Global Oil and Gas Exploration and Production - Data Monitor 2008

Global Oil & Gas Exploration & Production
Industry Profile
Reference Code: 0199-2119 Publication date: April 2008
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ABOUT DATAMONITOR
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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Market Value The global oil and gas exploration and production market grew by 14.7% in 2007 to reach a value of $1.6 trillion. Market Value Forecast In 2012, the global oil and gas exploration and production market is forecast to have a value of $3.3 trillion, an increase of 113.7% since 2007. Market Volume The global oil and gas exploration and production market grew by 3.4% in 2007 to reach a volume of 28.3 billion Boe. Market Volume Forecast In 2012, the global oil and gas exploration and production market is forecast to have a volume of 38 billion Boe, an increase of 34.8% since 2007. Market Segmentation I Crude oil dominates the global oil and gas exploration and production sector with 75.6% of the sector's value. Market Segmentation II The Americas generate 53.3% of the sector's value. Market Share SaudiAramco accounts for 17.6% of the sector's value.
Global - Oil & Gas Exploration & Production Datamonitor (Published April 2008) Page 3
CONTENTS
TABLE OF CONTENTS
EXECUTIVE SUMMARY CHAPTER 1

1.1 1.2 1.3
3 7
7 7 8
Market Overview
Market Definition Research Highlights Market Analysis
CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 CHAPTER 7

7.1 7.2 7.3 7.4 7.5 7.6 Summary Buyer Power
Market Value Market Volume Market Segmentation I Market Segmentation II Market Share Five Forces Analysis
9 10 11 12 13 14
14 15 16 17 18 19
Supplier Power New Entrants Substitutes Rivalry
CHAPTER 8
8.1 Saudi Aramco
Leading Companies
20
20
CONTENTS
8.2 8.3 8.4 ExxonMobil Corporation Royal Dutch Shell plc Chevron Corporation 22 25 28
CHAPTER 9
9.1 9.2
Market Forecasts
31
31 32
Market Value Forecast Market Volume Forecast
CHAPTER 10
10.1 Methodology
Appendix
33
33 34 34
10.2 Industry Associations 10.3 Related Datamonitor Research
CONTENTS
LIST OF TABLES
Table 1: Table 2: Global Oil & Gas Exploration & Production Market Value: $ billion, 2003-2007 ..9 Global Oil & Gas Exploration & Production Market Volume: Boe billion, .............. 2003-2007 ........................................................................................................10 Global Oil & Gas Exploration & Production Market Segmentation I: % Share, ..... by Value, 2007..................................................................................................11 Global Oil & Gas Exploration & Production Market Segmentation II: % Share,..... by Value, 2007.................................................................................................12 Table 5: Global Oil & Gas Exploration & Production Market Share: % Share, by Value, 2007 .................................................................................................................13 Key Facts: Saudi Aramco .................................................................................20 Key Facts: ExxonMobil Corporation..................................................................22 Key Financials: ExxonMobil Corporation ..........................................................24 Key Facts: Royal Dutch Shell plc ......................................................................25 Key Financials: Royal Dutch Shell plc...............................................................27 Key Facts: Chevron Corporation.......................................................................28 Key Financials: Chevron Corporation ...............................................................30 Global Oil & Gas Exploration & Production Market Value Forecast: $ billion, 2007-2012 ........................................................................................................31 Global Oil & Gas Exploration & Production Market Volume Forecast: Boe billion, 2007-2012 ........................................................................................................32
Table 3:
Table 4:
Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13:
Table 14:
MARKET OVERVIEW
CHAPTER 1
MARKET OVERVIEW
1.1
Market Definition
The oil and gas exploration and production sector is composed of companies engaged in the exploration and production of oil and gas. The market value in this study has been calculated using a basket approach, focusing on the 20 largest integrated oil and gas companies. Any currency conversions used in this report have been calculated using constant 2007 annual average exchange rates. For the purpose of this report the Americas comprises Brazil, Canada, Mexico and the US. Europe comprises Belgium, the Czech Republic, Denmark, France, Germany, Hungary, Italy, the Netherlands, Norway, Poland, Russia, Spain, Sweden and the UK. Asia-Pacific comprises Australia, China, Japan, India, Singapore, South Korea and Taiwan. The global figure comprises the Americas, Asia-Pacific and Europe.
1.2
Research Highlights
The global oil and gas exploration and production sector generated total revenues of $1.6 trillion in 2007, representing a compound annual growth rate (CAGR) of 24.7% for the period spanning 2003-2007. Sector production volumes increased with a CAGR of 5.4% between 2003 and 2007, to reach a total of 28.3 billion Boe in 2007. Crude oil sales proved the most lucrative for the global oil and gas exploration and production sector in 2007, generating total revenues of $1.2 trillion, equivalent to 75.6% of the sector's overall value. The performance of the sector is forecast to decelerate, with an anticipated CAGR of 16.4% for the five-year period 2007-2012 expected to drive the sector to a value of $3.3 trillion by the end of 2012.
MARKET OVERVIEW
1.3 Market Analysis
The oil and gas exploration and production sector is composed of companies engaged in the exploration and production of oil and gas. The growth rate of the global oil and gas exploration and production sector has been decelerating during the 2003-2007 period. However, the sector is expected to recover over the next five years. The global oil and gas exploration and production sector generated total revenues of $1.6 trillion in 2007, representing a compound annual growth rate (CAGR) of 24.7% for the period spanning 2003-2007. Sector production volumes increased with a CAGR of 5.4% between 2003 and 2007, to reach a total of 28.3 billion Boe in 2007. The sector's volume is expected to rise to 38.2 billion Boe by the end of 2012, representing a CAGR of 6.2% for the 2007-2012 period. Crude oil sales proved the most lucrative for the global oil and gas exploration and production sector in 2007, generating total revenues of $1.2 trillion, equivalent to 75.6% of the sector's overall value. In comparison, sales of natural gas generated revenues of $380.8 billion in 2007, equating to the remaining 24.4% of the sector's aggregate revenues. The performance of the sector is forecast to decelerate, with an anticipated CAGR of 16.4% for the five-year period 2007-2012 expected to drive the sector to a value of $3.3 trillion by the end of 2012.
MARKET VALUE
CHAPTER 2
MARKET VALUE
The global oil and gas exploration and production market grew by 14.7% in 2007 to reach a value of $1.6 trillion. The compound annual growth rate of the market in the period 2003-2007 was 24.7%. The strongest growth was in 2005, when the market grew by 39.7%. Table 1: Global Oil & Gas Exploration & Production Market Value: $ billion, 2003-2007 $ billion 647.2 800.8 1,118.9 1,361.9 1,562.7 % Growth
Year 2003 2004 2005 2006 2007 CAGR, 2003-2007:

