Analysis of Oil marketing industry

ANALYSIS OF PAKISTAN OIL MARKETING INDUSTRIES

Analysis of Oil marketing industry OIL MARKETING INDUSTRY OF PAKISTAN

GROUP MEMBERS Mohsin ali (5303)

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Contents
ACKNOWLEDGEMENT .........................................................................................................................................5 EXECUTIVE SUMMARY ........................................................................................................................................6 INTRODUCTION ...................................................................................................................................................7 HISTORICAL PERFORMANCE OF THE SECTOR: ..............................................................................................8 STREAMS ..............................................................................................................................................................9 i. ii. iii. iv. Up-stream.9 Mid-stream.....10 Down-stream.11 What is OMC?. .....11 FIVE MAJOR COMPANIES THAT COMPLETELY HANDLE THE DOWNSTREAM SECTOR ARE : .............. 11 RAW MATERIAL SOURCES ............................................................................................................................... 12 PORT FACILITIES.12 TRANSPORTATION.....12 PETROLEUM PRODUCTS OR INDUSTRY OUTLINE & ITS SIZE ..................................................................... 13 i. ii. iii. iv. v. vi. vii. viii. Liquefied Petroleum Gas (LPG) High Speed Diesel (HSD) KEROSENE Jet fueNAPHTHA FURNACE OIL Residual Furnace Oil LUBE BASE OIL CNG

TOP FIVE OMCS OIL MARKETING COMPANIES OF PAKISTAN16 i. PAKISTAN STATE ...16 ii. shell PAKISTAN LTD..17 iii. Caltex Pakistan ltd............................................................................................................................................... 18 INTERNATIONAL BECHMARK:- ......................................................................................................................19 i. International Player .............................................. .19 ii. World leader:- ............................................................................................................................................ .19 TOP FIVE LARGEST COMPANIES IN THE WORLD ...................................................................................20 1. 2. 3. Exxon (USA) ..20 Shell (Netherlands) ...21 Gazprom (Russia) .21

ANALYSIS OF MACRO ENVIRONMENT .................................................. ERROR! BOOKMARK NOT DEFINED. i. ii. iii. iv. political environment..22 current state legislation home markets..22 various government policies.23 trading government policies. ...23

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v. vi. vii. viii. ix. x. xi. xii. xiii. xiv. xv. xvi. Home market lobbying/pressure groups.23 local or international War..23 Local War : .24 ECONOMIC ENVIRONMENT......24 Home economy situations.25 Trends in home economy.25 Trends in the overseas export market26 General taxation issues26 Seasonal or weather affection.26 market trade cycle.27 Rising prices of petrol27 High Sales Tax...27

MARKET ROUTES AND DISTRIBUTION TRENDS ........................................................................................... 27 TRANSPORTATION .................................................................................. ERROR! BOOKMARK NOT DEFINED. a. b. c. d. e. f. Shipping Vessels28 Tank Lorries...28 Pipeline....28 Railway tanks.....29 Retail Outlets..29 Trend in interest and exchange rates.29 SOCIAL ENVIRONMENT ..................................................................................................................................... 30 a. b. c. d. consumers lifestyle trends30 consumer attitudes and opinions; ...30 changes of law that are affecting social factors....30 ethical issues involved: .31

TECHNOLOGICAL ENVIRONMENT ......................................................... ERROR! BOOKMARK NOT DEFINED. a. b. c. d. competing technology: ....31 Replacement of technology/: ..31 currently technology...32 Access.to.latest.technology,.licensing,and patents..32

THREATOF SUBSTITUTES......32 BARGAINING POWER OF BUYERS .................................................................................................................. 34 i. ii. iii. iv. v. International customers.34 Industrial consumers..34 Residential consumers.34 Government import on crude oil...35 Local customers.....35

BARGAINING POWER OF SUPPLIERS ............................................................................................................. 36 i. ii. iii. iv. International suppliers......36 role of OGRA s .36 substitutes Impact suppliers.36 impact of Local suppliers...37

ENTRY BARRIERS .............................................................................................................................................. 37

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i. ii. iii. Require High Capital Of Investment...37 High Risk Investment37 Easy entry to the upstream sector..37

COMPETITION ..................................................................................................................................................... 38 a. b. c. Upstream sector.38 Midstream sector....38 Downstream sector....38

ANALYSIS OF OTHER ISSUES .......................................................................................................................... 39 i. ii. iii. HR issues.39 Marketing issues39 Finance issues....40

RECOMMENDATIONS......................................................................................................................................... 41 BIBLIOGRAPHY ................................................................................................................................................... 42

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1. ACKNOWLEDGEMENT
First and foremost, I would like to express my gratitude to Allah, the most gracious and merciful, for all the things he has blessed me with and for giving me the strength and courage to finish my report. I am thankful to the Qazi Muhammad Salman who guided and motivates us in different process of report making. It was because of her kind efforts that I have been able to explore the practical world in a very professional manner. Last but not the least I would like to thank all of my fellows. They have been remarkable in leading me supporting and encourage in my work.

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2. Executives summary

The research includes the analysis of marketing of oil petroleum and gas , the report is almost based on descriptive analysis , and its also figure out the quantity of production of the top level industry , the analysis is totally on the streams , in which the petroleum industry is stand on , these are upstream , midstream ,and downstream. This report extract almost all the aspect of analysis of Pakistan petroleum industry , the report include the brief introduction , in which you read to know the basics of petroleum industry , report covers the basic concept of petroleum , that are the stream , and you have to easily understand the concepts of these streams , the report also include the analysis of international bench mark in which we have to cover International Player , of the industry in which some are wants to lead , and some are currently on the leading position, international benchmark also covered the top five leading companies in the world. The repots briefly approach to the analysis of macro environment , the political environment , environmental issues , current state of legislation of home market , impact of government policies , industry internal issues , international war and local war on prices , these are all covers in the macro environment , home economy and current economy situation are also discuss in the report in the place of economic environment, there are more heads which are include in the economic environment such as overseas export on marker , taxation issue , market trade cycle , price rising trends , general sale tax issues , these are all head told the analysis of macro environment. The research also include the analysis of social environment in which you read to know the how the customer buying behaviors affect on the social environment, also compare the social environment of local and international industry, after the analysis of social environment the research also include the technological environment, how the new technology replacing the old technology, also describe the current technology that is using in the process of exploring and drilling activities, The report also analysis the porter competitive forces , in which you know how th substitute the threat the petroleum products , porter competitive forces also analysis the buying behavior of customer and bargaining power of supplier , the report also describe the entry barriers , competition of market in the industry . The HR issues , marketing issues , and finance issues are also analysis in the report , At the end of the report the recommendation include in the report to set the weaknesses of the marketing of petroleum oil and gas.

