Downstream ‘New Platforms’ Highlighted

17 April 2014 | 0 comments | Saudi Aramco News | by

Saudi Aramco’s ambitious downstream expansion came into focus at the 15th International Oil Summit in Paris where president and CEO Khalid A. Al-Falih addressed a packed audience alongside Christophe de Margerie, CEO of French energy major Total.

Leaders from across the global oil industry, as well as the world’s media, listened as Al-Falih underlined Saudi Aramco’s credentials beyond upstream.

“We are in the process of building a world-leading downstream business that is both vertically integrated across the value chain and horizontally integrated across suitable geographies. Our goal is to add greater value to our hydrocarbon supplies, while building a more robust and resilient portfolio that can better withstand market turbulence,” he said. “We’re doing that through what I would call ‘new platforms’ for downstream business success, which I strongly believe represents the new model and way forward for this sector of our industry.”

Al-Falih told his audience that these “new platforms” require four key factors to ensure success.

The first, he said, is simply “large scale,” referring to the massive plants and their mega-capacity that enables them to “capture operational efficiencies and economies of scale.”

The second factor involves integrating refining, chemicals and lubes for value addition and portfolio diversification. Al-Falih said that this could be best achieved in a facility that has a certain critical mass of processing capacity. But as these mega-facilities are tied to reliable supplies of oil, he told those listening that having the right kind of reliable crude slate was essential.

The third key ingredient, according to the CEO, was building these facilities close to major markets.

“Matching world-scale plants and infrastructure with strong future demand for their output is vital for downstream success, and we will continue to see most of these new platforms being built in high-growth markets such as China, India, developing Asia and the Middle East,” he said.

Al-Falih underlined technology as the fourth key factor for the success of “new platforms,” as it would allow plants such as the SATORP complex to produce cleaner products that meet increasingly high environmental standards, all while maximizing profitability. Technology, in addition to innovation, was a constant theme throughout the summit, particularly as a driver for lowering costs, expressed not only by international oil companies (IOCs) and national oil companies (NOCs) but service companies, as well.

Al-Falih explained how Saudi Aramco was strengthening its R&D program with a technology agenda that incorporates both upstream and downstream. He made mention of the company’s research into advanced integrated fuel engine systems.

“We believe there are tremendous opportunities to be realized from the synergies that can be harnessed by combining advances in engines and fuels and by looking closely at their interface.”

He said that this research will satisfy several objectives, including radical improvements in mileage efficiency, substantial reduction in emissions and “the economic viability of engines and the fuels that power them.”

Hosted by the renowned energy institute Institut Français du Pétrole (French Petroleum Institute), the summit opened with remarks from Nordine Aït-Laoussine, former Energy Minister of Algeria, who moderated a morning session that included representatives from the International Energy Agency and International Energy Forum.

Satisfying energy demands was emphasized by speakers to be a joint challenge for both IOCs and NOCs, as was the effective management of supply costs. While moderating the IOC/NOC session, Aït-Laoussine mentioned how Saudi Aramco, under its current CEO, introduced the notion of the “INOC” — national oil companies who had evolved to include CSR, economic diversification and job creation as part of their remit.

All sessions featured perspectives on the macro view of the oil market, and Al-Falih, before delivering on the main theme of his speech, downstream, gave his thoughts.

“Despite the challenges we may face, the petroleum industry has weathered the effects of the global economic downturn better than most, and I believe we are in a long stretch of an expansion phase. In fact, if anything, the industry risks being stretched by the stretch. For example, oil demand is expected to continue growing,” Al-Falih said. “Most of this growth stems from the combination of a larger global population, higher living standards and rising urbanization, especially in the developing world where billions of new consumers will be demanding the comforts and conveniences that energy can provide.”

Al-Falih added that there was enough oil to meet growing demands, given the large global resources of both conventional and unconventional supply.

DeMargerie, who spoke immediately after Al-Falih, said that technology would be the key to unlocking the potential of unconventional resources, which would “extend the oil and gas horizon.” Total’s chief also said the industry would have to move as one if it wanted to realize its efficiency and profitability targets.

In keeping with the rest of the summit, both CEOs ended with a Q&A session in which Al-Falih stated that Saudi Aramco would maintain a daily crude oil production capacity of 12 million barrels and reiterated its commitment to unconventionals through $3 billion worth of investments.

