(MENAFN- Khaleej Times) GCC petrochemicals output hits $97.3 billion in 2012: GPCA The oil market will remain well supplied and maintain balance in world economy, says a senior official of Saudi Arabia's Ministry of Petroleum and Mineral Resources.
Addressing delegates at the eight annual forum of Gulf Petrochemicals and Chemicals Association (GPCA) here on Wednesday, Abdulaziz bin Salman bin Abdulaziz, Assistant Minister for Petroleum Affairs at the ministry, said the GCC petrochemical industry is at a critical juncture and it must be well prepared and positioned to meet future challenges.
"The main challenge facing the energy industry has never been a lack of resources. Rather the real challenge has always been to extract and deliver energy resources to markets in an efficient, reliable and sustainable way; and indeed time has proved this view," he said.
He said concerns over oil supply tightness have been replaced with perceptions of abundant oil resources.
"Despite years of being a reliable energy supplier to local and international markets, Saudi Arabia's oil and gas reserves continue to expand. This is due in large part to technological advances and innovations that have enabled the industry to increase availability and unlock energy resources in many parts of the world. So technology has always been and will continue to be the main driver in shaping the energy sector.
"More intense global competition, greater protectionism, and the current emphasis on job creation programmes in the GCC highlight a key challenge - the petrochemical industry in the GCC currently makes a limited contribution to diversifying domestic economies and expanding employment for the thousands of young people."
Abdulaziz proposed implementing crucial measures in the coming years such as innovation and partnering with international companies.
"Further, the regional industry should ensure that its operations are compatible with international trade rules. The governments and the industry should both work hard to satisfy and create additional Middle East demand for petrochemical products. This would enable the region's industry to diversify its markets, to reduce its vulnerability to the cyclical nature of international markets, and more importantly, to counteract some of the adverse effects of increased protectionism," he added.
Mohammed Al Mady, chairman of GPCA and vice-chairman and CEO of Sabic, said: "The GCC is definitely becoming more competitive, with Saudi Arabia, the UAE, Qatar and Kuwait leading the charge. Average scores are not far from countries such as China or India, but not competing with recognised leaders such as Switzerland."
The Gulf's petrochemicals output reached $97.3 billion in 2012, a $3.2 billion increase on the previous year, according to the latest industry report by GPCA. The production has increased by 19 per cent a year over the past five years. Last year, the Gulf's petrochemicals industry earned $52.7 billion in export revenues.
"Over the past three decades, the GCC petrochemicals sector has evolved from a chemical importing industry to one that exports the vast majority of its high-value goods to global markets. This has transformed the region's economy and created jobs for thousands of people," said Dr Abdulwahab Al Sadoun, secretary-general of GPCA.
While the GCC petrochemical industry is in a good position today, regional producers must not be complacent about the future, warned Dr Al Sadoun.
Held on the theme of "Innovation: The Foundation for Chemical Value Chain Leadership", the forum included a diverse range of spokespersons and welcomed more than 1,700 delegates from 50 countries
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