Khalid A. Al-Falih, President and CEO of Saudi Aramco, recently visited Beijing to attend the China Development Forum (CDF) 2014 and to meet key stakeholders.
Over the course of his three-day visit, Al-Falih reiterated several times the strategic importance of the Chinese market. According to Al-Falih, China, the world’s largest emerging economy and already the largest exporter, will be a key focus for Saudi Aramco in the decades to come. And Saudi Aramco, as China’s reliable oil supplier, “remains strongly committed to China’s energy security and the associated oil-related investments,” Al-Falih said.
Among key stakeholders were the business partners China Petrochemical Corporation (Sinopec Group) and China National Petroleum Corporation (CNPC), Chinese media and Aramco Asia employees in the Beijing office. Al-Falih was accompanied by Ahmed A. Al-Subaey, executive director of Marketing, Supply and Joint Venture Coordination.
At the CDF, Al-Falih addressed an audience of China’s policymakers and economists as well as executives from the top 500 international enterprises. In his speech he offered Saudi Aramco’s strong support to Premier Li Keqiang’s recent declaration of war on pollution, which the Chinese Premier called “nature’s red light warning against the model of inefficient and blind development”.
Al-Falih commented on China’s energy demand growth since 1970 and noted that China has achieved a phenomenal improvement in energy intensity over the years. Compared with 1970, Al-Falih said “China’s economy is 40 times larger today in real terms, while it consumes only 12 times as much energy as in 1970.”
The current picture, however, is not as positive in terms of the energy supply mix, Al-Falih noted.
“My friends, to turn nature’s red light to green, I believe there are three transformative paths that must be triangulated as China develops truly effective and sustainable low carbon development policies,” Al-Falih said as he went on to outline these paths.
First, China’s economy will need careful rebalancing toward greater emphasis on services and more advanced, less energy intensive industries. Achieving higher energy efficiency will be a key opportunity. Critical to this is the deregulation of the energy market and energy pricing, as market signals are the most effective means of attracting investment and encouraging consumers to be judicious in energy use.
Second, the energy mix of stationary applications will need suitable rebalancing, with a larger role for gas beyond the current six percent in China, which is about a quarter of the global average, and a determined switch to clean coal must be one of China’s highest priorities.
Third, given China’s expanding mobility needs, a steady and healthy rise in transportation energy is likely, and oil will continue to dominate the transportation sector because of multiple hurdles facing electric and fuel-cell alternatives. This means China’s oil demand growth is expected to remain fairly strong. This only reinforces the value to China of being able to access reliable supplies of oil from major producers such as Saudi Aramco.
“I firmly believe that sustainable economic development and low carbon development are not mutually exclusive,” Al-Falih said. “At Saudi Aramco, we are committed to supporting China’s efforts with both, and by doing so, help turn nature’s red light to green.”
Importantly, this year’s CDF, which featured the theme “China: To Comprehensively Deepen Reform,” provided an occasion for meeting and sharing views with key government officials at a crucial time in light of China’s ongoing comprehensive reform, especially in the energy sector. This included a meeting between Al-Falih and Chinese Premier Li Keqiang, along with a group of corporate executives. In addition, Chinese Vice Premier Zhang Gaoli and many ministers of China’s State Council spoke at the opening ceremony, highlighting China’s plans for comprehensive reform.
The many other sessions held during the forum also provided an excellent opportunity to gather valuable insight into the direction and priorities of China’s development from a diverse range of perspectives, which will help guide Saudi Aramco’s own development plans for China.
During his stay in Beijing, Al-Falih also had business meetings with Chinese business partners to further enhance the partnerships. In his meeting with Fu Chengyu, chairman of Sinopec Group, the two recounted the two companies’ cooperation both in the Kingdom and in China. Al-Falih and Fu Chengyu also explored areas where the two companies can further expand their cooperation. Al-Falih also had a business meeting with CNPC chairman Zhou Jiping, during which the two exchanged views on further expanding the two companies’ cooperation.
