comparison of world crude oil types and cost benefits

Comparison of World Crude Oil Types and Cost Benefits 1

COMPARISON OF WORLD CRUDE OIL TYPES AND COST BENEFITS

A dissertation submitted to the

University of Central Lancashire

in partial fulfilment of the requirements

for the degree of

Master of Science

in

Oil & Gas Engineering

by

Rahma Al Harthy

School of Engineering 2019 – 2020


COMPARISON OF WORLD CRUDE OIL TYPES AND COST BENEFITS


Abstract

The research paper focuses on the topic of World Crude Oil by emphasizing three

country contexts, including the UK, Malaysia, and Oman. In Chapter One, the

introduction section has provided a brief overview of the entire research paper. The

aim and objective of the research have been provided, which mainly investigates the

comparison of world crude oil in three countries, namely Oman, UK, and Malaysia.

Based on the aim, the objectives are also framed, which is guided to the question of

research. The background and significance of the study are also provided in this part

of the research study. Therefore, it can be said that all the aspects are covered initially

in this chapter of the Research Study.

In chapter 2, the literature review contains different discussions related to the topics.

This discussion focused on the concept and present situation of world crude oil, the

influence of OPEC organization in the crude oil markets, different types of crude oil

and the price, some statistical information of this oil, and also discussed the knowledge

regarding the future scope of this market.

In the methodology chapter, the research philosophy, approach, and design are

highlighted that are required for analyzing the impact of world crude oil types on cost

benefits in terms of 3 companies. The companies’ information is further collected

through primary research and based on that interpretation is also made for showing

the direct relationship between crude oil price and company benefits. Ethical

consideration has been shown here, showing the credibility of the data collection

method of this study.


The fourth chapter is related to the analysis of data as here the researcher analyses

the primary data that is collected with the help of a survey conducted by taking 51

respondents. This section has helped the researcher in comparing the quality of crude

oil produced by Oman, Malaysia, as well as the UK. The section also explored many

other factors related to crude oil and helped the researcher in knowing how crude oil

is affecting the economy of the country.

Chapter Five, the discussion section of Research analysis mainly helps in connecting

with the Literature Review sections as well as the sections of findings of the Research

Study. The section is mainly discussed the brief concept of various factors for

comparison on World Crude oil in Oman, UK, and Malaysia along with the properties

and cost Benefits. The discussion part generally helps to link with the objectives of the

real world. Chapter 6 focused on the discussion of the overall conclusion by providing

each chapter analyses.


Acknowledgement

I would like to thank my professor first of all, for helping me select this researchable

topic for my thesis purpose. I am also grateful to my classmates because they have

helped me collecting resources for completing this paper. I would like to shower my

gratitude towards my seniors as they have guided me throughout on how to complete

a thesis paper on time. Finally, I am grateful to my parents for their blessing and

constant cooperation.


Table of Contents

Chapter 1: Introduction ........................................................................................................ 10

1.1 Introduction ................................................................................................................ 10

1.2 Research Background ............................................................................................... 10

1.3 Research Aim ............................................................................................................ 13

1.4 Research Objectives ................................................................................................. 14

1.5 Research Questions .................................................................................................. 14

1.6 Research Rationale ................................................................................................... 15

1.7 Significance of Research ........................................................................................... 17

1.8 Summary ................................................................................................................... 18

Chapter 2: Literature Review ............................................................................................... 19

2.1 World Crude oil .......................................................................................................... 19

2.2 OPEC organization and its influence on the world crude oil industry: ......................... 20

2.3 Comparison of Different Types of World Crude oil and cost benefits: ........................ 21

2.5 Statistical information about Word Crude oil: ............................................................. 25

2.6 Scenario of Crude Oil industry in different countries .................................................. 27

2.7 Literature Gap ........................................................................................................... 30

2.8 Summary ................................................................................................................... 31

Chapter 3: Methodology ...................................................................................................... 31

3.1 Introduction ................................................................................................................ 31

3.2 Research philosophy ................................................................................................. 31

3.3 Research approach ................................................................................................... 32

3.4 Data collection technique ........................................................................................... 33

3.5 Data analysis tool ...................................................................................................... 34

3.6 Reliability and validity ................................................................................................ 34

3.7 Ethical considerations ................................................................................................ 35

3.8 Timeline ..................................................................................................................... 35

3.9 Summary ................................................................................................................... 35

Chapter 4: Results .............................................................................................................. 36

4.1 Introduction ................................................................................................................ 36

4.2 Quantitative Analysis ................................................................................................. 36

4.3 Cost-Benefit Analysis of three chosen companies ..................................................... 57

4.4 Summary ................................................................................................................... 59

Chapter 5: Discussion ......................................................................................................... 60

5.1 Introduction ................................................................................................................ 60


5.2 Discussion of LR ........................................................................................................ 60

5.3 Discussion of Findings ............................................................................................... 64

5.4 Summary ................................................................................................................... 65

Chapter 6 Conclusion: ......................................................................................................... 66

Conclusion ...................................................................................................................... 66

Linking with objectives ..................................................................................................... 66

Limitation and future scope - ........................................................................................... 67

Recommendation- ........................................................................................................... 68

References ......................................................................................................................... 69

Appendix ............................................................................................................................. 77

Appendix 1: Survey format .............................................................................................. 77

Appendix 2: Timeline ....................................................................................................... 85

List of Figures

Figure 1.1: Average Monthly OPEC Basket crude oil price from June 2019 to June

2020 ......................................................................................................................... 13

Figure 1.2: OPEC oil price annually 1960-2020 ....................................................... 15

Figure 1.3: Global crude oil exports of OPEC countries from 2012 to 2018 ............. 16

Figure 2.1: Global Crude oil production starting from 1990 to 2019 ......................... 20

Figure 2.2: OPEC Share of world crude oil reserves 2018 ....................................... 21

Figure 2.3: The cost difference of crude oil between 2001 and 2004 ....................... 22


Figure 2.4. Production of Crude oil. .......................................................................... 26

Figure 2.5: The world crude supply of oil from 2014 to 2020. ................................... 27

Figure 2.6: Crude Oil production in Oman ................................................................ 28

Figure 2.7: Oil Consumption and Production in Malaysia ......................................... 29

Figure 2.8: Production of Crude oil in the UK ........................................................... 30

Figure 3.1: Research onion ............................... Errore. Il segnalibro non è definito.

Figure 4.1: Graph for Survey Question 1 .................................................................. 38








Figure 4.9: Line graph for Survey Question 9 ........................................................... 54

Figure 4.10: Graph for Survey Question 10 .............................................................. 56

Figure 5.1: Share of OPEC in Reserving World Crude Oil ....................................... 62

Figure 5.2: Taxes in Oil ............................................................................................ 63


List of Tables

Table 4.1: Survey Question 1 ................................................................................... 37









Table 4.10: Survey Question 10 ............................................................................... 55

Table 4.11: CBA for three companies ...................................................................... 58


Chapter 1: Introduction

1.1 Introduction

Many developing countries depend on the revenues of oil heavily for contributing to

the government on exports and budgets. Forecasting different revenues require an

assessment likely for produced oil price and export. In a certain market of crude oils,

Oman, UK, and Malaysia are available widely for marketing along with more than 140

types of crude oils are produced in those countries. The main differential between

specific crude oil and marker can be more than 25 % larger, and it is widening as rises

of oil prices at the general level (Adlandet al. 2017). This chapter mainly gives a brief

analysis of the relationship of different crude oils and three types of difference in quality

along with the cost of transport and effects seasonally. The variety and number of

crude oils which are always traded on the international market has increased steadily

over the past few years. Additionally, according to API (American Petroleum Institute),

there is some gravity and materials of sulfur in crude oil which are generally included

the existing analysis and impact of acidity (measuring the TAN – Total Acid Number)

on the differential of price.

1.2 Research Background

Crude oil is a mixture of a large number of complex hydrocarbons and chemicals in

a small amount. The accurate composition of the mixture is used for determining the

products mix that can be obtained from crude oil by refining the crude (Ju et al. 2017).

