Differences and Similarities Between ADNOC vs. EMARAT

ADNOC vs. Emirates General Petroleum Corporation

Introduction

Abu Dhabi National Oil Company (ADNOC) vs. Emirates General Petroleum Corporation (EMARAT) is a research topic chosen to outline the difference and similarity of the two in relation to the services and products they offer to public and why people prefer any of them.

Both Abu Dhabi National Oil Company (ADNOC) and Emirates General Petroleum Corporation (EMARAT) are owned by the United Arab Emirates (UAE)(Hults, Thurber & Victor, 2012). (ADNOC) deals with production and distribution of its productions to customers while EMARAT does not produce but only distribute goods and services. EMARAT majorly buy goods and services from ADNOC then distribute it to the public. This research topicwill be covered in form of research questionnaires, which will be filled by the public and the students as a survey.

Statement of Research Objectives

The main objective of this research is to find out some of the difference and similarity of services and products provided by the two companies as far as the customer interest is concerned.  ADNOC is an oil manufacturing company and offers services and oil products (Al, 2001) while Emirates General Petroleum Corporation widely known as EMARAT is majorly a leading national petroleum brand that only market and distribute petroleum allied products and services.

A lesson from this research is, to know some of the advantages and disadvantages of purchasing oil products and services directly from the manufacturer in comparison to purchasing from retailers. What factors do customers consider before purchasing goods and services from either EMARAT or ADNOC?

Methodology

This qualitative research adopted two research mechanisms. The first approach focused on administration of questionnaires aiming to address the research questions and objectives. Questionnaires were administered to 50 participants consisting of consumers and energy experts with substantive knowledge of the energy sector in the context of United Arab Emirates. The second approach focused on execution of a critical review of the market position, strengths, weaknesses, opportunities, threats, and other relevant factors in relation to the two major entities in the energy sector. In addition, the report will also consist of the marketing strategy of the two energy companies in United Arab Emirates.

Questionnaire

Instruction:

FILL ONLY where there is a BLANK SPACE and ONLY MARK where there is A TICK. Make the points SHORT, SIMPLE AND STRAIGHT TO THE POINT.

(1) Name………………………………………………………………………………………

(2) Date………………………………………………………….Sign………………………

(3) Residence…………………………………………………………………………………

(4) Occupation……………………………………………………………………………….

(5) Which supply company do you prefer?

• • Abu Dhabi National Oil Company(ADNOC)
  • Emirates General Petroleum Corporation(EMARAT)

(6) a) Have you ever used goods or services from the other company?

• • Yes
  • No

b) If yes, when was the last time you used its products or services and what motivated you to use it?

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C) If No, why haven’t you used its products and services?

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(7) What are the reasons for choosing the company in question (4)

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(8) What do you like from the other company that you think your company should emulate?

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Findings/Results

Evaluation of the Graph

From the graph above, the following are noticed:

1. Some customers’preferred purchasing goods and services directly from the manufacturer in respect to price, ADNOC number of people 90 and EMARAT number of people 59. Many complained that Emirates General Petroleum Corporation offers its goods and services at a higher price compared to ADNOC. Emirates General Petroleum Corporation act as intermediaries thus buying goods from manufacturers AT lower prices and distributing them at higher prices(Kapoor, R., Paul, J., &Halder, B. (2011) and these discourages some customers.
2. Others customers’preferred EMARAT, number of people 70 compared ADNOC number of people 55 in respect to location. EMARAT’s is widely distributed in most parts of the country due to it being more of a distributor compared to ADNOC as a manufacturer which thus located majorly in two areas: Ruwais and Umm Al Nar oil refineries.
3. On quality and quantity of both goods and services offered by the two companies, many felt it had no difference (EMARAT and ADNOC, number of people 70 each) due to them coming from one manufacturer but different distributor.
4. Lastly, EMARAT number of people 65 and ADNOC number of people 55 in respect to offers offered the companies. Many preferred EMARAT due to its strong social and environmental program that supports community interest (Al-Azab, M., Al-Ghais, S., & El-Shorbagy, W. (2005) and strong brand that combines memorable design with exceptional customer service which ADNOC does not offer.

Company Analysis: Abu Dhabi National Oil Company (ADNOC)

Abu Dhabi National Oil Company possesses adequate experience in associating with IOCs in upstream oil projects. In its operations, Abu Dhabi National Oil Company demonstrates various strengths, weaknesses, opportunities, and threats determining its position in the market as well as market coverage (Company Monitor, 2012).

Strengths

Abu Dhabi National Oil Company focuses on maximization of three major strengths towards the achievement of its goals and targets in the energy sector. Abu Dhabi National Oil Company is major domestic oil and gas producer hence maximizes this strength to enhance its market coverage and position in the energy sector. Moreover, Abu Dhabi National Oil Company boasts of unrivalled access to exploration acreage. This enhances the ability of the company to maximize its profits while minimizing the cost of production and distribution of products to the consumers in the market and industry of operation. Finally, the organization enjoys substantive partnerships with IOCs thus an opportunity to increase its volume of transaction under the influence of large economies of scale.

Weaknesses

Abu Dhabi National Oil Company has two massive weaknesses affecting its marketing strategy towards providing quality and quantity products to valuable consumers. One of the essential weaknesses limiting the operation of the organization is the limited financial as well as operational freedom. In addition, Abu Dhabi National Oil Company suffers from some cost and efficiency limitations or disadvantages towards the achievement of its goals and objectives.

