GS Mains Model Question & Answer : Discuss the benefits and drawbacks of integration of Oil and Gas Companies ? Comment

 GS Mains Model Question & Answer : Discuss the benefits and drawbacks of integration of Oil and Gas Companies ? Comment

Q. Discuss the benefits and drawbacks of integration of Oil and Gas Companies ? Comment

Model Answer:

Discuss the benefits and drawbacks of integration of Oil and Gas Companies?

Benefits:

Better capacities to bear higher risk.
Avail economies of scale.
Create more share holders value.
Make better investment decision and be more competent globally.

Drawbacks:

The idea was first mooted in Atal vihari Vajpayee govt in 1998 but rejected due to apprehension of monopolistic regime.
In 2005, Krishnamurty committee :it would reduce competition and manpower in the oil and gas sector.

Suggestion:

Minimum political interference and liberalization have proven better in creating more shareholders.
Concern of employment generation should be taken care of.
Should focus on better strategy techniques and management practices.

Need to give intro and conclusion.

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