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Custom Saudi Arabia Opportunity Essay

Saudi Arabia is one of the most popular places for oil reserves and world’s leading petroleum country. They have many reserves, production houses, exports and refining capacity. This does not include possible reserves or reserves that currently are not recoverable with available technologies.

It is expected that the kingdom’s production will increase due to rapidly rising world oil demand. It also wants to seek to stabilize the oil market and avoid severe demand and prices fluctuation. This would lead in contributing and balancing the international economy so far. It can also contribute in the research and production of oil in the world’s growing demand.

The Saudi Arabia’s oil company will focus on some of the major points that is :

  1. Firstly by developing and qualifying Saudi Citizens.
  2. Secondly focusing on petroleum related and generalizing the energy related technologies and research centers in the City.
  3. Thirdly effective management successful petroleum industry which can not be achieved without the creative, qualifying and by the flexible management.
  4. Fourthly establishing a productive and effective working relationship among the government and the petroleum companies working in this kingdom.

The first oil wells were drilled less than 150 years ago but oil and petroleum which comes from it has become the most important energy source. Almost 40 per cent of the world’s energy supply comes from oil. Most oil is found in the Middle East and has to be taken by tankers and pipelines to places where it is used around the world.

King Faisal in the year 1974 ordered Aramco to build, design and operate master gas system. The company then embarked the largest engineering project to execute by any firm world. Aramco is fully owned by the Saudi government and by then it was known as Saudi Aramco.

The third main source of power comes from gas that occurs naturally beneath the Earth’s surface. It accounts for 23 per cent of the world total. The gas is mainly methane, with some ethane, propane and other gases. It is collected and then taken to where it is needed by pipelines, and has replaced the highly polluting coal gas that used to be made by burning coal.

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Saudi Arabia is famous for the oil and gas industry. They are the world’s richest country as it only exports oil to different nations. The Middle East is famous for only its oil fields and Caspian Sea is one the great oil resources found till now.

The former Sovient Republic of Turkmenistan is one of the largest gas deposits in the world. The inlands from the Caspian shore have some of the oldest oil fields and it is the good new for the geologist. It has an attractive market which contains the substantial infrastructure and a good competitive market.

These countries have a tough market. They have high prices for the oil production and an increase competition for the natural gas present over there. The pipelines which are laid have a vast international and regional politics behind it. The pipeline is beneficial to the central Asian countries. The pipeline provides a stability and encouragement for commercial trade and economic development between the countries. The short pipeline distance and the cost are low for the Asian countries but the competition is tough.

The different pipelines laid are stretched over 790 miles from Afghanistan to Turkmenistan border. And there many plan to link the cent gas line too. The Multan and New Delhi is under the 400 miles of this oil pipeline. There are some points:

  1. Maintaining the high crude oil prices are initiating new and old exploration field which should be developed.
  2. Asia is the largest consumer of oil. That why much of the pipeline from Saudi Arabia is through this belt.
  3. The production of oil and gas reserves is increasingly moving to the remote countries. And the Gulf of Mexico is between one of them.
  4. Ultra deep is a word which is applied to the industries present in the Gulf of Mexico.

They are the global producer of oil and gas in the world’s market. The state owns it own natural oil company with the name as Saudi Aramco. Its headquarter is situated in Dhahran, which operates the world’s single network of hydrocarbons that is the Master Gas System. It has the largest provision for the crude oil production and reserve.

It was before known as Aramco in the year 1933 to 1988 which simply meant an acronym for Arabian American Oil Company. It manages over 100 oil companies. The oil fields of the company are Ghawal Field which the world’s largest oil field, Safniya Field is the world’s largest offshore field, and Shaybah Field which is world’s largest of its kind.

There are many healthy prospects and a clear picture will emerge after the first well is drilled. Saudi Aramco has contributed in several ways by making several new oil and gas discoveries in the past recent years. Saudi Arabia, Iran and Kuwait are expecting to sign a treaty/ agreement to develop non associated gas reserves at Dorra.

The industry consists of crude oil exploration, production, manufacturing, marketing and shipping. The operation of the company is to perform task which was operated by the American companies and to produce an independent or free environment. The process of exploration is taken up by the Exploration and Petroleum Engineering Centre.