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3. Introduction
Petroleum industry is depend on the exploration , and drilling , transportation , and last the marketing of the petroleum and gas products , for any industry energy is the source of its growth , maintains and its development of the country , same like the petroleum is major energy to develop the countries industrial growth the first exploration and drilling in the world is takes place on the Pennsylvania by Edvin Duke in 1859 , in indo-pak the petrol firstly explore in Mianwali in 1886 , now it is the district of Punjab . . Inside gas market place modeling became speedily just after theparticular Arab embargo plus the quadrupling of thegas selling price inside 1973. Stephen Powel (1990) brings up in which from the later seventies there are more than 30openly readily available gas market place products. Since then the particular gas market place modeling energies get slowed downsignificantly. In this section of thereview, we all briefly provide greater well-known gas market place products that werementioned inside research in addition to scientific tests executed currently after which it detailed a lot more for the optimization products seeing thatthey may be a lot more linked to each of our offered product. Oil marketing industry is categories in three of the following stage , upstream , midstream , and downstream , petroleum , and gas industry is not only cover the process of exploring , drilling and transfer the raw material in to different shape of products but its also include the process of providing these products to the end consumers , and also include the marketing and distributing the petroleum products , this process comes after the initial processes i.e. upstream and midstream.

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4. Historical Background of Industry:
The beginning of investigation of petroleum is more then a centuary ago. In 1866 there was an first exploration at kundal at the range of mian wali the district of Punjab provience , in 1859 seven year g back there also was an first drilled by thr Titus ville , pennsylania at the support of Edwin duke . the drilling and exploring of crude oil was continued during the last quarer of the 19th centuary , there was also the discovery of oil at khattan in balochistan . in 1885 to 1892 there was the major success dirilled the crude oil i.e approximately 25000 barrels at khattan in Balochistan .the indio-pak have timely controlled the exploring and drilling activities . Thin 1915 Attock oil compant making the great market achivment ws that time , attock oil company explore thr crude oil in balochistan and drilled in to it . when the gov give the opportunities to the private compaies i.e. Burmah oil company , indolex petroleum company , withall petroleum corporation including attock oil company explore the crude oil and wet gasses and perform the drilling activities in different regions of the state. In 1947 after the creation of Pakistan an india , the Pakistan government has need to apppropiate rules and legal frame work for exploring and drilling of petroleum and gas in Pakistan , in 1949 pak gov make the legal frame work for the exploration and drilling activities f Pakistan , this new legal frame work was prve to be very helpful to finf yhe new ways of exploration , and companie was that time such as Attock oil company an Burmah oil companies increases thir work effisciency due to these rules and regulation , at the same time these companies establish the Pakistan oil fields Lts (POL) and Pakistan petroleum ltd (PPl). In 1956 the production of petroleum rapidly dicrases , although there was a some plases where drilling process was seems to but its also seems to be failed. The were also perform the work efficiency was increases by the some foreign companies but it was also unsuccessfull. To sustain the dilling activities the government takes the decision to full invole the process of exploring and drilling activities . in 1961 the for the investigation of petroleum and drilling of the crude oiland gasses the government makes the special sector i.e. (OGDC)oil and gas development corporation , in1961 this sector was explore the crude oil in total nine offshore regions. The golden period work by the (OGDC) was between 1883 to1987 , in this period thre was total 65 explorately wells that was also due to with the help of private sector , in these 65 well the drilled points was only base on 13 drille spots , 1:2.87 was the success ratio of per yer years. During 1990 to 2000 beyond we saying the first achivment madeby th shell introduce the first oil marketin company of Pakistan , then PSO came to in , and give the
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competitive edge to the shall Pakistan through its new innovative ideas, pso makes the value added products for the end consumers.

5. Pillars Of the Industry:

Petroleum oil and gas industry based on three of the following pillars:

1 Upstream 2 Midstream 3 Downstream

i.

Upstream:

The process of searching, exploring, drilling, of the reserves, its include the process of drilling the patrol under ground and under water i.e. sea , upstream is also categories in two of the following category.

a. Offshore exploration: Offshore means under the water and far away from the land , in the offshore exploration the exploring and drilling activities are under the water and far awy from the land is called offshore exploration.

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b. Onshore exploration: In simple words onshore means onground , land and onto dry land , the onshore exploration means the drilling activities are perform on to the land and far away from the water i.e. sea is called onshore exploration. Top 5 Exploration companies OGDCL POL British petroleum PPl BHL production (barrels in million) 11.501 4.773 4.626 1.303 0.656

ii.

Midstream:-

Midstream counters all the fundamentals which are used in upstream sector is respond by the midstream sector , all the inside of upstream are used in the midstream operational process , basically midstream is the process where collection of all the wet gasses , crude oil , and other minerals from the wellhead , and its transportation to the refinery spots where these raw material convert in to different products. Refineries Under the consideration of OCAC (oil companies advisory committee) are five major refineries that handle the midstream sector great fully.

S: No 1 2 3 4 5

Companies Names Pak Arab Refinery Limited National Refinery Limited Pakistan Refinery Limited Attock Refinery Limited Bosicar Refinery Limited

Million tons /day 4.50 2.71 2.1 1.82 1.50

Barrels /da 100000 62050 47110 40000 30000

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iii.

Downstream:-

The downstream sector is handling the process of making the finished product and carrying them to the end consumers; it involves the marketing, selling and distribution of petroleum products to the consumers.

a. What is OMC?

The companies involved in the process of rattail, and distribution of petroleum products is called OMC (oil marketing companies).

6. Five major companies that completely handle the Downstream sector are :
1 Pakistan state oil ltd 2 Shell petroleum Pakistan ltd 3 Caltex oil Pakistan ltd 4 Total Parco Pakistan ltd 5 Attock oil Pakistan ltd

This figure shows the complete streams process:

7. RAW MATERIAL SOURCES

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8. PORT FACILITIES Karachi port Trust operating and receiving crude oil , hydrocarbon products , low sulfur fuel and high sulfur fuel , Karachi port trust have the storage ability of theses product are 26million tons with the surety of land for the export and import of these products , Karachi port is capable to store 14 million tons of liquid cargo and 12 million tons of general cargo . Karachi port providing the facility to the store the tanks of refinery companies, any company store their material for the month , if there is no critical situation on the port.

9. Transportation of the Petroleum Products: Mobilization of crude oiland petroleum products inside the country is mostly carried with the help of road bowsers and Lorries. Approximately the number of Lorries working domestically is 1600 to 1800 with huge capacity of containing oil (20-40tons). These all tankers are running with private individuals & small contracting firms.High rates the administration are a reason of largely excess of tankers. In addition to the road-tankers fleet, Pakistan Railways (PR) contributes in transporting most ofthe fuel oil, and runs 5,400 tank wagons are used for this purpose. .

10.

