Risk Analysis in Oil Refining Sector

Topics: Petroleum, Peak oil, Petroleum industry Pages: 12 (2684 words) Published: December 1, 2008
Topics Covered

• Overview of the oil industry
• Major companies in oil sector & their briefings
• Some statistics regarding oil sector in India
• Challenges faced by the oil sector in India
• ONGC Limited
1. Introduction
2. Composition
3. SWOT Analysis of ONGC
4. PEST analysis
5. Matrix showing the risks

• Conclusion
• References

Overview of the Oil Industry
In current scenario there is one section in economy which is really hot and boiling and it is oil sector. With crude oil at $146 per barrel and raring to cross $200 per barrel this sector is suddenly giving sleepless nights to all the major economies of the world & suddenly going down to close to $47 overnight, it also showed that this particular sector is also quite unpredictable in nature. It is also responsible for increase in inflation throughout the world. The major oil consumers are US and China with India at sixth position the irony is that none of these countries is major producer of oil so they have to rely on other countries like OPEC, Russia for their needs. OPEC (organization of petroleum exporting countries) has 11 member countries and they together account for 40% of total oil production in the world and they have the market share of around 78% in potential crude reserves. As OPEC is the largest exporter of oil so it directly impacts the price of crude oil in the market. The whole oil sector is divided in to two categories Upstream – It involves exploration and production of crude oil. With limited crude reserves on the earth this field is always a matter of serious thinking among all the countries. Downstream – It involves the refining and transportation of oil. The major companies in this field are Shell, BP, Reliance, IOCL etc. For a clear understanding of the risks & other intricacies involved in this sector, I have taken 2 Oil majors as ONGC & Bongaigaon Petroleum Ltd. For my study, I will be dealing with oil industry as a whole along with these 2 companies as a whole.

Major companies in oil sector & their briefings

Assam Oil Company Ltd. (ACL), India
Assam Oil Company Ltd. (AOC) was one of the earliest enterprises in the world engaged in exploration and production of oil. Oil was discovered in Digboi in northeastern part of Assam in 1889 by Assam Railway & Trading Company. Assam Oil Company was taken over by the BOC in 1910, and between 1910 and 1930, the BOC carried out extensive exploration work in Assam and adjoining areas. In 1937, BOC, Royal Dutch/Shell, and Anglo Iranian Oil Company applied for exploration licensee in India and started geophysical survey. Due to World War II, all activities were suspended. Assam Oil is now a division of the Indian Oil Corporation. Bharat Petroleum Corporation Limited

Bharat Petroleum Corporation Limited (BPCL) is one of India's largest PSU companies, with Global Fortune 500 rank of 287 (2008). Its corporate office is located at Ballard Estate, Mumbai. It is involved in the refining and retailing of petroleum products. Bharat Petroleum is considered to be a pioneer in Indian petroleum industry with various path-breaking initiatives such as Pure for Sure campaign, Petro card, Fleet card etc. BPCL's growth post-nationalization (in 1976) has been phenomenal. One of the single digit Indian representatives in the Fortune 500 & Forbes 2000 listings,

Indian Oil Corporation
Indian Oil Corporation is an Indian public-sector petroleum company. It is India’s largest commercial enterprise, ranking 116th on the Fortune Global 500 listing (2008). It began operation in 1959 as Indian Oil Company Ltd. The Indian Oil Corporation was formed in 1964, with the merger of Indian Refineries Ltd. Indian Oil and its subsidiaries account for a 47% share in the petroleum products market, 40% share in refining capacity and 67% downstream sector pipelines capacity in India. The Indian Oil Group of Companies...
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