< Previousspent $1.36 billion (AED 5 billion) on more than 400 local Micro, Small, and Medium Enterprises (MSMEs) through the program. ADNOC’s ICV program is aimed at nurturing new local and international partnerships and business opportunities for the private sector, fostering socio-economic growth, and creating job opportunities for Emiratis. Launched in January 2018, the program has driven more than $20.7 billion (AED 76 billion) back into the UAE’s economy and created over 2,000 private-sector job opportunities for Emiratis. Over 4,200 suppliers are certifi ed in the program which has more than 20 certifying bodies. Recently, H.H. Sheikh Khalid bin Mohamed bin Zayed Al Nahyan, Member of the Abu Dhabi Executive Council and Chairman of Abu Dhabi Executive Offi ce, has chaired a meeting of the Executive Committee of the Board of Directors of the Abu Dhabi National Oil Company (ADNOC). During the meeting, held at ADNOC Headquarters, Sheikh Khalid reviewed ADNOC’s plans to support the UAE’s 2050 net-zero emissions target, and endorsed the company’s plans for new energy opportunities. So far in the current year, ADNOC has awarded over $272 million (AED40) billion worth of procurement contracts to date in 2021 across its business, with an In- Country Value (ICV) of 64%. As part of ADNOC’s 2030 strategy, the company is working to remain one of the lowest-cost producers and lowest carbon emitters in the oil and gas industry as it increases its crude oil production capacity, enables gas self- suffi ciency for the UAE, expands its downstream business, and strengthens its trading capabilities. Saudi Arabia’s IKTVA/Nusaned program Saudi Arabia launched its localisation program in 2015 with a view to lead in localisation and spur new opportunities for a youthful and skilled workforce. The stated intent of the program was to localize 70% of the company’s supply chain’s content by 2021, while raising energy related exports to 30%, in the process of creating thousands of jobs for young Saudis. As per Aramco, the synergy driven by the IKTVA program has delivered greater levels selection, the development of UAE Nationals, and to promote the localisation of critical functionalities in the oil and gas industry. The program achieved a thumping success in initial and got a huge shot-in- arm from the government’s announcement to drive $43.6 billion (AED160 billion) back into the UAE economy over the next 5 years as it executes its capital expenditure (CAPEX), which is recently approved by Abu Dhabi’s Supreme Petroleum Council (SPC). While announcing capital expenditure for the next fi ve year, Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO says, “ICV is a powerful mechanism for ensuring more economic value remains in the UAE from the contracts we award. “In short, we want to make sure that what we spend here, stays here, and helps stimulate the growth of the private sector and local economy.” Outlining the achievements recorded by the ICV program, Dr Al Jaber stresses ADNOC is doubling down on ICV to deliver greater value to the UAE. In 2020, ADNOC SABIC Head Offi ce. 20 Refi ning & Petrochemicals Middle East November 2021www.refi ningandpetrochemicalsme.com In-Country Valueof prosperity for the Kingdom, the local business community and Saudi Aramco with 56% of procurement spent in-Kingdom in 2019. The synergy driven by the iktva program has delivered greater levels of prosperity for the Kingdom, the local business community and Saudi Aramco with 56% of procurement spent in-Kingdom in 2019. According to Saudi Aramco President & CEO Amin H. Nasser “Through eff ective governance, iktva has created infrastructure, streamlined processes, and built capabilities that improve return on investment and leverage greater value for our company.” SABIC’s journey of investing in local content began in January 2017, when it established its Local Content Business Development Unit (LCBDU). The LCBDU provides a platform to stimulate investment in the Saudi economy by supporting programs, investors and entrepreneurs seeking to spur the Kingdom’s economic growth. In order to achieve the ambitions of SABIC’s LCBDU, we initiated ‘NUSANE’– our fi rst integrated localization program. NUSANED is central to our localisation program and its aims to bring together the public and private sector to help small and medium-sized enterprises (SMEs), says SABIC. Through its support to local business and procurement initiatives, it is helping SMEs that could help in reducing unemployment. By supporting local capabilities, the chemical major is