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Aman Amanpour spoke at Platts 5th European Petrochemicals Conference in Rotterdam, 5&6 Feb/2018. The event was very well attended with prominent co-speakers, excellent content and lively debates. Subject of Aman's presntation was "Midde East Petrochemicals Overview : continued Investment and Export capabilities: past, present, prospects" . See the "conclusions slide" in the following Tweeter link

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The 12th GPCA, 27-29 Nov 2017 in Dubai under the theme: "The Chemical Industry in Transformation: A New Journey Begins"

As promised last year (see below), here's my take of this year's GPCA: On a positive note: contrary to last year, the overall mood on profitability (especially within Western players) was rather bullish.  First some keywords captured by GPCA's SG in his summary: from Cost leadership to Value leadership, nurturing an Innovative Ecosystem, Chemical industry growing above global GDP. Transformation is key for the region to enhance its global competitive position. Industry's key role in protecting the environment.  Must invest through the cycles for the long term. Mega trends and changing world require urgent actions and bold answers. The future is the "connected plant" and Digitization offers many solutions for the industry and its Transformation. 

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Aman Amanpour's next "Masterclass and Strategic Management in Petrochemicals" will be held in Dubai 19-21 November 2017.

For more details on the program's content, target audiences, locations, further details and for registration, here's the link to the : "Course Brochure" . These programs are organized and supported by the Euro Petroleum Consultants - a reputable consulting, training and event management company ("EPC") 

 

Aman Amanpour delivered a keynote presentation at the 5th CIS Petrochemicals Conference on 5&6 April 2017

in Moscow/Russia .

The title of his speech was: "Middle East Petrochemicals: Growth Pathways, Old and New Models, Challenges & Impacts, possible ME/CIS Synergies. The event was well attended, his speech well received and debated. The outline included: Middle East and Petrochemicals, Impressive Growth History; Pathways, GCC & KSA: Initial & Current Busienss Models, GCC and Iran Petrochemicals: SWOT, MENA: Key Projects in pipeline, Challenges: Competitive, Domestic, Outside, State of Russian Petrochemicals, CIS & ME Petrochemicals: Possible Synergies? Conclusions.

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 Aman Amanpour's next "Masterclass in Petrochemicals" and "Strategic Management in Petrochemicals" will be in Dubai 30 April - 4 May 2017.

The programs are separate modules, yet complementary and could be combined as the dates are back-to-back. Please click on ["Masterclass"] and  ["Mini-MBA"] for more details on the programs’ content, target audiences, locations, further details and for registration. These programs are organized and supported by the Euro Petroleum Consultants - a reputable consulting, training and event management company ("EPC") 

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Aman Amanpour spoke at the 4th Platts European Petrochemicals Conference on 14&15March 2017 in Dusseldorf/Germany.

The title of his presentation was: "Middle East and Iran Petrochemicals: New wave of Investments in the context of Domestic needs and Global landscape" which was well received and lively debated. The outline included: Middle East & Petrochemicals: General, Impressive Growth History; Pathways, GCC: Current and Emerging Business Models, GCC and Iran Petrochemicals: SWOT, MENA: Key Projects in Pipeline, Some Challenges: Domestic and Outside, Conclusions.

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Middle-East Petrochemicals 2017 in the Global Context 

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Last year I provided the analysis: Global Petrochemicals: How the Scene has Changed? Why? What to come Next? While the depicted forces and trends are still at work, I’d like today to provide some specific remarks, focusing on the Middle East Petrochemicals in the global context. The region as a whole has moved on within the tension filed of socio-political forces, economic challenges, conflicts, alliances and competition. Our industry has been impacted by continued level of subdued oil prices, flatter cost curves hence more fierce global competition, threat of global oversupply (US shale) and self-sufficiency (China), change in trade patterns, scarcity of gaseous feedstock (except Iran) and the resultant urge for new business models. Integration, innovation, consolidations, enhancing the quality and effectiveness of human capital, revisiting (cancelling, delaying, re-scoping) of some planned investment projects, increasing global footprints by more international alliances and M&As …  are visible trends among many players as some necessary responses. These, in the face of deteriorating some of the conducive conditions (e.g. feedstock price and availability, other current incentives), looming overcapacity / down-cycle, emerging trade dynamics after the demise of TPP and TITIP / new wave of protectionism … These are sure necessary responses. But are they also sufficient considering mega-trends in general and the game changing factors in (petro)chemicals discussed in my previous analysis in particular ? It depends, I would say. It depends on how some of these measures are defined, translated into clear objectives and implemented successfully.  Let me take just four of these responses: Integration and its links with:  Consolidation, as well as Innovation and its key requirement: Human Capital. 

