< Previous10 NEWS UPDATE oilandgasmiddleeast.com APRIL 2019 Saudi Aramco CEO: How to address the in- dustry’s “crisis of perception” Saudi Aramco CEO Amin Nasser gave a fervent speech at London Petroleum Week outlining five key areas demanding the industry’s “urgent, collective effort” Saudi Aramco CEO Amin Nasser gave a speech at London Petroleum Week, addressing what he calls a “worrying and growing belief among policy makers and regulators, investment houses, NGOs, and many others that we are an industry with little or no future.” He pinpointed Davos, recounting instances where senior figures predicted the end of the oil and gas industry in a matter of years. “These views are not based on logic and facts, and are formed mostly in response to pressure and hype,” Nasser said. “But they are sincerely held.” He noted that 80% of oil demand comes from sectors where no alternatives are readily available, like petrochemicals, lubes, planes and ships; sectors that are expected to see growing demand. Chal- lenges with implementing renewable en- ergy solutions on a large scale, like their intermittent nature, lack of uptake, or the “trillions of dollars” needed to change the global energy infrastructure receive “very little thought,” Nasser said. “In other words, my encounters in Davos showed me that fewer and fewer of our stakeholders accept logic and facts, least of all from us,” Nasser said. This is what he calls a crisis of perception, which “threatens our industry’s very relevance, it puts our ability to supply ample, reli- able, and affordable energy to billions around the world at risk, which in turn risks their energy security. /10 Industry ‘crisis of perception’ /12 #Trending /13 Around the Gulf For the latest news and analysis, visit oilandgasmiddleeast.com Coming up: He pointed out five areas that “demand our urgent, collective effort”: 1. Show we understand society’s ex- pectations and concerns Environmental concerns have clearly grown, and pressure has mounted on en- ergy companies to take responsibility for carbon emissions caused by their opera- tions. “Very simply put, society demands ample, affordable, reliable, and cleaner energy,” Nasser said, noting that scientific studies have found that Saudi Aramco’s oil has “among the lowest carbon intensi- ties of any in the world.” Other initiatives, like the Oil and Gas Climate Initiative is a “stride in the right direction,” as well as Saudi Aramco’s work on ultra clean engine-fuel systems and carbon capture, he said, but noted that “these efforts are nowhere near enough to bridge the expectation gap. “And time is not on our side.” 2. Show that we share values with our stakeholders Nasser noted three key focus areas: envi- ronmental, social and governance aspects of oil and gas businesses. He emphasised localisation, through local employ- ment and localising supply chains, and encouraging diversity in the workplace. For Nasser, it also means “being ahead of other industries when it comes to busi- ness ethics, codes of conduct, compliance, and internal controls, backed by effective oversight and accountability. “In short, we must show our stake- holders that their values and ours align, 11 NEWS UPDATE oilandgasmiddleeast.com APRIL 2019 www.hi-force.com wherever we operate, if we want to be treated as relevant.” He says the industry must improve trust and transparency as “a sustainable, ethical, and transparent industry that is genu- inely willing to engage, listen, and change as needed.” 3. Push Energy 4.0 and change millenials’ perception Technology has been a central focus of the oil and gas industry, but Nasser said that despite the industry’s techno- logical achievements, milennials do not see oil and gas as an innovative, technology-driven space, “as innovative as Apple, Google, or Samsung, and are determined to use cutting-edge technology to make the world a better place.” To the latter point, he noted that millennials are not driven by money, rather by “mission and meaning.” “We need to inspire them with the incredible possibili- ties of Energy 4.0 – powering our industry to be Smarter, Greener, Faster, Safer, and above all still affordable, coupled with the technology-driven enablers we are contributing to address some of the world’s greatest challenges.” 4. Emphasise facts and logic The starting point of Nasser’s speech, he says that “we should remind stakeholders that oil and gas is responsible for much of today’s economic growth, and indeed future growth. We should also remind them that, despite being a much smaller proportion of the S&P500, energy pays twice the dividends of tech. “And we must push back on exaggerated theories like peak oil demand.” But this also means finding “new, cleaner and more ben- eficial ways of consuming oil that will help us to maximise the economic use of this incredibly valuable resource.” Ulti- mately, oil is not going to disappear overnight, and “all energy sources will be required for decades to come.” 5. Change the way we connect While facts and logic are important, Nasser appealed to industry professional to forgo the engineers instinct to “simply talk numbers or share data,” which he called the “least persuasive approach,” and instead tell stories appeal- ing to emotion. “So let’s tell the story