also contributing to the growth of GDP, the company says. SABIC’s Nusaned program and the ecosystem have helped in boosting the contribution of the private sector to the GDP by about US$ 1.6 billion in 2020 alone. Besides this, it has also generated over 7,900 jobs for citizens during the year. The chemical giant claims that in 2020, 435 new local products were developed through its NUSANED support and has facilitated more than 2000 investment registrations. It has successfully developed more than 120 business cases. SABIC global partnerships and presence in more than 50 countries help attract investments and bring international expertise to Saudi Arabia. The chemical giant has also set up a private equity investment company ‘Nusaned Investment’ which is wholly owned by SABIC and has been mandated to invest in the growth of the Kingdom’s local content and industry. In 2020, the company started working on its ambitious plan by forming a joint venture with the SCHMID Group of Germany for developing and manufacturing utility-scale Vanadium Redox Flow Batteries. “Supported by research and development facilities in Germany and Saudi Arabia, and leveraging on SABIC technical capabilities, the JV is in the process of setting up a gigawatts (GW) scale manufacturing facility in Jubail, the fi rst of its kind in the region,” says SABIC. Once operational, the facility will give a push to the fast-growing utility-scale energy storage segment and will also serve as a power storage platform to facilitate the growth of renewable energy, a key pillar in the Kingdom’s 2030 vision, it says. Oman’s ICV programme Oman launched its version of the in- country-value (ICV) programme offi cially in late 2013 though a previous smaller version of its localisation program known as the local content requirement was in operation since the late 70s. The Omani government defi nes ICV as “the total spend retained in the country that benefi ts business development, contributes to human capability development and stimulates productivity in Oman’s economy”. The ICV scheme comprises a comprehensive set of policies designed to maximise this sum and was aimed at increasing the total contribution from 18% to 32% by 2020. According to the Oman’s Oil and Gas Ministry, there is the potential for $64billion of additional opportunities in the oil and gas value chain between 2013 and 2020. State-owned Petroleum Development Oman is the frontline torchbearer in the Sultanate as it was the fi rst operator in the Sultanate to develop and implement the ICV data collection system. However, later when six affi liated companies of the state-owned Oman Oil Company and Orpic group were merged to create a new brand identity OQ, it become leading implementer of the ICV program. Concluding remark Authorities in the region are pumping a huge amount of money to boost the local economy and is certainly helping in generating employment but experts are pointing certain missing links, which are preventing it from realising its full potential ICV programs are aimed at increasing the loal contribution to economy. 21 Refi ning & Petrochemicals Middle East November 2021www.refi ningandpetrochemicalsme.com In-Country Value22 Refi ning & Petrochemicals Middle East November 2021www.refi ningandpetrochemicalsme.com Middle East Energy Awards MIDDLE EAST ENERGY AWARDS POSTPONED TO MARCH 2022! With record nominations and an overwhelming industry response, we will bring the event back in an expanded form, postponed to March 2022 Following record nominations for the Middle East Energy Awards, the hosting editors have decided to postpone it and organise a gala event in March 2022 to be able to further expand the event. We have received overwhelming response and a record number of nominations have been fi led from the key industry players in diff erent categories, so we look forward to welcoming you all to the ceremony in person in March 2022! The awards will celebrate the energy projects, initiatives, individuals and the companies that have changed the way we use energy in the Middle East. Covering the upstream, downstream and utilities sector, including renewables, the awards include a wide range of categories to ensure the participation of the full value chain. We are also very excited to be able to host this event physically, under strict adherence to safety guidelines. The awards ceremony is a great occasion to recognise the progress that the oil and gas industry has made in the past year, and is an equally strong opportunity to catch up with colleagues and peers in the