Sadara Review 2018

Sarah Baradah

Sarah Baradah

Outlook is promising for the downstream industry

Methane was once treated as a waste gas and sent to flaring, yet with foresight and wise investments, it was turned into valuable feedstock. Similarly one need not be surprised to find that CO2 will be feedstock for something big, says an expert

The outlook for the downstream industry is very promising ahead. The integration one sees across the value chain is evidence of what opportunities lie ahead, says Sarah Baradah in her outlook on the current status of the downstream industry in the Middle East.

Head of Legal and Board Secretary, Saudi Aramco Total Refining & Petrochemical Company (Satorp), Baradah, the winner of the 2018 Oil & Gas Woman of the Year award, says one might argue that some of the surrounding challenges suggest a possible hurdle in the way of the progression of this industry. Such challenges include tightening legal environmental regulations, disruptive business models, and rapidly advancing disruptive technologies. "However, I believe in a more optimistic view, that in every challenge lies the seed of opportunity…," she says.

Inversely to that view, optimist adaptors that comprehend the inherent opportunity are instead employing these disruptive technologies, to adapt new business models, and overcome tightening regulations!

Focus on the downstream industry is resulting in further technical and cost efficiencies

"The 4th industrial revolution is taken place as we speak, not only introducing ways to eliminate process waste, but providing us with technologies that turn waste into valuable products. We are benefiting from the efficiencies that these technologies are introducing, be it on the capabilities of processing plants or business efficiencies across the supply chain."

Back in the day, methane was once treated as a waste gas and sent to flaring, yet with foresight and wise investments, it was turned into valuable feedstock. Similarly, nowadays, and with engineering ingenuity coupled with the tenacity and creativity of the workforce to overcome challenges, one need not be surprised to find that CO2 will be feedstock for something big.

"We are more and more moving away from selling just crude towards selling also many refined products and shifting as well the focus to petrochemicals." This focus on the downstream industry is resulting in further technical and cost efficiencies, all to produce higher and bigger margins making downstream an increasingly lucrative industry.

Essentially, and if taking into account the rise in demand for downstream products, particularly with the effects of the expansions of the manufacturing industry, whether locally through the promising projects in my country and the region, or globally within other emerging economies, one can see the promising potential of the downstream industry. When coupling this demand increase with upcoming technology advancements, efficiencies, and integration across the value chain, anyone would realise that "we have only scratched the surface of the potential opportunities for the downstream industry to date".

Another factor playing a role in adopting this optimistic view is the availability of workforce as a valuable resource. If one looks at countries such as Singapore, and South Korea; countries that are effectively deprived of natural resources, they have managed to build a successful economy based solely on their human resources! "Now comparing that to the region and Saudi Arabia in particular: we do not only possess natural resources, such as hydrocarbons and renewables, but we also have the vital ingredient to the perfect recipe being an abundance of talented, ambitious and local workforce which serves for a thriving and sustainable industry as well as economy!"

Baradah suggests three key changes for the advancement of the industry:

The first is adapting technologies. For brownfield projects, adaptation should ideally happen together with a solid strategy that ensures the readiness of technology deployment. For greenfield projects, scouting for and embedding technologies should however be taken into account right at the design stage of the project. "I strongly believe that technology adaptation at this stage should come as a revolution and not an evolution; otherwise the true opportunity will be lost…It was indeed very wise calling it the 4th Industrial Revolution."

The second is introducing adaptive business models. Suitable business models provide great efficiency opportunities, especially when embedded into the norm of an organisation. Disruptive concepts like the "sharing economy", and other new concepts like "intra-company" supply chain integration exceed being business efficiency drivers to ensure the agility of the organisation to adapt.

Finally, this cannot happen without a focus on the driving force: human resources. "Companies within our industry, I believe should not only accept conventional "talents"." Instead, companies need to prepare a pool of individuals who have transferrable skills gained from other fields and industries, for it is this intermarriage that will create the needed edge to drive this anticipated revolution.

In the region, and for the sake of the local industry’s advancement and development, there is a lot to work on. However, with the local resources, there is a lot to work with!

"In that regard, and with the open doors that I am seeing for the array of diverse professional women and men, and the energetic youth around me in the region, I am very optimistic that the upcoming generation will have a diverse set of skills that will truly drive advancement," she adds.

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