Professional Documents
Culture Documents
COMPANY OVERVIEW............................................................................................ 4
Industry Challenges Analysis....................................................................................... 4
Current Challenges................................................................................................. 4
Frontier acreage and access to reserves:........................................................4
Unconventional resources:..............................................................................4
Conventional reserves in challenging areas:...................................................4
Rising emerging market demand:...................................................................4
NOC-IOC partnership:...................................................................................... 4
Investing in Innovation and R&D:............................................................................. 5
Alternative fuels, including second generation bio fuels:................................5
Worsening Fiscal terms:................................................................................... 5
Price volatility and role of speculators:............................................................5
Corporate social responsibility:........................................................................5
Industry Transformational Challenges........................................................................6
Shift in Supply and Demand Fundamentals:....................................................6
Saudi Arabias strategy:.................................................................................. 6
Demand:............................................................................................................... 7
New trading pattern emerging:.......................................................................7
EXTERNAL ENVIRONMENT:................................................................................... 7
Global environment:............................................................................................... 7
Competitor Analysis:....................................................................................... 7
Competitors Firms:................................................................................................. 8
Oil Industry...................................................................................................... 8
Natural Gas Industry....................................................................................... 8
Chemical Industry:........................................................................................... 8
Current Strategy :.................................................................................................. 9
Business Strategy:........................................................................................... 9
Corp. Level Strategy:....................................................................................... 9
Technology:......................................................................................................... 10
Trend to Invest in New Technology:..........................................................................11
Water, Big Data Technology to Remain Focus in future....................................................12
Economical:......................................................................................................... 12
Major economic crises in past:......................................................................13
The current situation:.................................................................................... 13
World economic growth in 2014:...................................................................14
OECD global growth in 2015:........................................................................15
Political analysis:.................................................................................................. 15
Whats happened in the past?.................................................................................... 16
Russia and Ukraine................................................................................................. 16
Legal Analysis...................................................................................................... 17
Production Sharing Contracts........................................................................17
Licensing Systems......................................................................................... 17
Current Scenario............................................................................................ 18
Demographic Analysis........................................................................................... 18
Picking up the slack.............................................................................................. 18
Lack of loyalty..................................................................................................... 18
Different perspective............................................................................................. 19
INTERNAL ANALYSIS............................................................................................ 19
Mission and Vision:............................................................................................... 19
Value System:...................................................................................................... 19
Ethics policy:....................................................................................................... 19
Conflicts of interest policy:..................................................................................... 19
Corporate Assets Policy:........................................................................................ 19
Internal Audits:.................................................................................................... 19
Bribery and Corruption:........................................................................................ 20
Training:............................................................................................................ 20
Control Systems:.................................................................................................. 20
Organization Structure:......................................................................................... 20
Human Resources:................................................................................................ 20
Technological Capabilities:..................................................................................... 21
SWOT ANALYSIS................................................................................................... 22
Strength.............................................................................................................. 22
Weakness............................................................................................................ 22
Opportunity........................................................................................................ 23
Threat................................................................................................................ 23
Strength: Strong market position..................................................................23
Weakness: Litigations and contingencies......................................................24
Opportunity: Rising global energy demand...............................................................25
COMPANY OVERVIEW
Exxon Mobil Corporation (Exxon Mobil or 'the company') is an integrated oil and gas company
engaged inthe exploration and production of crude oil and natural gas; manufacture of petroleum
products; and transportation and sale of crude oil, natural gas, and petroleum products. In addition, the
company manufactures and markets commodity petrochemicals. Exxon Mobil operates in the
Americas, Europe, Africa, the Middle East, and Asia Pacific. It is headquartered in Irving, Texas and
employed 73,500people as on December 31, 2015.
The company recorded revenues of $259,488.0 million during the financial year ended December
2015(FY2015), a decrease of 34.2% compared to FY2014. The operating profit of the company was
$22,277.0million in FY2015, a decrease of 57.1% compared to FY2014. The net profit of the
company was$16,150.0 million in FY2015, a decrease of 50.3% compared to FY2014.
Key Facts
Demand:
The worlds biggest demand centre are also shifting. According to Baker Institute, the Asia Pacific
region will account for an estimated 70% of global demand from 2010 to 2020 and the countries in
the region will emerge as beneficiaries.
