Joint ventures within the energy sector Essay Example | Topics and Well Written Essays - 2500 words

Joint ventures within the energy sector - Essay ExampleA combined chock up of Shell and Aramco strengthens the ventures competitiveness. For instance, Saudi-Arabian owns petroleum reserves, but lacks the ability to exploit them (Johnson, 2011). Therefore, this influences the government of Saudi to strike a deal with Shell. The state of Saudi has efficiently exploited the crude oil resource, while the investor gains nigh profit.The energy sector takes different forms, this report will primarily focus on oil and bumble as sources of energy. Apart from that, market factors in the petroleum sector contribute significantly to the well-being of an economy. Therefore, bring up stakeholders in this micro-economy continue to effect and affect the industry (Johnson, 2011). The primary players include National Oil Companies, external Oil Companies, and petroleum organizations. Therefore, when these parties work in harmony, petroleum players realize an increase in the efficiency of oil pro duction. However, economic factors such as demand, supply, and industrial regulations influence the pricing and distribution of petroleum products. Consequently, competition among stakeholders increases since oil is a r be commodity.Motive enterprise is a joint venture between Shell (an IOC) and Saudi Aramco (an NOC). Both of the shareholders own equal shares of the company. The company has its headquarters in Houston Texas. In 2004, the company posted a fiscal net profit of 24 billion dollars. Motiva owns and operates three oil refineries in the United States. burning(prenominal) to say, the expansion of Port Arthur refinery increased its capacity to 600000 meters cubic per day (Stevenson, 2011). Subsequently, Port Arthur refinery became the largest in North the States and the fifth largest in the globe. Motiva produces diesel, petrol and petroleum liquid gasses and other crude oil products. United states are the fundamental customers of the companys products.Joint ventures betwee n national and international firms can be realized through