SWOT Analysis of Oil and Gas Development Company with USP, Competition, Competition, STP (Segmentation, Targeting, Targeting, Positioning ! "ar#eting Analysis on P$T%O&AS Oil and Gas Development Company Parent Company
Petroliam Nasional Berhad (Petronas) (Petronas)
Category
Oil and Gas
Se'tor
Energy & Lubricant
Tagline Slogan
Reimagining Energy
USP
The leading Oil & Gas Industry Player in alaysia !"#E"N
STP
Segment
$or%orates and indiiduals in alaysia ! "#E"N loo'ing to ull energy needs
Target Gro)p
Enter% Enter%ris rises es loo'ing loo'ing to %rodu %roduce ce energ energy y * %eo%le %eo%le +ho de%end de%end on %etro %etrol* l* diesel diesel or ehicl ehicles es and domesti domestic c uses
Positioning
$om%an $om%any y engage engaged d in the e,%lor e,%lorat ation* ion* deelo deelo%me %ment* nt* %roduction and sale o oil and gas resources in alaysia & "#E"N
SWOT Analysis
-.Local mar'et leader in terms o reseres* %roduction and acreage acreage** and is listed listed on all stoc' e,chang e,changes es in alaysia and also on the London #toc' E,change /.Petronas has attained the benchmar' %osition as an industry leader* in the alaysia Oil & Gas industry Strengths
0.$om%any* e1ui%%ed +ith its #trategic Business %lan in line +ith augmenting energy su%%ly in the $ountry* has deelo%ed strategies to o%timi2e reseres additions and its %roduction base 3. Petronas lie u% among ma4or com%any to hae been listed listed at the London London #toc' #toc' E,cha E,change nge and +ell5'n +ell5'no+n o+n brand adertised in ma4or eents. 6. Oer Oer /7 thou thousa sand nd o %eo% %eo%le le orm orm a %art %art o the the +or'orce
-.8e%endence on 8omestic mar'et or gro+th Wea#nesses
/.9nder Perormance o Oil and Gas elds means limited mar'et share -."c1uire oerseas acreage by buying sta'es in e,isting iable %roducing elds
Opport)nities
/. Oil & Gas o%%ortunities and 4oint enture collaborations outside alaysia* +hich +ould include s+a% o assets or reseres ac1uisition +ith %ercentage o +or'ing interest in international mar'et. 0. :ast trac' deelo%ment o its current and uture %ro4ects at an aggressie %ace +ithout com%romising 1uality and trans%arency 3. "ccelerate Production Gro+th; by continuing to accelerate %roduction gro+th through utili2ing cutting edge technologies -. $ommodity %rice ris' can result in material and aderse moement in the grou%
Threats
/. $om%liance costs could increase and %lace urther %ressure on $om%any resources. 0. E,%loration and drilling ris's 3. E,change rate and Resere 8e%letion
Competition
Competitors
-. E,,on5obil Petroleum Ltd /. Royal 8utch #hell Ltd
Porter*s +ive +or'es "odel for the Oil Gas -nd)stry
Porter
Threat of &ew $ntrants. The actors that a=ect the ne+est com%anies to enter oil and gas business* es%ecially the u%stream segments are; • •
• •
•
• •
•
Huge capital required National Oil Companies control more than 90% of the proven oil and gas reserves Increase of the internal competition within the industry The ig oil and gas companies can increase their !"# spending which will give them a oost regarding innovation and improve e$isting technologies This strategy will give them a competitive advantage over new oil and gas companies which now enter the industry &lso' to mention that this whole strategy of the ig IOCs can force the new competitors to spend more money The ig IOCs or as we call it Integrated Oil and (as Companies which can easy compete with new competitors due to economics of scale Oil and (as prices volatility Oil and (as !eserves are usually located in war )ones or geographical areas with geopolitical con*icts or political instaility National and international law restrictions which can a+ect the new entrance of a company in the oil and gas usiness
Threat of S)/stit)tes. The main alternaties sources to oil and gas or %roducing energy +hich used or electricity* trans%ortation* heating* etc. are; • • • •
Nuclear Energy $oal >ydrogen Biouels and other rene+ables sources such as solar and +ind energy
These alternatie sources o energy can re%lace a high amount o hydrocarbons use in the global energy mi, according to their %erormance* 1uality and %rice o course. This strategy re1uires a big amount o inestments in R&8 and %roducing %rocedures* so the %ossibility or substitutes to dominate the global energy mi, until /737 is ery small.