New trading pattern emerging:
US-Canada-Mexico
Russia-China-India
Weakening of OPEC
OPEC under pressure
EXTERNAL ENVIRONMENT:
Global environment:
1. Political conflicts continue to escalate in oil-producing regions;
2. The effect on the industry of climate change (and resulting regulations) remains
unknown.
3. The slowdown in economic growth among emerging economies has led to a hiccup in
energy demand, with no clear indication of how long that slump will last
4. Another major factor is rapid innovation in hydraulic fracturing and other technologies.
This has not just reduced the cost of unconventional oil and gas plays, but it has led to
oscillating returns on investment in new fields. The broadening array of operating
environments, from these unconventional plays to mature fields to ultra-Deepwater
exploration, is challenging the traditional portfolio strategies of many oil and gas
companies. No single company, not even the integrated majors like ExxonMobil, Shell,
and BP, has the technical, operational and commercial capabilities to succeed in all the
new oil and gas operating environments.
5. Constant shift if Supply and Demand.
Competitor Analysis:
ExxonMobil operates in three major industries: oil, natural gas, and chemicals. Since the dynamics,
opportunities, and challenges in each are very different, the competitors in each industry are analysed
separately.
Competitors Firms:
Oil Industry
The world oil market is dominated by government-controlled companies that actually control the
majority of both current production (more than 52 percent in 2007) and proven reserves (88 percent in
2007). The companies operating in the world oil market can be broadly classified into three
categories:
National oil companies that function as corporate entities but have strategic and operational
autonomy and support of national governments. Examples are: Petro bras (Brazil), Statoil
(Norway), Petro China (China), and ONGC (India).
National oil companies that operate as an extension of the government Saudi Aramco
(Saudi Arabia), Pemex (Mexico), and PDVSA (Venezuela). They support their respective
governments programs like subsidizing fuels to domestic consumers.
Investor-owned oil companies (ExxonMobil, Shell, and BP) form a relatively smaller segment
of the world oil market and sell their output in competitive markets. ExxonMobil is the largest
among the six big non-states owned, vertically integrated oil companies, popularly known as
Big Oil (or super majors) companies; the others in these 16 categories are Royal Dutch
Shell, BP, ConocoPhillips, Chevron, and Total S.A. In addition, there is increasing competition
from national oil companies like Saudi Aramco, Gazprom and China National Petroleum
Corporation (CNPC). Though the big oil companies have the technological know-how and
large assets at their disposal, they are at a disadvantage when it comes to access to oil reserves,
as OPEC controls the majority. Access to high growth markets in non-OECD countries is
difficult as these markets are already served by incumbent, local, state-owned companies like
Petro bras in Brazil, Oil and Natural Gas Corporation (ONGC) in India, and Petro China in
China.
Though the oil business has been dominated by the Big Oil companies, the natural gas
business in the U.S. was, until recently, managed by small, independent, non-integrated
companies. With replacement ratios for oil dropping and the oil-rich regions becoming more
politically unstable, Western oil companies are scrambling to find new ways to address
growing energy demand. Big Oil companies started foraying into natural gas, an adjacent
market. Globally, there are big state-owned companies. Gazprom, of Russia, has 17 percent
of the worlds natural gas reserves. ONGC is an Indian state-owned oil and gas company that
contributes 81 percent of India's natural gas production. The Chinese market is dominated by
three local companies: China National Offshore Oil Corporation (CNOOC), CNPC (parent of
Petro China), and China Petrochemical Corporation (parent of Sinopec). The natural gas
market is highly fragmented, with dominant players in each region and no single company
having control over multiple geographies.
Chemical Industry:
ExxonMobil also manufactures and sells commodity petrochemicals and a wide variety of specialty
products. The competitors for ExxonMobil in this market are: BASF (Germany), Dow Chemical,
Ineos (UK), Saudi Basic Industries Corporation, DuPont and Chevron Phillips Chemical Company
LLC (CP Chem). Primary Competitors Oil The primary competitors for ExxonMobil in the oil
industry are the other Big Oil companies: Shell, BP, ConocoPhillips, Chevron, and Total S.A. See
following Exhibit for a detailed comparison of competitors. The common trend across all competitors
is the rise in production of natural gas. This indicates that the Big Oil companies are now adjusting
their energy portfolio to account for the depleting oil reserves. ExxonMobils jump in
Current Strategy :
Business Strategy:
Balanced Business Model: ExxonMobil revenues and profit margins are significantly affected
by changes in oil, gas, and petrochemical prices. A decline in oil or gas prices lowers
ExxonMobil Upstream business profit margins, whereas an increase in oil and natural gas
prices lowers ExxonMobil Downstream and Chemical business profit margins. On an overall
basis, ExxonMobil profit margins are somewhat stable due to integrated operations and are
less impacted by changes of the commodity prices in either direction.