of our determination to reduce emissions and carbon intensity for future generations (and the progress we are making) and help people to see that we are actually on the same side,” he said. He also noted that lower emissions grab headlines, but effi- ciency gains often take a backseat and are not recognised for their importance. He cited that “while the global economy is going to double in size by 2040, energy demand is expected to only grow by a quarter due to energy efficiency improve- ment. That will mean a 40% improvement in the carbon intensity of global GDP.” “This radical new mission is the defining challenge for this industry. It is up there with a manned mission to Mars, and just as profound for the Earth,” he said.12 NEWS UPDATE oilandgasmiddleeast.com APRIL 2019 #TRENDING The top stories from our website and its associated social media channels, where the latest upstream news first appears FACEBOOKTWITTERLINKEDIN McDer- mott wins offshore EPCI project worth up to $750mn The scope of work includes six new offshore jackets, three associated topsides, a pipeline, two bridges, cables and brownfield works at existing off- shore facilities in the Arabian Gulf. ADNOC signs $176mn onshore exploration concession agreement with Japan’s Inpex Corporation ADNOC awarded Onshore Block 4 to Inpex, which is expected to invest up to $176mn in the exploration phase, in which it holds a 100% stake. Saudi Ara- mco to use AUV subsea seismic acquisition fleet for Red Sea exploration within two months For the first time, Saudi Aramco will use 200 of its patented autonomous un- derwater vehicles for a seismic ocean bottom survey of the Red Sea. Saif Al Qahtani appointed CEO of Saudi Arabia’s multi-billion dol- lar King Salman Energy Park Petrofac wins $1bn EPC project in Al- geria for commis- sioning, startup and performance testing BHGE regional president on turning local strategy into global growth Zaher Ibrahim, president and CEO of Saudi Arabia, the North Gulf and East Mediterranean for BHGE, talks about successful localisation strategy, and how it can fuel global growth for oilfield services companies. Oil & Gas Middle East ADNOC: Hail and Ghasha EPC pack- ages will be tendered “very soon” ADNOC on its progress on the Ghasha ultra-sour gas concession, the time- line for each field, its ongoing and upcoming EPC package tenders, and its $1.36bn award to NMDC to build 11 artificial islands. Booz Allen Hamilton MENA VP on blockchain hurdles & opportunities Dr. Adham Sleiman, a vice president at Booz Allen Hamilton MENA, shares his thoughts on using block- chain through the energy transition, addressing the key challenges in implementing it on a wide scale. YOUTUBE OILANDGASMIDDLEEAST.COM CONNECT WITH US @OilandGas_ME Oil & Gas Middle East Oil & Gas Middle East13 NEWS UPDATE oilandgasmiddleeast.com APRIL 2019 1. SAUDI ARABIA 4. KUWAIT 2. UAE 5. OMAN 3. BAHRAIN 6. IRAQ KSA has found large quantities of gas in the Red Sea, according to Energy Minister Khalid Al-Falih. He said that Aramco has planned fea- sibility studies and could intensify exploration in the next two years. Kuwait Oil Ministry Acting Undersecretary Sheikh Talal Nasser Al-Adhabi Al-Sabah said that efforts by OPEC to stabilise the crude market have led to “noticeable improvement.” The UAE will start taking applications for long-term visas for select groups, like investors and professional talents in specialist fields including science, research and technical fields. Oman’s minister of oil and gas signed a $59mn exploration and pro- duction agreement with Occidental’s CEO for Block 72. It covers 3530 square kilometres and work will be undertaken in two phases. Bahrain’s oil minister reportedly said the nation is in talks with US oil and gas firms to start developing oil and gas from the offshore field it discovered in 2018, estimated to hold 80bn barrels of tight oil. Pearl Petroleum, the consortium led by Crescent Petroleum and Dana Gas, has signed a new agreement with the Kurdistan Regional Government which will see gas output increase 63% in two years. AROUND THE GULF The latest developments across the region REGION14 oilandgasmiddleeast.com APRIL 2019 POWER 5015 POWER 50 oilandgasmiddleeast.com APRIL 2019 It has been a whirlwind year for the regional oil and gas industry. Watching the market intently from our perch, Oil & Gas Middle East has seen the slips, successes and surprises that have kept oil and gas companies on their toes this year. In our Power 50 list, we tally all of these up to rank those who have demonstrated leading behavior, leaving an impact on the regional market for the year, and for years to come. While strong financial performance is one factor we con- sider when putting together this list, the key word here is “impact”. Our Power 50 are game-changing industry lead- ers who push boundaries and influence the nature of the oil and gas sector. The world is changing, and so must the energy industry. Some may be disappointed to find their position has slipped since the last incarnation of this list, which only featured 40 industry leaders. This year, the competition is fierce, and some former list members are back with a vengeance. As might be expected, among the top ranks of list are the NOCs and IOCs that commonly feature