Oil & Gas Industry Dynamics

Oil & gas industry Dynamics INTRODUCTION 1 Critically analysing BP's view of future 1 Evaluating why BP is taking such a radical approach2 Critically analysing how the fundamental of oil, gas and fuelmix expectation are playing out on BP decision3 Critically analysing the strategy of both the firm on their new business segments 5 REFERENCES 7 INTRODUCTION This report is based upon the oil and gas industry and its main aim is to understanding the strategy which is used by the oil and gas

Oil & gas
industry Dynamics

Table of Contents
INTRODUCTION...........................................................................................................................1
Critically analysing BP's view of future.................................................................................1
Evaluating why BP is taking such a radical approach............................................................2
Critically analysing how the fundamental of oil, gas and fuel mix expectation are playing out
on BP decision........................................................................................................................3
Critically analysing the strategy of both the firm on their new business segments...............5
REFERENCES................................................................................................................................7

INTRODUCTION
This report is based upon the oil and gas industry and its main aim is to understanding the
strategy which is used by the oil and gas industry. The present report is based upon two case
study i.e. British Petroleum (BP) which is one of the multinational oil and gas company in UK
and another is Statoil and Total which is another multinational energy company who operates its
unit in more than 36 countries. The report critically analyse BP's view of the future and then state
why the quoted firm will take such an approach. Study also describe how the fundamental of oil ,
gas and fuel mix expectation are playing out on BP decision and critically analyse the strategy of
both the firm in the future. Apart from this, the report also critically reflect on the causes of this
structural change and why OPEC measures taken in order to defend oil prices.
Critically analysing BP's view of future
British Petroleum mainly work on oil and gas company and it is also considered one of
the seven largest company in world. But now the company's views regarding their future are
change such that in 2021, its focus is to start up new project that is related to natural gas only.
This is so because it has been analyzed that gas is considered to be one of the fastest growing
fossil fuel source for all the coming decades as compared to oil and coal. Apart from this, the
company also wants to capturing the carbon emissions by investing in UK technology firm (BP
future strategy, 2019). In this project the firm, wants to remove carbon dioxide and emission
which is created when the sustainable biomass is used to generate an electricity.
Next view for BP is such that it wants to invest mostly on natural gas production because
the company says that gas is one of the fastest growing fossil fuels and that is why by using C-
capture's technology which could reduce the cost of capturing carbon dioxide and this process is
also applied to power generation from coal, gas and biomass for the production of cement, steel
and aluminum. Thus, it clearly shows that the company only wants to reuse the natural gas in
order to protect the environment from major harmful gases (Güntner, 2019). This is not sufficient
for the quoted firm such that it also announces another project that is related to gas production of
Egypt's West Nile Delta (WND). In this project, the company provide abundant supply of
domestic energy greater than ever, the main aim of this project is to deliver the gas production to
the people of Egypt.
Beside this, the quoted firm also wants to make 3.5 million metric ton of sustainable
greenhouse gas emission reduction in 2025 and further zero net growth in their operational
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emission in the same year. This view for the future clearly states that the company wants to make
some extra efforts in order to respond the global climate change and support to make clean, safe
and protect the environment from any harmful gas (Latif and Iskandar, 2019). These are the view
of BP for the future and the firm also start working on many projects as well so that in coming
years, the people are benefited and some natural fossil fuels are protected from misusing as well.
This focused and try to capture new technology for making the effective and better gas
projects. This help and support in development in carbon capture technology. It also pushes
towards cleaner fuel and natural gas in primary energy mix. So, the future of oil and gas industry
British petroleum is definitely good and best within the years. That have the reasons for improve
and make good future. Share of gas is to increase from 22% to 22%. This also increase the share
of energy consumption from gas. Fuel mix is adjust share of oil and gas, but the crude olil
number is required to meet energy demand ODF growing population higher than the current
level of it (Kilian, 2016).
BP's can face the major challenges for growing in the future. That are cost reduction is
the current crude oil extraction and transport. That are major challenge which is faced by
industry and British petroleum. Political and geological challenges are most of the easy to reach
deposit oil and natural gas. This help to create newer political and geological. This will help to
improve environmental footprint of British petroleum which is regulated by stringent
environment safety and functional laws. However, as drilling new and smart projects are help to
grow in ambitions and smarter equals faster. This will also help to improve the future of British
petroleum which is oil and gas industry.
Evaluating why BP is taking such a radical approach
British Petroleum is taking such a radical approach for start up the new projects related to
natural gas production. As their strategy is to change the pace of oil and gas industry in coming
decades and make the environment safe and secure for the upcoming generations and this is
possible only by investing some in technology so that the energy will be produced more
efficiently with new ways that helps to meet out the expected rise in a demand. This is so
because the world is working towards a lower carbon future. The main reason for investing in
natural gas product is to embrace the transition and low carbon future, such that through
company's support for the price on carbon and they underpinned it by a clear set of some
strategic priorities that helps to shape up the world and creates value (Mäkitie and et.al., 2019).
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The strategy priority is to support the low carbon investment and technology ventures at world
level and be modernize the whole business to make safe, efficient and more competitive.
