Oil Industry in Saudi Arabia

Introduction
The oil market is normally oligopoly since the industry normally has a few firms although the large proportion of the output in the industry shared among a few firms. Oil is one of the commodities heavily traded in the entire world. The oil demand, on the other hand, normally prices inelastic as a result of the versatility in its uses. The fluctuations in the oil prices play a significant role in the impacts for the oil exporters/producers as well as the fact that most of the nations around the world are dependent on oil being their chief energy source.

Body

Saudi Arabia is among the most rapidly growing nations in the greater Middle East regions. The development of the country’s oil sector is the main attribute that has been making it possible for the major improvement of the county’s position in the context of the international community. The evident increase energy needs in the world have contributed to the rapid development of the nations that have major oil productions, with Saudi Arabia the main country. The economy of Saudi Arabia is heavily dependent upon their oil industries. The ministry of petroleum, as well as mineral resources, offers the estimation that more than 90% of the expert in the country are normally from the proceeds of the oil export (Fattouh 2013). The export of oils into the world markets contributes more than 40% of the country’s GDP. Additionally the common assertion is that Saudi Arabia is world’s second largest producer of crude oil as well as an exporter.

For decades, the Saudi Arabian economic development has been dependent on their strong success in the oil industry. The country is world’s largest producer as well as exporter of the petroleum products and at the same time is a second largest producer of crude oil after Russia. Their economy is also dependent on the oil as well as the oil related industries encompassing the refinery of petroleum as well as petrochemicals. At the same time, Saudi Arabia is the biggest consumer of energy in the Middle East countries mainly as a result of their growing population as well as the large-scale development projects they are undertaking (Aissaoui 2013). The large government subsidies on fuel as well as the historically high prices of oil are the main causes that have been stimulating domestic consumption.

Considering the country’s high levels of production, it accounts for approximately 13% of world’s oil output and consequently almost 35% of the overall OPEC annual oil productions. The country has become a major determinant of the world oil demand as well as supply implying that the country’s oil production policies cold have a far-reaching effect on international oil prices (Naimi, 2012). From the 1970s, Saudi Arabia has been using their dominance to influence the prices of oil and consequently further their objectives in the sustenance of the long-term oil consumption. Additionally they have been using their dominance to promote their economic stability in the context of the industrialized world.

Reserves
Research indicates that Saudi Arabia possesses approximately 266 billion of oil reserves that have already proven which accounts for 16% of all the proved oil reserves in the world. Even though the country has approximately 100 main oil as well as gas fields, over 8 of their fields are normally located in the country’s northeast portion (Fattouh and van der Linde 2011). The giant Ghawar oil field is the world’s biggest field in the context of production as well as overall remaining reserves.

Production
The country produced an average of 11.8 million bbl/d of the overall oil liquids in the year 2013. The total production of the petroleum products, however, declined by 0.14 million bbl/d from the year 2012 which was their first decline since the year 2009 (Fattouh and van der Linde 2011). Additionally the country declined it oil production in the year 2013 with the objective of accommodating the non-OPEC production development from the country as Canada as well as the US.

Processing
Saudi Aramco is the firm that operates the world’s biggest oil processing facility in addition to a crude oil stabilization plant. It additionally possesses a crude oil processing capacity of over 7 million bbl/d. The efforts by Saudi Arabia to maintain their leading position in the international oil market has been the foundation of their economic policies from the beginning of the 1990s. Although the country has been making attempts aimed at diversifying their economy, the development of a self-propagating mo oil sector has been a very difficult task for the Saudi planners (Naimi, 2012). The government none the less has been able to offer above-average living standards for its citizens as well as the development of a world-class infrastructure basis as well as the social services. However, the sustenance of these living standards, however, is greatly dependent chiefly on the spending of the government which relies on the revenues from its oil industries. In this case, it is not possible for the Saudi Arabian government to neglect their oil industry as it has proven to be their chief economic engine.

The development of the oil industry is additionally a significant attribute in the promotion of the domestic political stability. In the early production days, it was evident that there was going to be the reduction in the Russia as well as from the other OPEC countries. Consequently, the country realized an opportunity to develop their disproportionate share of the net increment in the crude oil demand over the following years. With the objective of realizing their endeavor, the country focused on expanding their oil industry and consequently augments their production capacities. Also, the country embarked on the plans for upgrading their refineries with the objective of meeting the contemporary environmental standards in the west as well as their growing domestic demand.

The oil production in Saudi Arabia negatively correlated with those of other OPEC producing nations and consequently has been highly volatile although the country has not experienced any political shocks. Saudi Arabia sets its oil output in the anticipation that there is going to be the reaction of the fringe as well as maximize their profits relying on the residual demand (Naimi, 2012). The additional evident that is available from the various literature is that Saudi does not vary the output of their oil industries about the demand changes in the international markets. Instead of Saudi acting as the dominant oil producer, the country adopts a tit for tat strategy in punishing their members who produce beyond their quotas while at the same time rewarding those who normally comply.