industry, and to meet and network with industry leaders from across the value chain. We encourage every reader to join us in recognising the major innovations and achievements across the energy sector. To enquire about sponsorship and/or seat and table sales, please contact the Group Sales Manager (Mark Grennell: mark.grennell@itp.com).23 Refi ning & Petrochemicals Middle East November 2021www.refi ningandpetrochemicalsme.com Middle East Energy Awards THE CATEGORIES: Clean Energy Initiative of the Year This initiative demonstrates a strategic approach to lowering a company’s carbon footprint through the use of alternative energy. CSR Initiative of the Year A CSR programme that has provided demonstrable and lasting benefi ts to its targeted benefi ciaries. Digital Enabler of the Year A company which has made an outstanding contribution to the digital transformation of an energy fi rm through the use of its products, or services. Downstream Project of the Year The most ambitious, game-changing project in the regional refi ning and petrochemicals industry. EPC Company of the Year An organisation which has excelled in engineering, procurement, construction and commissioning of mega projects on time, at cost, and as per quality specifi cations. HSE Initiative of the Year A specifi c initiative that has demonstrably helped to reduce accidents and problems in the workplace, and has generally improved safety. Logistics Service Provider of the Year A logistics company off ering innovative solutions that create value for energy companies. Oilfi eld Services Company of the Year The most successful, innovative OFS company in the region in the last 18 months, with interesting solutions. Talent Development Programme of the Year An initiative that has made a diff erence in the industry by training the next generation of professionals, or upskilling the existing workforce. Technical Innovation of the Year A project that demonstrates a successful, innovative technical solution, which has solved a serious problem faced by the energy industry. Technology Provider of the Year This organisation provides watershed technologies to the energy industry, which facilitate outstanding operational excellence and RoI for the operators. Upstream Project of the Year An ambitious, innovative project that optimises, or streamlines upstream operations, refl ecting leading behaviour in the market. Utilities Project of the Year An innovative project disrupting the region’s utilities landscape, off ering much-needed hope for a better, more sustainable future. Energy Woman of the Year An outstanding female achiever who has a successful track record and has made a telling contribution to the energy industry. Young Energy Professional of the Year An employee aged 30 and younger whose work has had an overwhelmingly positive impact on his/her company over the past 18 months. TO LEARN MORE ABOUT THE 2021 AWARDS, VISIT: OILANDGASMIDDLEEAST. COM/ENERGYAWARDSRestoration of long-term viability Relaxation of lockdown measures has spurred demand for oil products in all major markets, lifting refi ning margins from the lows seen during the pandemic, though traders are concerned that higher natural gas prices, power crisis in some parts of the world and a host of other issues could still derail recovery. Refi neries across the world are ramping up capacities as the resurgence of economic activities in most of Asia following the easing of government- imposed movement restrictions due to improvement in the pandemic situation, boosted economic sentiments. The sudden increase in transport fuels across major economies has also boosted refi ning margins, particularly in Asia, where a host of other factors such as coal shortage, ongoing energy crisis and a likely rise in demand in coming months boosted the demand. Traders are, however, worried that higher natural gas prices, the ongoing energy crisis in some parts of the world and scheduled closures due to annual maintenance may put a constraint on supplies. Most analysts and traders are agreeing the profi t or refi nery margins for producing ground transportation fuels such as diesel and gasoline have rebounded globally for the fi rst time since the start of the pandemic, as countries gradually emerge from state- implement stringent movement restrictions across the world. George Dix, Oil Analyst at Energy Aspects, says, “Asian refi nery margins have moved considerably higher over the past month or so and now sit well above the fi ve-year average, after languishing near breakeven levels since the start