Different types of products are used, which are less or more valuable at a time,

depending on the demand and supply for them. Refineries mainly try to produce

valuable products, and they can do. The entire supply of the refineries is used on

different types of complexities with the overall capacity limit which is supplied. Hence,


the crude oils have a large proportion of the products which are more valuable, and it

can be treated by a large number of refineries in the world. It also uses the commands

based on the premium over the crude oils which generate a large proportion of lower

product value, or it can be processed by the refineries also.

Crude oils are produced in major markets of three countries for refining, and it takes

less transportation. Therefore, it is more attractive and needs command for producing

premium over oil from the market which is to incur the cost in larger transportation to

get to the competitive market (Yang et al. 2017). The existence of different differentials

and variations of the potential is posed over time, and it is an important issue for

countries of oil-exporting. Revenues of oil can be an important source of export and

government revenue.

Although the crude oils consist of a large number of characteristics regarding quality,

it needs to be taken into the running action of analysis of price, refinery and also

focused on two types of quality principles such as Sulfur Content and API gravity

(Kilian, 2016). Indeed, Sellers, buyers, and traders of oil need to adjust the price based

on the difference in quality. For new types of crudes, there is no price data on some

specific crude which needs the guidance for the expected price of selling by focusing

on similar crudes which are defined by yield and quality. As demonstrated in the below

figure, the price of crude oil in OPEC basket has reduced from 62.92 US dollars per

barrel to 37.05 US dollars per barrel from the year 2019 to June 2020. The given below

table is showing detailed information of crude oil produced by Malaysia, Oman as well

as the UK:


Countries Type of crude

oil

Price Properties API

Oman Kerosene Type

Jet fuel

0.42 Rial

Omani Per

gallon

Low freezing

point, higher

flash point,

density- 0.78-

0.81 g/cm^3,

Carbon atoms-

10-16, Sulphur

content- 1000

ppm

40-46

degrees

UK Petroleum £1.24 Asphaltenes-

<0.1-12,

Resins- 3 to 22,

Sulphur- 0.05 to

4.0, nitrogen-

0.02 to 0.5

22-32

degrees

Malaysia Tapis crude 46.12 US

Dollars

Sulfur- 0.04%,

greater

aromacity, extra

light

43-45

degrees


Table 1.1: Specification for crude oil

(Source: Created by the researcher)

Figure 1.1: Average Monthly OPEC Basket crude oil price from June 2019 to

June 2020

(Source: statista.com, 2020)

1.3 Research Aim

The main aim of the research is to make a comparison of world crude oil types of three

countries Malaysia, Oman, and the UK, and analysis the benefit of cost along with

their properties.


1.4 Research Objectives

● To investigate the basic concepts about the marketing of crude oils in different

countries with statistical evidence

● To identify the cost benefits of crude oils in Malaysia, Oman, and the UK as well

as their positions in exportation with properties.

● To evaluate the current pricing of crude oil in 3 countries and its possible

extension shortly.

● To analyze the current global statistics of world crude oil and the influence of

OPEC (Organization of the Petroleum Exporting Countries)

● To provide some recommendations for increasing the quantity of Crude Oil that

is usually exported in other countries.

1.5 Research Questions

1. What are the key factors for the comparison of World Crude oil types and benefits

of Cost in Oman, UK, and Malaysia?

2. How crude oil produced by countries like Malaysia, UK and Oman are different from

each other?

3. How can the cost-benefit analysis help in finding out the key differences in the crude

oil produced by the chosen countries?


1.6 Research Rationale

To estimate the values regarding crude, it is done by using various methods, and those

need to be developed as well. It normally refines the estimation of crude value and

makes the relationship with the specifications of the product. There are generally two

approaches that are used, such as valuation using Linear Programming and Valuation

using Simulation. Both of the forms are provided through the valuation of refiner to

ensure optimum, which is considered in market conditions.

Figure 1.2: OPEC oil price annually 1960-2020

(Source: opec.org, 2020)

As demonstrated from the above figure, in 2020, the average preliminary price of oil

stands as 39.07 US Dollars per barrel. The OPEC price of crude oil is defined by the

price and the so-called Basket of OPEC (Reference). The basket is mainly the

average price which is used for different types of blends of petroleum, and it is


produced by members of OPEC. Some of the famous blends of Crude oil are Arab

light belongs from Saudi Arabia, Basra Light belongs from Iraq, BCF 17 belongs

from Venezuela, Saharan Blend belongs from Algeria, and so on. By decreasing

and increasing the production of oil, OPEC tries to keep the price between maximum

and minimum.

Figure 1.3: Global crude oil exports of OPEC countries from 2012 to 2018

(Source: statista.com, 2020)

The OPEC Basket is the most significant trademark for the pieces of crude oil

worldwide. It is also an important and famous benchmark in Crude of Dubai (Fateh),

West Texas Intermediate (WTI), and Brent of UK. It is because there are various

https://www.statista.com/statistics/209641/average-annual-spot-price-of-wti-and-brent-crude-oil/




grades and types of oils and such benchmarks are always essential for referencing

the oil market globally (opec.org, 2020).

Recently, Oman, UK, and Malaysia have made the tie-up with companies such as

Shaleem Petroleum, UK Oil & Gas, Petroleum Sarawak Berhad respectively for

increasing the exportation quantity. Additionally, it is also observed that the three

countries are now making a bond with approximately 35 oil companies and observed

a growth of 40 % in recent years. The result reflects that making a strong relationship

with the companies give the countries a lot of profit.

The research mainly sheds light on various factors of comparison of crude oil in three

countries along with their cost benefits in recent years and properties. Additionally, all

the factors of comparison are covered through the research. Finally, the researcher

also showed the cost benefits and change in properties in Oman, UK, and Malaysia.

1.7 Significance of Research

The current research study is significant as it provides the viewpoint about the cost

benefits and properties of crude oil in three countries. While investigating the actual

research matter, some essential factors that are described for making a comparison

of three countries regarding types of crude oil. The researcher has also put the focus

on the effectiveness of those key points for increasing the cost benefits as well as

exportation quantity. The idea about various types of cost benefits and properties of

crude oil is gained from current research. It has been understood that countries such

as Oman, UK, and Malaysia have to make a tie-up with the companies for enhancing

their business and increasing the amount of quantity. From the entire discussion of the

study, various ways are found for future research on similar topics.


1.8 Summary

A detailed explanation of the entire research has been covered in this chapter of the

research study. Clear concepts of comparison, cost benefits, and properties of crude

oil in three countries have been explained here. The clear demarcation of the aim and

objectives of research has helped for understanding how the research needs to

proceed. The rational has represented all the factors with statistical evidence. Apart

from that, it can be stated that those data are going to be beneficial for any future

research on any similar topic. The chapter also demonstrates the reality of the topic

as well as the current position and helps for framing the discussion of the entire study

towards a better and expected outcome.


Chapter 2: Literature Review

2.1 World Crude oil

Crude oil is the type of liquid that can collect from the earth compromised with different

compounds like- organic compounds, hydrocarbons, metal, sediments, and so on.

This crude oil is extracted from the earth or ground in a state of natural unrefined (Jia

et al. 2017). This oil has different types also depends on the density, oil consistency,

and other property. This can vary from a very thick form of liquid to semi-solid high

weighted oil. Crude oil is one of the most important and valuable resources that can

found in the crust of the earth. Energy analysis of this crude oil is directly linked with

worldwide energy and economic development. Very few researchers state that this

crude oil is playing a valuable role in the important and crucial needs of the world, such

as- industry, transportation, insulation, medicine, and other necessary aspects.

Countries economy, as well as the global economy, can be boosted by the distribution

of crude oil across the world. Researcher Jia et al. (2017) opined that in the middle of

the century the petroleum becoming very useful for people, for example- the kerosene

lamp invention. The fractional distillation of crude oil provides the opportunity for many

refined products for rises the process of refining. Thus, this crude oil provides an

economic enhancement in the worldwide approach and also presents the various uses

in different aspects. From the given below the figure, the demand for crude oil has

grown continuously with time. It is further discovered that the countries located in the

Middle-East are more occupied in the production of crude oil.


