How Strategic Management Tools Help in the Realisation of Business Goals - Qatar Petroleum - Case Study Example

Greenwich School of Management Proforma for Postgraduate Work Programme: Executive MBA Module: Business Environment and Strategic Management (April 2013) How Strategic Management Tools Help in the Realisation of Business Goals: A Case Study of Qatar Petroleum By Nayef Al-Hajri Table of Contents 1 Introduction 3 2 Method and Discussion 5 2.1 QP Corporate Strategy 5 2.2 Strategic Management Tools 6 2.3 SWOT Analysis 6 2.3.1 Strength and Weaknesses 9 2.3.2 Opportunities and Threats 10 2.4 PEST Analysis 11 2.5 Benchmarking 13 2.5.1 Business Model 13 2.5.2 Production Output 13 2.5.3 Economic Output and Regional Baseline Data 14 3 Conclusion 17 References 19 List of Figures Figure ‎2.1.1: QP Joint Venture and Subsidiary Interests (source: QP, organizational website, QP Activities) 5 Figure ‎2.5.2: QP Oil Production Profile (Source: EIA) 14 Figure ‎2.5.3: QP Gas Production Profile (Source: EIA) 14 Figure ‎2.5.4: QPs Consolidated Financial Information 2007-2011 (Source: QP’s 2011 Annual Report) 15 Figure ‎2.5.5: Middle East Proven Oil Reserves (Source: EIA) 16 Figure ‎2.5.6: GCC Hydrocarbon Production Export and Dependency (Source: EIA) 17 List of Tables Table ‎2.1: SWOT Analysis 9 Table ‎2.2: PEST Analysis 13 1 Introduction The evaluation of the performance of businesses in their industry cannot be successfully completed unless their strategies are identified and carefully checked. In its common form, the term strategy is used for showing a plan appropriate for reaching the desirable ends by using available means (Mckeown 2011). The management of strategy, as an element of the business environment, can be a challenging activity. In general, strategic management focuses on “how the strategy is developed and implemented” (Analoui and Karami 2003, p.4). Strategic management has been also described “as the art and science of formulating, implementing and evaluating cross-functional decisions that enable the organization to achieve its objectives” (David, 2005, in Analoui and Karami, 2003, p.4). Through a similar approach, strategic management has been characterized as a process that serves specific organizational needs: the analysis of the organizational environment, the identification and implementation of strategies for achieving organizational objectives, the evaluation of each organization’s competitiveness and so on (Harrison 2012). The strategic management process incorporates a series of phases, aiming to help businesses to keep their value at high level (Harrison 2012). According to the literature, four are the most common phases of strategic management process: a) at a first level, the “vision and mission of the organization are reviewed” (Harrison 2012, p.260), b) then, “the internal and external organizational environment needs to be analyzed” (Harrison 2012, p.260), c) using the information retrieved through the research and the analysis developed in the previous two phases, the strategic manager proceeds to the identification of strategy that is most appropriate for supporting business goals (Harrison 2012), d) the “implementation of the chosen strategy” (Harrison 2012, p.260) can be completed; at this level, the strategic management process should not be considered as terminated. Indeed, after the completion of the installation process, the business strategy needs to be periodically monitored as of its performance (Harrison 2012). In this way, weaknesses and failures can be identified early so that major risks in regard to all business operations are avoided. According to Herzog (2010) the strategic management process can be also completed in just three phases: “a) situation assessment, b) strategy development and c) strategy implementation” (Herzog 2010, p.17). The development of the phases of strategic management process, as described above, is based on a series of tools, also known as strategic tools. The key role of these tools is to ensure that the decision-making process is adequately supported (Herzog 2010). Certain of these tools are quite popular. Reference can be made, for example, to SWOT analysis, PEST analysis, Porter’s Five Forces, Benchmarking, Forecasting and Financial Ratios (Herzog 2010). Each organization chooses the strategic tools that most respond to its needs taking into consideration the existing resources and the risks involved, both in the short and the long term (Herzog 2010). Also, the type of industry in which each firm operates is expected to influence the firm’s strategic management process, meaning also the strategic management tools that will be used for achieving the business objectives. The business model is another important criterion taken into account by strategic managers when having to choose the strategic tools employed in the achievement of business goals. Qatar Petroleum (QP) is the most powerful competitor in