Øyvind Hansen, Mickey (Bar) OtterleiBØK320 Markedsføring, Høst 2013, Høgskolen i Molde
PetroleumFrom A Marketing Perspective
Petroleum Industry PortfolioWe don’t need marketing really; you will buy our products anyway
▪ No need to prove our products ▪ No need to lure you into buying ▪ It is a supplier’s market
▪ You all need petroleum for transportation, medicine, agriculture, plastic products, and this is just to start with
▪ You are in our pockets
Do You Have A Driving License?
It means that it will run out one day, as all natural resources when being over exploited
Fossils are pressed between crusted hot layers
for millions of years
Refined natural gas, gasoline, naphtha, kerosene, fuel, lubricating oils,
paraffin wax, & asphalt
So What Is Petroleum?
Thick, flammable,
yellow to black colored mixture
of gaseous, liquid and solid
hydrocarbons
BUT The first oil company was established in 1858;
Seneca Oil Company started drilling in Titusville Pennsylvania,And oil companies started popping out everywhere.
Egyptians mummification
BabyloniansBuilding Material
ChineseHeating
How Long Have We Used It?
When Did Oil Become Essential?
A World Of Petroleum Seekers
The countries who are not in the game, wish they wereThose who are, have a lot of power over the rest
http://labs.wnstnsmth.net/worldoil/
RUSSIA
Gazprom:• 9,7 mil. barrels a day• Owned by the Russian
government
Rosneft:• 2,6 mil. barrels a day• Owned by the Russian
government
Lukoil• Private ownership• 2,2 mil. barrels a day
USASAUDI ARABIA
• Biggest oil company in the world
• 12,5 mil. barrels a day
• Owned by the state of Saudi Arabia
But there are many more...
The Petroleum Giants
ExxonMobil• Largest publicly traded
oil company in the world
• 5,3 mil. Barrels a day
Chevron• 3,5 mil. barrels a day• Internationally
involved in exploration
The World Leaders12.5
9.7
6.4
5.3
4.44.13.93.6
3.5
3.2
2.9
2.7
2.62.6
2.62.3
2.32.2
2.22.1 2 1.9 1.61.4
Saudi Aramco Gazprom National Iranian Oil Company ExxonMobil PetroChina BP Royal Dutch Shell
Pemex Chevron Kuwait Petroleum Corp. Abu Dhabi National Oil Co. Sontrach Total Petrobras
Rosneft Iraqi Oil Ministry Qatar Petroleum Lukoil ENI Statoil ConocoPhillips
PDV Sinopec Nigerian National Petroleum
ROSNEFT
ARAMCO
GAZPROM
ExxonMobilCHEVRON
LUKOIL
We Control 44% Of The World’s OilSaudi
Aramco16%
Gazprom12%
Exxon-Mobil
7%
Chevron4%
Rosneft3%Lukoil
3%Statoil
3%
The rest of the world
53%
The other 18 biggest companies, and the small players we do not hear so much about
How Do We Play The Game?• We create joint ventures
We all have businesses with the others
• We outsource our marketingWe have companies that do the marketing for us
• By gathering informationWe must be updated all the time about what is going on with the other players in the market
• By thinking of our PR nonstopWe must take the green parties off our backs
Petroleum Supply ChainExploration
Production
Crude Pipelines
Shipping
Storage Terminals
Product Pipelines Trading
Industrial Markets
Commercial Markets
Distributionretailers
Market/Product Grid
Same Product
Same Market
New Product
Same Market
New Product
New Market
Same Product
New Market
A new product is spread at almost all the markets
simultaneously, which means no competitive advantage to no one
through here..
Saudi Aramco Joint Ventures2002 • 50% shares in Motiva (belongs to chevron),
making Saudi Aramco a Co-Owner with Shell
2004 • 10% shares in Showa Shell Sekiyu K.K., a Royal Dutch/Shell refining & marketing arm in Japan.
2005 • Developing an integrated refining & petrochemical complex with Sumitomo Chemical Co. (Japan)
2007• Agreements with ExxonMobil, Sinopec Corp &
the Fujian Provincial Government of China to form 2 joint ventures: • Fujian Refining and Petrochemical Co. Ltd. (FRPC) • Sinopec SenMei (Fujian) Petroleum Co. Ltd. (SSPC),
a marketing venture.
