This is a MAJOR group paper for my strategic management class based on a case study for "EOG...

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This is a MAJOR group paper for my strategic management class based on a case study for "EOG Resources" (www.eogresources.com). Please make sure to use all appropriate management lingo and grammer. Please follow the Guidelines and Hints for the expectations for this paper. The Guidelines and Hints NEEDS TO BE FOLLOWED to show which sections need what info and how long each section needs to be (i.e 3.2.1 and 3.2.2 needs to be at least 5 pages; 3.2.3 needs to be at least 10 pages). The OUTLINE is what I have created for you to work off of it already has tons of information on it that you can use. Please make sure to use in text citations and put all references on a separate page. Anything that is copied straight from the internet source needs to have quotations. Please use the outline to work off of and also gather your own information if needed. Please ask any and all questions! Please write as a clean cohesive paper making a strong point and not just spouting out information. Thank you!

Guidelines for Project Part 1 3.2 Industry Analysis Hints: A. This part offers a big picture of the whole industry. The unit of your analysis should still be industry. Please don’t only discuss the case company’s market share and growth as that is the content for the internal analysis part. B. Just a few bridging paragraphs or a few pages would be enough here before you go to section 3.2.1. C. Length suggestion for section 3.2.1 and 3.2.2: at least five pages (APA format) D. Length suggestion for section 3.2.3: at least ten pages (APA format) E. You don’t need to have a lot of content between section title 3.2 and section title 3.2.1. Put the major content in each sub-section instead. 3.2.1 Description of the Industry Hint: Please start your description with the formal definitions in the SIC or NAICS scheme. The history and evolution of the industry should also be included. 3.2.2 Industry Dominant Economic Features Hints: A. Read the related chapter content in our textbook first. Keep in mind that industry economic features can include more than the following three aspects I specified. You can add more sub-sections here to improve the quality of your analysis. B. A longer period of data (e.g., around 10+ years) is preferred. 3.2.2.1 Market Size 3.2.2.2 Market Growth Rate 3.2.2.3 Industry Trends 3.2.3 Five Forces Analysis Hints: A. Read the related chapter content in our textbook about five-force analysis. Follow the textbook guide. B. The output of this section should be a table indicating the power of each force “strong,” “moderate,” “low,” or other wording for intensity. C. You will need to collect and cite data/information/report to show your logic and reasons. For example, you need to figure out who are our suppliers, buyers, substitute products, etc. And then analyze their characteristics following our textbook content. 3.2.3.1 Threat of New Entrants Hint: Keep in mind that investors/existing firms can enter this industry through greenfield development or acquisition. 1 MGMT 4309: STRATEGIC MANAGEMENT FALL 2021 TEAM PROJECT 3.2.2 Industry Dominant Economic Features (Person responsible: Monica Bonner) 3.2.2.1 Market Size 1) The market size, measured by revenue, of the Oil & Gas Exploration and production industry is $327.7bn in 2021 and the US oil and gas sector employs about 880,000 workers and contributes about $1.5 trillion towards the US gross domestic product, the growth of which has been heavily driven by shale production (André et al, 2020). The number of jobs supported by this industry or the industry employment is 10.3 million in Us which is almost 8% of nation’s gross domestic product. 2) The global oil and gas market is expected to grow from $4667.45 billion in year 2020 to $5870.13 billion in 2021 at a CAGR (compound annual growth rate) of 25.5%. The global market size (total sales revenue) in recent years is 2tr and there are 214,687 businesses in this industry globally (John et al, 2021). The companies holding the largest market share in the Global Oil & Gas Exploration & Production industry include Saudi Arabian Oil Company. Other major shareholders in this industry in foreign markets include PetroChina Company Limited, Exxon Mobil Corporation, National Iranian Oil Company and Public Joint Stock Company Gazprom. 3) References and charts -André Varella Mollick, Md Ruhul Amin, Occupancy, oil prices, and stock returns: Evidence from the U.S. airline industry, Journal of Air Transport Management, 10.1016/j.jairtraman.2020.102015, 91, (102015), (2021). -John William Rosso Murillo, Yeny Esperanza Rodriguez Ramos, The Profitability of Electricity, Oil, and Gas Utilities in America, Revista Facultad de Ciencias Económicas, 10.18359/rfce.4525, 29, 1, (27-48), (2021). -Global Oil & Gas Exploration & Production Industry - Market Research Report, Ibisworld.com - OIL NATURAL GAS: & SUPPORTING THE ECONOMY, CREATING JOBS, DRIVING AMERICA FORWARD, American petroleum institute, api.org - 1. Revenue 3.2.2.2 Market Growth Rate 1) The market size, measured by revenue, of the Global Oil & Gas Exploration & Production industry is $2.1tr in 2021. The market size of the Global Oil & Gas Exploration & Production industry has declined 2.2% per year on average between 2016 and 2021. 