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Introduction of SWOT Analysis of Kuwait National Petroleum Company (KNPC),

Category: Financial Statement Analysis Paper Type: Report Writing Reference: APA Words: 900

                Kuwait National Petroleum Company (KNPC), through the establishment of the company in 1960, was the first national company that has its Hydrocarbon resources exploited as well as managed by foreign companies. The vision of the Company was stimulating development and giving an exemplary experience in how national resources should be handled. KNPC, in the perspective of the company, has been a model for an indigenous potential to embrace exploitation and management of the country's oil resources that started to develop into a massive income source that is capable of sustaining welfare of the society and its overall development financing (KNPC, 2019).

        The State of Kuwait, in 1975, acquired KNPC’s full ownership and the operations were integrated relying upon oil refinery of the company in Shuaiba along with the petroleum products’ marketing from Al-Ahmadi Refinery, in international as well as local markets., KPC (Kuwait Petroleum Corporation) was established in 1980 as the asset was owned by the state of Kuwait along with all other oil companies in the country, including KNPC. KNPC, currently, has two state-of-the-art Refineries known as Mina Al-Ahmadi Refinery (MAA) and Mina Abdullah Refinery (MAB). In March 2017, the Shuaiba Refinery was closed after the kick-off of the CFP (Clean Fuels Project). 736,000 bpd crude oil is a total production capacity of both Refineries along with 2.5 billion scfpd gas processing capacity (KNPC, 2019).

        Advanced refining technologies are being hosted by MAA and MAB, following the two Refineries’ revamping in the 1980s. The most important units at MAB Refinery are four Hydrogen production units, two CDUs, a Vacuum Distillation unit, two ARD units, a Hydrocracking unit, and two delayed Coker units. Now, four Trains of ARDS units, an FCCU and a VGO Hydrocracker are being hosted by the MAA Refinery, besides a host of Hydrogen Recovery units and Hydrogen production, Sulphur recovery units, Distillate Hydrotreaters, and consolidated Sulphur granulation. KNPC, on a domestic scene, is responsible for all petroleum products’ sale and distribution in Kuwait’s local market. KNPC and KPC put the trend into effect towards privatization and initiated transferring Local Marketing assets in 2004, such as the petrol stations and the lube oil plant, to private companies. All over Kuwait 43, filling stations are owned by KNPC, and a 5-year plan is already underway to build more 100 stations to respond to the growing gasoline, and demand of other fuels (KNPC, 2019).

            Currently, several major projects are being carried out by KNPC amid to expand the refining capacity of the company and improve conversion capabilities. The Company, in the meantime, directed consideration to the human resources by the policy of steady growth implementation of national manpower and providing highly skilled and qualified human resources its sites. The percentage of Kuwait people, up to March 2018, in the total manpower was approximately 87.11% of the labor force of KNPC totaling 6,152 Employees (KNPC, 2019).

            The reason for choosing this company for the project is that it is one of the top companies in Kuwait rich in oil resources while focusing on human development and resources. The market share of KNPC in Kuwait is among the highest, so it seemed to be the best suitable company for this project.

SWOT Analysis of  Kuwait National Petroleum Company (KNPC),

The SWOT Analysis of KNPC is given as (Pahl & Richter, 2009):

External

Internal

Opportunities

KNPC(Kuwait National Petroleum Company) had a huge amount of opportunities for development. Rooms are always available for launching new services and products. The agreements of KNPC(Kuwait National Petroleum Company)’s trade are possible with other countries. In the market, there is a gradual change and if properly challenged then it’s a great opportunity.

Strengths

The KNPC(Kuwait National Petroleum Company) growth rate is much high. Entry of market has minimum limitations for a handling company such as KNPC(Kuwait National Petroleum Company). Industry offers the trends of the future. It is easier for KNPC(Kuwait National Petroleum Company) to approach similar industries. The industry has shown a solid diversification. After the number of successful years, In the world of oil resources, KNPC(Kuwait National Petroleum Company) is the most popular and attention-grabbing name. Services of KNPC offer stability to the economy through spending in diversified sectors of Kuwait, For example. Sector of oil.

Threats

By the government, KNPC(Kuwait National Petroleum Company) tackles a huge amount of protocols, and the company was also threatened by entrants of the new markets. In the UK or US, rising business affect the economic region of the MENA and GCC. KNPC(Kuwait National Petroleum Company) operations can be factored by the global economy and political scenario. Conditions of the unfavorable market can be in danger like growing competition.

Weaknesses

R&D (Research and Development) is a primary tool for the development of strategy and in R&D a huge amount of investment has to make by the company. The group activity exposes the KNPC’s liquidity, credit, and several types of risks of finance. In the business, there are huge levels of risks in the form of loans and borrowings from the bank.

 References of SWOT Analysis of Kuwait National Petroleum Company (KNPC),

KNPC. (2019). WHO WE ARE. Retrieved from https://www.knpc.com/en/about-us/who-we-are

Pahl, N., & Richter, A. (2009). Swot Analysis - Idea, Methodology and a Practical Approach. GRIN Verlag.

 

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