Oil & Gas in The United Kingdom June 2022: Marketline Industry Profile

MarketLine Industry Profile
Oil & Gas in the United Kingdom

June 2022
Reference Code: 0183-2116
Publication Date: June 2022
Primary NAICS: 324110
Secondary NAICS: 211130
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Industry Profiles
1. Executive Summary
1.1. Market value

The United Kingdom oil & gas market grew by 93.1% in 2021 to reach a value of $43,694.4 million.
1.2. Market value forecast

In 2026, the United Kingdom oil & gas market is forecast to have a value of $67,441.6 million, an increase
of 54.3% since 2021.
1.3. Market volume

The United Kingdom oil & gas market grew by 8.5% in 2021 to reach a volume of 959.2 million BoE.
1.4. Market volume forecast

In 2026, the United Kingdom oil & gas market is forecast to have a volume of 976.8 million BoE, an increase
of 1.8% since 2021.
1.5. Category segmentation

Petroleum products is the largest segment of the oil & gas market in the United Kingdom, accounting for
74% of the market's total value.
1.6. Geography segmentation

The United Kingdom accounts for 8.1% of the European oil & gas market value.
1.7. Market rivalry

The oil and gas market is characterized by the presence of large, diversified international companies with
highly vertically integrated operations throughout oil exploration, production, refining, transportation, and
marketing.

Industry Profiles
1.8. Competitive Landscape

The UK oil and gas market is concentrated to leading players BP, ExxonMobil, Shell, Total, China National
Offshore Oil Corporation (COOC), Centrica, Phillips 66, Valero Energy Corp and Petroineos.

Industry Profiles
TABLE OF CONTENTS
1. Executive Summary 2
1.1. Market value ................................................................................................................................................2
1.2. Market value forecast ..................................................................................................................................2
1.3. Market volume.............................................................................................................................................2
1.4. Market volume forecast...............................................................................................................................2
1.5. Category segmentation................................................................................................................................2
1.6. Geography segmentation.............................................................................................................................2
1.7. Market rivalry...............................................................................................................................................2
1.8. Competitive Landscape ................................................................................................................................3
2. Market Overview 8
2.1. Market definition .........................................................................................................................................8
2.2. Market analysis ............................................................................................................................................8
3. Market Data 11
3.1. Market value ..............................................................................................................................................11
3.2. Market volume...........................................................................................................................................12
4. Market Segmentation 13
4.1. Category segmentation..............................................................................................................................13
4.2. Geography segmentation...........................................................................................................................15
5. Market Outlook 16
5.1. Market value forecast ................................................................................................................................16
5.2. Market volume forecast.............................................................................................................................17
6. Five Forces Analysis 18
6.1. Summary ....................................................................................................................................................18
6.2. Buyer power...............................................................................................................................................20
6.3. Supplier power ...........................................................................................................................................22
6.4. New entrants .............................................................................................................................................24

Industry Profiles
6.5. Threat of substitutes ..................................................................................................................................26
6.6. Degree of rivalry.........................................................................................................................................28
7. Competitive Landscape 30
7.1. Who are the leading players? ....................................................................................................................30
7.2. What strategies do the leading players follow?.........................................................................................30
7.3. What were the most notable recent developments in this market?.........................................................32
8. Company Profiles 33
8.1. Exxon Mobil Corporation ...........................................................................................................................33
8.2. Centrica plc ................................................................................................................................................38
8.3. BP Plc..........................................................................................................................................................42
8.4. Shell plc. .....................................................................................................................................................46
9. Macroeconomic Indicators 50
9.1. Country data ..............................................................................................................................................50
Appendix 52
Methodology ...........................................................................................................................................................52
9.2. Industry associations..................................................................................................................................53
9.3. Related MarketLine research .....................................................................................................................53
About MarketLine....................................................................................................................................................55

Industry Profiles
LIST OF TABLES
Table 1: United Kingdom oil & gas market value: $ million, 2016–21 11
Table 2: United Kingdom oil & gas market volume: million BoE, 2016–21 12
Table 3: United Kingdom oil & gas market category segmentation: % share, by value, 2016–2021 13
Table 4: United Kingdom oil & gas market category segmentation: $ million, 2016-2021 13
Table 5: United Kingdom oil & gas market geography segmentation: $ million, 2021 15
Table 6: United Kingdom oil & gas market value forecast: $ million, 2021–26 16
Table 7: United Kingdom oil & gas market volume forecast: million BoE, 2021–26 17
Table 8: Exxon Mobil Corporation: key facts 33
Table 9: Exxon Mobil Corporation: Annual Financial Ratios 35
Table 10: Exxon Mobil Corporation: Key Employees 36
Table 11: Exxon Mobil Corporation: Key Employees Continued 37
Table 12: Centrica plc: key facts 38
Table 13: Centrica plc: Annual Financial Ratios 40
Table 14: Centrica plc: Key Employees 41
Table 15: BP Plc: key facts 42
Table 16: BP Plc: Annual Financial Ratios 44
Table 17: BP Plc: Key Employees 45
Table 18: Shell plc.: key facts 46
Table 19: Shell plc.: Annual Financial Ratios 48
Table 20: Shell plc.: Key Employees 49
Table 21: United Kingdom size of population (million), 2017–21 50
Table 22: United Kingdom gdp (constant 2005 prices, $ billion), 2017–21 50
Table 23: United Kingdom gdp (current prices, $ billion), 2017–21 50
Table 24: United Kingdom inflation, 2017–21 50
Table 25: United Kingdom consumer price index (absolute), 2017–21 51
Table 26: United Kingdom exchange rate, 2017–21 51

Industry Profiles
LIST OF FIGURES
Figure 1: United Kingdom oil & gas market value: $ million, 2016–21 11
Figure 2: United Kingdom oil & gas market volume: million BoE, 2016–21 12
Figure 3: United Kingdom oil & gas market category segmentation: $ million, 2016-2021 14
Figure 4: United Kingdom oil & gas market geography segmentation: % share, by value, 2021 15
Figure 5: United Kingdom oil & gas market value forecast: $ million, 2021–26 16
Figure 6: United Kingdom oil & gas market volume forecast: million BoE, 2021–26 17
Figure 7: Forces driving competition in the oil & gas market in the United Kingdom, 2021 18
Figure 8: Drivers of buyer power in the oil & gas market in the United Kingdom, 2021 20
Figure 9: Drivers of supplier power in the oil & gas market in the United Kingdom, 2021 22
Figure 10: Factors influencing the likelihood of new entrants in the oil & gas market in the United Kingdom, 202124
Figure 11: Factors influencing the threat of substitutes in the oil & gas market in the United Kingdom, 2021 26
Figure 12: Drivers of degree of rivalry in the oil & gas market in the United Kingdom, 2021 28

Industry Profiles
2. Market Overview
2.1. Market definition

The oil and gas market volume is defined as the total consumption (barrels of oil equivalent) of refined petroleum
products and natural gas by end-users in each country. The value of the oil segment reflects the total volume of
refined petroleum products, including refinery consumption and losses, multiplied by the hub price of crude oil.
The value of the gas segment is calculated as the total volume of natural gas consumed multiplied by the price of
natural gas (Henry Hub spot price). The values represent the total revenues available to exploration and
production companies from sales of crude oil and natural gas. All market data and forecasts are represented in
nominal terms (i.e., without adjustment for inflation) and all currency conversions used in the creation of this
report have been calculated using constant 2020 annual average exchange rates.
The length of the pandemic and restrictions introduced by various countries are still difficult to predict, though
many governments had introduced the national lockdowns and temporarily banned sales of products that are
deemed “non-essential”. As the length of the pandemic and its impact on this market is not certain, the data used
in this report has been modelled on the assumption of a crisis scenario and has taken into consideration forecast
impacts on national economics. Also, crude-oil and natural gas sanctions on Russia by various countries due to
Russia-Ukraine war is also accounted, which would impact in short-to-mid-term high volatility in oil prices and
demands across regions.
For the purposes of this report, the global market consists of North America, South America, Europe, Asia-Pacific,
Middle East, South Africa and Nigeria.
North America consists of Canada, Mexico, and the United States.
South America comprises Argentina, Brazil, Chile, Colombia, and Peru.
Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.
Scandinavia comprises Denmark, Finland, Norway, and Sweden.
Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand,
Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.
2.2. Market analysis

The UK oil & gas market grew by 8.5% in volume terms in 2021. The rebound of demand, combined with tight
supply conditions, inflated prices, with the value of the market going up by 93.1% in that year. Strong growth is
also anticipated in 2022 amid another hike in oil and gas prices, consequent to Russia’s invasion of Ukraine. The
market is expected to follow a strong growth trajectory thereafter until the end of the forecast period, given
expectations of lower price volatility and declining trajectory.
The strong recovery of demand in 2021, thanks to the recession of the COVID-19 pandemic, outpaced supply,
pushing oil and gas prices higher in that year. In fact, the level of market value growth was so high in 2021, that it
offset the sharp decline posted a year earlier.
The average price of Brent, WTI, and Dubai crude oils rose by 64.8% on average in 2021. In detail, the price of
Brent crude oil, the international benchmark, was $70 per barrel in 2021, 63.9% higher than its 2020 average.
West Texas Intermediate (WTI) crude oil, the US benchmark, had an average price of $67.6 per barrel in 2021,
70.2% higher than in 2020, while the price of Dubai crude oil averaged $68.4, down by 60.6% from 2020. The

Industry Profiles
Henry Hub Natural Gas spot price surged by 88.2% in 2021 at $3.83 per million Btu, the highest price since 2010.
The price of European natural gas shot up even higher by 389% at $16.02 per million Btu, the highest ever
recorded.
In supply terms, apart from the stagnant upstream activity, low gas storage inventories, reduced crude oil refining
capacity, and supply chain bottlenecks with increased freight costs, all contributed to the strong price inflation of
oil and gas in 2021.
With lockdown measures lifted during 2021 as the COVID-19 pandemic has been coming to an end, private
transportation as well as commercial transportation activities gradually returned to normal. This boosted demand
for gasoline and jet fuel oil in road transportation and aviation, which had declined dramatically during 2020 due
to lockdown measures. Demand for diesel and marine fuel, which are primarily used in trucks and ships for the
transportation of goods, was also strengthened, but at lesser extent as demand for these petroleum products was
less affected in 2020. Overall, the consumption of petroleum products in United Kingdom was up by 12.4%.
The consumption of natural gas, which was less impacted by containment measures during 2020, also recovered –
up by 5.1% - as demand for electricity generation and energy feedstock was stronger through the resumption of
commercial and industrial activities that were previously affected.
The UK oil & gas market had total revenues of $43.7bn in 2021, representing a compound annual growth rate
(CAGR) of 4.9% between 2016 and 2021. In comparison, the French and German markets grew with compound
annual growth rate (CAGR)s of 7.9% and 9.1% respectively, over the same period, to reach respective values of
$41.5bn and $67.2bn in 2021.
The oil and gas market has massively fluctuated in recent years amid the increased volatility of oil and gas prices.
The sharp drop in demand, due to the COVID-19 pandemic containment measures, was the most significant factor
driving the collapse in oil prices in 2020. The average price of Brent, WTI, and Dubai crude oils declined by 32.8%
on average in 2020. Natural gas prices were down by 25.6% on average in 2020. The Henry Hub Natural Gas spot
price dropped by 20.7% in 2020 at $2.03 per million Btu, the lowest price over the last two decades. Similarly, the
price of European natural gas plummeted by 32.5% at $3.24, the lowest since 2002.
The five-year historic period up to 2020 has been mostly characterized by strong declines for the price of oil,
except for 2017–2018, when prices surged. In response to growing US shale oil production, OPEC countries
increased supply as well to protect their shares, with prices dropping sharply from $96.2 in 2014 to $50.75 per
barrel in 2015, and even lower to $42.8 in 2016. However, lower oil prices meant that the oil income of OPEC
countries suffered, thus OPEC sought a turnaround. For this reason, an additional group of countries led by Russia,
OPEC+, was invited to join OPEC’s efforts in 2016, in order to increase leverage in terms of fixing production
quotas.
In September 2016, OPEC and OPEC+ countries agreed to reduce their production collectively by 1.8 million
barrels a day, starting from the first half of 2017, later extending these cuts for the rest of the year. As a result, oil
prices increased by 23.4% in 2017 to $52.8 per barrel. This production cut agreement was extended into 2018,
with prices increasing by 29.5% that year to $68.35 per barrel. The price of crude oil began to drop in late 2018 as
a result of the strong increase of US shale oil production and a simultaneous increase in the production of oil from
other non-OPEC countries, while global demand remained weak. In fact, production increases limited any upward
price movements caused by increased uncertainty over oil supplies in large oil-producing countries amid
geopolitical tensions, including the missile attack on Saudi Arabian refineries in September 2019, US sanctions on
oil trade from Iran and Venezuela, and the decline of oil production in Libya due to the ongoing civil war. For 2019,
the OPEC alliance decided to take a further 1.2 million barrels per day off the market amid concerns over weak
global demand, while the production of US shale oil continued to increase. However, OPEC’s decisions did not
prevent oil prices from falling, as the growth of production from non-OPEC countries not only balanced out supply
cuts from OPEC countries but also led to a growth in global supply that suppressed prices as global demand
remained weak.
Natural gas prices have followed a similar pattern – as natural gas is often a by-product of oil extraction – in fact,
oil and gas prices have been almost perfectly correlated over the last six years. The production of natural gas has
been growing since 2009, with increasing drilling activity and growth in the capacity of LNG terminals eventually
causing a supply gut that has suppressed prices. Natural gas prices declined by 20.4% in 2016. Two years of strong
growth followed, up by 21.1% in 2017 and 19% in 2018, before declining in 2019 by 25.5%.

