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ADNOC Gas Processing: Issues and Strategy Report


ADNOC Gas Processing, previously known as GASCO, can be numbered among the largest companies in the United Arab Emirates (“Optimizing resources,” n.d.). The company was established more than forty years ago, and it is headquartered in Abu Dhabi. Nowadays, ADNOC Gas Processing is one of the most successful gas producers in the United Arab Emirates as well as the entire world.

SWOT Analysis

At first thought, the company under consideration may seem to face no serious threats due to a large number of opportunities for further development that it has. An objective analysis of any company involves taking into account both strong and weak points related to a company’s activity. Among the tools helping to consider both positive and negative sides of companies’ activity, there is SWOT analysis.

In terms of the strengths of the given company, it is pivotal to highlight that ADNOC Gas Processing is an official market leader in the United Arab Emirates when it comes to the extraction of oil. Due to that, it is clear that the impact of industry rivalry on ADNOC Gas Processing cannot be listed among factors that produce risks and encourage the company to review its strategy. The oil-processing capacity of plants owned by ADNOC is extremely high as is clear from the average number of barrels of oil produced every day. The latter can be numbered among the key statements that the company is proud of. The recent reports state that ADNOC produces at least three million barrels of oil per day (“Our products,” n.d.). Another strength associated with the company and its business strategy is that it is not going to rest on its laurels, missing the chance to generate more financial resources.

They can be spent on the development of the Petroleum Institute Research Center located in the United Arab Emirates and other projects (“Research & development,” n.d.). In general, numerous strengths of the business strategy of ADNOC are inherent in the company’s willingness to invest in both professional research and education. The latter remains one of the most important decisions made by the management of the company under consideration. Such investments do not only allow ADNOC to improve oil processing technologies in order to reduce the costs of working processes and maximize profits but also help the company to create a better social image and demonstrate its readiness to contribute to the lasting prosperity of the United Arab Emirates. Continuing on the topic of strengths, a great number of strategic partners of ADNOC among both developed and developing countries needs to be taken into account (“ADNOC Group sustainability report 2015: Executive summary,” 2015). Selling its products across five continents (the largest buyers of ADNOC’s products are represented by Asian countries), the company has managed to win international acclaim to be listed among the most promising oil production and processing companies.

There are a few weaknesses associated with the strategy of ADNOC and its units. To begin with, even though the company has established its own educational institution that is responsible for the training of specialists, ADNOC still uses the help of foreign specialists in oil extraction technologies (“ADNOC Group sustainability report 2015,” 2015). The latter remains an important weakness, given that independence related to technology should be the ultimate goal of the organization. Also, another weakness that needs to be discussed within the frame of the report is represented by incidence rates (“ADNOC sustainability report 2014,” 2014). In fact, the company reports a gradual decrease in the number of work-related accidents, but safety control still needs to be improved.

When it comes to the opportunities of the company under consideration, they can be divided into a few groups based on the area of business that they relate to; the company has a wide range of opportunities that refer to its workforce. The ability of its employees to take steps toward the continuous professional growth remains extremely significant as the company regards the creation of a sustainable work environment as one of its key goals. To improve the skills of its workforce and become more independent from foreign specialists, ADNOC has an opportunity to design and implement new training programs for Emirati engineers to make sure that the country has enough specialists to be more independent in terms of technology (“Education,” n.d.).

Another opportunity related to the workforce of the company refers to mitigating the negative effects of gender inequality. A few years ago, the company started developing a program that was aimed at increasing the degree to which female specialists were engaged in the process of oil extraction and processing. Despite the efforts made by the management of the company to create more educational opportunities for female employees, the latter represent only 10% of its workforce (“ADNOC Group sustainability report 2015,” 2015, p. 30). Using its vast financial resources, the company can design a campaign to attract talented female specialists, which will allow making its workforce more diverse (“Enablers: Technology, partnerships & people,” n.d.). The latter is especially important, considering that ADNOC Gas Processing is planning to create more jobs and find new partners among European countries that support gender equality in employment opportunities.

There are two important potential threats that ADNOC Gas Processing needs to consider. First, the instability related to oil prices in the United Arab Emirates affected numerous companies in 2016, and there is a threat of further problems (Kennedy, 2016). To continue, a significant threat that may require the introduction of an additional strategy related to the potential long-term effects of the company’s activity on the natural resources of the United Arab Emirates (Pichtel, 2016). The threat and the company’s efforts to mitigate it are discussed in the next section of the report.