Qatar’s oil and gas sector; the company is fully controlled by the state and was established in 1974 (QP website, History). Through the years, the firm created a series of subsidiaries and joint ventures in order to respond to the country’s continuously increased needs in terms of exploration, process and storage of oil and gas (QP website, Activities). Today, QP is involved in a wide range of oil and gas-related activities, such as “oil and gas exploration, production operations, refined petroleum products, petrochemicals, fertilizers and so on” (QP website, Activities). The company has its operations base in Qatar with various onshore and offshore locations including the world scale North Field offshore asset. As a national oil company, QP aims to support the continuous increase of value of Qatar’s oil and gas sources. This report aims to identify and evaluate QP’s corporate strategy using appropriate strategic management tools. Then, appropriate suggestions can be made for improvements so that existing organizational weaknesses are eliminated. In this way, the important role of strategic management tools in the realization of business goals, or, else, in the increase of business value, will be verified. 2 Method and Discussion 2.1 QP Corporate Strategy The primary business focus of QP is to provide the State with a reliable cashflow, from diversified interests in oil and gas exploitation, and to meet national demand for oil and gas products. The mission of the company is “to ensure the State gets maximum benefit from its petroleum resources by engaging directly or indirectly in all activities that would add value to these resources” (QP, Vision and Mission). QP’s commitment to national development is also made clear through the support that the organization provides to the state policy of “Qatarisation” (QP, Careers, Qatarization). The above policy focuses on the maximization of employment of Qatari nationals in the national energy industry. QP’s corporate strategy is based on the development of strategic alliances with other organizations operating in the global oil and gas industry. These alliances are secured through the use of appropriately customized agreements, such as “Exploration and Production Sharing Agreements (EPSA) and Joint Venture Agreements (JVA)” (QA Annual Report 2011, p.8). Through these agreements the operations of QA can be continuously expanded keeping the profits of the organization at high levels. The current structure of the organization is presented in Figure 2.1.1 below. In the specific graph the current network of the firm’s subsidiaries and Joint Ventures is presented. Figure ‎2.1.1: QP Joint Venture and Subsidiary Interests (source: QP, organizational website, QP Activities) One of the most important characteristics of strategic management in QP is the existence of ‘directorates’, i.e. departments each one of which has the control of a particular organizational unit (QP Annual Report 2011). Reference can be made, as for example, to Oil and Gas Ventures (OGV) Directorate which has the supervision of one of the organization’s most important sectors, i.e. of hydrocarbon exploration. In addition, the above Department is responsible for the monitoring of the business daily operations. Another important element of the organization’s corporate strategy is the following one: the firm focuses on the continuous expansion of its activities, mostly through investing on energy-related projects developed worldwide (QP Annual Report 2011). This activity is developed through a particular business unit: the Qatar Petroleum International (QPI). 2.2 Strategic Management Tools The aim of strategic management in business planning is to identify a strategy that can respond to the organizational needs; then, the strategic management indicates the methods through which the resources required for the realization of this strategy could be retrieved. In order to decide on the strategy that would be most appropriate for a specific organization it would be necessary to check the organization’s current needs and performance. Also, the methods that could be used for achieving the organizational objectives should be identified and evaluated (Armstrong 1986). For QP, three strategic tools have been chosen so that the organization’s current strategy is evaluated: SWOT analysis, PEST analysis and Benchmarking. 