an overview of the oil industry chris bayci mary snyder gang (ross) zhang lir 554 9/30/08
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An Overview of the Oil Industry Chris Bayci Mary Snyder Gang (Ross) Zhang LIR 554 9/30/08. Overview. Value Chain Largest Oil Companies OPEC and World Trade Oil Prices American Politics Employment in the Oil Industry China’s Quest for Oil. Step 1: Exploration and Production. - PowerPoint PPT PresentationTRANSCRIPT
An Overview of the Oil IndustryChris Bayci
Mary SnyderGang (Ross) Zhang
LIR 5549/30/08
Overview
Value Chain
Largest Oil Companies
OPEC and World Trade
Oil Prices
American Politics
Employment in the Oil Industry
China’s Quest for Oil
Step 1: Exploration and Production
Step 2: Transporting Oil to the Refinery
Step 3: Refining
Step 4: Transporting Oil to the Consumer
Want to know more? Adventures in Energy
Largest Petroleum Refining Companies (as ranked in the Fortune Global 500 in 2008)
Rank CompanyGlobal
500 Rank
Revenues ($millions)
Headquarters
1 Exxon Mobil 2 372,824.0 Irving, TX
2 Royal Dutch Shell 3 355,782.0 The Hague, Netherlands
3 BP 4 291,438.0 London, England
4 Chevron 6 210,783.0 San Ramon, CA
5 Total 8 187,279.5 Courbevoie, France
6 ConocoPhillips 10 178,558.0 Houston, TX
7 Sinopec 16 159,259.6 Beijing, China
8 China National Petroleum 25 129,798.3 Beijing, China
9 ENI 27 120,564.7 Rome, Italy
10 Valero Energy 49 96,758.0 San Antonio, TX
OPEC
Organization of the Petroleum Exporting Countries
Created in 1960, HQ in Vienna
Objective: co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers
OPEC Member Countries produce about 45 percent of the world's crude oil and 18 percent of its natural gas.
OPEC's oil exports represent about 55 percent of the crude oil traded internationally.
In 2007, the U.S. imported almost 2 billion barrels of crude oil from OPEC of a total of around 3.7 billions barrels (most non OPEC is from Mexico and Canada)
Sources: www.opec.com and www.usa.gov
OPEC Members
Source: www.opec.com
World Trade in Oil
Oil: Key players and movements of 2007 Webpage Source: FT.com
What’s Going on With Gas Prices?
Price of Crude is Rising– Rising World Demand
– Supply Disruption Concerns
– Concerns about Futures
– Crude priced worldwide in American dollars and now the dollar is weak
Political Debate on Oil
Offshore Drilling– Moratorium ends with September– Democrats and Republicans have very different views
Republicans
Lift offshore drilling ban entirely
No windfall profits tax
McCain – The Lexington Project
John McCain Campaign Website
Democrats
Compromise with limited offshore drilling
Bill that forces “Big Oil” to give up tax breaks and pay royalties to states
Unconvinced by effect of getting oil 7-10 years from now
Obama – New Energy for America Plan
Barak Obama Campaign Website
Employment in the Oil Industry Construction and extraction ~ 40%
Business ~ 40%
Transportation ~ 10%
Production workers ~ 10 %
Talent Shortage:– Nearly 90% of the senior human resources (HR) executives at 22 top
international oil and gas companies believe their industry faces a talent void and call the problem one of the top five business issues facing their companies.
» Survey by Ernst & Young and Rice University– Three causes:
» Industrial activity at all time high globally» Cyclical business and poor public perception» Baby Boomers are ready to retire - Average age in oil and gas industry is 49
China's Quest for Oil
China's Quest for Oil
How much oil does China consume?
Why did the oil demand increase so quickly?
Where does the oil come from?
Implications for U.S.-China relations
How much oil does China consume?
The oil consumption: China VS. US US consumes about 20-21
million barrels of crude oil per day
China consumes a little more than1/3 of the consumption of US.
But China’s oil consumption grows by 7.5% per year, seven times faster than the U.S.
Source:http://www.wikinvest.com/concept/China's_Energy_Appetite
Why did the oil demand increase so quickly? Mainly because of a large-scale transition away from
bicycles and mass transit toward private automobiles– by year 2010 China is expected to have 90 times more cars than in 1990– projections show that China could surpass the total number of cars in the
U.S. by 2030
–
The automobile ownership of US VS. China
Automobiles Owned per 1000 People
Source:http://www.wikinvest.com/concept/China's_Energy_Appetite
Where does the oil come from?
China became a net oil importer in 1993 and is growingly dependent on foreign oil.
China currently imports 32% of its oil.
A report by the ”International Energy Agency” predicted that by 2030, Chinese oil imports will equal imports by the U.S. today.
China oil imports Today,
58% of China's oil imports come from the Middle east
By 2015, the share of Middle East oil will stand on 70%
Implications for U.S.-China relations: Middle East oil will become a key issue
The short-term vs. long-term
In the short term, China and U.S. may maintain good relations and enjoy the economic benefits derived from such cooperation.
In the long run, Chinese leaders feel that the U.S. seeks to dominate the Persian Gulf in order to exercise control over its energy resources and that it tries to contain China's aspirations in the region.
The U.S. is considered a threat to China's long-term energy security.
Any Questions?
Good luck on the Exam!