Analysis of Abu-Dhabi Marine Operating Company - Case Study Example

Name Class Unit Table of Contents Table of Contents 2 Brief description of the company 2 Entrepreneurial Opportunity for ADMA-OPCO 3 Major problems the company will address 3 Value proposition using the 6-stage thinking framework 3 Mini-case 4 Problem definition 4 Solution 5 Protection 5 Team 6 Challenges 6 Sources of finance 7 Stakeholders’ analysis 7 Conclusion 9 References 10 Brief description of the company Abu-Dhabi Marine Operating Company (ADMA-OPCO) is one of the largest oil and gas producer based in the Middle East. The company operates in the offshore areas of Emirates and Abu Dhabi. ADMA-OPCO has been in the industry for over 50 years making it one of the pioneering industries. The company shareholders includes; ADNOC, BP, Total and JODCO (ADMA-OPCO, 2015). Entrepreneurial Opportunity for ADMA-OPCO Oil and gas industry has been one of the sectors that produce a lot of waste water. In the hydrocarbon recovery process, it is estimated that water to oil ratio is 3:1. Treatment and disposal of water produced from the activity costs a lot of revenue. The high treatment costs for the produced water discharge have been a major loss of revenue in the oil and gas industry (Ahmadun, Pendashteh, Abdullah, Biak, Madaeni & Abidin, 2009). Most of the ADMA-OPCO oil fields are located in water scarce areas. The opportunity to re-use the produced water makes this a great entrepreneurial opportunity. The produced water can be treated to drinking water in a cost effective manner by ADMA-APCO. This will help the company gain extra revenue. Major problems the company will address Water scarcity in the oil and gas industry Limited freshwater in the areas of operations High costs of disposing waste water Growing volume of waste water generated from the fracking wells which requires disposal Value proposition using the 6-stage thinking framework Using the 6 stage thinking framework, the value framework is designed. The value framework will position the company in a good place as a recycler and distributor of the waste water as compared to competitors (Anderson, Narus & Van Rossum, 2006). The main aim is to place the position at a great competitive advantage in the oil and gas industry through treatment, reusing and recycling waste water. ADMA-OPCO water Clean purified water for domestic and industrial use Why use ADMA-OPCO purified water ADMA-OPCO water is purified and ready for both industrial and domestic use. Water is a scarce and expensive commodity that should not be wasted. The water has been purified using the latest technologies and made safe for use. This ensures that the consumer is taking care of the environment through minimising waste water. Benefits and features Clean and safe for use Affordable Environmental friendly product Convenient Mini-case Problem definition With the number of oil and gas exploration and production increasing for ADMA-OPCO, the demand for fresh water has been on the rise. The amount of waste water produced in the process has been on increase. This has led to the need for waste water treatment in the industry. The waste water discharge treatment has been very costly making the alternative to purify and reuse very attractive opportunity. At the moment, a fifth of the world population lives in waster scarcity areas. Also about one person in every eight lacks access to clean water. Properly treating waste water from the oil and gas industry is a great opportunity for the company (Ahmadun et al., 2009). Based on the value proposition, the company has to come up with a technology that will purify the water and make them safe for domestic and industrial use. This will ensure that the users are protected from the contaminants found in the waste water in oil and gas industry. The contaminants to be removed are oil and grease, suspended solids, dispersed oil, heavy metals, chemicals, gas, bacteria and radionuclides among others (Ahmadun et al., 2009). This is aimed at ensuring that the final product to the consumer is of high quality and safe for use. This will deliver value to the consumers. Solution The new water purification technology will be able to remove the contaminants in the waste water making it safe for domestic and industrial use. The main aim of the new technology is to ensure that the water is clean and safe while at the same time reducing the costs. This requires a customised technology that will meet the needs for ADMA-OPCO wells waste water properties. The technology will also be customised to meet the demand and amount of water available from the process. Protection Water purification in the oil and gas industry has been carried out with old technologies which includes reverse osmosis and distillation. This has made the process slow and unviable in the destitute oil regions. This calls for a new technology that can help in addressing the challenge. ADMA-OPCO will use a patented technology that will minimise the cost and improve the technology. The industry will use the technology through a centralised approach. The new technology will replace the use of mobile solutions which suffers from lack of continuous processing. The patented technology will help in ensuring that the competitors do not take advantage of the idea when revealed. This will give the company a competitive edge (Lumsdaine & Binks, 2003). Team The process of waste water treatment and reuse requires collaboration among different partners. This calls for a team work approach in the industry. This is an initiative that requires collaboration with non-governmental organisations among other stakeholders. The community will also be involved since the new technology will benefit them while also helping the company through additional revenue. The rapid growing population globally poses a major challenge to the available clean drinking water (Dal Ferro & Smith, 2007). This is one of the major reasons why there is need for different stakeholders in the community to be used. Teamwork at