Qatar Petroleum

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Qatar Petroleum

1. Strategy:

Strategy is the direction and scope of an organization over the long-term: which achieves

advantage for the organization through its configuration of resources within a challenging

environment, to meet the needs of markets and to fulfill stakeholder expectations.

And

Strategic Management can be defined as (1) the art and science of formulating, (2)

implementing, and (3) evaluating cross-functional decisions that enable an organization to

achieve its objectives.

2. Most Strategic Management Model:

1. PEST analysis

2. STEER Analysis

3. Five Forces Model

4. Strategic Group Map

5. SWOT analysis

6. Blue Ocean Strategies

7. Open innovation

8. seven S model

1) PEST Analysis: PEST analysis stands for "Political, Economic, Social, and Technological

analysis" and describes a framework of macro-environmental factors used in the environmental

scanning component of strategic management.

2. STEER Analysis: STEER analysis systematically considers Socio-cultural, Technological,

Economic, Ecological, and Regulatory factors.

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3. Five Forces Model:

a) Supplier Power:

b) Buyer Power:

c) New Market Entrants:

d) Product and Technology Development:

e) Competitive Rivalry:

4) Strategic Group Map:

1. Extent of product (or service) diversity.

2. Extent of geographic coverage.

3. Number of market segments served.

4. Distribution channels used.

5. Extent of branding.

6. Marketing effort.

7. Product (or service) quality.

8. Pricing policy.

5) SWOT Analysis

• Strengths: characteristics of the business or team that give it an advantage over others in

the industry.

• Weaknesses: are characteristics that place the firm at a disadvantage relative to others.

• Opportunities: external chances to make greater sales or profits in the environment.

• Threats: external elements in the environment that could cause trouble for the business.

6) Blue Ocean Strategy is a business strategy book first published in 2005 and written by W.

Chan Kim and Renée Mauborgne of the Blue Ocean Strategy Institute at INSEAD. The book

illustrates what the authors believe is the high growth and profits an organization can generate by

creating new demand in an uncontested market space, or a "Blue Ocean", than by competing

head-to-head with other suppliers for known customers in an existing industry.

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7) Open innovation is a paradigm that assumes that firms can and should use external ideas as

well as internal ideas, and internal and external paths to market, as the firms look to advance

their technology.

8) Seven (7) S-Models:

1. Business Environment/Strategy: Competition, Economy, regulation/taxes, labor &

supplier issues, Short-Term vs. Long-Term Goal etc.

2. Shared Values: How would you describe the mission of this company to your prospective

buyers?

3. Structure: Organization Chart, Departments, the number of management layers

4. Staff: the strengths and weaknesses of the organization's key people.

5. System/Infrastructure: reward system, manufacturing system, technology, customer

feedback

6. Skills: key knowledge and skills are needed to succeed in this business/organization

7. Style: Emphasize on quality, encourage teamwork, reinforce standards

3. about Qatar

Qatar is a peninsula of 11.437 sq. Km. located halfway down the west coast of the Arabian Gulf.

The Emir, His Highness Sheikh Hamad Bin Khalifa Al Thani, is the ruler of Qatar and is the

head of the constitutional authorities, holding both legislative and executive powers.

Oil and gas have given Qatar one of the highest per capita incomes in the world and made it one

of the fastest-growing economies. Displaying an enlightened approach to prosperity, Qatar is

channeling its wealth not into trophy assets but into funding the advancement of culture, science,

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and education. Its strategic path towards a post-hydrocarbon economy will be through a vibrant,

knowledge-based society.

Energetic and ambitious, the State of Qatar has emerged from virtual anonymity to become one

of the most forward-thinking nations in the Middle-East, with increasing regional and global

influence. Latest estimates put Qatar’s population at more than 1.5 million.

By 2030, Qatar aims to be an advanced society capable of sustaining its development and

providing a high standard of living for its entire people. Qatar’s National Vision defines the long-

term outcomes for the country and provides a framework within which national strategies and

implementation plans can be developed.

4. Company Profile:

4.1. QP History:

A selection from the QP archives

The first well, Dukhan 1, was drilled in 1939. Development continued after World War II and in

1949 the first crude exports occurred and the first offshore concessions were granted. In 1960,

the Idd Al-Shargi and Maydan Mahzam fields were discovered. The largest offshore field, Bul

Hanine, was discovered in 1970 and came on stream in 1972. Qatar Petroleum was created in

1974.

Logo:

Fig: Qatar Petroleum logo

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Qatar Petroleum: Committed to Excellence

At Qatar Petroleum we are committed to one thing above all: Excellence.

Qatar Petroleum (QP), a state-owned corporation established in 1974, is responsible for all

phases of the oil and gas industry in Qatar.

The principal activities of Qatar Petroleum and its subsidiaries and joint ventures cover

exploration, drilling and production operations, transport, storage, marketing and sale of crude

oil, natural gas liquids, liquefied natural gas, gas-to-liquids, refined products, petrochemicals and

fertilizers, and helicopter and financial services.

Qatar Petroleum’s strategy of conducting hydrocarbon exploration and new projects is through

Exploration and Production Sharing Agreements (EPSA) and Development and Production

Sharing Agreements (DPSA) concluded with major international oil and gas companies.

Thriving on a spirit of enterprise, each of our joint ventures is underpinned by transparency,

innovation and determination to achieve unparalleled standards of both quality and service.

