Question #1 (9 of 25 points)

Answer in maximum of 5-6 double spaced pages, font size: 11, 1 inch margin

The global upstream exploration and production (E&P) industry is at crossroads. The International Oil Companies (IOCs) also referred as major integrated oil companies are finding it difficult to find new reserves and to build new infrastructures – at the same time they are plush with cash due to high oil prices. National Oil Companies (NOCs) appear to be in the driver seat at least for the time being – and are dictating their terms and are going ahead with many infrastructure projects worldwide. In this question, I would like you to pick two out of the four companies – Abu Dhabi National Oil Company (ADNOC), Petrobras, Qatar Petroleum (QP) and Reliance Petroleum. You are asked to compare and contrast your selected two companies with respect to their energy infrastructure focus including their upstream and/or downstream efforts. You will provide the overall strategic role of the companies in global industry, their major activities, their investment strategy and focus (near term i.e., next 5 to 10 years, 2010+), and the regions where the company has or is planning significant oil and gas infrastructure investment and why.

With respect to the company’s strategic role in global upstream E&P industry indicate which of the following six role(s) fit each of the two companies well. The roles can be of 1) National Asset Owner; 2) Strategic Resource Seeker; 3) Technology Provider; 4) Technology Seeker; 5) Finance Seeker; and 6) Market Seeker. Provide your rationale.

You are required to include a short tabular summary with the following four elements for the two companies you select. For each of the companies, I would like you to provide approximately a 2-page summary with the following contents:

I. Company Summary and Strategic Role in Global Energy Industry

II. Summary of Existing Activities

III. Company Near Term Investment Strategy and Focus

IV. Summary of Top Five Strategic Infrastructure Projects (for Next 5-10 Years)

• Project Name
• Region/Country Name
• Primary Players/Owners and Contractors
• Infrastructure Capacity/Size
• Infrastructure Details/Status
• Infrastructure Development Activities/Plan
• Regional and International Resource Impact of the Project.

Question #2 (8 of 25 points)

Answer in maximum of 3-4 double spaced pages, font size: 11, 1 inch margin

In this question, you are asked to do the following:

A. Tell me exactly where you live (city, neighborhood, municipality, county, and country, if you do not want to give the exact address – it is fine with me).

B. Tell me who are your utility providers for electricity, natural gas, heating oil and water (i.e. which company is connected to your house for the energy services.) Indicate how you currently get your heating, cooling etc. (i.e., electricity, gas or heating oil?). I realize that all of you may not get electricity, natural gas and/or heating oil and may only get one or two services from the list.

C. Tell me how does the utility (or an energy marketer) bring you electricity, natural gas, heating oil and water (Select only one of the four energy related services that I have listed, i.e. if you do not get natural gas in your home, then do not worry about natural gas). In this assignment, I would like you to trace the flow of the energy resource from generation to end-use. For example in the case of natural gas, I would like to know:

i. Which company is connected to your house?

ii. What do you pay for natural gas (or your energy resource) at your house? Cost of supply and cost of transportation?

iii. How do you think the utility (or marketer) is bringing natural gas (or energy resource of your choice) to your house? For example, how does it arrange for buying the commodity and then transporting it to your house? Which LDC, which distribution pipeline, which storage facility, which city gate, which long-haul pipeline, which processing plants, which natural gas basins/field(s), which LNG terminal (if applicable) etc. (i.e. trace the flow) (for non-natural gas energy resource trace its corresponding supply chain)?

iv. Once you have listed all the infrastructure elements for natural gas (or energy resource of your choice), then indicate what would happen to your service if one or more of the supply chain element is disrupted? How can alternative supplies be routed to you? Does your locality have redundancy built in so that supplies can be routed from alternative sources? If so what is the redundancy?

v. In your opinion, what vulnerability assessment method is (or should be) used by the utility that supplies the service to your house? Why?

Pick one from natural gas, electricity, water or heating oil services that your home receives.

Question #3 (8 of 25 points)

Answer in 2-3 double spaced pages, font size: 11, 1 inch margin

In one of the most audacious hijacking to date, the Somali pirates seized the oil tanker, Sirius Star, owned by Saudi Aramco’s shipping subsidiary Vela International in the Indian Ocean on November 15, 2008. The tanker was fully loaded with crude oil with value of nearly $100 million (2 million barrels of crude). Vela's crude oil tankers usually sail from Ras Tanura, Saudi Arabia's main oil terminal in the Persian Gulf, to the Gulf of Mexico and Europe either sailing around the Cape of Good Hope in the southern tip of Africa, or through the Suez Canal. The Sirius Star was sailing via the Cape of Good Hope.

This was one of the latest pirate attack near the waters of war-torn Somalia. It was attacked more than 450 nautical miles (about 830km) south-east of Mombasa, Kenya. The tanker had a crew of 25 including citizens from Croatia, UK, The Philippines, Poland and Saudi Arabia. Pirates appear to be very bold as earlier most of the attacks used to be in the Gulf of Aden (77 attacks so far) in the region – and Sirius Star was actually in the open sea. In early November 2008, two Somali pirates were killed in an exchange of fire with Britain's Royal Navy in the Gulf of Aden, in an incident which underlines the continuing tension caused by piracy off the Horn of Africa.

For this question, you are asked to address the following:

a) How did the Somali pirates seize the Sirius Star? Explain?

b) How would you rate the criticality index of the oil tanker based on the CETs that we have discussed in the class? Why? Build the CET for Sirius Star based on your assessment.

c) Which vulnerability assessment method, in your opinion, is most applicable to assess vulnerability of Sirius Star? In your opinion, could your suggested vulnerability assessment have avoided such an attack? How?

d) What lessons do we learn from this incident in managing energy infrastructure asset, oil tankers, from pirates and other terrorists?

e) After the tanker was freed, what steps have been taken in order to avoid similar future hijackings?