GCC States Must Add Value to Their Oil Wealth, Says Kuwaiti Business Leader
Abu Dhabi, UAE – GCC states must increase their investment in value-added oil and gas processing to support sustainable, long-term economic growth, one of Kuwait’s leading industry executives said.
Speaking during preparations for the world’s largest annual meeting of senior oil and
gas executives, the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), EQUATE President & CEO Mohammad Husain said better integration of upstream, midstream and downstream sectors of the industry must be a priority for national oil companies (NOCs).
This would ensure that countries with significant oil reserves continued to receive the
greatest possible benefit from their natural resource.
“Historically, downstream industries in the Gulf have been relatively underdeveloped,” Husain said. “Exports from the region itself were generally as crude oil, with value adding taking place outside the regional economy. However, over the last two decades, the region has emerged as a global hub for the production of chemicals and petrochemicals, and the industry has been on a consistent and exponential expansion drive, growing at an average compound annual growth rate of 12 percent.
“As the global market for oil, gas and petrochemicals further evolves, we need to bring more of the processed value of petroleum products within our own economy as means for greater diversification and industrial presence. This has become a high priority for Gulf NOCs.”
ADIPEC 2017 will, for the first time, include dedicated conference and exhibition sections for downstream industries, reflecting their increasing strategic importance to Middle East NOCs wanting to maximise income across the value chain.
Mohammed Husain will represent the EQUATE Group, a global petrochemicals enterprise headquartered in Kuwait, on a series of four Downstream Global Leader panel discussions, alongside senior executives from companies including Nova Chemicals, Petronas, Borealis, BP, Pak Arab Refinery, Cepsa and Total. There will also be dedicated technical sessions for professionals in downstream fields.
“The expansion of ADIPEC to include the downstream sector is very welcome,” said Husain. “Countries in this region face very similar challenges, and we must work together in partnership to ensure that our hydrocarbon wealth creates sustainable social and economic benefits for future generations.”
For more than 30 years, Kuwait has consistently used downstream investments to increase the value of its petroleum resources, operating a group of interlinked companies under the umbrella of the Kuwait Petroleum Corporation (KPC), including oil production, refining, shipping and petrochemicals.
EQUATE is a key part of these investments, 42.5 percent owned by KPC subsidiary, Petrochemical Industries Company (PIC), in a partnership with US-based Dow Chemical Company with an equal stake. Currently, EQUATE is the world’s second largest producer of ethylene glycol, which is used in a variety of applications including polyester fibres, and the first Middle East based petrochemical enterprise to benefit from US shale gas sources.
Another subsidiary of KPC, Kuwait Petroleum International (KPI), has refinery investments in Europe and Asia, supplies around 4,000 retail fuel stations, most under its own Q8 brand, makes direct sales of fuel and heating oil to retail and industrial customers, is a major supplier of diesel to the road transport industry, and a significant supplier of aviation fuel at about 40 airports worldwide.
KPC is now increasing its investment within Kuwait and the GCC. The under- construction USD 16-billion Al-Zour refinery will be a 615,000 barrel per day ultra- modern facility, to be operated by the recently formed subsidiary, Kuwait Integrated Petrochemical Industries Company (KIPIC). The refinery will be integrated with a planned petrochemicals complex and a terminal for LNG imports.
Elsewhere in the GCC, KPI has signed a joint venture agreement with the Oman Oil Company to develop a USD 7-billion refinery in Oman’s Duqm Special Economic Zone, which will handle both Omani and Kuwaiti oil.
“The NOCs that we host at ADIPEC are all pivoting towards the downstream sector as a strategy to maximise their return on their crude oil operations, and ADIPEC is committed to supporting and driving that transition,” said Ali Khalifa Al Shamsi, CEO of Al Yasat Petroleum Operations Company and ADIPEC 2017 Chairman.
“For Middle East countries, investment within the region is a particular priority, as the
planning, construction and operation of new facilities creates additional business for local suppliers and contractors, and employment opportunities for citizens.”
Held under the patronage of His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, hosted by the Abu Dhabi National Oil Company (ADNOC), and organised by the Global Energy division of dmg events, ADIPEC is one of the world’s leading oil and gas events, and the largest in Africa and the Middle East.
ADIPEC will be held at Abu Dhabi National Exhibition Centre from 13 to 16 November 2017.