ADNOC Gas Processing and Environmental Problems

Processing plants operated by the company under consideration help specialists to perform large amounts of work with the help of modern equipment for gas production and processing, along with the use of new technology. The company’s key tasks include processing gas and the production of gas products. Among the products that ADNOC Gas Processing produces and distributes are propane, methane, and gasoline fraction. In assessing the company’s business strategy, it is important to take into account that ADNOC Gas Processing is owned by the government of the United Arab Emirates, which means that the management of the company is unable to implement steps that may involve increased risks. The work performed by the company plays an important role in the economic development of the entire country; ADNOC Gas Processing is listed among the key companies that provide fuel to industrial entities. The company distributes products that, among other things, allow the erection of steel structures, support the work of cement production plants located in the country, and help to generate electricity and supply water.

Due to the nature of the industry and a multitude of factors that can make gas processing and distribution dangerous for the ecosystem of the planet, one possible strategic challenge that must be considered is the environmental impact of the company’s operations. Any inability to minimize the negative influence of the company’s activities on the environment of the planet can be listed among the key challenges that it may face as this problem can lead to a range of far-reaching consequences. In general, a number of factors are closely interconnected with this challenge, elevating the creation of a strategy to reduce environmental impact to the level of a key strategic task. In considering this endeavor, it must be emphasized that ADNOC Gas Processing does not perform small-scale processing activities.

Indeed, the company’s management is proud of its high productivity and ability to distribute large quantities of products on a daily basis. As is clear from the size of the organization, any lack of effective measures aiming to help prevent environmental pollution and health issues could result in serious threats to the natural resources of the country as well as the population. The company’s strategic goals comprise another factor that makes the discussion of a strategy to reduce the environmental impact of ADNOC Gas Processing a crucial task. The management of the organization has clearly stated that as a part of its long-term strategic goals, ADNOC plans to focus on ramping up the production of gasoline and other products (“Our strategic foundations,” n.d.). As attempts to increase the work capacity of plants where potentially dangerous substances are processed will inevitably be connected with higher risks of environmental pollution and occupational accidents, companies should always design effective strategies to help to protect HSE principles.

The possible consequences of the problem present an important topic for discussion. The inability of gas processing plants to minimize unwanted emissions as well as the negative impact on the environment remains an important challenge as it involves a range of problems. In fact, it is crucial to have a clear strategy for helping to reduce environmental risks because the failure to implement the most effective work practices or to use the safest equipment may have a negative impact on the entire community. Specialists from ADNOC Gas Processing primarily use natural gas, one of the safest natural raw materials that can be produced in terms of harmful environmental effects, to produce fuel. Nevertheless, many researchers acknowledge that the combustion of natural gas can contribute to global warming. The amount of natural gas that is extracted and processed in many countries has significantly increased due to the necessity to operate numerous plants and factories.

The enormous amounts of natural gas and other sources of energy that are extracted and processed on a global scale are causing the average temperature on the Earth to gradually increase. Even though the effects of global warming will not be the same for people on different continents, it is crucial for every gas processing company on the planet to take timely measures to ensure safety for all parties that may be affected. Apart from the contributions that gas processing companies make to global warming, any inability to ensure the safety of production processes can lead to air and water contamination. The processing of natural gas does not produce large amounts of dangerous substances. However, the inability to reduce harmful emissions results in the presence of chemical smog that poses a threat to many species of birds and insects.

In particular, it is known that air pollution can be caused by regeneration gas coming from demercaptanization units (Davoudi, Rahimpour, Jokar, Nikbakht, & Abbasfard, 2013). Also, water contamination presents a significant concern, taking into account animals that either live in water or rely on it for hydration. In addition to concerns about environmental pollution, an unsafe working environment for employees can result from the inability to reduce unwanted emissions along with the lack of assurance that all practices aimed at disposing of industrial waste are appropriately implemented. Exposure to natural gas at work due to unsafe practices causes headaches, nausea, vomiting, breathing problems, and other health issues. Another factor that makes addressing this strategic challenge a key task is related to the social images of companies that fail to do their best to reduce the negative impact on the environment of gas processing. The effect on the company’s reputation of a failure to rise to the challenge is especially detrimental to the success of private gas processing companies or companies that perform small-scale production activities as they are more sensitive to the pressures of competition.