Industry Profiles
Market consumption volumes declined with a compound annual rate of change (CARC) of -2.5% between 2016
and 2021, to reach a total of 959.2 million BoE in 2021. The market's volume is expected to rise to 976.8 million
BoE by the end of 2026, representing a CAGR of 0.4% for the 2021-2026 period.
United Kingdom is self-reliant with respect to its oil needs, being one of the largest producers and exporters of oil
in the world. This implies that oil demand in this market is fulfilled at a lower cost than that seen in other markets
reliant on imports. On the other hand, the country is significantly dependent on gas imports to meet domestic
demand. Nearly 49% of gas consumption in the UK market is covered by domestic production, according to in-
house estimates based on latest figures from the Internal Energy Agency (IEA).

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3. Market Data
3.1. Market value

The United Kingdom oil & gas market grew by 93.1% in 2021 to reach a value of $43,694.4 million.
The compound annual growth rate of the market in the period 2016–21 was 7.6%.
Table 1: United Kingdom oil & gas market value: $ million, 2016–21
Year $ million £ million € million % Growth

2016 30,241.3 21,998.6 25,578.6
2017 36,070.8 26,239.1 30,509.2 19.3%
2018 43,697.8 31,787.3 36,960.3 21.1%
2019 41,421.0 30,131.0 35,034.5 (5.2%)
2020 22,625.1 16,458.3 19,136.6 (45.4%)
2021 43,694.4 31,784.8 36,957.4 93.1%
CAGR: 2016–21 7.6%

SOURCE: MARKETLINE MARKETLINE
Figure 1: United Kingdom oil & gas market value: $ million, 2016–21

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3.2. Market volume

The United Kingdom oil & gas market grew by 8.5% in 2021 to reach a volume of 959.2 million BoE.
The compound annual rate of change of the market in the period 2016-21 was -2.3%.
Table 2: United Kingdom oil & gas market volume: million BoE, 2016–21
Year million BoE % Growth

2016 1,077.5
2017 1,060.3 (1.6%)
2018 1,064.7 0.4%
2019 1,054.8 (0.9%)
2020 884.3 (16.2%)
2021 959.2 8.5%
CAGR: 2016–21 (2.3%)

Figure 2: United Kingdom oil & gas market volume: million BoE, 2016–21

Industry Profiles
4. Market Segmentation
4.1. Category segmentation

Petroleum products is the largest segment of the oil & gas market in the United Kingdom, accounting for 74% of
the market's total value.
The Natural gas segment accounts for the remaining 26% of the market.
Table 3: United Kingdom oil & gas market category segmentation: % share, by value, 2016–2021
Category 2016 2017 2018 2019 2020 2021

Petroleum Products 72.7% 74.4% 78.5% 80.8% 75.1% 74.0%
Natural Gas 27.3% 25.6% 21.5% 19.2% 24.9% 26.0%
Total 100% 100% 100% 100% 100% 100%

Table 4: United Kingdom oil & gas market category segmentation: $ million, 2016-2021
Category 2016 2017 2018 2019 2020 2021 2016-21

CAGR(%)
Petroleum Products 21,974.3 26,843.3 34,314.1 33,463.3 16,989.5 32,315.3 8.0%
Natural Gas 8,267.0 9,227.5 9,383.7 7,957.7 5,635.5 11,379.1 6.6%
Total 30,241.3 36,070.8 43,697.8 41,421 22,625 43,694.4 7.6%


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Figure 3: United Kingdom oil & gas market category segmentation: $ million, 2016-2021

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4.2. Geography segmentation

The United Kingdom accounts for 8.1% of the European oil & gas market value.
Germany accounts for a further 12.5% of the European market.
Table 5: United Kingdom oil & gas market geography segmentation: $ million, 2021
Geography 2021 %
Germany 67,241.2 12.5
United Kingdom 43,694.4 8.1
France 41,494.9 7.7
Italy 38,547.7 7.2
Spain 34,037.8 6.3
Rest of Europe 313,270.0 58.2
Total 538,286 100%

Figure 4: United Kingdom oil & gas market geography segmentation: % share, by value, 2021

Industry Profiles
5. Market Outlook
5.1. Market value forecast

In 2026, the United Kingdom oil & gas market is forecast to have a value of $67,441.6 million, an increase of 54.3%
since 2021.
The compound annual growth rate of the market in the period 2021–26 is predicted to be 9.1%.
Table 6: United Kingdom oil & gas market value forecast: $ million, 2021–26
Year $ million £ million € million % Growth

2021 43,694.4 31,784.8 36,957.4 93.1%
2022 70,855.1 51,542.4 59,930.3 62.2%
2023 64,558.3 46,961.9 54,604.4 (8.9%)
2024 53,546.8 38,951.8 45,290.7 (17.1%)
2025 60,153.1 43,757.4 50,878.4 12.3%
2026 67,441.6 49,059.3 57,043.1 12.1%
CAGR: 2021–26 9.1%

Figure 5: United Kingdom oil & gas market value forecast: $ million, 2021–26

Industry Profiles
5.2. Market volume forecast

In 2026, the United Kingdom oil & gas market is forecast to have a volume of 976.8 million BoE, an increase of 1.8%
since 2021.
The compound annual growth rate of the market in the period 2021–26 is predicted to be 0.4%.
Table 7: United Kingdom oil & gas market volume forecast: million BoE, 2021–26
Year million BoE % Growth

2021 959.2 8.5%
2022 977.7 1.9%
2023 992.0 1.5%
2024 993.5 0.2%
2025 993.9 0.0%
2026 976.8 (1.7%)
CAGR: 2021–26 0.4%

Figure 6: United Kingdom oil & gas market volume forecast: million BoE, 2021–26

Industry Profiles
6. Five Forces Analysis

The oil & gas market will be analyzed taking companies engaged in oil and gas exploration and production as
players. The key buyers will be taken as end users (individual and institutional) and independent retailers, and
suppliers of oil and gas field services as the key suppliers.
6.1. Summary
Figure 7: Forces driving competition in the oil & gas market in the United Kingdom, 2021
The oil and gas market is characterized by the presence of large, diversified international companies with highly
vertically integrated operations throughout oil exploration, production, refining, transportation, and marketing.
Competition exists between companies of similar size which operate in the same part(s) of the value chain. Overall,
competition dynamics are different across the activities (upstream, midstream, downstream) of the oil and gas market.
Rivalry can be limited as the market is highly concentrated to a small number of large companies, but lower oil and gas
prices in recent years have induced stronger competition.
Due to the importance of the products offered in this market, with oil and gas being the most common primary sources
of energy, there is a mass market of buyers, including individuals and firms, with large institutional buyers among the
latter. Buyers can be price sensitive due to the significant cost of oil and gas, but the indispensability of these products
for them, offsets that condition. Demand for oil and gas is fairly inelastic as households and firms are reliant on fuel for
their activities, thus their consumption has limited responsiveness to price changes.
There are different suppliers across each stage of the value chain of the oil and gas market, which is divided into three
distinct types of activities (upstream, midstream, downstream). Due to the nature of this market, with The supply of oil
and gas is restricted by the finite reserves of natural resources, companies exploiting these resources can have
monopolistic power. Oil and gas shipping companies also have significant supplier power as they provide the only large
scale means of transportation across the oceans, while the large economies of scale required in this business result in a
small number of large companies.
The presence of powerful incumbents and the need for substantial initial investment in oil and gas fields, heavy
equipment, and technology, reduce the threat of new entrants into the market. Oil and gas market players also have to

Industry Profiles
comply with regulations and standards set by the jurisdiction in which they operate. Complying with government
regulatory requirements on safety, environmental protection, fiscal regimes, and product standards, increases the
capital investments and operating costs.
Whilst alternative energy sources do exist as substitutes for oil and gas products, they are often more expensive and in
some cases they are not perfect substitutes, meaning that buyers are, to an extent, reliant on players operating in this
market. Nevertheless, as awareness over global warming and sustainable environment increases, the importance of
alternative sustainable energy sources, such as solar, wind power, has increased.

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6.2. Buyer power
Figure 8: Drivers of buyer power in the oil & gas market in the United Kingdom, 2021
Due to the importance of the products offered in this market, with oil and gas being the most common primary sources
of energy, there is a mass market of buyers, including individuals and firms, with large institutional buyers among the
latter.
Large institutional buyers include petrochemical companies that use oil by-products such as naphtha and bitumen as
their raw material input; these include giant multinationals such as Dow Chemical, Koch Industries and BASF, as well as
locally-based petrochemical companies such as INEOS AG. Large institutional buyers also include local utility companies,
like SSE Plc, Centrica Plc, EDF Energy Plc and E.ON UK, which use natural gas as or oil as a primary source of energy for
electricity generation or supply natural gas directly to households and businesses. According to latest data available
from the International Energy Agency (2018), oil and natural gas comprised 1% and 39%, respectively, of the primary
energy fuel mix for electricity generation in the UK. Residential demand for oil and gas as fuels for heating in the UK
accounts for 2% of oil and 30% natural gas consumption, according to the IEA (2018). The airline, maritime and
manufacturing industries, where core operations are highly reliant on fuel input, are large buyers for the oil and gas
market. Fuel consumption from transportation activities, including fuel consumption from non-commercial vehicles,
account for 73% of oil consumption in the UK, according to IEA (2018). Industrial demand, including petrochemical
companies and other manufacturing industries that use oil and gas products as inputs or fuels, account for 7% of oil and
20% of natural gas consumption in the UK, as per the same source.
Fuel retailers and wholesalers are also considered to be buyers, but there are only a few of them independent from
market players. An example of this in the UK market is the significant presence of fuel stations operated by leading
retail brands such as Tesco, Sainsbury’s and ASDA, comprising nearly half of gasoline and diesel retail sales. Market
players are characterized by highly vertically integrated operations throughout oil exploration, production, refining,
transportation and marketing, and they can act as both buyers and players within different stages, thus occupying the
trade stage of the value chain as well. Overall, large buyers may have great bargaining power by being an important
source of revenue for players, but the indispensability of fuel for them mitigates that power. Buyers can be price
sensitive due to the significant cost of oil and gas, but the indispensability of these products for them, offsets that
condition. Demand for oil and gas is fairly inelastic as households and firms are reliant on fuel for their activities, thus
their consumption has limited responsiveness to price changes. According to BP’s 2020 Statistical Review, oil and

