The Oil industry of Qatar - Assignment Example

Paper Assignment Table of Contents Table of Contents 1 Discussion 2 The Main Players under Qatar Oil Industry and Their Market Shares 2 Structure of the Industry 3 Nature of the Competition 3 The Global Competitiveness 4 Strategic Importance for the Industry for the Country 5 Future Prospects of the Qatar Oil Industry 6 Conclusion 7 Works Cited 8 Introduction Qatar oil industry is one of the developed industries of Qatar. The Qatar oil industry was established in the year 1939. It was established after the oil was revealed in the place named Dukhan, which is situated in the west part of Qatar. The Qatar oil industry was quite effective at that time and by the year 1940, 4000 barrels of oil were ready to use. The Second World War became an obstacle against the huge possibility of the production of oil in Qatar. Qatar oil industry started exporting their products from the year 1949 (Qatar Embassy, “History of Oil Discovery”). The major objective of the paper is to highlight the oil industry of Qatar along with its present as well as future prospects. The paper would intend to describe the nature of the oil industry and its competition with other industries in Qatar and also the global competitiveness of the industry. The paper would also include the social responsibility of the oil industry of Qatar in the concluding segment of the paper for the overall discussion. Discussion The Main Players under Qatar Oil Industry and Their Market Shares There are various different companies under Qatar oil industry which are either state owned companies or private companies. E.g. the Qatar General Petroleum Corporation (QGPC) is a state-owned company. There are several other private companies within Qatar oil industry such as, Qatar Petroleum, Pennzoil, Exxon Corporation, Total and Darwish Group. These are the main players of the Qatar oil industry. The Qatar Petroleum is the company with the highest market share in the Qatar oil industry; it has earned the 100 percent of the onshore and 29 percent of the offshore of the rig market shares. Pennzoil has earned the market share of 36 percent and Darwish Group’s market share is 50 percent. The ExxonMobil has its 30 percent working interest in Qatar in the oil industry. The Total Group has earned 22 percent market share in all over the Middle East (Thompson, “Major Oil Companies Operating in the Gulf Region”); (Qatar Petroleum, “2009 Annual Report”); (Sullivan, “Shell to Buy Pennzoil-Quaker State”); (Iqbal, “Darwish Technology Eyes 50% Market Share”); (ExxonMobil, “2010 Summary Annual Report”); (Total, “Energy In Motion”) Structure of the Industry Based on the structure of various different companies under the oil industry of Qatar, it can be stated that the oil industry of Qatar earns a large amount of the revenue and the GDP of the country’s economy. On the basis of the structure of the industry and the companies, their market shares, the free entries to the market and the competitions among the companies under the oil industry, it can be stated that the nature of the market is a mix of oligopoly and perfect competition. For example, the ExxonMobil is an American company which has signed an agreement to undertake a project as joint venture with Qatar Petroleum for a future project in the oil industry, which has proven that the entry to the market is not restricted (Bertrand, “ExxonMobil, Qatar Petroleum Line up $10.4 Billion for Barzan Gas Project in Qatar”). Nature of the Competition The Qatar oil industry has different companies under the industry, these companies are in competition with others and the companies are continuously providing opportunities to the market. There are many oil companies under Qatar oil industry but there are few companies that are performing with high market shares in the oil industry. A notable name in this context is of ExxonMobil which has entered the market of Qatar oil industry coming from the American market and the company has also entered into a joint venture with the Qatar Petroleum to assure a good market relationship and economic growth (Tuttle, “Qatar Petroleum, Shell Sign $6.4 Billion Petrochemicals Deal”). The Global Competitiveness The Middle East is situated at the junction of Asia, Europe, and Africa, which has resulted in a successful economic, intellectual and cultural hub. Qatar had started from being recognized as the pearl and fishing economy and now it is well recognized for the oil and gas industry and the country is known for its high position in the region as well as in the world in this industry. Qatar has earned the highest ‘per capita income’ in world for oil industry. Alike every other country, Qatar has also focused on globalization and it has helped Qatar in two main aspects i.e. economically and culturally. Qatar has accelerated its economy with the help of the present trend of globalization. Alike other industries Qatar oil industry has also shown the effectiveness in globalization with the help of various joint ventures and global supply chain management (U.S. Department of State, “Background Note: Qatar”). For example, the ExxonMobil possesses a prime position in the market in oil sector in Qatar. ExxonMobil has signed a Heads of Agreement (HoA) with Qatar Petroleum considering the supply of oil from Qatar to the US for next 25 years. This agreement involves these two oil firms to build three oil trains at the RasGas II. The gas to be used in the trains for the project would be provided by the North Field. The amount of the gas would be 737bcm of the reserve. The net investment for the project is identified