Report on Oil and Gas Management

Oil and Gas Management
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Theme 1: Cash crunch of sub-$50/bbl oil on projects and dividends..........................................3
Theme 2: Whether to abandon production-maximising policies.................................................5
Theme 3: Planning by oil companies to promote low carbon global world................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
ILLUSTRATION INDEX
Illustration 1: Dividend and profit ratio...........................................................................................4
Illustration 2: Dividends at $100 a barrel .......................................................................................5
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INTRODUCTION
Oil and gas sector plays a key role in economic development through performing various
activities in regard to oil production and sales. In addition to this, Big oil industry is considered
as critical factor because it holds membership of various big oil giants. Classification of big oil
and gas business firms can be as BP, Shell, Total, Nioc, Cnooc, Conoco, etc. It has been
identified that the working of such big oil and gas companies is related with the fossil fuels lobby
(Schroders, 2015). It also have direct influence on the economic development and political
aspects of the country. Price and demand changes plays a vital role in oil and gas industry.
However, the current learning is focused towards various challenges that big oil organisation
faces in international and domestic market. Furthermore, issues will be discussed under themes
of cash crunch, desertion of policies in context to production-maximization. It will also focus on
various factors of planning process that can reduce the carbon issue in the world.
Theme 1: Cash crunch of sub-$50/bbl oil on projects and dividends
As per the structured study, it has been identified that the cash crunch is considered as a
market circumstances where companies does not have sufficient funds to operate business. In
other aspect, it is referred as an issue in context to low liquidity which impacts the overall work
culture of the sector. Advancement in such kind of issues have direct influence on the operational
activities and profitability of the firms. For the same, the oil and gas industry also demands high
investment in order to perform production activities but due to lack of liquidity the companies
are facing issue of cash crunch (Kent, 2015). Big oil firms require funds to maintain equipments
and machineries, delivery of final product and salary of employees. Moreover, big oil and gas
business firms that are classified as BP, Shell, Total, Nioc, Cnooc, Conoco, etc. also demands the
same to operate business in sustainable manner. As per current statistical report, it has been
identified that in last one year, the Shell, Total and BP are facing issue regarding decrease in
pricing of their products and services (Anderson, 2012). It has also impacted the overall
development of oil and gas industry in global context. Perception of shareholders has also
affected due to such kind of negative changes in market. It has also increased the issue of low
liquidity in the global market and influenced operational activities.
Moreover, in order to overcome such issue the big oil companies has started focusing on
reduction in operational cost. In last six months due to lack of liquidity the internal and domestic
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