Cost Leadership: ExxonMobil maintains a competitive advantage through a cost leadership
strategy. They keep costs low primarily by superior capital allocation, investment in long-life
assets, and by maintaining their status as a technology leader in the industry. Long-life assets
allow ExxonMobil minimize depreciation and maintenance expense resulting in greater free
cash flow and lower procurement costs. Further, its next generation seismic imaging, reservoir
modeling and surveillance technology allow them to lower drilling and completion costs while
maximizing recovery (ExxonMobil, 2016)
Profits from Chemical Business: Exxon Mobil Chemical gets a lot less attention than the oil
and gas operations of the parent company, which is unfortunate because those chemical assets
have significant value as well and should help to ensure that XOMs profits remain positive
(excluding write-offs) regardless of what happens to oil prices. The chemical companys
principle products include olefins used in carpeting, ropes, and vehicle interiors; polyethene
used in packaging and plastics, polypropene used in textiles and stationary; and adhesive
resins. Exxon Mobil Chemical is also the largest producer in the world of butyl rubber.
The oil and gas industry has faced a learning curve in terms of how to best produce shale oil and gas.
The technology and learning curve effects that the operators, service providers and drilling contractors
have put in place have achieved has substantially improved the breakeven point of shale plays.
Technological advances have improved the breakeven economics on wells for both shale oil and gas
wells, to the point where some companies are able to drill economic dry gas wells with break-even
prices of between $2 and $2.50/Mcf. The economics have improved due to operators making better
decisions on fluid choices, rigs and pressure pumping.
Its not so much a single point technology as it is the integration of technologies and how they bring
those together.
A major focus of unconventional drilling now and in future is the accuracy of where well laterals are
being placed. Measurement-while-drilling and logging-while-drilling tools are allowing oil and gas
operators to better pinpoint where to place laterals in some cases, 50 feet can make a huge
difference. In plays such as the Delaware Basin in West Texas, this accuracy can make the difference
between a well having a five percent return or a 40 percent return. This accuracy also is allowing
companies to maximize resources in the upper and lower bench of the Eagle Ford shale play.
In a tough price environment, being able to push out every bit of optimization matters.The idea of
factory drilling and feeding the rig monster has been in the industry for decades, but drilling and
completion technology has evolved over time and, in its latest rendition, has been applied to shale.
The industrys focus on the size of acreage has created the need for lots of drilling; hence the idea of
factory drilling.
The factory drilling approach has been a controversial topic in the oil and gas industry.Some totally
believe in factory drilling and efficiency driven by statistical production results. Others are advocating
a data-driven approach where you drill smart, consistently achieving top quartile production results,
not statistically, and hoping to not have too many poor producers.
The shale plays have been classic acreage plays. Once the shale concept took hold, independent
exploration and production companies sent their landmen out to get the biggest acreage positions
ahead of their competition and ahead of the technical work. The technology implementation always
chases the landman. Always has, and always will in the United States, which has private mineral
ownership.
The overall shale boom, which includes the dominant U.S. shale plays, has solidly left the
exploration, access and appraisal phases and entered the development drilling phase of field/play life.
The factory approach to field development is the most expensive part of the cycle. The development
era could last for many years, given the huge acreage positions companies have accrued.
Trend to Invest in New Technology:
North Americas unconventional, deepwater, tight and heavy oil resources have been the focus of
much of the investment made since 2003 in oil and gas exploration and production technology. Since
2003, more than $7 billion has been invested in new technologies to enhance oil and gas exploration
and production.
Unlike in the past, the oil and gas industry now embraces emerging technologies from adjacent
industries. Initial investments focused on making unconventional plays more productive, such as
hydraulic fracturing technology. Now, a group of companies are focused on giving operators more
information on the actual production process, such as micro seismic, chemical tracers, down hole fibre
optic sensors and temporary insulation to bolster production recovery from wells.
