier Vacuumed (Chairman and MD)The Company is managed by a Board of Directors, who formulate its strategies, policies and reviews its performance periodically.

The Chairman ; Managing Director (CM) along with six whole-time Directors manages the business of the Company under supervision, control and guidance of the Board. The Board of Directors comprises of Executive (Functional) and Non- executive Directors. The Board has 14 members, of which 7 are Functional Directors including the Chairman ; Managing Director. The CM is holds additional charge of Director (Finance, with effect from 4th July, 2007), on dados basis, pending appointment of regular incumbent for which Government of India has initiated action. Other 6 members are Non-executive Directors of which 2 part-time official Directors and 4 part-time non-official Directors, all are nominated by the Government of India. OIC nominee Director ceases w. E. F 31st July, 2007.

Sometimes to get the experience and business strategies, C;MD, Oil India Limited and Managing Director, ONCE Videos Ltd. Are invited to the meetings of the Board SOOT analysts of ONCE Strengths It is the only company in India which is involved in offshore construction operations related to oil and gas project for the past twenty years) ONCE has massive well-established network across India. It has the experience in both offshore and onshore oil exploration. 3) Profit Margins are very high. 4) Powerful and renowned brand name in India. 5) Contributes in producing 77% of Indian’s crude oil and 81% of Indian’s natural gas. 6) Produces about 30% of Indian’s crude oil requirement. ) Highly killed manpower Weakness) Legal issues as it is controlled by the country’s petroleum ministry. 2) Employee management is a major problem due to the huge amount of employees) Has not make any discovery in the past and there is lower realization per barrels compared to international prices. 4)Has issues with Human rights and rehabilitation problems. Opportunities 1) Continuing increase in prices of fuel and 0112) Increasing natural gas market for more sales. 3) More discoveries in oil well. 4) Expanding market to abroad with help of its subsidiary ONCE VIDEOS LTD Threats) Security of personal many uses high technology, which is a high investment and attracts a higher risk. 3) High Competition. ) Hybrid and electric cars in the market SQL PESTLE Analysis: Political, economic, social and technical aspects related to the industry 1) Political – Crude oil is most important required commodity everywhere. Minute changes in crude oil prices make big difference in the economy. Oil and Gas is not completely De-regulated in India. Studies have shown that $10 in the crude oil price decreases the economic growth by 0. 5% in OPEC countries. For a developing country like India increase in oil prices makes more impact. India imports 80% of required crude oil, so fluctuation in this makes changes in stock market also. Stock market keeps close eye on crude oil prices. Also the Oil and Gas drives majority of the lives, since they are widely being used everywhere.

From industry to household, oil and gas usage is indispensable. Government regulates them by loosening the policies and defining standards for obeying. Economical -The oil industry is divided into two divisions one is oil exploration and second in production industry which is in the upstream and refinery industry which belongs in downstream. India exports refinery rodents, gross export is around ten percent of production. It imports around 75 % of the crude that it refines. The government works out a series of cross-subsidies to isolate domestic from international prices, such cross-subsidies have serious effects on the finances of the Indian companies and influences competition among them.

But the government has to bring domestic prices closer to international prices because both public and private oil companies are large part of the economy and so cross-subsidy regime will not work. Social – Daily life depends major on oil and gas. Most of things that we need are dependent on oil and gas. Excess of anything can be injurious . A country cannot be stable if it destroys the life support systems on which it depends. In the current scenario we have options of electric cookers, therefore these industries have to think before changing prices. Technology – Oil and gas are highly flammable products and very unstable they need trained labor to handle and highly sophisticated infrastructure to store, process and transport.

Technology has improved a lot which is very effective for this industry. They can control the impact on the environment. Indian’s world class R&D centre has developed new brands like SERVO brand of Indian Oil Legal-The deregulation in the Indian oil industry that came into effect in 2002 and proved to be extremely beneficial to ONCE. Domestic oil companies could now make independent decisions regarding the pricing of petroleum products based on import ratio and market forces. Experts believed that deregulation would give Indian Public Sector Units (US) an advantage due to their relatively well-developed infrastructure and distribution network.

