The Upstream Oil and Gas Company

Paper Summary:

This paper presents an analysis of the political/legal, economic, socio-cultural, technological and ecological factors affecting the United Kingdom-based Upstream Oil and Gas Industry. The paper then uses the analysis to identify the top three most significant issues or trends in the recent past and medium term future facing the industry and provides justification for those choices. Next, the paper develops three scenarios for the industry that relate to an environment where conditions are optimistic for the future, pessimistic for the future and middle-of-the-road. Through the analysis and the scenarios drawn, the paper attempts to provide an in-depth understanding of the situational factors that affect and have the potential to affect this industry now and in the future.

From the Paper:

"The Upstream Oil and Gas Industry in the United Kingdom is a mature one, and after 40 years of offshore exploration, the country remains self sufficient in oil and gas. This is an important sector for the UK, supplying most of the country's energy needs, representing 17% of the country's industrial investment and manufacturing virtually all the country's transport fuel. A PESTE analysis of the factors affecting the industry shows that it operates under legal, fiscal and environmental regulations where prices are determined by international organizations like OPEC and OECD. The economic factors affecting the industry are oil demand, price, production, investment and employment. Awareness of sustainable development and renewable energy sources is the major social factor. Technology plays a crucial role in reducing the costs of exploration and production of oil and gas, in addition to making the process safer and more environmental friendly. There is considerable attention being paid to the affect of oil exploration operations on the environment, and this will also determine the future of the industry. The three scenarios that can emerge for the industry mainly depend upon the oil and gas reserves left in the North Sea, the viability of their exploration and the development of alternative renewable energy sources."

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