Operators more willing to quickly introduce new technologies for shale in order to remain competitive
in different oil price environments, unlike offshore conventional, where operators are more
conservative about introducing new technologies. Onshore shale producers have more operational
freedom in this respect due to greater number of wells and shorter life spans when compared with
deepwater wells.
The next wave of investment in oil and gas technology will focus on improving recovery of tight oil
production. Single-digit recovery levels are currently seen in tight oil wells, compared with recovery
of between 20 to 70 percent from conventional wells. Currently, many operators are opting to drill
new wells rather than invest in currently producing wells to boost production.
Weaker oil prices will likely facilitate the more rapid adoption of new technology, such as fit-for-
purpose rigs for onshore drilling.
Water sourcing and usage will continue to be a cost driver for operators. For this reason, new
technologies for recycling and use of produced water in hydraulic fracturing could help minimize
these costs and provide environmental benefits as well..
Besides costs for acquiring water, companies also will seek technology solutions to help reduce the
amount of truck traffic on roads, which causes wear and tear on roads and creates safety issues, and
concerns over the environmental impact of hydraulic fracturing, such as the draining of aquifers.
These concerns have prompted discussions in some states about banning hydraulic fracturing.
Oil and gas companies will continue to seek out technologies that allow them to use less or no water
in hydraulic fracturing. Companies have been experimenting with using butane in hydraulic fracturing
instead of water. The fact that water already is scarce is some regions will drive the need for
innovation and collaboration in the oil and gas industry.
The oil and gas industry will continue to delve into Big Data as a means of gaining greater value out
of the massive amounts of data generated in oil and gas operations. The digital oil field was really one
of the first places that Fast Data started to appear, but now its in refineries, pipelines and
transportation, right the way downstream to the trader and the gas station forecourt.
Lets take machine reliability and that could be a rig upstream, a pump at the garage, a pressurized
vessel at the refinery or even a truck. Sensors on that machine allow us to see everything that is
happening motion, vibration, current, pressures, temperatures etc. Now, using all this data,
combined with historical records we can build a pretty picture of how reliable the machine is in given
circumstances how often it fails and what conditions cause it to fail more or less often.
This means that more robust maintenance strategies can be designed, but its still essentially
descriptive and doesnt help us when one of those conditions changes right now: theres a power
surge, a temperature rise etc.
So what we are now able to do is to monitor the stream of sensor data in real time and compare it to
the reliability model we have built. And there have been some stunning results; we expect to see much
more of this in future.
The Internet of Things (IoT) will gain a strong foothold across the industry.
The proliferation of sensors is going to keep exploding as we go forward. Infrastructures will need to
grow to support the growth in data, both wired and wireless.
As it brings new tools to manage growing amount of data at the edge of the infrastructure and deploy
analytics applications at the remote site to improve speed of decisions and accuracy, oil and gas
industry and suppliers are in the process of testing and crafting strategy on leveraging Fog Computing
phenomena to bring new applications and capabilities faster and to build a great competitive
advantage in processing data in Big Data age.
Economical:
Oil oversupply has been the key driver of oil prices recently and is likely to dominate. However,
investors should know that economic growth also plays an important role. When economic growth
slows, consumer demand declines. This has a negative impact on crude oil price movements.
Economic growth directly impacts international oil-producing companies such as Exxon Mobil
(XOM) and Chevron Corporation (CVX). It also impacts US oil producers such as Chesapeake
Energy (CHK) and Concho Resources (CXO).
Major economic crises in past:
The Great Depression in the 1930s is considered the mother of all financial crises. It lasted for almost
ten years. Some other financial crises include the Asian financial crisis of 1997, the 2000 recession,
and the 2008 global financial crisis, which is considered one of the greatest financial crises since the
Great Depression.
The common factor during an economic crisis is that economic growth slows down. Demand declines,
which have a negative impact on oil prices. During the 2008 financial crisis, crude oil prices declined
from the peak of $147 per barrel to $32 per barrel.
The European economy is still in the shadow of the 2008 financial crisis. It has high debts and high
unemployment. There are concerns that Europe and Japan, the fourth-largest consumer of crude oil,
might enter a recession.
Russias economic growth is also fragile. Its the fifth-largest consumer of crude oil.Russia could
possibly enter a recession in future.
Europe had slow economic recovery in 2014 due to a high debt burden and low investments.
