Petroleum Oil Energy 10

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Executive summary-This section offers a glimpse of what is to be covered in the wholepaper. Main parts of the paper are covered.

Introduction- This section offers a background regarding theissues touching on energy production. The thesis statement of thepaper is “The paper aims at discussing the aspects that need to beinvestigated in petroleum oil energy. Besides that it will outlinethe plan needed so that one can attain the products of petroleum andhow the plan will work effectively as a team for the attainment ofthe key deliverables”

Market size, growth, forecast range and sensitivity- The mainfactors which affects the market demand of petroleum is offered. Oneof the main factors affecting demand is industrialization incountries such as the United States and Japan among others.

Stakeholders- The stakeholders that are involved in petroleumoil either in the production include governments and regulators,employees, and the consumers. Other issues discussed include thesocial implications¸ technological forecasts and legal issuesaffecting petroleum production and consumption.

Plan- This section will discuss the main issues which shouldbe done to enhance effective production and consumption of petroleum.

Executive Summary

Petroleum oil is a commodity used on a daily basis across the globe,for the purpose of transport, manufacturing among others. There aresome aspects that need to be investigated when starting a new companyof petroleum oil in any country. For instance, the legal issues mustbe considered depending on the country of operation. Secondly theeconomic environment in the region has to apply based on thatpetroleum oil should benefit the economy positively.

The market size of petroleum is the next factor that should beinvestigated. For instance, the countries that need high consumptionshould be provided with oil accordingly. The political issues of oilshould be a concern to the host country based on that fact that oilproduction is associated with insecurity. The key stakeholders arethe next key factor that should be investigated since there is theneed to make a decision regarding the company. The main keystakeholders are the government and the investors, employees and thecustomers. Social implications of petroleum oil should beinvestigated so that negative social implication can be eliminated inthe society. Technology and creativity have to be applied if thepetroleum company is going to be successful. Technology plays anintegral part in making sure that the need of the consumers isattained. Lastly, the risk analysis must be conducted to ensurewhether the company is incurring profit or loss.

Energy production plays an integral part in national development. Thecountries that are associated with oil production has high grossdomestic product. Importation of the oil to other countries createsbilateral trade where the country will benefit on a win- winscenario. It is the role of the government to encourage bilateraltrade among the countries based on the fact that importation andexportation are crucial ideas that benefit the countries. Forinstance, United States can import oil from the United Arab Emirateswhile the other will need agricultural produce like coffee, tea ordairy products. The two countries benefits from the other and thusgood relationship exist between the two. The paper aims at discussingthe aspects that need to be investigated in petroleum oil energy.Besides that it will outline the plan needed so that one can attainthe products of petroleum and how the plan will work effectively as ateam for the attainment of the key deliverables.

Market size, growth, forecast range and sensitivity

The demand of petroleum oil is increasing rapidly due to innovationand creativity among the people. The industrialization is anotheraspect that is making the market size of petroleum oil increase. TheUnited Arab Emirates, United States, Russia, Canada, China, and Iranamong others produce petroleum, but the growth of transportation likeroad and air transportation makes the economy desire more oil. Thedeveloping countries need petroleum in large quantity, and this makesthe market size to keep on growing. The increasing need of petroleumoil in countries like China, United States, Japan, India, and Russiaamong others that are driven by demand from the road, air transport,and other machinery has made the market size of petroleum oil toincrease. The undersupply of petroleum will make a large deficit ifthe countries tend to increase its level of consumption.

Based on the fact that petroleum product is easily available theextraction of the oil is hazards to the environment. Additionally,the extraction is costly and extracted in the ocean where it leads toenvironmental degradation. To ensure that petroleum oil will meetthe high demand of oil in the industrialized countries, road and airtransportation have to come up with a plan of ethanol and biodiesel(Guo and Lyons, 2007, pg 36). Due to environmental rules that have tobe applied there is need to plan for electric cars and hydrogen fuelthat will meet the high demand. Teamwork is needed to ensure that theplan will effectively be attained for the purpose of attaining thekey deliverables by coming up with vehicles that will consumeethanol, hydrogen, and biodiesel.


The stakeholders that are involved in petroleum oil either in theproduction or as the final product are as follows.

Governments and regulators

The government and the regulators are one of the key stakeholders.The government authorizes the extraction and gives the license tooperate. After the extraction, there is the need for importation, andthus the government has to be a key beneficially in term of taxableincome. The carbon that is emitted from the extraction needs to bepassed in the carbon chimney so that it will be neutralized and beless severe to the people who are surrounding.


The petroleum oil company has employed many individuals and thus theyare part and parcel of the organization. The employees need to besafeguarded and motivated since they play an important role to makeit successful in the road and air transport. The employees holdregular meetings to ensure that their goals are achieved and ensurethat the production volume does not go below the intended capacity.


The use of petroleum oil is worldwide, and it implies that thecountry that is importing the petroleum oil has to consider the priceand delivery period. The customers need standard oil that is freefrom contamination, fair price and accessible on the demand of theconsumers. The oil regulation board is the consumers since it willhave to order the oil from different countries to meet the need intheir country.

