LUCRATIVE OIL & GAS INDUSTRY

Principles Of Marketing Lecturer name : Ms Yvonne Student : Fathurrahim Syahiir Idris Keshvinder Singh Faten Nadia Kerina

INTRODUCTION

Lucrative oil & gas industry

INTRODUCTION
In Malaysia , national oil and gas industry fully owned by the government. One of a biggest oil & gas company in Malaysia is PETRONAS. PETRONAS a short form for Petroliam Nasional Berhad is a Malaysian oil and gas company that was founded on August 17, 1974. Petronas is ranked among fortune global 500s largest corporations in the world. Fortune ranks Petronas as the 68th largest company in the world in 2013. It also ranks Petronas as the 12th most profitable company in the world and the most profitable in Asia.

INFORMATION

Lucrative oil & gas industry

LUCRATIVE OIL & GAS INDUSTRY (INFORMATION)

Petronas has grown to be an integrated international oil and gas company with business interests in 35 countries. As of the end of March 2005, Petronas Group comprised 103 wholly owned subsidiaries, 19 partly owned outfits and 57 associated companies. Together, these companies make the Petronas group that is involved in various oil and gas based activities.

Petronas engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining marketing and distribution of petroleum products, trading, gas processing and liquefaction gas transmission pipeline network operations, marketing of liquefied natural gas, petrochemical manufacturing and marketing, shipping, automotive engineering and property investment. Petronas provides a substantial source of income for the Malaysian government with 45% of the government's budget dependent on Petronas' dividen.
The company is headquartered at the Petronas Twin Tower that was officially opened in Malaysia's 42nd National Day, August 31, 1998, in the Corporation's 24th Anniversary year.

HISTORY

Lucrative oil & gas industry

LUCRATIVE OIL & GAS (HISTORY)

Petronas was not the first company to extract oil or gas in Malaysia. It was Royal Dutch Shell that began the oil exploration in Sarawak, then under the white Rajahs at the end of the 19th century. In 1910, the first oil was drilled in Miri, Sarawak. This became the first oil producing well known as the Grand Old Lady. Shell was still the only oil company in the area in 1963, when the federation of Malaya having achieved independence from Britain six years before, united with Sarawak and Sabah, both on the island of Borneo, and became Malaysia. The authorities in the two new states retained their links with Royal Dutch Shell that brought Malaysia's first offshore oil field on-stream in 1968.

 Meanwhile, the federal government turned to Esso, continental oil and Mobil, licensing exploration off the state of Terengganu in the Malay Peninsula the most populous region and the focus of federal power. By 1974, however, only Esso was still in the area. It made its first discoveries of natural gas in that year and then rapidly made Terengganu a bigger producer of oil than either Sarawak or Sabah. To date, Malaysia has some 28.35 billion barrels of oil reserves and about 1.2 per cent of the worlds natural gas reserves that is 2.35 trillion cubic meters of proven reserves. Malaysia has a current production rate of seven hundred and thirty thousand barrels per day of crude oil products. The Government of Malaysia also contributes significantly towards policy and macro-economic planning to secure a sustainable and long-term success of the oil and gas industry. The Governments main objective is to increase aggregate production capacity by five per cent every year up to 2020 to meet domestic demand growth while sustaining crude oil and LNG exports to overseas markets. In the Asia Pacific region, Malaysia aims to be the number one oil and gas hub by 2017, taking advantage of its strategic location at key shipping lanes as well as strong economic fundamentals in China, India and within Southeast Asia. In Malaysia, energy policy for the upstream sector is determined by the Economic Planning Unit and the Implementation and Coordination Unit, both of which report directly to the Prime Minister. The Government focuses on efforts to enhance output from existing oil and gas fields, new marginal fields as well as exploration and development opportunities in deep-water areas. To this end, new tax and investment incentives under Petroleum Income Tax Act were introduced in 2010 to promote oil and gas exploration activities.