Al-Falih gave an interview to China Business News, one of China’s leading business media outlets. During the interview, Al-Falih further elaborated on Saudi Aramco’s commitment as China’s most reliable oil supplier. He said he believes that the ongoing free trade agreement talks between China and the Gulf Cooperation Council will bring the energy trade between China and Saudi Arabia to a new height. In addition to Saudi Aramco’s commitment as China’s most reliable oil supplier, the company is also looking forward to more oil-related investments in China, said Al-Falih.
Saudi Aramco and Dhahran Techno Valley (DTV) recently signed an agreement that will provide land to Saudi Aramco for building the headquarters of the Saudi Aramco Entrepreneurship Center, or Wa’ed, one of the most important initiatives for nurturing entrepreneurship in the Kingdom.
The agreement was signed at the King Fahd University of Petroleum and Minerals (KFUPM) in Dhahran in the presence of HE Dr. Khalid Al-Sultan, director of KFUPM and chairman of the DTV Board, and Abdallah I. Al Saadan, senior vice president of Saudi Aramco Finance, Strategy and Development. Also in attendance was Hany K. Abu Khadra, executive director of Saudi Aramco‘s Community Services, and Dr. Halim H. Radwan, designated executive president of DTV.
“This will add a qualitative and integrated addition to existing research centers in DTV and interactions between those centers and KFUPM’s faculties and students,” Al-Sultan said.
He indicated that the agreement boosted the attractiveness of DTV as Saudi Aramco, the world’s leading energy enterprise, joins other international companies in establishing centers at DTV.
The establishment of the Wa’ed Center at DTV will support Wa’ed’s goals of transforming young people’s ideas for small enterprises into a successful investment reality through cooperation with research centers at DTV and the scientists of KFUPM, Al Saadan said.
“The center will work amid an integrated atmosphere of scientific and applied innovations that will lead to the emergence of enterprises in various high and economically feasible fields to contribute to the diversification of the national economy,” Al Saadan said, adding that the center will help create more qualitative and sustainable job opportunities with its activities and training for entrepreneurs and financial and nonfinancial support of feasible business ideas.
The agreement represents a major step in the strategic cooperation between Saudi Aramco and KFUPM, represented here by DTV, and will enhance the Kingdom’s efforts to achieve a knowledge-based society and economy.
The agreement is also considered a qualitative addition to the existing cooperation between KFUPM and Saudi Aramco in supporting entrepreneurship, which culminated last year with Saudi Aramco’s launching of an incubator for innovations and entrepreneurship at KFUPM.
The lights went out for over an hour on March 29 at King Abdullah Environmental Park in Al-Hasa, as Saudi Aramco’s iThra Knowledge Program joined 7,000 cities around the world in a remarkable environmental event: Earth Hour 2014.
“The goal of participating in Earth Hour is to raise awareness about the importance of conserving energy and instilling the concept of a sustainable environment in line with Saudi Aramco’s permanent commitment to environment protection and the company’s many related initiatives,” said Omar Bader, director of the iThra Knowledge program created by Saudi Aramco’s King Abdulaziz Center for World Culture.
The symbolic Earth Hour event was designed to draw attention to protecting the world’s environment. The eighth year of Earth Hour broke all previous records; the symbolic hour was celebrated in 162 countries and more than 7,000 cities worldwide. Earth Hour is a global awareness initiative of the World Wildlife Fund (WWF), one of the world’s largest conservation organizations.
“Earth Hour is a global event that concerns everyone,” said Bader. “At iThra Knowledge, our programs show how much we care about the environment and its protection, so we think it’s important to take part in global events like this one. That is why we took part in Earth Hour by dimming the lights in the Saudi Aramco iThra Knowledge Program.”
With over 15,000 visitors attending the program that night, program management decided to cut down energy consumption in the park by reducing lighting usage by 60% and overall energy use by 25%, while ensuring maximum levels of safety, the number one priority for program organizers and Saudi Aramco.
iThra Knowledge is hosting several events and competitions with a goal to raise awareness about conserving energy and protecting the environment. Bader pointed to the Children’s Art Contest, with the theme ‘Let’s Green It,’ and the Energy Efficiency Pavilion with its goal to inspire a better future for coming generations. Other activities include an Energy Efficiency Pavilion and the oil exhibit “Ghawar Oasis,” with its focus on corporate environmental responsibility.