Economic activity in the United States reflects faster recovery and shows improvement in
employment, the housing market, and financial conditions in 2014. Japans growth dropped in the
second half of 2014 due to an increase in the consumption tax. In the emerging markets, Chinas
economic growth slowed down due to economic transitions. However, other Asian economies such as
India are expected to have robust growth.
A stronger economy will boost consumption, and the demand for crude oil will increase. This will
lead to higher crude oil prices in the long term. In the near term, oil prices will be on a downward
trend due to an oil glut. As we saw earlier, lower crude oil prices will lead to low investments in new
oil projects. There is also a decline in drilling of new oil rigs. This will all lead to a decline in
production and will mean a lower supply in the long term. In turn, this will contribute to higher crude
oil prices in the long term.
The rise in crude oil prices will increase the margins of crude oil companies such as
Chevron Corporation (CVX), Exxon Mobil (XOM), BP (BP), Cenovus Energy (CVE), and
PetroChina (PTR).
Political analysis:
Geopolitical tensions impact crude oil prices. Political unrest affects production and reduces supply.
The consensus of a shortage of oil supply leads to an increase in oil prices. An oil price increase
directly impacts the profitability of oil producers such as Chesapeake Energy (CHK), Concho
Resources (CXO), BP (BP), Exxon Mobil (XOM) and Marathon Oil Corporation (MRO).
During the Gulf War that began in 1990, WTI (West Texas Intermediate) and Brent crude oil prices
doubled in the beginning of 1990 and dropped ~30% by the end of that year. The United States
invaded Iraq in 2003. During this war, Brent crude oil rose by 7% and then declined by 12% by the
end of the war.
These geopolitical tensions led to supply disruptions, which increased global crude oil prices. In the
Gulf War, supply dropped by ~7%, and in the Iraq War, supply dropped by ~3%. The 2013 Middle
East tensions didnt have much impact on oil prices due to increased production in the United States.
The recent geopolitical tensions between Russia and Ukraine may slow down the Russian economy.
Usually, this kind of political unrest disrupts production. Supplies decline, thus impacting crude oil
prices. But a glut in crude oil supply could mean that political tensions in the near term may not
impact oil prices.
Legal Analysis
There are several contractual concepts used around the world by governments to permit international
oil companies (IOC) to carry out petroleum explorations and, in the event of a commercial
discovery, development and production operations. The type of contract selected by a government and
the terms and conditions agreed between the signing parties depend mainly on the government policy
and the relative bargaining strengths of host countries, which are directly linked to the petroleum
potential of the offered acreage and the international oil market situation .
Production Sharing Contracts (PSC) and Licensing Systems are among the most common types of
contractual arrangements used for petroleum exploration and development. The differences between
the types of contracts are of a conceptual nature mainly with regard to the levels of control granted to
the foreign contractor, compensation arrangements, and levels of involvement by the National Oil
Companies (NOCs).
1. The concept of production sharing originated in Indonesia where the first agreement of this type
was signed in 1966 between PERTAMINA, the Indonesian state-owned company, and an American
company.
2. A production Sharing Contract (PSC) is a contract for cooperation between a National Oil
Company (NOC) and an international oil company (IOC). The foreign investor assumes all the
pre-production risks and recovers both his cost and his profit share from production, in predetermined
proportions, once commercial production from the contract area commences
3. Typically, the term of a PSC is between 20 to 30 years, with an option to extend. The contract
terminates, unless extended under agreed conditions, if no petroleum that can be developed
commercially is found within a pre-determined exploration period.
4. From the states perspective, obtaining direct foreign investment, freeing up scarce capital
resources for other activities, obtaining long term technology and skills transfer; and retaining control
over and ownership of oil and gas in the ground are among the reasons for using PSCs.
Licensing Systems
1. The Licensing system can be described as an agreement between government and an IOC whereby
the government grants the IOC the exclusive right to explore for, develop, produce, transport and
market the petroleum resource at its own risk and expense within a fixed area for a specific period of
time . The investor pays to the state fees and other taxes and other obligatory statutory charges
2. Under the old License system, the state was not directly involved in petroleum operations and its
petroleum revenues were only generated through taxation. In the modern form of licensing system,
the relationship between the government and the licensee has been modified. New provisions permit
the government to exercise a direct control on petroleum operations like submission to the
government by the licensee of an annual programme and budget of a development plan, the
government may participate with the licensee in case of a commercial discovery, to jointly develop
and produce such a field.