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natural gas accounted for 39.6% and 36.2% of primary energy consumption in the UK in 2019, respectively, with these
rates indicative of a high dependence on these fuels compared to other countries. In total, the annual per capita
consumption of oil and gas in this market tends to be high in comparison to tother countries, estimated at 15.5 barrels
of oil equivalent in 2019, according to MarketLine’s in-house research.
Crude oil and natural gas are commodities, which are largely undifferentiated for end-users. Although there are
different types of crude oil products, with slightly different properties depending on their origin, the various refined oil
products such as motor and aviation gasoline, diesel, jet fuel, kerosene, naphtha, marine (bunker) oil, have different
uses, with products for each use being largely undifferentiated. Regarding the oil product in highest demand, gasoline,
the number of octanes is seen as a mark of higher performance and differentiation among market players, leading to a
distinction of gasoline products to regular unleaded, premium unleaded and super unleaded. In addition, big market
players usually differentiate their gasoline products through the addition of extra engine-cleaning additives.
Brand loyalty is not likely to be a significant factor in this market (unless there are loyalty programs in place, so buyer
power is strengthened. Switching costs for individual buyers are not likely to be high, they may, however, be increased
with respect to institutional buyers with supply contracts.
The prices of oil and gas commodities which are set according to supply and demand by the mercantile exchanges of
New York, London and Dubai, which effectively enhances buyer power on the basis of open market. Moreover, buyer
power can be strengthened to some extent through the use of future or option contracts when trading with market
players. Through the use of option contracts, buyers purchase the right to exercise the option to buy a certain amount
of oil or gas for a predefined price at a certain date in the future, or in the case of future contracts they enter into a
legal obligation to purchase a certain amount of oil or gas at a predefined price at a later date in the future. That
enables buyers to set the price beforehand, meaning that they can buy oil or gas at their desirable price in the future,
avoiding any negative impact from the stock market as the price of oil and gas commodities is highly volatile.
Backwards integration is uncommon since extracting and refining oil and/or gas requires a vast amount of capital
invested in heavy duty equipment which is outside of the reach of most buyers. Some very large-sized buyers for whom
producing their own output of oil or gas may be beneficial to their core business might be an exception to this, such as
Delta Airlines, for example, which has established its own oil refinery to reduce fuel costs. The largest chemical
companies such as BASF, Ineos and Dow Chemical are also backward-integrated to petroleum refining and gas
processing activities, as their core operations overlap with those of the petrochemical industry. Ultimately though, the
likelihood of backwards integration is slim at best.
Overall, buyer power within the UK oil and gas market is assessed as moderate.

Industry Profiles
6.3. Supplier power
Figure 9: Drivers of supplier power in the oil & gas market in the United Kingdom, 2021
There are different suppliers across each stage of the value chain of the oil and gas market, which is divided into three
distinct types of activities: the upstream, which includes exploration, extraction and field development activities; the
midstream, which includes transportation and storage activities; and the downstream, which includes processing
(refining) trading and distribution to end-users. As most market players, are typically vertically integrated across all of
these stages, they can act as supplier for players occupying only one or two stages.
The supply of oil and gas is restricted by the finite reserves of natural resources, with companies exploiting these
resources having oligopolistic power. OPEC, the only official cartel protected by state immunity under international law,
is made up of 13 countries (Saudi Arabia, Iraq, Iran, UAE, Kuwait, Venezuela, Nigeria, Angola, Algeria, Libya, Republic of
the Congo, Gabon and Equatorial Guinea). The OPEC members coordinate their actions to fix oil prices by adjusting
supply (their level of oil production levels) in order to preserve stability in the global oil market and their income as
producers. In addition to the OPEC members, ten oil exporting countries (Russia, Azerbaijan, Kazakhstan, Brunei,
Bahrain, Malaysia, Mexico, Oman, Sudan and South Sudan) grouped as OPEC+ joined forces with OPEC in 2016,
participating in fixing oil prices by agreeing to production quotas. In the case of natural gas, although there is no official
cartel to coordinate the actions of the largest gas producers, the concentration of more than half of natural gas
reserves in only three countries (Russia, Iran, Qatar) practically gives oligopolistic power to the state-owned companies
that control these reserves in those countries.
Companies engaged only in upstream activities can be suppliers for those engaged in midstream activities, as well as for
oil refineries or natural gas processing plants. Although oil and gas are largely undifferentiated commodities, there are
more than 150 types of crude oil with variable properties depending on their origin and the well they are extracted
from, and that can slightly differentiate suppliers’ input for refineries. For example, crude oils which have low API
gravity (high density), classified as heavy crude oils - are of lower yield and thus cheaper, as they are harder to refine
than crude oils with high API gravity (low density). Crude oils with high sulphur content (0.5% or above), which are
classified as “sour” crude oils are also of lower yield and take more time to refine than crude oils of low sulphur
content, known as “sweet” oils.
Natural gas is more standardized as a final product but its raw form can vary too, affecting supplier choice. For example.
raw natural gas with very low hydrogen sulphide content sulphur content, called sweet gas, is easier and quicker to
refine to final product, unlike sour or acidic raw natural gases that contain hydrogen sulphide and carbon dioxide.

Industry Profiles
While large upstream companies are typically forward integrated to midstream operations, there can be a few large
midstream companies operating in storage and pipeline distribution networks. Pipelines are the most common way of
gas transportation, as other ways of transportation are more difficult and costlier, and they are usually owned by
upstream players, the state, or energy companies. The UK has an extensive gas pipeline network. The largest pipeline
network includes the National Grid Gas System (7,660km) operated and owned by the National Grid Plc. Other large
and important pipelines are the Langeled South gas pipeline which connects the UK with Norwegian gas fields,
operated by Gassco AS and major0ty-owned by Petoro AS and other participants; the UKCS–Easington MLW gas
pipeline spanning from North Sea fields to Durham, also owned and operated by Gassco AS; the SEAL gas pipeline
spanning from North Sea fields to Norfolk, operated by Royal Dutch Shell Plc and majority-owned by Total SA; the
FLAGS gas pipeline spanning from North Sea fields to Scotland, operated by Royal Dutch Shell Plc and jointly-owned by
the former and ExxonMobil Corp; and the Norpipe oil pipeline connecting the UK with Norwegian oil fields, operated by
ConocoPhillips and majority-owned by the former and Total SA. Overall, National Grid Plc, along with Gassco AS, Royal
Dutch Shell Plc and BP Plc are the largest pipeline operators within a fragmented network of pipeline owners and
operators. In terms of storage facilities, ExxonMobil Corp, Valero Energy Corp and Inter Pipeline Ltd are the largest
operators of oil storage facilities. The largest energy companies in the UK, namely Centrica, SSE, EDF and E.ON are
backward integrating to gas storage facilities, being the major operators in this field.
There also independent providers of transportation services, like oil and gas shipping, road transport and railway
companies, which move crude oil from production sites to refineries and deliver refined oil and gas products from
refineries to distributors and service stations. Oil and gas shipping companies have significant supplier power as they
are the only large scale transportation mean across the oceans, while the large capital required in this business results
in a small number of large companies. Examples of large companies operating oil and gas tankers include Frontline Ltd,
Teekay Corp, Nordic American Tanker, Euronav, Tsakos Energy Navigation, and Maersk A/S. Vertical integration to oil
and gas shipping business is common among the largest market players such as Shell, BP and Chevron, which usually
lease tankers, but it is less common for smaller players that do not have the financial muscle to engage in these
operations.
Refineries, natural gas processing plants and LNG terminals, which are part of the downstream activities, can also be
suppliers for independent players engaged in oil trading and distribution activities. While refineries tend to be part of
the business of large vertically-integrated oil companies such as ExxonMobil and Total in this market, there can be
independent players such as Valero Energy Corp, Phillips 66 and Essar Oil UK, with their activities limited to buying
crude oil from upstream companies, processing to refined oil products and then selling them to wholesalers or retail
distributors engaged in downstream activities as well. Centrica, ExxonMobil, Shell, Ineos AG and BP-ConocoPhillips are
among the largest gas processing plant operators in this market, while National Grid Plc and ExxonMobil are the
operators of the two large LNG regasification terminals in this market.
Switching costs between suppliers and players are relatively high, strengthening supplier power. Sector players tend to
enter into long-term contracts with their crude oil or gas suppliers in order to avoid price fluctuations to some extent,
very likely to including high exit fees, which gives suppliers an upper hand over them.
Supplier power can also be affected by the price of commodities. For instance, for suppliers of drilling equipment and
exploration services, when the price is high, demand may increases as oil and gas companies may explore deposits that
were previously deemed too costly. In contrast, when the price is low, investment in drilling and exploration declines,
increasing competition between suppliers. Oil price movements can also affect refineries’ profit margins, referred as
crack spread, which are based on the price difference between crude oil and the refined products extracted from it.
However, refineries tend to hedge price movements that could squeeze their margins by buying and selling future
contacts, and that increases their power against suppliers.
Overall, supplier power in the UK oil and gas market is assessed as moderate.

Industry Profiles
6.4. New entrants
Figure 10: Factors influencing the likelihood of new entrants in the oil & gas market in the United Kingdom, 2021
The threat of new entrants into the oil and gas market is differentiated across each stage of the supply chain. However,
through all means of entry, a vast amount of capital is required to be invested in infrastructure and equipment.
Incumbents are typically large, vertically-integrated, multinational companies, with enormous assets, exploiting there
large economies of scale.
Licensing is a significant regulatory hurdle in upstream activities. Permission to explore new fields and drill is generally
given by national governments through auctions, and obtaining it may be a lengthy process. Exploration, appraisals and
drilling licenses can be subject to a lengthy and costly process of complying with financial and environmental regulation.
Most countries, are open to agreements with private companies to exploit oil and gas fields. In some cases, states
operate monopolies in oil and gas exploitation, as seen in Russia or Saudi Arabia.
Upstream activities require massive investments in industrial equipment such as drill rigs and pumps and infrastructure
facilities around oil and gas fields, and that reduces the threat of new entrants. The total cost of well development
varies depending on the geomorphology of reserves. The cost of drilling an oil well can be anything from a few million
to hundreds of millions of dollars. Well development costs can be 15 to 20 times higher for offshore activities due to
the costly construction of oil platforms and transportation costs to the shore. Offshore drilling can account for 65% of
the total fixed cost of well development, compared to 30 to 40% in onshore projects. Similarly, for shale oil, the cost of
extraction is increased when horizontal drilling is involved, so that its extraction is only profitable when prices are
higher than the cost of shale oil extraction.
Ultimately, entering the upstream activities of the oil and gas market is dependent on the availability of unexploited
reserves.
In midstream activities, prospective players also need significant capital investments in infrastructure. Pipelines are the
most economically and environmentally efficient way to transport oil and gas, but upfront costs for their construction
can be massive. For natural gas, pipeline transportation is even more efficient compared to the costly liquefied natural
gas (LNG) transportation. Pipeline networks running across a country or through multiple countries can be profitable.
Building an international pipeline though requires navigating political waters, and securing permits through
international agreements. With regards to shipping and road transportation, entry to the market requires substantial
investments in fleet of vessels or trucks.
Downstream activities are also highly capital-intensive. Setting up a refinery requires a substantial amount of capital,
typically billions of dollars, due to the size and the technology of these facilities. Refineries require large economies of

