Analyze Case 14-1: The Oil and Gas Industry

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Oil and gas industry provides about 6.9 billion people throughout the world with 60 percent of their daily energy requirements. The other 40 percent energy requirements come from hydro electric power, coal and 'renewable'. Within a business perspective, oil and gas industry represents a massive scale of global commerce. The global energy market continues to expand and spend millions of dollars every year so as to improve on the maintenance and production of oil and gas. Companies have been invited for a negotiation by over 200 countries so as to explore their water territories water an aim of finding and producing oil and gas so as to create local jobs and provide billions of dollars and at the same time earn billions of dollars in national revenues (Asia-Pacific Oil & Gas Companies 2009).

Large oil quantities and gas quantities flow on a daily basis from exporting countries such as the Middle East to the importing regions such as Europe and Far East. The main aim of gas and oil exporters is revenue maximization and trade balance improvement while their control and sovereignty of their natural resources is maintained at all cost.

The major players in the oil and gas industry face significant challenges in the competitive market, changes in economic and government policies, mature assets and limited capital. These challenges arise from external pressures which come about as a result of shareholder demand and the growth in regulatory and environmental pressures. The players within the industry also ...