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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 Rene 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 Qatars 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. Qatars National Vision defines the longterm 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 Petroleums 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 companys 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 countrys 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 QPs 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)

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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

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& 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 QPs operations by providing timely information and communications services to the organization. In addition to providing state-ofthe-art supercomputing facilities that support the core exploration and production systems of QP. The QP Research & Technology Department represents a significant expansion of QPs technical capability. It will be central in forming QPs 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.

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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) 2) 3) 4) 5) Diversified Business Advance Technology Strategic Development of LNG Business Substantial Asset Portfolio 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.

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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 & thats why they cant 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.

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5.3. Porters 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 cant 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 arent cost effective.

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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 & thats why they cant take any decision by themselves, so before taking any decision they need to consult with government.

Achievement:
Qatars position as the worlds 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

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The industrial sector in Qatar celebrated another major milestone in 2011 with the inauguration of the worlds 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 manhours 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.

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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. 2. 3. 4. 5. Non autonomy Involvement in litigation Legal proceedings Employee unrest 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

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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 its key physical assets are the countrys 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

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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 31 st December 2013.

Encompassing: In order to meet the countrys 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.

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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 Qatars 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.

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

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9.2. GREAT Model


Goals:
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.

Roles / Results :
Qatars position as the worlds 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 worlds 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 countrys 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

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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 KEY EXTERNAL 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) 4 = the response is superior 3 = the response is above average. 2 = the response is average. 1 = the response is poor TOTAL: Weight Rating Weight score 0.10 0.10 0.08 0.02 0.05 0.15 0.05 0.05 0.10 0.05 0.05 0.05 0.05 0.10 4 3 2 2 3 2 2 3 3 2 3 3 2 2 0.40 0.30 0.16 0.04 0.15 0.30 0.10 0.15 0.30 0.10 0.15 0.15 0.10 0.20

Rating
1.00 2.60

The External Factor Evaluation Matrix score for Qatar Petroleum is 2.60. It represents that Qatar Petroleums response to the external environment is above average.

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11. The Competitive Profile Matrix (CPM Matrix)


The Competitive Profile Matrix (CPM) identifies a firms major competitors and its particular strengths and weaknesses in relation to an individual firms 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 Advertising Product Quality Price Competition Management Financial Position Customer Loyalty Global Expansion Market Share

Weight Rating 0.20 0.10 0.10 0.10 0.15 0.10 0.20 0.05 1 4 3 4 4 4 4 1

Score 0.20 0.40 0.30 0.40 0.60 0.40 0.80 0.05

Rating 4 4 3 3 3 4 2 4

Score 0.80 0.40 0.30 0.30 0.45 0.40 0.40 0.20

Rating 3 3 4 3 3 2 2 3

Score 0.60 0.30 0.40 0.30 0.45 0.20 0.40 0.15

Total

1.00

3.15

3.25

2.80

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

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12. QSPM (Quantitative Strategic Planning Matrix)


Technique designed to determine the relative attractiveness of feasible alternative actions
QSPM (Quantitative Strategic Planning Matrix) Alternative 1Business Expand in Asia Key Factors
Weight Attracti veness Scores Total Attractive ness Scores

Alternative 2New Business Setup in Africa


Weight Attracti veness Scores Total Attracti veness Scores

Strength 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 Sum weight Opportunity 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) Sum weight Sum Total Attractiveness Scores

0.11 0.11 0.15 0.10 0.09 0.10 0.12 0.06 0.08 0.08 100% 0.09 0.07 0.08 0.06 0.05 0.07 0.08 0.05 0.05 0.09 0.08 0.09 0.07 0.07 100%

3 4 2 3 1 2 2 3 3 1

0.33 0.44 0.30 0.30 0.09 0.20 0.24 0.18 0.24 0.08

0.10 0.08 0.13 0.15 0.08 0.09 0.11 0.12 0.07 0.07 100% 0.09 0.08 0.06 0.05 0.05 0.09 0.10 0.08 0.06 0.07 0.05 0.06 0.07 0.09 100%

2 3 1 4 0 3 2 3 1 1

0.20 0.24 0.13 0.60 0.00 0.27 0.22 0.36 0.07 0.07

4 2 3 1 1 2 3 0 1 3 2 3 1 2

0.36 0.14 0.24 0.06 0.05 0.14 0.24 0.00 0.05 0.27 0.16 0.27 0.07 0.14

4 4 0 2 1 4 3 2 0 0 1 0 1 0

0.36 0.32 0.00 0.10 0.05 0.36 0.30 0.16 0.00 0.00 0.05 0.00 0.07 0.00

4.59

>

3.93

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Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable; 4 = most acceptable; 0 = not relevant. So, for Qatar Petroleum its 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 2007 2008 2009 2010 2011 Sales Volume 117429634 168488206 118140863 188015060 289179187