Figure 2.1: Global Crude oil production starting from 1990 to 2019

(Source: yearbook.enerdata.net, 2020)

2.2 OPEC organization and its influence on the world crude oil industry:

OPEC is an international organization where the authority shows its intervention to the

international market of oil and derived a great benefit from all of these business stages

and processes. This multinational organization extract the oil and sell it to different

countries or places and gain benefit from it (opec.org, 2020). This OPEC stands for

the Organization of Petroleum Exporting Countries. This organization created in

September 1960 at the Baghdad conference (Ji et al., 2016). The main objective of

this organization is to keep the price of crude oil at a high range and controlling the

limitless supply of this oil in a worldwide manner. According to the research studies by

the year, 1970, the price of oil as a worldwide manner was $1.30, and the domestic

price was $3.8 calculating per barrel.


Figure 2.2: OPEC Share of world crude oil reserves 2018


According to the estimate made currently, 79.4% of the world's proven reserve of oil

is located in OPEC member countries, and the bulk of oil reserves is present in the

Middle East that accounts for 64.5% of the total OPEC. This organization is dealing

with different members across the countries, and all members try to set a proper

production level by some process that can maintain the prices of crude oil. Previous

research studies state that in the year 1980 decline of the price in crude oil basically

followed the share fall of OPEC in the market of oil and also the drop of petroleum

revenue due to economic hardship and fluctuation within the member countries of this

organization (Liu et al., 2019).

2.3 Comparison of Different Types of World Crude oil and cost benefits:

The variety and different numbers of crude oil that are traded within the international

market have enhanced over the few past years by increasing the world demand on

these aspects. Figure .1 indicates that in February 2005, the price of oil in Malaysia

was US$55.10, and the average price of this oil in the UK was $45.42.


Figure 2.3: The cost difference of crude oil between 2001 and 2004

(Source: Liu et al., 2019)

Previous research studies show that cruise oil is many types such as- light oils, oils of

heavy fuel, Medium oil, and so on. Various oil the grade 1 and 2 oil, oil of diesel fuel,

marine gas oil, domestic fuels that have some property of less evaporation, volatile

and medium toxic included in the light crude oil. The oil, including grade 3.4.5 and also

6, heavy fuels include in this heavy crude oil type (Gong 2020). This heavy oil has

some basic property like- slow evaporation property, highly toxic, and this can stay a

long time on the spoil as well as water for this property. In these present days,

moreover, than 160trade of oil is present in the market but considers three types such

as- Brent Blend, OPEC, and WTI. This Brent Blend is the combination of the oil that is

collected from 15 fields cross the North Sea (opec.org, 2020). This oil contains sulfur

as the amount of 0.3%. This oil has excellent quality for producing gasoline and

distillates that are generally utilized in this country with a large quantity. Researcher

Dai et al. (2016) opined that this oil trade provides an important benchmark for the


other different cured oil in this country. The price of this oil is higher of $4 per amount

of barrel than the basket price of OPEC. The WTI is a high-quality type of crude oil

and greatly enriching by value. This contains some better property and quality. Various

studies provide the information from one barrel of WTI oil to provide good and better-

quality gasoline that is excellent in comparison to the different oils Present in the

market. This oil contains the sulfur as the amount of 0.24% that helps to make this oil

as sweet crude oil. According to the institute gravity of American petroleum

organization the crude oil considers as lighter than the water when the API gravity of

the certain oil would be greater than 10. In another process when this amount would

be less than ten, then this can be considered that the oil is heavy than water and can

sink into the water (Joo et al. .2020). This combination of property and quality and also

the location of WTI oil helps it to be the prime crude oil. This WTI oil is refined in the

gulf coast region and also in the Midwest. Previous research studies show that the

price of this crude oil is higher as $5 to 7 % than the price of OPEC crude oil. This oil

also higher price than the Bren Blend oil as this consists of a high price of $1 to 2 %

per barrel form the Brent Blend oil. The oil of OPEC collected from different crude oil

of Saudi Arabia, Indonesia, Algeria, and other countries. This OPEC organization can

have the power to create different policies and regulations for sales as well as for the

production of this crude oil with some important jurisdiction (Masoumzadehet al.

.2017). This oil contains more percentage of the sulfur component, and the price of

this oil is less than the comparison with the other two crude oil. This is the main reason

for board use of the OPEC organization across the world (opec.org, 2020).


2.4 Comparing the types of crude oil produced by Oman, UK, and Malaysia

From many researches as well as studies, it can be found that Oman mainly produces

kerosene-type jet fuel which plays a significant role in aircraft powered by the gas-

turbine engines. Most of the researchers stated that the crude oil produced by Oman

is usually heavier and has a higher content of sulfur. At the same time, it is also found

that the API gravity of Oman crude oil is also lying in the range of 40 to 46 degrees

which means that the cost of crude oil is the highest. Another researcher also stated

that API gravity above 45 degrees has shorter chains of molecules and less valuable

to the refineries (Ross, 2019, p.792). From the value of API gravity, the oil is further

classified into light, heavy as well as medium. As the crude oil produced by Oman's

API gravity is higher than 31 degrees; thus, it is referred to as light crude oil. On the

other hand, another researcher found that the UK produced 1.42 million BOE per day

in 2014, in which 59% was crude oil (Petroleum). So, it has become an importer of

hydrocarbons. Most of the production in the country coming from the offshore fields.

Studies also showed that petroleum produced by the UK contains minimum impurities

and along with that the content of sulfur is also lying in the range 0.05 to 4.0 (Numin

et al. 2020). Moreover, the API gravity of the crude oil produced by this country is

between 22 to 32 degrees. So, it can be said that the oil is of medium quality. From

the context of cost, it can be observed that UK petroleum is costing 1.496 USD.

Malaysia is mostly engaged in producing Tapis crude oil that is mostly used as a

pricing benchmark in Singapore. From the research, it is found that the Malaysian

crude is very light, and API gravity is ranging between 43 to 45 degrees, and the aroma

is sweet. Moreover, it is also found that the content of this crude oil is 0.04%. This


crude is not traded on the market like Brent Crude but used as oil marker in Australia

as well as Asia (Parsvaand Tang,2017., p.836). Less content of sulfur is also

responsible for less refinery processing than other crude oil, and hence, the price is

also not too high.

2.5 Statistical information about Word Crude oil:

This day is based on the monthly average price setting of the 60diffenrt crude oil

products. The change of global market demand is responsible for the increase in the

price and product in this crude oil globally. The creation of the OPEC organization is

responsible for bringing a wide change of the Monopoly oil market across the country.

In the year 1973, the price of this crude oil was $9 per barrel, and this becoming $

11.65 in this current year. This is a drastic change in price due to the rise of demand

for this oil. The financial crisis in a global manner that rises in a higher level that is

recorded as a high price of $147 per barrel (Sun et al. .2020). Previous researchers

state that in this 20th century, this can be seen that the USA is known as one of oil

producer that lead the oils producing process as the world wide manner. This present

world economy depends on this file of fossil fuel and crude oil aspects. In these

present-day innovations of OPEC in the mechanism of the price, the brand helps to

control and stabilize the price of crude oil. According to various research studies, the

industrial growth and due to the current populations, the price of the oil rocketed as

the record level before the recession of the economy (opec.org, 2020). However, this

OPEC organization plays a major and dynamic role in regulating and stabilizing the

global market of crude oil with some process of energy poverty distribution, firm

distribution approach, and control nationally over the reserve of energy. In the

September conference of 2005, the OPEC organization provides an effective


framework and vision for the future of organizations by analyzing the role of crude oil

in the future of energy demand (Demirbaset al.2017). According to different

researchers, various factors and forces that drive the present oil market have many

different forms from many years ago. Statistics of EIA provides an understanding of

the east to west flow of cruise oil by analyzing the oil as the demanding resource.