Industry Profiles
scale and investment in advanced and highly automated technologies, while they also have high operating costs,
typically employing hundreds of people. New refineries are even more capital intensive due to more advanced
engineering and equipment required to improve efficiency, and meet higher quality fuel standards and stricter
environmental legislation. The location of refineries is also of great importance as it directly affects the transportation
cost of crude oil to the refinery and the transportation cost of refined products to the market. Accordingly, proximity to
transportation hubs, equipment suppliers, and large buyers such as petrochemical companies is vital. Overall, entry to
this part of the market is dependent on the state of capacity in the market with regards to consumption.
In the case of natural gas, downstream activities of natural gas processing plants are simpler and less costly, as dry
natural gas from gas wells is usually pure and needs limited processing. Moreover, natural gas is unique as a final
product, unlike oil crude oil which can be refined to different types of oil products. In country-markets which are reliant
on LNG exports or imports, entry to downstream activities can be realized through LNG liquefaction or regasification
terminals, respectively. In fact, these have been growing as LNG imports account for an increasingly large share of gas
imports worldwide. Location for natural gas processing plants and LNG terminals is crucial, with proximity to gas wells
and pipeline hubs reducing costs.
As far as trading activities and distribution channels are concerned, oil and gas distribution to end-users can
theoretically be accessible, but customer trust and brand building can be important factors at play, thus deterring new
entrants. Moreover, retail distribution through oil and gas service stations requires significant capital to operate at a
sizeable network of stations. The brand strength of local and international oil and gas brands in this market such as BP,
Esso (ExxonMobil), Shell, and Total could deter new entrants.
Taxes on crude oil or gas imports can also discourage new downstream players to enter a market reliant on imports, as
higher taxes can suppress their margins.
Investment in R&D is also important in this market. In upstream activities, hydraulic fracturing has been an important
technological advance for the extraction of shale oil, allowing extraction companies to recover oil that was
unrecoverable a few years ago. In downstream activities, refining methods are constantly improving. Modern refineries
can convert more than half of every barrel of crude oil into gasoline, a huge advancement compared to 70 years ago
when only a quarter of a barrel could be converted to gasoline.
Due to the importance of technology, the level of intellectual property in the oil and gas market is significant. For
example, in upstream activities, hydraulic fracturing has been an important technological advance, allowing the
recovery of shale oil that was unrecoverable a few years ago. In downstream activities, refining methods are constantly
improving; refineries today can turn more than half of every barrel of crude oil into gasoline, a huge advancement
compared to 70 years ago when only a quarter of a barrel could be converted to gasoline. In fact, important
technologies such as the fluid catalytic cracking (FCC), are patented by Shell, ExxonMobil and others.
Incumbents also have to comply with regulation set by each country. Complying with government regulation on safety,
environmental protection, and product standards, increases capital investments and operating costs. Moreover,
refineries, as a significant source of air and water pollution, they have to meet certain environmental protection
requirements. Especially, in oil shipping, complying with safety regulations is imperative as the risk of oil spills can result
into billions of dollar fines and costs of mitigating an environmental disaster.
Finally, entry to the oil and gas market also depends on the global demand and supply dynamics. High oil prices are
more likely to attract new entrants as the profitability improves. In contrast, lower oil prices create a challenging
environment, dissuading new entrants.
Overall, the threat of new entrants is assessed as weak within the oil and gas market.

Industry Profiles
6.5. Threat of substitutes
Figure 11: Factors influencing the threat of substitutes in the oil & gas market in the United Kingdom, 2021
Whilst alternative energy sources do exist as substitutes for oil and gas products, they are often more expensive and in
some cases they are not perfect substitutes, meaning that buyers are to an extent reliant on players operating in this
market. Nevertheless, as awareness over global warming and sustainable environment increases, the importance of
alternative sustainable energy sources to oil, such as solar, wind power, biothermal energy, hydroelectric energy,
wave/tidal energy, and biofuels (biomass or bioethanol) has increased. On the contrary, the use of coal and nuclear
energy as substitute sources has declined amid environmental and safety concerns.
Renewable energy substitutes are the most prominent as they offer notable benefits in terms of environmental impact
and sustainability. The production and demand of renewable energy has increased over the last two decades as climate
change has become a major issue since. Solar and wind power are starting to occupy a greater share of the energy
market as a whole. In the UK, 14.5% of primary energy consumption originated from renewable sources - mainly wind
power and biomass – as of 2020, according to BP’s Statistical Review. This figure indicates a high rate of development in
this field compared to other developed countries. The share of renewables on primary energy consumption is set to
increase further, as the UK is preparing for a deep decarbonization of its energy system. The country has decided to
halve its greenhouse gas emissions from 1990 to 2027 and to cut them by a total of 80% by 2050. The UK has been set
a target by the EU of producing 15% of the energy it consumes by 2020 from renewable sources. By the end of 2019
this figure stood at 33% of total electricity produced.
Overall, the benefits of renewable energy sources can vary. Although renewable energy sources such as solar power
and wind power are commercially viable and sustainable, having zero carbon footprint, their biggest disadvantage is
that they are intermittently available, depending on the time of the day or weather conditions. The use of alternative
sources like hydroelectric energy or wave/tidal energy can also be limited depending on the geography, while
development costs are high. While power companies can alter their primary energy mix to a small extent without
incurring many costs, a meaningful transition to these substitutes would require investment in new facilities, which
constitutes a very high switching cost, thus a major shift to renewable energy sources will take time to be realized.
What is more, the wide adoption of an alternative use of energy does not only require developments on the generation
of that energy itself but it also requires transformation of technology for motor engines in transportation, which is
currently based on the use of hydrocarbons like oil and gas. Particularly, where oil and gas products are commercially
used as a fuel, such as in aviation, maritime and heavy-duty road transportation, substitutes are very limited as most
alternative sources of energy cannot be commercially viable or technically feasible to use for this purpose. The use of
batteries or capacitors that store electricity - as seen with electric cars - could be one option to accommodate the use

Industry Profiles
of alternative sources of energy in the future, but technology in this field is still at infancy stage and not commercially
viable in the foreseeable future.
There are also very limited options of sustainable energy carriers (fuels) at present, namely hydrogen gas or biofuels,
with their production efficiency though being questionable at large scale. Hydrogen gas or biofuels stand out from
other major substitute energy sources in the sense that they are fuels like oil and natural gas, thus being a stable source
of energy which can be directly converted to power. Hydrogen, which contains three times more energy than natural
gas, can be a potentially renewable and zero-carbon emission energy source through the production process of
electrolysis. But this process requires a huge infrastructure cost that deems its use less efficient, with the production of
hydrogen mostly reliant on fossil fuels at present. A few major automakers have released fuel-cell vehicles, based on
fuel-cell technology that uses hydrogen as a fuel instead of a battery to generate electricity that powers these vehicles.
However, that technology appears to lose pace against battery-electric cars. Regarding different types of biofuels made
from organic matter and waste, bioethanol and biodiesel are the most prominent. Bioethanol, which is alcohol typically
produced by fermentation of starchy agricultural crops such as corn or sugarcane, can be used as a pure fuel in a
limited number of “flex-fuel” vehicles available from major automakers. Bioethanol is already used as a gasoline
additive in the US and Algeria, where gasoline contains 10 to 15% ethanol to increase octane and reduce carbon
emissions. In EU countries and Algeria, gasoline is allowed to have up to 5% ethanol content. Biodiesel is produced from
vegetable oils or animal fats using transesterification, and is most common in Europe. It can also be used as a pure fuel
in “flex-fuel” vehicles, but it is mostly used as a diesel additive – up to 7% - to reduce levels of carbon monoxide from
diesel-powered vehicles. The International Energy Agency has set a target for biofuels to account for more than 25% of
world demand for transportation fuels by 2050, in order to reduce reliance on fossil fuels and decarbonize transport
activities. Moreover, major countries around the world have declared a ban on the sales of new cars with internal
combustion engines by the end of 2035 or 2040, aiming at the adoption of electric cars.
It should also be mentioned that substitution also exists between oil and gas (intra-substitution). Although their prices
are highly linked since natural gas is often a by-product of oil extraction, refined oil fuels can be competitive substitutes
to natural gas in electric power generation and heating. Subsequently, an increase in the price of one could increase
demand for the other. This stems from the fact that the economics of non-associated gas fields are different from the
economics of associated gas extracted from oil fields, while the allocation of capital resources of upstream companies
between oil and gas can be competitive, leading to a decoupling of prices in the short-term. For example, an increase in
crude oil prices may lead to increase in oil drilling and a decrease in natural gas drilling, and vice versa. However, the
relationship between oil and gas prices is stable in the long-term, as a short-term change in the production of one
against the other leads to an opposite effect in the price of the commodity under change, eventually changing the
dynamics again in favor of a long-term balance between them. Since 2013, the price ratio of oil and gas per barrel
equivalent has been stable overall, fluctuating between 3:1 and 4:1.
Ultimately, as reserves of oil and gas deplete over the following decades, it is expected the adoption of substitute
sources of energy will increase in line with rising environmental concerns and the advancement of fuel and battery
technologies. For this reason, leading oil and gas companies have sought to diversify against an anticipated decline of
oil and gas consumption over the next decades, investing in alternative energy sources such as solar panels, wind
power and biofuels. In the mid-term, energy transition to alternative and sustainable sources, will continue to gain
share from oil and gas in electricity generation, especially when the costs of alternative energy sources are to remain
stable overall against oil price increases.
Overall, there is a moderate threat of substitutes in the US market.

Industry Profiles
6.6. Degree of rivalry
Figure 12: Drivers of degree of rivalry in the oil & gas market in the United Kingdom, 2021
Competition for large players is not limited to the boundaries of the domestic market as oil and gas trade is
internationalized, therefore competition is increased. Supermajor international companies such as Shell, ExxonMobil,
BP, and Total compete with each other on a global scale, as well as with national companies. Competition practically
exists among companies which operate in the same part(s) of the value chain as competition dynamics are different
across the activities (upstream, midstream, downstream) of the oil and gas market.
Vertical integration across all activities of the market is crucial. The integration of large oil and gas companies across the
entire supply chain from production to distribution of refined products provides cost efficiencies and a natural hedge
against adverse price movements.
The undifferentiated nature of the final products increases competition, as players have to focus on price and output in
order to become more competitive. Accordingly, high operational efficiency is a key competitive advantage in all
activities of the market. Due to the fact that oil and gas operations are highly fixed-assets based, fixed costs are also
high and the market is hard to exit as leaving would require significant divestments of assets specific to the business,
another factor that increases rivalry in the market.
Competition in the upstream activities is mainly focused on the exploration and discovery of new oil and gas wells. As
the discovery rate of new oil and gas well has been diminishing over the last three decades, rivalry has increased in this
field. Economies of scale and financial strength are key for competing in this part of the market; economies of scale are
important to achieve cost and production efficiency, while strong financial muscle is required for investing in
exploration and developing new oil and gas fields. Investment in new technologies can improve cost and production
efficiencies.
Competition in downstream activities, particularly in refineries is fierce. Refineries aim to maximize their margins (crack
spread), but since they have little or no influence over the price of their input or their output, they must rely on
operational efficiency for their competitive edge.
Higher refinery yields, can therefore be a result of advanced technology. Specifically, refineries’ technological
advantage is based on how much secondary conversion capacity (catalytic cracking, coking and other secondary
processing units) they have in addition to primary distillation units. Refineries with advanced secondary conversion
capacity are more efficient in removing sulphur and other substances to meet strict environmental requirements for
fuels.