3. In addition to matters of control, state participation enables the NOC and its personnel to gather the
needed experience and expertise to be able to take over operations in the future.
4. In terms of disposition of production, the licensees are entitled to 100% of the production at the
wellhead but must, upon request (and in accordance with the terms of the License) pay royalties and
must supply domestic needs. The government only receives in kind part, if any, of production through
royalties, domestic supply obligation and state participation.
Current Scenario
1. The comparison of a modern license agreement with a PSC shows that, from a purely economic
point of view, it is theoretically possible to arrive at a similar government take in the revenues of a
commercial field, whatever the type of contract in force. The terms of the contract must be modulated
against the characteristics of possible discoveries to obtain these results.
2. The PSC system guarantees the investor stability of legal relations with the state as well tax
stability.
3. The adoption of standard contracts reduces costs and increases efficiency. It further ensures that all
contractors tender their services by using the same terms and conditions.
Demographic Analysis
The age demographics of the oil industry are disturbing. There is a substantial population of people in
their late 40s and early 50s, and there is a fair group of neophytes, but there are very few people with
ages between the two groups.
From small drilling contractors to the super majors, the problem is the same. Sadly, the problem is not
geographically isolated. The expansion of exploration and development activity is international and
affects manpower in every location where drilling is taking place. In fact, the shortage of personnel is
already a crisis in some areas.Day rates for rigs, equipment, and personnel have escalated yet even
with higher oil and gas prices, and with companies paying higher wages, the industry is unable to
attract new employees or to encourage current employees to remain.
Picking up the slack
Consultants and service companies are picking up the slack for some technical areas. For example,
companies such as Q&B Servios Ltda. in Rio de Janeiro have capitalized on the shortage of workers
in the industry and found a niche market - providing people. The company provides tool rental,
specific services, and skilled workers for drilling and production on well sites offshore Brazil.
Similarly, the Gulf of Mexico is seeing drilling activity expansion, and companies like Q&B are
working to keep up the supply of trained workers. Global Project Consultants of Houston is providing
engineering supervision, procurement, cost control, and inspection services on the Canyon Express
project, among others.
While there are more consulting companies springing up and more individuals striking out on their
own to provide consulting services, there is still a lack of resources. Many consultants are finding that
they are in such demand that they are stretching themselves very thin in order to meet their
obligations.
Requests for their services continue to pour in. However, consultants can only fulfill some of the
manpower needs. Oil companies need to find a way internally to address the shortages of skilled and
experienced people.
Lack of loyalty
Part of the problem is rooted in the lack of loyalty between companies and employees, a situation that
often cannot be remedied simply by throwing money and stock options at employees. Employees
know that employment can end high salaries abruptly.
Loyalty is like credibility; it's hard to build up. And a lot of it has been destroyed. Much of today's
distrust stems from the severe cuts in personnel in the last industry downturn.
Hindsight has shown that cutting personnel to satisfy the analysts for short-term gain was misguided.
The industry got caught up in the idea of saving money in the short term, which amounted to losing
much more in the long term. The amount of money it would have taken to keep people was
insignificant, compared to the costs those companies are incurring now in the search for qualified
professional personnel.
A small number of companies avoided the pitfall of personnel shortages, by investing in its
employees strongly over the years and adhering to its corporate policy of hiring only entry-
level employees, promoting from within, and rewarding competence and loyalty.
Sometimes, this kind of investment has meant softness in equity share prices during slow
times.
Different perspective
There are companies that have made significant efforts to preserve their work force during the slumps
in order to be ready for business when the industry cycles up.
Global Marine, an international driller like Rowan, did lay off some employees in the last downturn,
but management contends that the reduction in force was based on performance. In order to avoid
losing critical skilled offshore workers, Global Marine implemented a "Bump-back Program." Briefly,
an employee was asked to move to a position subordinate to his or her current position. If the
employee wasn't reinstated to the original position after six months, then his or her wage dropped to
that of the subordinate position.
In implementing this program, Global Marine ensured employees were made aware of a potential
wage cut and were given a timeline. More significantly, employees knew they would not lose their
jobs.