Petroleum Products or Industry Outline & its Size:

The companies collect the crude oil from the wellhead, and through this crude oil companies make the many petroleum products to set the different boiling points of this crude oil, and also collect the many gasses who uses in different process are also collect from the crude oil , there are almost 40 refined products which are extracted from the crude oil . Some major products and their description are as under: Motor Gasoline (MOGAS) Motor gasoline is consist of many hydro carbons and is its help to contribute a sales of 7% of total products sales volume , its uses are residential mostly use in the home generator , motor bikes , now a days its consumption is down in Pakistan because CNG cater the many of its customer who covert their engine gasoline to CNG. MOGAS sale in Rs97.58 to Rs103 per litter.

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i. Liquefied petroleum Gas:

LPG extracted from crude oil and used as an alternative automotive fuel. Its use is illegal in the country, however many rickshaws, black cabs, and buses have exhausts that use them. The cylinders are dangerous and increase the chances of explosion due to its chemical nature. They are used widely because of it being cheaper than other sources of fuel.

ii.

High Speed Diesel Oil :

(HSPO) one of the most demanded products in Pakistan. This is the main earnings driver among POL products, generating 46% of overall sales volume. HSD volumes are reflected in the transport sector which is expected to take a quantum leap over the next 5 years. The transport sector accounts for approximately 78 % of total HSD sales followed by Agriculture which is around 16% of total HSD volumes. The HSD volumes have declined according to the AKD securities report. The demand of this always exceeds the indigenous supply and is thus imported. It contributes highly towards the import of petroleum, the basic use for HSPO is in the cars , high vehicles transports , its consumption is increase by 10.76% on past three decades. iii. KEROSENE

It is used to make jet fuel. Kerosene can be further divided into, JP-1, JP-4, JP-8. The production for JP-1 has almost finished. JP-4 is used for Domestic purposed and JP-8 is for the Firefighter planes; for the army. After the recent war in Iraq and Afghanistan, the demand for JP-8 has risen. The reason for this is, American planes use JP-4 and as a result of which all the planes in Pakistan converted to it as well. PSO supplies the fuel to American as well as the Pakistan army and is exported to Afghanistan.

iv.

Jet fuel

It has become a key product generating 8% of total POL sales volume. Jet fuel has shown an increase in volume that can be attributed in part to the increase in aviation activity due to improving economic conditions in the country. The primary driver for the growth in Jet Fuel volumes is exports. In FY 06, exports surged by almost 50% where the export concentration lies primarily in Afghanistan towards civilian as well as military
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consumption. We expect Jet Fuel volumes to continue growing as activity in the export activity in the segment continues to increase.

v.

NAPHTHA

This is another product of the distillation process which doesnt have much use unless it is converted to HSD. Pakistan doesnt have the hydrocracker which has the ability to convert Naphtha into HSD. As a result, excess NAPTHA is exported abroad. If we were able to form HSD from it, we would save thousands of dollars and reduce the import bill. The largest product of crude oil after refining is NAPHTHA.

vi.

FURNACE OIL

There are 2 types, HSFO (High sulfur furnace oil) and LSFO (Low sulfur furnace oil). Furnace oil is required by most industries in the form of fuel. It is largely consumed by the power generating plants such KESC and HUBCO. It is further required in boilers such in the sugar industry (when the byproducts are unable to meet the required demand) as well as the cement industry. The demand for furnace oil has shown decline, this is due to discoveries of alternate cheaper resources such as coal, hydro, gas and ethanol. The fluctuation in oil prices has a detrimental affect on the economy considering that oil and petroleum contribute the highest to the import bill.

vii.

LUBE BASE OIL

Used in the formation of lubricating oil. The oil is made of different viscosities and is used in car engines.

viii.

CNG

The advent of Compressed Natural Gas has made considerable inroadsas substitute for motor gasoline consumption. Pakistan, at present, is the largest Asian consumer and the third largest consumer of CNG behind Argentina and Brazil globally. In FY 05, the CNG market accounted for 2% ofthe total natural gas market. The GoP has promoted the use of natural gas as an alternative to liquid fuels considering the burden on the import bill of crude oil as well asthe environmental benefits as compared to the high emission fuel oils.

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11.

Top Five Oil Marketing Companies In Pakistan:

Pakistan State Oil Shell Pakistan Ltd Caltex Petroleum Ltd Total Parco Ltd Attock Patroleum Ltd

i.

Pakistan State Oil:

PSO was formed in 1976 through amerger of Pakistan National Oil, Premier Oil Company Ltd and State Oil Company Ltd. The GOP at present controls 54% stake of PSO including direct and indirect ownership, outof which 51% is up for privatization. PSO sells the full range of products thatinclude Mogas, HSD, Fuel Oil, Jet Fuel, Kerosene, LPG, CNG and petro-chemicals. PSO waslosing ground in key market segments, Mogas and HSD, as Shell Pakistan was giving a run for itsmoney. With a revamp of its corporate image enabled PSO to put a stop to its declining market share as the initiatives they undertook began to gain popularity, PSOs market share started to rise. PSO regained its market leader status from ShellPakistan in FY 03. PSO is the largest oil marketing company andthe onlynational one in Pakistan with a 61% market share in overall sales volume. When the overall sales volume had been declining in the past few years, the company decided to actively pursue retail markets with new, renovated pumps. The company hasalso introduced a variety of products that will help them in maintaining their market share which nclude corporate credit cards, fleet cards and prepaid cards. They have built New Vision outlets to provide better quality service to itscustomers. At present PSO has more than 3700 outlets located hroughout the country. Out of these, 150 outlets have been revamped so far and another 40 will be fully functional by
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the year end. At the sametime the number of company ownedand operated outlets has been increasing. PSO can establish additional value added services in conjunction with other consumer corporate. PSO has been aggressively on the marketing sideespecially with the advent of loyalty cards, enabling it to maintain market share in the retail level products particularly, the Mogas and HSD category. Furthermore it has a strong brand franchise in rural areas withthe highest maker penetration, and the company boasts the largest storage capacity (81% of total national storage). PSO has the largest infrastructure, it is expected to maintain its edge for a considerably long time and it has; since the past 5 years ithas been the market leader.

ii.

