Oil and Gas Management Assignment

Added on - 21 Apr 2020

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Running head: OIL AND GAS MANAGEMENTOil and Gas ManagementName of the StudentName of the UniversityAuthor Note
1OIL AND GAS MANAGEMENTTable of ContentsIntroduction......................................................................................................................................2Drivers of financial investments in refinery activities in UK..........................................................2Consumer needs...........................................................................................................................3Suppliers......................................................................................................................................3Competition levels.......................................................................................................................4Government policies....................................................................................................................5Barriers of financial investment in the UK refinery activities.........................................................6Startup costs.................................................................................................................................6Political risks...............................................................................................................................6Supply and demand barriers........................................................................................................7Environmental barriers................................................................................................................8Adoption of the technologies.......................................................................................................8Conclusion.......................................................................................................................................9Reference List................................................................................................................................10
2OIL AND GAS MANAGEMENTIntroductionThe oil sector that is present in the United Kingdom comprises of more than 200companies that are involved in the process of distributing, marketing and refining of thepetroleum products. The refineries that are present are divided in to two sectors such as the retailand the commercial sector where the oil is transported to government agencies, fuel distributorsand others. It can be seen that the number of refineries that are present in the country is finding itdifficult to invest more money in to their business due to the lack of proper management. Theinvestments that are done in the refineries help them to filter the petroleum products so that it canbe used for various purposes. The major companies that deal with oil refining activities in theUK are Lindsey Oil Refinery that is situated in Immingham and Stanlow Refinery that is situatedin Ellesmere Port in the UK (Yusuf et al. 2013).Drivers of financial investments in refinery activities in UKThere are various factors that affect the size and structure of the oil and gas refiningindustry in the United Kingdom such as the consumers, competitors, suppliers and thegovernment. The demand of the consumers regarding the fuel is dependent on the price of theoil. The rise in the price of the fuels will see that the consumers will opt for the gas stations thatwill be offering comparatively lesser amount. The UK oil market is divided in to two sectors,which are the retail and the commercial sector. The retail sector consists of the gas stations thatdeal with petroleum and it can be seen that there has been a major downfall in the last 25 years(Bunn et al. 2017).
3OIL AND GAS MANAGEMENTConsumer needsThe needs of the consumers play an important role for the refinery market of petroleumin the UK market. The consumer behavior depends on the level of the price and the conveniencethat they would get with respect to the access of the petroleum. The demand depends on the priceof the fuels so that they can purchase it according to their limits. According to a surveyconducted by UKPIA, it was seen that price and the availability of the gas stations were thefactors that attracted the customers in purchasing it. The consumers also stressed on the pointthat the stations that provide benefits such as the loyalty cards and bonuses are the ones thatattracts those (Yusuf et al. 2013).SuppliersThe suppliers are another factor, as they are the channels through which the supply offuel depends directly or indirectly. The agreement is based on the price, as the parties have tosign a contract based on the price that has been bargained. This will help them in controlling theprices so that there is an even competition within the market (Bunn et al. 2017). The contract isinclusive of the cost of distribution and storage, which indirectly leads to the rise in the prices ofthe oil. The cost of distribution is dependent on the distances from the gas stations and the placeof the suppliers. Apart from this, other factors such as the nature of the contract, price of the fuelin the wholesale market, arrangement of logistics and the terms under which the payment has tobe made needs to be taken in to consideration. The contracts are also subjected to limitationssuch as the risk of the whole sale prices and the prices that may get increased on the spot as well.These factors affect the oil industry in the UK market (Chmutina and Goodier 2014).
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