Last Friday saw the Saudi Aramco initiative iThra Knowledge, part of the King Abdulaziz Center for World Culture, wrap up its latest program of events in al-Hasa.
For 30 days, the program enjoyed a huge turnout of families and individuals of all ages, exceeding all expectations by topping an impressive 650,000 visitors, taking the grand total for the iThra Knowledge program in 2014 to 1.65 million attendees.
Omar Bader, the program director in al-Hasa, pointed out that this broke last year’s record and is part of a series of cultural and community focused programs that strive to reach 10 million visitors by 2020 in the Kingdom.
The closing ceremony saw Nasser A. Al-Nafisee, acting executive director of Saudi Aramco’s Corporate Affairs, attend.
“The program has achieved its goals in al-Hasa successfully as it had achieved them in Jiddah early this year and Dhahran late last year,” Al-Nafisee said. “Our goal is to contribute toward achieving the Kingdom’s vision in achieving a knowledge-based economy that is integrated among all parties and is based on a knowledge society. We strive to achieve sustainable prosperity and progress, leading to a better quality of life and culture for all the members of the society.”
He further noted that about 1.65 million visitors of all ages and classes benefited from the activities of this program in the areas where it has been held so far. “This is a clear sign that the program is achieving its goals steadily and strongly on the way to its completion under the ambitious plans,” he said.
Al-Nafisee expressed thanks and appreciation for all parties involved that helped organize these events at the King Abdullah Eco Park in al-Hasa. He also extended his thanks to the hundreds of volunteers who worked with the program officials from the King Abdulaziz Center for World Culture in organizing the activities.
World Heritage Day was celebrated in parallel with the closing ceremony by hosting a lecture from Dr. Mashari Al-Naim, Urban Heritage Center supervisor in the Saudi Commission for Tourism and Antiquities.
Al-Naim said the Center represents a quantum leap in the cultural world of Saudi Arabia. He stressed the importance of preserving heritage, saying that there is no point in celebrating it if we do not work on preserving it.
Emphasising that the Kingdom’s heritage includes not only urban structures, but crafts, clothes and all sorts of cultural products, Al-Naim added that heritage is no longer a luxury but a renewable economic source through reinvigorated crafts, a tool to teach citizens about their country and an essential part of the national identity.
Besides the lecture the audience could enjoy a short fly-through film featuring the engineering and designing of the unique architecture of the under-construction King Abdulaziz Center for World Culture.
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.
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.
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.