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PETROLEUM STORY. Petroleum structure Petroleum is a naturally occurring, yellow-to- black liquid found in geologic formations beneath the Earth's surface,

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Presentation on theme: "PETROLEUM STORY. Petroleum structure Petroleum is a naturally occurring, yellow-to- black liquid found in geologic formations beneath the Earth's surface,"— Presentation transcript:

1 PETROLEUM STORY

2 Petroleum structure Petroleum is a naturally occurring, yellow-to- black liquid found in geologic formations beneath the Earth's surface, which is commonly refined into various types of fuels. It consists of hydrocarbons of various molecular weights and other liquid organic compounds.

3 Petroleum structure The name petroleum covers both naturally occurring unprocessed crude oil and petroleum products that are made up of refined crude oil. A fossil fuel, petroleum is formed when large quantities of dead organisms, usually zooplankton and algae, are buried underneath sedimentary rock and subjected to intense heat and pressure.

4 Composition by weight ElementPercent range Carbon83 to 85% Hydrogen10 to 14% Nitrogen 0.1 to 2% Oxygen0.05 to 1.5% Sulfur0.05 to 6.0% Metals< 0.1%

5 OIL RESERVES

6 Structure of Oil Resrves

7 Unit of volume An oil barrel (abbreviated as bbl) is a unit of volume whose definition has not been universally standardized. In the United States and Canada, an oil barrel is defined as 42 US gallons, which is about 159 liters 1 barrel [US, petroleum] = liter * 0.88 = kilograms 1 metric ton is 1000 kilograms: / 1000 =

8 Top oil producers According to IEA top 10 oil producer countries produced over 64 % of the world oil production in The top oil producers in 2012 were: Saudi Arabia 544 Mt (13 %), Russia 520 Mt (13 %), United States 387 Mt (9 %), China 206 Mt (5%), Iran 186 Mt (4 %), Canada 182 Mt (4 %),United Arab Emirates 163 Mt (4 %), Venezuela 162 Mt (4 %), Kuwait 152 Mt (4 %) and Iraq 148 Mt (4 %). In 2012 total oil production was 4,142 Mt. In 2011 the world oil production was 4,011 Mt demonstrating an annually rising trend in oil production.

9 World84,820,000100% 1 Russia10,900, % 2 Saudi Arabia9,900, % 3 United States8,453, % 4 Iran4,231, % 5 China4,073, % 6 Canada3,592, % 7 Iraq3,400, % 8 United Arab Emirates3,087, % 9 Venezuela3,023, % 10 Mexico2,934, %

10 11 Kuwait 2,682, % 12 Brazil 2,633, % 13 Nigeria 2,525, % 14 Norway 1,998, % 15 Algeria 1,885, % 16 Angola 1,840, % 17 Kazakhstan 1,635, % 18 Qatar 1,631, % 19 United Kingdom 1,099, % 20 Colombia1,011, %

11 Influence of oil prices The demand for oil is highly dependent on global macroeconomic conditions. According to the International Energy Agency, high oil prices generally have a large negative impact on the global economic growth.

12

13 Oil prices

14 „Seven Sisters“ The "Seven Sisters " was a term coined in the 1950s by businessman Enrico Mattei, then- head of the Italian state oil company Eni, to describe the seven oil companies which formed the "Consortium for Iran" cartel and dominated the global petroleum industry from the mid-1940s to the 1970s.

15 „Seven Sisters“ The Anglo-Persian Oil Company (APOC) was an English company founded in 1908 following the discovery of a large oil field in Masjed Soleiman, Iran. It was the first company to extract petroleum from Iran. In 1935 APOC was renamed the Anglo-Iranian Oil Company (AIOC) and in 1954 it became the British Petroleum Company (BP), one of the antecedents of the modern BP plc.

16 „Seven Sisters“ The group comprised Anglo-Persian Oil Company (now BP); Gulf Oil, Standard Oil of California(SoCal) and Texaco (now Chevron); Royal Dutch Shell; and Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil).

17 „Seven Sisters“ Prior to the oil crisis of 1973, the members of the Seven Sisters controlled around 85 percent of the world's petroleum reserves, but in recent decades the dominance of the companies and their successors has declined as a result of the increasing influence of the OPEC cartel and state-owned oil companies in emerging-market economies.

18 „Seven Sisters“ Being well-organized and able to negotiate as a cartel, the Seven Sisters were initially able to exert considerable power over Third World oil producers. However, in recent decades the dominance of the Seven Sisters and their successor companies has been challenged by the following trends:

19 New Trends the increasing influence of the OPEC cartel (formed in 1960), a declining share of world oil & gas reserves held by OECD countries and the emergence of powerful state-owned oil companies in emerging-market economies. As of 2010, the surviving companies from the Seven Sisters are BP, Chevron, ExxonMobil and Royal Dutch Shell, which form four members of the "supermajors" group.

