Seeking to continue momentum in our efforts to build downstream opportunities, Saudi Aramco recently sponsored the first Olefins Academy with Linde Engineering.
The event was attended by more than 70 participants from across Saudi Aramco from Chemicals, Refining & NGL, Marketing Supply and JV Coordination, Pipelines, Engineering Services and Corporate Planning.
“The goal of the Olefins Academy is to provide practical training in the olefins business and in steam cracking technology,” said Salem R. Al Subayee, director of Chemicals Business Coordination and Support Department’s Growth Project Division. “That’s why we sponsored the German-based technology licenser to come here and provide technical training on steam cracking.”
There were 70 participants, mostly engineers from the Downstream business line, Engineering Services, Corporate Planning, and Research and Development. As Saudi Aramco pursues organic growth in its chemicals strategy, the company is looking at all of its refining assets for integration opportunities to produce olefins and downstream petrochemical derivatives.
Olefins production is a natural move for the company, which is seeking to reach a refining/chemical integration of 9.5 percent by 2020. The company is looking to integrate Ras Tanura refinery with a steam cracker for olefins production. The downstream derivative units will be either placed within Ras Tanura Refinery or will be located in Jubail. The olefins supply to Jubail and connecting Ras Tanura to the planned olefins grid at Jubail will open opportunities for small olefins consumers to bring downstream specialty chemical products to the Kingdom.
“It is a natural move to expand Saudi Aramco’s portfolio to make our vision of becoming a fully integrated energy and chemicals company,” said Al Subayee. “To this end, we are leveraging relationships such as this one with Linde and others. This makes a perfect fit for us while we are studying our refining assets and opening our systems and capabilities to integration to olefins. We are providing training opportunities for Downstream and also to the people who are already working with us on refining/chemicals integration initiatives. It is perfect timing for us.
Abdulateef Al‐Mulhim, Commodore, Royal Saudi Navy (Retired)
SAUDI Arabia is one of the biggest countries in terms of landmass spread over an area of around one million square miles with a population of about 30 million.
In other words, we have enough space to accommodate any expansion in any city without much difficulty. We do have obstacles and challenges of different kinds like the nature of the land, climatic conditions and severe shortage of water resources. In addition to these natural obstacles, we are faced with the issues of inadequate planning and mismanagement and a lack of efficient infrastructure especially in the rural areas.
We all know that many countries faced similar situations but they overcame all obstacles. The Netherlands is situated below sea level but with proper planning, large polder areas are now preserved through drainage systems. Singapore and Hong Kong overcame the problem of being densely populated tiny landmasses. Japan with its relatively high number of earthquakes also adapted to the phenomena with special building mechanism. So, why do we, the Saudis, need land reforms, land management and new building codes?
The Saudi population is growing at a rapid pace. And urbanization is also at its peak with more Saudis striving to move to cities for better prospects. Due to rapid urbanization, cities like Riyadh have grown into one of the largest cities in the world with a population exceeding the 5-million mark. With this burgeoning population in a city like Riyadh, is there enough land to accommodate these millions without witnessing any hike in land prices.
During the past few days, my classmate and former Shoura Council member, Dr. Ihsan Bouhiliqah, has raised this issue in a number of his columns in an Arabic-language daily. Last week, at an informal gathering at the majlis of another friend, Saleh Al-Humaidan, who is also associated with the newspaper industry, I was surprised to learn that there is one vacant, unused and unutilized square meter for each used, occupied and utilized square meter in many of the cities in the Kingdom. In other words, the hike in land prices is artificial due to which owning a decent house has become an uphill task for many Saudis.
There is a need for implementing rules and regulations for land usage in addition to establishing land utilization department to oversee proper use of lands, which are vacant and many of the owners just wait for the land prices to go up. It is fine because it’s their property but they don’t pay property taxes and this way, many large unused plots of lands are in the middle of already developed areas and these areas are becoming very congested while the owners of lands are not selling or developing these large areas in the middle of many major cities.
So, it is very necessary to implement a tax regime to utilize the large vacant lands. This will drive the prices down and make it easier for Saudis to own a home and help the government in planning for future. Isn’t it ironic that despite being a country with a huge landmass, we don’t find space to construct a school in some cities of the Kingdom?
The government has taken many steps to help citizens buy homes, which includes interest-free loans but without land reforms that include taxing landowners, it will be difficult to bring land prices down. Or if the government doesn’t want to impose any form of taxes then there should be rules about developing the land within a given period like for example five years and if the land is not developed then heavy taxes should be imposed.
There is another issue, I would like to highlight here. Many Saudis build their houses in such a way that it is hard to maintain. There are houses, which are more than 5,000 square meters. Due to the size of the houses, the consumption of water and energy increases. In other words, we waste many resources not out of necessity but due to old habits that have to be changed.
We must change our lifestyles keeping in view our future needs. We should think about our future generations. Many countries as I have mentioned adapted to the changing situation so we have no choice but to change and adapt. Our youths must be taught that oil will not remain forever.