Figure.2 provides the information on projected oil production by the member of non-

OPEC and the OPEC as per the million barrels in one day.

Figure 2.4. Production of Crude oil

(Source: Demirbaset al., 2017)

The below figure.3 presents the statistics of crude oil supply as a worldwide manner

and also provided the statistic of barrel per day from the year 2014 to 2020.


Figure 2.5: The world crude supply of oil from 2014 to 2020.

(Source: Abaas et al. 2018)

According to the statics of world crude oil, Russia have a high leadership position in

the world's largest oil producer as it produces approximately 10551500 billion barrels

in one day.

2.6 Scenario of Crude Oil industry in different countries

Globally, crude oil is considered to be the most important source of fuel, and it has

contributed the most in energy consumption across the globe. According to OPEC,

Saudi Arabia is the largest producer of oil in the world. Along with Saudi Arabia,

different countries play a significant role in producing crude oil (opec.org, 2020). From

most of the studies, it is found that Malaysia is producing the best quality of crude oil.

Another study stated that the production of crude oil in Oman has increased to 1108

BBL/D/1K in April 2020 from 1078 BBL/D/1K in March 2020. At the same time, it is


also discovered that the exports in Oman decreased from 1197.50 OMR Million in

February 2020 to 1109.80 OMR Million in March. At present, the price of Oman crude

oil is 50.74 US dollars, and according to DME, the price has hiked by 15 cents.

Figure 2.6: Crude Oil production in Oman

(Source: tradingeconomics.com, 2020)

From the statistics, it is found that Malaysia, at current, is holding 3,600,000,000

barrels of proven reserves for oil and ranks 28th in the world. The country is producing

762,168.43 barrels of oil per day and ranks 25th in terms of production. According to

Trading Economics, the production of crude oil in Malaysia is expected to be 640.00

BBL/D/1K by the end of 2020 (indexmundi.com, 2020). Recently, the country has also

welcomed the supply reduction agreement between the members of OPEC and its

allies as the country believes that it would help them in stabilizing the market of global

oil and ensure security in terms of supply to the customers. In June 2020, the price of

Malaysian Crude oil was 168.71 Malaysian Ringgit that has changed by 27.83%.


Figure 2.7: Oil Consumption and Production in Malaysia

(Source: energy.economictimes.indiatimes.com, 2020)

In the long-term, the production of crude oil in a country like the UK is projected to

trend nearly around 800.00 BBL/D/1K in the year 2021 and 750.00 BBL/D/1K in 2022

as per the models of the economy. Due to COVID 19, it has been estimated by the

OPEC that the UK Crude is down around 30% this year, and this has affected the

economy of the country adversely (opec.org, 2020). It is further found from most of the

research that the sector of oil and gas has been negatively affected due to a reduction

in the price of oil (markets.businessinsider.com, 2020). At present, the price of crude

oil in the UK is forecasted to be 47.88 US dollars per barrel in 2021, and this has been

forecasted as of June 2020. In January in 2020, the price was 67.53 US Dollars per

barrel. The price has collapsed due to the pandemic as well as production disputes

between the country such as Russia as well as Saudi Arabia.


Figure 2.8: Production of Crude oil in the UK

(Source: tradingeconomics.com, 2020)

2.7 Literature Gap

In this existing literature, various important aspects of crude oil are described by

following some possible future contracts also. Previous studies of different researches

provide basic information about crude oil in the context of several types and trades.

This research article focused on the discussion of each type of crude oil, especially

three types and also provided some valuable information about the three important

trade of this crude oil. Previous studies convey the three basic types of trade; however,

this literature studies also highlight the more important trade as per OPEC context.

This study of literature review provides the possible future scope for this crude oil

markets in the approach of clear vision and also covey the reason bending the

importance of different noncommercial trades.


2.8 Summary

In chapter two, the literature review contains different discussions related to the topics.

This discussion focused on the concept and present situation of world crude oil, the

influence of OPEC organization in the crude oil markets, different types of crude oil

and the price, some statistical information of this oil, and also discussed with the

information of the future scope of this market. Chapter six focused on the discussion

of the overall conclusion by providing each chapter analyses.

Chapter 3: Methodology

3.1 Introduction

Research methodology offers a systematic approach by which data is integrated into

the research project. Data acts as the basis of any research project for it is the primary

source of interpretation and leads the path for assuring relevant knowledge by the

topic. The chapter, therefore, has included different approaches, design, tools that

have been used to accumulate information. Identification of proper tools helps to

conduct a research project systematically, and that is the prime target of this segment.

3.2 Research philosophy

Research philosophy revolves around the collection, analysis, and interpretation of

relevant information. The philosophical assumptions help to formulate concepts

according to the topic which ensures the generation of profound conclusions. The

ability to provide a clear concept is the primary reason for its incorporation in the

research project (Mohajan, 2018). Three types of philosophies are there naming

ontology, axiology, and epistemology. The epistemology is mostly addressed for its

nature of deriving knowledge from a preconceived notion. Interpretivism, realism, and


positivism are the three parts of this philosophy, and the positivism philosophy has

been addressed for this particular project.

Justification

Identification of proper philosophy leads the path for deep understanding. Based on

the opinions of positivists, it can be said that stable realities can be internalized by

objective viewpoints. The existing theories, models, concepts help in the analysis of

research findings upon which gathering of knowledge is dependent. A large number

of quantitative information has been generated to present a comparative discussion of

the benefits of oil, which needs a positivism approach for its ability to analyze statistical

information systematically. The requirement of presenting information through

observations, critical understanding, therefore, has prompted the researcher to adopt

a positivist approach over others.

3.3 Research approach

The research approach determines the procedures for interpreting a generation data

set. The accuracy of key information is maintained through the incorporation of such

approaches as it helps to gather data according to the research objectives. A large

number of variables can be accumulated and presented in the project using the

research approaches. Based on the opinions of Zangirolami-Raimundo et al. (2018),

mainly two types are used to focus on the relevant attributes, and they are inductive

approach and deductive approach. The inductive approach focuses on the generation

of new concepts while the deductive approach centres around the analysis of

information taking consideration of existing knowledge. The deductive approach in

this respect has been chosen by the researcher to present data in a structured manner.


Justification

The deductive approach determines the evaluation of scholastic viewpoints against

the accumulated information to have a deep understanding of the undertaken topic.

Based on the excreted information, the ideologies are either accepted or rejected. The

concerned approach is also helpful for systematically answering the research

questions taking consideration of both qualitative and quantitative information. The

acknowledgement of crude oil types and cost benefits requires the assimilation of a

large range of information for comparative discussions (Langer et al. 2016). The

inductive approach in this regard is not required for its focus on generating new

concepts. Following guidelines of the deductive approach, the scholastic presentations

have been procured to analyze information in a significant manner. The bottom-up

approach is necessary to understand the perimeters of the oil business, and for this

reason, the usage of the inductive approach has been eliminated.

3.4 Data collection technique

Proper data collection leads the path for gathering accurate knowledge. Two types of

data are integrated into the research projects, and they are primary and secondary

data. Primary data refers to the survey, interview, case studies while secondary data

has its basis on the journals, articles, books, and others to communicate concepts.

According to Fletcher (2017), primary data, on the other hand, can be of both

qualitative and quantitative. Qualitative information refers to the descriptive types of

information, whereas numerical values are considered quantitative information. The

research project has focused on the generation of quantitative information through a

survey. Using a random sampling technique, the researcher has 51 individuals from

different oil companies to understand their perception of the chosen topic. Close-


ended questionnaires have been prepared for the accumulation of responses from the

participants and using accurate tools, the opinions have been evaluated to derive

profound conclusions.