Thus, it clearly states that British Petroleum is taking such a radical approach to reduce
the emission in company's operational process, further to improve the products in order to help
their customers who can also lower down the emission and as a result, it helps to create low
carbon business such that in 2017, British Petroleum creates a joint venture with Europe's largest
solar energy developer in order to form a Light source BP and then it is known as world's largest
operator of renewable energy business among all the oil and gas companies. Hence, it has been
clear that the quoted firm is work for the welfare of the environment and always recognize that
the global energy transition is essential to human welfare and only British Petroleum wants to
plan or build the business around the stable, predictable and efficient policy framework which
can be provided by the government only (Wegener and Amin, 2019).
This approach is effective and good for using and controlling price of oil and gas. This
will help to reduce and stable oil and gas prices to British industry. The radical approach is the
real analysis approach. This will help to give correct and accurate satiates and data for analysis.
By this, industry is able to find ideas of innovation and helped to give proper shaped its
development. By this British petroleum is able to develop things and control the price of oil to
keep stable and shaped. Radical approach is easier to identify the key ideas. With the help of this
British petroleum is able ti find solution for keep stable price, control price and reduced as well.
Overall, British Petroleum basically uses the natural gas in order to reduce the carbon
emission in environment and as per the company's view, they stated that as compared to coal and
oil, only gas is the fastest growing fossil fuel source for the coming decades. There is a shortage
of other natural fossil fuels and only gas can be renewable and can be used in order to produce
some electric power plant. That is why, around 75 percent of the BP' plans are majorly focused
on the natural gas only and for them investing on these project is beneficial for both the company
and the people as well (Griffin and Teece, 2016).
Critically analysing how the fundamental of oil, gas and fuel mix expectation are playing out on
BP decision
As British Petroleum made project on natural gas and it has been analysed that in coming
years, the quoted firm will easily meet out the demand of their customers and also lower down
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the emission of carbon as well. This shows the positive impact upon the BP decision. Even it is
also evaluated that as the firm wants to focus only on the natural gas because this is considered
one of the fastest growing fossil fuel source as compared to coal and oil. Moreover, it is also
realised that differentiated capabilities are also played a key factor for future success in BP
decision. Such that as the firm also try to adopt the new technology into the workplace which
means that by adopting new technologies helps to reduce the cost and time and that is what the
industry also demand (Orazalin, Mahmood and Narbaev, 2019). This shows that the oil, gas
industry expectation are also playing out the decision of a quoted firm.
This exists for supplying a wide range of essentials products to a variety of end users
markets. These products are manufactured oil and gas which from natural occurring. This is the
first used for heating and lighting, with development of diesel and petrol. The development of
technology also help increased demand for other petroleum products. It helps to increase the
supply of oil and gas took place. Growth in rates of oil have now matured and search for
alternative sources of fuel satisfy demand of energy. According to British petroleum, the world's
demand for energy which is gas and oil satisfied by representing coal, nuclear and renewable
energies. This will play out with BP decisions and its structure.
Moreover, the company only wants to focus on the natural gas rather than oil and coal
which is true also because the firm strategy is to be competitive in a time with reference to price,
policy, technology and even emission of carbon as well (Aruga, 2016). This is what the industry
also demand. Such that as British Petroleum mainly work on the low carbon activities and they
also want to growing gas and advantaged oil in the upstream. Thus, investing on advance
techniques and produce the natural gas for further consumption will be helpful for business and
the peoples as well.
But on the other side, it is also critically evaluated that the fundamental of oil, gas and
fuel mix expectation are also creates negative impact upon BP decision such that the cost of
those natural gas are so high which Is one of the major issue for oil and gas industry. On the
other hand, when BP introduce new natural gas project at high cost then it also affects the
business in negative way. Moreover, if the demand of oil is high but the company is mainly wok
on natural gas then it also did not able to meet the demand of the people and thus, shows
negative impact upon the business as well.
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Thus, the positive impact shows that the fundamental of oil, gas and fuel mix are help or
meet the expectation of the BP decision (Frandsen, Boa and Raja, 2019). Therefore, the quoted
firm should work on natural gas project so that it will help to cope with all advance techniques
into work force and this will lead to meet the demand of customers as well as industry as well.
The products are required to meet with certain specifications are depends on the end-use. Product
specifications and quality of produced raw gas are defiantly affected influences on the economic
gas projects. There is need to understand consideration of specific projects.
Critically analysing the strategy of both the firm on their new business segments
State oil and total are two companies that directing an important part of their budgets into
an alternative energy sources. The main aim of both the company is to make an alternative
energy an important or integral part of their portfolio and wants to become those energies as a
source of growth as well. Rather, then to treat the alternative energy as a complementary source
of an activity which can please a society and environmentally conscious investor. That is why
both the firms wants to take some action such that, in the context of State oil, recently the
company develop complete new department in New york in order to develop a massive wind
farm project. To start or develop this project, its main aim is to deploy renewable energy source
in order to meet out the electric needs of the state (Kassotis and et.al., 2016). State oil main goal
is to help or make offshore wind that is a leading option for generating clean and affordable
energy in New York.