The operations and activities of Qatar Petroleum are conducted on various onshore locations,

which include Doha, Dukhan, Mesaieed and Ras Laffan industrial cities, as well as offshore

areas including Halul Island, offshore production stations, drilling platforms and the North Gas

Field.

Qatar Petroleum is committed to its part as both a concerned partner and affiliate to the

protection, preservation and conservation of the natural environment, while ensuring that the

company’s employees and the general public live in a clean, safer world.

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4.2. Vision & Mission:

Their mission is to ensure the State gets maximum benefit from its petroleum resources by

engaging directly or indirectly in all activities that would add value to these resources.

Their overall objective is to maximize their contribution to the national wealth of the State of

Qatar, through the safe, efficient and environmentally acceptable exploitation of Qatar's

hydrocarbon reserves and through related activities. Specifically they seek:

1. To provide the state with a reliable cash flow, of maximum value, from diversified

business interests.

2. To build an organization with internationally competitive business and technical

expertise.

3. To maximize the employment of capable Qatari nationals, and develop them to the

competence level of the leading International Oil Company employees.

4. To meet National oil and gas demand in a cost-effective way.

While their key physical assets are the country’s Oil & Gas reserves, their ability to maximize

the economic returns to the State from these resources depends totally on the quality and

commitment of their staff; whom they value as their greatest asset.

They also value their great partners, suppliers and customers and they shall Endeavour to:

Set an example in Qatar in personal and organizational integrity and transparency.

Treat all people fairly and with mutual respect.

Have total participation of an excellent diverse workforce, rendering our diversity a

source of strength.

Reward and promote based on merit, performance and competence.

Openly communicate and work as a single integrated team.

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4.3. Board of Directors

HE Dr. Mohammed Bin Saleh Al-Sada

Minister of Energy & Industry

Chairman & Managing Director

Hamad Rashid Al-Mohannadi

Managing Director, RasGas

Deputy Chairman

Fahad Hamad Al-Mohannadi

General Manager, Qatar Electricity and Water Company (QEWC)

Member

Nasser Khalil Al-Jaidah

CEO, Qatar Petroleum International

Member

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Saad Sharida Al-Kaabi

Director Oil & Gas Ventures, Qatar Petroleum

Member

Khalifa Abdullah Al-Suwaidi

Managing Director, Qatar Fertiliser Company (QAFCO)

Member

Eng. Essa Hilal Al-Kuwari

President, Qatar General Electricity & Water Corporation (Kahramaa)

Member

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4.4. QP Operations

Qatar's first well was drilled in Dukhan in 1940.

EXPLORATION, APPRAISAL & DEVELOPMENT OPERATIONS

QP has concluded EPSA and DPSA with the following major international oil and gas

companies: ExxonMobil, Anadarko Qatar, Maersk Oil Qatar, Talisman Energy Qatar,

Wintershall Consortium, and Marubeni.

These agreements have enhanced oil and gas reserves through new discoveries and development

of existing fields. Some of the fields included in the agreements are Idd Al Shargi Dome (North

& South), Al Shaheen Field, Al Khaleej Field, Al Rayyan Field, Al Karkara Structure A Field,

and El Bunduq.

REFINED PRODUCTS

QP’s refining activities include the processing of crude oil and condensate into domestic and

export petroleum products as well as the production and export of GTL, LNG and NGL.

QP Refinery

Gas-to-Liquids (GTL)

Natural Gas Liquids (NGL)

Liquefied Natural Gas (LNG)

.

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PIPELINE GAS PROJECTS

Since July 2007, the Dolphin Gas Project has been producing, processing and supplying

substantial quantities of natural gas from offshore Qatar to the United Arab Emirates. Production

reached the maximum authorized throughput of two billion cubic feet per day (bcf/d) in February

2008. Other projects are at various stages to supply gas to Kuwait, Bahrain, Oman and Pakistan.

PETROCHEMICALS & FERTILIZERS

Qatar Fertiliser Company Ltd. (QAFCO)

Qatar Petrochemical Co. (QAPCO)

Qatar Vinyl Co. (QVC)

Qatar Fuel Additives Co. (QAFAC)

Qatar Fertiliser Company Ltd. (Q-Chem)


5.1. PEST/STEER/PESTEL Analysis:

According to (Kotler P. , 2006), Macro environmental analysis is find out the external forces that

affect a company to produce and sell, which are consisted of Political, Economical, Social,

Technological, Legal and Environmental factors that affect externally a business.

Political: According to (Oxford University Press, 2007) political factors refer to government

policy such as the degree of intervention in the economy. This might include trading policies,

lobbying, and inter-countries relations and etc. that can affect the business. in here that in major

business such as oil, which has a very high financial turn over, or there are many health and

safety measures or environmental precautions, the political intervention will be higher. Qatar

Petroleum has to respond by developing healthy plans commensurate with these economic and

political challenges in order to ensure the availability of hydrocarbon products required by the

various economic sectors in the State of Qatar, in order to fulfill its responsibility toward the

national economy and to meet customers’ needs and its contractual obligations.

Economic factors include economic growth, interest rates, exchange rates and the inflation

rate. These factors have major impacts on how businesses operate and make decisions. Oil is an

integral part of a country economy. Countries that have reserve in oil have a growing economic.