Shell Pakistan Ltd

In 1928, the Royal Dutch Shell plc andthe Burmah Oil Company Limited in India were merged and Burmah Shell Oil Storage and Distribution Company of India was formed. After the independenc of Pakistan in 1947, the name was changed to the Burmah Shell Oil Distribution Company of Pakistan. After the transfer of 51% stake to Pakistani investors in 1970, the name was again changed to Pakistan Burmah Shell (PBS) Limited. In 1993, as economic liberalization began to takeplace, Burmah divested from PBS and Shell Petroleum stepped into raise its stake to 51% andhas gradually increased it to 76% present. Shell Pakistan is divided into six functionalareas i.e. Retail,Commercial, Aviation, Operations, Finance and Human Resources.Shell Pakistan is the second largest oil marketing company in Pakistan enjoying a 17% overall market share. Despite the gradual declin in sales volume the company has managed toachieve a 24% growth over the 5 year period. The company was the first to initiate the retail revamping bythe introduction of Shells Retail Visual Identity (RVI). The company has continuouslyfocused on a high margin product mix. Even with declining volumes as witnessed in key POL products the focus onhigh margin and low volume products enables the company o maintain a competitive edge. Numerous Customer Value Propositions are delivered atthe retail outlets that include the first ever drive-through ATM, first ever pharmacy, and they now even provide the customers with the convenience of paying household bills at several pump sites in the major cities ofthe country. Market leadership in theLubricant product category (41 % M.S)
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iii.

Caltex Pakistan:

Chevron Pakistan Limited (formerly known as Caltex Oil Pakistan Limited) isa part of Chevron Corporation which is a leader in the global integrated energy business. Chevron is the fifth-largest integrated energy company inthe world. The headquarters are in San Ramon, California, and conducts business in approximately 185 countries, and is engaged in every aspect ofthe oil and natural gas industry, including exploration and production; refining, marketing and transportation; chemicals manufacturingand sales; and power generation. Chevron Pakistan Limited has operated inthe sub-continent since 1938 and apart from the main oil storage facility at Karachi, has 10 Depots throughoutthe country, which includes three inland terminals in Rawalpindi, Machike and Shikarpur. The companys Retail network consists of 598 outlets ocated throughouthe country as well as a wide spread distribution network catering to the demands of the Industrial, as well as the Agricultural sectors. Chevron installed its firstCNG facility at its Company managed retail outlet at Islamabad. Subsequently, more CNG facilities have been added to the network in Karachi and Lahore increasing the number of CNG refueling facilities to 66 nationwide. Inaddition, Chevron hasalso established three CNG conversion kit centers Chevron Pakistan wasthe first oil marketing company to introduce many modern concepts in the industry in Pakistan. Its technical advantage inthe industry is itsstate-of-the art computerized lubricating oil blending plant. Chevron wasthe first in modernizing itsretail outlets, installing electronic dispensers and implementing Customer Service Systems. It was the first oil marketing company to launch a CNG station inin Islamabad in 1998. Chevron isthe pioneer in establishing Convenience Stores and introducing co-branded Cards in the market.

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12. INTERNATIONAL BECHMARK:-

i.

International Player

The Organization of the Petroleum Exporting Countries (OPEC) is an international organization made up of Iran, Iraaq, Kowait, Nigeriya, Angola, Qatar, Saudi Arabi, United Arab Emirates and Venezeula. Internationally organizations aim is that stabilize prices in the internationaloil market with a view to prevent unnecessary harmful fluctuations, giving regard to the interests of the producing nations. OPECs influence however, has not been a stabilizing one. In 1973 crisis developing and developed world faced inflation. Pakistan had an inflation rateof 35% during that period. OPEC nations account for two-third of the world oil reserves and controls 48% of the production, which gives them strong bargaining power as being to be the suppliers.

ii.

World leader:-

The South American country Venezuela has the world largest oil reserves in the world with the deposits 296.5 billion barrels of last year data from BP Plc (BP/) show.Vebezuela has 20% of total global reserves. The second largest country in oil reserve is Saudi Arabia , with the deposits of 267billion barrels according to the last year data from BP Plc (BP/) . Saudi Arab holds 18 % of total global reserve of crude oil . The third largest global reserves of the oil is in Canada , with the deposit reserves of 175.34 billion barrels , and Canada hold the 11% of petroleum reserve through the world.

iii.

Top Five Largest Companies In The World

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1 Exxon (USA) 2 Shell (Netherlands) 3 Chevron (USA) 4 BP (UK) 5 Gazprom (Russia)

a. EXXON: It is world largest company of the oil in the world; this company is located in USA. Criteria for the largest are Assets, revenues, profit and proved reserves. The total asset of company is $331 billion, and revenue for the last year i.e. 2011, is $434 billion, and the income statement shows the $41 billion profit. EXXON has the total prove reserves for the last year is 24.9 billion barrels of oil equivalent.

b. Shells (Netherlands) Shells comes on the second rank of the world largest oil companies in the world, it head quarter is situated at Netherlands , The total asset of company is $345 billion, and revenue for the last year i.e. 2011, is $470 billion, and the income statement shows the $31 billion profit . Shells have the total prove reserves for the last year is 14.2 billion barrels of oil equivalent.

c. Chevron (USA) The third world largest company oil is Chevron, which is located at United States of America, The total asset of company is $209 billion, and revenue for the last year i.e. 2011 is $236 billion, and the income statement shows the $27 billion profit. Shells have the total prove reserves for the last year is 4.3 billion barrels of oil equivalent.

d. BP (UK) The company of UK Comes on the fourth rank of the oil company in the world is BP .The total asset of company is $293 billion, and revenue for the last year i.e. 2011 is
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$376 billion, and the income statement shows the $26 billion profit. Shells have the total prove reserves for the last year is 17.7 billion barrels of oil equivalent.

e. Gazprom (Russia) The Russian company GAZPROM has the fifth rank of largest oil companies in the world , The total asset of company is $328 billion, and revenue for the last year i.e. 2011, is $139 billion, and the income statement shows the $39 billion profit . Shells have the total prove reserves for the last year is 14.2billion barrels of oil equivalent.

13.
xvii.

ANALYSIS OF MACRO ENVIRONMENT

political environment

in the field of petroleum oil and gas marketing industrs political situation are very much critical , there are many issues that are not handle by OGRA , because of fully involvement of corrupted government statistics , the main issue of of the privatization of PSO is running and still this issue have many critical problem and conflict between the OGRAS and ministry of national petroleum and minerals . the second main issue that has been facing by the oil ministry is GAWADAR port , china want to rent this port for the storage and easy transportation of crude oil , but there are some pressure group who are interference this issue ,and the wont that Pakistan rent to their GAWADAR port to the china because of there some profit , there is one more party USA want to this port to storage their finish product , to help their defense agency .

xviii.

Ecological Or environment issues:-

oil extraction as well as production caneasily directly destruction surrounding natural environment. You will find degrees of wildlife as well as environment devastation via polluting of the environment, which include oil waste materials dropping, as well as incidents, like oil spills. Even though oil production is actually willingly conducted simply by authorities as well as non-public firms, yourdestruction triggered to the natural environment just isn't deliberate. This is the circumstance when the firms might be prepared to follow other designs of energy resources; on the other hand, their entire organizations count on oil production as a means involvingsmall business.
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xix.