0argaining Power of 0)yers. The main buyers o oil and gas %roducts are; •
Reneries
•
National Oil $om%anies
•
International Oil and Gas com%anies
•
8istribution com%anies
•
•
Traders $ountries (9#"* $hina* ?a%an* countries o the E9* etc.)
The bargaining %o+er o buyers in oil and gas industry is relatiely small due to the nature o this industry. Buyers are interested in the %rice and the 1uality o a %roduct. It is 'no+n* that global oil benchmar's determine the oil %rice* and the "ain Oil 0en'hmar#s are; •
Brent Blend
•
@est Te,as Intermediate (@TI)
•
8ubai!Oman
,nderstanding -enchmar. Oils/ -rent -lend' TI and #uai A Inesto%edia. (n.d.). Retrieed :ebruary /* /7-
#o it is obious rom the aboe that the buyers cannot a=ect the oil %rices. >igher bargaining %o+er hae the buyers only +hich consume enormous amounts o oil and gas such as E9* $hina* 9#"* ?a%an* and India in com%arison +ith other countries. :inally to mention that the only bargaining %o+er o buyers in the oil industry is only +hat 1uality o the oil they +ill buy.
Bargaining Po+er o #u%%liers; #ome big su%%liers in the oil and gas industry are ully integrated oil and gas industry (International and National Oil $om%anies) +hich are actie in the +hole alue chain o oil and gas sector.
TH1 (2O-&2 OI2 " (&3 IN#,3T!4/ 5!O351CT3 " CH&221N(13 IN TH1 N16T #1C
(n.d.). Retrieed :ebruary /3* /7- These com%anies can be the big International oil com%anies such as $heron* #hell and E,,on obil or National oil com%anies such as #audi "ramco* Ga2%rom* and Petrobras. The ability o those com%anies to a=ect oil %rices and the industry is high due to their business inolement on all o the business segments o oil and gas industry* so their bargaining %o+er is signicantly greater than the buyers. "nother great %layer in the side o the su%%liers are the oil rich countries (as they call them oil %roducing countries) or else OPE$ has a signicant bargaining %o+er. OPE$ nations o+n at least C7D or the +orld
7 reasons why the politics of oil have changed A @orld Economic :orum. (n.d.). Retrieed :ebruary /3* /7-
Based on the aboe gra%h rom Reuters it is obious that OPE$ controls and more than the 07D o the +orld oil %roduction %er day +hich gies the ability to this organi2ation to a=ect the global oil %rices signicantly by cutting or adding more %roduction* so this gie them also more bargaining %o+er. On the other hand* some countries li'e Iran* ene2uela* and e,ico luc' in any ne+ oil and technologies due to the control o their oil sector rom their oil stated com%anies. #o this situation can drie countries such as e,ico to become im%orters o oil due to the all in oil %roduction because in the case o e,ico the oil and gas sector o this country +as close to the international oil com%anies until /7-3.
In the case o the ene2uela* the national oil com%any +as used as a %olitical tool rom the %olitical elite o the country rom /777 and beyond* s%ecically +as
used to und large* rich social %ro4ect. This situation has drien the economy o ene2uela and o course the goernment budget to increase its de%endence on oil reenues. "t the same time* ene2uela has closed its oil sector to oreign oil and gas com%anies +ith result to be close to ban'ru%tcy at the beginning o /7-.#ome general characteristics or National Oil $om%anies are; •
•
9nli'e the IO$s* the NO$s are goernmentally controlled* and they usually manage a countryaing been gien the %riilege to the domestic reseres* the aim o the NO$s is* di=erently than the IO$s* not moneti2ation* but;
•
sering the national interests*
•
su%%orting the local economies and
•
een %rotecting the territorial enironments
3ource/ 2edesma' #' 8009 The Changing !elationship etween NOCs and IOCs in the 2N( Chain O$ford Institute for 1nergy 3tudies
The uture or IO$s and NO$s is li'ely one in +hich they +ill both com%ete and co5o%erate* but their bargaining %o+er +ill be signicant high until an alternatie source o energy +ill be discoered in the uture +hich can re%lace hydrocarbons.