2.3 SWOT Analysis SWOT analysis is used to identify the strengths, weaknesses, opportunities and threats (SWOT) that an organization can face in its industry. SWOT analysis is based on the comparison between a firm’s internal and external environment (Dyck and Neubert 2008). Indeed, in the context of SWOT analysis a firm’s strengths and weaknesses, elements of the organization’s internal environment, are evaluated in comparison with the opportunities and threats in the firm’s external environment (Dyck and Neubert 2008). Under these terms, SWOT analysis is a strategic tool helping to identify strategies that can enhance existing strengths using opportunities (Dyck and Neubert 2008). At the same time, through SWOT analysis the limitation of organizational weaknesses becomes easier (Dyck and Neubert 2008). This target is achieved by controlling the firm’s exposures to its environment threats (Dyck and Neubert 2008). A SWOT analysis of QP is presented below: Strengths Weaknesses 1. Hydrocarbon Asset Base QP is the world’s third largest oil company in terms of total hydrocarbon reserves in barrel of oil equivalent (BOE) value. Qatar’s North Field with the estimated 900 trillion cubic feet (TCF) of natural gas reserves represents the world’s largest single gas reservoir. Significant reserves of crude oil also exist in both onshore and onshore Qatar locations. 2. Integrated Oil & Gas Business QP’s business model of an integrated oil and gas operating company provides it with critical competitive advantage of good control of cost, quality, service support to customers, and value maximization across the entire upstream-downstream value-chain of the industry. Integrated operation guarantees better profit margins for company. Moreover, QP’s consolidated role as regulator, operator and stakeholder in the JV/PSA operations lends to direct and speedy government approval processes for applications for permits and licenses submitted by other oil and gas companies operating in Qatar. 3. Diverse & Competent Workforce QP possesses a large community of international personnel base. QP’s tradition for international recruitment promotes diversity in work place and predicates attraction/retention of globally competitive and competent talents. 4. Joint Operating Venture Partnerships QP is involved in a number of joint venture (JV) and production sharing agreement (PSA) partnerships with leading international oil companies (IOCs). QP’s existing JVs and PSAs partnerships ensures ready availability of necessary technical and operational capability and funding required for resource exploration and production facilities development in the upstream, and development and operation of value adding world scale downstream projects. 5. Solid Cash Flow Positive cash flow from the vastly successful JV and PSA venture partnerships and associated service agreements with QP operations has ensured strong financial capital base required for maintenance of existing JV cash obligations. 6. Divers Hydrocarbon Asset Portfolio A combination of strong corporate cash flow and joint venture partnerships has enabled QP to invest in ventures that add value to natural gas and oil developments like plastics, aluminum, fertilizers and utilities industries, leading to diversification and less dependency on oil and gas exploration and production. 7. Technical Support Agreements Crucial E&P technical support for services including field development studies and production technology operations are made available through special Technical Support Agreements (TSA) with the IOC JV partners and select Service Companies. 1. Organisational Structure QP functions as a corporate organization as well as a government parastatal. This has given rise to a somewhat bloated and cumbersome organisational framework often leading to repetition of roles and functions. Furthermore, QP’s integrated role as both an operating national oil company as well as regulator sometimes leads to conflict and/or compromise of functions. 2. Employee Turnover High rate of employee turn over could be connected to the above mentioned complex organisational structure and administrative system. Also the company’s high employee turnover rate may be related to the predominance of expatriate hires without long term career commitments within the organisation. 3. Legacy Assets Most of QP’s existing hydrocarbon assets are made up of old discoveries long been extracted. This particularly this case with oil development. Some QP’s currently operated oil fields have been producing for over 40 years and so are in technically decline phase. To remain competitive in the upstream industry, QP needs to achieve a positive reserves replacement rate through either active participation exploration and appraisal programs or deployment of cutting edge enhanced oil recovery (EOR) technologies. 4. Critical Technical Capability QP still depends on the external know-how of the IOC partners for crucial frontend field development and redevelopment studies and technology. However, in order to become a competent and efficient oil & gas operating company, QP must acquire its own technological and technical capability to perform these crucial E&P development activities currently being provided by the external partner organizations under the various partnership agreements. Furthermore, QP needs to demonstrate that the current partnership and technical services arrangements could facilitate the process of QP acquiring the crucial technical capability, either by technology transfer or cooperation. 