2011 • Formed the Sadara company with Dow Chemical Company (USA).
2012 • The Japanese-Saudi Yanbu Aramco sinopec refining company was founded.
SaudiAramco CSR Activities“We at Saudi Aramco are constantly seeking to enhance our positive impacts on the Kingdom’s economy, its communities and young people, and its natural environment.While supplying energy to the world is our core purpose, our sense of civic duty and mission extend far beyond running a successful business.”
Ras TanuraCommunity Project
Responsible Competitiveness
Encouraging new businesses to be
friendly to society, efficient and to deal fair
trading
”we remain committed to reducing the impact we have on the environment”
IT Schools, Awards,
Stipends, Free
Education
Gazprom Joint Ventures2001
• Gazprom, Rosshelf and Rosneft signed an Agreement on joint development of the Prirazlomnoye oil field located on the Pechora Sea shelf.
2002 • Gazprom, Royal Dutch Shell and ExxonMobil signed in Beijing a Framework Agreement with the Chinese gas company PetroChina
2003 • Gazprom, Rosneft and Surgutneftegaz signed the Agreement of cooperation to set up a consortium
2008 • Shareholders Agreement among Gazprom, Total and StatoilHydro on establishing the special purpose company Shtokman Development AG
2009 • Implementation Agreement setting the terms for Gazprom to acquire a 51 per cent stake in SeverEnergia among Gazprom, Eni and Enel;
2011 • Agreement on Gas Supply between Gazprom and LUKOIL;
2012• Agreements with Japanese Far East Gas,
PertroVietnam, Novatek, South Stream Slovenia and Rosneft
Gazprom Growth Strategies
Existing products, new markets
Rosneft Joint Ventures
2006• An agreement with CNPC for a joint venture in
Russia, with BP for a development of the Sakhalin shelf, strategic partnership with Gazprom
2008 • Commercial oil production begins in east Siberia, with TNK-BP
2010 • Acquisition of 50% shares on Ruhr Oel GambH was reached with National Oil Company Of Venezuela
2012• Agreement with BP regarding 5,66% Rosneft
shares• Strategic cooperation with ExxonMobil and
Gazprom for west Siberia joint venture• Agreement on ExxonMobil participation in
Arctic research with Gazprom• Joint venture with PDVSA (Venezuela) for
production of crude oil• 25 years contract was signed with INTER RAO
ES
Rosneft SWOT Analysis
Strength• Financial
Performance• Assets Portfolio
Weakness• Refineries Old & Not
Efficient• Restricted
Autonomy• Strong Domestic
Rivals• Under OPEC
Governing
Opportunities• Upgrading
Refineries• Strategic
Ventures with ExxonMobil
Threats• Joint Ventures in
Venezuela Under Governmental Threat
• Intense Competition Both Domestic & Internationaly
Lukoil Joint Ventures
2011• Acquisition of 11% shares in ERG, making
Lukoil owner of 60% shares in the ERG joint venture.
• Agreement with the Romanian national Agency Of Mineral Resources to research the Black Sea for 80% of the shares.
• Long termed partnership agreement signed with Rosneft for development, research and exploration of Rosneft sites on the Russian Shelf.
2012• Strategic partnership with Rosatom• Aquisition of 46 stations in Holland and 13 in
Belgia• Production in Venezuela as part of the
national Petroleum consortium
2013• Aquiring 18,75% shares in Iraq production,
from Statoil• Aquiring 100% SAMARA-NAFTA• Joint venture with the french SNF-SAS• Aquisition of 65% shares of production and
development project in Guinea, from a private Nigerian company
Lukoil Marketing Structure
ExxonMobil Joint Ventures
1999 • Exxon and Mobil joined to create the ExxonMobil cooperative
2005 • Expanding development in north offshore field in Qatar, as part of joint venture with Qatar Petroleum
2010• Finalizing agreement with XTO Energy Inc. for
development and production of unconventional resources.
• Leading a build and deployment response system to discover and capture contained oil in the gulf of Mexico as part of a joint venture with Chevron, ConocoPhillips and Shell
2011• Joint venture with Rosneft for exploration of
the Russian shelf and Siberia• Cooperation agreement with Rosneft, covering
31 million acres in the Kara Sea. Exxon Neftegas LTD, cooperation between ExxonMobil, Rosneft, Japanese company Sakhalin Oil, RN-Astra and Sakhalinmorneftegas-Shelf; & the Indian state-owned oil company ONGC Videsh Ltd.
