NGC incorporated in 1975 by the government is a wholly-owned state enterprise that has business in sale and transmission of distribution of natural gas. It has an international investment for access to local and international markets. NGC has a strong linkage in downstream and upstream sectors in the business entities. It has a subsidiary named the National Energy Corporation of Trinidad and Tobago, Phoenix, Park Gas Processors Limited, and NGC CNG (NGC 2020). It has a long-term model for maximizing resources on Trinidad and Tobago. It has more than 600 employees across all locations (NGC 2020).
The diversified energy sector has focused on the gas value chain and value-added creation by linkage with energy and the rest of the sector. The energy sector accounts for 34 % of the GDP. The sector is the largest exporter of Methanol and the country Trinidad and Tobago have been involved in petroleum and oil and gas exploration in cumulative production. The energy sector accounts for around 34.9% of the country’s GDP (GTT 2020).
Weakening economic growth and trade tensions that will hinder growth and will lead to modifications of supply chain
The Middle East and any political risk in the global market will result in price fluctuation
Scenario 1-COVID-19 impact will turn in economic recession and restructuring and closure
Scenario-2 Increase cost of oil extraction
Scenario-3 Climate change impact on non-nonconventional resources
Scenario-4 -Shift to sustainable globalization
The impact of COVID 19 on a decline in demand causing production decline and profitability. Consolidation of firms operating in the oil refinery
Technological cost and input consideration will significantly increase the cost of extraction
Increase in the use of clean energy and efficient use of fossil fuels for future vision
Creating sustainable globalization with the regulatory practice for operations
The cost of extraction will be higher due to the exploitation of vast reserves and deep shores that may lead to high cost as demand may increase after the substantiation period in recovery. The oil industry is impacted by drastic fluctuation due to geopolitical tension as described in the PESTLE analysis. The western social disturbance gives chance for won infrastructure development as the rise of Arab spring may be drastic in the future with the nation in the Middle East. The efficient non-conventional gas production chain will surge that will overcome challenges for technological and operational challenges for extraction. The government investment will be significant for distribution and marketing to be viable for sale. The climate change will impact for renewable and clean energy resources for innovative procure categorization that will impact the reduction of carbon footprints with LNG as a viable option for cost-benefit analysis. The curtailment of the issue would have also been helped by demand reduction. Demand reduction has therefore been a feature of the natural gas landscape in the last four years (The energy year 2020).
The dominance of producers will lead to hegemony for restructuring and acquisition in the market. The major oil control will lie with OPEC (Deliotte 2014). Trinidad and Tobago will see the surface collaboration of players for the supply of oil. The global production of oil will be at 1 per cent per year will site extraction on major player dominance will remain in the country (GTT 2020). The environment protocol will lead to sustainable globalization. The risk relating to the handling of the business environment, infrastructure, and labour for technical solutions will be regulated by international standards. The countries revitalization of felid and production in the large volume handling will be through modern techniques that will see the future scenario of focused production on the lower-cost barrel for offshore project s expansion of regional growth. The input price determines the fall in price in upstream due to input cost for negotiations (Newsday 2020).
The policy and lifestyle changes have improved the transportation sector and demand for electric vehicles has increased with companies shift. The extraction of oil shows dependence on oil revenue and perpetual export volume for variability for supplies. The restructuring by major players shows risk divergence for slow growth by the example of BP acquiring EV for fast chargers and Shell buying power retailer first utility (PwC 2019). The future scenario will become multiple industries in building platforms for joint ventures for risk aversion and downturn.
Changes in local price with behavioural pattern with on hydrocarbon has shown polices stimulate foe sustainable globalization. Oil producers are investing locally for diversification in economies. The demand growth decelerated as the trade war and economic crisis loom that will impact oil demand and market to go weak in the future for a gradual period. Global oil demand growth with countries particularly in Trinidad and Tobago comprises major revenue which has shown slow growth. The lower demand will place the future scenario for non-conventional product growth. The massive shift in energy and intensity with reliable fossil fuel will create demand efficiency for the project. Uncertainty over long-term demand will slow down demand by price volatility with material investment by restructuring and oil refineries consolidation. However, the products from petrochemical are part of the lifestyle they originate from petrochemicals, this will show the coexistence of hybrid models for the future. The future emissions and policy frameworks capture the success with the rise of CCS capture for energy demand (United Nation 2020). The scenario with the economy and regulatory framework will be drawn on the manufacturing process and raw material cost with sustainable use in locally managed solutions for long term growth.