5. Geographical Operational Area QP’s current oil and gas operations are limited to Qatar geographical area. Given the legacy nature of Qatar hydrocarbon discoveries as stated above, QP may need to expand the horizons of its upstream operational area beyond Qatar. It should be noted that QP’s current international operations through its QPI subsidiary is neither focused on increasing upstream participatory interests abroad nor achieving positive reserves replacement rate. Opportunities Threats 1. Technological Capacity Developemnt QP’s joint venture and production sharing partnerships with leading international operating companies provides valuable significant opportunities for pertinent knowledge sharing and technology transfer in crucial aspects of the business, particularly in field development planning production technology. 2. Political Stability Qatar’s political stability with remarkable socio-economic transformation, within an otherwise largely politically unstable region, offers a business atmosphere conducive for trade, investment, growth and development partnerships. 3. Proximity to Energy Markets Qatar’s geographical location is relatively central/near to high energy demand regions in the Asia Pacific, Europe and North America. This provides a competitive advantage in comparison to most major gas exporting countries. QP has maximized this advantage to invest heavily in LNG. 4. Human Capacity Development The joint operating venture businesses could be utilized as conduits for competency development through deployment of structured programs for staff secondment, exchange and cross posting, and employee mentoring; specifically designed for capacity development, critical skill acquisition and knowledge transfer to QP. 1. Regional Instability Political instability and tension in the middle east pose concerns for security of investment and logistics in the region. The North Field and the Strait of Hormuz are both located in some of the region’s geopolitically sensitive axes. In addition good international cooperation and cordial relations within the region will support effective development and operation of a number of the cross-border assets, including the North Field reservoir, by employing appropriate asset unitization agreements. 2. Market Competition Qatar is currently the leading LNG export country of the world. QP’s LNG exports and market share could be challenged by potential surplus LNG and sales gas supply due to new projects being added in elsewhere, Australia in particular. 3. Unconventional Resources Discovery and production of unconventional oil and gas resources such as shale oil and gas in the United States, Russia and Canada as well as in China and India. A surge in the production of these resources could pose significant threat to existing and established market for QP’s oil and gas resources particularly the Asia Pacific region. Moreover it is widely expected that the US will become a net energy (gas and LNG) exporting country by 2016. 4. Fluctuating Oil Markets The price of oil is not stable but subject global and regional geopolitical and socioeconomic events including current political instabilities in the middle east. Given this uncertainty and the fact that gas price per standard gas supply and purchase agreements (GPSA) is directly related to the prevalent price of oil, there is no safe guards for QP’s large gas export ventures in the face of an unstable world oil market. Table ‎2.1: SWOT Analysis 2.3.1 Strength and Weaknesses The strengths highlighted by the above SWOT framework apparently explains QP’s business strategy of leveraging strategic partnership with major international operating companies for the effective exploration and development of Qatar’s significant natural gas and oil resources. However, the effective development of these resources is related to a series of challenges, mostly because of the need for the use of advanced technology. The firm has been able to overcome these challenges using its extended network of subsidiaries and Joint Ventures. Undoubtedly, this approach has been operationally successful and thus has contributed immensely to the company’s strong revenue growth in the past 7 years. In regard to the firm’s strengths reference should be made to the following phenomenon: the company provides to its JV companies utility and operational infrastructure services using special service agreements. This practice further contributes in the enhancement of corporate cash flow. The results of the SWOT analysis in the highlighted weaknesses areas especially in regard to organisational structure and resourcing indicate the under-performance of the organization in terms of the achievement of its objectives. Indeed, according to the organization’s website “organizational optimisation & resource rationalization” (QP Vision and Mission) are among the firm’s objectives, as