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Business Case vs. Business Plan Research

Introduction
is no better way to ensure success in business than having comprehensive business documents. Although the old school of thought can tell that success in business rests with the entrepreneur, modern research and studies have shown that a business requires both a business case and business plan for success. However, a business may not stand to gain much from the mission-critical documents without understanding them. Comprehensive understanding of the documents requires differentiating them and knowing their application areas.

Business plan
A business plan is among the most important business components. A business plan is an important roadmap through which success in an organization will be achieved. It helps to evaluate business goals, comprehensive reasons why the goals are achievable, and plan for achieving the goals. A business plan documents the future of a business and where the business is headed. A business plan is not complicated as many would have thought. It ranges from a few sentences to hundred pages. However, as much as it will be simple, the few-sentence business should have a detailed business strategy for the future. Therefore, there is no standard way of writing a business plan (DeBoer, 1998).

It is clear that the size of a business plan does not matter according to the above description. However, the business plan should have some formal sections such as title page. Such formal sections will enable understanding and acting on the business plan. Furthermore, a business plan should have three important sections of business concepts, marketplace, and financiers. Such is a successful business plan that is likely to get approved in case it is necessary. The above three sections are further divided into (Viana, 1990):

Executive summary
Organization and management
Funding request
Company Description
Product line
Financial projections
Market analysis
Market sales
A business plan may focus on changes in company’s perception and branding by the customer. If the existing business would like to carry out a major change or would like to have a new line of product or service, it requires a business plan for at least three years. The investors are likely to expect a return on their investment after that period. A business plan can either be external or internal (Viana, 1990).

Business Case
Besides the business plan, there is a business case that may look similar. However, a business case is a comprehensive persuasion prepared by a company’s department or another unit of the company to help in justification of a proposed project by anticipated income. Therefore, a business case helps to capture the reasons for initiating and funding a certain project within the company. It should be presented well and in written document. However, it may be presented verbally or in presentations. A business case works in such logic that an organization’s resource such as money should not be consumed without going to support a particular business need. A comprehensive business case should adequately capture both quantifiable and non-quantifiable features of a proposed project. A business case depends on the attitude and volume of the business (Carroll, 2010).

Project management methodologies require comprehensive and highly structured business cases. Therefore, business cases range from comprehensive and highly structured to informal and brief. Formal business cases include information that also serves as the project background, the anticipated business profits, other options, anticipated costs, gap analysis, and risks involved in the project. The business case project team should also consider doing nothing as an option, but it should include the risks and costs of doing nothing. The company then derives the justification of the project from the above information. It should be noted that business case is not prepared and developed by the project manager. The business case is prepared and developed by the stakeholders and the project sponsors. The business case is argued regarding cost-benefit analysis. The cost-benefit analysis includes both financial and non-financial costs and benefits. The cost-benefit analysis helps the business to have understanding and account of environmental benefits thereby understanding economic effects in details (Hart, 2000).

Similarities between Business Plan and Business Case
Both are mission-critical business tools with an aim of bringing success to the business. Their implementation requires approval by the company’s management if they are to proceed to the next stage. They are also comprehensive and have several divisions thereby making them formal. Unavailability of any of the components may make the management disapprove the documents by the lack of details. Although they may look different, they look to seize an opportunity in the market whose achievement may propel the business to the next business level thereby making the business gain competitive advantage (Boehler, 2009).

Both documents should be developed adaptable. It means that they should be tailored to both the size and risk of the business proposal. Additionally, they are business oriented in that they are focused on the impact and capabilities of the business as opposed to focusing on the technical side of the business (Boehler, 2009).

Differences between Business Plan and Business Case
There are as many differences as similarities between the two business documents. A business plan covers the whole business. Therefore, business plan impacts are felt in the whole business. On the other hand, a business case addresses a single line of product or department. Therefore, its impacts are felt along that product or in that department. A business case also gives room for choices in case the proposed choice is not considered. However, this is not true with a business plan(Walker, 2002).

The two documents are different in what they aim to achieve during their developments. A business helps to give explanations about the company by giving facts and figures where necessary. A business case is driven by the need to implement a project in the organization. Therefore, a business case helps the business in reaching certain goals and objectives by focusing on the current state of the company and how it can be improved. A business plan is about planning for the business now and in the future (Walker, 2002).

Conclusion
There are more about the business case and business plan than what the paper has discussed. However, it was worth to have knowledge of the two mission-critical business documents. There is the need for more research in the areas to unearth more information about them. Although the discussions in this paper may not be detailed, it can be used by organizations that would like to have an understanding how they can strategize for their businesses using the two documents.