Aramco Asia Company consists of three companies — Aramco Far East Business Services Co. Ltd., Aramco Asia Japan Company and Aramco Asia Korea Company — and has offices in all three countries. Their existence shows Saudi Aramco’s commitment to the Asian region. They offer a range of support services, including marketing oil and chemical products, investments, career development and public relations.
As Saudi Aramco continues to expand into the chemicals business, Aramco Asia provides huge opportunities for the company and its Asian partners. The region accounts for two-thirds of Saudi Aramco’s oil exports.
Sulaiman M. Ababtain, president of Aramco Asia, the Beijing-based company with support branches in Shanghai and Xiamen, said, “Aramco Asia will serve as a cultural exchange gate between the Kingdom of Saudi Arabia and the Far East in addition to being a business and market information center.”
China, Japan and South Korea are among the most important exporters of construction materials and services to Saudi Aramco. Such commercial transactions have contributed to the growth of the Saudi economy and helped support the growing economies in Asia.
“Establishment of Aramco Asia will help foster cooperation in the area,” Ababtain said. “This step will also send a very clear message of Saudi Aramco’s commitment to securing long-term partnerships in the area and its intention to stay as Asia’s most reliable supplier in the future.”
Saudi Aramco has huge investments in Asia, and Aramco Asia manages its shares in these investments. In China, Aramco Asia was assigned to oversee the company’s interests in the Fujian Refining and Petrochemical Company and Sinopec SenMei Products Co., as well as the company’s interests in two joint ventures, S-Oil in South Korea and Showa Shell in Japan.
Ababtain has more than 25 years of service with Saudi Aramco. Before his appointment as president of Aramco Asia, he was manager of Domestic Projects, Domestic Joint Ventures, Product Sales and Marketing, and Crude Oil Sales and Marketing departments, and also was vice president of Planning at Petron, then a joint venture between Saudi Aramco and the Philippine National Oil Company.
“We are confident of the steady growth of these businesses, and Aramco Asia will develop the required work plans and strategies to accommodate future growth,” he said. “Growth of the Asian commercial business will contribute to achieving Saudi Aramco’s strategic goal to become a fully integrated global energy and petrochemical enterprise by 2020. Moreover, Aramco Asia is planning to market other petrochemical products in Asia, such as aromatics produced in Saudi Arabia, to ensure stable client bases in the region.”
The Asia region is becoming a major supplier for Saudi Aramco. “We are confident of establishing a reliable supply chain for materials and services,” Ababtain said. “We have already identified more than 150 first-class Chinese suppliers for Saudi Aramco.”
Aramco Asia will purchase materials to support its own offices and Saudi Aramco’s businesses, as well as developing market reports on basic commodities. Aramco Asia will also identify potential suppliers, manufacturers and service providers, all while fostering business opportunities for Saudi and Asian companies. The company also serves as Saudi Aramco’s extended arm for engineering services, project management and information technology in Asia.
Despite the fact it has existed less than two years, Aramco Asia has made quantum leaps in growth. Regional partners welcomed the formation of Aramco Asia and see it as an important step to facilitating opportunities for the Kingdom and Far East.
As do all Saudi Aramco affiliates, Aramco Asia demonstrates social responsibility through strategic initiatives. The company has signed memoranda of understanding for cultural and research cooperation between Aramco Asia and the King Abdulaziz Center for World Culture on one side and prominent culture, research and intellectual houses in China, including the Chinese National Theater of Arts.
Waleed Al-Helal, Public Affairs manager at Aramco Asia, said, “The social responsibility team actively works to activate and implement Saudi Aramco’s social responsibility strategies that are appropriate to social work practices in China, Korea and Japan. In China, for example, we were keen to launch social responsibility initiatives in areas where the company’s joint ventures are found in Fujian.”