Sales Volume
35000000 30000000 25000000 20000000 15000000 10000000 50000000 0 2007 2008 2009 2010 2011

Fig 1: Showing Sales Volume

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Total operating revenue Year 2007 2008 2009 2010 2011 Total operating revenue 124657849 178201982 124588739 197294049 300342331

Total operating revenue


35000000 30000000 25000000 20000000 15000000 10000000 50000000 0 2007 2008 2009 2010 2011

Fig 2: Showing Total operating revenue

Net Income Year 2007 2008 2009 2010 2011 Net Income 35049278 55800103 35207204 54566736 88862235

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Net Income
10000000 80000000 60000000 40000000 20000000 0 35049278 55800103 35207204 54566736 88862235

2007

2008

2009

2010

2011

Fig 3: Showing Net Income

Total Assets Year 2007 2008 2009 2010 2011 Total Assets 188336209 246034282 282307993 308896609 367551449

Total Assets
40000000

30000000
20000000 10000000 0 2007 2008 2009 2010

2011

Fig 4: Showing Total Assets

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ROA (Return on assets) Year Net Income Total Assets ROA 2007 35049278 188336209 2008 55800103 246034282 2009 35207204 282307993 0.124712034 2010 54566736 308896609 0.176650486 2011 88862235 367551449 0.241768153

0.18609952 0.226798081

ROA
0.3 0.25 0.226798081 0.2 0.15 0.1 0.05 0 2007 2008 2009 2010 2011 0.18609952 0.124712034 0.176650486 0.241768153

Fig 5: Showing ROA

Return on equity (ROE) Year Net Income Total Equity ROE 2007 35049278 62497932 0.560807004 2008 55800103 66089129 0.844315909 2009 35207204 66433613 0.529960699 2010 54566736 119974215 0.45482053 2011 88862235 218308845 0.407048258

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ROE
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2007 2008 2009 2010 2011 0.560807004 0.529960699 0.407048258 0.45482053 0.844315909

Fig 6: Showing ROE

Profit Margin Year Net Income Sales 2007 35049278 117429634 2008 55800103 168488206 0.331181062 2009 35207204 118140863 0.298010384 2010 54566736 188015060 0.290225347 2011 88862235 289179187 0.307291254

Profit Margin 0.29847047

Profit Margin
0.34 0.33 0.32 0.31 0.3 0.29 0.28 0.27 0.26 2007 2008 2009 2010 2011 0.290225347 0.29847047 0.331181062 0.307291254

0.298010384

Fig 7: Showing Profit Margin Qatar Petroleum

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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 oilequivalent 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 generation and trading. It also has and

marketing, petrochemicals, power

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

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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 Variable Cost Per unit Sales Break-even point (total sales) Break-even point (units) Break Even point in Year 2008 Fixed Cost Variable Cost Per unit Sales Break-even point (total sales) Break-even point (units) Break Even point in Year 2009 Fixed Cost Variable Cost Per unit Sales Break-even point (total sales) Break-even point (units) Break Even point in Year 2010 Fixed Cost Variable Cost Per unit Sales Break-even point (total sales) Break-even point (units) $10126644000 $29 $80(Per Barrel) 15,884,931,764.71 198,561,647.06 $7042196000 $21 $60(Per Barrel) 10,834,147,692.31 180,569,128.21 $5177510000 $32 $95(Per Barrel) 7,807,356,349.21 82,182,698.41 $4828545000 $27 $71(Per Barrel) 7,791,515,795.45 109,739,659.09

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Break Even point in Year 2011 Fixed Cost Variable Cost Per unit Sales Break-even point (total sales) Break-even point (units) Break Even Point in units $11943518000 $34 $100(Per Barrel) 18,096,239,393.94 180,962,393.94

Year 2011 Year 2010 Year 2009 Year 2008 Year 2007

Break-even point (In Units) 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)


198,561,647.06 180,962,393.94 180,569,128.21

109,739,659.09 82,182,698.41

Year 2011

Year 2010

Year 2009

Year2008

Year 2007

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

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Break Even Point in total sales

Year 2011 Year 2010 Year 2009 Year 2008 Year 2007

Break-even point (total sales) 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

18,096,239,393. 94 15,884,931,764. 71

Break-even point (total sales)

10,834,147,692. 31

7,807,356,349.2 7,791,515,795.4 1 5

Year 2011

Year 2010

Year 2009

Year 2008

Year 2007

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

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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 QPs 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

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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 suppliers 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 suppliers 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.

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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

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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. Clients 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 thats 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. Its still making profit but its decreasing every year. So a restructuring needs to be made if thats 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 todays 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.

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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.

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Appendix

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