Fujairah to join in International Petroleum Week
, February 15th, 2017
It was recently announced that HH Sheikh Dr Rashid Bin Hamad Al Sharqi, deputy chairman, Fujairah Oil Industry Zone (FOIZ), will head the delegation from the UAE's Emirate of Fujairah at the Middle East Energy Summit on 22 February 2017 under the auspices of the Energy Institute's International Petroleum (IP) Week in London slated for 21-23 February.
HH Sheikh Dr Al Sharqi will be accompanied by HH Sheikh Sultan bin Saleh Al Sharqi, vice chairman, Fujairah National Group, UAE. Dr Salem Abdo Khalil, technical advisor, Government of Fujairah, will give the welcome note on how national oil companies (NOCs) in the Gulf are finding their feet after decades of reliance on the financial and technical expertise of international oil companies (IOCs).
The NOCs historically enjoyed easy and cheap access to energy reserves, which created operational inefficiencies. Now, a 70 percent decline in oil prices since mid-2014 to today’s US$55/barrel have spurred NOCs to swiftly and smartly demonstrate unprecedented efforts to improve their commercial efficiency, while safeguarding national energy security.
“The current era of low oil prices and rising energy demand means NOCs are undergoing unprecedented change since their inception more than seventy years ago. Today, NOCs must balance a three-point agenda – commercial success, social responsibilities and national energy security,” said Dr Salem, member of FOIZ development committee. FOIZ is also a gold sponsor of the Gulf Intelligence Middle East Energy Summit at IP Week.
“Accordingly, the relationships between NOCs, IOCs and service companies are evolving and bringing more changes this year. The energy industry in the Gulf that we know today will have a different face this time next year. The ever-growing range of sophisticated infrastructure, storage and trading facilities at the FOIZ, Port of Fujairah and Fujairah Free Zone will lay a crucial enabling role for Gulf-based NOCs, IOCs and service companies to expand their footprint at home and abroad,” Dr Salem added.
Fujairah’s location to the south of the Straits of Hormuz – through which around 40% of seaborne oil passes – makes it a strategic location from which the Gulf’s energy entities can expand their commercial footprints. The Port of Fujairah is already the world’s second largest bunkering hub and in the last year alone, the port has launched a US$175 million very large crude carrier (VLCC) jetty.
The weekly release of oil inventory data by FOIZ spearheaded market discussions on how best to launch the Middle East’s first independent pricing benchmark for oil products. Part of Fujairah’s growing popularity is that it offers a one-stop shop, with the port able to provide supplies, bunkering, crew and so on. Furthermore, the goal of FOIZ to increase petroleum storage capacity by 75% to 14 million cubic metres by 2020 is well underway and a second VLCC jetty may be built in the medium-term.
As well as leveraging the opportunities offered by the port, NOCs must also ramp up their technical expertise to be commercially competitive on the global energy stage. NOCs have fallen behind IOCs when it comes to being technically savvy and thinking outside the box to maximise the potential from more mature and challenging assets.
NOCs’ transformation into more independent entities is well-timed, as the populations and energy demand across the region swells. Dubai’s population is forecast to double to five million by 2030 and Qatar’s population of 2.6 million is expected to grow eight-fold by 2050, for example. BP’s Energy Outlook anticipates a 49 percent increase in the Middle East’s energy demand by 2035, with gas demand accounting for almost half the growth.