Speaking of his public relations role, Al-Helal said, “I worked during the last months on attracting Chinese trained talents in media and public relations who have a good command of oral and written Chinese and English. The team is working in coordination with Dhahran Public Relations on developing and launching websites in English and native languages for Saudi Aramco’s subsidiaries in Asia.”
Aramco Asia’s Marketing and Joint Projects Department plays a pivotal role in developing opportunities. The department is staffed by 16 employees of different nationalities; most are experienced Chinese nationals. In coordination with organizations in Dhahran, the department assesses new investment opportunities in Asia, ensures the crude oil needs of customers in China are met, coordinates joint venture operations administration, conducts financial analysis and economic feasibility studies, and keeps track of developments in Asian petroleum markets.
“We exert continuous effort to accelerate the implementation of investment opportunities to achieve Saudi Aramco’s strategic goals to become the world’s leading integrated energy and petrochemicals company,” said Rakan Tarabulsi, manager of Marketing and Joint Projects.
Fiona Xanq joined Aramco Asia in January 2013 as an investment analyst. “The company cares for its employees and their family members,” she said. “We also receive training courses in work fields, which require professional development. For example, I worked as an investment analyst and had no experience in oil and gas businesses. However, the company gave us the opportunity to attend conferences and training courses in this field.” She noted that the work atmosphere at Aramco Asia is marked by professionalism, cooperation and a sincere desire to achieve more success for the company.
As part of Aramco Asia’s operations, the Purchasing, Contracting and Logistic Services Department manages the purchase of materials and preparation of contracts, in addition to qualifying and registering suppliers and contractors. The department provides contracting services for China, Japan and South Korea. The unit’s supervisor, Wail A. Al-Sahlawi, said, “Since we are still a new company, we needed considerable contracts, including contracts for expansion of offices, PR companies, establishment of the website, communication support, IT, research and development center and other contracts. This is in addition to many logistical operations, especially for transporting petrochemicals and inspection and quality contracts.
“Because we were tasked with the establishment of a new contracting unit in Asia, we had to search for competent and trained local talents to process contracts according to company policy and Chinese law,” Al-Sahlawi said. “I have become quite confident of the employees’ intelligence, innovation, professionalism and loyalty. For example, I am impressed with the excellent performance of the three Chinese female employees working with me now. When I assign a task to one of them, she doesn’t do it according to the highest professional standards only, but exerts extra effort to improve the work quality.”
Karen Yuan of the Contracting Unit processes contracts. She said her work is an extension of her previous work at IBM. “After reviewing the scope of work of the new contracts required by various departments at the company, we invite interested contractors and companies to bid. After receiving their bids, we review them and award the contract to the winning company or contractor.
“As a team, we have the enthusiasm and loyalty to work with dedication. For example, we work on 16 or 18 contracts simultaneously. Even though this poses a great challenge, especially when tackling intricate details of each contract, with our perseverance and enthusiasm we manage to conclude these contracts accurately, which makes us enjoy the thrill of accomplishment,” Yuan said.
Industrial Relations functions at Aramco Asia China are increasing, with responsibility for personnel in China, Japan and South Korea – handling training, maintenance, loss prevention and transportation – in short, overseeing many aspects of the employees’ work and life as well as for students Saudi Aramco sponsors at Asian universities.
“We work hard to continuously recruit new employees in response to the company’s business expansion, particularly in new businesses such as chemicals,” said Farhan Al-Rashid, Industrial Relations manager at Aramco Asia-China. “We have contracted eight companies to provide recruitment services to help us find appropriate employees.”
Al-Rashid started work in China in March 2012. “Expatriate life in China is complex; everything, searching for a residence, signing the lease, the type of foods and searching for restaurants. If an employee wants to buy a car, he has to place his name on a waiting list. … Even after receiving the car, you will receive sometimes a text message telling you that you will not be able to drive your car tomorrow or on a certain day of the week to avoid causing heavy traffic on roads.”
Khalid A. Al-Radi works in the Joint Venture Coordination Department as a financial analyst. In 1998, he was sent to South Korea to learn the Korean language and started working in S-Oil in 1999. “Learning Korean is difficult.”