these objectives have been set by the Organisations and Systems Department (OS) of the QP. On the other hand, the organization has been able to overcome the negative implications of the above failure in the following way: the firm’s strategic management team has taken clear strategic steps to secure the company revenue by consolidating and expanding its operations. In addition, the firm has managed to become one of the most powerful competitors in the global energy market, to secure a high cash flow for the state by creating a highly diversified network of operations and to support the Qatarization plan of the state. All these targets are incorporating in the firm’s objectives (QP Mission and Vision), a fact that leads to the assumption that the firm has been able to minimize the effects of its weaknesses to maximize the benefits of its strengths. 2.3.2 Opportunities and Threats The external environment refers to the macro economic and socio-political factors which have a far reaching potential to impact on the business. QP’s current activities focus on the exploitation of some of the opportunities identified by the above SWOT Analysis. Particular reference should be made to research & technology and new ventures development. In September 2009 QP set up a Research and Technology Department (TR) to plan and execute R&D needs for existing and new business opportunities. The government has also encouraged the JV partners to set up R&D units in the country. TR is such unit. TR is currently co-located with the R&D subsidiaries of some of QP’s JV partners at the Qatar Science and Technology Park in Doha. TR is mandated to collaborate with other departments of QP and other R&D establishments to initiate and support the acquisition, development and retention of knowledge that will deepen and broaden QP’s technical capabilities. Given the preponderance as well as the potential impact of “opportunities and threats” on QP’s operations and bottom line as highlighted by the above SWOT framework model, a more detailed analysis of these factors will be required in order to obtain a better understanding and optimization of these factors. 2.4 PEST Analysis PEST analysis is a tool for identifying and exploring a firm’s external environment at the level that this environment can highly affect organizational operations (Henry 2008). “PEST” stands for “Political, Economic, Social and Technological” (Henry 2008, p.51). PEST can be used for analyzing in details the external factors that have been already explored using the SWOT analysis. In the context of the SWOT analysis these factors have been characterized as opportunities and threats. Political Socio-Cultural 1. Regional Political Instability Global/regional conflicts - such as increasing tensions across Strait of Hormuz - can have major impact on QP’s business activities. It may be required to set up security surveillance of all oil & gas operations and facilities located offshore, and to provide alternative routes for oil/gas export shipment. 2. Environmental Regulations Environmental regulations are becoming more stringent. These regulations are periodically changed. Additional cost and technology challenges are encountered when oil and gas projects are required to comply with the new regulations. Climate Change - GHG emissions and in specific CO2 - is becoming a worldwide concern and will eventually impact oil and gas business. 3. Fluctuation in Oil Markets Lack of balance between OPEC and non-OPEC production has resulted in market volatility. Volatile market environment coupled with concerns from geopolitical entities and demand for oil/gas in emerging economies have resulted in price volatility and tighter supplies. 1. Qatarisation It is the intention of the State government and QP management to increase the percentage of nationals working in the country’s industrial units. There is high competition for the limited pool of competent and high quality Qataris. Given that most of the current upstream technical and managerial staff is within 10 years of retirement. This will cause a critical loss of both knowledge and experience and dilution of focus on quality hire and Qatarization. 2. Global Manpower Mobility Global competition for the highly skilled and specialized, technically qualified, manpower is an ongoing challenge in the oil and gas business. Ability to attract and retain global required talents can provide a competitive advantage in the industry. 3. Relationship with Neighbouring NOC’s This can have impact on cooperation in data exchange and/or data acquisition which may affect exploration activities in oil blocks Economic Technological 1. Oil & Gas Price The lack of predictability in crude and gas prices affects the project viability at both macro and micro levels. Low prices of natural gas in the US due to shale gas boom in the US and reduction in demand in EU due to its debt problems. Trend for decoupling oil-linked price of LNG in general. 