Ministerial representation also came in the form of HE Suhail Mohammed Al-Mazrouei, Energy Minister for the UAE, and HE Abdalla Salem El-Badri, Secretary General of OPEC, who said that challenges and uncertainties for the industry remained and new ones might be around the corner.

‘Enabling’ Value-Added Chemical Manufacturing

17 April 2014 | 0 comments | Saudi Aramco News | by

Saudi Aramco News

The critical need for skilled people is a key issue for Saudi Arabia and the industry in general, says Warren W. Wilder, Saudi Aramco executive director of Chemicals, in his presentation at the 2014 IHS World Petrochemical Conference.

Warren W. Wilder, Saudi Aramco executive director of Chemicals, served as a featured speaker on a panel discussing the global energy outlook. His presentation, “Mideast: Evolution of Growth Strategies toward Differentiation,” was part of the 2014 IHS World Petrochemical Conference with a theme that posed this question: “The Impact of the Next Capital Cycle on Global Chemical Markets: Can the New World Order in Energy and Chemicals be Sustained?”

In his remarks, Wilder pointed to Saudi Arabia’s culture and policies as enabling the Kingdom’s rapidly transforming chemicals industry. He noted that Saudi Aramco is facilitating the development of a robust chemicals industry by building conversion parks alongside domestic production facilities.

“Despite changes, certain fundamentals still apply: Saudi Aramco has an 80-plus year history of reliable crude oil supply and will continue to be a reliable supplier,” Wilder said as he described the rapid changes in the industry landscape.

One of the most important points highlighted by Wilder is the critical need for people: “One of the key issues for Saudi Arabia and the industry in general is skills. The greatest shortage we are facing is not capital or feedstock; it is skills,” he said, emphasizing the need for strong cooperation between public and private sectors, and describing the educational opportunities in Saudi Arabia with a robust curriculum in science, technology, engineering and math (referred to as STEM subjects), as well as statistics.

Another key enabler that will help in the future growth of the (chemicals) industry is the huge public investment in infrastructure through the Public Investment Fund (PIF), Wilder said. In addition to this fund, support can be found from local entrepreneurial, vocational and development organizations such as Wa’ed, Saudi Arabian General Investment Authority (SAGIA), KAUST, Dhahran Techno Valley, KFUPM and the Royal Commission for Jubail and Yanbu’ (RCJY).

Also crucial for success in chemicals is technology. Saudi Aramco is expanding its Research & Development (R&D) program with research centers around the world, including a trio of R&D centers opening in the U.S.

“The industry in Saudi Arabia is transforming from a commodity-based (chemicals) business toward far more value-added products and chemistry,” he said. “In addition to the anticipated increase in global capacity and growth, there is a shift to heavier feedstock and the creation of more value-added opportunities.”

Looking at the industry landscape, Wilder said that Saudi Arabia will continue to be the largest Gulf Cooperation Council (GCC) chemicals producer.

Wilder described the rapid transformation in the GCC and the changing landscape in the industry that are part of the impetus behind Saudi Aramco’s investment in a massive chemicals program, including Sadara, currently underway, and Petro Rabigh, with an expansion underway.

The American Experience in Saudi Arabia

16 April 2014 | 0 comments | Special Interest | by

Prince Mohammad Bin Fahd Program for Strategic Research and StudiesUCF Special Assistant for Global Perspectives John C. Bersia and UCF President John C. Hitt pose for a group photo with PMU Rector Issa Al-Ansari, Vice Rector for Academic Affairs Nassar Shaikh, and Vice Rector for Business Affairs and Development Adel Al-Saleh

Many of you have been interested in the Prince Mohammad Bin Fahd Program for Strategic Research and Studies at the University of Central Florida program that was announced on Aramco ExPats August 2013. This program is a partnership between UCF and Prince Mohammad Bin Fahd University, a private university in Al Khobar, Saudi Arabia. Both universities share a commitment to scholarship, partnership, leadership and outreach, as well as a focus on the future. The Prince Mohammad Bin Fahd Program for Strategic Research and Studies at UCF will address four broad areas that are vital to both countries’ futures: governmental ties, security and regional stability, culture and the economy.