2) The market size of the Global Oil & Gas Exploration & Production industry is expected to increase 13.3% in 2021. 3) Other related changes in the industry recently and in the future includes- A. Revenue for the Global Oil and Gas Exploration and Production industry is expected to decrease partially as a result of the COVID-19 (coronavirus) pandemic, which caused various supply chain disruptions. B. Despite an expected decrease in revenue over the five years to 2021, industry profit is still expected to increase due to its low levels in 2016 and the expected economic recovery in 2021. C. Demand from the industry's major markets is expected to fluctuate due to the coronavirus pandemic. 4) References and graphs - https://www.ibisworld.com/global/market-research-reports/global-oil-gas-exploration-production-industry/ - https://www.statista.com/statistics/294614/revenue-of-the-gas-and-oil-industry-in-the-us/ - https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/oil-and-gas-industry-outlook.html - https://csimarket.com/Industry/industry_growth_rates.php?ind=602 3.2.2.3 Industry Trends 1) There are many changes recently or expected in the near future in terms of the total number of firms in the industry, location distribution of the firms, abnormal industrial etc. These are as follows: A. Recently, US has been moved from being a net importer of oil and petroleum products and natural gas to a net exporter. These changes are caused by the seismic shift in world oil and gas markets fundamentally. B. It is estimated by the IEA (International Energy Agency) that by the year 2024, US will be exporting more oil than Russia and thus will be coming close to exports of Saudi Arabia. Further, it is estimated by IEA that under stated policies, 85% of the global oil production increase will majorly come from USA. But, US has limited ability for moving in a way for influencing the oil process as individual producers in US as per the anti-trust laws in the US. C. Gas consumption in North America is forecasted to grow 0.4% annually which is because of the growth in US industrial consumption. NA gas production represents more than 28% of total gas supply in 2019 wherein the production increases 1.5% annually through 2025 as per forecast. D. More than 70% growth occurs in US to service new LNG export facilities. Production in Canada continues to raise at 3% annual rate. In Mexico production continues to decline, but at a more moderate rate of 2% annually compared to historical reductions. E. Natural gas seems to be trapped between the renewable focus and the decarbonization efforts. Also, overbuilding is following the growth concern for downstream and midstream. 2) There are many new products, production processes, technology innovation (improvements) present recently or expected in the near future which are as follows: A. Internet of things: IoT is used by oil and gas industry for improving the production, optimization of equipment, ensuring the safety of workers along with monitoring the remote areas. Real time data is collected by the sensors instilled in the wells, choke valves and blowout preventers. This data may be used by the oil and gases companies for faulty equipment identification in quick way that further helps the field engineers for prediction and reaction in quick manner. This innovation allows facilities in oil and gas for minimization of maintenance costs while gaining the detailed visibility into the processes and equipment. E.g.- Zyfra builds an Industrial IoT Platform, Sensital provides a Real-Time Monitoring Platform. B. Artificial intelligence: AI and data science is applied in the oil and gas industry for solving the complex issues in the midstream, downstream as well as upstream operations. It also supports the decision-making process with the insights from perspective, predictive and cognitive analytics. This way, artificial intelligence helps the engineers and managers for discovering as well as implementing the new exploration and production ideas on filed for increasing the return on investment. E.g- Nesh designs an AI-powered Chatbot, Neudax provides Intelligent Decision Support for Upstream O&G. C. Big data and analytics: It helps data analysts to draw insights from performance and production data along with helping engineers for optimizing the production while ensuring the reservoirs safety. E.g.- Welligence offers Data-as-a-Service (DaaS), Phoenix RDS provides Optimization through Analytics. D. Automation, robotics, cloud computing etc. are several other innovative technologies that are future of oil and gas industry. 3) There are many changes in the scope of the market such as the pace of globalization; product/business diversification of current large companies. Some of these are as follows: The oil & gas industry were facing the headwinds of market even prior to pandemic but the pandemic moved the scenario to fast forward wherein the situation to come in few years actually came in few months only. Future may be tough pivoting the new energy which may need companies to take bold choices which are as follows- A. Stance and commitment on clean energy by the administration. B. Several changes in the end use patterns of demand and composition of supply. C. Consolidation in the low-price environment. D. Environmental, impact focus and socially responsible investing would rise. E. New talent strategies would be adopted to succeed in the work future. Thus, the choices made by the organizations along with their trends would decide the path forward and reverberate by the decision making in future. 