3.5 Data analysis tool

Data analysis is one of the most crucial parts of any research project. The process of

transforming raw information into a subjugated knowledge regulates the accuracy of

the concerned project, as opined by Basias and Pollalis (2018). Different types of data

analysis tools such as predictive analysis, text analysis, prescriptive analysis are

included in the projects for transcription information. The generated quantitative data

in this research project have been analyzed through graphs and charts. Several books,

journals, websites have also been considered to understand the basic concepts of oil

companies' operations to evaluate it against the generated perceptions. Tools like

survey have helped the researcher in collecting the relevant piece of information from

the companies like Shaleem, UK Oil & Gas as well as SawarkBerhad from Oman, the

UK as well as Malaysia. This has helped the researcher in knowing how crude oil

produced by these countries are different from each other. Moreover, the secondary

source has helped the researcher in knowing about the key features of different crude

oils and how they make a unique product.

3.6 Reliability and validity

The reliable and valid approach of a research project assures its successful

completion. Scrutiny of data before its presentation in the project is the primary step

for maintaining reliability and validity. The technical tools also offer great help in

assuring accuracy and reliability. The prepared questions for the survey have only

been centered on the oil crude oil types and cost-benefit measures of the organization,


following the guidelines of Chen et al. (2018), thereby eliminating the scope for

generating irrelevant information. The limited scope of answering has also paved the

path for addressing accurate information. The usage of excel sheets has prompted the

reliable presentation of the analyzed data. The researcher has also focused on the

termination of biased presentation, and thus, reliability and validity standards have

been maintained.

3.7 Ethical considerations

Ethical grounds also prompt the maintenance of accuracy and reliability. The

researcher has assured the implementation of ethical guidelines to protect its valid

nature. Consent forms have been provided to the participants to generate their

agreement for expressing notions. No discriminatory behaviour has been showcased

in the survey procedure to hamper the mindset of the individuals. Random sampling,

on the other hand, has eliminated the scope for biased presentation. The accumulated

information has solely been used for academic purposes, and the confidentiality of the

raw information has been maintained. The guidelines of the Data Protection Act (1998)

have been maintained to ensure the accuracy of the concerned projects.

3.8 Timeline

[refer to Appendix 2]

3.9 Summary

The detailed discussion has paved the path for understanding the importance of

different methodologies in the research projects. The methods used for the

accumulation of information related to the crude oil industry has also been shed light

upon for a brief understanding. Justifications of addressed approaches have been


inserted along with the timeline to provide the ideas of the accuracy of the project. The

importance of reliability and authenticity by maintaining ethical standards have also

been communicated to develop a critical understanding of research methodologies.

Chapter 4: Results

4.1 Introduction

Analyzing the data is considered to be the most crucial aspect of any research. This

is the process of systematic application of logical as well as statistical approaches for

describing, illustrating, and evaluating the data. Thus, an essential component for

ensuring the integrity of data is hence said to be a suitable and perfect analysis of the

findings from the research. Hence, this section is the most important in this research

as this compares the quality of crude oil produced by three different companies from

three different countries such as Oman, the UK, and Malaysia. Thus, in this section,

the researcher carries out a quantitative analysis of the data. Here, the researcher is

interested in surveying 51 respondents from three different companies.

4.2 Quantitative Analysis

In this study, the survey is going to help the researcher in finding out opinions as well

as behaviors of different respondents either buying crude oil from different oil

companies in countries like the UK, Oman, and Malaysia or working there. From the

survey, the researcher can out the quality of crude oil exported by these companies,

their cost, and other related parameters that are helping the companies in competing

with each other. Thus, here, the researcher chose Shaleem Petroleum from Oman,

UK Oil & Gas from the UK, and Sawark Berhad from Malaysia.


Question 1: According to you, why crude oil is considered to be the primary

resource of energy?

Reasons Total Respondents

Number of respondents

Percentage

Can be used in airlines and transportation fuels

51 14 7.14

Essential for the production of plastic

51 13 6.63

Can be utilized for doing agricultural businesses

51 12 6.12

Used in making chemicals like fertilizers, soap, perfume and so on

51 9 4.59

Used in making cosmetics 51 3 1.53

Table 4.1: Survey Question 1

(Source: Created by the Researcher)


Figure 4.1: Graph for Survey Question 1


Analysis

From the table as well as the graph demonstrated here, the importance of crude oil

has been stated. In this aspect, it is truly said that crude oil is the primary resource of

energy as most of the essential things of human lives are manufactured by taking the

help of this. From the survey response, it can be observed that 4.59% of the

respondents believed that crude oil is essential for making the chemicals of daily use

such as soap, perfume, fertilizers, paints, and so on. At the same time, most of the

respondents also showed their responses in the production of plastic, and the

percentage for this response was 6.63%. At the same time, it is also seen that 7.14%%

of the respondents also believed that crude oil is essential for the production of

transportation fuels.

0 10 20 30 40 50 60

Can be used in airlines and transportationfuels

Essential for the production of plastic

Can be utilized for doing agriculturalbusinesses

Used in making chemicals like fertilizers,soap, perfume and so on

Used in making cosmetics

Titolo del grafico

Percentage Number of respondents Total Respondents


Question 2: How many barrels of crude oil are consumed in your respective

nations?

Barrels/day Oman UK Malaysia

0.1 Million to

5Million

183,000 838000

5Million to 10

Million

1,583,896

10 Million to 500

Million






Analysis

From this question, the researcher has tried to compare crude oil consumption in three

different countries. From the survey, it is seen that the UK is consuming the most. The

UK consumes 1,583,896 barrels of crude oil per day, and it is ranking 15th in the world

for oil consumption. This is accounting for nearly about 1.6 % of the total consumption

of crude oil in the world, i.e. 97,103,871 barrels per day as per OPEC. Then, as

illustrated in the graph as well as the table, Malaysia consumes 838000 barrels per

day, and its global ranking in this context is 28. But at the same time, it can be seen

that Oman is consuming only 183,000 barrels and ranking 57th in the world for the

consumption of oil. This country is accounting for only 0.2% of the world's total

consumption.


Question 3: How the cost of crude oil is fluctuating in Oman, the UK, and

Malaysia?

Price ($) Oman UK Malaysia

20-30 31.50

30-40 33.45

40-50 44.47

50-60






Analysis

From the given table and graph, it can be seen that in a country like Oman, the price

of crude oil is fluctuating the most. In this aspect, it can be said that the price of crude

oil is widely affected due to supply, demand, and geopolitics. From the graph, it is

observed that the price of oil in Oman is $44.47 whereas, in the UK, it is $31.50 and

that of in Malaysia, it is $33.45. Thus, in this context, it can be said that, in the UK, the

price of the lowest.


Question 4: What are the reasons for fluctuations in the cost of crude oil in

different countries?

Factors affecting

oil price

Total Respondents Number of respondents Percentage

Current supply as

well as output 51 14 7.14

Future supply as

well as reserves 51 13 6.63

Demand from

major countries of

the world

51 12 6.12

Political crises

and events 51 9 4.59






Analysis

The researcher has framed this question for identifying the factors that affect the price

of oil in different countries. The price is mostly determined by the global supply as well

as demand. Thus, the same thing has been shown in the graph. Future supply, as well

as the reserve, is contributing the most in this matter. It is also seen that most of the

respondents also said that the price is depending on the demand from major countries

of the world, and this is accounting for 6.12 % out of 100%. Thirdly, it is also observed

that 7.14% of the respondents also believed that the price of fluctuating due to the

current supply of crude oil. Only 4.59% of the respondents believed that due to the

political scenario of a particular nation, this price varies. At the time of formulating this

question, the researcher also found that the supply of oil, as well as its price across

0 10 20 30 40 50 60 70 80

Current supply as well as output

Future supply as well as reserves

Demand from major countries of the world

Political crises and events

Titolo del grafico



the globe, is mostly influenced by OPEC as this sets a target for the production for its

members.

Question 5: Do you agree that OPEC plays a significant role in affecting the oil

price?