This year the program is pursuing a new initiative entitled “The American Experience in Saudi Arabia,” a series of in-depth interviews, primarily with former employees of Saudi Aramco who are now residing in United States.

The program is currently looking for participants who would like to tell their experiences and partake in the project. Please email or telephone Amal Khan directly.

Please contact:

Amal Khan
Program Coordinator
Prince Mohammad Bin Fahd Program
for Strategic Research and Studies
University of Central Florida
4104 Libra Drive, Suite 117
PO Box 162478
Orlando, Fl 32816
Office: 407-823-2441

John Ames

16 April 2014 | 1 comment | Brats | by

Well Fire at Dammam #12Well Fire at Dammam #12

On May 1st 1939 King Abdul Aziz Ibn Saud inaugurated the first tanker load of Saudi oil at Ras Tanura, two months later the well being drilled at Dammam #12 exploded into a blazing inferno killing five Americans and Saudis.

Burning eight thousand barrels of oil a day, the well was lost but if the blowout continued the whole field was threatened because it might lose reservoir pressure so that the oil would have to be pumped out at great expense. With no outside expertise or fire-fighting equipment available for at least a month the oil men, resourceful veterans of overseas oil camps from Venezuela to Borneo, decided to extinguish the fire themselves.

At the time there was an eight-inch oil pipeline that went to Al-Khobar on the coast to fill barges bound for the BAPCO refinery in Bahrain. They flushed the pipe and reversed its flow to pump an inexhaustible flow of salt water to cool the flames. This whole episode is described by Wallace Stegner, the master author of the American West, in his book Discovery: The Search for Arabian Oil.

After ten days of battling the hellish flame that roared day and night like an out-of-control jet engine, on the afternoon of the 18th of July – when the temperature was already more than a hundred and ten degrees, Bill Eltiste, a tall, lanky engineer, dressed in an asbestos suit crouched behind a large steel shield on wheels that he slowly pushed towards the raging blowout as the air got hotter and hotter with every step. Around his waist was a thick cable to drag him back from the fire if he was overcome with heat.

Looking through a thin slit in the shield Bill directed the bulldozer driver right behind him. He also wore an asbestos suit as he maneuvered a thirty-foot-long boom that held a sixty-foot-long pipe with a large, steel funnel–shaped cone at the end. Water jets pounded the fire and a thick spray doused the two men as they moved in closer and closer into the unbearable heat. Using hand signals Eltiste guided the boom operator until with his gloves smoldering he dipped his fist and the funnel dropped to snuff out the roaring torch. Suddenly it was quiet. The man driving the Caterpillar was John Ames and when I was a kid he lived next door to me.

Americans and Saudis fighting the flamesAmericans and Saudis Fighting the Flames

John could operate any piece of heavy equipment from a bulldozer to a steam shovel with the same delicate touch, he could make just about anything with an arc welder, a cutting torch and a stack of sheet steel. John was the kind of all-around guy that was the life-blood of an oil camp.  Pragmatic, practical, versatile and most importantly – good humored, he was one of the hundred Americans that remained in Dhahran during the war. Working seven days a week for five years they pumped up to 10,000 barrels a day to Bahrain to top off the refinery and refuel the British navy in the struggle against Hitler.

In late November of 1942, John and Steve Furman went on a hunting trip to bag some hubbarah, a large game bird, to be the turkeys for Thanksgiving for these men isolated in a remote desert as the greatest war in history engulfed the world. They relished the feast, outdid each other to make jokes and laugh and be in the spirit of the day but behind his mask of easy camaraderie each man was thinking about his family: his wife, his children, brothers and sisters, aunts and uncles, his parents, cousins, nieces and nephews, and the damage this war would bring into their lives. There was not one thing he could do about it but pump oil. So maybe it was time to tell the guys the story about when Lem Dawkins got his foot run over by Skinny Blake’s pick-up truck.

Nearly twenty years later, John had gained a few comfortable pounds but still sported his signature brush-top haircut, close cropped along the sidewalls like a Marine. His house was next to ours on 11th street. As a young kid I’d sort of hover around peering through the fence made with jareed sticks of split-palm fronds tied together with a rust colored jute string. He had converted his carport into  a garage and I would watch him use his torch to cut steel, braze things together, heat metal to a glow and shape it with repeated blows of a big hammer against an anvil made from a piece of a cut-off railroad track.

