KPC has recently taking primary steps to implement a program for changing its current management model and adopting a new one called Strategic Management Model. In light of this model, the program aims to:

• Enhancing the current relationship between KPC and its subsidiaries to increase the subsidiaries’ commerciality by granting them more authorities and freedom in managing their operations.
• Focusing KPC efforts towards the oil sector strategic issues and setting high-level directives and guidelines to the subsidiaries while monitoring their performance with no interference in their executive authorities.

What is Commerciality?

Commerciality is defined as:

• Having the capabilities and authorities to rapidly make decisions.
• Having the authorities to access business resources (e.g. capital, assets, human) to manage the activity with minimal regulatory interference.

Why did KPC adopt the program of changing its management model?

 KPC and the Supreme Petroleum Council (SPC) have a vision towards enhancing KPC and its subsidiaries performance to be in line with the international commercial companies. However, the current relationship between KPC and subsidiaries involve several issues that hinder the required commerciality.

Such issues include:

• KPC’s frequent involvement in the subsidiaries’ operational initiatives.
• Subsidiary senior management’s limited authority for capital approval in comparison to the private sector.
• Subsidiaries’ limited flexibility in human resources management.

Therefore, a study was conducted in 2005 to overcome these issues and answer the following questions:

1. What is the best management model for KPC that would allow KPC to monitor the performance of its subsidiaries operations, while giving them the enough authorities and freedom to manage their operations commercially?
2. What is the impact of changing the KPC management model on the key management processes between KPC and its subsidiaries, and on the organizational structure of KPC? The study resulted in a number of recommendations to address the above-mentioned issues and enhance the commerciality of KPC’s Subsidiaries. The recommendations can be summarized as follows:

1. Changing the current KPC management model to the Strategic Management model.
2. Re-design some key management processes between KPC and its subsidiaries (capital administration, Human Resources, strategic planning and performance management).
3. Revise KPC’s organizational structure.

What actions are KPC taking to implement the program of changing the management model?

The Program was divided into many projects, each of which was assigned to a distinct implementation team. These teams include representation from KPC and subsidiaries and would require 6- 12 months to carry out their tasks. Table below shows the teams and their scope of work.  

What is the Program Management Office (PMO)?

To follow up and coordinate with these teams and make sure that they succeed and meet the deadlines, KPC has created the Program Management Office (PMO), the purpose of which is to oversee the implementation of the above-mentioned projects and identify and resolve barriers for implementation. The PMO team also helps in coordinating among the related projects. The PMO is a PROGRAM MANAGER, NOT A PROJECT MANAGER. The PMO sponsor is the Chief Executive Officer.

What is your role?

In order for the KPC to change to a strategic management model, the understanding, participation and support of ALL OIL SECTOR EMPLOYEES is required. We all know that change is difficult and confusing in the beginning, but it will be worthwhile in the end.

It is worth mentioning that this transformation will turn KPC and its subsidiaries into being a more international commercial company and will improve the working atmosphere for all of us working here. Furthermore, it will help us fulfill our mission, which is to manage our country’s hydrocarbon resources to the best of our abilities.