Industry Profiles
Refineries’ operation can be differentiated in terms of product mix, with some refineries focused on lighter oil products
such as gasoline and others on heavier oil products such as marine fuel. The more complex the refinery, the wider the
range of crude oil inputs it can choose from, thus having a competitive advantage. This becomes increasingly important
as the increasing demand for lighter oil products, particularly gasoline, and the increasing supply of heavy crude oil as
share of total crude oil extracted, creates a quality gap that fewer refineries can fill.
For dry natural gas, the refinery process in processing plants is minimum, which reduces the level of sophistication
required in downstream activities, thus reducing the need for investment in R&D. However, the lack of differentiation
intensifies rivalry among downstream players in this field.
Rivalry is limited in supply terms for upstream companies as concentration to a few players is high. This is evident
through OPEC and OPEC+ members that account for more than half of the global production of oil, and their actions
largely influence the global price of oil and the decisions of all oil and gas companies. For example, during an economic
recession, OPEC members will agree to cut supply in response to weaker demand, while they will increase supply during
an economic boom.
In the case of natural gas, although there is no official cartel, the high concentration of resources to a handful of
countries, and extensively to a handful of players, creates a natural oligopoly. However, storage costs are higher for
natural gas as it is more difficult to store it due to its state, and that is more likely to induce competition. Accordingly,
natural gas is more prone to short-term price shocks and supply imbalances that disrupt the market, and induce rivalry.
The level of supply in midstream activities related to transportation and storage can largely impact rivalry among
midstream companies. When there is oversupply (overcapacity) of oil and gas tankers or oil and gas storage facilities,
rivalry among players in these activities increases as they have to compete on lower prices. In contrast, when the level
of demand exceeds supply of transportation means and storage facilities, rivalry is reduced. As far as pipeline networks
are concerned, competition is not existent as these are a monopolistic activity by nature; it is not economically viable
for multiple competing pipelines to exist.
In downstream activities, and particularly in refineries, oversupply can have an adverse effect on rivalry. Refinery
utilization rates, which are a major factor impacting profitability, can highlight the level of input with respect to
capacity. Typically, a 95% utilization rate is considered as optimal.
Although oil and gas are indispensable inputs for economic activity, rivalry is impacted by the economic output. Prices,
as a result of the equilibrium between demand and supply strongly impact rivalry conditions. Lower oil prices increase
rivalry as they suppress profitability, especially for refineries and upstream companies with high break-even points. In
contrast, higher oil prices increase the margins of players in the market, alleviating competition. The fall in oil and gas
prices during 2014-16 with a prolonged low-price environment since then – the lowest since the aftermath of the
financial crisis of 2008 - has increased rivalry among players in the market, as it has become more difficult for smaller
players to compete over suppressed margins. The collapse in oil prices during 2020, amid a sharp drop in demand due
to the pandemic, has intensified rivalry conditions in the industry, suppressing margins for players further. Only
recently, in 2021, the surge of oil and gas prices as result of a strong demand recovery that outpaced supply, has
enabled oil and gas companies to increase their profitability, thus alleviating competition. Most importantly, though,
the recent geopolitical developments with Russia's invasion in Ukraine are set to permanently disrupt the supply, and
extensively the demand dynamics across the oil & gas markets worldwide. With impending sanctions against Russian oil
and gas exports by many countries, there is a high risk of a long-term supply shock given limited supply alternatives,
especially with respect to gas supplies. This is set to favor non-Russian suppliers of oil and gas in the upstream and
midstream sectors, which are to benefit from increased demand in a tight supply environment that maintains high
prices and improved margins. While downstream players like refineries can theoretically be favored from a high-price
environment, the increasing concentration of the market to fewer suppliers in the upstream and midstream sector may
put them at disadvantage. Meanwhile, the record-high price levels, especially with regards to gas, may weaken
demand. Subsequently, it is expected that rivalry will intensify in the mid-term.
Overall, there is a moderate level of rivalry in the global oil and gas market.

Industry Profiles
7. Competitive Landscape
The UK oil and gas market is concentrated to leading players BP, ExxonMobil, Shell, Total, China National Offshore
Oil Corporation (COOC), Centrica, Phillips 66, Valero Energy Corp and Petroineos.
7.1. Who are the leading players?

In the UK, the supply of oil through upstream activities is highly concentrated to BP and CNOOC, which operate
some of the largest oil fields in the North Sea and West Shetland. These two players account for approximately
25% and 15% of oil production in the market, respectively. Other leading players in upstream activities include
Premier Oil, Apache Corp, Total and Repsol, which have minor but still significant market shares in oil production,
while the rest of the market is fragmented by smaller players. The concentration of market power tends to be
higher in downstream activities in this market, where ExxonMobil, Valero Energy, Phillips66 and PetroIneos (a
joint-venture between Ineos AG and PetroChina) are the leading players in refinery activities. These four players
account for nearly 85% of the supply of refined petroleum products in this market. In the retail distribution part of
the market, competition tends to be higher among leading brands Shell, BP, Esso and low-cost brands of
independent retailers. Overall, the presence of quite a few large players in the oil segment of the UK market, and
the fragmentation of the value chain between downstream and upstream activities increases competition.
The supply of gas through upstream activities in the UK is highly concentrated to Total and Chrysaor, which
account for nearly 30% and 15% of production in the market. Other significant players in this field include Shell,
Perenco and Neptune Energy, which have smaller shares, with the rest of the segment highly fragmented by
smaller players. In midstream activities, mainly comprised by the operation of the pipeline network, the National
Grid plc is dominant, with BP and ExxonMobil also having considerable shares. In downstream activities, Centrica
has high concentration of market power by comprising nearly a quarter of the total gas processing capacity of the
market, followed by Shell which makes up for approximately 15%. The rest of the market is fragmented among
other large players like ConocoPhillips, Eni, Perenco, Total and Ineos. The market power of ExxonMobil and
National Grid which are dominant in the operation of LNG terminals, has been increasing against the rest of
players in this segment, in line with increasing share of supply by LNG imports. Although there is a relatively high
concentration of gas supply to a few players, the high fragmentation of the gas segment in each stage of the value
chain is increasing competition.
7.2. What strategies do the leading players follow?

Exxon Mobil has extensive upstream and downstream operations. The company's upstream segment explores for
and produces crude oil and natural gas. The company's upstream business includes exploration, development,
production, natural gas marketing, and research activities. In the US, exploration and development are carried out
primarily in the Permian Basin of West Texas and New Mexico. The company's downstream segment produces and
sells petroleum products. Exxon Mobil has a wide presence across various regions. The company's revenue stream
is diversified in terms of geographies. Exxon Mobil divides its geographic divisions into US and non-US. The non-US
region covers Canada, the UK, Belgium, Italy, France, Singapore, Germany, and other countries. In FY2020, the
company generated 35.1% of its total revenue from the US and 64.9% of revenue from non-US countries The
company's global operations and regional brand identity gives it a competitive advantage and also indicates that
the company has a wider scope in increasing its revenues by utilizing its global presence. Moreover, its worldwide
presence reduces exposure to economic conditions or political stability in any one country or region.
Exxon Mobil's downstream operations refine and distribute products derived from crude oil and other products.
The company's global network of manufacturing plants, transportation systems, and distribution centers provides
fuels, lubricants, and other products and feedstocks to customers. ExxonMobil has reserves in Europe, Asia,
Australia and Oceania, Africa and the Americas. As of December 2021, the company’s proved reserves stood at
18,536 million barrels of oil equivalent (MMboe), which comprised 56.9% proved developed and the remaining

Industry Profiles
being proved undeveloped reserves. Its proved reserve base includes 7,436 MMbbls of oil; 1,406 MMbbls of NGL,
38,175 bcf of natural gas; 438 MMbbls of synthetic oil; and 2,894 MMbbls of bitumen.
ExxonMobil’s Downstream segment manufactures, trades and sells petroleum products. The refining and supply
operations include a global network of manufacturing plants, transportation systems, and distribution centers that
offer a range of fuels, lubricants and other products and feedstock to customers around the world. As of
December 2021, the company’s downstream refinery throughput was 3,945 Mbbl/d. The US accounted for 36.7%
of the company’s Downstream business and Non-US accounted for 63.3% of the segment revenue in FY2021. The
increase in revenue was due to improved margins as a result of improved refining conditions, which added
US$1,920 million to the segment revenue. The segment also reported higher volumes due to a recovery in
demand, which added US$100 million in revenue. The lower capital expenditure in the segment also increased
segment earnings by US$300 million.
BP is one of the largest refiners in the world. The company owned or had a share in 10 refineries worldwide. The
availability of substantial refining capacity enabled BP to refine larger amount of crude oil and produce higher
quantity of petroleum products. Operating reliability is core to the company’s refining business. In FY2020, BP’s
operations remained strong, with refining availability at 96%. As of December 2020, BP’s share in crude distillation
capacity stood at 1,909 thousand barrels per day (Mbpd), which includes 771 Mbpd in the US; 862 Mbpd in
Europe; 276 Mbpd in Rest of the World. Its total refinery throughput consists of 693 Mbpd/d in the US; 742
Mbpd/d in Europe; and 192 Mbpd/d in Rest of the World.
BP has a substantial base of geographically distributed assets, which strengthened its business operations.
Interests in assets and territorial coverage enabled the company to reduce its dependence on a single type of
assets. It had interests in various assets in exploration, development, production and commercialization phases. As
of December 2020, BP had interests in 20.6 million gross acres of developed oil and gas assets and 670.2 million
gross acres of undeveloped oil and gas assets. Its gross developed acreage consisted of 75,000 acres in the UK;
86,000 acres in rest of Europe; and 3.6 million acres in the US.
The company’s strong network gives it a competitive advantage to increase its market share and also enable it to
attract new customers. The company’s British Gas is a leading in-home servicing provider and energy supplier in
the UK with 7.26 million energy residential customers and 3.4 million services customers. Centrica’s Bord Gais
Energy is the second largest home energy supplier in Ireland. Centrica Business Solutions has 240MW of solar
designed, installed and maintained worldwide. Centrica Energy Marketing & Trading trades gas across 15 countries
and power across 24 European countries.
Shell is the largest retailer of petroleum products across the world. Substantial investments in retail operations
enabled the company to tap the potential in various regions. As of December 2021, it had 46,000 branded service
stations in more than 70 countries. Shell is also one of the largest suppliers of aviation fuel. It sells fuels under the
Shell V-Power brand in 66 countries. The company had around 32 million customers visit its retail sites to buy fuel,
convenience items, including beverages and fresh food, and services such as lubricant change and car wash.
Shell has a substantial base of geographically distributed assets, which strengthened its business operations.
Interests in assets and territorial coverage enabled the company to reduce its dependence on a single asset type. It
had interests in various assets in exploration, development, production and commercialization phases. As of
December 2021, the company had interests in 36.1 million gross acres of developed oil and gas assets and 152.9
million gross acres of undeveloped oil and gas assets. Its gross developed acreage comprises 6,009 thousand acres
in Europe; 21,360 thousand acres in Asia; 2,485 thousand acres in Oceania; 3,937 thousand acres in Africa; 487
thousand acres in the US; 359 thousand acres in Canada; and 1,463 thousand acres in South America.
Focus on technical innovation enabled Shell to strengthen its integrated business operations. The company carries
out research and development (R&D) to come up with technological solutions for its operating businesses and
energy projects across the world. Its R&D aims at developing technologies for reducing energy requirements,
environmental impact and cost of operations. Shell develops technologies that enable it to capitalize on growth
opportunities in both upstream and downstream segments. Its R&D covers the entire value chain of energy
business and the company manages it as a single integrated R&D organization, which endeavors to develop
proprietary technologies internally and through scientific and technological collaborations. It focuses on
developing new methods that could reduce time and increase the amount of oil extracted. The company intends

Industry Profiles
to develop new fuels for transport such as advanced biofuels and hydrogen. Currently, it is working on reducing
environmental impact through technological applications such as carbon capture and storage (CCS) and energy
efficiency at its refineries. As of December 2021, the company had approximately 8,532 patents and patent
applications pending. In FY2021, it spent US$815 million on R&D, which as a percentage of revenue, stood at 0.3%.
The company operates technological centers in the Netherlands, India and the US, with other centers in Brazil,
China, Germany, Oman and Qatar.
7.3. What were the most notable recent developments in this market?
Energy giant Shell is reassessing its recent decision to abandoned plans to develop the Cambo oilfield, in the UK
North Sea, reported the BBC.
In December 2021, the firm said it had pulled out of the Cambo project, which is situated more than 1,000 metres
underwater, citing weak economics.
The move also followed campaigns against the project by climate activists over its non-compliance with the
country’s environmental goals.
The review of the decision by Shell comes amid surging global oil prices. When the decision was first made, crude
oil prices were below $70 a barrel. Prices have now surged to more than $100 per barrel, following the invasion of
Ukraine by Russia. Shell owns a 30% stake in the Cambo field, which is expected to have an operational life of 25
years. Siccar Point holds the remaining stake of 70%

Industry Profiles
8. Company Profiles
8.1. Exxon Mobil Corporation
8.1.1. Company Overview
Exxon Mobil Corporation (Exxon Mobil or “the company”) is an integrated oil and gas company that is involved
in the exploration and production of crude oil and natural gas, manufacture of petroleum products, and
transportation and sale of crude oil, natural gas, and petroleum products. The company also manufactures and
markets commodity petrochemicals, including polyethylene, olefins, polypropylene plastics, aromatics, and a
wide range of specialty products. Exxon Mobil markets its products under Exxon, Mobil, Esso, and Mobil 1
brand names. Exxon Mobil has a business presence across the Americas, Europe, Africa, the Middle East, and
the Asia Pacific. Exxon Mobil is headquartered in Irving, Texas, the US.
The company reported revenues of (US Dollars) US$276,692 million for the fiscal year ended December 2021
(FY2021), an increase of 54.9% over FY2020. The operating profit of the company was US$23,233 million in
FY2021, compared to an operating loss of US$30,653 million in FY2020. The net profit of the company was
US$23,040 million in FY2021, compared to a net loss of US$22,440 million in FY2020. The company reported
revenues of US$87,734 million for the first quarter ended March 2022, an increase of 7.9% over the previous
quarter.
8.1.2. Key Facts
Table 8: Exxon Mobil Corporation: key facts
Head office: 5959 Las Colinas Blvd , Irving, Texas, United States
Telephone: 19724441000
Fax: 19724441505
Number of Employees: 63000
Website: corporate.exxonmobil.com
Financial year-end: December
Ticker: XOM
Stock exchange: New York Stock Exchange
SOURCE: COMPANY WEBSITE MARKETLINE
8.1.3. Business Description
Exxon Mobil Corporation (Exxon Mobil or “the company”) is an oil and gas company. The company is involved in
the exploration and production of crude oil and natural gas, manufacture of petroleum products, and
transportation and sale of crude oil, natural gas, and petroleum products. It also manufactures and markets
commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene and a wide range of
specialty products.
The company operates through three reportable business segments: Downstream; Chemicals; and Upstream.
The Downstream segment manufactures and sells petroleum products. Exxon Mobil's downstream operations
refine and distribute products derived from crude oil and other feedstocks. The company's global network of
manufacturing plants, transportation systems, and distribution centers provides fuels, lubricants, and other
products and feedstocks to customers. In FY2020, the Downstream segment reported revenue of US$140,896
million, which accounted for 78.9% of the company's total revenue.

