11th Industrialists' Conference TV Spot

Information provided by GOIC to Al Jazeera TV Channel as background to Eng. Rafat El Suwaimel’s interview.

GCC Petrochemical Industry
Tuesday, October 30, 2007

Global petrochemical Industry is facing lot of changes in the past few years. We have seen lot of challenges: prices of crude oil and gas have soared and continuous to do so; petrochemical margins in GCC touched record levels while the plants in the West are facing tough times; economies of China and India continues to grow and have substantial impact on the market and prices of petrochemicals, etc are a few worth mentioning here. And another challenge is the overheated EPC contract market which is pushing the project costs to record levels.

Participants in the global petrochemical industry must consider the impact of the capacity growth in the GCC and the Middle East on global markets. By the year 2010, the countries of the Middle East will produce above 20% of the world’s basic petrochemicals and polymers, such as ethylene and polyethylene.

Feedstock prices vary by country in GCC, but they all provide feedstock at attractive prices that provides an incentive to invest in the hydrocarbon production.  This enables a Gulf-based producer to manufacture and deliver petrochemicals, say, polyolefins at a price typically below 75% of that of cost in China and elsewhere.  But the demand comes mainly from China and to less extend from India.

Opportunities for continued and future petrochemical development include exploiting the energy advantage to a greater degree. This means that more capacity in energy intensive chemicals. The development further along the petrochemical value chain will be driven by an export orientation. 

Most of the GCC countries like Saudi Arabia, Kuwait, Qatar, UAE already in place healthy and growing base chemical production that utilizes methane, ethane, and gas liquid feedstock in petrochemical units. These plants are of global size and utilize best and modern technologies. With base and secondary chemical production already flourishing, producers have begun exploring tertiary industries. This can offer diversity and better value addition to the industry. They are actively collaborating with petrochemical industry participants to gain access to technology and expertise.

Good infrastructure can be found in large industrial cities, such as Jubail, Yanbu ΄ , Messaieed and Ras Laffan. The GCC country governments have made the investments in ports, roads, and buildings to promote the industrial growth. However, space in the existing industrial cities is becoming limited due to high growth rate witnessed recently , and additional development will be necessary to support future growth. 

On the financing side, strong growth has occurred in the Middle East banking sector in the past decade. The equity markets have also emerged in all GCC countries. Foreign direct investment (FDI), another important economic driver, has grown modestly during the past decade. It can be evidenced from joint ventures formed with foreign companies such as Shell, ExxonMobil, Dow, Total Petrochemicals, and ChevronPhillips.

The Middle East will exert an increasing influence on global petrochemical markets over the long term due to its advantaged feedstock position. Further petrochemical development will lead to growth in tertiary, energy-intensive and export-oriented conversion industries.

ABU DHABI TO HOST CONFERENCE ON PETROCHEMICAL INDUSTRY
Abu Dhabi, Sept.18, 2007

Under the patronage of Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, with the attendance of their Excellencies the ministers of industry in the GCC member states, Abu Dhabi Emirate hosts the GCC 11th Industrialists' Conference in January 2008.

The conference is organized by the Gulf Organization for Industrial Consulting in cooperation with some industrial stakeholders in the United Arab Emirates.

The conference targets to create a vision of petrochemicals industry in the GCC in 2020.

The two-day conference agenda includes an open discussion session with their Excellencies the ministers of industry in the GCC, alongside 4 work sessions, subsidiary workshops, further to the accompanying exhibition.

From a statistical perspective, statistics indicates that the average of gulf investment value growth in chemicals and petrochemicals between 2000 - 2006 was 5percent, as it increased from USD 70 billions, thus constituting 59percent of the total gulf investment in the processing industries which equals some US D 118.3 billions. On the other hand, workforce in this sector reached some 163,134 workers in 2006, with a growth rate of 4.9percent since 2000 when there were 122,735 workers.

The petrochemicals industry is considered amongst the dynamic industries due to the multiplicity and density of its products and complexions as well as its wide rage of applications in the different fields of modern life. As such, this conference provides the opening for GCC member states to restructure their processing industries in a way that helps them achieve more integration, interrelation and balance, and thus providing it with more endurance and competitiveness in the global markets.

ABU DHABI TO HOST CONFERENCE ON PETROCHEMICAL INDUSTRY
Sep 18, 2007

Abu Dhabi, Sept.18, 2007 (WAM):Under the patronage of Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, with the attendance of their Excellencies the ministers of industry in the GCC member states, Abu Dhabi Emirate hosts the GCC 11th Industrialists' Conference in January 2008.

The conference is organized by the Gulf Organization for Industrial Consulting in cooperation with some industrial stakeholders in the United Arab Emirates.

The conference targets to create a vision of petrochemicals industry in the GCC in 2020.

The two-day conference agenda includes an open discussion session with their Excellencies the ministers of industry in the GCC, alongside 4 work sessions, subsidiary workshops, further to the accompanying exhibition.

From a statistical perspective, statistics indicates that the average of gulf investment value growth in chemicals and petrochemicals between 2000 - 2006 was 5percent, as it increased from USD 70 billions, thus constituting 59percent of the total gulf investment in the processing industries which equals some US D 118.3 billions. On the other hand, workforce in this sector reached some 163,134 workers in 2006, with a growth rate of 4.9percent since 2000 when there were 122,735 workers.

The petrochemicals industry is considered amongst the dynamic industries due to the multiplicity and density of its products and complexions as well as its wide rage of applications in the different fields of modern life. As such, this conference provides the opening for GCC member states to restructure their processing industries in a way that helps them achieve more integration, interrelation and balance, and thus providing it with more endurance and competitiveness in the global markets.

"Oil prices are at their peak now, and with the development of the petrochemical industry, we can capitalise on the rewards to initiate and support other industries that seem more promising in the longer term," said Dr Ahmad Khalil Al Motawa, GOIC secretary general, referring to the organisation's plan to support the knowledge industry in the GCC.

"None of the Arab countries is taking a leading role in the Information Technology (IT) revolution of this age, and the reason is that none was prepared, and what we intend is to prepare ourselves to play a substantial role in the knowledge industries revolution, which is already developing," he said.
The conference will present a platform for interaction between officials, experts and private sector players, opening the door for investment opportunities for the private sector in the growing petrochemical industry in the region.

"The energy sector has been a public concern for a long time, but now many GCC countries are opening the door to the private sector to participate," Al Motawa added.
In the UAE, various energy companies were passed to public ownership, including Aabar Petroleum, and Abu Dhabi National Energy Company (Taqa).

With massive petrochemical projects in the pipeline, opening the door to the private sector's participation can provide another element for success.

"Oil reserves in the region will last 60 to 100 years, according to forecasts, while the petrochemicals sector has grown by five per cent annually since the beginning of 2006, with investments exceeding $70 billion," Al Mutawa said.

The involvement of the private sector in the development process comes in-line with the objectives of the UAE's strategic plan, which was revealed by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, according to Khouri.
"We have a cluster of three projects worth $1 billion that are in the planning phase in coordination with an international banking institution, with the objective of opening the door to the private sector's participation," Al Mutawa added.

The 11th round of the conference will be attended by all the ministers of industry in the Gulf, as well as former heads of state, in addition to industry experts from all over the world.
"We are also looking forward to receiving positive participation from the UAE side, including the Abu Dhabi National Oil Company," Al Mutawa added.