As the economy continues grow, the demand for oil therefore increase. QP look for, to provide

the state with a reliable cash flow, of maximum value, from diversified business interests, To

build an organization with internationally competitive business and technical expertise, To

maximize the employment of capable Qatari nationals, and develop them to the competence level

of the leading International Oil Company employees and to meet National oil and gas demand in

a cost-effective way.

Social factors include the cultural aspects and include health consciousness, population growth

rate, age distribution, career attitudes and emphasis on safety. Qatar Petroleum is committed to

help meet the global demand for energy through environmentally and socially responsible ways.

QP subscribes to the principles of sustainable development to meet present needs as well as those

of future generations. QP is committed to the health and safety of its employees, contractors and

visitors. From drilling to construction, operations to decommissioning, Corporate Health, Safety


& Environment (HSE) policy forms an integral part of daily business. QP provides efficient

service in the areas of housing, facilities services and maintenance, and transport services.

Technological factors include technological aspects such as R&D activity, automation,

technology incentives and the rate of technological change. The Information Technology

Department (ITD) plays a strategic and core role in QP’s operations by providing timely

information and communications services to the organization. In addition to providing state-of-

the-art supercomputing facilities that support the core exploration and production systems of QP.

The QP Research & Technology Department represents a significant expansion of QP’s technical

capability. It will be central in forming QP’s long-term technology strategy, and remain at the

forefront of key technologies through collaborative research with international partners.

Environmental factors include ecological and environmental aspects such as weather,

climate, and climate change, which may especially affect industries such as tourism, farming,

and insurance. Furthermore, growing awareness of the potential impacts of climate change is

affecting how companies operate and the products they offer, both creating new markets and

diminishing or destroying existing ones. As a community partner, QP demonstrates its strong

concern for the environment by sponsoring programs such as school and community

environmental awareness and education, environmental workshops, tree planting, marine debris

removal and several programs to conserve and protect valuable natural resources such as

mangroves, marine turtles, Reem gazelles, houbara bustards and ostriches.

Legal factors include discrimination law, consumer law, antitrust law, employment law, and

health and safety law. These factors can affect how a company operates, its costs, and the

demand for its products. The health and safety law: they are enforcing by government on

employer over their employees in other to have a better and safer work. Qatar Petroleum

conducts all its business in line with the strictest Code of Ethics and Conflict of Interest policy in

accordance with the Qatar Petroleum Regulations.


5.2. SWOT Analysis

SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate

the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business

venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves

specifying the objective of the business venture or project and identifying the internal and

external factors that are favorable and unfavorable to achieving that objective.

Strengths: 1) Diversified Business

2) Advance Technology

3) Strategic Development of LNG Business

4) Substantial Asset Portfolio

5) Integrated Energy Business

6) Strong Liquidity Position

Weakness: 1) Decreasing Profitability

2) Involvement in Litigation

3) Non Autonomy

Opportunities: 1) Demand for Hydrocarbons in Long Run

2) Research and Technology Initiatives

3) Refining Industry Growth in Middle East

4) Increasing the Export of Ethane

5) Construction of Pearl GTL

Threats:

1) Fluctuating Oil Markets

2) Challenge of Environmental Regulations

3) Rising Capital Costs in the Refining Sector

Strength

1. Qatar petroleum has diversified their business in different sides.

2. The company is using advanced technology in their business.

3. Strategic Development of LNG Business

4. The company has substantial asset portfolio which helps them to be in the largest position.

5. Qatar Petroleum has integrated energy business.

6. The company has Strong Liquidity Position which helps them to meet the critical situation

very smoothly.


Weaknesses

1. Their profit of Qatar petroleum is declining day by day which indicates that they have some

weaknesses.

2. Involvement in Litigation

3. As Qatar petroleum is not a fully private company & that’s why they can’t take any decision

by themselves, so before taking any decision they need to consult with government.

Opportunities

1. The company has a great opportunity because of the increasing demand for Hydrocarbons in

Long Run.

2. Qatar Petroleum can use Research and Technology Initiatives to meet the needs of the

customers effectively.

3. The Growth of Refining Industry in Middle East can be a great opportunity for them.

4. Increasing the Export of Ethane

5. Construction of Pearl GTL

Threats

1. As there is different Oil Markets in the worlds so the market can be said as fluctuated which

can be great threat for the company.

2. The government is imposing different environment regulations day by day so it can be threats

for the company to follow all the rules.

3. The Capital Costs is rising in the Refining Sector which can affect the company to do the

business accurately.


5.3. Porter’s Five (5) Forces Analysis

Industry rivalry:

Oil industry is very vast, starting from exploration to refining and distribution, and there are

many companies active in oil industry. However, the number of main oil companies who can

explore and main oil fields is very limited. Major petroleum companies are

• Qatar Petroleum

• Chevron

• Conoco Philips

• Royal Dutch Shell

Bargaining power of Suppliers:

The suppliers for Qatar Petroleum are countries that have oil reservoirs and oil fields. They

usually have a bid for their oil field explorations. Here the bargaining power of suppliers is too

high and they can choose the contractor.

Bargaining power of buyers:

The buyers of the petroleum oil usually purchase in the oil markets, and the market price is

determined by the demand.

Threats of new Entrants:

As the capital for oil companies is too high, and the level of technical knowledge is too high and

Advanced, this has created a very high barrier for the new entrants. There is almost no new

entrants’ threat in oil industry and also for Qatar Petroleum.

