PESTLE, PORTER and SWOT analysis of LUKOIL

Topics: Petroleum, Russia, Peak oil Pages: 15 (2605 words) Published: April 17, 2014
Alina Belkina
1. Short overview of LUKOIL

Industry
Oil and gas
Founded
1991
Headquarters
Moscow, Russia
CEO
Vagit Alekperov
Products
Petroleum, Natural gas, Petrochemicals
Revenue
Increase US$ 139.2 billion (2012)
Net income
Increase US$ 11. billion (2012)
Employees
150,000

LUKOIL, a vertically integrated oil company, and carries out exploration, acquisition, integration and subsequent efficient development of oil and gas fields outside the Russian Federation to facilitate the transformation of LUKOIL into a transnational energy corporation. LUKOIL operates in 25 countries (the most major of them are Russia, Azerbaijan, USA, Georgia, Turkey and Czech Republic). Net income in 2013 is $3.105 billion. Basic earnings per share – $4.11. The Company’s 2012 net income rose by 6.2% and reached record $11,004 billion. EBITDA (earnings before interest, taxation, depreciation and amortization) rose by 1.7% and reached $18,915 billion. Sales revenues were $139,171 billion (+4.1% y-o-y). In 2013 Forbes estimated LUKOIL as #43 in Sales, #34 in Profit, #254 in Assets, #139 in Market value. According to these data we can assume, that LUKOIL is successful Russian company with a lot of strengths, like good prospects regarding financial indicators. And fortunately, it doesn´t need any financing. Usually, the company invests in different projects regarding environmental protection and employee´s support.

2. Mission and Vision
Mission:
“The Company’s mission consists in increasing shareholder value through the exploration and production of hydrocarbons outside Russia.” My vision of the situation is that company wants to be a reliable supplier of hydrocarbons on the international market. Moreover, Lukoil has a purpose to support economic growth and social stability in long-term prospects. Thus, it has some main aims such as to achieve reputation of a reliable and dependable hydrocarbon supplier in the world; to deliver high-quality petroleum products to end-users; to ensure long-term sustainable growth; to reach leading position on the market; My formulation of the mission:

Lukoil as a company in the oil and gas industry using natural energy recourses is trying to be a leader in the international market by reducing costs, increasing operations and stabling social aspects. Vision:

“The company wants to be world’s leader in oil and gas sector by first-class services to our customers, effective HR policy, reliable and positive image of the company, effective environmental policy, optimization of the operational efficiency, decrease of the operational costs, sustain high-profit level.” In conclusion, company’s mission determines a purpose within the organization; provides standards for allocating organizational resources; establishes a general organizational climate; shows purpose and direction. Consequently, mission and vision are clear and give a lot of advantage.

3. Macro-environment (PESTLE)
At the beginning of this part, it is necessary to mention some relevant facts: Population in Russia: 139mln
Area: 17mln sq. km
Time zones: GMT +2 to +11
9th largest economy in the world in terms of GDP, reaching USD 2014,8 bn 2013 Exports and Imports exceed 50% GDP
Highest GDP per capita among BRICS countries
Winter Olympic Games 2014 in Sochi 2012 and FIFA World Cup 2018 are coming 1. GDP

Figure 2.1 Real GDP

As we can see on the Figure 2.1 Real GDP has a tendency to grow up. Moreover, the present value of Real GDP is about 2014.8 USD billion which is the highest point during the history. Real GDP had been increased up to more than 6% in comparison with the previous period Contemporary situation in economy, especially in Real GDP, shows the opportunity for a company to increase production, because higher GDP means higher consumer expenditures; in turn, it is an alleviating competitive pressure within industry, then it’s the potential for expansion. As we can see GDP is constantly growing that means an opportunity...
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