as US$12bn (ExxonMobil, “Qatar Petroleum & ExxonMobil to be Host Sponsors of Qatar Business & Investment Forum in New York”). Strategic Importance for the Industry for the Country The Qatar oil industry is the most important industry of all in among all other industries of Qatar. The economy of the country is driven by the revenue generated by the oil industry of Qatar. The oil industry of Qatar provides nation’s 56% GDP, which is highest compared to the contribution from any other industry. The oil industry of Qatar provides ample opportunities for the country’s economic growth. It also provides huge opportunity for employment generation in the oil sector. The rising position of the oil industry also helps to maintain the global relationship with other companies. For example, the Exxon Mobil has proved its technological leadership to provide high class performance. The company focuses on the constant and continuous improvement, and the company policies focus in capturing existing oil companies with the improved technological assistances. The ExxonMobil also signed a joint Venture with the Qatar Petroleum to ensure the global relationship and to maintain the global supply chain management. The joint venture with an organization in the Qatar oil industry facilitates ExxonMobil to increase the revenue of the company as well as the concerned country from where the ExxonMobil operates. The new projects of ExxonMobil and Qatar Petroleum would also offer the benefit of employment of various potentials (US Department of State, “Background Note: Qatar”). Future Prospects of the Qatar Oil Industry The Qatar oil industry has focused on the future prospects such as, increased amount of oil reserves, which has been decided based on the continuous success of the production rates and there are many more projects that are already in action and it is expected that the projects would help the industry in various ways. According to a news report, it has been noticed that the Qatar oil industry would focus on the factors like, supply–demand prediction of the natural gas, and crude oil and petroleum products by 2020. It would also focus in the projects related to the gas and oil in the sectors like middle stream, upstream and downstream. The oil industry of Qatar would include various storage capacities, and also the pipelines for crude oil in the near future (Business Monitor, “Qatar Oil & Gas Report”). ExxonMobil has also shown their future prospects based on these factors. The organization has planned to expand their energy supplies for others. The company has its improved technology and the various energy sources. The company has estimated that natural gas would go beyond coal as source of energy. They have also estimated that the demand of oil would increase to a figure of 100 million barrels in a day by 2030. Thus, it can be comprehended that the prospect for the oil industry is quite good (Smith, “Exxon Mobil's 2030 Forecast: Natural Gas To Surpass Coal As Energy Source”). Conclusion The Oil industry of Qatar has effectively maintained the trend of the industry, the local and the global market relationships and it has also focused on the social responsibilities. According to recent news, it was found that the World Petroleum Congress has planned to take additional corrective measures to prevent the increased emission of oil and gas, the fossil fuels and also the measures to maintain a balance between the nature and the climate. The oil industry in Qatar has highlighted that they would be taking various different steps to prevent the Carbon Di-Oxide emissions. The oil industry of Qatar is quite responsible towards the society and it is noticeable from the activities taken by the companies under the oil industry. Exxon Mobil has taken various safety measures to ensure safety for their employees. The company has shown its efficiency to maintain the bio diversity, and also to reduce emission of oil and gases. The company helps in managing the water and helps to keep it fresh. ExxonMobil is also effective in waste management. The company strives hard to maintain a balance between the nature and the climate (Kaye, “World Petroleum Congress in Qatar This Week Will Be Carbon Neutral”). Works Cited Business Monitor. “Qatar Oil & Gas Report”. December 31, 2011. Report Description, 2011. Bertrand, Pierre. “ExxonMobil, Qatar Petroleum Line up $10.4 Billion for Barzan Gas Project in Qatar” December 31, 2011. Home, 2011. ExxonMobil. “Qatar Petroleum & ExxonMobil to be Host Sponsors of Qatar Business & Investment Forumin New York”. December 31, 2011. Files, 2011. ExxonMobil. “2010 Summary Annual Report”. December 31, 2011. Annual Reports, 2010. Iqbal, Asif. “Darwish Technology Eyes 50% Market Share”. December 31, 2011. Business, 2011. Kaye, Leon. “World Petroleum Congress in Qatar This Week Will Be Carbon Neutral”. December 31, 2011. Home, 2011. Qatar Embassy. “History of Oil Discovery”. December 31, 2011. Prelude, 2010. Qatar Petroleum. “2009 Annual Report”. December 31, 2011. Files, 2009. Sullivan, Tim. “Shell to Buy Pennzoil-Quaker State”. December 31, 2011. Lube Report, 2002. Smith, Jack Z. “Exxon Mobil's 2030 Forecast: Natural Gas To Surpass Coal As Energy Source”. December 31, 2011. News, 2011. Total. “Energy in Motion”. December 31, 2011. Profile, 2011. Tuttle, Robert. “Qatar Petroleum, Shell Sign $6.4 Billion Petrochemicals Deal”. December 31, 2011. News, 2011. Thompson, Eric V. “Major Oil Companies Operating in the Gulf Region”. December 31, 2011. The Library, 2011. U.S. Department of State. “Background Note: Qatar”. December 31, 2011. Profile, 2011. Read More