Source: Datamonitor
23.70% 39.70% 21.70% 14.70% 24.7%

DATAMONITOR
Figure 1:
Global Oil & Gas Exploration & Production Market Value: $ billion, 2003-2007
$ billion 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2003 2004 2005 $ billion
% Growth 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2006 2007 % Growth
Source: Datamonitor
DATAMONITOR
MARKET VOLUME
CHAPTER 3
MARKET VOLUME
The global oil and gas exploration and production market grew by 3.4% in 2007 to reach a volume of 28.3 billion Boe. The compound annual growth rate of the market volume in the period 2003-2007 was 5.4%. The strongest growth was in 2005, when the market grew by 10.2%. Table 2: Global Oil & Gas Exploration & Production Market Volume: Boe billion, 2003-2007 Boe billion 23.0 23.4 25.8 27.4 28.3 % Growth
Year 2003 2004 2005 2006 2007 CAGR, 2003-2007:

Source: Datamonitor
2.10% 10.20% 6.00% 3.40% 5.4%

DATAMONITOR
Figure 2:
Global Oil & Gas Exploration & Production Market Volume: Boe billion, 2003-2007
Boe billion 30 25 Boe billion 20 15 10 5 0 2003 2004 2005
% Growth 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2006 2007 % Growth
Source: Datamonitor
DATAMONITOR
MARKET SEGMENTATION I
CHAPTER 4
MARKET SEGMENTATION I
Crude oil dominates the global oil and gas exploration and production sector with 75.6% of the sector's value. In comparison, natural gas accounts for the remaining 24.4% of the sector's value. Table 3: Global Oil & Gas Exploration & Production Market Segmentation I: % Share, by Value, 2007 % Share 75.60% 24.40% 100.0%
DATAMONITOR
Category Crude oil Natural Gas Total

Source: Datamonitor
Figure 3:
Global Oil & Gas Exploration & Production Market Segmentation I: % Share, by Value, 2007
Natural Gas 24.4%
Crude oil 75.6%
Source: Datamonitor
DATAMONITOR
MARKET SEGMENTATION II
CHAPTER 5
MARKET SEGMENTATION II
The Americas generate 53.3% of the sector's value. In comparison, Europe generates a further 38.8% of the sector's value. Table 4: Global Oil & Gas Exploration & Production Market Segmentation II: % Share, by Value, 2007 Geographical Americas Europe Asia-Pacific Total
Source: Datamonitor
% Share 53.30% 38.80% 7.90% 100.0%

