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Business Analysis Transformation (BAT). Monitoring Normalizing Plan Paper

Words: 2273, Paragraphs: 168, Pages: 8

Paper type: Analysis , Subject: Business

Business Analysis & Transformation (BAT)

Monitoring & Normalizing Plan (MAN)

A CASE STUDY REPORT

Submitted to: Mr. Luke Spiller

Subject Assessment: Sustainable Enterprise (LB5203) – TASK 2 – SP23 – 2018

by

KARAN JAIN- 13603800

In the partial fulfillment of the award of the degree

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Of

MASTER OF BUSINESS ADMINISTRATION

In

LEADERSHIP

SCHOOL OF BUSINESS

JAMES COOK UNIVERSITY

Date submitted: 15th January, 2019

Word count: 2300 words

Executive Summary

Over 80% of the world’s energy are needs are provided by coal, oil and gas. Although 80% of technologies to extract fossil fuels any have changes over the decades, the core products themselves have never been challenged until now.

Pressure to reduce carbon emissions is putting the future of Statoil Company in jeopardy, encouraging the growth of alternative methods to generate and distribute power. In the past eight years the value of the Statoil Company has halved leaving the company to redefine its role in this new energy world. Across the world Statoil company is facing disruption on an unprecedented scale. The pressure to adapt into this new energy world has now become the major concern for Statoil Company.

So in the following document I would like to discuss about the new methods that would replace the old process of Statoil Company to compete with the new energy world.

INDEX

1. Statoil Petroleum & Wind Energy…………………………………………………………..5

2. What needs to change? ………………………………………………………………………6

3. Business Case ………………………………………………………………………………….6

3.1 SWOT Analysis……………………………………………………………………………6

3.2 Grand Strategy matrix…………………………………………………………………….7

3.3 Strategy Formulation (Simplified Methodology)…………………………………………7

4. Transformation Plan…………………………………………………………………………8

4.1 Transforming Offshore oil rigs…………………………………………………………..8

4.2 Transforming Priorities ………………………………………………………………….8

4.3 Transforming into Subordinate companies……………………………………………..9

4.4 Transforming management systems………………………………………………………9

5. Monitoring System…………………………………………………………………………….9

5.1 Scope and Boundaries…………………………………………………………………….9

5.2 Dimensions……………………………………………………………………………….10

5.3 Pressure-State-Response (PSR)……………………………………………………………10

5.4 Indicators (Generic)……………………………………………………………………..….11

5.4.1 Economic (Profit)………………………………………………………………………11

5.4.2 Environmental (Planet………………………………………………………………….11

5.4.3 Socio-Cultural (People)…………………………………………………………………12

5.5 Indicators (Specific)…………………………………………………………………………13

5.5.1 Company & industry performance………………………………………………………13

5.5.2 Use & Reuse of all resources……………………………………………………………13

6 Conclusions……………………………………………………………………………………14

7. References…………………………………………………………………………………….15

1. Statoil Petroleum & Wind Energy

Statoil is a multinational energy based company was founded in 1972. It is petroleum and wind energy based company (Yergin, 1990)which operates in about 40 countries. In 2001, Statoil was a well publically listed company and ten years later (Downey, 2009) Statoil was well on it way of becoming global energy producer. In 1974, Statoil made its first footprint by discovering start field oil in the North Sea and it continued (Burrough, 2009)up the coast of Norway. Statoil’s ability to develop and apply technology has been challenged many times by the Norwegian continental shelf nature.

Figure 1- Working and functioning of Statoil Petroleum & Wind Energy

It was the harsh weather that Statoil faced everyday (Raymond, 2006)but it made Statoil into one of the absolute frontrunner by applying new technology. Away from Norway, Statoil went to find new horizons in Peregrino Field (Brazil).Soon; Statoil merged with Heathrow Statoil became the number one offshore operator in the world. Statoil’s strength and future is technology focused and Statoil has shaped its profile (Tarbell, 2008)as an upstream energy producer. Through global exploration of screw guard and discoveries at the Norwegian continental shelf, the peregrine south (Inkpen, 2011) brazil and early moves into unconventional sources in north America, future steps have already been taken representing the same optimism on which Statoil was founded. For 10 years (Coll, 2012)Statoil has discovered sector leaving shareholder return through developing a sustainable and value based businesses and culture.

2. What needs to be changed?

The green society needs to be managed. Here, Statoil needs to manage millions of feed in and consumption sites including many sharing (Zuckerman, 2013)economies which might have under and over consumption at times. This management equation, big data mining, technical competence is obviously something the world (Kleveman, 2003)needs and Statoil must strive for being a capable partner in that.

Statoil should be encouraged for any kind of (Silverstein, 2014)partnerships with any partner, with any customer and it is a new attitude and Statoil don’t need to control the world. By this Statoil can produce many renewable (Carter, 2005) energy products. Encouraging and embracing these alternative technology forward thinking oil and Gas Company can withstand the disruption caused by renewable revolution.

3. Business Case

3.1 SWOT Analysis

STRENGTH WEAKNESS

? 2nd in the gas supply in Europe.

