Statoil

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A PEST(LE) analysis of:

By: Erik Bruun-Olsen & Simen Stockinger

Statoil ASA is a Norwegian Renewable Energy, Oil and Gas company, where the government of Norway is the main shareholder with 67 % of the shares. Statoil was established as a wholly state-owned company on 14th of July in 1972, and it was ranked as the 13th biggest Oil and Gas Company in the world by Fortune Magazine. Statoil is today a considerable international company, with 22.000 employees in 36 countries all over the world and it is Europe’s second largest natural gas supplier. The company manages the whole value chain from exploration and development of oil and gas fields to operations of production platforms and retailing of oil and gas products. Statoil merged with Norsk Hydro and gas division 1th October 2007, and was given the temporary name, “Statoil Hydro”. The company changed its name back to Statoil ASA on November 1, 2009.

PEST model:
STATOIL ASA
STATOIL ASA

Political:
The political environment in which a firm operates has a major impact on its operations and profitability, and is mainly influenced by the political forces in an industry or country. The political environment will have a large impact on Statoil’s opportunities for international growth and investment choices as it operates under demanding political conditions worldwide. These forces will especially determine its chances of getting access to resources and establish relationships with host governments and NOC’s (National Oil Company). Control over oil and gas fields are becoming increasingly political. This is due to the profits of such reserves is extremely high. This means that each country want control over their own resources. For Statoil, which operates in 36 countries, this may mean that countries will nationalize their resources to domestic firms. Developing countries with unstable dictatorship or a history of sudden nationalization are examples of political risks may be obvious. Or more subtle that exists in countries that adjust foreign ownership rules to ensure that domestic companies have an interest. Because the government has so much power and can change the laws, regulations and taxes can mean unpredictable changes for Statoil and the oil / gas industry. Due to the government's high tax rate and fees in Norway, Statoil alone gave total approximately 19 ​​billion euros in 2011. Statoil has also helped to shape Norway into a modern industrial country. Today and for a long time the firm has been the most important player within the industry in Norway.

Liu Deschu, president and CEO of Sinochem Group, and Helge Lund, president and CEO of Statoil ASA, sign the Memorandum of Understanding in Oslo

Economical:
The external economic environment, local and international level, has an extremely impact on Statoil’s activity in the market. Currency rates, raw material prices, interest- and inflations rates are examples of the most important economic forces that Statoil will influence. These factors will affect the profit potential of Statoil and estimate the potential size of the market. One of the major issues in the oil and gas market is the influence of the raw material prices. As with other markets, the prices of oil and gas fluctuate over time as a result of changes in the demand and supply. The current price has reached their highest levels since the late 80´s, resulting in a strong growth in the oil and gas market. One of the reasons seems to be a result of demand exceeds supply, with reason of political instability, energy substitutes, petroleum prices, industrialization, economic growth etc.

The increased demand from the emerging developing countries, such as China and India, is one of the reasons why demand is still increasing. More than 60 % of the increase in the world primary energy demand between 2000 - 2030 will come directly from developing countries especially in the growing Asia. This trend will probably continue, since the demand...
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