DATAMONITOR
Figure 4:
Global Oil & Gas Exploration & Production Market Segmentation II: % Share, by Value, 2007
Asia-Pacific 7.9%
Europe 38.8%
Americas 53.3%
Source: Datamonitor
DATAMONITOR
MARKET SHARE
CHAPTER 6
MARKET SHARE
SaudiAramco accounts for 17.6% of the sector's value. In comparison, ExxonMobil holds a further 15.4% of the sector's value. Table 5: Global Oil & Gas Exploration & Production Market Share: % Share, by Value, 2007 Company SaudiAramco ExxonMobil Royal Dutch Shell Chevron Other Total
Source: Datamonitor
% Share 17.60% 15.40% 12.50% 5.90% 48.50% 100.0%

DATAMONITOR
Figure 5:
Global Oil & Gas Exploration & Production Market Share: % Share, by Value, 2007
SaudiAramco 17.6%
Other 48.5%
ExxonMobil 15.4%
Chevron 5.9%
Royal Dutch Shell 12.5%
Source: Datamonitor
DATAMONITOR
FIVE FORCES ANALYSIS
CHAPTER 7
7.1
Summary
Figure 6: Forces Driving Competition in the Global Oil & Gas Exploration & Production Sector, 2007
Intensity of competition
Buyer Pow er 5
Weak Strong
4 3 2 1 0
Degree of rivalry
Supplier Pow er
Substitutes
New Entrants
Score for each force is mean of scores for its drivers. Total area & color indicates intensity of competition overall. Source: Datamonitor
DATAMONITOR
The global oil and gas exploration and production is dominated by large multi-national companies such as Royal Dutch Shell and Exxon Mobile Corporation. Oil and gas products are largely relatively undifferentiated products, which strengthens buyer power and drives a high level of rivalry within the sector. The large capital outlay required, stringent environmental regulations and intense rivalry between players, present significant barriers to entry.

7.2 Buyer Power
Figure 7: Drivers of Buyer Power in the Global Oil & Gas Exploration & Production Sector, 2007
Strength of buyer power
Weak
Strong
Product dispensability Buyer independence
Buyer size 5 4 3 2 1 0
Oligopsony threat Low -cost sw itching
Backw ards integration Financial muscle Price sensitivity
Undifferentiated product Tendency to sw itch
Scores: 1= weak driver...5=strong driver Source: Datamonitor

DATAMONITOR
The global oil and gas exploration and production sector is dominated by vertically integrated multinational companies such as Exxon Mobile and Royal Dutch Shell. The market is concentrated with the leading four players each accounting for approximately 3-5% of global revenues. The size and vertical nature of such companies grants them considerable power over buyers in downstream sectors such as oil refining and petrochemicals. However, crude oil is a relatively undifferentiated product, the price of which is set according to supply and demand by the mercantile exchanges of New York, London and Dubai, which effectively ameliorates buyer power on the basis of price.

7.3 Supplier Power
Figure 8: Drivers of Supplier Power in Global Oil & Gas Exploration & Production Sector, 2007
Strength of supplier power
Weak
Strong
Forw ard integration
Differentiated input
Supplier size 5 4 3 2 1 0
Oligopoly threat
Sw itching costs
Importance of quality/cost No substitute inputs
Player independence Player dispensability

DATAMONITOR
Supplier power within this industry is moderate. Major suppliers are oil equipment and services companies including Baker Hughes, Technip, Schlumberger, and Halliburton. There are a small number of large equipment and services companies, which, combined with high demand from the oil and gas industry, enhances their supplier power. However, many larger oil and gas companies have backward integrated oil and gas services operations, and use third-party services companies to supplement their own activities. This, combined with the high importance of the oil and gas industry to supplier revenues, reduces the supplier power of oil equipment and services companies.

7.4 New Entrants
Figure 9: Factors Influencing the Likelihood of New Entrants in the Global Oil & Gas Exploration & Production Sector, 2007
Likelihood of new entrants
Weak
Low -cost sw itching 5 Market grow th Undifferentiated product 4 3 Weak brands Scale unimportant 2 1 0 Little IP involved Low fixed costs
Strong
Suppliers accessible Distribution accessible
Little regulation Incumbents acquiescent

DATAMONITOR
The threat of new entrants into the global oil and gas exploration and production sector is weak. Oil and gas companies are typically large, highly vertically-integrated, multinational companies that utilize the large scale of their production and distribution networks to reduce costs and enhance profitability. The substantial capital outlay and fixed costs of the apparatus required for large-scale drilling and production operations present a high barrier to entry, especially for companies running offshore operations. There is also a significant regulatory environment within the oil and gas industry, which is restrictive to the entry of players into the industry. Permission to explore new fields and extract oil and gas is generally in the gift of national governments, and obtaining it may be a lengthy process.