2. Global Disasters Like the ones in the Gulf of Mexico and Fukushima, Japan can have an impact over the entire oil and gas industry including QP. Through the above incidents the inability of technology to fully support the effective management of accidents in the energy sector has made clear. 3. JV and PSA projects QP responsibility to ensure that the implementation and operations of projects is in accordance and compliance with international best industry practices. QP has initiated Operational Performance Monitoring and Benchmarking System for all North Field integrated projects. The Performance Monitoring System aims to address critical operational parameters such as energy & costs efficiencies. 4. Surplus of LNG and Gas Supply The beginning of new projects in Australia and elsewhere and the surge in the US shale gas production as well as the potential net gas export taking place in Asia including in China and India all pose economic risk to current established supplies and future supply scenarios. A probable near-term implication is the emergence of a gas “spot market” that would affect existing traditional supply agreements. 5. Cost Escalation Increase in cost of construction and drilling projects in response to global market factors including oil price, economic recession, shortage of rigs and manpower supply, etc, could severely affect the firm’s profitability and its cash flow. QP’s integrated business model including investment in drilling activities and GTL could provide limited economic offset to the potential impact of cost escalation with price volatility. 1. Reservoir Management Uncertainty Unpredictable nature of the behavior of reservoirs has an effect on production and reserves forecast thereby a financial bearing on QP. Ultimately this influences how we advance with the exploration and development of our fields. 2. Capability and Knowledge Transfer It is essential that QP strives for transfer of technology and knowledge from the EPSA/DPS/JV partners to build it own capabilities. It is not yet clear how the current business cooperation between QP and the joint venture partners has contributed in the realization of this aspiration. 3. New Technology Potential emergence of ‘game changing’ technology e.g. for a more cost effective development of GTL, environmentally efficient and improved recovery of shale gas, new seismic and drilling techniques, etc. 4. Other Unconventional Resources Development of more unconventional resources, such as the seabed methane hydrates and coal bed methane. 5. Quality Sustainability Management QP has responsibility to ensure that the projects’ execution and operations are aligned with the international best industry practices and standards. A robust and effective system is required particularly for the North Field area, for benchmarking operational performance referring to key parametric environmental, health and safety metrics. Advanced monitoring system will also address other critical operational parameters such as energy & costs efficiencies, mass balance, gas flaring, water and gas injection, etc. Table ‎2.2: PEST Analysis 2.5 Benchmarking Benchmarking is the process of comparing business processes and performances of organizations or industries using one or more metrics (Stapenhurst 2012). Performance metrics used in benchmarking analysis includes quality, time, cost, turnover, etc (Stapenhurst 2012). Using the specific strategic tool, an organization can learn how well its business strategy and processes have performed in comparison to the competition or peer organizations (Stapenhurst 2012). According to a study conducted in 2010 by Global Benchmarking Network, benchmarking is next to SWOT analysis among “improvement tools” used by most organizations (Global Benchmarking Network 2010). 2.5.1 Business Model The performance of QP’s business strategy in maximising value from a large resource base through opportunities in joint operating partnerships is tested against performances of other NOCs in the region; the above task is developed using Benchmark analysis. Production and revenue growth relative to proven hydrocarbon reserves are used as the key performance metrics and are based on published data. 2.5.2 Production Output In terms of oil and gas production QP has achieved consistent production growth trajectories over the past ten years (Fig. 2.5.1 and Fig 2.5.2). An important fact should be highlighted: Qatar has one of the lowest reserve base in terms of oil among GCC countries (Fig 2.5.4). However, QP has been able to maximize and sustain oil production at over one million barrels per day since 2009, through a strategic consolidated production of crude and natural gas condensates. Figure ‎2.5.2: QP Oil Production Profile (Source: EIA) Three-quarters of the total crude produced come from production sharing (PSA) partnerships; 70 percent of which is produced by novel or advanced drilling and