Industry Profiles
The Chemicals segment produces and sells petrochemicals. The segment supplies olefins, aromatics, polyethylene,
polyolefins, polypropylene, Paraxylene, ethylene, polyolefins and other petrochemical products. In FY2020, the
Chemical segment reported revenue of US$23,091 million, which accounted for 12.9% of the company's total
revenue.
The Upstream segment explores for and produces crude oil and natural gas. It includes exploration, development,
production, natural gas marketing, and research activities. The company's upstream portfolio includes operations
in the US, Canada, other Americas, Europe, the Asia-Pacific, Australia, and Africa. The company’s upstream
business is arranged into five businesses: heavy oil, unconventional, deepwater, liquefied natural gas (LNG), and
conventional. In FY2020, the Upstream segment reported revenue of US$14,549 million, which accounted for 8.1%
of the company's total revenue.
Geographically, Exxon Mobil operates in the Americas, Europe, Africa, the Middle East, and Asia Pacific. The
company classifies its operations two regions, including the US and Non-US. In FY2020, the Non-US reported
revenue accounted for 64.9% of the company's total revenue and the remaining 35% from the US.

Industry Profiles
Table 9: Exxon Mobil Corporation: Annual Financial Ratios

Key Ratios 2017 2018 2019 2020 2021
Growth Ratios
Sales Growth % 18.21 17.78 -8.50 -30.13 54.95
EBITDA Growth % 37.53 23.83 -22.54 -49.92 185.49
Net Income Growth % 151.40 5.73 -31.19 -256.49 202.67
EPS Growth % 72.35 50.88 -47.02 -150.91
Working Capital Growth % 70.96 -13.84 52.07 -17.70 -121.89
Equity Ratios
EPS (Earnings per Share) USD 3.23 4.88 2.59 -1.32 5.33
Dividend per Share USD 3.06 3.23 3.43 3.48 3.49
Dividend Cover Absolute 1.06 1.51 0.75 -0.38 1.53
Book Value per Share USD 44.28 45.27 45.26 37.12 39.77
Profitability Ratios
Gross Margin % 31.55 30.96 29.33 30.32 30.90
Operating Margin % 5.09 7.46 4.56 -17.17 8.40
Net Profit Margin % 8.31 7.46 5.61 -12.57 8.33
Profit Markup % 46.09 44.84 41.50 43.50 44.71
PBT Margin (Profit Before Tax) % 7.87 11.08 7.85 -16.17 11.29
Return on Equity % 10.50 10.87 7.48 -14.28 13.67
Return on Capital Employed % 4.15 7.21 3.91 -11.09 8.23
Return on Assets % 5.81 6.00 4.05 -6.45 6.86
Return on Working Capital % -113.51 -227.38 -83.69 267.24 925.25
Operating Costs (% of Sales) % 94.91 92.54 95.44 117.17 91.60
Administration Costs (% of Sales) % 17.31 15.80 16.35 20.32 14.39
Liquidity Ratios
Current Ratio Absolute 0.82 0.84 0.78 0.80 1.04
Quick Ratio Absolute 0.52 0.51 0.49 0.46 0.71
Cash Ratio Absolute 0.05 0.05 0.05 0.08 0.12
Leverage Ratios
Debt to Equity Ratio Absolute 0.23 0.20 0.25 0.43 0.28
Net Debt to Equity Absolute 0.21 0.18 0.23 0.40 0.24
Debt to Capital Ratio Absolute 0.18 0.16 0.20 0.30 0.22
Efficiency Ratios
Asset Turnover Absolute 0.70 0.80 0.72 0.51 0.82
Fixed Asset Turnover Absolute 0.95 1.12 1.01 0.72 1.21
Inventory Turnover Absolute 10.12 10.73 9.64 6.66 10.16
Current Asset Turnover Absolute 5.36 5.87 5.21 3.76 5.32
Capital Employed Turnover Absolute 0.82 0.97 0.86 0.65 0.98
Working Capital Turnover Absolute -22.30 -30.48 -18.34 -15.57 110.19
SOURCE: COMPANY FILINGS MARKETLINE

Industry Profiles
Table 10: Exxon Mobil Corporation: Key Employees
Name Job Title Board

Angela F. Braly Director Non Executive Board
President ExxonMobil Fuels and Lubricants
Bryan Milton Senior Management
Company
Bryan Milton Vice President Senior Management
Craig Morford General Counsel Senior Management
Craig Morford Vice President Senior Management
Dan Ammann President Low Carbon Solutions Senior Management
Darren W. Woods Chairman Executive Board
Darren W. Woods Chief Executive Officer Executive Board
Douglas R. Oberhelman Director Non Executive Board
Geraldine Chin Chairman ExxonMobil Asia Pacific Executive Board
Geraldine Chin Managing Director ExxonMobil Asia Pacific Executive Board
Jack P. Williams Senior Vice President Senior Management
James M. Spellings, Jr. General Tax Counsel Senior Management
James M. Spellings, Jr. Vice President Senior Management
Jeffrey Ubben Director Non Executive Board
Jennifer Driscoll Vice President Investor Relations Senior Management
Joseph L. Hooley Director Non Executive Board
Karen McKee President ExxonMobil Chemical Company Senior Management
Kathryn Mikells Chief Financial Officer Senior Management
Kathryn Mikells Senior Vice President Senior Management
Kenneth C. Frazier Director Non Executive Board
Len M. Fox Controller Senior Management
Len M. Fox Vice President Senior Management
Liam Mallon President ExxonMobil Development Company Senior Management
President ExxonMobil Upstream Business
Linda D. DuCharme Senior Management
Development Company
President ExxonMobil Upstream Integrated
Linda D. DuCharme Senior Management
Solutions Company
Linda D. DuCharme Vice President Senior Management
Michael Angelakis Director Non Executive Board
Neil A. Chapman Senior Vice President Senior Management
Vice President Fuels Europe, Middle East and
Neil A. Hansen Senior Management
Africa

Industry Profiles
Table 11: Exxon Mobil Corporation: Key Employees Continued

Neil W. Duffin President ExxonMobil Production Company Senior Management
Neil W. Duffin Vice President Senior Management
Robert N. Schleckser Treasurer Senior Management
Robert N. Schleckser Vice President Senior Management
Samuel J. Palmisano Director Non Executive Board
Steven A. Kandarian Director Non Executive Board
Susan K. Avery Director Non Executive Board
Tan Sri Wan Zulkiflee Wan Ariffin Director Non Executive Board
Theodore J. Wojnar, Jr. Vice President Corporate Strategic Planning Senior Management
Ursula M. Burns Director Non Executive Board
William C. Weldon Director Non Executive Board

Industry Profiles
8.2. Centrica plc
Centrica plc (Centrica or 'the company') is a provider of electricity, natural gas, and home services. The
company provides gas storage services and other energy related services; installation, repair, and maintenance
of domestic central heating, plumbing and drains, gas appliances, and kitchen appliances. It also offers
installation and maintenance of heating, ventilation, and air conditioning (HVAC) equipment and water heaters,
and provision of breakdown services. The company produces and processes gas and oil, and develops new
fields across Europe and the UK. Centrica has business presence across the UK, Republic of Ireland, Germany,
Norway, other European countries, the US and Canada. Centrica is headquartered in Windsor, Berkshire, the
UK.
The company reported revenues of (British Pounds) GBP18,300 million for the fiscal year ended December
2021 (FY2021), an increase of 22.4% over FY2020. The operating profit of the company was GBP954 million in
FY2021, compared to an operating loss of GBP362 million in FY2020. In FY2021, the company recorded a net
margin of 6.6%, compared to a net margin of 0.3% in FY2020.
8.2.2. Key Facts
Table 12: Centrica plc: key facts
Head office: Millstream Maidenhead Road, Windsor, United Kingdom

Telephone: 441753494000
Fax: 441753494001
Website: www.centrica.com
Ticker: CNA
Stock exchange: London Stock Exchange (LON)
Centrica plc (Centrica or 'the company') is an energy and services company that generates and supplies electricity
and natural gas to industrial, commercial and residential customers. It also offers various energy-related services.
The company operates across Europe and North America.
The company classifies its business operation into five business segments: Energy Marketing and Trading, Centrica
Business Solutions, British Gas, Bord Gas Energy and Upstream.
The Energy Marketing and Trading includes procuring, trading and optimization of energy in Europe and the UK. It
also generates power from Spalding combined cycle gas turbine tolling contract. It procures and sells LNG globally.
In FY2020, the Energy Marketing and Trading segment reported a revenue of GBP2,742 million, which accounted
for 18.3% of the company's total revenue.
Under the Centrica Business Solutions segment, Centrica supplies of electricity and gas and provides of energy-
related services to customers and trading counterparties in the UK. It supplies flexible generation, energy
efficiency solutions, and new technologies to industrial and commercial customers. In FY2020, the Centrica
Business Solutions segment reported a revenue of GBP2,123 million, which accounted for 14.2% of the company's
total revenue.
The Centrica Consumer segment includes Connected Home, North America Home, Ireland and UK Home divisions.
Connected Home division provides energy efficiency solutions and new technologies to residential customers.

Industry Profiles
Ireland division offers repair and maintenance of domestic central heating in the Republic of Ireland. The segment
supplies gas, electricity and energy management solutions to industrial, commercial and residential customers.
The UK Home division provides fixed-fee maintenance breakdown service and insurance contracts in the UK,
kitchen and gas appliances, central heating, repair and maintenance, plumbing and drains, electricity and gas to
customers in the UK. In FY2020, the Centrica Consumer segment reported revenue of GBP2,123 million, which
accounted for 14.2% of the company's revenue.
The Centrica Business segment includes Central Power Generation, Energy Marketing and Trading, UK Business,
North America Business and Distributed Energy and Power divisions. The Central Power Generation division
includes nuclear assets and power generation from combined cycle gas turbines in the UK. North America Business
division supplies electricity, gas and other services to business customers and is also involved in procurement,
trading and optimization of energy in North America. Energy Marketing and Trading division operates business
through Neas Energy and is involved in trading and optimization of energy. The UK Business division supplies gas
and electricity and offers energy-related services to business customers in the UK. Distributed Energy and Power
division supplies energy efficiency solutions, technologies to industrial and commercial customers, and flexible
generation. In FY2020, the Centrica Business segment reported revenue of GBP2,123 million, which accounted for
14.2% of the company's revenue.
The Upstream segment includes the Spirit Energy and Centrica Storage divisions. It produces and processes gas
and oil, and develops new fields across Europe and the UK. In FY2020, the Upstream segment reported revenue of
GBP1,379 million, which accounted for 9.3% of the company's revenue.

