QATAR PETROLEUM’S OPERATION STRATEGY

QATAR PETROLEUM’S OPERATION STRATEGY

Specific set projects or plans can be accomplished by converting the mission statement through the strategic objectives which aim for long-term organizational goals. The strategic objectives are designed to entail specific, realistic, and measurable translations of the company’s mission statement, which can be applied to managing and guiding decision-making procedures successfully. On the other hand, operational objectives entail a project’s monthly, weekly, or daily benchmarks that assist in implementing the main strategic objectives. Operational purposes are connected to the strategic objectives as observed in managing and employees breaking down the main strategic goals into workable or accommodable roles and tasks. Getting tasks accomplished, such as the production of services and goods to consumers, are the main concerns in an organization’s operational responsibilities. Operations management is significant since it manages most of the company’s organization’s revenue and resources. However, most individuals perpetuate that the role of operations management is majorly restricted to short-term or day-to-day tactical problems. Qatar Petroleum (QP) organizational operations are strategically significant since most of the organization’s structure and activities are embedded in the daily roles within the operational functioning methods. The annual or totality constitutions of the organizational long-term strategic implications and decisions contain the daily operational actions. Therefore, the paper addresses the operational strategies applied in Qatar Petroleum in fostering strategical connections.

Does the operations strategy reflect the business strategy (top-down)?

Operation strategy that the entity utilizes in realizing its business strategy can be derived and supported by its operations strategy in meeting the entity’s business and management strategies; this is known as the top-down perspective. The concept above is similar to the Haye and wheelwright’s three organization stages. Skinner’s process of identification of the operational tasks is the preferable process of developing an operations strategy according to the top-down perspective. For instance, in Qatar Petroleum, their operational tasks would be determined by their logical business strategies, and according to research conducted, the five objectives of operational performance is one method of accomplishing operations task. The company has to focus on offering low prices, thereby indicating that the operational functions should be based gaining low cost in the operations management. The operations task can attain goals of speeding up operations suppose their business strategy is based on creating and offering fast deliveries to their immediate and mega oil and natural gas consumers. Now, in this company, one observes that the operations strategy is linked to the corporate strategy through every business unit within their premises.

QP is relentless in ensuring that it develops the State of Qatar’s energy resources based on its significant operations in the global oil and gas industry. Therefore, the company has taken a massive role in ensuring unprecedented growth and assistance in meeting the universal energy requirements. Various upstream projects for the continued growth of Qatar’s offshore and onshore fields are being implemented by the company, which is committed to generating resources in a sustainable method (Amir, Rahim, and Mat). A clear example is illustrated in their diversified oil mine portfolio, which is branched into different fields. For instance, the Dukhan Field was discovered back in 1939, and this was the first oil and gas field to be located in the state, which was distinctively the only onshore field during that era. The area is further segmented into four sectors, namely Diyab, Jaleha, Khatiyah, and Fahahil. Production of gas, oil, and condensate occurred in 296 regions over 58 gas wells and 230 water injectors within this field and are transported by pipeline to Mesaieed for further processes or export to other states (Bseiso and Rasi, 2009, January). Other areas within the country are the Maydan Mahzam (MM), which was initiated in October 1963 as an offshore field (Bolivar, 2014, January, pp. 1-10). Now, high diversification can be expounded. Still, notably, the significant operations process has been illustrated in how the company sources its oil, gas, and condensate from the fields up to the consumption level. A clear indication is represented with their mode of transportation (pipeline), which is a fast and efficient method of transporting services and goods, thereby decreasing production time, which increases the revenue leading to more affordable and low prices as indicated earlier (Al-Mana, 2017).

Does the operations strategy align with the market requirement?

Market requirements entail the reduction of oil pricing, generating natural gas, transportation of oil products to global and marginalized regions, and generating income in QP as much as there are other minor market needs. One of their operations strategies entailed gaining upstream investments internationally by developing its oil and gas industry and contributing universal energy industry development. The above events were rapidly demonstrated in their increased investments in producing and exploring activities in numerous growing regions. QP continued to establish a world-class portfolio of exploring acres in 2018 as a section of their international upstream strategies. QP successfully played a part in numerous international exploration biddings and finalized several major international upstream farm-ins or acquisitions in collaboration with its principal shareholders and international partners. The company managed to win the exploration rights for its five offshore exploring blocks in Mexico, indicating its year started on a good note. Finally, it’s international upstream portfolio proceeded to increase, and by early February 2018, the company acquired 25% of Total interest in its South African offshore in Exploration Block 11B/12B (Al-Emadi, 2019, pp. 27-38).

Now, the operations strategies align with the market requirements since the company continues to diversify its oil fields with the acquisition of Total shares in the South African offshores. Semi-submersible deep-sea Stavanger was expected to drill an exploratory well by early 2019, indicating that already exploration activities were underway in the block. Another successful participation followed when another bid round was concluded in Brazil, a late acquisition in late March 2018. Moreover, this was the second winning bid in Brazil and had consortiums in QP at 30% interest. Furthermore, onshore blocks were included in the company’s increasing international exploration acreages when they entered into agreements of acquiring 30% of the equity in Argentina in two ExxonMobil affiliates in June 2018. These two ExxonMobil affiliates held hydrocarbon license rights for the seven blocks. In a bid to optimize its market requirements that were earlier mentioned, the company continues to outgrow its minefields (Wright, 2018, pp. 247-259).