Threat of substitute products:

Petroleum oil can’t be substituted by any other product, as it is not only the fuel but also the raw

material for petrochemical industries. Other sources of energy are bio fuel, nuclear energy, solar

energy and which at the moment aren’t cost effective.


6.1. SWAN Analysis

Strengths:

Qatar petroleum has diversified their business in different sides.

The company is using advanced technology in their business.

Strategic Development of LNG Business

The company has substantial asset portfolio which helps them to be in the largest position.

Qatar Petroleum has integrated energy business.

The company has Strong Liquidity Position which helps them to meet the critical situation

very smoothly.

Weakness:

Their profit of Qatar petroleum is declining day by day which indicates that they have some

weaknesses.

Involvement in Litigation

As Qatar petroleum is not a fully private company & that’s why they can’t take any decision

by themselves, so before taking any decision they need to consult with government.

Achievement:

Qatar’s position as the world’s largest LNG producer was reinforced with the start-up of the

Qatargas seventh and final mega train, which has a production capacity of 7.8 million tons

per annum.

Qatar was the first in the Middle East to produce lead-free gasoline

Qatar Petroleum has achieved world-class safety performances at the two multi-billion major

capital projects currently being executed by its Technical Directorate.

Qatar is using the most advanced and environment-friendly technologies and equipment to

handle the problems of all kinds of solid and liquid waste and improve the work atmosphere

and quality of air.

Qatar is a leader in supporting charitable and social activities


The industrial sector in Qatar celebrated another major milestone in 2011 with the

inauguration of the world’s largest gas-to-liquids (GTL) plant, Pearl GTL, at Ras Laffan

Industrial City.

Muscat, Oman. 25 March 2012 - As part of its continuous quest for excellence, Qatar

Petroleum (QP) has achieved world-class safety performances at the two multi-billion major

capital projects currently being executed by its Technical Directorate. One these projects, the

Port Expansion Project in Ras Laffan Industrial City, has already achieved 37 million man-

hours without any lost time injury (LTI), while the Gas Sweetening Facilities Project in

Mesaieed Industrial City and Dukhan has registered 15 million man-hours without LTI.

Next Step:

The rapidly expanding health and education sectors and the new facilities for the FIFA World

Cup in 2022 will need additional power and desalinated water supplies.

Qatar Petroleum has commenced the construction of the strategic multi-faceted Barzan gas

project, which is expected to be fully operational by 2014, is an essential building block for

Qatar's future and will bring extensive benefits to many local industries

The second Laffan condensate refinery is currently at the engineering stage and is expected

to be commissioned by 2016.

Qatar Petroleum has signed a joint research and development agreement on petroleum

profiling, a technology that can be used to identify the chemical composition of crude oil.

QP is planning to increase the reserves of crude oil and increase the production capacities of

the oil fields through continuous efforts in collaboration with major international oil and gas

companies, most notably Occidental, Exxon Mobil, and Maersk Oil Qatar.

Qatar Petroleum (QP) and Shell have signed an agreement to start the next phase of Front

End Engineering and Design (FEED) work on a large-scale petrochemicals complex in Ras

Laffan Industrial City, Qatar.


6.2. TOWS – Matrix

Technique used in strategy formulation for combining

a. External analysis (EFE Matrix)

i. Opportunities

ii. Threats

b. Internal analysis (CPM Matrix)

i. Strengths

ii. Weaknesses

CPM Matrix Strengths: 1. Strongest liquidity position

2. Integrated energy business

3. Diversified geographic presence

4. Strong research and development (R&D)

capabilities

5. Presence across the energy value chain

Weakness: 1. Non autonomy

2. Involvement in litigation

3. Legal proceedings

4. Employee unrest

5. Declining production of gasoline

Opportunities: 1. Construction of Pearl GTL. 2.Increase in the energy demands in the country 3.Increasing the export of ethane 4.Chevron is liquidating its aviation business 5.Search for alternate energy sources

Threats: 1.Constantly growing circular debt 2.Challenge of environmental regulation 3.Devaluation of Qatari Riyal 4.Decline in consumption of White Oil Products 5.Fluctuation of oil prices in international markets 6.New alternatives to the industrial energy requirements such as solar energy 7.Deregulation of the mechanism of setting fuel prices 8.Scarcity of CNG in the country 9.Forward integration of oil refining companies (suppliers)

EFE Matrix


7.1. ViSA Model

ViSA model stands for Vision, Strategy, and Action plan Model.

Vision: their vision is to maximize its contribution to the national wealth of the State of Qatar,

through the safe, efficient and environmentally acceptable exploitation of Qatar's hydrocarbon

reserves and through related activities. Specifically it seeks:

To provide the state with a reliable cash flow, of maximum value, from diversified

business interests.

To build an organization with internationally competitive business and technical

expertise.

To maximize the employment of capable Qatari nationals, and develop them to the

competence level of the leading International Oil Company employees.

To meet National oil and gas demand in a cost-effective way.

Strategy: While it’s key physical assets are the country’s Oil & Gas reserves, our ability to

maximize the economic returns to the State from these resources depends totally on the quality

and commitment of our staff; that they value as their greatest asset.

Action Plan: They also value their great partners, suppliers and customers and try to:

Set an example in Qatar in personal and organizational integrity and transparency.

Treat all people fairly and with mutual respect.

Have total participation of an excellent diverse workforce, rendering our diversity a

source of strength.

Reward and promote based on merit, performance and competence.

Openly communicate and work as a single integrated team.

