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Introduction of The investment strategy
of an oil company
The
key aspect of the oil company strategic planning and the decision making is
based on the investment strategies, the risk inherent with the asset investment
options, and analysis of the previous investment strategies in the oil company.
The report on the investment strategy address the plan of investment in the
Saudi Aramco. Saudi Aramco is the oil company of Saudi Arabian that is based in
Dhahran. The Company is trading oil around the world and make $46.4 billion in
revenues on an annual basis. Saudi Aramco is serving the global market and
participates in solving global challenges that generate global impact
Aim and objective of The investment strategy of an oil company
The
plan of the present research project is to assess all the possible investment
strategies of Saudi Aramco company. The research highlights rational and
potential advantages and disadvantages associated with the investment approach.
The report will flourish a new investment strategy that attempts to attain a
higher degree of competitive advantage over the previously existing production
process and it also steps up the replacement investment. The implementation of
the present report will enable to improve the resource planning as "Just
in Time" and control system will monitor the performance of the company
Investment strategy of The investment strategy of an oil company
The
investment is required to be working over the obsolete platform that will
measure all the prospects of the strategy and estimated concerns. The present
investment strategy will re-evaluate the previous options. The finance
department of Saudi Aramco will evaluate the strategy and how it could be
implemented. According to the theories, the current levels of investment cannot
be maintained without having any access over the fiscal changes. The trend of
investment will be towards the cost and fields that will attract investment
over the competitive global environment
Collection of information and data of The investment strategy of an oil
company
The
present action report is based on the collected data. The whole data is
collected from the previous reports and by identifying the sensitive changes in
the input costs, commodity prices, services provided to the customers around
the world, analysis of the long cycle of investment, production and revenues, reasons
of increased risk, decreasing margins and specific development. The collected
data will be used as evidence in specific areas including reform field
allowances, point of investment, reduction in the tax rate, facilitation of
asset transferred, tax treatment, and fiscal changes. The key changes in the
previous investment strategies are listed below,
1.
In the new investment strategy, the immediate
reduction will be carried out in the supplementary charges from 32% to the 30%
that demonstrate the commitment of government in reducing the burden of the
overall tax. The ambition is to reduce the cost and rate to make it further
affordable.
2.
The new strategy will introduce the basis wide
investment allowance for the reduction of the effective tax rate
3.
The immediate extension will be done in the
expenditure supplement from six to ten in the accounting period and the support
will continue to work.
4.
The under-explored areas of Saudi Aramco will be
considered in the accounting periods.
5.
Further work on the investment will explore the
tax system for the tax credits, mechanism, affordable conditions, and targeted
government in the industry.
6.
The reforming conditions for the fiscal
treatment of infrastructure will also be carried out in the lifecycle of fields
7. The radical conditions will be used to
decommissioning tax relief and work that will reform the fiscal treatment of
infrastructure
8.
The average operating and capital cost per
barrel will be increased with the change in the investment strategy. The fixed
cost of the maintaining infrastructure will be considered for production. The
cost of operating well will be beyond the expected life.
9.
The physical and technical challenges will be
considered while operating the remote areas in Saudi Arabia. The investment
strategy will consider new methodologies and technologies to enhance the oil
recovery and to achieve production process. The report identified different
aspects of industry behaviour with a lack of collaboration in the cost issues
The dynamics of investment adjustment will be considered for the Saudi Aramco and the dynamic investment framework is considered in the general model as follows,
In
the model is the intercept of
accounts and that trend common investment. that is the ratio of
investment and the capital (K). The constant variance is independent to the
each other.
Advantages and disadvantages of The investment strategy of an oil
company
The
specific model will provide higher expected profitability with the higher
investment in the Saudi Aramco. The output prices and profits are correlated
with each other in the model. The investment will increase the revenues of the
oil company. The lower level oil reserves cost more to extract oil therefore
the company will focus on the higher production of oil to generate more
revenues. The investment strategy will consider the technical conditions in the
exploration of oil. The production level is highly intended to capture the
dependences of technology, dependence, geology, and environment
Conclusion of The investment strategy of an oil company
The present
report illustrates how oil investment in Saudi Aramco is facing considerable
challenges. The investment strategy will be developed to reduce government
budgets and to improve the obsolete capitals. The nominal investment will
consider the overdue maintenance costs that will translate the real investment
in the benefits. The limited geographical opportunities will also be considered
for the development of Saudi Aramco.
References of The investment strategy of an oil company
Dubey, K., Howarth, N., & Krarti, M. (2017). Evaluating
Building Energy Efficiency Investment Options for Saudi Arabia. King
Abdullah Petroleum Studies and Research Center.
Ektinteractive. com. (2010). Business
Processes and Risk Management. Retrieved from www.ektinteractive.com:
https://www.ektinteractive.com/business-processes-risk-management/
Hvozdyk, L., & Mercer-Blackman, V.
(2010). What Determines Investment in the Oil sector. Retrieved from
www.eisourcebook.org:
https://www.eisourcebook.org/cms/What%20Determines%20Investment%20in%20the%20Oil%20Sector.pdf
Maniruzzaman, A. F. (2018). the pursuit
of stability in international energy investment contracts: A critical appraisal
of the emerging trends. Journal of world energy law and business, 01(02),
121-130.
News. efinancialcareers. com. (2016, 09 06). Where to work now in FICC, equities and IBD if you want to survive in investment banking. Retrieved from news.efinancialcareers.com: https://news.efinancialcareers.com/uk-en/254402/ficc-equities-ibd
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