Current state Of Legislations on Home market:

Prices of oil have shown fixed rise since 2003, the price of 2006 wasthe double as of in January 2004. Supply& Demand also including hypothetical issues and their relationship all leads to the fixed rise inoil prices. This thing hurt many of the world countries. As a result those countries have price shocks as on the dependency of oil at macro level Pakistans economy another reason for contributing to stronger request is thelow level of stocks in industrial level.

xx.

Various Government Policies:

Government has offered anattractive incentives and opportunities in the field of hydrocarbon and production on upstream and downstream sector for both domestic and foreign investors. Currently petroleum and natural resources ministry has asserted to exceed local crude oil production to 100,000 barrels per day fromthe current 67,000 barrels per day and gas production from 4.2 billion cubic feet per day to 5 BCFD till mid of upcoming calendar year 2013.The federal governmentunveiled a new petroleum policy in a bid to attract investment in oil and gas sectors to enhance local production.As production costs, storage, and delivery rise assuming oil isa main source of vitality in the economy. Thus when oil prices exceeds a particular level it influence the economy hence quick prices increase the moremajor influence on the economy of Pakistan.

xxi.

Impact Government policies on Trade:

Your buy and sell operate with the MINICOM calls for a good motion to create things along with companies available not just with the home but in addition with the international marketplaces to have a better equilibrium regarding buy and sell. So, so as to participate in an energetic role in the world-wide growth along with poverty decrease, this Ministry need to be sure that buy and sell is definitely an motor regarding growth simply by concentrating on actions aimed at career creation like income era.

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xxii. Pressure Groups:

Pakistan petroleum industry fully catered by the hand of Government politician , they catered all the industry sources , to save their benefit , the is very hard to that somebody entered in this market because they create many barriers to the new entrants for the sake of their benefits , although there a lot of pressure of the international market , the USA fully involve in the Pakistan petroleum industry , Pakistan cant explore their reserves because the pressure of united state , they make the types of polices and regulation that Pakistan cant explore and drilled the crude oil and other minerals , because the bad economy situation.

xxiii. International War: The Chinese government is negotiating with the government aboutthe construction of oil refinery at Gwadar port. Pakistan is considering providing incentives from free land for refinery construction to allowing unlimited duty-free import of crude for processing, sales tax exemption for refined products exports and infrastructure, but there isa lots of pressure of usa in the Pakistan government , its a very beneficial to the Pakistan if china store there material in the Gawadar port , the economic condition has been positive change if the government give to their port to he Chinese government . There is one more issue i.e. The nuclear ambitions of Iran have enraged US and other powers. The tussle between the two countries poses a threatof war and creates a lot of uncertainty in oil market which leads to fluctuations in price of oil in the oil market as Iran is the second largest supplier of oil.

a. Local War : OGDC is fully pressures to the local government , there alots of years has been passed to the independence of the country but still Pakistani regulatory bodies cant tackle the issueof the rights of Baluchistan. For every 4 well dug there is a chances of only 1 being successful, this keep a lot of investment and capital tied inexploration and increases the lead time of the supply. Nearly 18% to the world high cost, This has been only due to the discollaboration and conflict between the regulatory bodies. Government and other foreign investors have mademulti billion investments in Gwadar port in province of Baluchistan. The political turmoil in province especially after the killing of Nawab Akbar Bugti escalated the tension and makes it more difficult to attract
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foreign investment in oil and gas sector in the province, thusmaking the prospects of future supplies uncertain.

xxiv. ECONOMIC ENVIRONMENT The appealing demand in country is grown by 6.3% per annum.Demand for current fuels grew by 4.6% per annum. New fuels are leading by oil and gas, whose usage grown up to 6.1% &7.0% per annum. In between this era19712000 the transportation with automobiles and other vehicles is the largest user of petroleum products 48%, shadowed by control 35%. This is been accounted for about 11%, and the equilibrium is used in other sectors including the inhabited sector. Petroleum product prices are higher, sometimes higher than import parity levels because of taxation. The sector accounts for a large share about 10-16 % of total revenues. Petroleum taxes exceeded Rs. 50 billion in fiscal year 1999, as the government elevated surcharges when oil prices fell in 1998-99, & kept end user prices fairly constant. In fiscal year 2000 and 2001, surcharges on petroleum products fell significantly (particularly for HSFO, which fell to zero by July 2000 when the HSFO market was Decontrolled), as the management did not permit on the full impact of increasing import costs to consumers. During fiscal year 2002, petroleum surcharges increased to Rs. 30 billion, largely due to a moderation in international prices. According to federal bureau of statistics (FBS), petroleum products are the main ingredient in import bills with a growth of 10.0%.

xxv.

Home economy situations

Key issues in the economy that impact Global oil prices effects theoil and gas industry of Pakistan because Pakistan oil marketing companies imports more than 70% percent finished goods and raw material from foreign countries.The political trendin Pakistan has worsened the conditions of oil and gas marketing industry. The privatization of PSO has been an issue since few years the Governments wants tomake it semi-public and private. The Government of Pakistan (GOP) is committed to accelerate an exploration and development program in order to reverse the decline incrude oil production. Government has form petroleum policies in different years but they are not effective.

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xxvi. Home Economy Trends: The economy of Pakistan is emerging rapidly. This growth is asking forhuge energy consumption & frequent pressure on Pakistans economy. Our country basically depends upon the resources we have that is of oil and gas to reach its requirement level. The issue arises here that Pakistan unfortunately does not hasenough supply of oil as result Pakistan has to import big quantity of oil and also oil based products from middle east . The resources in natural gas are enough in Pakistan forits latest requirements but the issues which we are seeing nowadays arisen because of a mafia who want take extra profit from thecommon man.

xxvii. Overseas Export Market trend: The exports of our country are not significant however from 2000-2 to 2005-09 exports of our country decreased. The decrease in exports issue our 100% increasein exports of Naphtha .Pakistan also started exporting Motor Spirit from 2000-01,JP-1 from 200102,Kerosene from 2002-03 HSD from 2002-03 ,furnace oil from 2004-06 and Asphalt from 2003-06 and crude oil was exported for alimited time period from 2001 to 2005. The exports of HSD were minimal because it was exported to Afghanistan since they did not had adequate transport facilities and also war in Afghanistan lead to increase in demand of HSD to be used in tanks ,helicopters etc . The export of crude for a limited period was possible because of an oil field at Badin which high quality crude oil that was exportedto earn foreign exchange.

xxviii. Taxation issue: Government give the subsidiary to the petroleum government , but although government failed to tackle the price of petroleum products , Asim hussain the federal minster of petroleum and natural resource was said on an interview that was take by the news channel on last Thursday , that , the provision of subsidy by the government on petroleum products can also decrease burden on people, however, he added that giving subsidy would be a difficult step for the incumbent government he added that Oil and Gas Regulatory Authority (OGRA) was responsible for changing prices of petroleum
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products, adding that the Ministry of Petroleum was not involved in the increment of prices .