4) Other industry trends identified includes: Covid Impact A. Global oil and Gas exploration and production industry is expected to partially decrease due to covid-19 pandemic that may cause disruptions of several supply chains. B. Even though, a revenue decrease is expected over 5 years to 2021, it is expected that industry profit still will increase because of its low 2016 levels and in the year 2021, economic recovery is expected. C. Fluctuation in the demands from major markets from industry is expected because of coronavirus pandemic. 5) References and Graphs - https://www.startus-insights.com/innovators-guide/top-10-oil-gas-industry-trends-innovations-in-2021/ - https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/oil-and-gas-industry-outlook.html - https://www.forbes.com/sites/forbes-personal-shopper/2021/09/14/best-binoculars/?sh=5ed81a346dd4 - https://www.osti.gov/biblio/7301533 - Sunil K. Mohanty, Mohan Nandha, Abdullah Q. Turkistani, Muhammed Y. Alaitani, Oil price movements and stock market returns: Evidence from Gulf Cooperation Council (GCC) countries, Global Finance Journal, 10.1016/j.gfj.2011.05.004, 22, 1, (42-55), (2011). - Zahid Iqbal, CEO age, education, and introduction of hedging in the oil and gas industry, Journal of Economics and Finance, 10.1007/s12197-013-9274-y, 39, 1, (189-200)

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Deblina · Accepted Answer

Oil and Gas Production: Industry Analysis		19
OIL AND GAS PRODUCTION: INDUSTRY ANALYSIS
Table of Contents
3.2.1 Oil and Gas Exploration and Production Industry	3
History and Evolution of the Oil and Gas Industry	3
3.2.2 Industry Dominant Economic Features	5
3.2.2.1 Market Size	5
3.2.2.2 Market Growth	6
3.2.2.3 Industry Trends	8
3.2.3 Five Force Analysis	11
3.2.3.1 Threats of New Entrants	13
3.2.3.2 Threat of Substitutes	15
3.2.3.3 Power of Suppliers	18
3.2.3.4 Power of Buyers	19
3.2.3.5 Rivalry amongst Competitors	20
Five Forces Summary	20
References	23
3.2.1 Oil and Gas Exploration and Production Industry
According to the Standard Industrial Code division's oil and gas exploration industry is coded under major group 13. This major group encompasses regulations for the establishments that are primarily concerned in producing crude petroleum and natural gas, exploration of oil, producing natural gasoline and cycle condensate, and producing gas and hydrocarbon liquids from the coal at the mine site. The types of activities that are included in the production and exploration of oil and gas are drilling, oil and gas well operation, and maintenance operation of natural gasoline and cycle plant gasification liquefaction and pyrolysis of fossil fuels.
History and Evolution of the Oil and Gas Industry
	The first oil wells that is known to have been drilled in China in 347 AD.In the 17th century, most of the oil-producing companies were mainly from Europe. In 1643 Indonesia also found some of its oil wells. The first commercial oil well was discovered in Romania in the year 1650. However, in modern history, the first oil and gas industry was started in 1847. This was associated with the discovery of Scottish Chemist James Young who saw that natural petroleum was oozing in a coal mine. He was the first to distill this seepage into thin oil for the lamps and the thicker part for lubricating the machines. Subsequent discoveries and distillation of the liquid obtained from coal mines were carried out further. 
The first known oil well drilled in USA was in Trinidad in 1857 by the American Merrimac Company. The first modern well was drilled in America by Edwin Drake in Pennsylvania in 1859. Thereafter, in 1865 John D Rockefeller established the Standard Oil Company in Ohio. This was one of the world's largest companies. 
The period 1895 to 1950 witnessed an increase in worldwide oil demand. During this period the demand turned out to be greater than the corresponding increase in the supply of oil. This was because of the fact that with a series of development and the post-industrial revolution the demand of oil increased by 16% per annum whereas the supply is increased by only 12%. The USA perceived an overall increase in their exports of crude petroleum which increased by over 44%.
In the 1900s, the Standard Oil Company which was one of the largest companies in the USA was segregated into 34 separate companies because of the antitrust laws. During this era, the USA was a dominant player in almost the entire worldwide production of oil and gas. In the latter half of the 21st century, the concept of globalization began to emerge in almost all parts of the world. Therefore, more competitors appeared on the stage and give rise to a situation of useful competition across Europe and Asia too. A large number of oil wells were discovered particularly in Middle East Asia which led to the decrease in the domination of the United States in the oil and gas industry. The discovery of new oil fields was subsequently followed by a global increase in consumption of oil at a rate of 7% per annum. This expansion was potentially driven by a significant increase of the automobile industry. Moreover, the increased consumption was also compounded by the political and economic instability in the Middle East during this period.
