Factors That May Affect Business

Change in technology and its application.

Indeed a change in technology and its application will change the entire economic and operational perspective. However, with prudence if the technology is inducted phase wise then such changes may not pose significant challenges.

Change in government regulations.

As anywhere else or in any sphere of business, Governmental regulations will play a pivotal role. The defined factors are;

• Change in oil exploration, licensing and production policy
• Change in the guidelines/regulations that define Production Sharing
• Taxation or withdrawal of incentives for EOR

Change in the economy

The overall growth rates predicted for the oil exploration and production industry are indeed very encouraging. Substantial investments in exploration and production of petroleum are predicted in the next 5 year plans. However a key factor that may determine the economic viability of the project is the currency conversion and international oil pricing. Although internationally there is a consensus that oil prices shall be stabilized @ US $ 100.00 a barrel in the medium time span, any downward trend to say US $ 50/- or below will increase the pressure on operating margins of the business.