Industry Profiles
Table 13: Centrica plc: Annual Financial Ratios

Key Ratios 2017 2018 2019 2020 2021
Growth Ratios
Sales Growth % 3.44 -2.33 -41.72 -6.32 22.42
EBITDA Growth % -35.99 -17.93 -18.80 22.36
Net Income Growth % -80.38 -44.21 -659.02 104.01 2851.22
EPS Growth % 56.41 -40.85 -31.47 15.00 18.83
Working Capital Growth % 20.41 -83.34 -307.75 -565.59 -30.51
Equity Ratios
EPS (Earnings per Share) GBP 0.26 0.15 0.10 0.12 0.14
Dividend per Share GBP 0.12 0.12 0.02
Book Value per Share GBP 0.48 0.55 0.21 0.16 0.40
Gross Margin % 14.40 15.53 17.76 15.61 15.68
Operating Margin % 1.72 3.10 -4.91 -2.42 5.21
Net Profit Margin % 1.17 0.67 -6.41 0.27 6.61
Profit Markup % 16.82 18.39 21.59 18.49 18.60
PBT Margin (Profit Before Tax) % 0.49 2.10 -6.48 -3.86 4.19
Return on Equity % 12.13 5.82 -84.41 4.28 51.16
Return on Capital Employed % 3.64 6.97 -8.45 -3.83 10.47
Return on Assets % 1.54 0.89 -5.29 0.23 5.47
Return on Working Capital % 28.21 298.59 132.71 -13.18 49.97
Liquidity Ratios
Leverage Ratios
Net Debt to Equity Absolute 1.30 1.12 3.27 3.78 -0.02
Efficiency Ratios
Working Capital Turnover Absolute 16.44 96.41 -27.05 5.44 9.59

Industry Profiles
Table 14: Centrica plc: Key Employees

Amber Rudd Director Non Executive Board
Carol Arrowsmith Director Non Executive Board
Catherine O’Kelly Managing Director British Gas Energy Senior Management
Chris O’Shea Chief Executive Officer Executive Board
Chris O’Shea Director Executive Board
Heidi Mottram Director Non Executive Board
Managing Director British Gas Services and
Jana Siber Senior Management
Solutions
Jill Shedden Chief People Officer Senior Management
Kate Ringrose Chief Financial Officer Executive Board
Kate Ringrose Director Executive Board
Kevin O’Byrne Director Non Executive Board
Nathan Bostock Director Non Executive Board
Raj Roy General Counsel Senior Management
Raj Roy Secretary Senior Management
Scott Wheway Chairman Executive Board

Industry Profiles
8.3. BP Plc
BP Plc (BP or ‘the company’) is an integrated oil and gas companies in the world. The company's operations
primarily include the exploration and production of gas and crude oil, as well as the trading and marketing of
natural gas, power, and natural gas liquids (NGLs). It offers refining, manufacturing, transportation, marketing,
trading and supply of crude oil, petroleum, petrochemicals products and related services to wholesale and
retail customers. It sells refined petroleum products including gasoline, diesel, aviation fuel, and liquefied
petroleum gas (LPG). BP operates across Europe, Asia Pacific, Africa, and the Americas. The company is
headquartered in London, the UK.
revenues of US$49,258 million for the first quarter ended March 2022, a decrease of 2.6% over the previous
quarter.
8.3.2. Key Facts
Table 15: BP Plc: key facts
Head office: 1 St. James's Square , London, United Kingdom

Telephone: 442074962107
Fax: 442074964630
Website: www.bp.com
Ticker: BP.
BP Plc (BP or ‘the company’) is one of the world's largest oil and gas companies. The company's operations
primarily include the exploration and production of gas and crude oil, as well as the marketing and trading of
natural gas, power, and natural gas liquids (NGLs). BP operates in 79 countries across Europe, Asia Pacific, Africa,
and the Americas.
The company operates through three reportable business segments: Downstream; Upstream; Rosneft; and Other
Businesses and Corporate.
The Downstream segment is the product and service-led arm of BP, focused on fuels, lubricants, and
petrochemicals. The company's downstream activities include the refining, manufacturing, marketing,
transportation, and supply and trading of crude oil, petroleum, petrochemicals products and related services to
wholesale and retail customers. The segment has significant operations in Europe, North America and Asia, and
also manufactures and markets products in Australasia, Africa and Central and South America. The company's fuels
business includes fuels value chains (FVCs) including refineries, fuels marketing businesses, and global oil supply
and trading activities. The company sells refined petroleum products including gasoline, diesel, aviation fuel, and
liquefied petroleum gas (LPG). The lubricants business manufactures and markets lubricants and related products
and services globally, adding value through brand, technology, and relationships, such as collaboration with

Industry Profiles
original equipment manufacturing partners. The company's lubricants business manufactures and markets
lubricants and related products and services to the automotive, industrial, marine, aviation, and energy markets
across the world. Its key brands are Castrol, BP, and Aral. The petrochemicals business manufactures products at
locations around the world, using proprietary BP technology. These products are then used by others to make
consumer products such as paint, plastic bottles, and textiles. In the petrochemicals business, BP manufacture and
market four main product lines: purified terephthalic acid (PTA); paraxylene; acetic acid; and olefins and
derivatives. The company also produces a number of other specialty petrochemicals products. In FY2020, the
Downstream segment reported revenues of US$162,816 million, which accounted for 90.3% of the company's
total revenue.
The Upstream segment is engaged in activities such as oil and natural gas exploration, field development and
production, and midstream transportation, storage, and processing. The segment is also engaged in the marketing
and trading of natural gas, including liquefied natural gas (LNG), power, and NGLs. BP's exploration, development
and production activities are delivered through five global technical and operating functions: exploration; reservoir
development; global wells organization; global projects organization; and global operations organization. The
exploration function is engaged in renewing the company's resource base through access, exploration, and
appraisal, while the reservoir development function is responsible for the stewardship of the company's resource
portfolio. The global wells organization and the global projects organization functions are engaged in the safe,
reliable, and compliant execution of wells (drilling and completions) and major projects, respectively. The global
operations organization function is engaged in the safe, reliable, and compliant operations, including upstream
production assets and midstream transportation and processing activities. The upstream segment's total
estimated hydrocarbon reserves, on an oil equivalent basis including equity-accounted entities. The company's oil
and natural gas production assets are located onshore and offshore and include wells, gathering centers, in-field
flow lines, processing facilities, storage facilities, offshore platforms, export systems (like transit lines), pipelines,
and LNG plant facilities. The principal areas of production are Angola, Argentina, Australia, Azerbaijan, Egypt,
Trinidad, the UAE, the UK, and the US. In addition, the company operates US Lower 48 onshore business which is
engaged in activities producing natural gas, NGLs and condensate across six states, including production from
unconventional gas, coal bed methane (CBM) and shale gas assets. In FY2020, the Upstream segment reported
revenues of $17,067 million, which accounted for 9.5% of the company's total revenue.
The Other Businesses and Corporate segment comprise the biofuels and wind businesses, the company's shipping
and treasury functions, and corporate activities worldwide. In the alternative energy business, BP is focused on
biofuels and wind. It operates three bioethanol sites in Brazil producing bioethanol and sugar and exporting power
to the local grid. In addition, the company directly operated 14 wind farms in eight US states, while holding an
interest in a separate facility in Hawaii. Through the shipping business, BP is engaged in the transportation of
hydrocarbon products using a combination of BP-operated, time-chartered and spot-chartered vessels. In FY2020,
the Other Businesses and Corporate segment reported revenues of US$483 million, which accounted for 0.3% of
the company's total revenue.
Geographically, the company classifies its operations into two segments, namely US and Non-US. In FY2020, US
segment accounted for 30.8% of the company's total revenues, followed by Non-US with 69.2%.

Industry Profiles
Table 16: BP Plc: Annual Financial Ratios

Key Ratios 2017 2018 2019 2020 2021
Growth Ratios
Sales Growth % 31.26 24.37 -46.68 -33.50 48.89
EBITDA Growth % 89.12 38.44 -16.00 -127.93
EPS Growth % -0.91 38.54 4.19 -100.63
Working Capital Growth % 8.28 -70.00 175.43 55.75 -6.68
Equity Ratios
EPS (Earnings per Share) USD 0.45 0.62 0.65 0.72
Dividend Cover Absolute 1.12 1.57 1.58 -0.01 3.35
Gross Margin % 15.48 15.08 28.68 23.91 23.92
Profit Markup % 18.31 17.76 40.20 31.42 31.44
Return on Equity % 3.44 9.44 4.09 -28.50 10.02
Return on Assets % 1.26 3.36 1.39 -7.22 2.73
Liquidity Ratios
Leverage Ratios
Efficiency Ratios
Working Capital Turnover Absolute 23.45 97.22 18.82 8.04 12.82

Industry Profiles
Table 17: BP Plc: Key Employees

Ayten Agalarova Vice President Georgia Senior Management
Vice President Communications and
Bakhtiyar Aslanbayli Senior Management
Advocacy, Middle East and Caspian regions
Bernard Looney Chief Executive Officer Executive Board
Bernard Looney Director Executive Board
Executive Vice President Trading and
Carol Howle Senior Management
Shipping
Executive Vice President Innovation and
David Eyton Senior Management
Engineering
Executive Vice President Gas and Low
Dev Sanyal Senior Management
Carbon Energy
Elkhan Mammadov Vice President Production, AGT Region Senior Management
Vice President People and Culture, AGT
Elnara Mammadova Senior Management
Region and Russia
Executive Vice President Customers and
Emma Delaney Senior Management
Products
Eric Nitcher Executive Vice President Legal Senior Management
Executive Vice President Communications
Geoff Morrell Senior Management
and Advocacy
Executive Vice President Strategy and
Giulia Chierchia Senior Management
Sustainability
Executive Vice President Production and
Gordon Birrell Senior Management
Operations
Helge Lund Chairman Executive Board
Johannes Teyssen Director Non Executive Board
John Sawers Director Non Executive Board
Karen Richardson Director Non Executive Board
Karim Alaa Senior Vice President North Africa Senior Management
Kerry Dryburgh Executive Vice President People and Culture Senior Management
Louise Kingham Country Head - UK Senior Management
Louise Kingham Senior Vice President Europe Senior Management
Melody Meyer Director Non Executive Board
Murray Auchincloss Chief Financial Officer Executive Board
Murray Auchincloss Director Executive Board
Pamela Daley Director Non Executive Board
Paula Rosput Reynolds Director Non Executive Board
Tushar Morzaria Director Non Executive Board
Executive Vice President Regions, Cities and
William Lin Senior Management
Solutions
Vice President Safety and Operational Risk
Zaur Pashayev Senior Management
Assurance, AGT and Asia Pacific Regions

Industry Profiles
8.4. Shell plc.
Shell plc. (Shell or 'the company'), formerly Royal Dutch Shell plc, explores for and recovers crude oil, natural
gas, and natural gas liquids (NGLs); transport oil and gas; and operates the upstream and midstream
infrastructure necessary to deliver oil and gas to market. The company is engaged in refining and marketing
activities for oil products and chemicals as well as gas power. The company offers petroleum products supply
and distribution services; gas service stations; and automotive technical support services. Shell sells its products
and services under the brands: Shell and V- Power. Shell operates through four segments namely: Downstream;
Integrated Gas; Upstream and Corporate. It has operations in Europe, Asia, Oceania, Africa, and the Americas.
The company is headquartered in The Hague, the Netherlands.
revenues of US$84,204 million for the first quarter ended March 2022, a decrease of 1.3% over the previous
quarter.
8.4.2. Key Facts
Table 18: Shell plc.: key facts
Head office: Shell Centre , London, United Kingdom