Response Total respondents Number of respondents

Percentage

Strongly agree 51 10 5.1

Agree 51 20 10.2

Neutral 51 5 2.55

Strongly disagree

51 10 5.1

Disagree 51 6 3.06






Analysis

From this survey question, the researcher has tried to evaluate the importance of

OPEC in determining the price of crude oil. Here, it can be observed that most of the

respondents agreed that OPEC has a significant impact. While it is also seen that

2.55% of the respondents were neutral on this matter as they agree and also disagree

in some matter. Least respondents showed a negative response to this question, and

the percentage was 5.1 and 3.06. In this context, the researcher has gathered relevant

information related to OPEC (opec.org, 2020). The researcher has found that OPEC

is responsible for unifying and coordinating the petroleum policies concerning its

member countries and hence ensuring that the oil markets are stabilized enough for

supplying oil to the customers regularly (Al-Eitan and Al-Zeaud, 2017).

0

10

20

30

40

50

60

Strongly agree Agree Neutral Stronglydisagree

Disagree

Titolo del grafico

Total respondents Number of respondents Percentage


Question 6: What is the position of Oman, the UK, and Malaysia in crude oil

production in the global market?

Countries The current

position in oil

export (Rank)

Barrels of Oil

exported (In

millions)

Barrels of oil

produced (In

million)

Oman 21 310.3 998.3

The UK 19 896 1.7

Malaysia 25 16.5 1.7






Analysis

This survey question has helped the researcher in identifying the major exporter of

crude oil in the world. From the table, it is observed that at present, Oman is in the

21st position from the perspective of production. Amongst the three countries, the UK

is 19th as this country is exporting 896 barrels of crude oil at the international level.

From the survey, the researcher found that Malaysia is the key oil, as well as gas

producers in the Asia-pacific region as this country, is producing over 1.7 million

barrels of crude oil (Mesaganet al. 2019).


Question 7: According to you, which country's crude oil is the best?

Countries Total Respondents Number of

Respondents

Percentage

Oman 51 10 5.1

Malaysia 51 31 15.81

UK 51 10 5.1





Total Respondents

Number ofRespondents

Percentage

0 10 20 30 40 50 60

UK Malaysia Oman


Analysis

From the above table and graph, it can be observed that most of the respondents said

that Malaysia is producing the best quality of crude oil in the world. 15.81% of the

respondents said that Malaysia is exporting the best quality of crude oil to other

nations. At the same time, it is further observed that the UK is ranking second in terms

of oil export. 5.1% of the respondents showed their response to the UK, whereas only

5.1% of the respondents said that Oman is exporting and producing the best quality

of the oil. In fact, at the time of investigating more on this question, the researcher also

found that Oman is importing crude oil from the UK.


Question 8: What are the key substituents present in the crude oil that makes

the best and superior quality of the oil?

Key

substituent

Total

Respondents

Number of respondents Percentage

Sulfur

content

51 15 7.65

TAN 51 5 2.55

API Gravity 51 20 10.2

Hydrocarbon 51 11 5.61






Analysis

From the given table and graph, the researcher has analyzed the quality of crude oil

and how Malaysian crude oil is better than crude oil supplied by UK and Oman can be

evaluated. From the table, it can be observed that 10.2% of respondents said that API

gravity is the most crucial thing that is responsible for making the quality of crude oil

superior. 5.61% of the respondents also believed that hydrocarbon also plays a

significant role in enhancing the quality of the oil. In the meanwhile, 7.65% of the

respondents also agreed that sulfur content in the oil is also affecting the quality of the

oil. Only 2.55% believed that total acid content in crude oil is responsible for enhancing

quality (Ji and Fan, 2016). In this context, the researcher also found that price per

barrel difference between the crude oil of superior as well as low quality plays a

significant role. Hence, in this context, the researcher states that API gravity, as well

as the content of sulfur in the oil, are two crucial measures for quality of the crude oil,

Sulfur content

TAN

API Gravity

Hydrocarbon

51

51

51

51

15

5

20

11

7.65

2.55

10.2

5.61

TITOLO DEL GRAFICO

Percentage Number of respondents Total Respondents


along with that, TAN is also playing a major role as this is affecting the price of a barrel

concerning the crude oil. Hence, in this aspect, it can be said that Malaysian crude oil

is the best one (Hussain et al. 2019). Furthermore, the researcher also found that

Malaysian crude oil is of high price because of the purity of the blend. It also contains

less sulfur content, thus requires a minimum amount of refinery processing than other

crude oils.

Question 9: According to you, how crude oil is affecting the economy of any

country?

Impact Total Respondents

Number of respondents

Percentage

Fall in the market price

51 20 10.2

Increases the aggregate demand in the economy

51 10 5.1

Increases investment and enhances the demand for downstream

51 15 7.65

Increase the GDP of the country

51 6 3.06




Figure 4.9: Line graph for Survey Question 9


Analysis

From the table as well as a graph, it can be observed that most of the respondents

agreed to show their response to a rise in the level of GDP of the country. Nearly about

3.06% of respondents agreed that crude oil is responsible for increasing the GDP of

the exporting nation. 30% believed that crude oil is responsible for reducing the

investment and less exploration in any sea and also purchases less from the supply

chain present at downstream (Aidrous and Glavina, 2020). At the same time, it is also

observed from the table as well as a graph that crude oil is responsible for lowering

the market prices and hence knocks it with the help of revenue as well as profit. 5.1%

of respondents also believed that this is responsible for affecting aggregate economic

51

20

10.2

51

10

5.1

51

15

7.65

51

6

3.06

0 10 20 30 40 50 60

TOTAL RESPONDENTS

NUMBER OF RESPONDENTS

PERCENTAGE

Titolo del grafico

Increase the GDP of the country

Increases investment and enhances the demand for downstream

Increases the aggregate demand in the economy

Fall in the market price


demand. Apart from that, the researcher, on more investigation found that the price of

crude oil is indirectly affecting the cost like manufacturing, heating as well as

transportation (Kazem and Chaichan, 2016). Hence, it is considered to be an important

thing for the economy of any nation.

Question 10: Do you believe that using DCPIP method can be beneficial for

analyzing the degradation of crude oil that comprises of high sulfur content?

Response Total respondents Number of respondents

Percentage

Strongly agree 51 10 5.1

Agree 51 20 10.2

Neutral 51 5 2.55

Strongly disagree

51 6 3.06

Disagree 51 10 5.1






Analysis

From this question, it can be seen that most of the respondents agreed to the fact that

the DCPIP method can efficiently find out the reason for the degradation of oil quality.

In this regard, 3.06% denied this fact as they don't believe that the quality of crude oil

can be enhanced as it is a natural resource. In this context, the researcher also found

that bacteria present in the crude oil is affecting the quality of crude oil. Along with that,

the researcher also found that the DCPIP method can change the colour of oil after

the oxidization of the hydrocarbons present in the oil.

0

10

20

30

40

50

60

Strongly agree Agree Neutral Stronglydisagree

Disagree

Titolo del grafico

Total respondents Number of respondents Percentage


4.3 Cost-Benefit Analysis of three chosen companies

Particulars Shaleem

Petroleum

SawarkBerha

d

UK Oil &

Gas

Benefits (in $-M)

Increase In revenue 250.9 304.02 500.5

Increase in Additional Revenue 30 40.5 25.9

Total Benefits 280.9 344.52 526.4

Costs (in $-M)

Oil-related defence expenditures 49.1 137.8 140.7

Loss of domestic investment 123.3 117.4 120.5

Cost of periodic oil-supply

disruptions

82.5 132.8 145.4

Total Costs 254.9 388 406.6


Benefits Cost Ratio 1.102000785 0.887938144 1.29463846

5

Table 4.11: CBA for three companies

(Source: Created by the researcher)

Analysis

For CBA, the researcher here took the help of Excel software. For achieving the

outcomes, in this case, the researcher has followed a number of steps. In the

beginning, the key parameters for calculating the cost as well as benefits have been

considered. Then, the researcher has added the parameters to get the total value of

cost as well as benefits with respect to the three chosen companies Shaleem,

SawarkBerhad as well as UK Oil and Gas. Them, the total benefit value is divided by

the cost value so, the resultant value is obtained. The ratio obtained in this case has

helped the researcher in analysing the ration of cost and benefit efficiently. From the

above table, the CBA for three petroleum companies operating in different countries

can be demonstrated. From the table, it can be observed that the revenue for UK Oil

and Gas has increased the most followed by SawarkBerhad and Shaleem Petroleum.