Does the operations strategy learn from the operational experience?

QP has acknowledged the vast and critical roles played by its capital in shaping its vision into reality as it continues to pursue its corporate ideas. Therefore, leading to the formation of “QP People Agenda,” which was formulated since 2016 to assist in fostering its operations strategy (Al-Emadi, 2019, pp. 101-111). Several projects and initiatives that are designed to offer new methods of managing individuals in the company that is in line with the internationally set standards are included in the QP People Agenda, and this comes from the operational experience that has been generated for years within the company. Its plan focuses on three segments that entail driving sustained performance for the organization’s procedures, policies, culture, systems, and people, enhancing affiliation of workers within the company towards collaboration, leadership, and commitment and driving organizational excellence. A large number of activities were undertaken in 2018, and one of them included the rollout to all workers towards the QP values along with the integrated corporate strategies (Fuccaro, 2020, p.2). Standards of behavior should be put into action daily when shaping the desired corporate cultures, and this was included within the six core values that formed the QP’s leadership framework.

A three-day workshop that had ELT (Executive Leadership Team) members, CEOs of the subsidiaries, and Managers in attendance formulated the rollout of the new values and strategies in February 2018. Similar workshops were then formulated for the rest of the year to reach more than 97% of QP workers from the various departments and directorates. According to Mr. Saad Sherida Al-Kaabi who acts as the Minister of States for Energy Affairs and President and CEO of Qatar Petroleum the new strategies and values are critical for the expansion and ensuring continued global growth thereby changes should be embraced for continued success (Gardner, Pessoa, Diop, Al-Ghanim, Le Trung, and Harkness, 2020, pp. 83-102). Moreover, a new talent management procedure that had more than 1,200 leaders trained in preparing the rollout was conducted as part of the plan. A comprehensive strategy that entailed planning for the future, attracting best local talent and globally, developing staff to ensure a highly capable team and engaging employees in inspiring high performances are some of these processes that could cover the entire workers’ lifecycle.

Does the operations strategy develop the capability of its resource and process (inside out)?

The capability of QP’s process and resource is developed in an inside out operations strategy that has both the market-led and operations led perspective.  In response to the market environment in which the entity is operating, the operations strategy that is developed in this perspective is termed as marked-led. According to Nawaz and Koc an organization’s operation strategy must be linked to its marketing strategy by considering their services and products winning bids within the market place (Nawaz, and Koç, 2020, pp. 133-175). There are marketing qualifying criteria and order winning principles that entail satisfactory factors before making a purchase and factors which consumers will ultimately need to make a purchase decision. In this scenario, one observes QP has utilized an inside out operations strategy to finance its resources by looking into the order winning criteria as much as they are based on market qualifying criteria. A clear illustration was indicated in their previous acquisitions.

On the other hand, there is an operation-led perspective that excels at operations when driving the organization’s operations strategy. A resource-based view (RBV) strategy that is covered in the strategic management literature and is in line with the Hayes and Wheelwright stage 4 entity should be fitted within a company’s operations structure. The manner in which an organization develops and deploys its resources and constructing capabilities rather than just aligning itself with the market demands is illustrated as a superior performance effect when relating to RBV. Tangible resources, procedural and systems resources, values and cultural resources, networking resources, and knowledgeable experiences and skill resources are included as the core resource categories when checking into the core QP operations strategies (Ritz, 2019).

The following four operations strategies can be reconciled by encouraging technological and innovative measures into the company. Operations strategy is branched into three levels, namely corporate, business, and low-level strategies, and QP utilizes corporate strategies, thereby indicating that technological measures are needed within the company to foster changes. The blockchain technology can be manifested within the company to assist in allocating resources amongst the minefields, thereby reducing charges within the tariffs, which also would impact the revenue by lowering the prices of oil and gas, thus creating demand for their produces. This project of reducing costs through the operations strategy can be integrated into the operations management and assist in delivering the strategic impact by including the above four perspectives. A clear illustration was demonstrated with the Qatarization in supporting the Qatar National Vision (QNV) 2030 goals for developing a motivating and capable workforce.

References

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Al-Emadi, T.A., 2019. An Analysis of the Organisational Culture of the Qatari Gas Industry in Terms of Giddens’ Legitimation Structure: The Case of Technology Transfer. In Joint Venture Agreements in the Qatari Gas Industry (pp. 101-111). Springer, Cham.

Ritz, R.A., 2019. A strategic perspective on competition between pipeline gas and LNG. The Energy Journal, 40(5).

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Gardner, A., Pessoa, S., Diop, A., Al-Ghanim, K., Le Trung, K., and Harkness, L., 2020. A Portrait of Low-Income Migrants in Contemporary Qatar. In Asianization of Migrant Workers in the Gulf Countries (pp. 83-102). Springer, Singapore.

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Al-Mana, A.A., 2017. Measuring efficiencies and value creation of national oil companies: A case study of Qatar petroleum. International School of Management.

Bseiso, N.A., and Rasi, M., 2009, January. Delivering World-Class Wells in Qatar’s North Field: Integrating Innovation and Execution. In the International Petroleum Technology Conference. International Petroleum Technology Conference.

Bolivar, C., 2014, January. Qatar Petroleum Experience in Implementing the Measurement Strategies for Custody Transfer, Allocation, and Royalties. In IPTC 2014: International Petroleum Technology Conference (Vol. 2014, No. 1, pp. 1-10). European Association of Geoscientists & Engineers.