The global environmental measures post-Kyoto protocol shows the penetration of alternative energy and natural gas transportation by the large market presence and favourable pricing for distributed networks. The industry network in production costs and commercial supply chain will see the impact of market conditions with design concept and operations affected for a halt with demand integration in the long haul
Credible value proportion through M&A takes local communication and market access to offer competitiveness and differentiation by government alliance and addressing risk and technology for extraction that will be costly for drilling exercise and oil and gas operations. The governance in Trinidad and Tobago has taken measures for price optimization and conflict resolution between potential companies for maintaining regulation on consumption and supply (The energy year 2020). The economic crisis will contract the market with a recessionary environment and growth restriction due to tight regulations and government spending in the non-fiscal balance for re-adjusted funding and fiscal stability. Structural change for climate and private sectors for oil and energy risk prevention for safety guidelines. The natural expansion in the energy matrix relates to production by NGC for the global sustainable matrix with global connectivity with the US (EY 2019). The change in the use of oil for consumption with economic feasibility in usage with energy matrix with a higher cost for replacement with supplier collaboration for change in the development of economic feasibility matrix. The government negotiation with the upstream price is for maintenance of production and regulation price with the cost of input central to the pricing determined. The lower oil price and demand are central with capital expenditure and exploration for oil rig counts that is halted with a negative impact on exporting countries for an anticipated cut for the quarter with economic recessionary environment in the near time.
The innovative model solutions as smart grid penetration has increased the cost of extraction and storage for oil that ay dilutes the importance and fluctuating price. On the other hand, the long-term outlook for renewables is stronger by blueprints (Shell) (EY, 2020). The geopolitical conflicts impact the production and revenue, the NGC imported in the US with trade agreements for quick collaboration shows potential for non-conventional resources for ordered growth and completion by the multilateral accord that influences oil extraction and refinery in the global market. The natural gas undeniable broad demand will increase the continued expansion of natural gas with OECED consumption by NGC and government in signalling climate conditions for less carbon approach by a more comprehensive policy. The abundance of risk measures with oil extraction will consolidated local producers for reforming economies for higher production sustainability and reducing dependence on oil in the future for market share through Joint venture
Political factors – The political conflict and geopolitical conflicts affect production. The threats to business operations in oil and gas are influenced by political factors and decisions. The majority of the oil-producing countries dominate the oil and gas production across Trinidad and Tobago with 32% penetration (Deliotte 2014).
Economic factors - The demand for oil and gas is affected by an economic and global scenario with a recessionary period due to crisis the production and price show decline. The companies face debt with a substantial fall in price for a consecutive period
Social factors – The country encourages foreign investment and protection of the natural environment with sustainable practices. The oil used in transport and allied service continues with availability and accessibility by consumers
Technological factors- Technological factors impact the industry in the oil and gas industry for production. The future scenario with a multipolar world that may affect the oil price with a different economic block in countries. The supply-demand will turn in the manufacturing business with supply risk for oil extraction with the gas supply.
Environmental factors – Natural gas is considered as cleanest fuel. Substantial oil drilling practices for co-existence of supply and environmental sustainability will be the future (Deloitte 2014).
Legal Factors – These contributes to the norm by the country and regulation for industry interest and foreign regulation in the industry.
The impact on the scenario as economic crisis loom has a significant impact in the above quadrants (Scenario1).
Figure- Scenario Matrix
The changes in the future can be
Use of autonomous and digitalization for oil exploration and production by government
Use of autonomous and digitalization for oil exploration and production declined by the government.
Porter's s five force model on the future scenario
Figure- Porters five force model
Threats of new entrant
The oil and gas industry is huge and new entrants will be in new capacity to gain market share. The sustainable globalization alternative will see an increase in demand. The cost and capital requirements are large with the government regulation will be difficult for domination with OPEC governing body as powerful in the world (DNV GL 2017). The volatility in the oil and gas industry will be in a vulnerable situation.