20 "New Seven Sisters" The Financial Times has used the label the "New Seven Sisters" to describe a group of what it argues are the most influential national oil and gas companies based in countries outside of the OECD. According to the Financial Times this group comprises: Saudi Aramco (Saudi Arabia) China National Petroleum Corporation (China) Gazprom (Russia) National Iranian Oil Company (Iran) Petrobras (Brazil) PDVSA (Venezuela) Petronas (Malaysia)

21 OPEC OPEC (Organization of the Petroleum Exporting Countries) is an oil cartel whose mission is to coordinate the policies of the oil-producing countries. The goal is to secure a steady income to the member states and to secure supply of oil to the consumers. The OPEC Reference Basket (ORB), also referred to as the OPEC Basket is a weighted average of prices for petroleum blends produced by OPEC countries. It is used as an important benchmark for crude oil prices.

22 OPEC OPEC is an intergovernmental organization that was created at the Baghdad Conference on 10–14 September 1960, by Iraq, Kuwait, Iran, Saudi Arabia and Venezuela. Later it was joined by nine more governments: Libya, United Arab Emirates, Qatar, Indonesia, Algeria, Nigeria, Ecuad or, Angola, and Gabon. OPEC was headquartered in Geneva, Switzerland before moving to Vienna, Austria, on September 1, 1965.

23 OPEC OPEC was formed at a time when the international oil market was largely separate from centrally planned economies, and was dominated by multinational companies. OPEC's ‘Policy Statement' states that there is a right of all countries to exercise sovereignty over their natural resources. Because OPEC is an organization of countries (not oil companies), individual members have sovereign immunity for their actions, meaning that OPEC is not regarded as being subject to competition law in the normal way.

24 OPEC In the 1970s, OPEC began to gain influence and steeply raised oil prices during the 1973 oil crisis in response to US aid to Israel during the Yom Kippur War which lasted until March OPEC added to its goals the selling of oil for socio-economic growth of the poorer member nations, and membership grew to 13 by 1975.

25 OPEC In the 1980s, the price of oil was allowed to rise before the adverse effects of higher prices caused demand and price to fall. The OPEC nations, which depended on revenue from oil sales, experienced severe economic hardship from the lower demand for oil and consequently cut production in order to boost the price of oil. During this time, environmental issues began to emerge on the international energy agenda. Lower demand for oil saw the price of oil fall back to 1986 levels by 1998–99.

26 OPEC In the 2000s, a combination of factors pushed up oil prices even as supply remained high. Prices rose to then record-high levels in mid-2008 before falling in response to the 2007 financial crisis. OPEC's summits in Caracas and Riyadh in 2000 and 2007 had guiding themes of stable energy markets, sustainable oil production, and environmental sustainability. OPEC has twelve member countries: six in the Middle East, four in Africa, and two in South America.

27 CountryRegionJoined OPEC Population (July 2012) ProductionProduction (bbl/day)bbl Algeria Africa196937,367,2262,125,000 (16th) Angola Africa200718,056,0721,948,000 (17th) Ecuador South America ,223,680485,700 (30th) Iran Middle East196078,868,7114,172,000 (4th) Iraq Middle East196031,129,2253,200,000 (12th) Kuwait Middle East19602,646,3142,494,000 (10th) LibyaAfrica19625,613,3802,210,000 (15th) Nigeria Africa ,123,7402,211,000 (14th) Qatar Middle East19611,951,5911,213,000 (21st) Saudi Arabia Middle East196026,534,5048,800,000 (2nd) United Arab Emirates Middle East19675,314,3172,798,000 (8th) Venezuela South America ,047,9382,472,000 (11th) Total369,368,42933,327,700 bbl/day

28 Brent Crude Brent Crude is a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide. Brent Crude is sourced from the North Sea, and comprises Brent Blend, Forties Blend, Oseberg and Ekofisk crudes (also known as the BFOE Quotation). The Brent Crude oil marker is also known as Brent Blend, London Brent and Brent petroleum.

29 Global Price Benchmark The other well-known classifications (also called references or benchmarks) are the OPEC Reference Basket, Dubai Crude, Oman Crude, and West Texas Intermediate (WTI). Brent is the leading global price benchmark for Atlantic basin crude oils. It is used to price two thirds of the world's internationally traded crude oil supplies.


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