? Added 1.25 bbr of oil equivalent.

? Current ratio is higher than competitors.

? Innovative technology in upstream.

? Expect to complete 70 wells by 2020. ? LNG imported in Europe fell about 23%

? Political instability in regions where operates

? Financial net income decrease 39.2 bnNok from 65 bnNOK in 2012.

? Increase competition with other more powerful players.

OPPORTUNITIES THREATS

? Annual growth on oil demands 1.3 brd every year.

? Increase gas demand, 1% Europe, 2% N. America, 5% Asia.

? New large field wells after 2018

? NOC-IOC partnerships

? Increase liquidity. ? Unstable political environment in operational regions.

? E.U. policies to decrease CO2 emissions.

? Gradual decrease in oil prices

3.2 Grand Strategy matrix

Figure 2- Grand Strategy Matrix for Statoil

3.3 Strategy Formulation (Simplified Methodology)

? Brand name closely connects with heavy machinery, (Stevenson, 1998)working efficiently in extreme situations, reliability.

? High annual growth compared (Doran, 2016) with other markets (10.6%).

? Spread worldwide with firms brand name and reputation by products more widely used.

Proposed Strategic operations. Internal- External matrix SWOT Analysis Grand Strategy Matrix

Invest in R&D in renewable technology

X

Expand retail networks in Asia.

X

X

X

Partnerships with strong NOC

X

X

X

Liquidation

X

Expand pipeline network in EU.

X X

X

Unrelated diversification/ small tools and accessories

X

Figure 3- GDP to Energy demand Comparison

4. Transformation Plan

Everyone in the Statoil Company agrees that (Carter P. , 2007) there will different futures of power sources. In fact,5 trillion dollar deal during Paris agreement for green society may cause a seismic shift but that doesn’t means that (Mitchell, 2011)company should give up its fossil fuels that made it so rich. Instead Statoil should start banking on mew methods to clean up the oil process. The company should start attempting to (Ross, 2012) become the most carbon efficient oil and gas producer in the world. Unfortunately, Statoil’s business still relies on the harmful burning of fossil fuel by its customers. But at least (Sabin, 2004) Statoil can try and reduce its own carbon footprint.

4.1 Transforming Offshore oil rigs

Statoil can transform some of its (Conaway, 1999)offshore oil rigs with technology that enables engineers to separate the carbon dioxide and pump it under ground. Statoil’s Sleipner gas rig is the world’s first offshore carbon capture (Mealer, 2018)storage plant. At Sleipner we have to look a lot to CO2 gas. So, we have to capture CO2 and separate it from the gas stream and outlet into the subsurface 1000 meters down the ground through a (Maass, 2009) well and then we can store the CO2 in subsurface forever and ever. By this Statoil can store up to 1 million tones of CO2 making extraction less carbon intensive.

4.2 Transforming Priorities

Prioritizing gas over more harmful fossil fuels (Smil, 2008)will further reduce global warming and keep it relevant for decades to come. One of the advantage of gas it’s very abundant, reliable and flexible. You can turn the gas stream on and off which (Sinclair, 1998) makes it regulate the flow of gas very regularly.

4.3 Transforming into Subordinate companies

Statoil should make a decision to fully commit to renewable revolution. The company can be broken up into two subordinate (Mackay, 2008) companies. All the commodities businesses, the traditional fossil, power plants can be put into one of the subordinate company and the remaining with the renewable sources to the other half (Marketable rennwable energy: Concepts, Business Models and cases, 2017) of the company.

Statoil can spin of majority share of its fossil fuel assets by the end of 2020 and scale up its investment on wind and solar. But rather than (Tantau, 2017)generating renewable power, Statoil can also generate its opportunity to diverse its power supplies on an industrial scale.

4.4 Transforming management systems

The green society needs to be managed. Here, Statoil needs to manage millions of feed in and consumption sites including many sharing (Lea-Retd, 2013) economies which might have under and over consumption at times. This management equation, big data mining, technical competence is obviously something the world needs and (Berger, 2000)Statoil must strive for being a capable partner in that.

Statoil should be encouraged for any kind of partnerships with any partner, with any customer and it is a new attitude and Statoil don’t need (Tantau A. D., 2017) to control the world. By this Statoil can produce many renewable energy products. Encouraging and embracing these alternative technology forward thinking oil and Gas Company can withstand the disruption caused by renewable revolution.

5. Monitoring System

5.1 Scope and Boundaries

Boundaries for sustainability are challenging due to (Eckerson, 2005) in-depth management equation, big data mining, technical competence and other operational arrangements. Statoil strive to maintain adequate transparency level (Lind, 2014)about fluctuation in boundaries

? Economic data is equity based and is reported at regular intervals.

? Only permanent employees are reported in workforce data.

? Assets (Operating units) report social performance data.

? Health and safety data is reported for subsidiaries, facilities and all other operating units.

? Environmental data is reported for subsidiaries, facilities and all other operating units.