INTERNAL ANALYSIS
Human Resources:
The employee strength of the organization is more than 75000 world wide.This function is integrated
with different business verticals of the company. The HR management manages a pool of smart,
knowledgeable and skilful resource which is the soul and strength of the company. These talented
resources support various business verticals within the organization. There is a cosmopolitan culture
within the company and the resources are hired from various countries. The organization provides an
exciting, challenging, rewarding work in the areas of:
1. Recruiting
2. Employee development
3. Corporate learning
4. Industrial/labor relations
5. Compensation and benefits
6. Employment equality and workplace diversity
7. Policy development
8. Organizational development
9. Change management
10. Recruiting
11. Employee development
12. Corporate learning
13. Industrial/labor relations
14. Compensation and benefits
15. Employment equality and workplace diversity
16. Policy development
17. Organizational development
18. Change management
The human resource at Exxon mobil is integrated with various line of business. The individuals are
dedicated to high integrity, high quality work and good corporate citizenship. The company supports
local employee networks to nurture an environment which is committed to diversity and dedicated to
quality. This helps in facilitating innovation and a competitive advantage over others.
It promotes respect for human rights and is committed to complying with all applicable laws and
regulations.
Technological Capabilities:
The company has successfully implemented few sophisticated and technologically advanced projects
and its employees are integral part of the worlds premier project design and execution which is deeply
committed to safety, security and health of its employees.
The company focuses on:
1. Unlocking new sources of energy in places which were thought to be inaccessible.
2. To develop supplies of clean burning natural gas.
3. Create partnerships and ventures to formulate fuels, lubricants and plastics.
4. Exploration of oil and natural gas across the six continents.
Exxonmobil seeks to advance innovation and technology to deliver the energy needed by the world
enable life.
It markets fuels and lubricants under four brands :
1. Esso : Branded fuels, services and lubricants for personal and business needs.
2. Exxon : services and lubricants sold in the US
3. Mobil: Mobil is known as performance and innovation. It is recognized for its advanced
technology in fuels lubricants and services.
4. ExxonMobil Chemical :It has a broad portfolio of petrochemical product brand and service
solution.
It uses advanced technologies such as carbon capture and sequestration, advanced carbonate fuel
technology, deep water drilling, energy efficiency cogeneration, seismic imaging, 4D seismic
technology, hydraulic fracturing, liquefied natural gas, hydrogen fuel cells in most of its major
projects.
Fig. 2. Technology gaps: oil production of both complex and deeper (offshore)fields requires the
development and application of advanced technologies. Newreserves need to be added by using (1)
new technology to discover new prospectsand to allow these reserves to be reported as proven. (2)
Production fromconventional oil is under duress as remaining reserves are in challenging
reservoirs;new technology is needed to maintain production volumes. (3) Production
fromunconventional reserves also requires deployment of new technology.
SWOT ANALYSIS
Exxon Mobil Corporation (Exxon Mobil or 'the company') is an integrated oil and gas company
engaged in the exploration and production of crude oil and natural gas; manufacture of petroleum
products; and transportation and sale of crude oil, natural gas, and petroleum products. The company
is one of the world's largest publicly traded international oil and gas companies. The strong market
position across the value chain enables Exxon Mobil to take advantage of emerging growth
opportunities around the globe.
Also, the resource and geographic diversity across business portfolio enables Exxon Mobil to mitigate
risks in a dynamic market environment and maximize profitability through changing business cycles.
However, challenging downstream industry environment characterized by weak demand and
overcapacity would pressurize the company's earnings and margins.
Strength
Strong market position
Extensive upstream and downstream operations
Robust research and development capabilities
Diversified geographic revenue stream
Weakness
Litigations and contingencies
Declining financial performance and capital efficiency
Increasing financial leverage
Opportunity
Rising global energy demand
Strategic expansion of upstream, downstream, and
Chemical operations
Increasing demand for LNG globally
Threat
Challenging downstream industry environment
Environmental regulations
Economic conditions
Supply-related risks
References
1 http://www.rigzone.com/news/oil_gas/a/136449/Oil_Gas_Technology_Trends_to_Lo
ok_For_in_2015
2 http://marketrealist.com/2015/01/must-know-geopolitical-tensions-impact-oil-prices/
3 http://www.lawteacher.net/free-law-essays/international-law/legal-aspects-of-oil-and-
gas-contracts-international-law-essay.php
4 http://www.offshore-mag.com/articles/print/volume-61/issue-8/news/manpower-
shortage-age-demographics-of-petroleum-industry-leading-to-problems.html