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In-Depth SWOT Analysis of ADNOC – The Market Leader of Oil Industry

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The last time we saw the SWOT Analysis of Hyundai, today we will look at the SWOT Analysis of Abu Dhabi National Oil Company. 

The Abu Dhabi National Oil Company, or ADNOC, is the United Arab Emirates’ state-owned oil company (UAE). It is the world’s 12th largest oil business by output, with a capacity of 3.1 million barrels per day with intends to rise to 4 million by the end of 2020. It is the largest oil firm in the United Arab Emirates.

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In this blog, we will look at the SWOT analysis of ADNOC, but before that let’s learn more about the company.

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About ADNOC

The Abu Dhabi National Oil Company (ADNOC) is one of the world’s leading oil producers and a key driver of Abu Dhabi’s economic growth and diversification. They operate across the whole hydrocarbon value chain, with a production capacity of more than 3.5 million barrels of oil per day and 10.5 billion cubic feet of natural gas per day. Exploration, production, storage, refining, and trading, as well as the development of a wide range of petrochemical products, are all part of their network of completely integrated enterprises.

ADNOC enterprise- SWOT Analysis of ADNOC | IIDE

ADNOC continues to explore new methods to maximize the value of its resources while utilizing the latest technologies, building mutually beneficial collaborations, and producing In-Country Value, with an ambitious perspective for the future. Together, they are committed to ensuring that their good impact on the communities in which they operate, as well as the Abu Dhabi economy, is sustained for future generations.

 

Quick Stats about ADNOC
Founder Zayed bin Sultan
Year Founded 1971
Origin Abu Dhabi, UAE
No. of Employees 55000 (2015)
Company Type Public
Market Cap US$ 53750 (2021)
Annual Revenue US$ 60 Billion (2014)
Net Income/ Profit US$ 15 Billion (2021)

 


Products Provided by ADNOC:

Following are the different products offered by ADNOC

  • Crude Oil
  • Oil Products
  • Natural Gas
  • Petrochemicals

 

Competitors of ADNOC:

Some of the top competitors of ADNOC are listed below

  • Dodsal
  • Trouvay
  • Cauvin Group

 

SWOT Analysis of ADNOC

Infographic- SWOT Analysis of ADNOC | IIDE

SWOT analysis simply examines both external and internal aspects that influence and affect a company’s business endeavor. We’ll look at ADNOC’s strengths (S), weaknesses (W), opportunities (O), and threats (T). The SWOT analysis is extremely useful for identifying areas for development, growth opportunities, and threats to a company.

 

1. Strengths of ADNOC

Strengths are the advantages that the company has over its competitors. Let’s look at some of the strengths of ADNOC.

  • An Abundance of Financial Resources – Abu Dhabi National Oil’s primary strength is its financial resources, which are plentiful. The company’s earnings are enormous, accounting for 70% of the UAE’s gross domestic product (Davidson 2011). As a result, the organization has both the financial and human resources to invest in innovation and to help it grow.
  • Market Leader – ADNOC has a competitive advantage over its competitors due to its availability of financial resources, which makes it the market leader in the industry.

Petrol Station of ADNOC- SWOT Analysis of ADNOC

  • High Brand Equity – The second strength of ADNOC is its brand equity. Since its inception in 1971, Abu Dhabi National Oil has developed to become a leading name in the oil and gas industry. Not only in terms of market share but also terms of market value, equity is crucial for a brand’s growth.

 

2. Weakness of ADNOC

Weaknesses are factors that need to be worked on to strengthen the company.

  • Management of Company- The first weakness of Abu Dhabi National Oil Company is the management of the company. Political appointees with the right power connection lead Abu Dhabi National Oil. This takes away opportunities from potential candidates that may be equally competent. Furthermore, political office bearers wield immense influence over the operations of the company.
  • Poor Management – Poor management can have an impact on a company’s budget, its employee turnover and overall profits. Lastly, a decrease in productivity and morale are strong indicators that employees may be struggling with the leadership being given in the company. If employees have an effective leader, their job performance will soar.
  • Lack of Transparency and Accountability – The second weakness of the Abu Dhabi National Oil Company is the lack of accountability and transparency within the company. Until recently, the company did not publish its financial reports. This has undermined stakeholder confidence in the company.

 

3. Opportunities of ADNOC

Opportunities are external factors that can strengthen the company if grabbed at the right time and worked on properly.

  • The Availability of Vast Natural Resources – Oil and natural gas resources are still in use. Solar and wind power provide new ways for Abu Dhabi National Oil Company to operate. According to the data, all global energy sources will be needed to meet the growing demand by 2040, but there will be significant changes in the supply of clean fuel, especially natural gas.
  • Growth Potential – Another use is human infrastructure. There is a high percentage of educated youth in the UAE. The company can get into the hands of the people to encourage growth. Abu Dhabi National Oil could invest in technology to close the huge market gap that the international community is taking advantage of.

 

4. Threats of ADNOC

Threats are potential harms that can affect the company if not waved off correctly as early as possible.

  • Decrease in Global Market Share – There have been significant discoveries in the oil sector and the development of domestic refining skills around the world which has led to the dramatic growth of Abu Dhabi National Oil Company’s global market share. There has been the discovery of shale oil in the United States of America, the most recent being the Texas-Midland Basin; the discovery of an oil field on the Shetland Island of Scotland and other finds in Russia, Mexico, and various other developing lands, such as India.
  • Shift to Renewable Energy and Non-Conventional Sources of Energy – The petroleum industry is likely to face stiff competition from unconventional energy sources due to the increased focus on green technology government to reduce the environmental impact and subsidies provided by renewable energy facilities. Global investment in the renewable energy sector stands at $ 288.9 billion in 2018 which far exceeds the mineral investment. In 2018, investment in renewable energy was three times the amount invested in new coal and electricity generators.
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Conclusion

Despite facing its equal share of problems like any other company at such a high level, the Abu Dhabi National Oil Company still stands at the top and holds it firmly. It is the most important player on the market to watch out for. Despite the intense competition and the negative impact of the Covid 19 epidemic, it is still a market leader because of its rich history. The company has the potential to grow further and create its supremacy in the market.

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