of 2020.” “This rally is driven by a variety of factors.” Moreover, the ongoing energy crisis along with coal shortage across Europe and Asia, resulting in a steep increase in demand for burn kerosene, diesel or fuel oil for power generation and annual stock build ahead of approaching winter heating demand, is also supporting higher refi nery margins and pushed crude prices higher. Global crude and key refi ned product prices have risen more than 60% in 2021 to multi-year highs. According to traders, refi ning margins have improved across all geographies. Going forward as demand for hitting oil with the onset of peak winter in the northern hemisphere is likely to witness a sharp rise, partly due to ongoing coal shortage. Resurgence of demand The resurgence of economic activities in major Asian economies such as India, South Korea, Taiwan and Japan will push demand for fuels and refi ners in the region are also likely to benefi t from the increased margins. Dix says, “On the demand side, Asian demand for transportation fuels is starting to show signs of life as restrictions are lifted, while elevated natural gas prices should also lead countries to switch to fuel oil usage for some power generation over winter. Asia’s crude runs are expected to reach 29.5 million barrels per day (bpd) in the fourth quarter, versus 29.1million bpd a year ago. The demand for fuel in Asia was over 30.3 million bpd October-December period of 2019 indicating the return of demand to the pre-covid level. Taiwan’s Formosa Petrochemical Corp, one of Asia’s top fuel exporters is planning to process 400,000 bpd in November, up from 370,000-380,000 bpd in October. That is expected to rise to 460,000 bpd, or 79% of Formosa’s capacity, in December and January 2022. In India, a senior offi cial from the oil ministry indicated that almost all state-run refi neries were operating at full capacity. India’s gasoline demand was 7-8 per cent above the pre-pandemic levels currently, with diesel demand lower by about 7-8 per cent, according to Indian Oil Corporation Chairman Shrikant Madhav Vaidya. India’s oil demand is expected to increase by 170,000 bpd quarter-on-quarter basis in the third quarter, and as much as 575,000 bpd in the fourth quarter, driven by a broad-based pickup in economic activity and rising COVID-19 vaccinations. Bhargavi Gandham Oil & Gas analyst at GlobalData, says, “China, the world’s largest oil and gas importer, and a leading consumer, George Dix, Oil Analyst at Energy Aspects 24 Refi ning & Petrochemicals Middle East November 2021www.refi ningandpetrochemicalsme.com ResearchAsia’s crude runs are expected to reach 29.5 million barrels per day (bpd) in the fourth quarter. continues to witness strong growth in the refi nery sector. Growing demand, especially from petrochemicals and transportation sectors, will boost the refi ning activity in the country.” During 2021-2025, Yulong and Jieyang are expected to be the leading projects in terms of refi ning capacity in the country with 400,000 bpd capacity, each. Shandong Yulong Petrochemical Ltd is the operator as well as 100% equity holder of the Yulong project, which is expected to start operations in 2023. The Jieyang project is expected to start operations in 2022. Petrochina Pdvsa Guandong Petrochemical Co Ltd is the operator while China National Petroleum Corp and Petroleos de Venezuela SA hold 60% and 40% of equity in the project, respectively. Refining Margins South Korea’s four refi ners reported a total of 25 Refi ning & Petrochemicals Middle East November 2021www.refi ningandpetrochemicalsme.com Research4 trillion won ($3.4 billion) in operating profi t in the fi rst half as strong performance of non- refi ning sectors including petrochemicals and lubricants off set weak refi ning margins during the period. Margins are expected to improve further as increasing vaccinations are predicted to raise mobility and fuel demand, industry sources said. Some predicted fuel demand would recover to pre-pandemic levels in 2022. Singapore complex refi ning margins, a proxy for refi ner profi tability in top oil consuming region Asia, hit their highest since September 2019 above $8 a barrel this month. The margins had turned negative last year, plumbing a record low in May, as the pandemic eroded demand. In Northwest Europe, refi ning margins topped $9 last week, the highest since April 2020, while U.S. Gulf Coast refi ning margins are currently around $14, up nearly three-fold from the same period a year ago. The spike in margins comes against the backdrop of a steady