7.5 Substitutes
Figure 10: Factors Influencing the Threat of Substitutes in Global Oil & Gas Exploration & Production Sector, 2007
Threat of substitutes
Weak
Strong
Low -cost sw itching 5 4 3 2 1 0
Beneficial alternative
Cheap alternative

DATAMONITOR
Oil has few significant substitutes for vehicle fuels or petrochemicals, although some plant-based alternatives are attracting interest. Switching costs for these substitutes are generally high. However, their benefits may become more apparent as concern over greenhouse gas emissions rises. Also, as reserves of oil and gas decline over the following decades, it is expected that the theat of substitutes will increase substantially as alternative fuels become more readily available and oil products become increasingly expensive.

7.6 Rivalry
Figure 11: Drivers of Degree of Rivalry in the Global Oil & Gas Exploration & Production Sector, 2007
Degree of rivalry
Weak
Competitor size 5 Zero-sum game? Number of players 4 3 Storage costs Low -cost sw itching 2 1 0 Similarity of players Undifferentiated product
Strong
Lack of diversity Hard to exit
Low fixed costs Easy to expand

DATAMONITOR
Oil companies are typically large-scale operations, with few activities in alternative industries, high fixed costs, and high exit barriers. These combine to produce a high level of rivalry.
LEADING COMPANIES
CHAPTER 8
LEADING COMPANIES
8.1
Saudi Aramco
Table 6: Key Facts: Saudi Aramco P.O. Box 8341, Dharan 31311, SAU 966 3 872 0115 966 3 873 8190 www.saudiaramco.com December N/A N/A
DATAMONITOR
Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website
Saudi Arabian Oil Company (Saudi Aramco) is the state-owned oil and gas company of the Kingdom of Saudi Arabia. It has operations in exploration, production, refining, marketing, distribution and international shipping. The company is the world leader in crude oil production, with the capacity to produce approximately 8.9 million barrels a day as of 2006. Saudi Aramco is primarily divided into six business lines. They are exploration and producing; refining, marketing and international; engineering and project management; operations services; finance; and industrial relations. Saudi Aramco has a monopoly over upstream oil development in Saudi Arabia. Its oil operations encompass the Kingdom of Saudi Arabia, including territorial waters in the Arabian Gulf and the Red Sea, totaling more than 1.5 million square kilometers. The company's crude oil and condensate reserves stood at 259.9 billion barrels as of 2006. Oil reserves of Saudi Aramco are concentrated in only eight fields, including Ghawar, the world's largest oil field, and Safaniya, the world's largest offshore oilfield. Saudi Aramco is also engaged in gas production and processing. The company has 248.5 trillion cubic feet of gas reserves as of 2006, which is approximately 4% of the world's gas reserves. The company's natural gas reserves are concentrated in the onshore Ghawar field, and the offshore Safaniya and Zuluf fields. The company operates five domestic refineries at Riyadh, Ras Tanura, Rabigh, Yanbu and Jiddah. In addition, the company is a part of two 50:50 joint venture refineries in Jubail and Yanbu. The company partners with Shell (Saudi Aramco Shell Refinery Company in Jubail) and ExxonMobil (Saudi Aramco Mobil Refinery Company in Yanbu) in the refining sector.
LEADING COMPANIES
Saudi Aramco hold stakes in a number of refining and marketing enterprises around the globe, including the Motiva joint venture with Shell in the US, S-Oil in Korea, Petron in the Philippines, and Showa Shell, in Japan. The company has marketing offices in North America, Europe and the Far East. The company has a multi channel distribution system, comprising pipelines, marine crude oil tankers and product carriers. The company has a pipeline network of 20,000 kilometers to supply crude oil to various locations. Its major pipelines include the East-West Crude Oil, Natural Gas Liquids pipeline, and the Dhahran-Riyadh-Qasim multiproduct pipeline in Saudi Arabia. The company's shipping subsidiary, Vela International Marine, operates one of the world's largest fleets of supertankers. Saudi Aramco Terminals handle more than 9,000 tankers per year. These terminals are located at Ras Tanura and Ju'aymah on the Arabian Gulf coast and Jiddah, Rabigh, Jaizan, Yanbu' and Duba on the Red Sea coast. Key Metrics No financial information is currently available.