John Ames at Manifa 1941John Ames at Manifa 1941

Every once in a while he would glance at me and then quickly avert his eyes as if the point of the process was that I didn’t exist – which was fine with me. Big, blustery friends of his would show up smoking, joking and laughing, speaking an earthy language that immediately updated my mental thesaurus of four letter words and colorful adjectives. It was the beginning of my career as an amateur lexicographer. Occasionally he’d be bantering with his pals and crack a slight smile to the kid behind the fence.

John was married to Esther – Esther Ames MD.  As the only American woman doctor in Aramco she spent a fair amount of time in Riyadh tending to the women of the royal family: the dowagers, the princesses and their daughters. She was a great favorite and was showered with elaborate hand-embroidered dresses, finely worked brass coffee pots, silk scarves and the like. Sometimes Emir Saud bin Jiluwi, the governor and most powerful man in eastern Saudi Arabia, would send his personal black Cadillac and two bodyguards to take her to his palace.

John even managed to get a blade out of the connection when some grateful prince sent him a curved, eight-inch dagger in a beautiful jet black scabbard filigreed in fine gold-plated wire. He showed it to me once and naturally I was completely impressed.  However at the time I knew none of this background. Only that at my parents’ parties John and Esther were having just as much fun as anybody else.

I’m almost ten and basically fanatical about snorkeling, fishing, Half Moon Bay and gladiator movies. I had seen the now classic “Fall of Rome” movie epic Quo Vadis three times. There was a bunch of dialogue about religion and some boring romantic stuff but it featured the burning of Rome by Nero and some spectacular scenes of gladiators dueling in the Coliseum. They fought with fists, swords, clubs and spears but I was enthralled by the tall Nubian who fought with a net and a trident. He’d snare a giant, hairy Gaul – frothing at the mouth with swords in both hands, yank him off his feet and it was game over.  Later in life I’d notice that the Trident warrior would be in every gladiator movie, most especially Woody Strode’s role in Spartacus. I also figured out that almost no one was as enthusiastic about gladiator movies as I was and they would tend to shun me when I brought up the subject. They still do.

Leaving Quo Vadis I was convinced that if I had a trident spear I could easily gig dozens of those guppies that swarmed the shoreline of Half Moon Bay. I wasn’t exactly a marine biologist and was totally ignorant about seafood, but my dad and his fishing pals would eat sardines out of a can while we drifted over the third reef, lines baited for hamoor. The guppies looked like sardines. A no-brainer, they’d go ape to eat fresh sardines. This is a good example of how faulty information can lead to flawed conclusions.

John used to hire me to sweep up his garage for a riyal though I would have done it for free just to hang around. A few days after Quo Vadis he asked me to come over on Thursday morning. This was my big chance. I spent hours drawing the trident of my dreams and finally settled on a five-inch long point flanked by three-inch sub-spears.

After breakfast I folded the drawing into my back pocket and happened to find a broom that I was sure that nobody would miss and went into the backyard and sawed off the broom part. I failed to notice that there weren’t any other brooms in the broom closet, just mops. This oversight would later be sharply corrected by higher authorities.

When I arrived, John with torch in hand was gently heating quarter-inch copper pipe from a big spool and wrapping it around a length of six-inch steel pipe. “Hi Mr. Ames. What are you making?”

“Tim, I’m making a coil of copper pipe. When I’m finished it will be three-feet high.”

Why anyone would do that was beyond me, though later on I would understand the necessity for such a piece of sculpture. What they called a condenser. “You want me to start sweeping?”

He showed me where to start and went back to his spiral of copper. After a while he sawed off his creation from the spool, filed the edge and released the copper coil to hold it up, “What do you think?”

The copper was fresh and shiny, it was perfectly symmetrical. He softly pressed it down and let it bounce up and down like a spring. He was grinning. “Mr. Ames, that’s really wicked.” It took him a second to understand that was a compliment and then I made my pitch.

I told him about the Net Man in Quo Vadis, practically recreated the entire scene. And then told him my plan to harvest sardines at the beach. I thought he was smiling slightly but he was probably just trying to contain his hysterical laughter at the thought of my dad and Tom Handzus opening a sardine can full of guppies at the third reef.