At the same time, for the petroleum company located in Oman named Shaleem, the

increase in additional revenue is the maximum. After calculating the benefits, it can be

drawn that UK oil & gas has earned maximum benefits. Thus, in this aspect, it can be

said that the value of the benefit depends on an increase in revenue. All the values

are estimated in dollar Million. For analyzing the cost value, here, three parameters


have been considered. In the case of oil-defence expenditures, it can be observed that

for UK Oil & gas, it is maximum. Along with that, it is further observed that UK Oil &

gas has a maximum loss in the context of domestic investment whereas, for Shaleem,

it is the lowest. Another thing that can be seen from this, the cost of periodic oil supply

disruptions is lowest for Shaleem. Hence, after calculation, the total cost incurred three

companies, namely; Shaleem, SawarkBerhad, and UK Oil & Gas are as follows: 254.9,

388, 406.9, respectively. The ratio of benefit and cost is maximum for UK Oil and Gas,

whereas the lowest for SawarkBerhad. As this ratio is greater than 1 for Shaleem and

UK Oil & gas, thus, it can be said that they have greater benefits than costs. Hence,

they have positive net benefits. In the case of SawarkBerhad, the ratio is less than 1.

Hence, the cost is greater than the benefits.

4.4 Summary

The entire section is comparing the quality of crude oil produced by three different

countries, namely the UK, Oman, and Malaysia. In this section, the researcher

surveyed 51 respondents related to this industry. The survey has assisted the

researcher in knowing the truth and facts of this industry and how crude oil is produced

by different countries and how they are competing with each other. In this section, the

researcher framed ten questions and then analyzed the entire scenario. Moreover,

researchers with the help of a survey also found that crude oil plays a significant role

in economic growth as well as disruptions of the country (Hameed et al. 2017).


Chapter 5: Discussion

5.1 Introduction

The study mainly is focused on the objectives for generating the comparison of crude

oil, including the cost benefits and properties in three countries with their bond with

respected companies as well. Focusing on the research aim of the analysis of

research, it needs to develop a detailed and informative Literature Review for

analyzing the comparing factors of crude oils with the properties and benefits of cost

in Oman, UK, and Malaysia. Based on the objective, the research study mainly has

focused on various statistical evidence that can give a strong comparison. The root

analysis of the Literature Review is done for measuring the different types of

effectiveness and the strong connectivity of the countries worldwide. The section of

discussion is also used for analyzing basic findings for generating the factors for

comparison regarding crude oil. It is also obtained by using the survey analysis as per

the priority of motivation of research for the factors of comparison as well as properties

and benefits of cost as well. The analysis also helps in understanding the concept

briefly and focused on the analysis of research for achieving the aim of the research

study.

5.2 Discussion of LR

Focusing on the discussion part, it mainly provides a depth concept about the section

Literature Review. It is observed that the section is mainly used for analyzing the

concept regarding various theories on that topic. The LR section also covers the

theories regarding world crude oil with various cost benefits and properties. After the

critical analysis, it can be said that Shaleem Petroleum is taken as an Oman Based oil

company, and it is one of the leading locally-owned Omani companies. It is delivering


work over and well-maintained service over 15 years in a row. Now, Shaleem

Petroleum employs more than 250 people, and it now proudly represents the

ownership of the interest over more than 400 shareholders (shaleem.co, 2020).

Similarly, Oil & Gas UK has tie-up with the UK government, and it is the champion

among all the sectors. There are also definitive information sources that are applied

for upstream of the UK, and it is mainly the gateway to the network industry. Oil & Gas

UK (OGUK) is the representative company on a leading role for the offshore industry

in Oil and Gas. It is a non-profit organization which is established in the year 2007 with

the stretching back pedigree for more than 40 years.

On the other hand, it is accessed by depending upon the workgroups and led forums

of industry. OGUK has the membership, which provides a valuable opportunity for

making shape through the agenda of industry and works collaboratively with the peers

of industry (oilandgasuk.co.uk, 2020). It is also used for identifying and promoting good

practices in the research. Some key things are provided by OGUK such as raising the

offshore profile, promoting the dialogue across all the sectors, and influencing for

generating activities including the fiscal, technical, issues regarding skills and safe

environment along with solutions on brokering (oilandgasuk.co.uk, 2020). It also needs

to develop initiatives and delivering a well and structured program worldwide.

Petroleum Sarawak Berhad - PETROS is a Malaysia based exploration firm of Oil

and Gas. It is an integrated player throughout the value chain of natural gas and oil.

The company mainly has a tie-up with Malaysia and provides a large quantity of crude

oil which is exported worldwide (Vidmar and Perkovič, 2018). The organization is

growing rapidly for delivering the strategy for creating value and ambitions on the

footprint.


Figure 5.1: Share of OPEC in Reserving World Crude Oil


According to the basic estimation, more than 79 % of oil reserved and located in the

Member countries of OPEC. It uses all the percentages from different countries with

the bulk of the oil reservation of OPEC in the Middle-East and has the amounting of

approximately 64.5 % of the total of OPEC (Suet al. 2017). The member of the

countries of OPEC has additions significantly to the reserve of oil for the past few

years. For example, it needs to adopt the best practices which are used for intensive

exploration as well as enhancing the recoveries. The OPEC also proves that their

reserve of oil currently stands with more than 1,190 billion barrels (opec.org, 2020).


Figure 5.2: Taxes in Oil


The above graph illustrates the variations of inter-country as well as the average price

per litre of oil across the G7 Countries according to the average of OECD during 2018

(opec.org, 2020). It is also important that the variations on the prices occur to widely

varying levels of the taxes (in red color) and impose by consuming nations of major

oil. It is the range relatively on the levels on moderate such as the USA to high-levels

in Asia and Europe.

Analyzing various theories of Literature Review, it is found that every theory is related

to the concept of world crude oil along with properties and cost benefits. From the

concept influence of OPEC Organization on the crude oil industry of the world, it is

obtained that there are several statistical pieces of evidence on that point as well the

benefits of cost. Discussing the crude oil industries of different countries, it mainly

covers the industry related to crude oil with year-wise analysis on it (opec.org, 2020).


In this part, the researcher has also focused on the area of findings throughout the

research. According to the development of the project, it can be stated that the

researcher has provided productive and furnished literature to implement the aspects

of literature (Kretschmann et al. 2017). Through the main concept of benefit in the

market and future scope in three countries, various factors are explained as per

requirements. The Literature review also portrays various theories regarding cruise oil

in different countries, and these are also explained in a structured format.

5.3 Discussion of Findings

The section of findings of the research study helps to relate with the concept of real-

world comparison of world crude oil along with the properties and cost benefits in three

countries, namely Oman, UK, and Malaysia. The section generally helps to make the

connection with the aim of the research with the objects of the real-world and also

evaluates different types of importance as well as effectiveness through the analysis

of research. Focusing on the objective of the research, it states the comparison of

world crude oil of Oman, UK, and Malaysia. The analysis of research performs a

survey analysis, and the survey shows that there are various benefits of cost with the

properties in world crude oil in Oman, UK, and Malaysia. It is also done for finding the

opinion along with the behaviour of different respondents from different companies of

oil in countries like Oman, the UK, and Malaysia. It is also observed from the first

question that the reason behind the consideration of crude oil as primary resources.

30.3% of people have answered that it can be used for airlines and fields of

transportation, 21.21 % of people state that it can be utilized through plastic

production, 10.1 % of people have preferred that it can be used for business regarding

agriculture, 30.3 % of people also selected the option- for making chemicals like soap,


perfume, fertilizers and so on while 10.1 % of people have selected the option - for

making cosmetics. From the one question of the survey, it can be believed that

maximum people are going for making chemicals like soap, perfume, fertilizers from

crude oil.

