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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

GCC states must add value to their oil wealth

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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 per cent.


“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 per cent 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. Elsewhere in the GCC, KPI has signed a joint venture agreement with the Oman Oil Company to develop a $7-billion refinery in Oman’s Duqm Special Economic Zone, which will handle both Omani and Kuwaiti oil.


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