Spring in Their Soles

ExxonMobil has a strong legacy in Saudi Arabia and firm relationships here today. How have your operations developed?

ExxonMobil is delighted to have been a partner in the country’s growth for more than 80 years. We started years ago selling kerosene for lanterns. In 1948, we joined the Aramco Consortium, which of course, both of our heritage companies were part of Aramcoand which ultimately became Saudi Aramco. We are truly proud to be a part of that history. The footprint that we have today came about just over 35 years ago, when we undertook investments in major refining and petrochemical facilities. The investments on the petrochemical side were carried out as 50:50 joint ventures with SABIC, while the investment in the refinery is a 50:50 joint venture with Saudi Aramco. Since then, there have been additional investments in each of the facilities to expand capacity and improve performance. Currently, we are in the midst of two multi-billion-dollar projects. In the case of our refining operation, SAMREF, we are near completion of a clean fuels project that should reach mechanical completion in early 2014. At Kemya petrochemical plant, a joint venture with SABIC, the Elastomers project is in its early stages. As the country develops, it is looking to expand its downstream footprint into the production of synthetic rubber or elastomers for the domestic market. This project, when completed, will provide the Kingdom with the ability to produce elastomers for the very first time. We are excited about this as it is complex technology and is certainly a step further along the value chain.

What needs do the elastomer project and the new refinery project meet in a global sense, and where are they taking Exxon and the country?

Let me start with cleaner gasoline. The specifications for fuels are increasingly strict. If refineries are to remain competitive in the global economy, they are going to need the ability to produce fuels that meet the increasingly stringent specifications that are being enforced globally. In addition, Saudi Arabia has already laid out its vision of increasing the stringency of fuel specifications here in the Kingdom. The goal is to reduce the sulfur content in gasoline and diesel to 10 ppm. Overall, this improvement and investment will give the refinery the ability to meet the Saudi specifications when they are introduced within a few years, while at the same time maintaining its competitiveness in the global market. On the elastomers side, the Kingdom today uses many elastomer products, but they are almost all imported. Elastomers are a key step in the evolution beyond commodity chemicals that the Kingdom has predominantly produced thus far. The impetus behind this investment is to provide the raw materials that can then be used by other investors to build local businesses. It is a complex challenge, but the elastomer project creates the opportunity to build out the downstream elastomer industries as independent investors, whether local or international, and to recognize the opportunity to create and market and sell elastomer-based products in the Kingdom.

Where will the Higher Institute of Elastomers Industries (HIEI) and ExxonMobil’s other vocational training ventures fit within its operations in the Kingdom?

We are particularly pleased about the HIEI, an institute in Yanbu, that it is now up and running. It has welcomed its second year of students, having opened its doors in the fall of 2012 with 63 students, adding a further 70 students this past fall. The whole course is a 2.5 to 3 year curriculum that focuses on higher technology-based skills that the students will need to work in industries that manufacture elastomers. In setting up the HIEI, we partnered with the University of Akron in the US, as it is the world’s leading elastomer technology institution. HIEI also hired Saudi university graduates who had an interest in teaching and sent them to the University of Akron for two years of training. As a result, today, we have 15 Saudi instructors on the ground in Yanbu. Having Saudis training Saudis, and having put in all the hard work up front to develop a strong curriculum, will make this one of the best training institutes in the Kingdom.

Moving forward on all these fronts, where do you hope to see ExxonMobil in Saudi Arabia in the next five to 10 years?

I am confident that you are going to see ExxonMobil and its partners continuing to operate world-class joint ventures, as we have done in the past, safely, efficiently, and with a Saudi workforce. We are pleased with our history in the Kingdom and look forward to further opportunity as Saudi Arabia continues its impressive growth and development.

© The Business Year – January 2014