In the early 19th century this particular industry was dominated by 7 oil and gas producing companies who were popularly known as "the seven sisters". The Standard Oil of New Jersey (Esso) then( Exxon), Standard Oil of New York (Mobil), the standard oil of California (chevron), Royal Dutch Shell, Texaco, Gulf, and the British Petroleum. However, discoveries of large numbers of Oil and Gas fields in the Middle East led to the creation of cartels which dominated the industry thereafter.
In the latter half of 20th century the industry was influenced by the giant oil-consuming nations of the United States and the European countries. Iran, Iraq, Kuwait, Saudi Arabia, formed the Organization of the Petroleum Exporting Countries (OPEC) in 1960. Thereafter, the entire industry across the globe evolved.
3.2.2 Industry Dominant Economic Features
3.2.2.1 Market Size
The market size of the Oil and Gas Industry in the United States has been estimated at $ 327.7 billion in 2021. The revenue of the referred industry in the US market is expected to grow from $4667.45 billion in 2020 to $5870.13 billion in 2021 at a compound annual growth rate of 25.5%. Presently there are 34,219 oil and gas field services businesses in the USA in 2021. And the growth rate of field services is about 7.2 % in 2021. The highest number of oilfield services is located in Texas. 
Figure 1: Global Market Size Forecast 2015-2025
Source: (Adroit, 2020)
However, globally the market size of Oil and Gas exploration and production industry is about 2.1 trillion dollars which are presently growing at a rate of 13.3%. However, in the last 5 years, the annual market size growth has diminished by 2.2%. This can be well contemplated with the fact that the government and the general public in recent years have focused more on sustainable approaches to reduce the use of non-renewable resources. It is evident from these statistics that the market size of the oil and gas exploration and production industry is declining at a faster rate than the global mining sector. The theories of the sustainable development approach have triggered every economic activity (Gancherka&Westerman, 2018). This is one of the major reasons due to the subsequent decline nation of the market size for the Global industry. 
Moreover, the oil crisis in the early years of the 21st century is also a contributing factor that has eventually reduced the market size. OPEC had increased the oil price with the motive of earning more in the early years of the 19th century. In the short run, the demand for oil and gas is usually inelastic and therefore the demand did not contract to allow the oil Industries to earn high profits. However, in the long run, the demand for petroleum, oil, and gas has high elastic demand, which is one of the contributing factors that have abruptly resulted in the decline of the global market size of Oil and Gas industry.
3.2.2.2 Market Growth
The oil and gas market is experiencing a decline in its market in recent years. The outbreak of pandemics at the end of 2019 has been a major blow for this industry. The downturn caused by the pandemic has risked the survival of many oil and gas companies. The demand increased by 25% in April 2021. This was mainly because of the flight restriction and lockdown in almost all the countries of the world. However, experts expect that the demand may rise in the last quarter and a subsequent rebound is expected in the market.
Although, it is evident that the oil and gas industry is used to determine the ups and downs of economic cycles but the recent stagnation and a prominent decline in the oil and gas market are having a serious negative impact on the growth of the industry. But the point to be noted in this aspect is that the decline in this particular industry has started even before the pandemic. However, the pandemic has fast-forwarded this particular scenario in the market (Liu & Kemp, 2019). The supply chain disruptions owing to the pandemic are also a strong factor that has resulted in the subsequent decline of the market growth of the oil and gas industry. The growing aspect of the new energy future is a competitive issue that should be effectively considered by the oil and gas companies.
Figure 2: Market Growth 2000-2021
Source: (The New York Times, 2020)
The market condition indicates that the industry is recently experiencing its third price collapse in the last decade. This industry has earlier witnessed two shocks. However, the industry bounced back to the main track significantly during those times. The current scenario is aggravated by a combination of supply shocks and an unprecedented demand drop due to the crisis that is prevalent in the recent times. Moreover, the economic health of the industry has degraded excessively than the previous crises. The factors that contributed to this aspect of poor returns in recent times in this particular industry were the advent of shale, excess supply, and generous financial markets which overlooked the capital discipline. The prices have touched to an extent of 30-year lows and the increasing societal and environmental aspects make the change in the growth of the market inevitable (Vinokur&Ponomareva, 2021). 
The crisis of the outbreak of COVID-19 had catalyzed these effects which had already begun before the outbreak of the pandemic. Therefore various factors are already shaping up which are contributing towards the transformative moments for the industry. Experts project a consequent analysis that upholds the best scenario where oil prices can recover in 2022 to pre-crisis levels of $50/ bbl to $60/ bbl. This has been one of the most controversial aspects which promote both challenges and opportunities to the modern economy. It has been forecasted that this temporary price rise which has consequently lead to the decline in investment presently will result in spot shortages in the near future.

This is a MAJOR group paper for my strategic management class based on a case study for "EOG Resources" (www.eogresources.com). Please make sure to use all appropriate management lingo and grammer....

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