7.2. SMARTER Model

Specific: In 2011, after three years of financial crisis happened in 2008, Qatar Petroleum has to

respond by developing robust plans commensurate with these economic and political challenges

in order to ensure the availability of hydrocarbon products required by the various economic


sectors in the State of Qatar, in order to fulfill its responsibility toward the national economy and

to meet customers’ needs and its contractual obligations.

Measurable: Besides being recognized as one of the leading oil and gas companies in the

world, Qatar Petroleum has proved its versatility by organizing world-scale events. During 2011,

Qatar Petroleum hosted the 20th World Petroleum Congress, a major industry event held for the

first time ever in the Middle East region.

Achievable: Taking into account primary and secondary research and facts from market share

data Qatar Petroleum do believe that objectives are achievable.

Realistic: Considering the amount of financial resources and manpower expertise they do

believe that objectives are realistic.

Time: It is the expectation that the highest market share objectives set for Qatar Petroleum will

be achieved by the end of 31st December 2013.

Encompassing: In order to meet the country’s future needs for clean burning natural gas in

the power and water sectors and to provide feedstock to the local petrochemical and refining

industries, Qatar Petroleum has commenced the construction of the strategic multi-faceted

Barzan gas project. This project, which is expected to be fully operational by 2014, is an

essential building block for Qatar's future and will bring extensive benefits to many local

industries.

Reviewed (Rewarding): Through this journey of success and achievements, Qatar

Petroleum has never compromised the environment, safety and health of our society. Continuous

and close monitoring and control of emissions and pollution was one of the key factors of our

success as a major contributor to our economic and social development. Chairman of Qatar

petroleum think that everything was possible that time because of his manpower and he said

“Achieving those goals has never been possible without the continuous and faithful efforts of our

employees, partners and contractors, who are working hard to differentiate Qatar Petroleum as an

international player in the oil and gas Industry.”


8. BCG Matrix (The Boston Consulting Group)

The BCG model is a well-known portfolio management tool used in product life cycle theory.

BCG Matrix is often used to prioritize which products within company product mix get more

funding and attention. The BCG Matrix graphically portrays differences among divisions in

terms of relative market share position and industry growth rate.

BCG STARS (Qatar Petroleum):

Qatar Petroleum produces 2.3 million barrels per day. The vast majority of Qatar’s production is

in the form of natural gas, which gets shipped as LNG around the world. Qatar shares the world's

largest natural gas field, which lies under the Persian Gulf, with Iran. Qatar is also home to the

biggest U.S. military base in the region, not far across the desert from its gleaming capital Doha.

There Qatar Petroleum has high growth and high market share. So they are in Star position in the

BCG matrix.


9.1. PURE Objective

Positive:

Through this journey of success and achievements, Qatar Petroleum has never compromised the

environment, safety and health of our society. Continuous and close monitoring and control of

emissions and pollution was one of the key factors of our success as a major contributor to our

economic and social development.

Understood:

Performance: efficient and skilled workers who knows about their own job perfectly.

Style: Emphasize on quality, encourage teamwork, reinforce standards.

Jargon: is to ensure the State gets maximum benefit from its petroleum resources by


Culture: They also value their great workers, partners, suppliers and customers.

Recorded:

They keep records for all of their activities so that if needed they can use those as a base in

future.

Ethical:

Qatar Petroleum conducts all its business in line with the strictest Code of Ethics and Conflict of

Interest policy in accordance with the Qatar Petroleum Regulations. Any vendor wishing to

conduct business with Qatar Petroleum must abide by a similar ethics regime as practiced by

Qatar Petroleum.


9.2. GREAT Model

Goals:

Their mission is to ensure the State gets maximum benefit from its petroleum resources by


Roles / Results:

Qatar’s position as the world’s largest LNG producer was reinforced with the start-up of the

Qatar gas seventh and final mega train, which has a production capacity of 7.8 million tons per

annum. Besides being recognized as one of the leading oil and gas companies in the world, Qatar

Petroleum has proved its versatility by organizing world-scale events. During 2011, Qatar

Petroleum hosted the 20th World Petroleum Congress, a major industry event held for the first

time ever in the Middle East region.

Expectations / Performance:

Because of strong mindset and high performance now it became the world’s largest petroleum

company.

Accountabilities / Abilities:

Every worker is responsible for his own work specially on jobs that cut across functional lines.

Timing:

In order to meet the country’s future needs for clean burning natural gas in the power and water

sectors and to provide feedstock to the local petrochemical and refining industries, Qatar

Petroleum has commenced the construction of the strategic multi-faceted Barzan gas project.

This project, which is expected to be fully operational by 2014


10. The External Factor Evaluation Matrix (EFE Matrix)

1. List Key External Factors (Opportunity & Threats)

2. Weight Ranges: 0.0 (not important) to 1.0 (very important)

3. Assign a 1-to-4 rating of each key

4. Multiply each factors by its rating = weight score

5. Determining Total Weighted Score for Company

Table 1: EFE Matrix for Qatar Petroleum

The External Factor Evaluation Matrix score for Qatar Petroleum is 2.60. It represents that Qatar

Petroleum’s response to the external environment is above average.