xxix. Weather Affects on Upstream sector: Companies must drill wells to confirm whether crude oil or natural gas ispresent deep within the earth. First, geoscientists interpret seismic and geological data to determine the best location to search for these resources. Then rig workersdrill thousands of metres deep into the sea floor, often in severe weather and sea conditions. To handle these challenges, the industryuses large, stable, self-contained platforms to drill wells. xxx. market trade cycle

Government encouraging use of other substitutes Oil imports form amajor portion of our import bill therefore government is encouraging used of substitutes such as CNG, Coal, ethanol, nuclear, solar and wind energy. People haveshown strong affinity towards these substitutes to their cost efficiency.

xxxi. Price rising Trend: Oil has been a subject of historical price rises inthe international market that ultimately increases the price of petroleum products available in Pakistan. Due to increasing prices of petrol people were quick in shifting to substitutes suchas CNG.

xxxii. Sale Tax: The government charges the fuel tax 15% on t petroleum products , to reduces the demand of petroleum product , government to convert their customers to other sources..

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14. Market routes and distribution trends 15.

a. Kpt trend for the Storage : . Karachi port Trust operating and receiving crude oil , hydrocarbon products , low sulfur fuel and high sulfur fuel , Karachi port trust have the storage ability of theses product are 26million tons with the surety of land for the export and import of these products , Karachi port is capable to store 14 million tons of liquid cargo and 12 million tons of general cargo . Karachi port providing the facility to the store the tanks of refinery companies, any company store their material for the month , if there is no critical situation on the port.

16.
g. Transport by ships:

TRANSPORTATION

National Tanker company subsidiary of Pakistan National shipping Company (PNSC) was established in 1981, and itis jointly owned by PNSC and PERAC (State petroleum Refining and Petrochemical Corporation). NTC owns one tanker M.T Johar, with carrying capacity of 80,000 tons which is principally used for transportation of crude oil from the Arabian Gulf to Karachi. The countrys remaining transport needs of imported crude oil aremet through chartered tankers as required.

h. Tankers & Lorries: Road boozers or tank Lorries move most ofthe domestic crude oil and petroleum products. The road tanker fleet is used both for short-haul secondary distribution within cities, and medium tolong haul shipments aroundthe country. Due to pipeline limitations, and severe rail infrastructure constraintsmost transportation is done by road. Companies like PSO use modern systems suchas Radar Gauging System to maintain quality, temperature and level of product (to ensure there are no leakages) inthe lorries. This helped in overcoming problem of adulteration and leakages to a great extent. However, all the Lorries in Pakistan donot have this system and they are not willing to do it due tothe cost attached in replacing theselorries.

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i.

Pipeline System:

The installations and refineries can receive the supply from both pipelines toand tank Lorries; however, depots are supplied only through tank Lorries. White oil pipeline was establishes in 2004 that transports oil from the south ofthe country to the north. It has reduced costs as the transportation cost has lowered; lorries and rail require fuel to work, which is not needed by pipelines.

j.

Railway Lorries & Tankers:

Pakistan railway also play the role to transportation of crude oil , and petroleum products , there has bee 400 taker lorries who have serve for the transfer of petroleum products.

k. Retailer stations Most petroleum products are marketed ex-depot but gasoline. Diesel and kerosene are sold through retail outlets. In recent years many outlets have been extensively renovated and upgraded, especially after deregulation of the sector by the government, which increased the competition inthe downstream sector. They also have to sell compressed natural gas CNG, which has become a serious competitor to gasoline. Increasing attention is also being paid to safety standards andthe quality and quantity of products offered to the consumers.

l.

Trend in interest and exchange rates

As you see our home economic situation the dollar is increase Rs62 to Rs93,the economic growth in the country of over 6% in recent years haspushed the annual demand for oil by over one percent.Sectoral oil consumption during the year 2004-10 was: Power (19.8%), transpport (63.90%), agriculture (9.99%), industry (11.50%), domestic (3.4%) and government (1.95%).
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So we conclude all that exchange rate is directly proportional to the prices , if the dallar increase ther prices of the petroleum products is also increase.

17.

Social Environment

The specific corporate social responsibility (CSR) issues that the oil majors have engaged with and prioritized, the evolution of the CSR agenda through time reflects, to a large extent, the state of play regarding activist and global concerns on social and environmental issues. Although, much of the early CSR focus was on environmental management and protection. In the run-up to unced, the bcssd coined the phrase efficiency and member companies such as Shell, Chevron and Enni proclaimed their commitment to environmental protection. Ennis development of a lead substitute for gasoline

e. Customer buying Trends: consumers consume electricity made from oil. Since electricity hasinelastic demand and consumers have little choices as far as electricity providers are concerned, therefore, they do not enjoy a bargaining power as buyer. Their bargaining is very low. However, the government has initiated a project to generate electricity fromsolar energy reducing dependence on oil for electricity generation. Thus bargaining power of consumers in future may rise.

f. Customer attitude towards Downstream Sector:

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In a current situation the consumers are very much destruct , because they have not any option to choosing energy , the consumption of CNG is very much increase due to increase of car , and almost local vehicles also convert to the CNG, petrol (gasoline Oil) replace by the CNG.

g. Social Enviroment affect by new Laws Amendments: The social trend in oil marketing company which rising in the demand ofoil which is because of raise in population rate. The demand of oil has been increasing rapidly due to the rise in consumption of the consumers. Diesel fuel usage has grown due to lower rates & taxes as compared to petrol. To some extentthey are the effects of promoting CNG which also influenced the motor petrol market in recent years. The oil promotion companies follow HSE which fitness safety and environment. To manage application of HSE values inside the oil and gas sector, OCAC has set up adistinct subcommittee for this purpose.

h. Facing Unethical Issues: The are many ethical issues that are facing by the Petroleum industry, the most important issue here petroleum industry face is Private Strike because of government bad policies, because this is democratic government people come out without hesitations on road they block everything they blocked full of transferring oil by dry port this is very biggest loss for the government and also for the other sectors .

18.