I whipped out my drawing and showed him my idea of the perfect trident. He examined it carefully and said, “Are you sure this is what you want?”

“Oh yes, this is exactly like the movie but I changed it a little and made it smaller.” And then to clinch the deal I went over to the jareed fence and pulled out the broomstick I had wedged between the fronds. “I already have the shaft for the trident.”

He said, “I can do that.” He made me wear dark welder goggles as a yard away he cut the spearhead out of thin sheet-steel and brazed it to a short length of pipe the diameter of my broom stick. I pulled the goggles off and watched him work the tines with a grinder, sparks flying everywhere. He finished up, attached the head to the broom handle and handed me an actual replica of Poseidon’s spear – or so I thought.

When I hit the beach at Half Moon Bay I streaked to the shoreline and started spearing the first flock of guppies I saw. Except that the tines were too big and too far apart and the guppies easily eluded me time after time. I finally figured that I should go deeper after the bigger fish. A ten-inch silver fish streaked before me in about four feet of water. I hurled the spear with stunning accuracy, unfortunately the broom handle was extremely buoyant. The cunning weapon plunged in about three feet before it popped straight back into my forehead. Oh well, it wasn’t a perfect idea but the trident held a special place of honor in the corner of my bedroom for years to come.

A few months later John came out of our house while I was messing around in the front yard and said, “Hey Tim. I just talked to your dad and he said it was okay for you to go shooting with me.”

Shooting! I was a post-war kid raised on war movies and westerns. I had only shot my dad’s .22 rifle when we spent long leave at my grandfather’s ranch in North Dakota. “That’d be so wicked.”

“Meet me in five minutes at my truck.” I rushed into the house, thanked my dad, my mom and my bewildered sister Mary as I hurried to my room to get my army surplus canteen, scurried to the kitchen to fill it and ran out to the Dodge Power Wagon.
John came out with a US Army green-canvas duffel bag rolled up lengthwise, placed it in the back and we headed out of camp towards the junction of the Ras Tanura to Abqaiq road. We hung a left to Abqaiq and the old Half Moon Bay entrance, drove on for a few miles before John pulled across the highway and headed for a ridge about half a mile off, between Dhahran and the road. He made his way up to its base and we hiked up to the top with the duffel bag over John’s shoulder. He stopped to show me some jackal footprints in the sand.

The crest was fractured with slabs of broken rock interspersed with long drifts of sand. I took a long pull from my canteen and watched a truck travelling over the far away asphalt. Jebel Shamaal loomed on the horizon north of us. John looked around, opened the duffel bag and pulled out a M-1 Garand rifle. This was the real thing. The rifle used by American soldiers throughout the war. I started to hear the soundtrack from an Audie Murphy movie in my head. The Sands of Iwo Jima with John Wayne invaded my imagination.

“This is an M-1 rifle. If the enemy was coming down from Ras Tanura, headed to Dhahran, where on this ridge would you shoot at him?” He had me from the moment I saw the rifle, but I managed to point at a cleft between two giant pieces of limestone.

“Good choice Tim, it would be hard to get you there, but even a near hit would shower you with sharp rock fragments like a hundred tiny bullets. Over there on the sand crest is the place to go. Keep your head down and when they shoot back at you the bullets will either miss or be absorbed in the sand. Here I’ll show you.” We went over to the sand and he showed me how the rifle worked, cycled the bolt action a few times and then inserted the clip, went prone and aimed the gun, “See there is a black rock the size of a basketball down there about fifty yards away. That is the enemy.”

I didn’t really know who the enemy was supposed to be but innately understood that they were some Nazi scourge I had seen in countless movies and deserved a round in the basketball. John took a careful aim, a short breath and squeezed off the first round. It sounded like thunder breaking six-inches from my ear drum, echoed back at us and a puff of dust erupted from the black boulder. I almost missed the sound of the spent cartridge as it pinged back into the rocks.

It was one of those moments. The setting sun was starting to throw shadows on the terrain beneath us, a small canyon backed by another rocky ridge. John’s hair was grayish white with age, his brush top glistened in the light like the comb of some exotic Mohican raptor. His big pale-blue eyes traced with wrinkled crow’s feet set in his craggy face gazed at the target for a minute before he lowered the weapon and turned to me with a crooked smile said, “Watch this!” and settled into position.

