Category Archive: Pipeline
“Historic opportunities” is how president and CEO Khalid A. Al-Falih described the refining and chemicals potential for the Gulf region at the opening evening of the 9th Middle East Petrotech 2014 conference in Bahrain on May 18.
During his keynote address at the three-day conference, Al-Falih laid out Saudi Aramco’s downstream strategy and the company’s path to becoming a global petrochemicals player. “That includes implementing a new, holistic model for mega-scale downstream investments that will contribute to our own corporate profitability and growth, to the broader development and diversification of the Kingdom’s economy, as well as to the greater prosperity of our region for many decades to come,” he said.
Petrotech 2014 saw the coming together of global refining and petrochemicals experts, with the number of participants reaching almost 3,000. It was a fitting audience for the CEO as industry leaders listened attentively when he spoke about the downstream opportunities in the region, noting “the real value of our region’s downstream activities is best captured through the economic ripple effect of industrial clusters, value parks and the development of the knowledge-based R&D, engineering and service firms to support them. This will help satisfy three critical regional development objectives: greater diversification of the industrial base; stronger economic growth; and sustainable job creation.”Crucially, Al-Falih told attendees, the mentioned ripple effect will cause “new platforms for success,” which he said lay at the heart of Saudi Aramco’s downstream strategy.
The “new platforms” are characterized by five key elements: scale, integration, strategic location, operational excellence and technology. Al-Falih then went on to explain each element in detail. Beginning with scale, he explained to attendees that this would entail “constructing enormous refining and chemical plants whose mega-capacity allows them to capture operational and scale efficiencies and serve as the nuclei for the secondary and tertiary industries.”
Saudi Aramco’s unique upstream position means it is no stranger to constructing large scale facilities. “We’re used to building on an immense scale, as well as producing and processing vast volumes of hydrocarbons,” said Al-Falih. “Furthermore, mega-projects are one of our core competencies, and we’ve been extending that expertise into the downstream. So we’re well accustomed to dealing with the challenges that come with massive scale, as well as with reaping its benefits.”
Moving on to integration, the CEO described how the company would leverage those economies of scale by integrating refining, chemicals and lubes for both value addition and portfolio diversification.
“In our view, the future lies in integration across the entire value chain,” he commented. From feedstock to finished product, this would enhance “value addition opportunities created all along
the way for us, our investment partners, and the customers and product off-takers downstream from our investments,” Al-Falih said. Listeners were then told that the third element of strategic location would involve locating these facilities close to major markets with substantial long-term growth, but importantly, as Al-Falih pointed out, “while ensuring they are tied to strong marketing networks in those countries.”
Saudi Aramco is already expanding in the Kingdom and in high growth markets such as Asia to ensure its facilities and infrastructure are close to the centers of future demand. Al-Falih cautioned, however, that while scale, integration and location are vital elements to downstream success, on their own they would not be enough. This brought him to the fourth element of operational excellence, which Al-Falih said encompasses cost optimization and reliability as well as safety and environmental stewardship. While developing the right downstream investment portfolio to match the company’s business objectives and the Kingdom’s economic goals is critical, “we must also develop it in the right way for it to be globally competitive and therefore sustainable over the long term,” he said.
The final element of Saudi Aramco’s formula for downstream success is technology. The CEO said, “Focus on technical excellence and innovation begins with more efficient process technologies to produce cleaner products and maximize profitability.”
With global oil demand set to rise by a quarter over the next 25 years due to global demographic growth and rising standards of living, Al-Falih said he is confident that the prospects for the downstream industry are similarly bright, particularly as hydrocarbons must be converted into useful products before they are consumed. He said that the company will be one of the largest downstream players on the planet by volume, “but for us, that’s definitely not enough. Our refining capacity will also be linked to robust marketing networks with strong brands, and to world-scale petrochemical plants — in fact, a growing proportion of the hydrocarbon molecules we produce will go to chemicals, given that this sector is set to grow at multiples of global GDP.”
Attendees were also told that the company is a founding shareholder in the new Saudi Arabian Company for Industrial Investment, which focuses on manufacturing and conversion industries that rely on petrochemicals, plastics, fertilizers, steel and aluminium. For Al-Falih, the future workforce of Saudi Aramco is critical to the success of the company’s downstream strategy: “We are bringing into our workforce thousands of talented young men and women and investing in their education and development, to help deliver the bright future to which we aspire. Which is why, while I am very proud of our company’s downstream progress to date, I am even more energized by the achievements and developments that are still to come.”