But after learning Korean, he was able to learn more about Korean culture, which helped him understand the community and helped greatly in his work. “To understand the mentality of a person you have to learn his or her language,” he said.
“I used to work in financial planning at S-Oil and later I worked in all financial and accounting departments. At that stage, I was assistant to the company’s president of Finance from 2005 to 2007 and then returned to Domestic Joint Ventures in Dhahran,” he noted. “I worked for several years there, then moved in 2011 to work in the company’s office in Hong Kong as head of the financial analysis team in the Joint Venture Department. After six years we were relocated to China after the establishment of the office here.”
In 2012, Kamal Garatli arrived at Aramco Asia to establish a department for engineering, technical services and IT in South Korea, Japan and China. “All equipment, devices and tools must be carefully inspected. That is why we have 17 inspectors in addition to inspection companies employing more than 349 inspectors, which we have signed contracts with to perform the required work. We help them learn Saudi Aramco’s specifications and standards.”
The department’s tasks also include establishment of a research center in China to conduct research in petroleum engineering, geophysics and geology.
“We found the location for constructing the center,” he said. “Then we began searching for an engineering company qualified to execute this vital project. The company will first prepare the design, and following approvals, construction will commence.“
Sirin Lu is the academic adviser responsible for Saudi Aramco’s students at China Petroleum University – their studies, achievements and everyday living. There are nearly 75 students in China, Korea and Japan, and another 52 are expected to join them.
“I feel personally responsible for them,” said Lu. “I am so close to them, inquire about their needs and help them solve their problems and overcome any difficulties. My work is very interesting. … Those students are the pillars who will make a difference in the future.”
She said she helps students select courses and teachers and talks to faculty of the language institute or university to communicate points of views between students and the university. “Judging from experience, studying the language may take 18 to 24 months due to the difficulty of the Chinese language. … Saudi Aramco’s students are excellent and industrious in their educational achievement, which is gratifying. Some of them have won awards for fluency in Chinese,” she said.
Hasan Al-Ghamdi, head of Aramco Asia-China Finance Division, is in charge of petrochemical sales and marketing, as well as office expenditures. In all, 24 employees work with Al-Ghamdi: six in Xiamen and 18 in Beijing, where all 18 are Chinese.
“We are responsible for adhering to Chinese tax regulations and ensuring we follow those regulations. We make sure all our accounting and tax procedures are highly accurate because mistakes or omissions are intolerable in our work.”
Mahir Al-Ayadi works in internal auditing. His group provides an accurate and independent audit of the company’s governance affairs, risk management and internal regulations.
“From the start of my work in China,” said Al-Ayadi, “I was eager to build relations that transcend formal work boundaries to the human side, especially since we know that the Chinese people, by nature, attach great importance to friendship and acquaintance of their customs and language in processing and facilitating work. I have a wide network of relationships that have enriched my personal and work experience, and I advise my co-workers to do the same,” he said.
Al-Ayadi joined Saudi Aramco in 2002 and worked in the Internal Audit Department until he was nominated to be acting chief auditor in the Fujian Refining and Petrochemical Company. He worked there from 2007 to 2012, where he contributed to establishing an audit unit. During his work in China, he obtained his internal audit certificate and is considered among the first expatriate auditors in China to receive this certificate. In April 2012, he was appointed chief auditor in Aramco Asia, where he laid the foundation for an audit department that now carries out all auditing tasks covering all of Aramco Asia’s operations in China.
Sofi Chi is supervisor of Public Affairs at Aramco Asia-Beijing. Speaking about the nature of her work, she said, “My mission is to implement Saudi Aramco’s public relations strategies after tailoring them to suit Chinese society, whether at work, or in social outreach with government or private entities. I also supervise employees, especially the newly hired, and try to pass my previous experiences to them. I organize visits for executives to Beijing and the company’s other operation areas. I am proud of my contributions to the success of the signing of the agreement between the King Abdulaziz Center for World Culture and the Chinese National Theater for Arts and Aramco Asia.”
Her work, as with all Aramco Asia employees, is strengthening the connection between Dhahran and its Asian partners.