Threats of substitute
The switching cost is high for initial change for the substitute products that may reduce with attractive piece trade-off. Alternative energy would provide a competitive substitute. Hydrocarbon and biofuels as attentive will require a high amount of investments
Power of suppliers
Vertical integration and the powers of producers will maximize profitability. They have the power to limit production and supply and charge a higher price.
Power of buyers
The buyer's power will be low in the scenario with market development and oil benchmarks developed.
Rivalry among competitors
High rivalry among competitors for relatable size and market share for expansion will be observed. In the upstream market, the competitive rivalry is significantly intensified in the scenario for sustainable development (BP 2019)
Figure - Scenario Matrix
The scenario matrix draws implications with the factors that would arise due to the change in outlook in the oil and gas industry.
INDUSTRY AND TIMEFRAME
DRIVERS OF UNCERTAINTY
Aviation industry -2020-2022
Pandemic impact on travel and demand
The economic crisis with a fall in price and gradual contraction in the economy and per barrel price decrease in major economies
Consolidation and technological updation through government subsidies
The petrochemicals will see a change in global demand with modest growth in consumption with measure industrial shift for a short period. Oil demand slows down with efficiency standard o internal engine and vehicles will drive a market hit. Oil and gas production with decrease stakeholders with technological advancement can maintain sustainability with operational frontiers (BP 2019).
The oil demand and the industry outlook is driven by a change in consumption by demographic and technological innovation by consumer choice for oil extraction and usability and access by countries proportional in the future the ideal scenario is for development of a sustainable model that can be carried for future as a supply for natural gas has improved with Natural Gas company Trinidad and Tobago has dominated the market with extended gas infrastructure and power generation. Natural gas will expand with the primary energy supply for CO2 emission cut. The alternative source will coexist with the demand for electric vehicles will increase for a sustainable environment. The economic growth and GDP contribution of the sector are significant in emerging markets and Trinidad and Tobago's economy and overall development of the sector. Oil prices add volatility and change in geopolitical outlook for suppliers and oil companies will compel to adapt and change for disruption ahead. The industry is expanding with the natural gas value chain for renewable power generating and the rise of LNG for the value chain. The climate change possesses movement for a regulatory framework with oil as the leading fuel for consumption is still established large scale.
BP. 2019. BP energy outlook. [Online]. Available at: https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-outlook/bp-energy-outlook-2019.pdf. [Accessed on June 23, 2020].
Deloitte. 2014. The vision-Global scenario for the oil and gas industry 2040. [Online]. Available at: https://www2.deloitte.com/content/dam/Deloitte/ru/Documents/energy-resources/ru_er_vision2040_new_eng.pdf. [Accessed on June 23, 2020].
DNV GL. 2017. Energy transition outlook. Oil and Gas forecast to 2050. [Online]. Available at: https://www.ourenergypolicy.org/wp-content/uploads/2017/09/DNV-GL_Energy-Transistion-Outlook-2017_oil-gas_lowres-single_3108_3.pdf. [Accessed on June 23, 2020].
EY. 2020. How Paris agreement became a reality. Available at: https://www.ey.com/en_in/oil-gas/how-delivering-the-paris-agreement-could-become-a-reality. [Accessed on June 23, 2020].
GTT. 2020. Oil and gas industry overview. Available at: http://www.energy.gov.tt/our-business/oil-and-gas-industry/. [Accessed on June 23, 2020].
Newsday. 2020. Khan: Govt looking to negotiate the upstream price. [Online]. Available at: https://newsday.co.tt/2020/06/02/khan-govt-looking-to-renegotiate-upstream-gas-price/. [Accessed on June 23, 2020].
NGC. 2020. Company profile. [Online]. Available at: https://ngc.co.tt/about/. [Accessed on June 23, 2020].
PwC. 2019. Oil and gas trends in 2019. [Online]. Available at: https://www.pwc.com/gx/en/ceo-survey/2019/Theme-assets/reports/pwc-2019-ceo-survey-oil-and-gas-report.pdf. [Accessed on June 23, 2020].
The energy year.2020. Trinidad and Tobago market overview. [Online]. Available at: https://theenergyyear.com/market/trinidad-and-tobago-2/. [Accessed on June 23, 2020].
United Nation. 2020. World economic situation and prospects 2020. United Nations publications
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