KEY EXTERNAL

Weight Rating Weight

score

OPPORTUNITIES

1. Construction of Pearl GTL 0.10 4 0.40

2.Increase in the energy demands in the country 0.10 3 0.30

3.Increasing the export of ethane 0.08 2 0.16

4.Chevron is liquidating its aviation business 0.02 2 0.04

5.Search for alternate energy sources 0.05 3 0.15

THREATS

1.Constantly growing circular debt 0.15 2 0.30

2.Challenge of environmental regulation 0.05 2 0.10

3.Devaluation of Qatari Riyal 0.05 3 0.15

4.Decline in consumption of White Oil Products 0.10 3 0.30

5.Fluctuation of oil prices in international markets 0.05 2 0.10

6.New alternatives to the industrial energy requirements

such as solar energy

0.05 3 0.15

7.Deregulation of the mechanism of setting fuel prices 0.05 3 0.15

8.Scarcity of CNG in the country 0.05 2 0.10

9.Forward integration of oil refining companies (suppliers) 0.10 2 0.20

4 = the response is superior

3 = the response is above average.

2 = the response is average.

1 = the response is poor

Rating

TOTAL: 1.00 2.60


11. The Competitive Profile Matrix (CPM Matrix)

The Competitive Profile Matrix (CPM) identifies a firm’s major competitors and its particular

strengths and weaknesses in relation to an individual firm’s strategic Position.

Score Systems:

4 = Major Strength; 3 = Minor Strength; 2 = Minor Weakness; 1 = Major Weakness

Table 1: CPM Analysis of Qatar Petroleum Industry (lubricate):

CPM Analysis of Qatar Petroleum Industry (lubricate)

Qatar Petroleum Chevron ConocoPhillips

Critical Success Factors Weight Rating Score Rating Score Rating Score

Advertising 0.20 1 0.20 4 0.80 3 0.60

Product Quality 0.10 4 0.40 4 0.40 3 0.30

Price Competition 0.10 3 0.30 3 0.30 4 0.40

Management 0.10 4 0.40 3 0.30 3 0.30

Financial Position 0.15 4 0.60 3 0.45 3 0.45

Customer Loyalty 0.10 4 0.40 4 0.40 2 0.20

Global Expansion 0.20 4 0.80 2 0.40 2 0.40

Market Share 0.05 1 0.05 4 0.20 3 0.15

Total 1.00 3.15 3.25 2.80

Qatar Petroleum score 3.15 so they have Major Strength on their position.


12. QSPM (Quantitative Strategic Planning Matrix)

Technique designed to determine the relative attractiveness of feasible alternative actions

QSPM (Quantitative Strategic Planning Matrix)

Alternative 1- Business Expand in Asia

Alternative 2- New Business Setup in

Africa

Key Factors

Weight

Attractiveness Scores

Total Attractive

ness Scores

Weight

Attractiveness Scores

Total Attractiveness Scores

Strength

1. Strongest liquidity position 0.11 3 0.33 0.10 2 0.20

2. Integrated energy business 0.11 4 0.44 0.08 3 0.24

3. Diversified geographic presence 0.15 2 0.30 0.13 1 0.13

4. Strong research and development (R&D) capabilities

0.10 3 0.30 0.15 4 0.60

5. Presence across the energy value chain 0.09 1 0.09 0.08 0 0.00

Weakness

1. Non autonomy 0.10 2 0.20 0.09 3 0.27

2. Involvement in litigation 0.12 2 0.24 0.11 2 0.22

3. Legal proceedings 0.06 3 0.18 0.12 3 0.36

4. Employee unrest 0.08 3 0.24 0.07 1 0.07

5. Declining production of gasoline 0.08 1 0.08 0.07 1 0.07

Sum weight 100% 100%

Opportunity

1. Construction of Pearl GTL 0.09 4 0.36 0.09 4 0.36

2.Increase in the energy demands in the country

0.07 2 0.14 0.08 4 0.32

3.Increasing the export of ethane 0.08 3 0.24 0.06 0 0.00

4.Chevron is liquidating its aviation business

0.06 1 0.06 0.05 2 0.10

5.Search for alternate energy sources 0.05 1 0.05 0.05 1 0.05

Threats

1.Constantly growing circular debt 0.07 2 0.14 0.09 4 0.36

2.Challenge of environmental regulation 0.08 3 0.24 0.10 3 0.30

3.Devaluation of Qatari Riyal 0.05 0 0.00 0.08 2 0.16

4.Decline in consumption of White Oil Products

0.05 1 0.05 0.06 0 0.00

5.Fluctuation of oil prices in international markets

0.09 3 0.27 0.07 0 0.00

6.New alternatives to the industrial energy requirements such as solar energy

0.08 2 0.16 0.05 1 0.05

7.Deregulation of the mechanism of setting fuel prices

0.09 3 0.27 0.06 0 0.00

8.Scarcity of CNG in the country 0.07 1 0.07 0.07 1 0.07

9.Forward integration of oil refining companies (suppliers)

0.07 2 0.14 0.09 0 0.00

Sum weight 100% 100%

Sum Total Attractiveness Scores 4.59 > 3.93


Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable;

4 = most acceptable; 0 = not relevant.

So, for Qatar Petroleum it’s visible they should go for the Alternative 1- Business Expand in

Asia, which is most acceptable from the two options.

