SAUDI ARAMCO
GROUP NO;6
TABLE OF CONTENTS
OVERVIEW OF COMPANY
COMPETITIVE ADVANTAGE
HIGH REMAINING OIL PRICES
GOVT. REACT TO RECORD OIL PRICES
STRATEGIC PLANNING
UPS AND DOWNS OF OIL RETAIL PRICES
OVERVIEW OF THE COMPANY
World’s biggest oil production.
World’s most profitable company.
World’s largest single hydrocarbon network.
World’s biggest oil exporter.
SAUDI ARAMCO
PRODUCTION
COMPANY
NETWORK
Export
TIMELINE OF HISTORY
05
04
03
02
01
1933
1938
1939
1976
1980
Signing with CASOC
Oil concession agreement signed with Standard Oil of California who creates the California Arabian Standard Oil Company (CASOC) to manage the concession .
Commercial oil production
Aramco began its first drilling operations shortly after, starting its first commercial oil production in 1938
Exports
They started to export oil globally.
Enormous production
First to produce more than 3 billion barrels of oil in a year.
Officially born
In the late 1980s, the Saudi Arabian Oil Company (Saudi Aramco) was officially established.
ALBUM OF SAUDI ARAMCO
COMPETITIVE ADVANTAGE OF SAUDI ARAMCO IN OIL INDUSTRY
Major Oil Companies�
Rank | Company Name | Country | State Ownership |
1 | Saudi aramco | Saudi Arabia | 100% |
2 | National Iranian Oil Company | Iran | 100% |
3 | Exxon Mobil | USA | N/A |
4 | Petroleos De Venezuela | Venezuela | 100% |
5 | China National Petroleum Corporation | China | 100% |
6 | British Petroleum | Uk | N/A |
7 | Royal dutch shell | Uk/Netherlands | N/A |
8 | ConocoPhillips | USA | N/A |
9 | Chevron | USA | N/A |
10 | Total | France | N/A |
PORTER’S FIVE FORCES MODEL
Competitive Rivalry
Potential Entrants
Power of Suppliers
Substitutes
Power of Buyers
Cartels
Govt. Regulations
Politics
Integration
Politics
Slowdown in production
Goal beyond economic performance
Joint ventures
Biofuels
Technology
Joint ventures
Rights for investment
Outsourcing
FOREIGN DIRECT INVESTMENT ENVIRONMENT
04
01
02
03
In 2018, Saudi Arabia saw foreign direct investment (FDI) rise by 127 percent year-on-year.
Foreign direct investment to Saudi Arabia rose 10% from $3.18 billion in the first nine months of 2018 to $3.50bn in the first nine months of 2019.
FDI to kingdom rose to $3.50bn in first nine months of 2019.
Saudi Arabia sees biggest rise in FDI in 10 years.
PICTURES ON FDI ANALYSIS
PICTURES ON FDI ANALYSIS
FINANCIAL ANALYSIS & RELATED PICTURES
FINANCIAL ANALYSIS & RELATED PICTURES
FINANCIAL ANALYSIS & RELATED PICTURES
STRATEGIC PLANNING
SWOT ANALYSIS
S
W
O
T
Threats
Decrease in global market share owing to newer exploration capabilities of other �countries,
Continued focus on renewable energy and non-conventional sources of energy,
War and terrorism in the Middle East region leading to drone attack on Aramco.
Opportunities
Global economic growth driving consumption of energy and increasing dependency on fuels,
Saudi Aramco's IPO will bring out the real valuation of the company and ensure more financial and operational transparency.
Weaknesses
High dependency of company's profitability on crude oil sales,
Corporate governance and transparency is an issue at Aramco with very few disclosures made by the company.
Strengths
Huge Production & refining capacity,
High downstream operations and marketing capabilities,
Pioneering advancement in technology & ecologically sustainable growth.
WHY DO OIL RETAIL PRICES VARY SO MUCH BETWEEN COUNTRIES?
Production Costs, Storage Impact
Natural Disasters, Politics Weigh
Supply and Demand Impact
OPEC Influence Prices
Interest Rate Impact
OPEC INFLUENCE PRICES
Oil prices are influenced by a variety of factors but are particularly responsive to decisions about output made by OPEC, the Organization of Petroleum Exporting Countries.
SUPPLY AND DEMAND IMPACT
Like any product, the laws of supply and demand influence prices; a combination of stable demand and oversupply has put pressure on oil prices over the last five years.
NATURAL DISATERS, POLITICS WEIGH
When a natural disaster or world crisis is a potential threat to the oil supply or distribution process, the event creates uncertainty about the future of oil supply and demand. This uncertainty often causes volatility in pricing.
PRODUCTION COSTS, STORAGE IMPACT
Production costs influence prices, along with storage capacity; although less impactful, the direction of interest rates can also influence the price of commodities.
INTEREST RATE IMPACT
One of the basic theories stipulates that increasing interest rates raise consumers' and manufacturers' costs, which reduces the amount of time and money people spend driving. Fewer people on the road translates to less demand for oil, which can cause oil prices to drop.
CAN SAUDI ARAMCO COUNT ON HIGH REMAINING OIL PRICES?
YES
Saudi Aramco can count on oil price remaining high.
Saudi Aramco Oil Policies
High dependence oil revenues
Saudi Aramco seeks high price
Strong Supply and Demands
Market Share
Leadership Role
HOW SHOULD GOVT. IN OIL CONSUMING COUNTRIES REACT TO RECORD OIL PRICES?
BY DEALING
Saudi Aramco make a deal with an oil- exporter country, like give and take policy.
BY BUYING
For good economical country they can buy the oil in high price.
USING ELEMENT
They can use another element for their power source.
BY SAVING
use those related things with oil for a limited time that they can save the oil.
HOW?
GLOBAL OIL PRICES IN 2020
YOU
SO MUCH!
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