Abu Dhabi National Oil Company

In the world of economic powerhouses, the United Arab Emirates was a sleeping lion for a considerable length of time. It was invisible on the map of both the developing and the developed nations. Today, a stark difference overshadows this long-held assumption that the UAE was just another poor nation (Mallakh 1981). The sole reason behind the change in circumstances has been the vast reserves of oil and petroleum resources that are found within the nation’s territories. Overnight, the country’s economic fortunes have shot up, and today the UAE remains one of the world’s fastest growing economies. Its success over such a short period is attributable to one company which had been bestowed with the responsibility of managing the nation’s oil and gas wealth. The Abu Dhabi National Oil Company (ADNOC) has been phenomenal in this journey out of poverty and into large scale amassing of wealth.

The Abu Dhabi National Oil Company is the mother of almost all the oil companies in the UAE. It deals with the mining, processing, distribution, marketing and sale of the nation’s oil within and beyond the borders of the UAE. The company started operations more than four decades ago (in 1971) and its headquarters are in the nation’s capital city, Abu Dhabi (Plunkett 2008). It is one of the reasons behind the growth and soar of Abu Dhabi into a world city, a main artery in the lifeline of the UAE. ADNOC controls more than 90% of the nation’s oil and petroleum reserves. To conduct its operations efficiently, it has branched out to up to fourteen subsidiary companies, including GASCO, ADGAS, ADCO, and ZADCO among many others (Plunkett 2008).

Initially, the companies that had the rights to exploit, mine and sell the oil and petroleum products in the UAE met near-insurmountable huddles (Mallakh 1981). The coming of ADNOC was a great relief to the oil and petroleum market and the petrochemical industry in general. The strategies put in place by the company went a long way in improving and expanding the markets for the benefit of the young companies. These achievements did not come easy, and like any growing company, it met its fair share of setbacks and detractors. In 2000, the company was managing a meager 2.7 million barrels of oil per day (Plunkett 2008). That was not the only problem. The company’s production, distribution and marketing policies were skewed, and it called for a major overhaul of its policies and activities. The level of staff motivation also remained wanting for a long time and customer feedback went begging as their deliveries were either not in time or not at all. The company realized that stiff competition in the market would soon shove it out of business and into the territories of extinction. Change was necessary and it had to come fast.

The Pareto effect, also known as the 80/20 rule is a term used to mean disproportional. For instance, an extremely minute percentage (about 10%) of the world’s population owns more than 90% of the world’s wealth. Pareto effect owes its name to Vilfredo Pareto, a famous economist who lived between 1848 and 1923 (Moore 2007). He postulated the theory of the disproportional effect. Pareto analysis involves giving priority to few crucial policies and undertakings in a bid to hand a boost to a firm’s quality of services rendered or goods produced (Moore 2007). The overall effect is to improve goods and services and with it magnify the profit margins, while at the same time reducing operational costs. The use of Pareto analysis has earned its place and made a mark in the field of goods and services quality improvement. Several companies use the analysis as a quality control measure. In production and quality control, it refers to a situation where 80% of the problems in the products and services owe their existence to the 20% of errors of omission or commission in the processing stage (Moore 2007).

The Abu Dhabi National Oil Company undertook to correct the errors, failures and huddles it had met. Through brainstorming, survey and other reliable methods, the company discovered its major weaknesses and put up measures to correct them (Plunkett 2008). The Pareto analysis of quality control came in handy at such a crucial time. Through this analysis, the company managed to correct the errors bedeviling the transport and distribution wings. These two branches had a great bearing on customer satisfaction and appeal. The customers’ interests had to receive immense priority. According to the Pareto analysis, the few major failures that were crippling the industry had to be dealt with and that is exactly what the company did (Moore 2007). It set up subsidiary branches that had different responsibilities. Most notably, the department of distribution was on the receiving end with the company providing more distributors. The distributors were responsible for supplying the internal market, the retailers. With time, warehouses were also set up to curb the menace of failure of making deliveries. This had been a major concern for the company as it was losing customers due to dissatisfaction. The new warehouses provided a constant supply of petrochemical products and proved useful during emergencies too. To back-up the improvements it had made, particularly in the supply and distribution sectors, the company sought to better the transport of the products to their destinations. With an ailing economy worldwide, the company saw it unprofitable to buy more vehicles for this purpose. Rather, it resorted to hiring vehicles in situations where it became necessary (Plunkett 2008). This undertaking was immensely influential in ensuring the company met its distribution targets comfortably and the customer requirements promptly. To top it all up, the company gave its most valuable asset a boost of morale. The human resource department, which experienced neglect in the previous regimes, was subject to improved working conditions. As a result, an increased sense of purpose and drive to achieve intoxicated the whole department tremendously increasing the quality of services and goods produced.

Despite the drawbacks met by the Abu Dhabi National Oil Company in its maiden days, it rose to the occasion to become one of the largest bodies of its kind (Plunkett 2008). It is the best in the Middle East and ranks an impressive fourth in the world. Over the years, it has significantly increased its production from a mere 2.7 million barrels a decade ago to a staggering 21 million barrels presently (Plunkett 2008). Its relationship with its clients has also grown rapidly. Today, it enjoys a loyal and consistent clientele base, and the numbers are growing bigger by the day. Despite the dwindling oil reserves and constant pressure to shift to cleaner green energy from the international community, the company has managed to keep its profit margins reasonable if not impressive (Mallakh 1981). However, with the changing climatic conditions due to global warming, it is highly recommendable that the company joins this noble course. It can do this by engaging in production of clean energy, investing in ways of improving production without polluting the environment or financing the exploitation of other green sources of energy. It owes this responsibility to the society. This will further increase its stake and do well to its mission and vision.