13. Financial Analysis

Sales Revenue

Year Sales Volume

2007 117429634

2008 168488206

2009 118140863

2010 188015060

2011 289179187

0

50000000

10000000

15000000

20000000

25000000

30000000

35000000

2007 2008 2009 2010 2011

Sales Volume

Fig 1: Showing Sales Volume


Total operating revenue

Year Total operating

revenue

2007 124657849

2008 178201982

2009 124588739

2010 197294049

2011 300342331

Net Income

Year Net Income

2007 35049278

2008 55800103

2009 35207204

2010 54566736

2011 88862235

0

50000000

10000000

15000000

20000000

25000000

30000000

35000000

2007 2008 2009 2010 2011

Total operating revenue

Fig 2: Showing Total operating revenue


Total Assets

Year Total Assets

2007 188336209

2008 246034282

2009 282307993

2010 308896609

2011 367551449

35049278

55800103

35207204

54566736

88862235

0

20000000

40000000

60000000

80000000

10000000

2007 2008 2009 2010 2011

Net Income

0

10000000

20000000

30000000

40000000

2007 20082009

20102011

Total Assets

Fig 4: Showing Total Assets

Fig 3: Showing Net Income


ROA (Return on assets)

Year 2007 2008 2009 2010 2011

Net Income 35049278 55800103 35207204 54566736 88862235

Total Assets 188336209 246034282 282307993 308896609 367551449

ROA 0.18609952 0.226798081 0.124712034 0.176650486 0.241768153

Return on equity (ROE)

Year 2007 2008 2009 2010 2011

Net Income 35049278 55800103 35207204 54566736 88862235

Total Equity 62497932 66089129 66433613 119974215 218308845

ROE 0.560807004 0.844315909 0.529960699 0.45482053 0.407048258

0.18609952

0.226798081

0.124712034

0.176650486

0.241768153

0

0.05

0.1

0.15

0.2

0.25

0.3

2007 2008 2009 2010 2011

ROA

Fig 5: Showing ROA


Profit Margin

Year 2007 2008 2009 2010 2011

Net Income 35049278 55800103 35207204 54566736 88862235

Sales 117429634 168488206 118140863 188015060 289179187

Profit Margin 0.29847047 0.331181062 0.298010384 0.290225347 0.307291254

0.560807004

0.844315909

0.529960699

0.45482053

0.407048258

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2007 2008 2009 2010 2011

ROE

0.29847047

0.331181062

0.298010384

0.290225347

0.307291254

0.26

0.27

0.28

0.29

0.3

0.31

0.32

0.33

0.34

2007 2008 2009 2010 2011

Profit Margin

Fig 7: Showing Profit Margin

Fig 6: Showing ROE


14. Competitor Analysis

Chevron:

For more than 130 years, Chevron has developed some of the world's most complex crude oil

fields. We have a strong position in nearly all of the world's key basins, and our extensive project

portfolio provides the foundation for future growth.They are the largest private producer of oil

in Kazakhstan, the top oil and natural gas producer in Thailand, the largest oil producer

in Indonesia, and a major leaseholder in the U.S. Gulf of Mexico.In 2011, Chevron produced

2.673 million net oil-equivalent barrels per day from operations around the world.

Exxon Mobil:

Exxon Mobil Corporation or ExxonMobil is an American multinational oil and

gas corporation headquartered in Irving, Texas, United States. It is a direct descendant of John D.

Rockefeller's Standard Oil company and was formed on November 30, 1999, by the merger of

Exxon and Mobil. ExxonMobil is the world's largest company by revenue and one of the largest

publicly traded companies by market capitalization in the world. The company is ranked no 1

globally in Forbes Global 2000 list in 2012. Exxon Mobil's reserves were 72 billion oil-

equivalent barrels at the end of 2007 and, at then (2007) rates of production are expected to last

over 14 years.With 37 oil refineries in 21 countries constituting a combined daily refining

capacity of 6.3 million barrels Exxon Mobil is the largest refiner in the world.In 2012,

ExxonMobil confirmed a deal for production and exploration activities in the Kurdistan region of

Iraq.

Royal Dutch Shell:

Royal Dutch Shell commonly known as Shell is the second largest company in the world in

terms of revenue and one of the six oil and gas "super majors". Shell is also one of the world's

most valuable companies. Shell is vertically integrated and is active in every area of the oil and

gas industry, including exploration and production, refining, distribution and

marketing, petrochemicals, power generation and trading. It also has major renewable

energy activities, including in bio fuels. It has operations in over 90 countries, produces around

3.1 million barrels of oil equivalent per day and has 44,000 service stations worldwide. Shell Oil

Company, its subsidiary in the United States, is one of its largest businesses


15. Breakeven Analysis

We know that Break Even point equals to:

Fixed Costs/Price - Variable Costs = Breakeven Point in Units

Break Even point in Year 2007

Fixed Cost $4828545000

Variable Cost Per unit $27

Sales $71(Per Barrel)

Break-even point (total sales) 7,791,515,795.45

Break-even point (units) 109,739,659.09














Fixed Cost $10126644000







Fixed Cost $11943518000





Break Even Point in units

Break-even point (In Units)

Year 2011 180,962,393.94

Year 2010 198,561,647.06

Year 2009 180,569,128.21

Year 2008 82,182,698.41

Year 2007 109,739,659.09

Year 2011 Year 2010 Year 2009 Year2008 Year 2007

180,962,393.94 198,561,647.06

180,569,128.21

82,182,698.41

109,739,659.09

Break-even point (In Units)

Fig 8: Showing Break-even point (In Units)


Break Even Point in total sales

Break-even point (total sales)

Year 2011 18,096,239,393.94

Year 2010 15,884,931,764.71

Year 2009 10,834,147,692.31

Year 2008 7,807,356,349.21

Year 2007 7,791,515,795.45

18,096,239,393.94 15,884,931,764.