ExxonMobil Growth Analysis
Conventional Oil/Natural Gas Exploration &
Production
Gas Exploration & Production,
Unconventional E&P
Chemicals
Refinery & Manufacturing Power & Coal
Transportation
Our leading business segment
and money maker: We spend
a fortune over this
The chemicals give us high
profitability while the investment is
comparatively low
Eventually we do have hopes for this section, because we expect it to become profitable in a few decades
We really don’t like getting our hands dirty, so.. Why transport oil or refine it when there are others that can do it for us?
ExxonMobil Market OfferingSegmentation,
Targeting & Positioning
• Power generation (40% expected growth rate)• Countries that cuts back nuclear power
(Germany & Japan)• Industrial customers
Customer Value
• The products are commodities, hard to differentiate
• Value is added by bonus products and supplementary products
Marketing Mix:
• Product - As many marketing networks as possible, retailers (19000 stations)
• Price - price premium for specialty chemical products• Promotion - a shift to cleaner energy is expected• Place - Increasingly look for opportunities in the emerging
economies of Asia and Africa
Chevron Joint Ventures2001
• Merged with Texaco to create ChevronTexaco Corporation
• Joint venture with Phillips66 “The chevron Corp. & Phillips Petroleum company”
2005 • Changed name to Chevron Corporation, acquired Unocal Corp. (Union Oil Company Of California)
2006 • Joint venture with Los Alamos National Laboratory
2013• Interest in the joint-venture of Angola LNG,
along with Sonangol with a 22.8% interest and subsidiaries of Total, BP and ENI, each with a 13.6% interest.
• Joint-venture arrangement with the Nigerian National Petroleum Corporation (NNPC).
• Chevron’s China subsidiary has entered into production sharing contracts (PSC) with China National Offshore Oil Corporation (CNOOC)
2011 • Acquiring Atlas energy for 3,2 billion dollars
Chevron Market Offering
The South African Customer Value
The New Zealand Customer Value
Same Products, different continents
What About Norway?• Statoil has operations in 34 countries, and 23000 employees
• Production of 2,1 million barrels per day, operating 7 pipelines
• The 3rd biggest sales company of crude oil in the world
• 500 retail stations in Norway, with a market share of 34%
• Joint agreement with NAF, which gives 500000 members discounts on fuel
• Statoil are marketing 2 gasoline types and 1 type of diesel
• They market bioethanol E85 as well, which consists of 85% ethanol and 15% gasoline
• All the Statoil’s have added up to 5% biofuel to the regular gasoline and 7% to diesel
How Much Of It Do We Have
Why Is CSR So Important?In 1989, the Exxon Valdez spilled 750000 barrels into the ocean, because of an unprofessional crew and insufficient equipment and safety regulations.
20 years after
The Worse Oil Spills In History1
1991 - Gulf War – Kuwait, 10,3 mil. barrels burned by the Iraqis
2
1980 - Ixtoc I Oil Well (owned by PEMEX) – Gulf of Mexico, 3,3 mil. pressure imbalance
3
1979 - Atlantic Empress/Aegean Captain, 2,2 mil. After collision between the 2 ships next to Tobago.
4
1992 - Fergana Valley, Usbekistan, 2,1 mil.
5
1991 Liberia’s tanker ABT Summer, next to Angola, 1,92 mil., an explosion
6
1983 – Norwuz oil field, 1,9 mil. colission with a supertanker.
7
1983 - Castillo de Bellver, Spanish tanker caught fire, 1,8 mil.
8
1978 – Amoco Kadiz, 1,6 mil. Crew lost control of the ship
While Oil Giants Use CSR:Go Green
Monitor Petroleum Companies
Use Green Technologies
Create Safety Regulations
Recycle
Our ConclusionsThe petroleum industry is using one of earth’s resources and is a risk to our future
Petroleum is needed in many other industries and we cannot simply stop using it
It is the mean for motoric activities in so many areas, that we must conclude:
We have no choice but to buy it
It is and will be a vendor’s market
CSR, Market Offerings, PR, and any other mean of being «nice» to us does not matter and is not really needed – they got us in their pockets. The real game is
among themselves, and this is the only thing that matter to them
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