Political issues

One of the political issues that are experienced in petroleum oilproduction and importation is a security concern. For instance, inthe Middle East and part of North Africa where insecurity is a greatconcern makes the importation and exportation a challenge. Iraq andLibya are known as major producers, but the political situation isworrying since sometimes it is hard to import or export petroleumoil. The second political issue that is experienced in petroleum oilproduction is the energy revolution that is expected in the NorthAmerica (Frankel, 2007, pg 55). The revolution will shape the marketof petroleum production globally and thus the prices are expected toreduce significantly. It is imperative that the industries will incurlosses that will lead to the closure of the industries making NorthAmerica being the supplier of petroleum oil. The third politicalissue that being experienced is that the prices of petroleum willincrease based on the demand. This is not true based on the fact manycountries are getting rich oil fields that are making the demand ofimporting of oil less.

Economic environment

The petroleum industry creates revenue to the government and inreturn the government provides development agendas. The petroleumthat is imported to different countries is a deal that was made manyyears ago. Distributing of petroleum to the key stakeholders benefitsthe country economically. For instance, the gross domestic productsincrease significantly. The tax that is attained after conductingtrade improves the economy and creates employment to the younggeneration who are employed in petroleum industries (Lez, 2006, pg21). In this regard, all the stakeholders benefit mutually based onthe transactions that are carried and improve the countryeconomically.

Exemption of tax may be allowed when two countries are trading, andtrade tariffs are allowed so that bilateral trade can be achieved. Itis the role of the government to act as the agent so that itsresources can be beneficial to the citizens. Failure to encouragetrade in the petroleum oil production implies that the naturalresources do not play an integral part in generating revenue to thecountry.

Social implications

One of the social implications of petroleum oil is that it createsemployment opportunity. The community benefits positively since thejobless are employed either casual or permanent based. The socialinfrastructures such as roads are improved to enhance accessibilityto the site where the petroleum is being extracted. The livingconditions of those who are employed in the petroleum company areimproved significantly based on the fact that they depend on thecompany for the survive (Heradstveit, 2004, pg 41). One of thenegative social implications is that conflict in those oil fieldstends to immerge based on that people from other areas are employedinstead of employing the local individuals.

The cultural value of the community where the petroleum company islocated is disregarded. If it continues, the moral values are notfollowed by both the local and the workers. The contractors who aregiven the extraction of the oil do not consider the host countryculture. Additionally, they employ the unskilled youth casually andwork for many hours.

Technological forecasts

The use of technology has to be applied so that the stakeholders willbe subjected to changes. For example, when technology is used thereis a possibility of price reduction of petroleum oil based on thatthe extraction cost will not be high. The drilling technology isexpected to increase the production of petroleum by 9.9 trillionbarrels. The mostly used technology is hydraulic fracturing. If thepetroleum companies may use Enhanced Oil Recovery (EOR) technologiesmeans that environment will not be degraded. This is based on thefact that they are going to use solar energy for steam injectionwithout violating the environmental rules.

Legal issues

The host government has to apply a certain law to the petroleumcompany so that the interest of the entire community is obtained. Forinstance, the investors who are extracting the oil has to observeenvironmental degradation and failure to that the government canterminate the contract. The second legal issue is working license(Adu, 2013, pg 31). The company cannot operate without a license andthus the investors have to maintain the working permit and renew it.The next legal issue is that the company together with its employeeshas to pay tax. It is the role of each and everyone to be taxcompliance so that the government can have revenue required fordevelopment agendas.

Risk analysis

It is a risk when extracting hydrocarbons based on the healthimplication of individuals. The hydrocarbons, when exposed toindividuals, are hazardous, and this is the reason biodiesel,hydrogen and ethanol are being used as alternatives fuel. The cost ofextracting petroleum is high though the demand is still high makingthe petroleum companies to charge high prices to their customers. Thenew technology used in extraction is still costly though it isenvironmentally friendly.


As a team to work effectively and attain the key deliverables, it isimportant to consider technology when extracting the petroleum oil.The modern technology that has been discussed above does not pollutethe environment by exposing carbon to the air. Competent individualswith experience of petroleum production should be given the contractso that they can use the resource available to benefit the country.The next plan that is supposed to be implemented is checking of thecompany whether it has met the required standard based on the factthat petroleum is explosive oil. Regular review and how they conducttheir business is important to ascertain that it not exposed todanger or any oil spillage that can cause death both to sea animalsor individuals. For that attainment of the key deliverables thepetroleum company has to minimize the cost of production so that thegovernment can benefit from the importation of oil. To meet the highdemand of petroleum oil the extraction method used should beeffective to avoid contamination of oil with other chemicals.

Reference List

Adu, K 2013. Governance of the petroleum sector in an emergingdeveloping economy. Gower: Burlington

Frankel, E 2007. Oil and security a world beyond petroleum.Springer Verlag: Dordrecht

Guo, B., &amp Lyons, W 2007. Petroleum production engineering acomputer-assisted approach. Gulf Professional Pub: Burlington, MA

Heradstveit, D 2004. Oil in the Gulf: Obstacles to democracy anddevelopment. Ashgate: Aldershot, Hants, England

Lez, P 2006. Running out how global shortages change the economicparadigm. Algora: New York