More than 2,000 engineers and earth scientists recently gathered for the Society of Petroleum Engineer’s (SPE) Saudi Arabia Section 2014 Annual Technical Symposium and Exhibition.
The event, sponsored by Saudi Aramco and other oil and gas companies in the region, was opened by Amin H. Nasser, senior vice president of Upstream, and saw more than 80 technical papers presented addressing the latest technology developments.
Khaled A. Al Buraik, vice president of Petroleum Engineering and Development and chairman of the Board of Directors of SPE Saudi Arabia Section, highlighted the impetus behind the symposium to provide a platform for sharing experience and knowledge transfer between industry professionals. He also said that the event was designed to promote the latest research and technology developments to address the industry’s future challenges.
In his welcome note, symposium chairman Dr. Ahmed Alhuthali highlighted the leading role the symposium plays in promoting innovation and technology development in the region. He also praised the outstanding quality of the technical papers and presentations given in the symposium year after year.
This year’s theme, “Unattainable, Unsustainable, Unconventional Made Possible,” accentuates the oil and gas industry’s efforts to energize the globe and to deliver a sustainable future. The recent advances in various aspects of oil and gas industry, including digital energy, unconventional resources exploitation, drilling practices and ultimate oil recovery processes, show that the industry is reliable and can evolve to meet global demand.
Saudi Aramco professionals from across various upstream specialties were well represented at the symposium as they showcased Saudi Aramco’s leading role in innovation and technology development in the industry. Furthermore, Al Buraik added, “The oil and gas industry is uniquely positioned to capitalize on the strength of its human capital and financial resources to address future upstream challenges for a brighter tomorrow.”
Saudi Aramco’s engineers played a major role in the symposium’s 20 technical sessions. The event also involved a very vibrant executive panel discussion, which engaged leaders from the oil and gas industries in a lively discussion to address one of the most resonating questions posed to our professionals today, which is how to unlock the full potential of upstream technologies.
Saudi Aramco leads by example when it comes to environmental stewardship in the communities where it operates and its employees live.
This year, at the 10th annual President’s Award for Environmental Stewardship ceremony held April 23, Khalid A. Al-Falih, Saudi Aramco president and CEO, recognized four organizations whose environmental efforts have been exceptional. The ceremony was a sign that the company takes its role of Citizenship very seriously, putting words into plans and plans into action.
Departments receiving the award included Central Region Distribution Department and North Ghawar Producing Department (Operating Organizations), Central Community Services Department (Support Services Organization) and Ras Tanura Refinery Operations (Most Improved Facility).
In giving the awards, Al-Falih said, “I want to congratulate the departments that were recognized, their teams and all the employees behind them, and I hope by being recognized today it will give them reinforcement and positive feedback to go back and urge the organization to move further toward our destination.
“When you look at where we are today versus a few years ago, you come back feeling very content,” Al-Falih said. “The company is becoming a best-in-class steward of the environment.”
The annual awards are organized by the Environmental Protection Department (EPD) and are an opportunity for the company’s numerous departments to compete and showcase their commitment to environmental stewardship.
Organizations are judged according to their efforts in maintaining environmental compliance, enhancing environmental performance, raising awareness and pursuing environmental initiatives.
Although awards were presented to just four organizations, EPD manager Hesham Al-Musaiid said that the entire company has made incredible strides toward putting environmental stewardship at the forefront of all company operations. Some of the highlights were:
- The company has implemented zero discharge technology at 400 well sites, a 55 percent increase compared to 2013.
- Implementation of zero discharge technology is responsible for the recovery of 5 billion scf of gas, in addition to 200,000 barrels of crude oil.
- Thanks to ongoing flare reduction initiatives, the overall amount of flaring for the company remained under 1 percent of total raw gas production for the second consecutive year.
- “We have made good progress in implementing the corporate environmental strategies, and as a result, we have realized substantial gains on all environmental fronts, including protecting the air that we breathe and conserving our precious groundwater resources,” Al-Musaiid said. “The hard work and dedication of all company organizations will ultimately benefit us, our families and our community at large.”
Ultimately, Saudi Aramco’s people will be crucial to the company’s success in improving environment protection, both as individuals and collectively as a company, Al-Falih said. “The solution is leadership. It’s technology, it’s people, it’s investments, it’s all of us working together, the support organizations and the research organizations, taking ownership to ensure that we get there.”
