Abu Dhabi National Oil Company (ADNOC) SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

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Threat

1. Decrease in global market share owing to newer exploration capabilities of other countries: There have been huge oil field discoveries and development of domestic refineries’ capabilities worldwide that has led to rising threat of global market share of ADNOC. There have been shale oil discoveries in US the recently being at Texas – Midland basin; oil field discoveries at Sheltland island of Scotland and other discoveries at Russia, Mexico and other various developing countries like India.

2. Shift to renewable energy and non-conventional sources of energy: Fossil fuel industry is likely to face stiff competition to the non-conventional sources of energy owing to increased focus of the government on greener technologies to reduce environmental impact and subsidies being provided to the renewable energy establishments. Global investments for overall renewable energy sector stood at US$ 288.9 billion in 2018 which far exceeded fossil fuel investments. Investments in renewable energy in 2018 were three times higher than the amount invested in new coal and gas-fired generators.

3. Political instability and war in Middle East region: Businesses in the Middle East are likely to be affected by the political instability and war that have affected the region. Qatar has already been boycotted by the GCC members from the last two years. The Syrian and Yemen wars have greatly disrupted the region. A full war and oil supply business disruptions are very likely following the drone attacks on Aramco’s facility in September 2019.

Political

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Economic

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Social

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Technological

1. Leveraging blockchain to streamline operations: Stalwarts in the oil and gas space are striving to fully tap the potential of blockchain technology to clamp down on operational time and expenses, introduce a new layer of transparency and substitute industry legacy systems with an innovative blockchain-based framework. ADNOC in 2019 has entered into a partnership with IBM, piloting a blockchain-based automated system which aims to integrate oil and gas production across the full value chain. The flagship unparalleled system provides a secure platform for the tracking, management, evaluation and execution of transactions at every step, right from the production well to the end consumer. As per statements from ADNOC, embracing blockchain will actually help in bringing down execution time for transactions between ADNOC’s operating companies, and substantially boost operational efficiencies across its entire value chain. It will also elevate the authenticity and reliability of production data by infusing greater transparency in transactions.

2. Mission ‘Oil and Gas 4.0’ – embedding technology on each aspect of business: The acid test for any oil and gas company lies in minimizing costs and maximizing margins as the industry faces major headwinds with market uncertainties and fluctuating prices. By employing artificial intelligence and digitization, ADNOC is insulating itself against market turmoils and driving profitability across its operations. Predictive analytics is a great aid to cut down on maintenance costs, prevent shutdowns and salvage against system failures. Big data is permitting companies to make real-time decisions in response to market movements, in line with industry trends and ahead of the competition. ADNOC’s mission ‘Oil and Gas 4.0’ means embedding a tech-focused, digital-first mindset within every aspect of its business, driving its performance, energizing its partnerships, and empowering its people.

Legal

1. Focus on health and safety through strong HSE policy: Health, Safety, Environment subjects are of monumental importance to the oil and gas industry and following and aligning company objectives with HSE guidelines is a mandate for players globally and is also enforced by internal policies of most organizations. ADNOC keeps its employees, communities and environment safe by commitment to 100% HSE, and a zero-tolerance approach to compromises or shortcuts. Its people and contractors are cent percent aligned with HSE. They ensure adherence to the Group HSE policy, identify and mitigate risks, and keep themselves and their colleagues safe. All ADNOC employees are empowered and obliged to intervene in unsafe situations, address the issue, and ensure that the company policies and procedures are stringently followed and never compromised. ADNOC’ s Lost Time Injury Frequency is 36% lower than industry benchmarks as of 2018.

Environmental

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