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Oil Price and Petrochemical Manufacturing in UAE - Essay Example

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The report discussed the effect of falling oil prices on petrochemical manufacturing in UAE. The falling oil prices are attributed to decline and failure in petrochemical production in the UAE. Borouge Company is a petrochemical production corporation supplying polyethylene and polypropylene…
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Oil Price and Petrochemical Manufacturing in UAE
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 Oil Price and Petrochemical Manufacturing in UAE The Effect of Falling Oil Prices on Petrochemical manufacturing in UAE The falling oil prices areattributed to decline and failure in petrochemical production in the UAE. Borouge Company is a petrochemical production corporation supplying polyethylene and polypropylene. In 1998, Abu Dhabi National Oil Company (ADNOC) and Austria’s Borealis founded the company as a joint venture. The company is a chief provider of chemical and innovative plastics solutions. The company has its headquarters in Singapore. It has more than 3000 employees with more than 40 nationalities offering customer services to clients across Middle East, Asia, and Africa. In 2010, the company’s annual production capacity tripled at its Abu Dhabi plant to an estimated value of 2 million tons.
Preliminary Objectives
The research investigates the immediate impacts that failing oil prices pose to UAE’s economy. It explores the effects of falling oil prices on UAE’s economy. The relationship between oil production firms and petrochemical producing industries are essential to the research. The research will investigate the impacts and effects of falling oil prices on petrochemical manufacturing in UAE. The falling prices risk the survival of petrochemical manufacturing industries that also contribute to the economic stability and income of UAE. The risked survival may render some of the employees in Petrochemical sector jobless raising the level of unemployment in the country. The unemployment crisis lowers the per capita within the country reducing the country’s Gross Domestic Income (GDP) in turn. Finally, the research will draft and recommend possible solutions to the effects of falling oil prices on UAE’s economy.
Sources of Information
Primary Sources
1. International Energy Agency Oil Market Report
The international Energy Agency asserts that the fall in oil prices translates into a cut in the production of petrochemical products. The effect of this is a retard in the growth of the petrochemical industries, which are also a major contributor to the UAE’s economy (International Energy Agency, 2015).
2. OPEC Monthly Oil Market Report
OPEC reports that a fall in oil prices slows the global growth. A decline in the oil prices increases demand for oil products at the expense of petrochemical products (OPEC, 2014).
Secondary Sources
1. United Arab Emirates Petrochemicals Report - Q1 2010
The source explains the manner in which falling oil prices undermine the competitive advantage of petrochemical products. The reduced competitive advantage lowers the total sales of the products endangering the firms (Business Monitor International Ltd., 2010).
2. Borouge Company Website
The company’s website outlines detailed information on the background of Borouge Company (Borouge Company, 2015). Further, it highlights the production capacity of the company that helps in assessing the statistical effects a fall in oil price poses on petrochemical manufacturing.
Plan of Tasks
First, the research will begin by analyzing the petrochemical manufacturing industries’ records and scales of production. The researcher will assess the trend in productivity in the industry in terms of income and input to the national income in terms of tax. The researcher will deploy questionnaires to UAE internationals assessing them on their demand for petrochemical products with falling oil prices. The final strategy will involve assessing, analyzing and predicting the effect of falling oil prices on petrochemical manufacturing based on expert opinions on credible sources. The journals and other peer-reviewed articles offer substantial information regarding the effect falling oil prices causes on petrochemical manufacturing.
References
Borouge Company. (2015). About Us. Retrieved 2015, February 18 from http://www.borouge.com/aboutus/default.aspx
Business Monitor International Ltd. (2010). United Arab Emirates Petrochemicals Report - Q1 2010. London: Business Monitor International.
International Energy Agency (2015, January 16).“ Oil Market Report.” Retrieved 2015, February 18 from https://www.iea.org/oilmarketreport/omrpublic/currentreport/
OPEC (2014, December 10).”OPEC Monthly Oil Market Report.” Retrieved 2015, February 18 from http://www.opec.org/opec_web/static_files_project/media/downloads/publications/MOMR_December_2014.pdf Read More
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