PDO's Operational Performance Analysis

This assignment delves into the operational performance of Petroleum Development Oman (PDO), a leading oil exploration company in Oman. Focusing on three key decision areas – quality, inventory management, and layout design – the analysis aims to identify strengths and weaknesses within PDO's operations. Based on this evaluation, recommendations are provided to enhance the company's efficiency and overall performance.

OPERATIONS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
Q1 Three decision areas of operation management.........................................................................1
Q2 Evaluating strength and weakness of PDO................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Operation management is the process of administration of business practices to establish
apex level of proficiencies within an organisation (Heizer, 2016). It is the process of
transforming raw materials and labour into goods and services in order to maximise the profits
and sales of the organisation. In the case study the three important operation management
decision areas will be discussed in concerned with Petroleum Development Oman. The present
activities of the firm will be identified and recommendations will be provided for improvement
of performance. Eventually, strengths and weakness of the company will be analysed to show
how both can be synergistically exploited to improve the performance of organisation.
Q1 Three decision areas of operation management
Operation management is the area of management which focuses on designing and
monitoring the process of production and redeveloping organisational operations in order to
enhance the effectiveness in the quality of goods and services. Petroleum development Oman is
leading oil exploration and production company operating in Sultanate of Oman (About PDO,
2018). Majority of crude and natural gas production and supply has been done by the
organisation and motive of company is to deliver excellence, growth and sustainable value
creation within and well beyond industry. The three operating management decision area that
concerned by the organisation is described below: Quality: Quality is the major decision area in operation management. It refers to the
quality of products and services which is delivered by the organisation to their clients and
customers. Petroleum Development Oman is leading organisation which specialised in oil
and natural gas exploration (Gnana, 2016). The management has made critical efforts in
the past, in order to enhance the quality of products and services. In quality area, the
operation managers focuses on the needs and expectations of the demands of clients and
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make adequate efforts so that their expectations can be fulfilled. The management of
Petroleum Development Oman makes market research in order to gather the precise
information efficiently. Inventory Management: Inventory management refers to the precise allocation of
inventory in order to avoid future risks and uncertainties. Here, the management of
organisation allocates suppliers, labours, stock and human resource in adequate manner
so that efficiency can be enhanced in the organisation. The Petroleum Development
Oman, possess efficient workflow, working conductions and other operational and
environmental factors that demand an online inventory management solution which helps
in monitoring offshore operations at Port of Mina Al Falhal, and gives safer workplace
for employees and track the movements of stock for distribution across supply chain
(Awaid and et.al., 2014).
 Layout Design: Layout design decision area of operation management refers to the
placements of workplace and the process of distribution of goods and services. It is an
important area of operation management decision as it displays the framework and
structure of organisation in effective and efficient manner (Pavlov and Vasiliev, 2017).
The Petroleum Development Oman use Port of Mina Al Falhal to export Oman Blend
Crude oil and import/export refined white oil products to world wide and local customers.
The management of Petroleum Development Oman search for oil fields and convert them
into productive assets by constructing wells and operating hydro carbon treatment and
transport facilities.
Thus, the above mentioned are three operational decision areas which is considered by the
management of PDO in order to sustain in the competitive market. Petroleum Development
Oman is leading oil and natural gas corporation whose majority of stake is owned by government
of Sultanate (60%), 30 per cent is owned by Royal Dutch Shell Group, 2 per cent hold by Partex
and 4 per cent Total (About PDO, 2018). The objective of organisation is to engage efficiently,
responsibly and safely in the whole of process embarks from extraction to transportation of
hydrocarbons within and outside the boundaries of Nation (de Vries and et.al., 2016). In order to
improve the existing performance in the described areas, the recommendations are described
below:
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 Use of advance technologies: In order to improve the quality and managing inventory
efficiently, it is recommended to the management of Petroleum Development Oman, to
install high tech and automation systems that aid in reducing the efforts, cost and time of
the managers and shows efficient outcome. In the era, the rise of information
technologies and systems transforms the perception of organisation. Automatic robots
systems have replaced the traditional approach of extraction, filtration and distribution
process of petroleum and oil (Mikesell, 2016). Thus, it is being advised to the
management to install technologies such as green completions, plunger lift systems, etc.
which aid in enhancing the sustainability and quality of the products and services. Training and development of employees: In order to enhance the skills and competencies
of employees and workforce engaged in Petroleum Development Oman, the management
needs to provide effective training to the employees. The training courses includes
handling and controlling of technologies for monitoring of inventory and other areas
which are essential to the organisation (Al-Shaqsi, 2015). Training and development aid
in enhancing the skills and knowledge level of employees of the organisation and with
the help of precise training courses, the organisation will able to attain its core objectives
and goals effectively and efficiently.