ADMA-OPCO will ensure that the program is a success. Challenges One of the major challenges in adoption of the new technology is public acceptance. There has been a major debate on the safety of the recycled and purified waste oil from the oil and gas industry. The idea to reuse waste water for drinking is still at its infancy and there are variations in water quality from one location to another. There have been little studies carried out in the feasibility of the waste water for the public consumption (Dal Ferro & Smith, 2007). Despite this, the reuse of the domestic waste water can be a major source of information for the industry. This is due to fact that reuse of domestic waster has grown rapidly over the last two decades as an alternative. Public perceptions on wastewater from the oil and gas industry have been very critical. Despite the fact that the water has been tested and demonstrated to meet the current drinking water standards, there has been fear and concerns of existence of unknown compounds which can be toxic. The company has a major challenge in carrying out studies to show the impacts of chemical mixtures. There is need for more tests on existence of unknown toxic compounds in the waste water. Another challenge is the high amount of waste water generated in the industry. This will require the company to invest more in purchasing the equipments required. The industry has spending a lot in wastewater management technology hence the new technology in water treatment will save a lot of revenue (Ahmadun et al., 2009). Sources of finance The process of purifying waste water to make it safe for use is highly costly. This is a process that requires a lot of capital investment. The company will be required to set aside some of the revenue in their allocation for the new technology. This will ensure that the project is well budgeted for and eliminate failure due to cash. The new technology will involve less cost for treatment and distribution compared to the old technologies in use. This makes it feasible by ADMA-OPCO since it will not put a lot of strain on the budget. The low costs will be able to gain both public and government acceptance as it will be beneficial to all stakeholders. Stakeholders’ analysis The main stakeholders in this case are the company, government, public, shareholders (ADNOC, BP, Total, and JODCO) and the associated firms. The company has to engage all stakeholders while carrying out the project. Through appropriate communication channels, it will be possible for the company to eliminate resistance. This is through proper communication channels where the stakeholders will be explained on the importance of investing on the water purification segmented and expected benefits. The shareholders have to be explained the need for investing in freshwater and the ability of the industry to become profitable. This is due to the rising need for fresh water and the high cost of treating and disposing waste water. The shareholders require adequate information before making their final decision to invest in the project. This will ensure that they are able to assist in committing their time and capital in the new innovative venture. The general population which will be supplied with the freshwater will have to be informed about the safety standards and tests that have been carried out by the project to ensure that the water is safe for their use. This is due to fact that they are a major source of resistance to the project (Lumsdaine & Binks, 2003). Government will be involved in laws and regulations. This is through determining the operating standards and legal requirement. Close partnership with the government will ensure that the project is a success. This is a project that requires a close collaboration among all partners involved in the industry (Ahmadun et al., 2009). For the ADMA-OPCO, this is a great opportunity that the firm can take risk and venture into. The opportunity presents the company with a chance to gain a competitive advantage and enjoy higher revenues. The venture will make it possible for the company to reap higher revenues (Clarysse & Kiefer, 2011). Conclusion The ability of the company to exploit the entrepreneurship opportunity in waste water treatment and reuse will help a lot in gaining a competitive advantage. The company will be able gain additional revenue from the purified water. This requires critical thinking to come up with a value proposition framework. The wastewater from hydrocarbon exploration is high while most of oil and gas production is located in the dry areas. The purification process will ensure that waste water is put into good use. ADMA-OPCO will be able to use technology to purify the water and distribute them to industries and home use. The main challenges are; public acceptance and cost of the equipment. The company will have to protect the new innovation through patenting it. The company has adequate revenue that can be allocated for the new project. For the innovation to succeed, the company will be required to collaborate with all stakeholders. This will ensure that there is low resistance from the stakeholders. The project is a great entrepreneurial activity for the company. References ADMA-OPCO. (2015). home, retrieved 17th November 2015 from, http://www.adma- opco.com/en/home/index.aspx?&PriMenuID=1&mnu=Pri Ahmadun, F.l., Pendashteh, A., Abdullah, L.C., Biak, D.R.A., Madaeni, S.S. and Abidin, Z.Z. (2009). Review of technologies for oil and gas produced water treatment. Journal of Hazardous Materials, 170 (1): 530-551 Anderson, J. C., Narus, J. A., & Van Rossum, W. (2006). Customer value propositions in business markets. Harvard business review, 84(3), 90. Clarysse, B. & S. Kiefer (2011).The Smart Entrepreneur, 2nd Edition, Edgar & Thompson. Dal Ferro, B. and Smith, M. (2007). Global onshore and offshore water production. Oil & Gas Review OTC Edition. Lumsdaine, E., & Binks, M. (2003). Keep on Moving: Entrepreneural Creativity and Effective Problem Solving. McGraw-Hill. Read More