5.2 Dimensions

Company Statoil

Industry Oil and gas

Products Petroleum

Natural gas

Petrochemicals

Electrical power

Revenue US$62 billion

Owner Government of Norway (65%)

Government Pension Fund of Norway (5%)

GEK Terna(3%)

Others (27%)

Number of employees 21,876 (2018)

Operating oil and gas fields Australia, Algeria, Angola, Azerbaijan, Brazil, Canada, China, Libya, Nigeria, Russia, United States and Venezuela.

Trading Offices ( crude oil and petroleum) London, Stamford, Connecticut, Singapore

5.3 Pressure-State-Response (PSR)

Pressure State Response

Stress on Non-renewable

Sources on energy.

Poor valorization

Of assets

Weak measure

for environmental

Safety.

Complex operations to control cost.

Week collaboration with oil field services.

Issues on employee on boarding, retention and training. Crude oil and other fossils

On the verge of getting

Exhausted.

Poor sustainability of supplying

Crude oil and gas.

Decreasing stringent standards.

Poor market prices, fluctuating demand.

Inefficient and immature oil rigs.

Poor performance culture. Ensuring investments on renewable sources of energy.

No unplanned shutdowns, securing operational assets.

Ensuring transparent environmental management activities.

Optimizing performance of employees, facilities, assets

Improving logistics and better supply chain management.

Adequate training systems in ongoing management.

5.4 Indicators (Generic)

5.4.1 Economic (Profit)

Generally, Gross Domestic Product (GDP) is the (Social Media listening and monitoring for busines applications, 2016)economic indicator for oil and Gas Company. Increase in GDP signifies to the increase in demand of oil.

Some of the other economic indicators that the needs to be looked at are as follows:

? Oil inventories- Countries like U.S. store oil for future use. The changes in the stock level shows the trends of production.

? Refinery use and Production-Requirement of maximum use of refinery can generate higher oil prizes.

? Government policy- Increased taxation on petroleum may lead to hike in prizes.

5.4.2 Environmental (Planet)

Following are the generic indicators that considers environmental factors

Figure 4 – Environmental indicators- Oil and gas industry

5.4.3 Socio-Cultural (People)

Following principles are covered in (Priestery, 2016)Socio-Cultural indicators.-

? Comprehensive- All well being must be ensured all important aspects.

? Limited- Highly significant set of indicators must be allotted to every aspect.

? Directly measures well being

? Includes Objective and subjective measures

Figure 6- List of concerns that are covered in Socio-Cultural indicators.

5.5 Indicators (Specific)

5.5.1 Company & industry performance

Statoil completely focusess on converting ambitions into actions.

5.5.2 Use & Reuse of all resources

Statoil should make a decision to fully commit (Goldsmith, 1991) to renewable revolution. The company can be broken up into two subordinate companies. All the commodities businesses, the traditional fossil, power plants can be put into one of the subordinate company and the remaining with the renewable sources to the other half of the company.

Statoil can spin of majority share of its fossil fuel assets by the end of 2020 and scale up its investment on wind and solar. But rather than generating renewable power, Statoil can also generate its opportunity to diverse its power supplies on an industrial scale.

6. Conclusions and Recommendations

The green society needs to be managed. Here, Statoil needs to manage millions of feed in and consumption sites including many sharing economies which might have under and over consumption at times. This management equation, big data mining, technical competence is obviously something the world needs and Statoil must strive for being a capable partner in that.

Statoil should be encouraged for any kind of partnerships with any partner, with any customer and it is a new attitude and Statoil don’t need to control the world. By this Statoil can produce many renewable energy products. Encouraging and embracing these alternative technology forward thinking oil and Gas Company can withstand the disruption caused by renewable revolution

Bibliography

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Carter, p. (2005). Don’t tell Mom: Work on the rigs.

Carter, P. (2007). This is not just a Drill: Just another Glorious day in oilfield.

Coll, S. (2012). Private Empire : ExxonMobil and American Power.

Conaway, C. F. (1999). The petroleum industry.

Doran, P. B. (2016). Breaking Rockefeller: The Incredible Story.

Downey, M. (2009). Oil 101.

Eckerson, W. W. (2005). Performance Dashbords: Measuring, monitoring and managing your business.

Goldsmith, F. (1991). Montoring and conversation.

Inkpen, A. (2011). The Golbal oil & Gas Industry: Management and Startegy Finance.

Kleveman, L. (2003). The New Great Game.

Lea-Retd. (2013). Business model for renewable energy in the built envionment.

Lind, P. (2014). Monitoring business performance: models, methods and tools.

Maass, P. (2009). Crude world: The voilent twilight of oil.

Mackay, D. J. (2008). Suatainable energy- Without the oil air.

(2017). Marketable rennwable energy: Concepts, Business Models and cases.

Mealer, B. (2018). The King of Big spring.

Mitchell, T. (2011). Carbon Democracy: Political Power in the age of oil.

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About the author

This paper is written by Sebastian He is a student at the University of Pennsylvania, Philadelphia, PA; his major is Business. All the content of this paper is his perspective on Business Analysis Transformation (BAT). Monitoring Normalizing Plan and should be used only as a possible source of ideas.

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