production technology. In fact Qatar has achieved the highest production and export of oil and gas relative to reserves in the region. Figure ‎2.5.3: QP Gas Production Profile (Source: EIA) 2.5.3 Economic Output and Regional Baseline Data Qatar Petroleum has consistently posted good performance results in terms of revenue and profit statements as well as balance sheets in its annual reports. According to the company’s 2011 Annual Report 7, revenue, assets and profits generation have maintained solid positive growth rates over the past ten years (Fig. 2.5.3). Figure ‎2.5.4: QPs Consolidated Financial Information 2007-2011 (Source: QP’s 2011 Annual Report) Figure 2.5.3.a. Oil Production Efficiency of Petroleum Development Oman Ltd (Oman’s National Petroleum Company), Source: 2011 Annual Report Figure 2.5.3.b. Recoverable Crude Oil and Condensate, as related to Saudi Aramco (Source: 2012 Annual Report) According to a recent report by the U.S Energy Information and Administration (EIA), between 1990 and 2010 the average value of hydrocarbon exports of GCC countries has been decreased; the above decrease is resulted if the relevant figures are considered as percentage of the total exports of goods and services (Fig. 2.5.5). During this period, the net value of production and export of hydrocarbon by the GCC countries has been decreased except from Qatar and Oman. In addition, Qatar achieved the highest reduction in hydrocarbon dependency, in terms of hydrocarbon revenue per cent of total revenue in the region, suggesting a higher rate of revenue diversification. Figure ‎2.5.5: Middle East Proven Oil Reserves (Source: EIA) Figure ‎2.5.6: GCC Hydrocarbon Production Export and Dependency (Source: EIA) The above “scorecard” for Qatar’s hydrocarbon export and revenue performance indicates robust economic value along with diversification in the downstream and non-oil allied industries such as plastics, aluminum, fertilizer, utilities and technical services. This fact verifies the QP’s strategy of leveraging strong cash flow and joint venture partnerships in the upstream aiming to maximize opportunities in the entire value chain. 3 Conclusion Strategic management tools can be used in both planning and evaluation of a company’s strategy or direction. According to Henry Mintzberg’s strategy can be defined as “a pattern in a stream of decisions” (Mintzberg 1978, p.934); based on the above definition it can be claimed that strategic tools can be effectively used for the evaluation of the performance and the strategic objectives of an organization. The specific approach to strategic management has been used in order to explore and evaluate the business strategy of Qatar Petroleum. Three widely used strategic tools have been employed: SWOT, PEST and benchmarking analyses. The results of SWOT and PEST analyses confirm that QP remains loyal to its strategic business goal, which is “to maximise benefits from Qatar’s exiting petroleum resources’ (QP Vision and Mission). The firm has achieved the above target by engaging directly or indirectly in all activities that would add value to these resources. The results show that QP’s main strategy for accomplishing this mission is via Joint Ventures and Production Sharing Partnerships (JVs and PSAs) with international oil and gas companies. The Joint Venture business structures have ensured the availability of the necessary venture capital and of the technological capacity required to explore, develop and produce the company’s hydrocarbon assets; most of the above tasks are technically difficult mainly because of the location of these assets. The company continues to seek opportunities to leverage on the JV and PSA partnerships aiming to enhance as possible the development of its assets, its technology and its human capital; in this way, the company would be able to secure the high level of its production output. Indeed, the company has kept its asset value, its revenues and its profits at high levels, as shown in its annual business report (Tables 2.5.3, 25.3.a and 2.5.3.b). However a similar indication of success does not exist in regard to the development of competence in critical technical and operational areas, a target that has been incorporated in the firm’s list of objectives. QP’s continuous to focus on the joint venture and technical service development. However, the development of the firm’s own operated assets remains a critical weakness and a potential threat to future growth opportunities. QP further leverages on the success of the business partnerships to support and expand the company’s integrated business model aiming to maximise value through involvement in the full value chain of the petroleum and allied industries. Still, in order to remain competitive as a member of the international energy industry QP must seek to achieve and sustain positive production output profile. 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