The centerpiece stadium of King Abdullah Sports City (KASC) offers a compelling collection of many pieces of artwork and paintings, all of which have been produced by Saudi Arabians.
Adorning the walls are vivid, florid expressions of sport art, produced by Saudis of all ages and genders. There are splashes of color and energy everywhere.
For Basma Bader, Saudi Aramco’s project engineer for specialized materials and furniture, the sourcing of original Saudi artwork was a special and exciting challenge.
“Our main objective was to search for local Saudi artists who were interested in producing art meant for display exclusively in the stadium,” she says. “We were amazed by the number of interested artists of all ages, from 17 years to more than 60 years of age.
The end result is a remarkable collection of original Saudi art involving 54 national artists whose canvasses would sit comfortably in any gallery worldwide.
A very specific brief was developed for the sourcing of the Saudi artwork. It had to be all original artwork to be produced and delivered by Saudi artists. Any monument should give back to the people and share that energy. Secondly, the art should be sports related, football in particular. The only restrictions put on the brief for the art were for size.
Given a year to deliver a facility in alignment with King Abdullah’s vision of the transformative power of sport in the Kingdom’s youth, Saudi Aramco answers the call with a state-of-the-art stadium and celebrates at its inauguration this example of Safety, Excellence and Citizenship.
When King Abdullah made plans to have his vision of the transformative power of sport in the progress of the Kingdom’s youth realized, he entrusted Saudi Aramco with the mission. In just a year, the company delivered on the promise with a state-of-the-art stadium, part of the wider King Abdullah Sports City (KASC).
On May 1, company officials joined with the Custodian of the Two Holy Mosques and the highest-ranking officials in the Kingdom to celebrate a sports city that is a concrete testament to the company’s core values of Safety, Excellence and Citizenship. As the sun set on it became clear that the inauguration had been imbued with huge symbolic gravity. This was not the closing of the day, but rather the dawning of another in an inauguration emblematic of King Abdullah’s vision of the transformative power of sport in the progress of the Kingdom’s youth.
The moment was the climax of an inauguration ceremony wrapped around the King’s Cup final. It signified the King’s vision, and when the boy took flight again to land on the field, there was a general feeling that the magnificent stadium was more than just a stadium; it had been cast as a catalyst for the inspiration and well-being of a generation of Saudis.
At home across the Kingdom, the Saudi population watched the inauguration on their televisions. The landmark event was filmed by 100 cameras placed at vantage points around the stadium, with aerial footage adding to the drama of the ceremony.
Among the thousands who were present, a burning sense of civic pride and patriotism filled the glittering interior bowl of the stadium.
At the venue, King Abdullah was received by HRH Crown Prince Salman bin Abdulaziz Al Saud, the Deputy Premier and Minister of Defense; HRH Deputy Crown Prince Muqrin bin Abdulaziz Al Saud, Second Deputy Premier, Adviser to and Special Envoy of the Custodian of the Two Holy Mosques; HE Ali I. Al-Naimi, Minister of Petroleum and Mineral Resources and Khalid A. Al-Falih, president and CEO of Saudi Aramco.
A Project Management team from Saudi Aramco had delivered the stadium, part of a wider sports city, in just a year and in alignment with the King’s vision. On the day, the company’s corporate values of Safety, Excellence and Citizenship were manifested in a carnival celebration.
A detailed crowd management plan swung into action, covering every safety scenario and involving close collaboration between Saudi Aramco organizations and government agencies and security forces. The throngs of spectators would enter and leave the stadium safely and comfortably.
The stadium stood as an example of engineering ingenuity and excellence, and KASC as a shining example of the value of Citizenship. The tens of thousands of smiling young faces and the glowing pride on the faces of Saudi Aramco’s employees and management made this event one to savor for years to come.
The theme of transformation coursed through the event as the stadium’s interior morphed in a riot of bright colors and visual effects.
Old Jiddah town was re-imagined in stunning form with cutting-edge 3D mapping technology. Dancers and acrobats took to a constantly transforming field of play culminating in a 3D recreation of the stadium itself, with the efforts of Saudi Aramco’s Project Management Team during its construction projected onto it for all to see.
At the end teams of fireworks experts prepared a dazzling finale. The inauguration had been a success, a realization of the King’s vision in construction and theatrical form, a tribute to the determination and innovation of Saudi Aramco employees and an example of how Saudi Arabia is a can-do nation.