Telephone: 442079341234
Website: www.shell.com
Ticker: SHEL
Royal Dutch Shell plc (Shell or 'the company') is one of the world's largest independent oil and gas companies
primarily engaged in the exploration and production of crude oil, natural gas, and natural gas liquids (NGLs). In
addition, the company is engaged in refining and marketing activities for oil products and chemicals. Shell operates
in Europe, Asia, Oceania, Africa, and the Americas.
The company operates through four business segments: Upstream, Integrated Gas, Oil Products and Chemicals.
Shell’s Integrated Gas segment manages liquefied natural gas (LNG) activities and the conversion of natural gas
into GTL fuels and other products, as well as the New Energies portfolio. It includes natural gas exploration and
extraction, when contractually linked to the production and transportation of LNG, and the operation of the
upstream and midstream infrastructure necessary to deliver gas to market. It markets and trades crude oil, natural
gas, LNG, electricity, carbon-emission rights and also markets and sells LNG as a fuel for heavy-duty vehicles and
marine vessels. In FY2020, the company's 18 LNG liquefaction plant with capacity of 132.7 million tonnes per
annum (MMTPA), with a liquefaction volume of 33.2 MMT and LNG sales of 69.67 MMT. In FY2020, the Integrated
Gas segment reported revenues of US$33,287 million, which accounted for 18.4% of the company's total revenue.
Shell's Upstream is engaged in the exploration for and extraction of crude oil, natural gas and natural gas liquids,
and the marketing and transportation of oil and gas, and Oil Sands, which is engaged in the extraction of bitumen
from mined oil sands and conversion into synthetic crude oil. The company's Upstream segment includes the

Industry Profiles
upstream international and upstream Americas. The company's upstream Americas business manages its
upstream activities in North and South America. It explores for and recovers crude oil, natural gas and NGLs,
transports oil and gas and operates the upstream and midstream infrastructure necessary to deliver oil and gas to
market. Upstream Americas also extracts bitumen from oil sands that is converted into synthetic crude oil. It
manages the LNG business in the Americas, including assets in Peru and Trinidad and Tobago. It also markets and
trades natural gas in the Americas. Additionally, it manages the US-based wind business. In FY2020, the company
had 38.4 million gross developed acres and 155.2 million gross undeveloped acres. It had 24,570 gross oil and
6,221 gross natural gas wells with total production of 2,424 Mboe/d of oil and gas in FY2020. The company
managed 9,124 MMboe 1P reserves, including 3,977 MMbbls of oil and NGLs; 26,114 bcf of natural gas; and 644
MMbbls of synthetic crude oil In FY2020, the Upstream segment reported revenues of US$6,767 million, which
accounted for 3.7% of the company's total revenue.
Under the Oil Products, the company include refining and trading, and marketing business. Refining and trading
business. It converts crude oil and other feedstock into a range of oil products which are moved and distributed
across the world for domestic, industrial and transport use. The segment marketing business include lubricants,
retail, business-to-business (B2B), pipelines and biofuels businesses. As of FY2020, the company had 125 Shell and
joint-venture terminals in 25 countries; and 46,000 service stations in approximately 80 countries. It manages nine
tank farms across the US; 6,000 km pipelines in the Gulf of Mexico and 5 states in the US. The company operates
four base oil manufacturing plants, 32 lubricant blending plants, eight grease plants and four GTL base oil storage
hubs. It had 13 refineries with capacity of 3.1 mb/d with throughput of 2,063 Mbbl/d and production of 2,122
Mbbl/d. In FY2020, the Oil Products segment reported revenues of US$128,717 million, which accounted for
71.3% of the company's total revenue.
The Chemicals segment manages manufacturing plants and its own marketing network.
In FY2020, the Chemicals segment reported revenues of US$11,721 million, which accounted for 6.5% of the
company's total revenue.
Geographically, the company classifies its operations into four geographies, namely Asia, Oceania, Africa; Europe;
the US and Other Americas. In FY2020, the namely Asia, Oceania, Africa accounted for 36.1% of the company's
total revenues, followed by Europe with 27.8%; US segment with 28.2%; and Other Americas with 8%.

Industry Profiles
Table 19: Shell plc.: Annual Financial Ratios

Key Ratios 2017 2018 2019 2020 2021
Growth Ratios
Sales Growth % 30.65 27.26 -11.20 -47.65 44.84
EBITDA Growth % 64.28 31.12 -4.02 -50.04 105.03
EPS Growth % 238.79 23.86 23.63 -34.41 -11.97
Working Capital Growth % 22.70 25.78 -33.58 39.65 82.07
Equity Ratios
EPS (Earnings per Share) USD 1.95 2.41 2.99 1.96 1.72
Dividend Cover Absolute 1.04 1.28 1.59 3.01 1.93
Gross Margin % 18.05 17.25 18.98 21.85 24.00
Profit Markup % 22.02 20.85 23.43 27.96 31.58
Return on Equity % 6.68 11.76 8.50 -13.96 11.69
Return on Assets % 3.17 5.79 3.94 -5.53 5.13
Liquidity Ratios
Leverage Ratios
Efficiency Ratios
Working Capital Turnover Absolute 19.52 19.75 26.40 9.90 7.87

Industry Profiles
Table 20: Shell plc.: Key Employees

Abraham Schot Director Non Executive Board
Andrew Mackenzie Chairman Executive Board
Ann Godbehere Director Non Executive Board
Ben van Beurden Chief Executive Officer Executive Board
Ben van Beurden Director Executive Board
Catherine Hughes Director Non Executive Board
Dick Boer Director Non Executive Board
Donny Ching Director Legal Senior Management
Director Strategy, Sustainability and Corporate
Ed Daniels Senior Management
Relations
Euleen Goh Director Non Executive Board
Gerrit Zalm Director Non Executive Board
Harry Brekelmans Director Harry Brekelmans Senior Management
Huibert Vigeveno Director Downstream Senior Management
Jane Lute Director Non Executive Board
Linda M. Coulter Secretary Senior Management
Martina Hund-Mejean Director Non Executive Board
Neil Carson Director Non Executive Board
Nigel Sheinwald Director Non Executive Board
Ronan Cassidy Chief Human Resources Officer Senior Management
Ronan Cassidy Corporate Officer Senior Management
Sinead Gorman Chief Financial Officer Executive Board
Sinead Gorman Director Executive Board
Chief Information Officer Shell Energy
Steve Nichols Senior Management
Australia
Senior Vice President Global Renewable
Thomas Brostrom Senior Management
Solutions
Wael Sawan Director Integrated Gas and New Energies Senior Management
Zoe Yujnovich Director Upstream Business Senior Management

Industry Profiles
9. Macroeconomic Indicators
9.1. Country data
Table 21: United Kingdom size of population (million), 2017–21
Year Population (million) % Growth

2017 65.5 0.5%
2018 65.9 0.5%
2019 66.2 0.5%
2020 66.5 0.4%
Table 22: United Kingdom gdp (constant 2005 prices, $ billion), 2017–21
Year Constant 2005 Prices, $ billion % Growth

2017 2,705.7 2.4%
2018 2,772.3 2.5%
2019 2,841.2 2.5%
2020 2,912.3 2.5%
Table 23: United Kingdom gdp (current prices, $ billion), 2017–21
Year Current Prices, $ billion % Growth

2017 3,243.4 4.4%
2018 3,389.9 4.5%
2019 3,544.9 4.6%
2020 3,714.3 4.8%
Table 24: United Kingdom inflation, 2017–21
Year Inflation Rate (%)

2017 2.0%
2018 2.0%
2019 2.1%
2020 2.1%

Industry Profiles
Table 25: United Kingdom consumer price index (absolute), 2017–21
Year Consumer Price Index (2005 = 100)

2017 135.8
2018 138.6
2019 141.5
2020 144.4
Table 26: United Kingdom exchange rate, 2017–21
Year Exchange rate ($/£) Exchange rate (€/£)

2017 0.7760 0.8770
2018 0.7502 0.8850
2019 0.7837 0.8779
2020 0.7795 0.8899
2021 0.7274 0.8600

Industry Profiles
Appendix
Methodology
MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-
checked and presented in a consistent and accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by
analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases
provide the foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company profiles
and macroeconomic & demographic information, which enable our researchers to build an accurate market overview
Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each
definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the
market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends
MarketLine aggregates and analyzes a number of secondary information sources, including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to
be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can
then be refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

Industry Profiles
9.2. Industry associations
9.2.1. Oil & Gas UK
2nd Floor, 232-242 Vauxhall Bridge Road, London, SW1V 1AU, GBR
Tel.: 44 20 7802 2400
Fax: 44 20 7802 2401
www.oilandgasuk.co.uk
9.2.2. UK Petroleum Industry Association
Quality House, Quality Court, Chancery Lane, London WC2A 1HP, GBR
Tel.: 44 20 726 9760 0
www.ukpia.com
9.2.3. EUROPIA - The European Petroleum Industry Association
Boulevard du Souverain 165 - 3rd Floor, BE-1160 Brussels, BEL

Tel.: 32 2 566 91 00
Fax: 32 2 566 91 11
www.europia.com
9.2.4. Energy Institute
61 New Cavendish Street, London W1G 7AR, GBR

Tel.: 44 20 7467 7100
Fax: 44 20 7255 1472
www.energyinst.org.uk
9.3. Related MarketLine research
9.3.1. Industry Profile
Oil & Gas in France

Oil & Gas in Germany
Oil & Gas in Italy
Oil & Gas in Europe

Industry Profiles

Industry Profiles
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MarketLine Industry Profile

Oil & Gas in the United Kingdom

Reference Code: 0183-2116

Publication Date: June 2022

Primary NAICS: 324110

Secondary NAICS: 211130

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 1

1.1. Market value

1.2. Market value forecast

1.3. Market volume

1.4. Market volume forecast

1.5. Category segmentation

1.6. Geography segmentation

1.7. Market rivalry

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 2

1.8. Competitive Landscape

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 3

1.1. Market value ................................................................................................................................................2

1.2. Market value forecast ..................................................................................................................................2

1.3. Market volume.............................................................................................................................................2

1.4. Market volume forecast...............................................................................................................................2

1.5. Category segmentation................................................................................................................................2

1.6. Geography segmentation.............................................................................................................................2

1.7. Market rivalry...............................................................................................................................................2

1.8. Competitive Landscape ................................................................................................................................3

2.1. Market definition .........................................................................................................................................8

2.2. Market analysis ............................................................................................................................................8

3.1. Market value ..............................................................................................................................................11

3.2. Market volume...........................................................................................................................................12

4.1. Category segmentation..............................................................................................................................13

4.2. Geography segmentation...........................................................................................................................15

5.1. Market value forecast ................................................................................................................................16

5.2. Market volume forecast.............................................................................................................................17

6. Five Forces Analysis 18

6.1. Summary ....................................................................................................................................................18

6.2. Buyer power...............................................................................................................................................20

6.3. Supplier power ...........................................................................................................................................22

6.4. New entrants .............................................................................................................................................24

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 4

6.5. Threat of substitutes ..................................................................................................................................26

6.6. Degree of rivalry.........................................................................................................................................28

7.1. Who are the leading players? ....................................................................................................................30

7.2. What strategies do the leading players follow?.........................................................................................30

8.1. Exxon Mobil Corporation ...........................................................................................................................33

8.2. Centrica plc ................................................................................................................................................38

8.4. Shell plc. .....................................................................................................................................................46

9.1. Country data ..............................................................................................................................................50

9.2. Industry associations..................................................................................................................................53

9.3. Related MarketLine research .....................................................................................................................53

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 5

Table 8: Exxon Mobil Corporation: key facts 33

Table 9: Exxon Mobil Corporation: Annual Financial Ratios 35

Table 10: Exxon Mobil Corporation: Key Employees 36

Table 11: Exxon Mobil Corporation: Key Employees Continued 37

Table 12: Centrica plc: key facts 38

Table 13: Centrica plc: Annual Financial Ratios 40

Table 14: Centrica plc: Key Employees 41

Table 15: BP Plc: key facts 42

Table 16: BP Plc: Annual Financial Ratios 44

Table 17: BP Plc: Key Employees 45

Table 18: Shell plc.: key facts 46

Table 19: Shell plc.: Annual Financial Ratios 48

Table 20: Shell plc.: Key Employees 49