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Iranian Oil and Gas

In: Other Topics

Submitted By robinkip
Words 3163
Pages 13

1.0 Introduction
This study’s rationale is based on the deductions from the available literature that there is a dire need to understand the Oil and gas industry competitiveness in Iran (Michael E. P. 1990). This study thus uses Porter’s model of competitive advantage of nations to analyze Iran’s oil and gas industry’s competitiveness in the global market. This study will also focus on the factors that affect the industry’s competitiveness.
In the past decade, there has been a progressive increase in world oil demand due to increase in the global economic growth (Hooman 2000), (Narsi, 2001). With the global demand for energy projected to rise in the future coupled with the exponential reduction in oil reserve discovery from the majority of non-OPEC (Organization of Petroleum Exporting Countries) countries, there is a significant demand for oil from OPEC countries, such as Iran. Moreover, unless there is a feasible alternative, the influence of Iran and other OPEC countries will be more prevalent. This, therefore, means that the energy sector in OPEC countries faces fierce competition (Fereidun 2016).
Iran is the oldest oil-exporting country in the Persian Gulf region. With the continued discoveries of new oil fields, its current reserves have exceeded domestic consumption and exports. Being the founding member of the OPEC, Iran has also enhanced its intra-group rank from the fourth largest producer in 1960 to the second largest producer in 2008 (Amuzegar, 2008). The extraordinary competitive advantage of oil for the Iranian economy, besides its deposit volume and rising price, is that oil’s extraction cost is low, and its sale proceeds contain huge profits. This also relates to the Iranian natural gas in which the country is...

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