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Exxon Mobil – Falling

Production Problem
-By Group P1
• Umang Sharma
• Shalabh
• Shah Savan
• Sudip Kar
• Kirti Mishra
Exxon Mobil – A brief overview
 American Multinational Oil & Gas Company
 Formed in 1999 by Merger of Exxon and Mobil

 Ranked No. 2 on Fortune’s 500 list for 2010

 largest of the six oil ‘supermajors’

 Produces 3% of the world’s oil

 3 operating divisions
1.Upstream
2.Downstream
3.Chemical Division


Problem Statement
 The production has fallen consistently from
2006 to present

 Raised questions about growth


 Long-Run decrease in Revenue & Profit


Behavior Over Time Graph (BOT)
BOT – Variables Used
 Production
 Operating Cost
 Revenue
 Profit
BOT – Counterintuitive Behavior
 PRODUCTION
 OPERATIONAL COSTS

 REVENUE

 PROFIT

qExpected:
 Decreasing Margins
 Decreasing Profit
 Decreasing Revenue

qActual: Opposite is observed – COUNTERINTUITIVE


Behavior
Reasons for COUNTERINTITUITIVE
Behavior
 Hike in world-wide Oil Prices in 2006-2008
 Margins Increased

 Losses due to fall in Production and rise in


Operational Cost recovered
 Revenue and Profit Rise

 *Put Chart Here*


Reasons For Falling Production
 DEPLETING RESOURCES

 POLITICAL REASONS

 INCREASING DEMANDS Of RESOURCE-RICH


COUNTRIES

 COMPETETION FROM CHINA


Stake Holder Map

Economic

Community Government

Internal
Exxon Mobil
Media

Customer
Environment
Stakeholder Chart
INTERNAL
• COMMUNITY
 Managers - Local Residents
 Share Holders - Property Owners
 Workers - Local Businesses

ECONOMIC
• ENVIRONMENT
 Commercial Banks - Local environment
 OPEC - Ocean Environment

MEDIA
• GOVERNMENT
 Newspaper - Income Tax Department
 Television - Ministry of Petroleum
 Internet - Ministry of Transport
• - Ministry of
Environment  
•CUSTOMER

 Countries
 Organizations
 Automobile drivers
Identifying Stakes
E co n o m ic Environment :
OPEC: Best means for safeguarding the OPEC Affects the surroundings and local
country’s interests and also ensures the environment.
stabilization of prices in international
oil markets

Customers Government
Country: Imports and Exports of oil and oil Collection of duties from the revenues
related products generated. Controlling import and exports.

Internal Community
Employees: manages and perform various task The company provided employment to local
of the company. residents and help in developing the
overall local surroundings.

Media
Marketing and promotion of company’s
product.
Power Vs Stake Grid

Forma l or Economic Political


Power Votin g
Stake

Equity Managers
Shareholders
Workers

Economic Commercial Banks Income tax Department

Influencers Community OPEC Ministry of petroleum


Media Ministry of
Environment
Causal Feedback Loop Analysis
Questions?