Technological Environment

e. Technological Competitor: In competing technology t petroleum industry is gonevery much competitive environment , on current situation the winning industries , of petroleum in upstream and own strum sectors are OGDCL , POL , British Petroleum and BHL ,there upstream and midstream sector are very much strong , these industries have very much tough competitor with each other. but the situation of Pakistan haveapposite to this industry , as I mention above the Pakistan have very much reserves but it cannot be allow to explore its reserve , the one of the main factor are also the technology , Pakistan have

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not its machinery , Pakistan go through the foreign refineries companies o drilled their reserves.

f. Replacement of Old Technology: Technology is replacing experienced labor bythe necessity and not design, as ageing employees retire with valuable engineering skills, according to IDC experts. Staffing remains a big issue forthe CIOs as the 'digital oilfield' models adopted by national oil companies (NOCs).

g. Current Technology: Currently the upstream and midstream sector primarily engaged inthe manufacturing machinery and equipment for use inthe oil and gas fields or for drilling water wells, including portable drilling rigs. Establishments primarily engaged in manufacturing offshore oil and gas well drilling and production platform areto classified the upstream and midstream . The oil and gas sector is among the biggest IT spenders inthe region, with economies heavily reliant on hydrocarbon exports. Energy firms leverage IT across all core functions, butthe most significant innovations are now in exploration and production.

h. Access to latest technology, licensing, and patents The access of new technology are handle with the hand of OGRA , foreign companies invest all these aspects of new technology , and in downstream sector the licensing patterns and polices have a frame of pattern , but OGRA cant follow these regulation , in Pakistan downstream process the corruptions is involve in each of unit , OGRAS all employs has corrupt , so that If somebody wants to open fuel station in anywhere of the country he have to pay the big bribe to the OGRAS corrupted employees.

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Analysis of Oil marketing industry Porters Competitive Forces

19. THREAT OF SUBSTITUTES a. Ethanol Hydrocarbon The government has started a pilot project on thedirective of Prime Minister to mix 10% of ethanol with the gasoline. The blending of ethanol is on testing stage in Karachi, Lahore and Islamabad. Ethanol a by-predict of molasses obtained through distillation is a comparatively cheaper fuel that would also enhancethe performance of the engine. OCAC has some worries over the issue because successful results of the project would mean 10% shifts inenergy demand towards ethanol.

b. Energy Extract From coal: Most of the cement manufacturers converted their cement plants from furnace oi to coal firing system during 2003 04 .due to this conversion thedemand for furnace oil in the cement industry has been reduced.

c. Nuclear Power of Energy: Pakistan is emphasizing on building alternative energysources due increasing price of oil internationally. A Chashma Nuclear power plant has already been set up to meet our energy need. Since our demand for energy is greater than supply therefore recently government is setting up another nuclear powerplant.

d. Water Energy Water is another alternative to produce electricity. Due toexpensive electricity generation through oil, Pakistans government has planed to build Bhasha dam, Mangla dam and Kalabagh dam so that our rising energy demand is met cheaply. This would influence our petroleum industry because power is the second largest consumer of petroleum products. It accounts for 35% of total consumption. If this were gradually reduced due to dams; our petroleum sector would beadversely affected. Hydropower electricity generation accounts for 40%.

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e. Wood Wood is used, as an alternative energy fuelin rural households because they cannot afford expensive fuels to meet their energy needs. Instead of using electricity made from oil they resort to wood combustion to meettheir lightning needs.

f. Wind and Solar Energy: Alternative Energy Development Board (AEDB) was established to initiatea dynamic programmed to promote, implement and execute alternative renewable energy technologies. The government recommendation includes development of wind and solar energy to ensure that at least 5 percent of total power generation capacity is met through these resources by 2030 i.e. (9700 MW). Alternative EnergyDevelopment Board to ensure the installation of 100MW wind power by June2006 at Keti Bandar and Gharo Sindh and 700 MW by 2010. Development of solar products like solar fans, solar cookers, solar geysers, etc. must be developed throughprivate sector on top priority.

20.

BARGAINING POWER OF BUYERS

vi.

International Customers:

The bargaining power of international consumers is limited since prices are setby OPEC And also petrol has inelastic demand therefore, consumers have to buy it because their vehicles, industries and in short economies ar dependent on it. Internationally, major oil importers such as USA and EU had been trying to contain demand for imported crude through a policy of conservation coupled with increased use of alternative energy resources. In the USA, automobile companiesare now producing cars that can give more mileage per gallon ofoil than before.

vii.

Industrial Customers:

Locally the industrial consumers do not have much say since the prices are setby OGRA fortnightly and are usually based on international oil prices. However industrial
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consumers do have impact because they are shifting to cheaper energy resources for example in 2003 10-cement industry shifted to coal from furnace oil.

viii.

Residential Consumers:

Household consumers consume electricity made from oil. Sinceelectricity has inelastic demand and consumers have little choices as far as electricity providers are concerned, therefore, they do not enjoy a bargaining power as buyer. Their bargaining is very low. However, the government has initiated a project togenerate electricity from solar energy reducing dependence on oil for electricity generation. Thus bargaining power of consumers in future mayrise.

ix.

Government on the import of crude Oil

In Pakistan most of the crude oilis bought from Saudi Arabia under government-togovernment contract. The terms of the contract are not disclosed but the refineries pay full international price, and any benefit and discount accrues to the government. The remaining crude oil requirement is fulfilled fromAbu Dhabi, Iran and Oman. The government buys oil from oil exploration sector and has a high bargaining power. previously for each oil discovery government used to have stake of 50% ,however now it has reduced to 12.5% .even though the bargaining power has reduced over the years the government still enjoys a strong position asbuyer since the sector had been in government control for long and major companies like PPL and OGDCL have been here since 1960s.

x.

Local Usage:

The bargaining power of transport consumers isrising and may continue to rise in future because of increased use of alternative fuels such as CNG and LPG, blended ethanol which may be introduced in future. Also flexi fuel cars using ethanol as fuel would have strong impact on the bargainingpower of transport consumers in near future.

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21. Bargaining power of Suppliers:

v.

International Suppliers:

Because of the shifting of crude oil to another source of energy the international price of crude oil is decreasing, on the last years the price of crude oil is sharply increasing because of the consumption of local transport. There is one more reason of declining the price of crude oil is that the demand of crude oil in international market is decrease, said by the OPEC However the prices of crude oil is decreasing , but the OPEC have strong bargaining power to the supplier , OPEC cut their supply to maintain their price , if OPEC cut the supply of crude oil its impact both of local and international suppliers of crude oil.

vi.

Substitutes Impact on Suppliers:

Due to rising demand of substitutes and trend towards using alternative energy fuels is increasing therefore the bargaining power of suppliers has reduced to a certain extent. The government has recently announced to introduce CNG inpublic transport, which has raised worries in the minds of OMCs regarding their bargaining power as suppliers.

vii.

Impact Of Local Suppliers:

The bargaining power of local suppliers especially of OMCs remains weak dueto semi the Government of Pakistan governs regulated environment where the entire operations flow stream. However as deregulations proceeds inthe future, bargaining power of suppliers will become important over the next 3-5 years.

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22.

Entry Barriers:

iv.

Require High Capital of Investment:

In petroleum industry there is require very high capital to digging the well , the high capital investment require both the sectors i.e. upstream and midstream, also the investor resist to invet their money on two of above sector because the failure of risk is greater then to the risk of success , so the high capital requirement is also the major entry barriers of petroleum industry.

v.