Different companies related to the gas processing industry tend to use similar strategies aimed at reducing the environmental impact of their activities. For instance, Marathon Petroleum (MPC), known as one of the most successful gas processing companies in the United States, recognizes environmental protection as one of its key principles (Marathon Petroleum Corporation, 2017). To fulfill this mission, the corporation works to design, implement, and improve various programs aimed at waste minimization. Also, as is clear from the reports provided by the organization, the management keeps track of greenhouse gas emissions resulting from the activity of MPC. Measures ranging from the use of safe refining processes to efforts at industrial waste minimization have helped the company to improve its social image and join the ranks of the best gas processing companies.

An important part of the company’s strategy includes efforts aimed at reducing the number of occupational accidents that cause increased health risks for employees as well as dangerous emissions. In other words, many companies regard accident prevention as the key to environmental protection. Exterran Corporation is another key player in the market that uses a range of measures that help the company to reduce the negative impact of its working processes on the environment. In order to address possible challenges, the company uses portable testing devices that help in assessing air quality and preventing possible accidents that can pose a threat to employees or to the entire community (Robinson, 2013). Also, the management of the company does its best to provide training to specialists who must be ready to go into action in case of emergency. Strategies that other large companies use to address the challenge are quite similar.

To ensure safety and reduce unwanted emissions, ADNOC Gas Processing uses a strategy that includes a combination of measures enabling the company to reduce industrial waste and prevent occupational accidents. Just like other successful companies in the industry, ADNOC Gas Processing focuses attention on training its emergency response groups as the skills of the latter help to guarantee the absence of far-reaching consequences in case of emergency. Having the understanding that the United Arab Emirates should make a contribution to prevent global climate change, the company is concerned about the problem of greenhouse gas emissions.

Apart from implementing work practices that increase the effectiveness of emergency teams, ADNOC Gas Processing does its best to demonstrate its commitment to environmental protection, and this makes the company’s operations more sustainable and improves its social image. For instance, it invests in environmental protection projects that involve landscape gardening and the distribution of artificial coral heads that help numerous species of fish to survive (“Our strategic foundations,” n.d.). The company’s effort to engage in numerous nationwide projects aimed at the protection of flora and fauna has a positive impact on the way that people in the United Arab Emirates perceive its activities. In its efforts to protect the natural resources of the country, ADNOC Gas Processing sets itself above the other gas processing companies in the country that might be attempting to achieve similar success. Sustainability and innovation also play an important role for the company as it actively invests in research devoted to the use of renewable energy and natural gas in the generation of electricity.

Conclusion

In conclusion, apart from other advantages, the strategy that ADNOC Gas Processing is pursuing aligns with the principles outlined in Abu Dhabi Vision 2030 and UAE Vision 2021; the document highlights that building a sustainable business environment in the country is inherent in environmental protection (Alobaidi, Rahim, Mohammed, & Baqutayan, 2015). The document further emphasizes the importance of the rational use of the country’s natural resources as they help it to stay prosperous. The company under consideration, in its turn, sees the implementation of new cost-effective practices as one of the key strategic goals to success. Meanwhile, the company’s national strategy focuses on improvement to the infrastructure of the country that is impossible unless natural resources are also protected. As a part of this effort, ADNOC Gas Processing and other departments of ADNOC are planning to initiate more programs that will prevent water contamination and restore wildlife habitat areas to preserve biological diversity.

References

ADNOC Group sustainability report 2015. (2015). Web.

ADNOC Group sustainability report 2015: Executive summary. (2015). Web.

ADNOC sustainability report 2014. (2014). Web.

Alobaidi, K. A., Rahim, A. B. A., Mohammed, A., & Baqutayan, S. (2015). Sustainability achievement and Estidama green building regulations in Abu Dhabi Vision 2030. Mediterranean Journal of Social Sciences, 6(4), 509.

Davoudi, M., Rahimpour, M. R., Jokar, S. M., Nikbakht, F., & Abbasfard, H. (2013). The major sources of gas flaring and air contamination in the natural gas processing plants: A case study. Journal of Natural Gas Science and Engineering, 13, 7-19.

Education. (n.d.). Web.

Enablers: Technology, partnerships & people. (n.d.). Web.

Kennedy, C. (2016). Low oil prices hitting real estate in UAE. Web.

Marathon Petroleum Corporation. (2017). Code of business conduct. Web.

Optimizing resources. (n.d.). Web.

Our products. (n.d.). Web.

Our strategic foundations. (n.d.). Web.

Pichtel, J. (2016). Oil and gas production wastewater: Soil contamination and pollution prevention. Applied and Environmental Soil Science, 2016, 1-24.

Research & development. (n.d.). Web.

Robinson, D. (2013). Oil and gas: Treatment and discharge of produced waters onshore. Filtration and Separation, 50(3), 40-46.

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