Through the part of data analysis, the researcher has developed the analysis of the

survey for making the comparison of world crude oil and the benefits of cost for three

countries. The researcher has taken 51 respondents from different companies and

tries to collect the statistical data for assuming the world crude oil and cost benefits of

Oman, UK, and Malaysia. There are various questions developed by a researcher that

can be used for developing the process of survey, and the questions are also too

hectic. There are various options for maintaining the manner of ethics and done

confidentially that also portrays that the sample size for developing the answer is not

ethical and legal.

5.4 Summary

According to the part of the discussion, it can be analyzed that the data analysis and

literature review both are a major part of any research project as both parts consist of

different types of database which are collected from survey analysis. The researcher

has also focused on the quality of crude oil generated by three countries such as

Oman, the UK, and Malaysia. After all, the survey is also done to know the facts which

are true in the oil industry and how various types of crude oil are produced along with

their competition. On the other hand, it constructs ten questions and analyzes the

entire scenario. However, the researcher has found the significant roles plays by crude

oil from the survey, along with its contribution to the economy of the country. Therefore,

it is assumed that explanation of research objectives and motives has been fulfilled by


the researcher. Therefore, it can be summarized that the data analysis and Literature

Review is the most appreciated process.

Chapter 6 Conclusion:

Conclusion

This entire project work provides different valuable pieces of information about this

crude oil market and cost-benefit analysis. This project focused on the discussion of

the literature review, project methodology, results of the research, and other important

information. This thesis also helps to analyze different types of prices according to the

types of crude oils and trades. These different prices of crude oil can drive the primarily

demand criteria as well as the satisfaction of consumers in the present and futures

markets. The intervention of OPEC deals with different risk and the problem of the oil

market and also help to bring the possible solution. OPEC control and regulate the oil

exportation across the worldwide aspect with its different member countries. Different

statistical information depending on the market situation also includes this important

information that analyzed the present market situation and cost, benefit aspects of this

crude oil market. The result, as well as discussion parts, also provide the information

on the cost-benefit aspect to three different countries and also analyzed this piece by

using essential software.

Linking with objectives

This project research focused on the different objectives of this research work based

on the topics. As per the first objectives of this project work on the investigation of

these crude oil concepts, types, rate of the prices, and others' perspectives and also

provides the statistical information in the context of three different countries. The result


parts also focused on the cost-benefit analysis of this crude oil industry and the

exportation properties by adopting some analysis approach like- software analysis

process and this discussion help to link with the second objective of this project, as

per the third objective the discussion of this project especially the discussion part and

the part of the literature review also focused on the current pricing aspects of this oil

in several countries. Various research studies of this project work also meet with the

third objective that highly the influence of OPEC in the present oil industry to exporting,

regulating, and controlling different aspects related to this crude oil market situation. It

is because this OPEC is an important organization that related to multi-international

companies and deal with various activities of this oil industry. The last objectives that

focused on the quality of crude oil and its improvement also liked with this project in

the part of the recommendation. Thus, then the entire project approach focused on

different valuable information parts related to his crude oil industry and market.

Limitation and future scope -

The most popular and common limitation of this oil industry is the resource of oil. As

this extract from the earth, this can bring an effect on the ecosystem as well as on the

natural resource of this environment. Also, the rate of production of this crude oil is

higher than the conventional reserve. This oil is collected from the are nonrenewable

energy sources, and therefore this cannot be eternal during many times or years (Genc

2017). During the burning time of this crude oil also can produce some carbon dioxide

gasses, and it brings major effects on the environment by increasing the greenhouse

gas effect. The import cost of this crude oil is also expensive, that has a high demand

in various countries. As this crude oil comes from a nonrenewable resource; therefore,

the import cost, as well as the production cost, is high, and demand is also vast across


the world. The cost of electricity produced by coal gas is less than the cost of crude

oil. Despite these, all barriers to using this crude oil this oil have broadly useful

throughout the world with different aspects. This crude oil is used for different aspects

like- uses of gasoline, use of jet fuel, heating oil that is used to heat the building, use

of diesel fuel, and so on (Alhajeriet al., 2019). Most of the parts of the economy can

be influenced by this crude oil as this has a high demand in the present and also will

be demanded in the future market. When the producer can control all the necessary

aspects and can make some proper strategies to resolve all barriers, then this

opportunity can make the oil industry on a large demanding scale in the future. Also,

many problems with the industry can arise in this business cause of various incidents

like- leakage of gasses, delay in sustainable approach, and so on. Therefore, the

organization always needs to focus these all aspects, and this approach can open

various future scope for this industry.

Recommendation-

The industry of this crude oil needs to give it's more focused to control and resolve the

different problems related to this oil market and quality. Also, they need to focus on

the sustainable approach of oil marketing and business. The consumer can satisfy by

the best quality of this crude oil; therefore, all the organization related to the export

and precaution activity of oil needs to focus on the quality of the oil also. High density,

as well as a high component of carbon, can signify poor quality crude oil. Therefore,

the organization needs to avoid these types of oil; they also can adopt some

techniques to reduce the properties from the oil. When a company starts to focus on

high-quality crude oil, then this can create an opportunity of high profit for those current

organizations.


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Appendix

Appendix 1: Survey format

Question 1: According to you, why crude oil is considered to be the primary

resource of energy?

Reasons Total Respondents Number of

respondents

Percentage

Can be used in airlines

and transportation fuels

51

Essential for the

production of plastic

51

Can be utilized for doing

agricultural businesses

51

Used in making chemicals

like fertilizers, soap,

perfume and so on

51


Used in making cosmetics 51

Question 2: How many barrels of crude oil are consumed in your respective

nations?

Barrels/day Oman UK Malaysia

0.1 Million to

5Million

5 Million to 10

Million

10 Million to 500

Million

Question 3: How the cost of crude oil is fluctuating in Oman, the UK, and

Malaysia?


Price ($- M) Oman UK Malaysia

20-30

30-40

40-50

50-60

Question 4: What are the reasons for fluctuations in the cost of crude oil in

different countries?

Factors affecting

oil price


Current supply as

well as output

51


Future supply as

well as reserves

51

Demand from

major countries of

the world

51

Political crises

and events

51

Question 5: Do you agree that OPEC plays a significant role in affecting the oil

price?

Response Total respondents Number of

respondents

Percentage

Strongly agree 51

Agree 51


Neutral 51

Strongly disagree 51

Disagree 51

Question 6: What is the position of Oman, the UK, and Malaysia in crude oil

production in the global market?

Countries The current

position in oil

export (Rank)

Barrels of Oil

exported (In

millions)

Barrels of oil

produced (In

million)

Oman 21

The UK 19

Malaysia 25

Question 7: According to you, which country's crude oil is the best?


Countries Total

Respondents

Number of

Respondents

Percentage

Oman 51

Malaysia 51

UK 51

Question 8: What are the key substituents present in the crude oil that makes

best and superior quality of the oil?

Key substituent Total

Respondents

Number of

respondents

Percentage

Sulfur content 51

TAN 51


API Gravity 51

Hydrocarbon 51

Question 9: According to you, how crude oil is affecting the economy of any

country?

Impact Total

Respondents

Number of

respondents

Percentage

Fall in the market

price

51

Increases the

aggregate demand

in the economy

51

Increases

investment and

enhances the

51


demand for

downstream

Increase the GDP

of the country

51

Question 10: Do you believe that using DCPIP method can be beneficial for

analyzing the degradation of crude oil that comprises of high sulfur content?

Response Total respondents Number of

respondents

Percentage

Strongly agree 51

Agree 51

Neutral 51

Strongly disagree 51

Disagree 51


Appendix 2: Timeline

16/06/2020 06/07/2020 26/07/2020 15/08/2020 04/09/2020

introduction

Literature Reviwe

Methodlogy

Results

Discussion

Conclusion

introductionLiterature

ReviweMethodlogyResultsDiscussionConclusion

Start Date 16/06/202026/06/202004/08/202019/08/202025/08/202028/08/2020

Days to Complet 103915742

Time Line

comparison of world crude oil types and cost benefits

Documents