The Oil an Gas Industries

The Oil an Gas Industries

Carolyn Shepherd

Ashford University

BUS690: Business Strategy

Jonathan Green

February 4, 2013

The energy sector has had different news during the current fiscal so far. When the crude prices went up in the global market, the government had frozen prices on the petro-products affected the oil companies in the year of 2005 in the first quarter.

The government took steps when they started to excise duty reduction and price increases. Below is the reason for the SWOT analysis on the oil and gas industry as a whole.

SWOT Analysis

Strengths

As history portrays in developing the economy the demand for petroleum products has driven the economy. With the GDP expecting to grow in the long-term the energy sector will benefit as well.

To brings things into perspective diesel sales has risen it is calculated to increase more by 60% in 2030. The oil and gas industry has seen returns on sales which has gained profitability by 7.6% globally and an average of 5.8% in the U.S.

The recent price increases and the decisions to allow oil companies to increase their prices will serve the industry well. This will reduce government interference and provide some leverage to the industry to increase prices in order to maintain the margins.

Weakness

Even though the industry has been very profitable, there is a struggle among the large oil producing companies their natural resources cannot be used because they have a lower economic growth When the economy is good and the oil prices are high the large oil producing companies can prosper.

There’s not much freedom due to the government and their limitations on oil companies

OPEC has imposed many regulations.

Opportunities

In speaking of Equity Oil many of the marketing oil companies are now changing into upstream exploration and production to secure the crude supply. Oil companies will have to deal with government regulations with each countries policy. The oil companies will bid to extend the oil and gas rights, based on the countries procedures on oil leases.

Threats

Within the competition the oil companies had complete control over the marketing and the private sector was limited only to refining until 2004. Private oil companies like Shell are likely to receive competition, the price the petrol and diesel are kept high to cross subsidize the kerosene.