LEADING COMPANIES
8.2 ExxonMobil Corporation
Table 7: Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:
Key Facts: ExxonMobil Corporation 5959 Las Colinas Boulevard, Irving, Texas 75039 2298, USA 1 972 444 1000 1 972 444 1348 www.exxon.mobil.com December XOM New York
DATAMONITOR
Exxon Mobil Corporation (Exxon Mobil) is engaged in 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 also has interests in electric power generation. The company has three divisions: upstream, downstream and chemicals. The upstream division explores for and produces crude oil and natural gas. The company is also engaged in power generation. The company's upstream business has operations in 31 countries and includes five global companies. These companies are responsible for the corporation's exploration, development, production, gas and power marketing, and upstream-research activities. The company's upstream portfolio includes operations in the US, Canada, South America, Europe, the Asia-Pacific, Australia, the Middle East, Russia, the Caspian and Africa. Exxon Mobil has interests in electric power generation facilities with total capacity of 14,400 megawatts. At the end of fiscal 2006, the company had net reserves of 8,194 million barrels of oil and 32,480 million cubic feet of natural gas. The company had 17,163 of crude oil and 9,254 of natural gas net production wells at the end of fiscal 2006. Exxon Mobil's gross undeveloped exploration acreage totaled 105 million acres in 31 countries at the end of fiscal 2006. The company's downstream activities include refining, supply and fuels marketing. The company's refining and supply business focuses on providing quality products and feedstock. The company manufactures clean fuels, lubes, and other high-valued products. At the end of fiscal 2006, the company had interests in 40 refineries in 20 countries, with distillation capacity of 6.4 million barrels per day and lubricant basestock manufacturing capacity of 150 thousand barrels per day. The company has interests in 13 lubricant refineries and manufactures three brands of finished lubricants; Exxon, Mobil, and Esso; through interests in 48 blending plants. During fiscal 2006, Exxon Mobil's refinery throughput was 5.6 million barrels per day.
LEADING COMPANIES
The fuels marketing business operates in over 100 countries. The Exxon, Mobil, and Esso brands serve motorists at nearly 35 thousand service stations and provide over 1 million industrial and wholesale customers with quality fuel products. Fuel products and services are provided to aviation customers at more than 700 airports and to marine customers at more than 200 marine ports around the world. The company supplies lube base stocks and markets finished lubricants and specialty products. Exxon Mobil's leading lubricant brands include Exxon, Mobil and Esso. The chemicals division manufactures and sells petrochemicals. Exxon Mobil Chemical is an integrated manufacturer and global marketer of olefins, aromatics, fluids, synthetic rubber, polyethylene, polypropylene, oriented polypropylene packaging films, plasticizers, synthetic lubricant base stocks, additives for fuels and lubricants, zeolite catalysts and other petrochemical products.
LEADING COMPANIES
Key Metrics Table 8:
Metric Revenues Net Income Profit Margin Total Assets Total Liabilities Employees
Source: Company Filings
Key Financials: ExxonMobil Corporation