 Focusing on quality and sustainability: Quality and sustainability are essential factors
for the organisation. In order to raise the corporate value and increase the customer base,
it is very crucial for the organisation to concentrate on the quality and make efforts to
improve the sustainability (Dickins and Germaine, 2014). It is recommended to the
management of PDO to focus on the quality and sustainability in order to enhance the
productivity and sales.
Q2 Evaluating strength and weakness of PDO
In order to ascertain strategic position of Petroleum Development Oman, the strengths
and weakness of the company will be evaluated. This is done in order to determine how both can
be synergistically exploited to improve the performance of the organisation. In this context, the
strengths and weakness of the Petroleum Development Oman is described below:
Strengths
1. Barriers of market entry: As Petroleum Development Oman, is the leading oil
exploration corporation incorporating in the Sultanate of Oman, it posses a major strength
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which restricts other markets to enter in country (Petroleum Development Oman SWOT
Analysis, 2017). The organisation posses majority of stake in exploring and distribution
of oil and natural gas within the country. This creates a barrier to other markets and
organisation to establish their business in Oman.
2. High Growth Rate: The growth rate of Petroleum Development Oman is relatively high
due to increase in export practices in different countries (Mahrooqi and et.al., 2015). This
impacts on the profitability of the organisation and management obtain this strength to
sustain in the competitive market.
3. Skilled Workforce: Management of Petroleum Development Oman hire skilled and
competent workforce and place them at right position according to their talent and
knowledge level. By doing so, management able to enhance the quality of production and
distribution services.
Weaknesses
1. Obsolete Technologies: The management of Petroleum Development Oman relied on
traditional methods and uses technologies which are now obsolete. This becomes the
weakness of the company (Zhong and Bazilian, 2018). Though, the management making
efforts by installing high tech systems at Port of Mina Al Falhal.
2. Stiff competition in outside market: Despite of having enormous market share in Oman,
the management of organisation faces stiff competition in order to lay step in outside
economy. Countries like China, US and other European Countries creates high level
competition in the oil and gas export market economy.
From the analysis of strength and weakness of the company, it can be elucidated that the
management has enormous market share in Oman with the help of highly skilled workforce and
effective management, it faces problems in gaining competitive advantages in establishing
market in other countries (Zhong and Bazilian, 2018). By using high tech systems and
automation technologies, the management of Petroleum Development Oman might be able to
improve the existing quality of products and services and thus, will able to drive towards growth
and development.
CONCLUSION
In the above case study, the three decision areas of operation management in context with
Petroleum Development Oman has been discussed. It has been identified that Petroleum
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Development Oman is the leading oil exploration company incorporating in Sultanate of Oman.
The three decision areas of operation of management were quality, inventory management and
layout design. After the precise analysing of decision areas, recommendations has been provided
which can help the management to improve their performance efficiently. The strengths and
weakness of Petroleum Development Oman has been identified and evaluated in order to know
how both can be synergistically exploited to improve the performance of company.
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REFERENCES
Books and Journals
Al-Shaqsi, S.Z., 2015. Emergency management in the Arabian Peninsula: A case study from the
Sultanate of Oman.
Awaid, A., and et.al., 2014, January. ESP Well Surveillance using Pattern Recognition Analysis,
Oil Wells, Petroleum Development Oman. In IPTC 2014: International Petroleum
Technology Conference.
de Vries, S.M., and et.al., 2016, October. An Overview on the Quantification of Geomechanical
Risks at Petroleum Development Oman. In EAGE/SPE Workshop on Integrated
Geomechanics in Exploration and Production.
Dickins, P.R. and Germaine, K., 2014. Managing evaluation and innovation in language
teaching: Building bridges. Routledge.
Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.
Mahrooqi, S.A., and et.al., 2015, March. Oil Spillage Environment Impact Reduction Based On
Automated Leak Detection on Rod Pumping Wells in South of Oman. In SPE Middle East
Oil & Gas Show and Conference. Society of Petroleum Engineers.
Mikesell, R.F., 2016. Petroleum company operations and agreements in the developing
countries. Routledge.
Pavlov, D. and Vasiliev, A., 2017, October. Oil Fingerprinting Technology for Well and
Reservoir Management. In SPE Russian Petroleum Technology Conference. Society of
Petroleum Engineers.
Zhong, M. and Bazilian, M.D., 2018. Contours of the energy transition: Investment by
international oil and gas companies in renewable energy. The Electricity Journal, 31(1),
pp.82-91.
Online
About PDO. 2018. [Online]. Available
through:<http://www.pdo.co.om/en/about/Pages/default.aspx>
Gnana, J., 2016. Petroleum Development Oman awards quality assurance contract. [Online].
Available through:<https://www.meed.com/petroleum-development-oman-awards-quality-
assurance-contract/>
Petroleum Development Oman SWOT Analysis, 2017. [Online]. Available
through:<https://www.swotanalysis24.com/swot-p/84381-swot-analysis-petroleum-
development-oman.html>
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