drop in inventories across key markets. Combined oil product inventories from the United States, northwest Europe, Fujairah, Singapore and Japan fell to their lowest since 2014 as of 14 October 2021. Dix says, “Low Chinese product exports are tightening Asian markets, high natural gas prices are constricting European refi nery operations, and Middle Eastern supplies could surprise to the downside on the delays to refi nery start-up timelines.” Higher natural gas prices However, like refi nery maintenance, high natural gas prices too are expected to slow the ramp-up in runs, executives said. In Europe, record natural gas prices are forcing refi ners to adjust operations to limit their exposure to costly inputs, such as hydrogen which requires natural gas as a feedstock and is used by refi ners to remove sulphur from oil products. He says, “Margins should cool off after winter as product demand is met by rising runs and lower natural gas prices reduce operational constraints. “The main uncertainty for the 2022 margins outlook is China, as Beijing steps up its campaign to reign in energy consumption as part of its climate goals.” In the United States, crude runs are expected to drop for a second straight month in October to 15 million barrels per day, as the sector starts autumn maintenance, Energy Aspects said in a note. Crude oil prices are also rising, ramping up inventory gains, amid tight supply after Hurricane Ida, last month hit the US Gulf coast -- where about 45% of the country’s crude production facilities are located. About three-quarters of the US Gulf’s off shore oil production, or about 1.4 million barrels per day, has remained halted since late August, according to a Reuters report. That is roughly equal to what OPEC member Nigeria produces. India’s gasoline demand rose sharply in Q3 and is now at 7-8 per cent above the pre-pandemic levels, data from the oil ministry showed. Bhargavi Gandham Oil & Gas analyst at GlobalData 26 Refi ning & Petrochemicals Middle East November 2021www.refi ningandpetrochemicalsme.com ResearchGlobally, 416 upcoming crude oil refi nery projects are expected to start operations from 2021 to 2025. Of these, 93 represent new build projects and 323 are expansions of existing or upcoming projects. More than half of the upcoming refi nery projects are in the construction stage and likely to start operations from 2021 to 2025. Feasibility and approval are the other major project stages with 87 and 83 projects, respectively. As per global data, strong petroleum products demand is likely to boost refi ning sector in China. The Asia economic giant is likely to start the operations of 42 crude oil refi nery projects or 26% of the total crude oil refi nery projects in Asia, between 2021 and 2025, to meet the growing demand for plastics and petroleum products. Outlook Global Rating agency, Fitch expects petrochemical margin volatility in south and south-east Asia to continue in the near term, although within a narrower band, after key product prices reached both multiyear highs and lows over the last 18 months. This will be due to elevated feedstock prices, new capacity additions and a demand recovery after the Covid-19 pandemic. Companies that are able to switch across various feedstocks and manage product mix may reduce the volatility in cash fl ows, enabling them to better navigate through the pandemic and other challenges, including demand-supply issues. The sharp increase in crude oil-linked naphtha prices, the key feedstock for most Asian crackers, has cut petrochemical product margins even as fi nal product prices remained high. Naphtha prices have increased by around 50% year to date, while the prices of key petrochemicals such as high-density polyethylene (HDPE), have risen by around 15%. Fitch expects the demand growth for most petrochemicals to continue to be driven by end-user sector demand. “With Chinese product exports largely out of the picture at least in the short term, Asian margins must stay strong through at least Q4 21 to incentivise other regional refi ners to pick up the slack,” says Dix. OPEC believes oil demand will exceed pre-pandemic levels in 2022, In Asia, ongoing coal shortage has resulted in a steep increase in demand for fuel oil 27 Refi ning & Petrochemicals Middle East November 2021www.refi ningandpetrochemicalsme.com ResearchRoyal Dutch Shell has appointed Wael Sawan as head of its integrated gas and renewables division, replacing Maarten Wetselaar who will leave the energy company after 25 years. Sawan currently heads Shell’s oil and