Apart from this, the quoted firm also wants to succeed in future and that is why it also
makes a mindset of a radical change and they play an effective role as well in order to shape up
the future of energy by reduce the cost i.e. greater efficiency and simplification, raise the
recovery time, always explore new areas and make carbon efficient operations by using
renewable source of energy. In 2030, the quoted firm also gradually open up many areas in
order to maintain profitable and high level of production such that the firm is also expected to
drill the first well in order to reach the goals (Khalil and et.al., 2017). Apart from this, in order to
make new business segments, the firm also start making their efforts in order to reduce the
emission of greenhouse gases because as the population grows, they need to provide a more
energy to heat and that is why the firm also start capturing renewable business opportunities.
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On the other side, it has been critically analysed that Total has its own portfolio
diversification in which the firm is focused to build a major solar energy power house so that
they use the son power in order to generate the large amount of energy producer and also
investing significant resources as well. Further another strategy of the quoted firm is to meet out
the energy demand of the growing population and also contribute to limit the global warming as
well. The company also focus on improving the carbon intensity of the current production mix,
developing some renewable energy and then improving the energy efficiency as well. Beside
this, Total also focus on low break-even oil projects and also expand with full gas value chain
and then develop a profitable low carbon electricity business. Therefore, to present this in better
form in market, the quoted firm also update its reporting in 2019 by creation of new segments i.e.
Integrates gas, Renewable and Power (iGRP).
Moreover, the cited firm also released 'Integrating climate into strategy that clearly
includes a new carbon intensity indicator in which its main aim is to reduce the carbon intensity
of its energy sales up to 15% from 2020 to 2030. Further, the firm also aim is to pursue its effort
in order to accelerate as new technologies which become available and reach a reduction around
25 to 30 Percent in 2040 (Hebblewhite, 2017). Thus, this all shows the strategy of both business,
that clearly states that their main aim is to serve for the welfare of the public and provide them
the best part of services by using new techniques into the working area. In the same way, in 2011
Total also introduce new solar power house that converts the sun rays into solar energy and
generate maximum electricity without causing harm to environment and this is one of the famous
strategy that helps to take a business at further level of success.
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REFERENCES
Books and Journals
Aruga, K., 2016. The US shale gas revolution and its effect on international gas markets. Journal
of Unconventional Oil and Gas Resources. 14. pp.1-5.
Fischer, L., 2016. Oil imperialism: The international struggle for petroleum. Routledge.
Frandsen, T., Boa, S. Ø. and Raja, J. Z., 2019. Pricing structures for solutions: an exploratory
study within the oil and gas industry. International Journal of Production Research,
pp.1-16.
Griffin, J. M. and Teece, D. J., 2016. OPEC behaviour and world oil prices. Routledge.
Güntner, J. H., 2019. How do oil producers respond to giant oil field discoveries?. Energy
Economics. 80. pp.59-74.
Hebblewhite, M., 2017. Billion dollar boreal woodland caribou and the biodiversity impacts of
the global oil and gas industry. Biological Conservation.206. pp.102-111.
Kassotis, C.D. and et.al.,2016. Endocrine disrupting activities of surface water associated with a
West Virginia oil and gas industry wastewater disposal site. Science of the Total
Environment.557. pp.901-910.
Khalil, M. and et.al., 2017. Advanced nanomaterials in oil and gas industry: design, application
and challenges. Applied Energy.191. pp.287-310.
Kilian, L., 2016. The impact of the shale oil revolution on US oil and gasoline prices. Review of
Environmental Economics and Policy. 10(2). pp.185-205.
Kumar, B. R., 2019. British Petroleum Merger with Amoco. In Wealth Creation in the World’s
Largest Mergers and Acquisitions (pp. 217-222). Springer, Cham.
Latif, S. A. and Iskandar, T. A. Y. T., 2019. Antecedents of Waste Management in the Oil and
gas Industry. Environment-Behaviour Proceedings Journal.4(10).
Mäkitie, T. and et.al., 2019. The green flings: Norwegian oil and gas industry’s engagement in
offshore wind power. Energy Policy. 127. pp.269-279.
Niblock, T. and Lawless, R., 2016. Prospects for the world oil industry. Routledge.
Orazalin, N., Mahmood, M. and Narbaev, T., 2019. The impact of sustainability performance
indicators on financial stability: evidence from the Russian oil and gas
industry. Environmental Science and Pollution Research, pp.1-12.
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Spitz, P. H., 2019. Circumstances Are Perfect: A New Industry Grows Rapidly. In Primed for
Success: The Story of Scientific Design Company (pp. 57-72). Springer, Cham.
Wegener, M. and Amin, G. R., 2019. Minimizing greenhouse gas emissions using inverse DEA
with an application in oil and gas. Expert Systems with Applications. 122. pp.369-375.
Online
BP future strategy. 2019. [Online]. Available
through:<https://www.bp.com/en/global/corporate/news-and-insights/bp-magazine/bp-
best-of-2018-in-pictures.html>.
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