Unlocking the potential of oil products in the MENA region
LONDON - As the end of the UAE Vision 2021 approaches, governmental moves to diversify the energy sector in the MENA region have been bolstered by a need to unlock the potential of every oil and gas molecule.
To extract the full potential from crude oil, refinery takes place. The industrial process involves extracting the crude oil from beneath the Earth’s surface and refining it into a variety of useful products, such as petroleum, kerosene, jet fuel, gasoline and other types of fuels.
Industry forecasts indicate that by 2040 the demand for natural gas will grow 40% and the demand for oil will increase by at least 10 million barrels per day. The increase in demand for these resources is the primary reason for driving investment downstream across the MENA region and over the next 20 years, projects valued at $283 billion are being implemented to help the region meet this ever-increasing demand for energy.
Following the decline in the price of oil in 2014, margins have fallen but the demand for refined products exceeds that of the refinery capacity. Therefore, it is important to consider the need for upgrades to the technology used at these refineries.
In the average refinery processes, less than half of a barrel of oil will contribute to its value; the remainder will be what is known as “negative crude oil” or “crack.” Converting this negative product into a valuable resource is the main reason for an upgrade to the refinery process.
Should upgrades not be implemented, because of the pace of refinery engagement, they will lose their competitive edge and have no choice but to close operations.
Christopher Hudson, president of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), said that as MENA producers focus on maximising value from the existing fields, developing resources have heightened interest onshore and offshore. This will have a knock-on effect in the investigating of diversifying and upgrading infrastructure and the revenue streams and new product lines.
“The headline speakers at ADIPEC are the same policymakers and business leaders whose decisions will shape the future of oil and gas. Their dialogue in Abu Dhabi will set the agenda for a thriving industry and economic growth, underpinned by people, partnerships, technology and bold and innovative thinking,” Hudson said.
Saudi Aramco, the largest spender in the region’s oil and gas sector, has $31 billion in investments under way, with $42.2 billion of projects spread across the three largest oil and gas companies in Kuwait.
“While producers in the Middle East continue to maximise value from existing fields, there is heightened interest in developing new resources, both offshore and onshore, as well as investing in upgrading and diversifying both infrastructure and products downstream to create new products lines and revenue streams. ADIPEC 2019 will be a catalyst for future growth and prosperity in the oil and gas industry,” Hudson said.
Algeria’s Sonatrach has disclosed plans to execute projects worth $10.8 billion with a $2.5 billion contract regarding the Hassi Messaoud refinery. Egypt’s Ministry of Petroleum and the Kuwait Oil Company have project plans worth $12.3 billion.
The largest pre-execution contract value lies with Iraq’s Ministry of Oil, where the projects carry a value of $19.5 billion, with $13.7 billion in the bidding phase.
ADIPEC 2019, scheduled for November 11-14, will bring industry thought leaders together. Inaugurated in 1984, ADIPEC is recognised as a leading industry conference and exhibition for oil and gas.
Forty-two oil companies, 145,000 visitors and more than 980 technical and strategic speakers from around the world will gather for the event that brings together more than 2,200 international exhibiting companies.
This year’s conference will demonstrate the evolution taking place in the energy sector, with “Oil & Gas 4.0” the main strategic conference of the event, hosting sessions exploring the development of technology and energy. Other sessions will examine partnerships for global energy conservation.