PRICE

Lucrative oil & gas industry

LUCRATIVE OIL & GAS (PRICE)

Malaysia's fuel prices are among the lowest in the world. Only seven other nations, which are Venezuela, Saudi Arabia, Kuwait, Egypt, United Emirates, Iran and Nigeria, sold fuel at prices lower than Malaysia. Malaysia was able to sell cheaper fuel because of the significant subsidy borne by the government. In fact our local oil can be sold at a lower price if we refined totally our oil. The reason for this is because of the subsidy that the government provides to help ease the burden of the people. Malaysias oil can be last for another twenty years. This is the reason why Petronas starts exploring oil overseas in country like Sudan, Vietnam but our LPG can still last for another 80years.

LUCRATIVE OIL & GAS (PRICE)

Recently, in Sarawak there's a profit sharing contract with the American company named Murphy Oil. Diesel is priced at RM1.80, making the subsidy stand at 90.4 cent and Petron95 at RM1.90 while the market price is RM2.80.

The Liquefied Petroleum Gas (LPG) that is used for cooking formed the highest subsidy at RM20.86 due to the market price at RM 47.46 for a 14kg gas cylinder.
The high subsidy that the government is shouldering is part of the reason why there is a request for supplementary budget. Due to the fuel price difference from USD110 to USD118.65 per barrel there had to be a supplementary budget to cater for the difference between the projected and the actual price prices at that time. The last fuel price hike was in March this year - to RM2.90 from RM2.70 previously.

PLACE

Lucrative oil & gas industry

LUCRATIVE OIL & GAS (PLACE)

Asia Pacific division stretches from India to New Zealand, so the Houston-based global oil and gas services giant with 58,000 employees and revenues in excess of $20 billion had lots of options with respect to a regional headquarters location. It chose Kuala Lumpur, Malaysia, in 2009 as the city in which to consolidate smaller regional operations such as Singapore, Australia and other locations. The reason the chose Malaysia because Malaysia delivers the right environment for the oil and gas industry and Malaysia has done a fantastic job in the last 10 years and has a great vision going forward to 2020 and beyond for becoming an oil and gas services hub. Many oil and gas companies like Baker Hughes' customers are already based in Malaysia, the points out more so than in Singapore. For example, which has logistical and transactional benefits but little actual oil and gas industry. Major foreign operating companies include ExxonMobil, Shell, Murphy Oil, Hess and Talisman Energy. Small to medium sized operators in Malaysia include Lundin, JX Nippon and Newfield.

LUCRATIVE OIL & GAS (PLACE)

Oil field service and equipment players besides Baker Hughes include Schlumberger and Technip. Malaysia's national oil and Gas Company, Petronas has supported the development of such local companies as Scomi, SapuraCrest, Kencana, Petra Perdana and Wasco. Petronas holds exclusive rights to all oil and gas E&P projects and is responsible for all licensing procedures. Foreign and private companies must operate through production sharing contracts with PETRONAS. Malaysia is a significant location for the oil and gas business, both peninsular Malaysia and in Sarawak and Sabah.

Another benefit to a Malaysia regional headquarters is transactional transparency. Malaysia puts a big focus on fighting corruption and monitors closely its compliance with global transparency standards.
This policy is in keeping with Baker Hughes value system. It assures us that our investment will be protected for the long term.

PROMOTION

Lucrative oil & gas industry

LUCRATIVE OIL & GAS (PROMOTION)

Malaysias Oil and Gas Industry progresses, the local companies have become prominent service providers in the areas of exploration and production operators in Malaysia and are also capable of providing their services and products globally. Malaysian oil and gas companies are competent in providing multi-disciplinary services which include among others, process design, mechanical and piping design, structural and civil design, electrical and instrumentation, oil rigs engineering and fabrication, welding and pipe threading, environmental management such as total sludge management which involves sludge quantification, sludge removal and sludge treatment. A few promotion methods would be like for example, at one point Shell gave out toy cars after you purchased a certain amount of fuel. As for Petronas they had lucky draw event that would award certain people with a car if they get lucky, not to forget shell also utilizes bonus link card so you can obtain points and redeem plenty of interesting rewards like electronic products, t-shirts, umbrellas and so on.

THE END

Lucrative oil & gas industry