Piraisoodi Savarkar

1
Economic Analysis of ExxonMobil

• Piraisoodi Savarkar
• Prasad Poosarla
• Rajaji Ganesan
• V.K. Venkatesan

2
Agenda

• VK introduction, market structure, competition.
• Pirai demand determinant, elasticity, price,
  demand and supply.
• Rajaji international and environmental issues.
• Prasad financial position and projections.

3
Introduction

• Oil an integral part of life.
• Oil economy.
• 12 of supply by ExxonMobil.

4
Market Structure

• Oligopoly.
• OPEC the cartel.
• Position of ExxonMobil in US market.
• Market share.
• Leadership.
• Key players.

5
Competition

• Competitor's.
• Royal Dutch / Shell Group.
• BP Amoco p.L.C.
• Elf.
• Enron corp.

6
Demand Determinants

• Climatic changes
• Technology improvements
• Economic cycles
• Government policies
• Number of competitors
• Advertising dollars spent

7
Elasticity of Demand
8
Oil Demand Price
9
Domestic Issues

• Foreign dependency
• Inflation
• GDP
• Unemployment rate
• Interest rate
• Foreign currency exchange rate

10
International Issues

• Limited number of suppliers
• Environmental issues
• Carbon emission and global warming
• OPEC as cartel
• Steady growth in oil demand

11
Oil Spills and Fines

12
Carbon Dioxide Emission

13
Alternate Sources of Energy

• Solar, wind, tidal, geothermal, wave, hydro,
  nuclear
• Change in demand of gas oil

14
Current and Future Finances

• 3rd quarter earnings of 4.5 bn in 2000
• Fourth consecutive record quarter
• Expanding economy increase in demand
• Increasing dependency on foreign oil in US
• Open prospective energy-rich areas without
  impacting environment

15
Cost Benefit Analysis

• Be the most profitable competitor like present
• Growth opportunities limited reduce operating
  costs
• Operating costs 9bn lower in the last 7 years
• Reduce variable cost to increase profit margins

16
Future Key Financial Factors

• Competitive factors
• Political factors
• Project related factors
• Merger related factors
• Capital investments
• Capital budgeting

17
Conclusion

• Future of oil industry
• Future of ExxonMobil