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Influence of Globalization on the Petroleum Industry Report (Assessment)

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Updated: Sep 14th, 2021

Introduction

Globalization has brought forth a lot of changes in the traditional market sphere so that previously unknown companies such as Nokia single-handedly brought down established giants like Motorola.

It has been said that companies should standardize both their products and their global marketing efforts to the maximum extent possible. Some industries for which this approach is useful to include the services industry such as customer relations, research, and business processing.

This paper shall use the petroleum product and the industry to illustrate that standardizing global marketing efforts is needed to remain competitive in globalization.

Discussion

Although Globalisation has been practiced for centuries (AQ, 2007), it is generally understood today as the increasing interdependence and connection of people and places resulting from advances in transport, communication, and information technologies. This has caused political, economic, and cultural convergence.

Globalization has notably stressed the convergence of patterns of production and consumption and in economics, the convergence of prices, products, wages, rates of interest, and profits. The globalization of the economy depends on the role of human migration, international trade, movement of capital, and integration of financial markets. There also is the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions, free international capital flows, and more rapid and widespread diffusion of technology (Levitt, 1983). This paper will expound on the product petroleum and the industry in general.

Petroleum or crude oil is defined as a naturally occurring liquid found in formations in the Earth consisting of a complex mixture of hydrocarbons that are mostly alkanes of various lengths. Its approximate length range is C5H12 to C18H38 and any shorter hydrocarbons are considered natural gas or natural gas liquids. Long-chain hydrocarbons are more viscous and the longest chains are paraffin wax. In its natural form, petroleum may contain other nonmetallic elements such as sulfur, oxygen, and nitrogen (API, 2007).

Petroleum is usually black or dark brown but it may be yellowish or even greenish and varies greatly in appearance, depending on its composition. Likewise, crude oil is also found in semi-solid form mixed with sand such as in the Athabasca in Canada, where it may be referred to as crude bitumen.

Petroleum is used by volume for producing fuel oil and gasoline or petrol, both considered as primary energy sources (Energy Information Administration, 2007). It is said that 84% by volume of the hydrocarbons present in petroleum is converted into energy-rich fuels or petroleum-based fuels that include gasoline, diesel, jet, heating, and other fuel oils, and liquefied petroleum gas (EIA, 2007).

Due to the high energy density of petroleum, easy transportability, and relative abundance, it has become the world’s most important source of energy. Petroleum today has become the main raw material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. EIA (2007) reported that the 16% not used for energy production is converted into these other materials.

Petroleum is found in porous rock formations in the upper strata of some areas of the Earth’s crust. There is also petroleum in oil sands (tar sands). Known reserves of petroleum are typically estimated at around 140 km³ (1.2 trillion barrels) without oil sands [4], or 440 km³ (3.74 trillion barrels) with oil sands [5]. However, oil production from oil sands is currently severely limited. Consumption is currently around 84 million barrels per day or 3.6 km³ per year.

Because of reservoir engineering difficulties, recoverable oil reserves are significantly less than total oil-in-place. At current consumption levels, and assuming that oil will be consumed only from reservoirs, known reserves would be gone around 2039, potentially leading to a global energy crisis. However, this ignores any new discoveries, rapidly increasing consumption in China and India, using oil sands, using synthetic petroleum, and other factors which may extend or reduce this estimate.

Uses

The chemical structure of petroleum is composed of hydrocarbon chains of different lengths. Because of this, petroleum may be taken to oil refineries and the hydrocarbon chemicals separated by distillation and treated by other chemical processes, to be used for a variety of purposes. See Petroleum products.

[edit] Fuels

Further information: alternative fuel

Ethane and other short-chain alkanes which are used as fuel

Diesel fuel (petrodiesel)

Fuel oils

Gasoline

Jet fuel

Kerosene

Liquid petroleum gas (LPG)

Natural gas

Generally used in transportation, power plants, and heating.

Petroleum vehicles are internal combustion engine vehicles.

[edit] Other derivatives

Certain types of resultant hydrocarbons may be mixed with other non-hydrocarbons, to create other end products:

Alkenes (olefins) which can be manufactured into plastics or other compounds

Lubricants (produces light machine oils, motor oils, and greases, adding viscosity stabilizers as required).

Wax, used in the packaging of frozen foods, among others.

Sulfur or Sulfuric acid. These are useful industrial materials. Sulfuric acid is usually prepared as the acid precursor oleum, a byproduct of sulfur removal from fuels.

Bulk tar.

Asphalt

Petroleum coke, used in specialty carbon products or as solid fuel.

Paraffin wax

Aromatic petrochemicals to be used as precursors in other chemical production.

Reference

Academic Quotes. (2007) “Globalisation in brief.” Web.

Energy Information Administration (2007). “Petroleum 101).” Web.

American Petroleum Institute (2007) Manual of Petroleum Measurement Standards (MPMS) by the American Petroleum Institute. Web.

Levitt, Theodore. Globalization of markets., Harvard Business Review, 1983.

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IvyPanda. 2021. "Influence of Globalization on the Petroleum Industry." September 14, 2021. https://ivypanda.com/essays/influence-of-globalization-on-the-petroleum-industry/.

References

IvyPanda. (2021) 'Influence of Globalization on the Petroleum Industry'. 14 September.

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