2003 2004 2005 2006 2007 237,054.0 291,252.0 358,955.0 365,467.0 390,328.0 21,150.0 25,330.0 36,130.0 39,500.0 40,610.0 8.9% 8.7% 10.1% 10.8% 10.4% 174,278.0 195,256.0 208,335.0 219,015.0 242,082.0 84,363.0 93,500.0 97,149.0 105,171.0 120,320.0 88,300 85,900 83,700 82,100 81
DATAMONITOR
Figure 12:
Revenues & Profitability: ExxonMobil Corporation

Revenues Net Income Profit Margin 12.0% Profit Margin (%) 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2003 2004 2005 Year 2006 2007
450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
US$ Millions
DATAMONITOR
LEADING COMPANIES
8.3
Royal Dutch Shell plc

Table 9: Key Facts: Royal Dutch Shell plc Carel van Bylandtlaan 30, The Hague 2596 HR, NLD 31 70 377 9111 31 70 377 3115 www.shell.com December RDS; RDS; RDSA New York; Amsterdam; London
DATAMONITOR
Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Royal Dutch Shell (Shell) is engaged in oil and gas exploration and production, transportation and marketing of natural gas and electricity, marketing and shipping of oil products and chemicals. Shell also has interests in renewable sources of energy including wind and solar energy. The company has extensive operations in more than 140 countries around the world. The company operates through five divisions: exploration and production, gas and power, oil products, chemicals, and others and corporate. The exploration and production (E&P) division, a part of Shell's upstream business, explores for and recovers oil and natural gas around the world. The division's activities are spread across 39 countries, and conducted along with joint venture partners. In 2006, the company's total hydrocarbon production (including oil sands) was 3,473 thousand barrels of oil equivalent (Boe) per day. During 2006, the company participated in 198 successful exploratory wells in Australia, Brunei, Cameroon, Egypt, Malaysia, Netherlands, Nigeria, Oman, Syria and the US. The E&P division is supported by the exploration and production R&D Directorate, which in engaged in application of technology to enhance the costefficiency and performance of the company's exploration and production activities. The Directorate has two main research and development laboratories, one in the Netherlands and another in the US. Additional technology facilities are in Oman, Qatar, Norway and Canada. The gas and power division is also part of Shell's upstream business. The gas and power division works closely with the E&P division. It liquefies and transports natural gas, develops power plants and markets gas and electricity on a worldwide scale for consumption by industry, commerce and business establishments, residential and government consumers. It is also involved in Gas to Liquids (GTL) and coal conversion technologies. The company's gas and power business operates in 33 countries around the world.
LEADING COMPANIES
The oil products division forms a part of the company's downstream business. The downstream businesses convert crude oil into refined products including fuels, lubricants and petrochemicals. Shell's oil products operations have a presence in more than 100 countries. The oil products division is comprised of five different downstream businesses, which include manufacturing, supply and distribution, retail, business to business (B2B) and lubricants. Shell's oil products' manufacturing portfolio includes interests in 40 refineries, with a capacity of 4 million barrels per day. The distribution network includes 5,000 miles of pipeline in the US. It also includes about 20,000 trucks worldwide making 10,000 deliveries a day. Shell is one of the largest single branded retailers with more than 45,000 service stations. The chemicals division is part of the company's downstream business. The chemicals division produces and sells petrochemicals to industrial customers worldwide. These products are a raw material to manufacture plastics, coatings and detergents; which in turn are used in items such as textiles, medical supplies and computers. The chemicals portfolio includes several joint ventures: Infineum, Saudi Petrochemical Company (SADAF), China National Offshore Oil Corporation (CNOOC) and Shell Petrochemicals Company Limited (CSPCL). The others and corporate segments cover the company's renewable, hydrogen and carbon dioxide (CO2) business. Renewable develop businesses based on renewable sources of energy, including wind and solar power. Hydrogen develops business opportunities in hydrogen and fuel cell technology. The CO2 group works towards controlling CO2 emissions. Corporate represents the functional activities supporting Shell.
LEADING COMPANIES
Key Financials: Royal Dutch Shell plc

2003 2004 2005 2006 2007 198,362.0 266,386.0 306,731.0 318,845.0 355,782.0 12,042.0 19,257.0 25,311.0 25,442.0 31,331.0 6.1% 7.2% 8.3% 8.0% 8.8% 158,417.0 187,446.0 219,516.0 235,276.0 269,470.0 64,033.0 96,063.0 121,592.0 120,331.0 143,502.0 119,000 113,000 109,000 108,000 104,000
DATAMONITOR
Figure 13:
Revenues & Profitability: Royal Dutch Shell plc