Written by Abdulateef Al‐Mulhim. KSA Needs Land Reforms reprinted with permission of Arab News and Abdulateef Al‐Mulhim.
Master Shameer Ahmed Khan, son of Rauf Ahmed Khan and Sajida Rauf and grandson of Mr. Shafiq Ahmed Khan celebrated the completion of reciting the Holy Qur’an in Karachi with all his relatives last month. Shameer is ten (10) years old and is the eldest among his brother Jazim and sister Ambareen.
Mr. Shafiq Ahmed Khan is a permanent member and office holder of Saudi Aramco Ex-Employees Association (SAEEA). He is an Ex-Employee of Saudi Aramco Badge No. 73789 retired on December 31, 2007 from Media Production and Operations Department Dhahran after working for thirty years.
SAEEA wishes Master Shameer Ahmed Khan to recite the Holy Qu’ran on a regular basis with the Blessings of ALMIGHTY ALLAH.
Write to Shafiq Ahmed Khan on email@example.com or call him on his cell +92-300-298-7308.
Abdulateef Al‐Mulhim, Commodore, Royal Saudi Navy (Retired)
After the start of the Saudi economic boom in 1973, there was an influx of expatriates into the Kingdom.
They came from many different countries and spoke different languages.
But the common language of communication between Saudi nationals and other nationalities was English.
At the same time, those expatriates were in great need of following local and international developments and most important, the news about their home countries.
In 1975, there were no quick means of communication like the Internet.
In 1975, Saudi Arabia had many papers that covered news, but, those were in Arabic.
So, there was a great need for an English-language newspaper in the Kingdom.
In addition, with massive development projects under way, people outside the country were very keen to read news articles about the Kingdom and the Saudi point of view.
So, in 1975, Mr. Hisham Ali Hafiz and Mohammed Ali Hafiz came up with the brilliant idea of launching the first English newspaper in Saudi Arabia. And their dream became a reality.
Today, Arab News is one of the 29 publications produced by Saudi Research & Publishing Company (SRPC), a subsidiary of Saudi Research & Marketing Group (SRMG).
The paper was an instant hit from day one. It was a window on the world.
While professionals were involved in the making of its track record, the newspaper provided a training environment for many Saudi nationals and others in the field of journalism.
Arab News was one of the best public relations platforms for Saudi Arabia during the biggest economic boom and it highlighted the nation’s rapid progress to the outside world.
The newspaper gave extensive and in-depth coverage to important events that happened in the Kingdom and the region.
An example is the Iraqi invasion of Kuwait. Extensive coverage was given by Arab News of both Desert Shield and Desert Storm operations. After the terrorist attack of 9/11, Arab News was rated as one of the most authentic sources of balanced news about the region and Saudi Arabia.
At the end of the day, Arab News was a vital news source for millions of expatriates who work, live and travel to the Kingdom.
It is being used as a source of information for many foreign missions and companies.
My association with this paper has been since its launch in 1975. I used to read Arab News while on vacations in the Kingdom between 1975 and 1983 when I was attending schools in the US.
From that day I wanted to be part of it, but, I only decided to write for this newspaper after my retirement from the Saudi Royal Navy a few years ago.
At that time, the editor in chief was Khaled Almaeena who is considered as one of the leading media managers not only in the Kingdom, but the whole Arab world.
After he left, the Arab News had Abdulwahab Al-Fayez as its editor in chief. Abdulawahab Al-Faiz gave the paper a different approach.
And later on Mohammed Fahad Al-Harthi became the editor-in-chief, an experienced journalist.
After I started writing for it, I was overwhelmed with joy of the wide scope of readers the newspaper has. I have seen many articles from Arab News being republished and translated in many countries.
In other words, the Arab News became the window for Saudi Arabia.
And in a few months after its foundation, Arab News became the main source of reference to many think tanks because of its extensive coverage and analysis of events.
The most positive impact that Arab News has on Saudi society and millions of expatriates is that it promotes open dialogue between citizens and foreigners.
The newspaper became the voice of millions of expatriates. It provided a platform for them to express their appreciation and grievances.
It helped in the solution of many cases of expatriates and the issues were initiated by writers and readers of Arab News.
Some of the expatriates were even given the chance of reading part of the newspaper, written in their native language.
And most importantly, Arab News helped in healing the homesickness of many expatriate workers when they arrive in the Kingdom for the first time.
Arab News was and still is a very successful newspaper even in the era of Twitter and Facebook.
The amount of responses received reflects its popularity among readers from all over the world.
Now, 39 years have passed since Arab News was founded and it is still adapting to the many changes that are affecting the media industry.
Just a few years ago, it launched state-of-the-art new facilities at its main headquarters in Jeddah, Riyadh and Dammam.
We wish Arab News, the first English Saudi newspaper, and its staff many successes ahead.
Written by Abdulateef Al‐Mulhim. Arab News: A Turning Point for Saudi Media reprinted with permission of Arab News and Abdulateef Al‐Mulhim.
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.