in industry head- lines, but there have been some surprising movers even among the top echelons of the upstream industry. Methodology: Oil & Gas Middle East scrutinises the activity of each company on the list. However, we can only consider credible information that is publicly available, including financial statements, press releases and company data.16 POWER 50 oilandgasmiddleeast.com APRIL 2019 Since he took the helm of the Abu Dhabi National Oil Compa- ny in 2016, Dr. Sultan Ahmed Al Jaber has spearheaded a slew of changes at the company towards its 2030 Strategy. No, it does not boast the highest production numbers in the region, but there is rarely a quiet day for ADNOC. Al Jaber retains his position at the top of our Power List for the third consecutive year thanks to his tireless efforts to transform ADNOC, and, ar- guably, the wider oil and gas industry. In the past year alone, ADNOC has spurred a series of high-profile deals with international partners, opened it- self up to foreign investors, announced a new integrated gas strategy to push the UAE to gas self-sufficiency, with the considerable help of a hefty $132bn capex between 2019-2023. ADNOC has also looked outside of its typical limits, pivoting to Asia as a growth opportunity and making a push to further grow its downstream portfolio. For more on ADNOC’s growth strategy, read our Q&A with Al Jaber (p30). SULTAN AHMED AL JABER CEO, ADNOC GROUP17 POWER 50 oilandgasmiddleeast.com APRIL 2019 It’s not easy being big, and in the oil and gas industry, it doesn’t get much bigger than Saudi Aramco. It is impossible to discount Saudi Ara- mco’s central position in the global energy landscape. It is the world’s largest oil producer. But this year has shown that growth and strength in the market rely upon more than the amount of barrels pumped per day. It is all about strategy. Saudi Aramco has shown its true ambitions this year, recently an- nouncing plans to acquire the Saudi Public Investment Fund’s 70% stake in chemicals giant SABIC for $69.1bn. Aramco will also invest $150bn in its gas programme, and in November, signed a framework agreement with ADNOC, to explore collaborations in the natural gas and LNG value chain. Saudi Aramco has kept a strong stance internationally, with several mega-deals signed this year. The Future Investment Initiative Forum saw 15 MoUs worth $34bn signed by the oil titan. The past year has also seen an enormous effort to localise business, encourage diversity & grow across the entire value chain. AMIN NASSER CEO, SAUDI ARAMCO18 POWER 50 oilandgasmiddleeast.com APRIL 2019 It is unusual to feature two high-rank- ing members from the same company, but as the face of Saudi oil and gas production, and of Opec+, Khalid Al- Falih has earned his spot on this list. As one of the most resonant voices among Opec+, Al-Falih has protected its decision to cut production by 1.2mn bpd (much to President Donald Trump’s dismay) and has repeatedly noted its purpose is to maintain balance be- tween supply and demand in the global market. Al-Falih recently announced the discovery of vast quantities of gas in the Red Sea, relatively new territory for the oil and gas titan. On more familiar territory, Al-Falih has said that produc- tion in the Neutral Zone, shared with Kuwait, could restart this year. Even as Saudi Arabia reins in its production to adhere to the agreement struck by Opec+, the nation’s ambi- tions lie far beyond its vast resources, and it is eyeing long term growth. Al- Falih was quoted as saying that “going forward, the world is going to be Saudi Aramco’s playground.” And what an interesting playground it would be. KHALID AL-FALIH CHAIRMAN, SAUDI ARAMCO | MINISTER OF ENERGY, INDUSTRY AND RESOURCES, KSA19 POWER 50 oilandgasmiddleeast.com APRIL 2019 As BP’s leader, Bob Dudley has seen the firm through some tough times, from the Deepwater Horizon tragedy in the Gulf of Mexico to the industry down- turn. In 2018, it produced on average 3.7mn boed. The company plans to spend $1.8bn in Egypt in 2019 and $1bn in Abu Dhabi annually to expand its operations. BOB DUDLEY CEO, BRITISH PETROLEUM Total CEO Patrick Pouyanné has opened new possibilities for the French super- giant; it signed an unconventional gas exploration concession agreement with ADNOC for the Diyab play. It has also played into NOCs’ push into the downstream segment, including working with Saudi Aramco on the $5bn Jubail petrochemical complex. PATRICK POUYANNÉ CHAIRMAN & CEO, TOTAL Eni’s large Mediterranean discoveries put it into the regional industry’s focus. But more recently, it has made headlines because of a frenzy of activity; within days, it signed exploration concession deals in Bahrain, the UAE and Oman. Under Descalzi’s leadership, Eni has expanded in the region, including its recent acqui- sition of a 20% equity interest in ADNOC Refining. CLAUDIO DESCALZI CEO, ENI In 2018, PDO had a combined oil, gas & condensate output of 1.2mn bpd, with 610,170bpd contributed by oil production- -the largest amount for the company since 2005. Restucci plans to increase oil output by 60,000bpd in five years, and has a tight grip on spending, with 142 efficiency improvement projects saving the company $152mn in 2018. RAOUL RESTUCCI MANAGING DIRECTOR, PDONext >