Revenues Net Income Profit Margin 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2003 2004 2005 Year 2006 2007
400,000 350,000 US$ Millions 300,000 250,000 200,000 150,000 100,000 50,000 0
DATAMONITOR
Profit Margin (%)
LEADING COMPANIES
8.4 Chevron Corporation
Table 11: Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:
Key Facts: Chevron Corporation 6001 Bollinger Canyon Road, San Ramon, California 94583, USA 1 925 842 1000 1 925 842 3530 www.chevron.com December CVX New York
DATAMONITOR
Chevron Corporation (Chevron) engages in fully integrated petroleum operations, chemicals operations, mining operations of coal and other minerals, power generation and energy services. The company conducts business activities in the US and approximately 180 other countries. Chevron operates through four business divisions: downstream, upstream, chemicals and others. Chevron's upstream business explores for and produces crude oil and natural gas. Chevron's worldwide oil-equivalent production was approximately 2.67 million barrels per day in 2006. Chevron's downstream comprises refining, fuels and lubricants marketing, supply and trading, and transportation. It is a global and diverse organization with interests in 20 fuel refineries, an asphalt plant and a marketing presence in approximately 175 countries. The upstream and downstream activities of the company are conducted in North America, South America, Europe, Africa, the Middle East, Central and Far East Asia, and Australia. The company's US West Coast and Gulf Coast refineries produce lowsulfur fuels that meet 2006 federal government specifications. Chemicals operations include the manufacture and marketing of commodity petrochemicals for industrial applications, and fuel and lubricating oil additives. Chevron operates in the chemicals segment via its 50% owned affiliate Chevron Phillips Chemical Company LLC (CPChem) and the wholly owned Chevron Oronite Company (Chevron Oronite). Chevron also owns an approximate 19% equity interest in the common stock of Dynegy, a provider of electricity in the US.
LEADING COMPANIES
CPChem has operations in the US, Puerto Rico, Singapore, China, South Korea, Saudi Arabia, Qatar, Mexico and Belgium. Chevron Oronite is a fuel and lubricatingoil additives business that owns and operates facilities in the US, France, the Netherlands, Singapore, Japan and Brazil and has equity interests in facilities in India and Mexico. Margins in 2006 for commodity chemicals at CPChem and for fuel and lubricant additives at Oronite were higher than in 2005 and 2004. Chevron's Global Power Generation (GPG) business develops and operates commercial power projects. It owns 15 power assets located in the US and Asia. GPG manages the production of more than 2,334 megawatts of electricity at 11 facilities it owns through joint ventures. The other segment includes the company's mining operations. Chevron operates in the coal mining and marketing segment through its subsidiary, The Pittsburg & Midway Coal Mining Company (P&M). P&M owns and operates two surface mines, McKinley, in New Mexico, and Kemmerer, in Wyoming, and one underground mine, North River, in Alabama. P&M controlls approximately 225 million tons of proven and probable coal reserves in US, including reserves of environmentally desirable low-sulfur coal. The company is contractually committed to deliver between 11 million and 12 million tons of coal per year through the end of 2009 and believes it will satisfy these contracts from existing coal reserves. Chevron markets petroleum products under three brands: Chevron, Texaco and Caltex. The company also manufactures gasoline additive, under the brand name Techron, to international Texaco and Caltex products. The company supplies its products directly or through retailers and marketers to almost 9,600 branded motor vehicle retail outlets, concentrated in the southeastern, southwestern and western states of the US. Approximately 600 of the outlets are company-owned or -leased stations. Outside the US, Chevron supplies directly or through retailers and marketers to approximately 16,200 branded service stations, including affiliates, in nearly 75 countries.
LEADING COMPANIES
Key Financials: Chevron Corporation

2002 2003 2004 2005 2006 99,049.0 121,277.0 155,300.0 198,200.0 1,668.7 1,132.0 7,230.0 13,328.0 14,099.0 17,138.0 1.1% 6.0% 8.6% 7.1% 1027.0% 77,359.0 81,470.0 93,208.0 125,833.0 132,628.0 45,755.0 45,175.0 47,978.0 63,157.0 63,693.0 53,014 50,582 47,265 53,440 55,882
DATAMONITOR
Figure 14:
Revenues & Profitability: Chevron Corporation

Revenues Net Income Profit Margin 1200.0% Profit Margin (%)
Page 30
250,000 200,000 US$ Millions 150,000 100,000 50,000 0 2002 2003 2004 Year 2005 2006
1000.0% 800.0% 600.0% 400.0% 200.0% 0.0%
DATAMONITOR
Global - Oil & Gas Exploration & Production Datamonitor (Published April 2008)
MARKET FORECASTS
CHAPTER 9
MARKET FORECASTS
9.1
Market Value Forecast

In 2012, the global oil and gas exploration and production market is forecast to have a value of $3.3 trillion, an increase of 113.7% since 2007. The compound annual growth rate of the market in the period 2007-2012 is predicted to be 16.4%. Table 13: Global Oil & Gas Exploration & Production Market Value Forecast: $ billion, 2007-2012 Year 2007 2008 2009 2010 2011 2012 CAGR, 2007-2012:
Source: Datamonitor
$ billion 1,562.7 1,761.6 2,109.3 2,461.7 2,859.9 3,339.2
% Growth 14.70% 12.70% 19.70% 16.70% 16.20% 16.80% 16.4%

DATAMONITOR
Figure 15:
Global Oil & Gas Exploration & Production Market Value Forecast: $ billion, 2007-2012
$ billion 4,000 3,500 3,000 $ billion 2,500 2,000 1,500 1,000 500 0 2007 2008 2009 2010
% Growth 25.0% 20.0% % Growth 15.0% 10.0% 5.0% 0.0% 2011 2012
Source: Datamonitor
DATAMONITOR
MARKET FORECASTS
9.2 Market Volume Forecast
In 2012, the global oil and gas exploration and production market is forecast to have a volume of 38 billion Boe, an increase of 34.8% since 2007. The compound annual growth rate of the market volume in the period 2007-2012 is predicted to be 6.2%. The strongest growth is predicted for 2010 when the market is forecast to grow by 6.4%. Table 14: Global Oil & Gas Exploration & Production Market Volume Forecast: Boe billion, 2007-2012 Boe billion 28.3 30.1 31.8 33.9 35.9 38.2 % Growth 3.40% 6.20% 5.80% 6.40% 6.10% 6.20% 6.2%
DATAMONITOR
Year 2007 2008 2009 2010 2011 2012 CAGR, 2007-2012:

Source: Datamonitor
Figure 16:
Global Oil & Gas Exploration & Production Market Volume Forecast: Boe billion, 2007-2012
Boe billion 45 40 35 30 25 20 15 10 5 0 2007 2008 2009 2010 Boe billion
% Growth 7.0% 6.0% 5.0% % Growth 4.0% 3.0% 2.0% 1.0% 0.0% 2011 2012
Source: Datamonitor
DATAMONITOR
APPENDIX
CHAPTER 10
APPENDIX
10.1 Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-checked and presented in a consistent and accessible style. Review of in-house databases Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, Datamonitors in-house databases provide the foundation for all related industry profiles Preparatory research We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview Definitions Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends Datamonitor aggregates and analyzes a number of secondary information sources, including: National/Governmental statistics International data (official international sources) National and International trade associations Broker and analyst reports Company Annual Reports Business information libraries and databases Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date
APPENDIX
10.2 Industry Associations
International Association of Oil & Gas Producers (OGP) 209-215 Blackfriars Road, London SE1 8NL, UK Tel: 44 20 7633 0272 Fax: 44 20 7633 2350 http://www.ogp.org.uk Independent Petroleum Association of America 1201 15th Street NW, Suite 300, Washington, DC 20005, USA Tel: 1 202 857 4722 Fax: 1 202 857 4799 http://www.ipaa.org
10.3 Related Datamonitor Research

Datamonitor Industry Profiles Global Oil & Gas Refining & Marketing Global Oil & Gas Storage & Transportation Global Coal & Consumable Fuels Global Integrated Oil & Gas

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Global Oil & Gas Exploration & Production

Reference Code: 0199-2119 Publication date: April 2008

t: +61 2 8705 6900 f: +61 2 8705 6901 e: apinfo@datamonitor.com

EXECUTIVE SUMMARY CHAPTER 1

Market Definition Research Highlights Market Analysis

CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 CHAPTER 7

Supplier Power New Entrants Substitutes Rivalry

Market Value Forecast Market Volume Forecast

10.2 Industry Associations 10.3 Related Datamonitor Research

Year 2003 2004 2005 2006 2007 CAGR, 2003-2007:

23.70% 39.70% 21.70% 14.70% 24.7%

Year 2003 2004 2005 2006 2007 CAGR, 2003-2007:

2.10% 10.20% 6.00% 3.40% 5.4%

Boe billion 30 25 Boe billion 20 15 10 5 0 2003 2004 2005

Category Crude oil Natural Gas Total

Natural Gas 24.4%

Crude oil 75.6%

% Share 53.30% 38.80% 7.90% 100.0%

% Share 17.60% 15.40% 12.50% 5.90% 48.50% 100.0%

Royal Dutch Shell 12.5%

FIVE FORCES ANALYSIS

FIVE FORCES ANALYSIS

FIVE FORCES ANALYSIS

Strength of buyer power

Product dispensability Buyer independence

Oligopsony threat Low -cost sw itching

Backw ards integration Financial muscle Price sensitivity

Undifferentiated product Tendency to sw itch

Scores: 1= weak driver...5=strong driver Source: Datamonitor

FIVE FORCES ANALYSIS

Strength of supplier power

Forw ard integration

Importance of quality/cost No substitute inputs

Player independence Player dispensability

Scores: 1= weak driver...5=strong driver Source: Datamonitor

FIVE FORCES ANALYSIS

Likelihood of new entrants

Suppliers accessible Distribution accessible

Little regulation Incumbents acquiescent

Scores: 1= weak driver...5=strong driver Source: Datamonitor

FIVE FORCES ANALYSIS

Low -cost sw itching 5 4 3 2 1 0

Scores: 1= weak driver...5=strong driver Source: Datamonitor

FIVE FORCES ANALYSIS

Lack of diversity Hard to exit

Low fixed costs Easy to expand

Scores: 1= weak driver...5=strong driver Source: Datamonitor

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Key Financials: ExxonMobil Corporation

Revenues & Profitability: ExxonMobil Corporation

450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0

Source: Company Filings

Royal Dutch Shell plc

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Key Financials: Royal Dutch Shell plc

Revenues & Profitability: Royal Dutch Shell plc

Source: Company Filings

Profit Margin (%)

Key Financials: Chevron Corporation

Revenues & Profitability: Chevron Corporation

1000.0% 800.0% 600.0% 400.0% 200.0% 0.0%

Source: Company Filings

Market Value Forecast