INTRODUCTION
The oil and petroleum industry in Malaysia operates under an oligopolistic market structure. Both PETRONAS and Shell are renowned firms that produce and sell petroleum in Malaysia. Incorporated on 17 August 1974, PETRONAS is Malaysia’s national oil company, assigned with complete ownership and control of the petroleum resources in Malaysia. Throughout the years, PETRONAS grew into a “completely integrated oil and gas corporation and is ranked among FORTUNE Global 500® largest corporations in the world” (PETRONAS, 2014).
Since 1981, Shell has been in Malaysia for over a hundred years. 19 years later, Shell produced Malaysia’s first barrel of oil. In 1910, Shell discovered Malaysia's first oil well. During 1914, Shell built Malaysia's first refinery in Miri and in 1963. Shell was also the first to take oil exploration offshore and discovered oil and gas in East Malaysia waters. Shell has become the petroleum retail market leader in Malaysia today, catering to one-third of West Malaysia and half of East Malaysia’s market requirements (Shell, 2014).
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PETRONAS and Shell are both in the petrol industry and they operate in an oligopolistic market structure and are competitors to one another. An oligopoly market structure is a market structure where there are only a few suppliers in the market. Thus, they dominate the whole industry. PETRONAS and Shell are among the few major firms in the oil and petroleum industry in Malaysia and they each hold a huge percentage of the market share in the industry. Also, firms in an oligopolistic market produce either similar or differentiated products. PETRONAS and Shell produces and sell petroleum and are considered as a perfect oligopoly. As PETRONAS and Shell sells homogenous prod...
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This organization belongs to the oligopoly market structure. The oligopoly market structure involves a few sellers of a standardized or differentiated product, a homogenous oligopoly or a differentiated oligopoly (McConnell, 2004, p. 467). In an oligopolistic market each firm is affected by the decisions of the other firms in the industry in determining their price and output (McConnell, 2005, P.413). Another factor of an oligopolistic market is the conditions of entry. In an oligopoly, there are significant barriers to entry into the market. These barriers exist because in these industries, three or four firms may have sufficient sales to achieve economies of scale, making the smaller firms would not be able to survive against the larger companies that control the industry (McConnell, 2005, p.
Exxon and Mobil were two big competitors in the oil industry. In the 20th century, Exxon and Mobil operated with relatively low-price, and in low-margin environments. The market in the United States and Europe have grown and matured, allowing them both to grow with great success. The competitiveness has tightened worldwide in the crude oil business. Both companies have continued to advance new technologies, introducing new marketing innovations. They have extend there reach into high-growth markets. The two companies became more efficient, reduced costs, and increased shareholder’s value by there merge.
Oklahoma's oil and natural gas industry is giving us unstoppable progress for energy solutions, but the other parts of the nation are still searching for theirs. While providing jobs for the thousands of people who live in Oklahoma, the oil and natural gas industry not only donates to America's petroleum production, but it also produces millions of dollars for our state’s economy, schools, and roads. Making new headways in our industry every day, artificial technology, scientific breakthroughs, adequate new exploration, and drilling methods took place. Without these upgrades, we would not be able to extract oil and natural gas from challenging fields more efficiently than we can now. As capability rises, environmental impact will continue to go down. In 1897, a tower of surging oil divided the Bartlesville sky. Oklahoma's preliminary drilling swaged badly, brought forth by the federal controls on wellhead prices of natural gas applied to interstate commerce in the 1950s. By 1982, oil prices hit an all time high of $37.60 per barrel. Furthermore, the number of progressive drilling rigs in Oklahoma also hit a record of 882. The total quantity produced from the soul and natural gas industry in Oklahoma reached about 40 billion dollars in 2007. Also, through the gross production tax, oil and natural gas producers and royalty owners gave more than 2 billion dollars to Oklahoma used for teacher retirement, public schools, wildlife management, bridges, roads, and state colleges. Petroleum remains an indispensable Sooner State industry. Natural gas continued to grow in the early 1990s despite of the entire staggering bust that was caused by the plummeting world crude oil p...