71

10,834,147,692.31

7,807,356,349.21

7,791,515,795.45

Year 2011 Year 2010 Year 2009 Year 2008 Year 2007

Break-even point (total sales)

Fig 9: Showing Break-even point (total sales)


16. KSFs Analysis (Industry Key Success Factors)

1. Technology-related KSFs

• Providing timely information and communications services to the organization. In

addition to providing state-of-the-art supercomputing facilities that support the core

exploration

• production systems of QP, during 2008 ITD also implemented and expanded upon other

leading-edge technologies such as IP converged network services which included, in

addition to the traditional IP data services, IP telephony, videoconferencing, and IP-based

access control and closed circuit television systems.

• Department Planning, execution, coordination and management of QP’s research

departments in field and plant trials for testing and qualification of

new technology solutions equipment at Qatar Science & Technology Park (QSTP) The

QP Research & Technology Department.

2. Manufacturing-related KSFs

• Management and quality assurance and HSE management systems. received accreditation

to the highest international standards for quality management system

• AIR QUALITY MONITORING QP implements an extensive air quality monitoring

program within and surrounding its facilities to characterize emissions, verify compliance

with air quality standards and identify areas where improvement is necessary.

• Over 2000 of QP employees have benefited from in-house access to e-Learning courses.

• Access to e-Learning courses through the Internet able to access the latest news, press

kits and downloadable images for publication

3. Distribution-related KSFs

• Being refined to process the crude oil and condensate into various finished petroleum

product process crude oil and condensate into various finished products to meet domestic

demand as well as for export.

• The main finished products are liquefied petroleum gas (LPG), petrochemical naphtha,

premium gasoline, super ... the crude oil and condensate into various finished


petroleum products.

• The finished products are intended for supplies its refined products locally, mainly to

WOQOD, SEEF, QAFAC, QAPCO and NGL.

4. Marketing-related KSFs

• Brand Name

• Fast, accurate technical assistance

• Suppliers wishing to conduct business with QP Purchasing Department are first required

to register

• Upon completing the registration, QP Purchasing Department will authorize Quadrem to

initiate the process for the supplier to use the e-Supply Management (e-SM) technology.

• The process to bring the supplier on board will include the following:

Quadrem will set up supplier’s e-SM account

Supplier will receive its e-SM logon credentials and unique Organization ID (OrgID)

Supplier must accept Quadrem Terms & Conditions upon first logon

Supplier must respond to and accept the e-SM training schedule notification and

information sent by Quadrem

Quadrem will submit the supplier’s on board confirmation to QP Purchasing Department.

QP Purchasing Department will then begin sending the following purchasing documents

to the supplier:

Reach the people who matter to your business and open up new opportunities with your

trade partners via transactions, participating in discussions, exchanging ideas, marketing

strategies and advertising.


5. Skills & Capability-related KSFs

• Qatar Petroleum Purchasing Department launched e-Supply Management to facilitate the

purchasing processes between Purchasing Department and registered suppliers.

• The e-Supply Management application focuses on the exchange of the following

documents between Purchasing Department and registered suppliers:

Request for Quotation

Quotation

Order

Change Order

Order Response

Order Status Request

Order Status Response


17. Recommendation

1. Qatar Petroleum should address some of the environmental issues so that it does not face

the media backlash like BP oil did.

2. More safety measures need to taken to ensure safety of the workers.

3. Qatar Petroleum is controlled by the government. So it faces lot of challenges to compete

with other aggressive privately owned companies. To sustain in this modern era a

company will have to be proactive, aggressive and agile but these are some of the

qualities that Qatar Petroleum lacks.

4. New business ventures should be considered by the company.

5. More dynamic feedback system will have to be developed to communicate with the

customers.

6. Client’s views should be taken with great importance.

7. Qatar Petroleum should consider itself going private so that it can freshen up things a bit.

8. A change in management needs to be ensued if that’s what it takes to strengthen the

company.

9. New operational plan needs to be designed to get the best out of its resources.

18. Conclusions

Qatar Petroleum is one of the power house companies in the world. It has a huge amount of

resources. It has all the technical and non-technical capabilities that a company should have. It’s

still making profit but it’s decreasing every year. So a restructuring needs to be made if that’s

what it takes to improve its current situation. A company as big as Qatar Petroleum will not fail

so easily but it will lose its ground if it does not take corrective measures. The company has the

capability to go even bigger if it takes all the right decisions. Customer driven approach is the

new best thing in today’s business world. So a sort of same approach could really help the

company. So if Qatar Petroleum starts making the decision we could see company for hundreds

of years to come.


19. References

Oxford University Press, (2007). University Press (OUP). An acclaimed bestseller in 2007.

Al-Sada M.B.S, (2013), Message from the Chairman. Minister of Energy & Industry

Chairman & Managing Director, Qatar Petroleum.

Kotler, P. (2006). Alphabet soup. Marketing Management, 15(2), 51-51.

McDonald M. (2004). Strategic marketing and firm performance. J. Mark. 2(4): 23-40.

Kotler P, & Connor RA. (1997). Marketing of professional services. J. Mark. 5(4):12-18.


Appendix

Qatar Petroleum

Documents

Transcript of Qatar Petroleum