OIL AND GAS INDUSTRY

Oil and Gas Industry

MMM2519 Joe Bloggs - 0909090

Executive Summary

The paper is based on the attractiveness of the oil and gas industry from a variety of perspectives. The paper analyzed the two giant companies named Chevron Texaco and Libyan National Oil Company based on the current and previous economical conditions. Moreover, it focuses on the industry concentration, describing the market size, basis of competition and life cycle analysis. Additionally, it is also based on barriers to entry as the completion in the market is very much high. Further it analyzed the cost structure and technological system that are implemented to achieve higher growth level. In the end, we have the bird eye view on the Oil pipeline Drilling, its issues and solutions following the current debate regarding the topic.

Oil and Gas Industry

Introduction

ChevronTexaco was formed in October 2001, when Texaco Inc. and Chevron Corporation merged. The company's headquarters are in San Francisco. The company has operations in North America, South America, Europe, Africa, the Middle East, Asia and Australia. In May 2005, the company announced that it had changed its name to Chevron Corporation. In the United States, Chevron markets under the Texaco brand as well. In 2010, Chevron acquired Atlas Energy, a midstream natural gas processor, for $3.2 billion.

Libyan National Oil Company, headquartered in Libya, is a provider of equipment and components used in oil and gas drilling and production operations, oil field services and supply chain integration services to the upstream oil and gas industry. Libyan National Oil Company conducts operations in over 800 locations across six continents, and its product portfolio is so extensive that the company has been called a "one-stop shop" for drilling contractors.

Products include all the heavy hardware for oil drilling as well as instrumentation, controls and drilling power generation. The company has embarked on an acquisitive growth path in recent years, acquiring more than 30 companies since 2004. During the five years to 2011, revenue is expected to increase at an average rate of 13.1% annually and total $3.9 billion. Since the fourth quarter of 2008, a precipitous drop in oil prices and the deteriorating economic climate have led oil companies to reduce investment into new drilling projects, thus lowering demand for rig equipment. It is estimated that a strong backlog of orders almost buttressed Libyan National Oil Company's revenue from the downturn in drilling activity in 2009, when the company generated $12.7 billion in revenue.

Libyan National Oil Company enjoyed phenomenal growth before the financial crisis caused oil prices to plummet and drilling activity to slow. A number of strategic acquisitions also drove growth over the period, including the purchase of Grant Prideco for $7.5 billion in 2008.

Objective

The objective of this paper is to analyse the data of oil industry based on two companies discuessed above.

Discussion

There are many grades of crude oil produced worldwide, ranging from the highest quality light, sweet crude oil to poor-quality heavy, sour crude oil. Condensate (a very light form of crude oil) and natural gas liquids ...