The Shell Oil Company involves a group of energy and petrochemicals companies that operate globally. Shell employs over 92,000 employees and operates in more than 70 countries and territories. Shell is considered a prominent gasoline provider, offering products that range from energy fuels, lubricants for businesses, and petrochemicals for detergents, packaging, carpets, and computers. The Shell corporation is also making strides to embrace renewable energies “by creating hybrid energies with traditional fuels such as natural gas” (Shell Global, n.d.). Shell is building hybrid power plants that combine renewable energies, including those produced by sun and wind, with traditional fuels. By investing in emission-free energies, Shell seeks to improve its operations and competitive posture as renewable technologies advance.
Oil was first discovered in the mid-seventeenth century by Spanish explorers. July of 1543 Spanish explorer Luis de Moscoso saw oil floating on the water in the Galveston Bay (Olien 1). In the beginning there was no market or demand for oil until following the Civil War period, entrepreneurs begin digging wells. The first significant oil discovery in Texas was in 1894 in Navarro County near
The political instability inherent in emerging economies make for very challenging business environments. In late October 1995, Royal Dutch Shell founds itself in just such a tenuous environment in Niger. As Paine and Moldoveanu (2009) outlined,Shell came under scrutiny in the 1990’s for the environmental impact that they were having on the Niger Delta. Shell was accused of creating an “ecological disaster” on the region, caused by oil spills, emissions from flaring of natural gas, and drainage of contaminated water into the waterways (Paine & Moldoveanu, 2009). Adding to the operating complexity, the Nigerian government and its leader faced escalating international condemnation for the actions of a special military tribunal
Since its discovery back in the year 1858 crude oil has been become one of the most sought after resources on the face of the planet. It is due to this fact that the oil industry has fallen into a rather odd category in the case of globalization and seeking out new markets, new labor and new customers. The reason being that the need for crude oil and fuel is always present therefore the product of oil in its basic sense sells itself and the companies do not have to go out and publicly advertise it in the sense that clothing lines and other commodities do. Oil companies must focus more on the matter of why an individual should buy their oil and along with other alternative fuels over their competitors even though in the end the companies products are the same thing. The company ExxonMobil has been the superior company in the oil industry for quite sometime now, and had plenty of success as individual companies before their merger in 1999. The reason for there success is partially due to the power they wield as the most successful company, leading to many new refineries around the world, making deals with smaller companies to gain access to new markets and are leading the world in alternative fuel research. However these things all come naturally to the biggest oil company in the industry, the real question is how they became the powerhouse they are now. That question can be answered by the way in which the company has not focused in globalizing their product of fuel and oil, but globalizing the image of the company company. This is achieved by focusing on charity in which they donate hundreds of millions of dollars, Foreign Direct Investment in areas in which they wish to expand by attempting to provide these impoverished areas wit...
ExxonMobil is a multinational oil and gas company with its headquarters offices in Irving, Texas. It was formed in 1999 through a definitive agreement between Exxon Corporation and Mobil Oil Corporation to merge and create a new company. In essence, the corporation produces, distributes and sells oil and natural gas across the world. The structure and culture help it survive the price burst which often occurs in the global oil market. Notably, among its largest competitors, ExxonMobil generates high revenue and produces large volumes of oil for every penny it spends. Besides, the company publicizes the highest price of natural gas and oil, both in absolute terms and for every employee it hires. Significantly, even in good years, the top managers
South China Morning Post. "Chronological events of Malaysia Airlines flight MH370." South China Morning Post. N.p., 15 Mar. 2014. Web. 2 Apr. 2014. .
