OIL AND GAS

Analysis of ExxonMobil, United States



Analysis of ExxonMobil, United States

Introduction

The oil and gas industry make up the fuel industry in the world. Oil and gas industry includes production, transportation and refining of oil. Distribution of the world's oil is a pie chart. The main suppliers of oil to the world market are developing countries. More than 40% of production and 50% of exports go to the OPEC - Organization of Petroleum Exporting Countries, uniting 12 countries in Asia, Africa and South America (Wall, 2008, 77). The major oil traffic flows are directed from the Middle East to Western Europe, Japan, China and North America. In some developing countries oil and gas is created on their own refining capacity (Gulf States, Venezuela), and it increases the proportion of finished petroleum products in their exports. Gas industry provides the production, transportation, storage and processing of natural gas. Transportation of natural gas within the continents are mainly pipelines (80%), and for long distances (e.g., from the Middle East to Japan), the gas is transported in liquefied form by special courts. This method of transportation leads to a noticeable increase in the cost of gas, so much of it is consumed in the countries that produce gas. The major exporters of natural gas are Russia, Canada, Norway, Algeria, Indonesia, and Turkmenistan. The main importers are Europe, USA, and Japan. There are many companies playing important role in providing oil and gas to various parts of the world thus in this paper I am going to analyze future potential of ExxonMobil, United states.

Oil and gas Industry Analysis

Before analysing future potentials of ExxonMobil I would do a short industry analysis of oil and gas, following is the value chain of oil and gas industry:

There are three important sections of entire industry value chain: Downstream, Upstream, and Mid-stream. Downstream part of oil and gas industry is the last part of value chain in which industry sells and distributes the end products in the market after refining the crude oil in the same part. Upstream part of value chain is also known as Exploration and Production (E&P). While in mid-stream part the oil collected from upstream part (E&P) is delivered for further development to various processing plants (Tarbell, 2009, 19). Competition in upstream industry is relatively high since it is highly attractive industry with low threat of new entrants and substitutes along with moderate buyer and supplier power. Down stream industry is attractive but particularly for integrated oil and gas companies as compared to those non-integrated manufactures because of complements role. His industry has high competition along with moderate buyer power, and low threat of new entrants and substitutes. There is continues supply available of crude oil to downstream manufacturers. Where as mid-stream industry has moderate competition because vertical integration continuously supplies crude oil to the manufactures. It has moderate buyer power, along with low threat of new entrants. As compared to non integrated oil and gas companies this industry is attractive to integrated oil and gas ...