Opportunities

Despite the essence of such weaknesses, the organization has adequate room to expand its operations to gain competitive advantage in the market and industry of operation. Abu Dhabi National Oil Company can exploit untapped upstream production potential with the aim of increasing its market coverage and production volume. In addition, there are large areas of under-explored territory, which can act as production opportunities for the growth of Abu Dhabi National Oil Company.

Threats

Various factors affect the ability of Abu Dhabi National Oil Company towards achieving competitive edge in the energy industry. One of these factors is transformation of the national energy or OPEC policies, which might work to the disadvantage of the society. In addition, lack of medium-term oil product growth might also affect operations of the organization in short and long-term basis.

Market Position & Strategy

According to the information on the website, ADNOC manages and oversees production of more than $2.7 million through the main company and its subsidiaries responsible for extraction and processing of oil and gas. Some of the subsidiaries enhancing the operations of Abu Dhabi National Oil Company include ADMOC, Shell, Abu Dhabi Oil Refining Company, and GASCO. Abu Dhabi National Oil Company supplies gas to around 20 customers in the form of power plants, group companies, and the Ruwais industrial estate. In the coming years, Abu Dhabi National Oil Company should recognize solid growth because of substantive projects with IOC partners aiming to invest about $10 billion over a period of seven years (2010-2017). In addition, ADNOC focuses on boosting gas output in Abu Dhabi with the aim of meeting the needs and preference of the ever-increasing private consumers and industrial demands. This is an indication that the key strategy is boosting of oil recovery output and gas injection in the market and industry for maximization of profits and revenues at the end of the fiscal year (Company Monitor, 2012).

Company Analysis: Emirates General Petroleum Corporation (EMARAT)

This is the dominant regional fuels distributor with unrivalled access to exploitation of local oil demand increase as well as diversification under the influence of globalization. Like in the case of Abu Dhabi National Oil Company, EMARAT has its strengths, weaknesses, opportunities, and threats as it seeks to gain competitive advantage in the market of operation (Company Monitor, 2012).

Strengths

One of the major strengths of this company is the dominant share of fuels in relation to the retail segment. In addition, the company has the capacity to maximize its major role in downstream oil supply infrastructure towards the achievement of competitive advantage. Recently, EMARAT has recognized massive growth in its share of gas infrastructure operation. These strengths are crucial in maximization of profits in the retail energy sector.

Weaknesses

The company faces limitations due to its lack of involvement in refining or upstream operations thus reduction in profit levels. In addition, EMARAT operates in a highly competitive lubricants market reducing the ability of the organization to accrue maximum profits. The company needs to address these weaknesses to compete effectively and appropriately in the highly competitive industry and market.

Opportunities

EMARAT has the opportunity to maximize its profits through concentrating on the increased needs and demands of domestic and regional oil users. In addition, there are opportunities for the development and expansion of infrastructures aiming to enhance efficiency in products delivery.

Threats

EMARAT might also suffer from any changes in the national or regional energy policy, with reference to reduction in the volume of products or profits at the end of the fiscal year.

Market Position & Strategy

EMARAT focuses on marketing and distributing petroleum across the United Arab Emirates as the dominant regional fuels distributor. The company focuses on expansion of its operations to other downstream markets. Currently, EMARAT operates a network of more than 170 service stations while also retailing aviation fuels and lubricants. The core of EMARAT operations towards the achievement of its goals and targets is marketing and distribution of oil products. Recently, the company focuses on adoption of a new marketing strategy of expansion of diversification of the investment base. This is through entering into new partnerships with foreign partners to offer valuable expertise for the projects (Company Monitor, 2012).

Recommendation

As from the information gathered above, there is a very huge difference on people’s taste and preferences on different types of goods and services offered by different companies. Therefore, the suggestion is that companies should reduce competition on their products and create a society where, a person can purchase any type of good or services no matter the location or brand at an affordable price. These will encourage development and growth, reduce exploitation and prevent entry of poor goods and services into the market. In addition, ADNOC should focus on integration of various offers as marketing techniques aiming to attract more consumers as well as increasing profits and revenues at the end of each financial year.

Conclusion

From the research, there is a very small difference why people prefer goods and services from one of the companies, Abu Dhabi National Oil Company(ADNOC) being the manufacture and distributor of oil products(Al, A. I. (2001) while Emirates General Petroleum Corporation(EMARAT) being the distributor of oil products from ADNOC. The main difference was the price of oil products from ADNOC was cheap compared to price of oil products from EMARAT. People also felt EMARAT has widely located its distributors compared to ADNOC. In addition, ADNOC and EMARAT differ in their mode of marketing and distribution. ADNOC operates in a national or regional industry in manufacturing and distributing its oil and gas products. On the other hand, EMARAT operates in the retail industry aiming to bring oil and gas products closer to consumers.

References

• Al, A. I. (2001). United Arab Emirates: A new perspective. London: Trident Press.
• Hults, D. R., Thurber, M. C., & Victor, D. G. (2012). Oil and governance: State-owned enterprises and the world energy supply. Cambridge, UK: Cambridge University Press.
• Al-Azab, M., Al-Ghais, S., & El-Shorbagy, W. (2005). Oil pollution and its environmental impact in the Arabian Gulf region.Amsterdam: Elsevier.
• Kapoor, R., Paul, J., &Halder, B. (2011).Services marketing: Concepts & practices. New Delhi: Tata McGraw Hill Education.
• Company Monitor. (2012). UAE Oil & Gas Report, (1), 40-58.
• Research and, M. (2013). Research and Markets: Abu Dhabi National Oil Company (ADNOC) Oil and Gas Operations, Key Strategies and SWOT Analysis. Business Wire (English).