The industry is divided into three distinct sectors including the upstream, midstream and downstream sectors. The upstream sector includes the exploration and production of crude oil as well as the exploration and production of natural gas. This sector has experienced the largest amount of deals in terms of mergers and acquisitions, which will be further discuss in section III. The midstream sector involves the transportation of extracted petroleum from the upstream sector through pipelines, rail, barge, truck as well as storage. Finally, the downstream sector connects the end consumers through derived products such as gasoline, liquefied natural gas (LPG), liquefied natural gas (LNG), kerosene (aircrafts), and diesel…
Thai Oil Limited Company is a subsidiary company of PTT Thai group Limited Company which is a corporate company established in Thailand. Moreover, PTT Thai group is the biggest shareholder (49.1% of shareholder ratio) of the issued and paid-up capital of the company. Thai Oil is the firm of petroleum refinery specifically in Complex Refinery produced in high modern tech-nology and relevant to involved chain petrochemical firm. The major market is the national market guaranteed with one of the most efficient oil refinery companies in South-east Pacific. Presently, the oil refinery produce capacity is approximately 275,000 barrel per day (25% of the whole nation oil refinery). Additionally, Thai Oil also involves in the other kinds of the business by the shareholder, for example, power producing business, fundamental petroleum business, Paraxylene producing business, petroleum and chemical petroleum products marine transportation, chemical petroleum pipe transportation, as well as the consulting of energy. Thai Oil Group’s integrated business com-prise of the following sectors; Petroleum Refinery Business (TOP), Petrochemical Business(TPX), Lube Base Petroleum Business, Solvent and Chemical Products Business(TOS/TS/SKAV/TSV), Power Generation(TP/TOPSPP/GPSC), Transportation Business(TM/THAPPLINE), and Manufacture of Ethanol Business(TET). Therefore, Thai Oil also has managed the concept of CSR principle into business strategy. Apart from running business by taking the safety of society
Malaysia is located in the south-eastern Asia, bordering Thailand and northern one-third of the island of Borneo, bordering Indonesia, Brunei, and the South China Sea, south of Vietnam. Due to its locations, it has been colonised since the late 18th centuries by many countries. Since 1965, Malaysia has had one of the best economic records in Asia, with GDP average of 6.5% growth for almost 50 years. The economical development especially boosted during 1981 and 2003 under the governance of Prime Minister Mahathir bin Mohamad. Malaysia succeeded in diversifying its economy from dependence on exports of raw materials to expansion in manufacturing, services, and tourism. Also, the current Prime Minister continues to pursue pro-business policies .
The worst imaginable environmental catastrophe that could occur in Maryland has just become a reality. The lifeblood of Southern Maryland's Watermen has been forever affected. The ecosystems of the Patuxtent River and Chesapeake Bay have been irreversibly contaminated. The Three Mile Island and Chernobyl Nuclear Accidents have affected the world ecosystems; but the Chalk Point oil spill has reached us here in Southern Maryland. The ethical considerations with generating electricity from fossil fuels, specifically oil, has a profound impact on us all. We all use electricity to make our lives easier and more productive. By using this electricity have we given our permission for the oil companies free reign in order to provide us with the service we demand?? Are we just as responsible for the oil spill as the corporate leaders who run the companies? As citizens we are in a position to develop and enforce regulations to protect ourselves. Do we also protect the environment; or is the environment just something for us to use? These and many other moral dilemmas exist for modern man.
Time will occur start with economic downturn, political unstable, lost of confident level of the investor for the reason of diseases that present that time. It is also possible that they are no more country we call Malaysia.
The third type of market structure available in today’s market industry is an Oligopoly. "An oligopoly involves only a few sellers of a standardized or differentiated product, so each firm is affected by the decisions of its rivals and must take those decisions into account in determining its own price and output" ( Brue & McConnell, 2004, p. 3,4). Examples of an oligopoly can be found in the petroleum industry. Shell and Texaco for example must consider a number of different factors when trying to increase revenue. Due to the limited number of petroleum companies in the market, companies must depend on low level sellers to make price adjustments weekly to capitalize on demand. As with most oligopolies some price variation is necessary to maintain healthy profits. Companies like Texaco and Shell should make note however that too much deviation in price can create an unstable product market. Many companies in an oligopolistic market will use consumer perks to assist with price deviation. Texaco and Shell, for example, offer incentives su...