High Investment Risk:

There are many companies who enter the petroleum market of Pakistan but they have to invest on downstream sector , because all are resist to invest on Downstream and upstream sector, because the success risk is very much low i.e. 1:3.5

iii.

Easy entry :13.5

The OGRA make the type of frame work that national and international feel saving their capita and make maximum profit to it , such as the two companies Askars Oil and Baqri Petroleum invest the 500million to the upstream sector.

23.
d. Up-stream sector

COMPETITION

In upstream sector the competition is merge because the their has been many companies lacaal and international. OGDCL , British Petroleum and PPL have give the tough competitive edge because their infrastructure is very strong as compared to the other industries. e. Mid-stream The midstream has five refineries and has oligopolistic competition. The prices polices for the homogeneous products.
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Parco refinery give to the competitive edge to all the refineries , because its products are better quality then others.

f. Down-stream sector The OMC sector is gearing up for increasedcompetition as existing refineries and the evolution of the vertical entities have found it viable to establish retail distribution networks. PSO is the largest oil marketing company in Pakistan with a 61% share in overall sales volume.however, the over all sales volume has been declining in the last few years which has prompted the company to actively pursue its retail market with new, renovated pumps following Shell Retail Visual Identity strategy. The company has also introduced corporate credit cards, fleet cardsand prepaid cards enabling the company to maintain a chunk of its market share. The focus on marketing is significant among OMCs after the deregulation. After deregulation since PSO monopoly dissolved, other OMCs took step to grab the marketshare.

24.
iv. HR issues

Analysis of Other Issues

Organizations inthe Oil and Gas sector are realigning their HR strategies to go with their nucleus business objectives. The roles of HR workers are becoming ever more demanding because ofthe talent-crunch in the division that is staring exact in the face. The talent emergency is building their job of organizing their resources all the more hard. A key issue for HR managers isto work in harmony with the continuously changing business imperatives. therefore, they are not given sufficient time or means to design longterm strategies to grip the talent crunch. usually,, most business strategies are reviewed and tailored at times whereas the management now andthen fails to review the HR strategies whereby making the task ofthe HR manager all the more difficult. The good news is that in recent years some of the companies have realized that there is a critical problem ifthe role of the HR role isnot addressed by the management. New managerial techniques such as professional recruitment - based on systematic assessment tests and executive searches; capability based management; career and succession planning and tailored compensation plans havebeen increasingly gaining ground. Key focusareas for regional players are: HR marketing and recruiting;
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staff development and motivation; rewards and compensation, and performance management.

v.

Marketing issues

Marketing is the wholesale and retail distribution of advanced petroleum goods to business, industry, government and public clients. The price paid by clients is intricately connected to the reality that oil is the key product of international trade. In other words, the oil industry is subjective by economic and political conditions. Other factors influencing price are rig utilization rate sand oil contracts, normally crude oil and petroleum goods flow to the markets that offer the highest value to the supplier, which usually means the nearest market first because of buck transportation cost and superior net income for the supplier. In practice, however, the trade flow may not follow this outline due to other factors that may influence the flow, such as refining configurations, product demand mix,and product quality qualifications. There are also differences in U.S. regional trade that are the result of various conditions, such as the uneven distribution of both production and refining across the United States.

vi.

Finance issues

Financial officers in upstream operations need the aptitudeto make hands-on decisions. They need to do this by reducing pause time between data arrest and data examination and between data investigation and the conclusion of the resultant decisions. We all are familiar with manufacture in a well naturallydeclines over time. In combination with process and production workers, E&P financial executives need a way to quickly evaluate several significant factors including, but not limited to: Price of oil and/or natural gas Revenue calculations from production volume Expected production improvement Duration of production increase Cap-Ex Total allocation forecast for all OCTG items in dollars and metric tons Materials management
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Effectiveness of the oil field services vendor who does the work Cost, including lost production while well is off-line Opportunity cost of enhancing a particular wellvs. other wells in the field These factors (as well as many others) are unified and can have considerable operational and financial implications. The E&P financial executives must be able to analyze multiple scenarios and calculate the expected ROI for each scenario to optimize decision-making. With the new plays, this datahas become Big Data as it has become more volumetric and more varied than ever before.

25.

Recommendations

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In petroleum industries I suggested that OGRA finished his conflict between the investors, because these are the main source who explore and drilled the oil minerals of Pakistan. For the production and exploration companies should set together and make the regulation bodies , and counter these social strike , petroleum industry have faces many loses due to these strike , for every strike the government have paid Rs50million to Rs100million plenty to the KPT port association . To establish the petroleum industry GOGRAS eliminate the conflict with the issues of , safety , distribution , supplying , storage , taxation ,and to on , to the national and international investors. OGRAS should to cleans policy to issuing the license of drilling, exploring , and making of fuel station. Government should make the type of incentive that the owned their drilling and exploring machineries. In HR the petroleum sector is very much sensitive , in upstream sector government make the polices that their trained employee not switch the another country , because one these employee government make so many rupees , actually these trained employees are the main asset of petroleum industry of Pakistan. Government reduces the restriction about the capital investment. In the supply line government use own transport although it hire almost private transportation for the transfer of oil to the one place to another and also form the port. Government should reduces the capital interest so that more national and international invest on the Pakistan petroleum industry like Venezuela and Saudi Arab.

BIBLIOGRAPHY
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www.pakboi.gov.pk/word/oil%20&%20Gas%20.doc http://www.ocac.org.pk/industrysales.asp www.psopk.com www.shell.com www.caltex.com www.ocac.org.pk www.ogra.org.pk Petroleum review Year Book http://www.mbendi.com/indy/oilg/as/pk/p0005.htm\ (worldbank.org/PAKISTANEXTN/.../Oil...Sector/POGSR-2003.pdf)Oil and Gas Journal (OGJ) www.scribd.com/doc/16581862/Paksitan-State-Oil http://www.pakistaneconomist.com/database2/cover/c97-27.asp http://www.ocac.org.pk/industrysales.asp www.interior.gov.pk www.environment.gov.pk www.epb.gov.pk www.ppisonline.com http://www.caltex.com/pk/en/history.asp http://www.apl.com.pk/aplcompanyprofile.htm http://www.answers.com/topic/pakistan-state-oil http://www.totalparco.com.pk/lub http://business.highbeam.com/industry-reports/equipment

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http://www.instituteforenergyresearch.org/2008/06/25/the-worlds-largest-oil-and-gascompanies/ http://www.forbes.com/2010/07/09/worlds-biggest-oil-companies-business-energy-bigoil.html http://www.numbeo.com/gas-prices/country_result.jsp?country=Pakistan http://www.mops.gov.pk/ http://www.ameinfo.com/technology-critical-oil-exploration-revisiting-298528 http://www.exchangerates.org/Chart.aspx?iso_code=PKR&base_iso_code=USD&mode=G&filter=720

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