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<p align="justify">This is the detailed Porter’s Five Forces of Occidental Petroleum. This framework examines the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and the intensity of rivalry among existing competitors. Discover how these forces impact Occidental Petroleum&#8217;s strategy and operations.</p>
<p align="justify">Occidental Petroleum is an American international hydrocarbon company headquartered in Houston, United States. The company was formed in 1920 (Occidental, 2021). The company&#8217;s main concentrated areas are the United States, The Middle East and Columbia. The company is the major oil and gas producer in Oman, Qatar and The United Arab Emirates. Occidental Petroleum operates through integrated infrastructure with a focus on oil and gas. The other segment includes chemical, midstream and marketing.</p>
<p align="justify">The oil and gas segment develop and produce oil, condensate, natural gas liquid and natural gas. The chemical segment produces and market basic chemicals. The midstream &; marketing is responsible for purchases, markets, gathers, processes, transports and stores oil, condensate, natural gas liquids, natural gas, carbon dioxide, and power. Porter&#8217;s five forces model is a helpful tool to identify threats and opportunities faced by Occidental Petroleum in the business world.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The oil and gas industry is concentrated in the world. It results in the furious rivalry between the companies. The majority of the industry is ruled by top ten companies, including Saudi Aramco, Exxon, British Petroleum and Chevron. Major oil and gas companies are relatively equal in size, power and capabilities (Datamonitor, 2009). The intensity of the rivalry in the industry can act as a reason for the price war. The competitor can engage in a price war to gather market share and influence other companies.</p>
<p align="justify">In 2020 companies looked horn, resulting in the price war due to COVID-19 Pandemic and decreased consumption (Forbes, 2020). It resulted in negative demand for the product. OPEC oversees the export of oil in the world; it consists of 13 major oil-producing nations. Occidental Petroleum is a mid-level company. By viewing all these factors and considering a global conglomerate in the petrochemical, oil and gas exploration, and energy sector, there is intense competition.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The fossil fuel industry is under immense pressure to reduce its carbon emission. The industry act as the backbone of the economy. Climate activist is forcing companies to move on to it and reduce dependence on those products. Oil act as a fundamental part of transportation, energy production, and manufacturing industries. Renewable energy resources are developing at an unprecedented pace.</p>
<p align="justify">The main Substitutes for oil and gas for producing energy are Nuclear energy, Hydro Power Plants, biofuels, and renewable energy sources. The energy generation industry is reducing its dependency on fossil fuels. In 2018, wind farms produced around 7% of the electricity generated in the US compared to less than 1% in 2000 (Arcadia, 2019). Renewable energy sources will impact the oil industry as the world is moving to more climate-friendly products.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The oil and gas sector is highly regulated. Governing bodies and government regulates the industry. The main barriers to entry in any industry are capital requirements, product differentiation, regulatory requirements, and economies of scale (Grant, 2010). The exploration and production of oil and gas require higher capital investment, technology and trained human resources. The geographical position and geopolitical condition also create hindrance for companies. OPEC regulates the majority of oil production and export.</p>
<p align="justify">These countries control the prices in the oil and gas industry, and it is unstable. The oil demand is decreasing, making it difficult for newcomers to get any share in the market. The industry is already saturated, and competition is high. Considering the facts mentioned earlier, the threat of new entrants remains low.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">At the moment, oil is the major irreplaceable commodity in the world. It is vastly used and readily available. There is no alternate available, which can be used at that scale, which is Irreplaceable For Now. Oil And Gas Energy Has A Complex Supply Chain, Including Producers, transporter, marketing companies. The significant buyers of oil and gas industries are oil refiners, state oil companies, and oil trading and distribution companies. All these factors result in minimum leverage to the client.</p>
<p align="justify">The client all over the world the oil-based products are benched against international standards for oil. It is to control the quality of certain oil products. The quality standards used commonly are West Texas Intermediate, Brent Crude and Dubai Crude (Petroleum, 2015). The buyer’s only leverage is getting a quality product according to international standards.</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">The primary supplier of the industry is equipment suppliers. The oil production equipment directly links with the quality of the product, and malfunction in it can cost losses of millions of Dollars (Porter, 1979). The supplier can exert power in that case. OEC governs the export of oil and gas production. Organization of Petroleum Exporting Countries (OPEC) is an intergovernmental body with 13 member countries, and 79.4% of all the world&#8217;s oil reserves are located in member countries (OPEC, 2019) act as a cartel against suppliers. The production rate of oil directly influences its price. The price depends on the supply and demand of the product. The supplier holds low to moderate bargaining power in the oil &; exploration industry.</p>
<h2 align="justify">References</h2>
<ul>
<li>Arcadia (2019). The rise of wind energy in the US. Available at: https://blog.arcadia.com/the-rise-of-wind-energy-in-the-u-s/</li>
<li>Datamonitor (2009). China National Petroleum Corporation company profile. Available at: Business Source Premier</li>
<li>Forbes (2020). Support An Oil And Gas Industry In Trouble By Believing In Competition. Available at: https://www.forbes.com/sites/thebakersinstitute/2020/04/02/support-an-oil-and-gas-industry-in-trouble-by-believing-in-competition/?sh=120b3777c3f8</li>
<li>Grant, R. M. (2010). Contemporary Strategy Analysis. 7th Edition.</li>
<li>Occidental. (2020). About Occidental. Available at: https://www.oxy.com/aboutOccidental/Pages/default.aspx</li>
<li>OPEC. (2019). Data/Graphs. Available at: https://www.opec.org/opec_web/en/data_graphs/330.htm</li>
<li>Petroleum. (2015). Benchmarks. Available at: http://www.petroleum.co.uk/benchmarks</li>
<li>Porter., E. M (1979). How Competitive Forces Shape Strategy. Available at: https://hbr.org/1979/03/how-competitive-forces-shape-strategy</li>
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