He took a deep breath, let it out and fired – and fired. He dissolved into a focused state that would have been welcomed from Bunker Hill to Omaha Beach. He emptied the clip in twenty seconds as the black rock spurted dust and rock chips with every hit. Heavy equipment wasn’t the only kind of machinery he could operate.

Now it was my turn. He loaded another clip and handed the rifle to me as I stretched out in the sand. I couldn’t quite get my shoulder to the rifle butt and still reach the trigger, so he steadied the back of the M-1 while I aimed it. I jerked the trigger on the first shot and missed by yards. A terrible shot but it didn’t really matter. I had fired an M-1 rifle which was one of the wildest dreams of almost every nine-year-old American boy born in the wake of World War II.
John taught me to keep the gun perfectly vertical and gently squeeze the trigger and by my last shot I grazed the edge of the basketball to be rewarded with a cloud of sand and rock splinters. He put in another clip and fired three rounds on one knee. Then he fired standing up. His last shot missed the rock. John paused and said, “Well, I guess I hit the Nazi next to him.” He laughed and we went back to Dhahran.

It wasn’t until many years later did I learn that in the dark days of 1942 when Rommel had taken Tobruk and the Afrika Corps was rolling towards Cairo the Americans had organized a contingency plan should German storm troopers try to seize the oil field. Some of the men would hold off the invaders long enough for the drillers to destroy the very wells they had so patiently drilled and then everyone would flee south to the Emirates and from there to India. I don’t know where the M-1 rifles came from but a witness at the VJ Day – Victory in Japan day, celebrations in Dhahran on September 2nd 1945 was amazed at the sheer amount of rifles and shotguns that almost magically appeared on King’s Road to fire salvos into the air.

Seeing the present day metropolis that stretches unbroken to Al-Khobar, it is easy to forget that seventy five years ago Dhahran was a miniscule oil camp built on a desolate desert plateau by a thousand Saudis and a couple of hundred Americans. Men who sweated in hundred degree heat, pervasive humidity and blinding sand storms to build an oil field out of nothing, who risked themselves to save it from a runaway well fire and were perfectly willing to fight to the end to prevent the Axis powers from capturing their wells intact.

They were professionals. Sure they were paid well, but really they worked out of pride for their craft and the respect of their peers. Their greatest delight was problem solving. Present the challenge and they would get the job done no matter what it took. They were men like my neighbor John Ames.

Well fire at Dammam #12


ARABIAN SON: 21 Stories by Tim BargerARABIAN SON: 21 Stories
by Tim Barger

E-book: $4.95

Paperback: 142 pages ~ $12.95

ISBN: 978-098820505-5

Aramco Asia Japan Supports Company Business Events

16 April 2014 | 0 comments | Saudi Aramco News | by

Saudi Aramco News

Saudi and Japanese businessmen gathered recently at the 18th Saudi-Japanese Business Council event in Tokyo that was supported by Aramco Asia-Japan (AAJ).

The Saudi Aramco Entrepreneurship Center Company Ltd. (Wa’ed), a wholly owned subsidiary of Saudi Aramco, delivered a presentation to the more than 200 businessmen present at the event. Einas Al Ashgar, Energy SME Development Group Leader of Wa’ed, delivered an overview presentation about the organization and its programs for supporting entrepreneurs and small- and medium-sized enterprises (SMEs) in Saudi Arabia — an area valued as a key contributing engine for job creation within Saudi Arabia.

AAJ also organized the Saudi Aramco booth at the Saudi Arabian General Investment Authority (SAGIA) exhibition that was held in Tokyo and Osaka recently. The theme of the exhibition was “Invest Saudi,” where AAJ detailed the commodities currently available for localization and presented the incentives that investors would enjoy if they operate as local manufacturers.

Wa’ed also joined AAJ at the SAGIA exhibition in distributing brochures and responding to questions from visitors that numbered more than 700.

Other noteworthy participating organizations and companies included the Royal Commission for Jubail and Yanbu’, SABIC, Maaden, Petro Rabigh, SWCC, SIDF, National Clusters Program and the Saudi National Water Co.