Downstream projects in the Middle East are likely to be re-examined in light of the falling oil prices, according to HE Dr Mohammed Saleh Abdulla Al-Sada, Qatar's minister of energy and industry and Qatar Petroleum chairman,speaking at the ninth annual GPCA Forum in Dubai yesterday
As part of the forum’s plenary address, he highlighted the declining price of oil as a significant factor, influencing the strategic direction of the petrochemical and chemical industry in the region.
The Qatari minister said, “As we have all seen in the past few weeks, oil prices have reached their lowest levels in more than four years, causing concerns that current and future chemical prices would be impacted as a result.
“Therefore, downstream project economies are expected to be re-examined and reassessed particularly as prices continue to fall and as the future forecast expects a new chapter in its history.”
Other influencing factors that were underlined include US shale gas and the pressure it has placed and will continue to place on the chemical and petrochemical industry in the Middle East, as well as the potential repercussions of China’s growing plastic industry.
Furthermore, while he acknowledged the substantial investment that the GCC channels into R&D generally, the Qatar Petroleum chairman highlighted the need of directing more of this investment into R&D of new and unique capabilities and initiatives.
“There is a growing need to place greater emphasis on developing the GCC’s innovative capabilities in order to stimulate and revitalise our industry’s competitiveness in light of these challenges,” he explained.
"All together 75 per cent of the industry’s R&D spending in the region is geared towards maintaining and advancing existing technologies while the remaining 25 per cent is invested in new capacities. I believe that the time has come for this to change."
HE Dr Mohammed Saleh Abdulla Al-Sada inaugurated this year’s GPCA annual forum, which expects to see more than 1,900 attendees over three days and includes speeches from Khalid Al-Falih, CEO of Saudi Aramco and Andrew Liveris, chairman, president and CEO of Dow Chemical Company.
According to GPCA, Qatar’s petrochemical portfolio consists of 19mn mt of capacity, earning up to US$11.5bn in revenues and producing products such as fertilisers, plastic, and fine chemicals.