As it turned out Noon’s, revenues did certainly go up shortly after the new regulation came into effect. The Net sales went up by 53. 4% room the financial year 2001-2002 to the financial year 2002-2003. However this was not only due to the deregulation but also due to the inflation in oil prices. When ONCE attributed this to Government Policies Environmental-operational hazards are very common to the petroleum industry. Hazards like personal injury, oil spills and blow outs can shatter the industry in a few moments. India has faced a lot of personal injuries to the workers in the industry and has also felt the tremor of a blow out at Iambi High. Natural Disasters and Severe Temperatures also make it difficult to work at the refineries.

Competitor Analysis The companies that ONCE competes with in the global industry are all incorporated into gas and oil companies with investments in many countries , well developed infrastructure, big exploits in extraction and refining as well as a strong presence in retailing. Their size gives them a certain rigidity , but it also fives them a pool of financial resources that can be used to position them to take advantage of any new opportunities emerging from the global oil and gas environment. In addition, these companies have the surplus resources to do R;D in renewable energy sources . This will become more and more important for energy companies if they are to survive in a no to far-off future with diminishing petroleum services.

If ONCE is to follow suit and gain competencies in this field to stay competitive later on, it will need the financial resources to do so. Growth is essential . And in order to grow globally, it will eve forced to fight its competitors head on. Internal Analysis Value Chain Analysis Operation Noon’s major business is E&R. The company produces more than one million barrels of oil everyday, thus contributing around eighty percent of all the entire Indian Oil and Gas production. ONCE also takes on exploration ;departed as well as conventional . Historically ONCE alone discovered 6 of the 7 basins that are being used today. In the latest distribution of exploration sectors, the company was awarded 85 out of the 162 appointed blocks.

ONCE now controls 60% of the hydrocarbon resources in India, making it as one of the most dominating firms in the industry. With the acquisition of MRS., ONCE became a truly integrated oil and gas corporation. MRS. was loosing money when it was acquired by ONCE, and they changed it into a profit making company in less than a year . The 9. 65 META refining capacity is now being expanded to 15 META. According to Noon’s annual reports this is also one of the most efficient refineries in terms of capacity utilization and process efficiency. Though OVAL, ONCE has equity participation in 26 E;P companies across 15 countries. This has a two edged advantage, firstly should there be regional the financial portfolio profitable.

Having a presence in and diplomatic ties with a country makes it easier and faster to exploit opportunities that may present themselves , and secondly a global presence makes the company known and gives he company alternatives in terms of growth. Marketing ; Sales This is where Noon’s value chain lags a little behind. It seems the company does not have much off presence in marketing and fuel retail . As long as it does not it will be dependent on other companies to distribute its refined products. To be a fully integrated global actor in the hydrocarbon industry, this is one segment where ONCE should probably focus on for its future success. Firm Logistics.

ONCE owns and operates through 70 On land drilling rigs 29 offshore drilling rigs and 74 on land work over rigs. 47 well platforms and 32 process platforms. 55 Offshore Support Vessels 2 multipurpose Support Vessels and one seismic survey vessel It has more than 1 5,000 kilometers of pipelines , the largest pipeline network in the country which also includes a massive amount of it which is sub sea. Five virtual reality centers to implement accuracy in their finding efforts. These properties are highly specialized , and hence pose a huge barrier if ONCE wishes to exit the industry. A major concern lies with the age of the oil fields that the company extracts from.

If the production did not increase from 2002-2003 and in 003-2004 ,ONCE should have been concerned about whether they had reached a peak position. Developments in technology has found a temporary solution , but if the wells dry out these assets would become worthless. The pipelining networks are a clear strength, they being the largest network in India, they give the company a cutting edge in the domestic transportation. Noon’s experience with Seismic Survey vessels and simulation centers is also an advantage for them as new explorations are the future for this industry. Core Competencies From our analysis of Noon’s current circumstance , the following core competencies have been observed.

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