The drilling process is most crucial process so the company keeps hiring new engineers for the setting up this process as the increase in the demand of oil. The company has an Environment Master Plan to keep the environment free from any ought  of pollutant.

The company has the top most name in the Petroleum Intelligent Weekly Annual world oil company ranking since 1988 when it had started. It enjoys a number of advantages which includes low cost production, reserves, advanced technological knowledge, a well organized and efficient decision making system and highly motivated employees.

The Ministry of petroleum and Mineral resources was established in 1960 to execute the general policy related to oil, gas and minerals. The Ministry supervises its affiliate companies working in the fields of petroleum and minerals by observing and monitoring research that is exploration, development, production, refining, transportation, distribution activities related to petroleum and petroleum products. The Ministry activities of the following companies and establishment between them.

They also see the overseas organizations like Saudi Geological Survey. The names of the companies are:

  1. Saudi Arabian Company (Saudi Aramco).
  2. Saudi Texaco.
  3. Aramco Gulf Operation Ltd. (AGOC).
  4. Saudi Arabian Mining Company (Ma’aden).

The increase in the oil demand and unexpectedly low price elasticity gives it a great opportunity for the state and the company. The strategy required by the state is

  1. Revitalizing exploration
  2. Expansion of oil production capacity.
  3. Vertical integration.

There are two principles on which it is working them are:

1. To secure the refining capacity which is equivalent to half of the oil production capacity?

2.  To prioritize securing the outlet for Saudi Arabian Crude oil rather than taking about the management control.

Regarding oil, some risk assessments could be Iraq. Iraq has been embargoed for 20 years and now that Iraq is returning to market and gets reconstruction and it oil production fully online and also starts new explorations, 90% of Iraq is undiscovered and there is a potential for another 100 billion barrels of oil which will make them on par with Saudi Arabia and challenge them on their hegemony, many think they will eradicate OPEC, s weakened ability to set prices through qoutas.

The SWOT analysis can give us the clear view of the mistake and other great achievements of the state along with the company it runs on the basis of the plus and minus points which is required to know the overview of that field. How capable is the person and its team in producing such a vast investment.

The favorable conditions in the SWOT analysis are strengths and opportunities. And the bad effect is the Weakness and threats. This is based on the internal sources which are value chain, while external source is political, economic, social, and technological.

Strength

  1. The world’s largest oil production capacity.
  2. The low cost oil and gas production.
  3. The advanced technology and highly motivated employees.
  4. The relationship with the government.

Weakness

  1. Sour crude oil.
  2. Heavy dependence on the sales of a single crude oil.
  3. Relatively low capacity linked to downstream.

Opportunity

  1. High price of the crude oil.
  2. Sufficient investment of the capital in the right place.
  3. The growth or increase in the demand rate of the crude oil.
  4. Its link with WTO. 

Threat

  1. The rise in the domestic gas demand.
  2. The potential gas supply.
  3. The demand rate of oil has gone down due to the increase in the price.

On the upside Asia, especially China and India will increase oil consumption. China is expected to surpass US in energy consumption within 10 years and at the same time they have very little reserves. They will become the biggest importer of oil within very short time which means increased demand.

Comparing the two oil and gas companies of the world

The oil company of the world is the Saudi Arabian one because it is the world  distributor oil company. I think it is the most important of all. As compared to the other one this is the biggest importer of the oil company.

They have high prices for the oil production and an increase competition for the natural gas present over there. The pipelines which are laid have a vast international and regional politics behind it. The pipeline is beneficial to the central Asian countries. The pipeline provides a stability and encouragement for commercial trade and economic development between the countries.

It is expected that the kingdom’s production will increase due to rapidly rising world oil demand. It also wants to seek to stabilize the oil market and avoid severe demand and prices fluctuation. This would lead in contributing and balancing the international economy so far. It can also contribute in the research and production of oil in the world’s growing demand. 

There is very small amount oil present in the oil. Chemical substance found in the sea called “produced water”. Production and transport of oil, it also includes risk for oil splitting and discharge. Before entering the new area we should protect, the establishment of petroleum free zones which are available in this area.

Custom Saudi Arabia Opportunity Essay

Code: Sample20

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