BUSS 1005 Business Economics Assignment
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University of Florida
Business Economics (BUSS 1005)
Added on 2020-04-15
BUSS 1005 Business Economics Assignment
University of Florida
Business Economics (BUSS 1005)
Added on 2020-04-15
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A REPORT ON OCCIDENTAL PETROLEUM CORPORATION: OMAN iA REPORT ON OCCIDENTAL PETROLEUM CORPORATION: OMANStudent NameInstitutional AffiliationFacilitatorCourseDate
A REPORT ON OCCIDENTAL PETROLEUM CORPORATION: OMAN iiTable of ContentsIntroduction.................................................................................................................................................1Occidental Oman Profile.............................................................................................................................2Oman Oil and Gas Industry Market Structure.............................................................................................3Barriers to entry in the Oil and Gas Industry in Oman................................................................................4Factors affecting the demand for oil and gas for Occidental Oman.............................................................5Factors affecting the supply for occidental Oman.......................................................................................6Recommendations.......................................................................................................................................7Conclusion...................................................................................................................................................7References...................................................................................................................................................9
A REPORT ON OCCIDENTAL PETROLEUM CORPORATION: OMAN 1IntroductionGlobalization is taking over today’s world of business at a fast pace (Docquier and Rapoport 2012, p.681). Many businesses are maneuvering ways to compete favorably in their various industries both domestically and internationally. The nature of the market structure and the intensity of competition within the market structure in which an organization operates highly determine its profitability. There are four major types of market structures namely the monopoly,monopolistic competition, perfect competition and oligopoly competition (Song, Wei and Wang 2015, p.319). Businesses which operate in monopoly and oligopoly market structures are highly profitable as barriers to entry exist which means that only a few firms operate in the market and hence set prices together to maximize their profits (Stucke 2013, p.162). Businesses operating in monopolistic competition market structures face stiff competition as new firms continue to enter the market due to low barriers to entry and hence end up making only the economic profit and may even be competed out of the market (Feenstra 2010, p.1).In this report, Occidental Oman has been analyzed based on the various learning outcomes. These include the business environment structure within which it operates, its industry’s barriers to entry, factors determining its supply and demand and a description of its various competitors and the overall level of competition in the industry. Recommendations have also been suggested to help the company to remain competitive in its industry. Analysis of an organization’s industry enables it to identify various ways to utilize in order to cope up with stiff competition in the industry and hence remain competitive. It is therefore very crucial for any organization to analyze its industry for its continued success in the industry.
A REPORT ON OCCIDENTAL PETROLEUM CORPORATION: OMAN 2Occidental Oman Profile Occidental Oman is a subsidiary company of Occidental Petroleum Corporation which was established during the year 1920 in Houston Texas in the United States of America. Occidental Oman established its operations in Oman in 1979 and thus it has been operating in Oman for the last 30 years (Anon, Oman). The company deals with oil and gas production activities as well as chemicals production. Its productivity is based on production agreements sharing together with Qatar and the United Arab Emirates subsidiaries which are both in the Middle East region. During the year 2018, the Middle East region posted productivity of 286000 oil barrels and this accounted for 43 percent of the world oil production. The region holds the company’s reserves worth 28 percent. Occidental Oman is the second largest oil producing company in Oman after the Petroleum Development Oman (PDO) which is owned by the government with 60 percent shares and other international companies with 40 percent (Andrew Figgins, James Lansdell and Yasser Taqi 2018, p.2). The international companies contributing to the 40 percent ownership include Shell, Total and Partex with ownership percentages of 34 percent, 4 percent, and 2 percent respectively. Occidental Oman operations are mainly concentrated in the Oman Central region at Mukhaizna Field and Oman Northern region at the field of Safah and Block 62. Occidental Oman has doubled its Oman land to 6 million acres after an award of three blocks of exploration near the existing operations by the Oman Ministry of Oil and Gas during the year 2018. This has enabled the company to greatly expand its operations and hence better results are anticipated in the future. Oman Oil and Gas Industry Market StructureOccidental Oman is categorized in the Oman Oil and Gas Industry (Chazen 2012, p.6). The industry is oligopolistic in nature due to its high market concentration. The industry is dominated
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