gas production, or upstream, division. In his new position, he will oversee Shell’s continued expansion into low-carbon and renewable energies as well as the power markets, key pillars in Shell’s strategy to reduce its emissions to net-zero by 2050. Sawan, 47, a Canadian citizen of Lebanese origin, is seen by many as a potential successor to Chief Executive Ben van Beurden along with Huibert Vigeveno, who heads Shell’s refi ning and chemicals, division. Sawan will be replaced by Zoë Yujnovich, 46, who currently heads conventional oil and gas operations, Shell said in a statement. Both appointments are eff ective on Oct. 25. Wetselaar, once himself seen as a candidate to take the top spot in the company, will become the chief executive of Spanish Oil Company Cepsa starting Jan. 1, 2022, Shell said. Wetselaar oversaw in recent years Shell’s growth into liquefi ed natural gas (LNG) and low-carbon, including investments in off shore wind, hydrogen and electric vehicle charging. “I am also immensely grateful to Maarten for his outstanding contribution to Shell and our customers, for his vision and drive in shaping a world-class LNG portfolio, and for laying the foundations of our power and renewable solutions business,” said CEO van Beurden Cepsa Chairman Ahmad Yahia Al Idrissi said Wetselaar’s appointment would help Cepsa speed up its energy transition strategy. Cepsa, owned by Mubadala and Carlyle, is foraying in renewable energy including signing a JV with Masdar to develop wind and solar projects in Spain and Portugal.. Hans Casier has been unanimously re- elected by the members of the Essenscia Governing Body as Chairman of the Belgian sector federation of chemistry and life sciences. Casier succeeds the CEO of BASF Antwerp, Wouter De Geest who was president of Essenscia for 8 years. Casier has been with INEOS since its inception in 1998. In 2005, Casier became CEO of INEOS Oxide and since 2014, has taken up the role of CEO of INEOS Phenol. He has also held positions in production, technology, product and business management expanding his extensive multi-industry experience. The renewed chairman’s mandate is for a period of three years. Hans Casier, Chairman, Essenscia said: “The past three years have been fascinating but challenging, partly due to the corona crisis. Chemistry and life sciences have shown themselves to be an essential sector in diffi cult circumstances. Just think of vaccines, hand gels and protective materials. “With the European Green Deal and the climate ambitions, new challenges await. We are convinced that, as a sector, we can provide the innovations, technologies and products to help realise those sustainable goals.” In his role, Dario Puglisi will lead the company and its management on a new path of growth and development in the sustainable energy market to address the challenges of the energy transition and become one of its players worldwide. Exergy International is a company jointly invested in by Tica Group and Golden Eagle Group, Puglisi has a degree in Engineering obtained from Politecnico di Milano University and extensive technical and management skills in the Engineering, Procurement and Contractor (EPC) sector for large industrial customers, oil & gas plants and infrastructures, gained while working in major corporations such as Tecnimont and Techint. “I am delighted to start this new professional path in Exergy, a very dynamic and highly innovative company,” said Puglisi. “Driven by the innovative approach that is Exergy’s key feature, we can off er the market customized solutions for effi cient and sustainable power generation, today more and more essential to face the energy transition.” Albert Yam, Member of the Board of Exergy International said, “We are thrilled to welcome Dario Puglisi as the new Chief Executive Offi cer of Exergy. “His outstanding technical experience in the development of large infrastructures and industrial plants coupled with his managerial skills will strongly contribute to giving new impetus to Exergy’s growth, strengthening its leadership as a solution provider of innovative technology for the geothermal sector. Shell names Sawan as head of gas and renewables Ineos CEO re-elected as Chairman of Essenscia Belgium EXERG International announces the appointment of Dario Puglisi as Chief Executive Offi cer 28 Industry Movement Refi ning & Petrochemicals Middle East November 2021www.refi ningandpetrochemicalsme.comChemicals IndustrialInfrastructure MiningConstruction Gas Rening Oil Pipeline Petrochemicals Renewables Power Oshore WaterNext >