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Presented by :Abhishek Jain (75102) Kritika Taneja(75127) Lakshay Kalra(75128) Class : BFIA 2A
ACKNOWLEDGEMENT
Our deep sense of gratitude to Dr Kumar Bijoy the Guide of the project for supporting, mentoring and helping us in the various stages of project .
CONTENTS
INTRODUCTION SECTOR OVERVIEW SWOT ANALYSIS BCG MATRIX MICHAEL PORTER 5 FORCES MODEL RATIOS BIBLIOGRAPHY
INTRODUCTION
The petroleum industy includes the global process of exploration, extraction, refining, transporting (often by oil tankers and pipelines) and marketing petroleum products.
After the Indian Independence, the Oil Industry in India was a very small one in size and Oil was produced mainly from Assam and the total amount of Oil production was not more than 250,000 tonnes per year.
HISTORY
The Oil Industry started off more than five thousand years back. Oil sipping up from the ground were used to make the boats waterproof in the Middle East and also used as medicating as well as for painting different things. The demand for Oil was much higher than what it actually produced and this brought forward the concept of making oil production companies which is collectively known as the Oil Industry.
ORIGIN IN INDIA
The origin of oil & gas industry in India can be traced back to 1867 when oil was struck at Makum near Margherita in Assam. At the time of Independence in 1947, the Oil & Gas industry was controlled by international companies. India's domestic oil production was just 250,000 tonnes per annum and the entire production was from one state - Assam.
The foundation of the Oil & Gas Industry in India was laid by the Industrial Policy Resolution, 1954, when the government announced that petroleum would be the core sector industry. In pursuance of the Industrial Policy Resolution, 1954, Government-owned National Oil Companies ONGC (Oil & Natural Gas Commission), IOC (Indian Oil Corporation), and OIL (Oil India Ltd.) were formed.
Petroleum is vital to many industries, and is of importance to the maintenance of industrial civilization itself, and thus is a critical concern for many nations. Oil accounts for a large percentage of the worlds energy consumption, ranging from as low of 32% for Europe and Asia, up to a high of 53% for the Middle East. Government of India declared the Oil industry in India as the core sector industry under the Industrial Policy Resolution bill in the year 1954, which helped the Oil Industry in India vastly.
COMPANIES ANALYSED
SWOT ANALYSIS
THREATS 1.Government regulations 2.High Competition Competition : 1.Bharat Petroleum 2.Hindustan Petroleum 3.Reliance Industries
THREATS
ONGC
STRENGTHS
WEAKNESSES
1.Indias largest crude oil and natural gas producer 2.Strong brand name 3.High profit making 4.Has over 40,000 employees 5.It produces about 30% of India's crude oil requirement 6.Contributes 77% of India's crude oil production and 81% of India's natural gas production 7.Commemorative Coin set was released to mark 50 Years of ONGC OPPORTUNITIES
1.Increasing fuel/oil prices 2.Increasing natural gas market 3.More oil well discoveries
1.Legal issues 2.Employee management 3.Bureaucracy 4.Human rights and rehabilitation issues
HPCL
STRENGTHS WEAKNESSES
1.India's major oil and gas company 2.Operates largest Lube refiniery in India 3.Large product portfolio 4.Owns and operates the largest Lube Refinery in India producing Lube Base Oils of international standards 5.Produces over 300+ grades of Lubes, Specialities and Greases
1.Legalissues 2.Employeemanagement 3.Human right issues, rehabilitation issues 4.Environmental hazards from wastes
OPPORTUNITIES 1.Increasing fuel/oil prices 2.Increasing natural gas market 3.More oil well discoveries 4.Expand export market
BPCL
STRENGTHS WEAKNESSES
1.One of India's largest state owned oil and gas company 2.Has brand presence 3.Refining and retailing of petroleum
OPPORTUNITIES 1.Increasing fuel/oil prices 2.Increasing natural gas market 3.More oil well discoveries 4.Expand export market
EXXON
STRENGTHS 1.One of the strongest brands , in operations for over 100 years . 2.R&D and diverse operations 3.Growing financial performance 4.Has over 83,000 employees 5.37 oil refineries in 21 countries 6.Better Cash flows in terms of Revenue and profit. OPPORTUNITIES WEAKNESSES 1.Employee management across the world 2.Negative Publicity from Exxon Valdes Spill 3.Environmental hazards and oil spills 4.Involved in illegal Trade with few countries.
THREATS
1.Increasing demand for LPG and CNG 2.High investments 3.Increasing prices of fuels across the world 4. Market Development in oil demanding markets like Indonesia , korea .
1.Government regulations and policies. 2.High Competition 3. Slowdown in economy due to recession. 4.Alternative energy sources 5. Increasing resistance from environment and social groups.
BCG MATRIX
STAR
CASH COW
IOC
DOG
COMPETITIVE RIVALRY MEDIUM Limited number of companies owing to the nature of the industry Foreign and private players beginning to enter the scene
BARGAINING POWER OF CUSTOMERS LOW Traded at global prices, so customers have no bargaining powers.
RATIOS
Debt-equity ratio Total asset to debt ratio Current Ratio Quick Ratio Interest coverage ratio
1.5
BPCL HPCL
IOC
EXXON 1 ONGC RIL
0.5
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source:capitaline
A metric used to measure a company's financial risk by determining how much of the company's assets have been financed by debt =
3.5
3 BPCL
2.5
HPCL 2 IOC RIL
1.5
0.5
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source:capitaline
EXXON
45
40
35
30
25
20
EXXON
15
10
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
ONGC
40
35
30
25
20
ONGC
15
10
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
25
20
BPCL
15
10
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
EXXON
250
200
150
EXXON
100
50
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
ONGC
300
250
200
150
ONGC
100
50
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
CURRENT RATIO
The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities. It is expressed as follows:
2.5
1.5
BPCL HPCL
IOC
1
0.5
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source:www.capitaline.co
QUICK RATIO
The Acid-test or quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately. Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities.
1.8
1.6
1.4
1.2
BPCL
1
0.8
0.6
0.4
0.2
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
BIBLIOGRAPHY
Capitaline Investopedia Wikipedia Yahoo Finance Money control
Professor