Integration:  Refinery-Petrochemicals (vertical) integration is high on the regional agenda but has still a long way to go. Saudi Aramco has been leading the way with Petrorabigh and Sadara mega joint ventures with Sumitomo and Dow respectively. Other GCC countries (UAE, Kuwait, Oman) are planning and are in different stages. Iran is seriously considering the matter as well. Horizontal integration (e.g. around industrial clusters) have also started to take shape for example around Sadara JV in Al-Jubail-2.  However, the region is still in earlier miles of its integrative journey. The three other elements -as follow- need to be addressed simultaneously for extracting maximum possible (corporate and social) values out of comprehensive and multi-dimensional integration. Filling in the value chain gaps (e.g. in propylene and aromatics value chains), especially in the countries with broad industrial bases such as Iran, is also an “integral part of integration”

Consolidation:  (You can call it organizational integration too). After a rather significant international acquisitions and merger journey by the local players (SABIC, IPIC, Aramco, KPC, OOC) of renowned Western companies (DSM, Huntsman, GE-Plastic, NOVA, Borealis, LANXESS, MEglobal) a new wave of consolidation seems to have kicked in: SABIC’s taking over of Shell share in the tradition-rich Sadaf JV and Tasnee selling its Cristal titanium oxide business to US-based Tronox are the two very recent examples. Iran, for instance, needs still to create functioning consolidation models post the abrupt NPC “privatization” which has created a fractured landscape for petrochemicals governance and challenges for further growth. Consolidation is an area which must and will further evolve. The interplay between the state-owned enterprises and other players such as regional conglomerates, foreign corporations, local family companies and stock markets, as well as high-level government policies will determine the future paths. In the context of fierce competition (global, regional and local) the ME players will face serious (scale, efficiency) challenges which, if mastered professionally, could create added value and new opportunities.

Innovation:  Not many new chemical molecules for industrial uses have been created recently. Innovation in manufacturing processes and applications of existing chemicals and/or their modifications and service differentiations have though been plentiful and highly effective. Middle Eastern players, besides creating their own research and innovation centers, can and should profit from the existing world-class innovations and best practices by striking international alliances with key research, engineering and commercial institutions- from companies to academia. However this would –foremost- need a healthy supply of talent in different disciplines enabled by progressive national and corporate policies and strategies.  Human Capital: The region as a whole is not short of a healthy supply of talent in different disciplines mentioned above. At the national levels though, there are difference in individual countries, depending on their socio-political (demographic, developmental, governance, cultural) conditions. Despite these national differences and at the corporate levels, the industry must take a much more active role in creating, nurturing and enhancing its human capital as THE most both: immediate and sustainable success factor. Just to mention a very recent global executive survey conducted by Boston Consulting (BCG)  – with the key finding: Leadership and talent management capabilities have a surprisingly strong correlation with financial performance. “Talent magnets”—those companies that rated themselves strongest on 20 leadership and talent management capabilities—increased their revenues 2.2 times faster and their profits 1.5 times faster than “talent laggards,” or those companies that rated themselves the weakest. 

Conclusion: 

Middle East Petrochemicals as a whole is at a turning point. The image of lowest-cost supplier of bulk petrochemicals to the world’s consuming markets is challenged by new feeds (shale, coal), technologies and significant new capacities within those very markets.  The regional players though have still strong means to address these and their other challenges. Whether in Saudi Arabia or in Iran: the excellence in and interplays between integration, consolidation, innovation and human capital are among the key measures for the regional petrochemical industry to maintain competitiveness and for reaching new heights.

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Aman Amanpour spoke at Iranian National Petrochemicals Conference 

Aman Amanpour delivered a keynote presentation on 26th February 2017 in Tehran at the “National Iranian Petrochemicals Conference: Opportunities and Threats”. The title of his speech was: “Value by Integration, Competition, Sustainability – Premier Enterprises’ Approaches”. In the afternoon he was invited to attend a panel of Iranian industry leaders where the key challenges and opportunities of hydrocarbon and petrochemicals were debated and provided his views on topics such as investment strategies, foreign and domestic partnership, value chain, portfolio and technology aspects, financing as well as some business obstacles and best practices.

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Aman Amanpour chaired the 4th Maximising Propylene Yields conference in Frankfurt 7&8th December2016  

Representatives of renowned chemical companies and experts from specialist entities presented and discussed the latest on market, business, partnerships, technologies (traditional and on-purpose), innovations, operational excellence, value chains, derivatives, challenges and opportunities of propylene as a key petrochemicals building block. One of the key common conclusion being: in spite of short-term pressure on market prices and margins, maximizing propylene yield via innovative routes makes strategic and long-term sense, considering continued demand growth, as well as unique derivatives’ properties for current and upcoming novel applications in key consuming sectors.

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The 11th GPCA, 27-29 Nov 2016 in Dubai under the theme” “Competitiveness: Riding New Waves”.

Aman Amanpour comments : The mood at this year’s event was subdued as companies struggle to cope with low oil prices, diminishing availability of advantaged gas feedstock, business models not fully fit-for-purpose and reduced profitability. There were plenty talks in the keynote speeches of “innovation, integration, consolidation, competition with other regions, more specialty and higher value products and service offers, creating jobs, maintaining the value in the region ….” Themes which were also at  centre of almost all of the past 10 GPCAs. New(er) being though the challenges mentioned in the first sentence above. While China/Asia, US and Iran are moving to add significant capacities, GCC players have entered their more stagnant phase of capacity addition.  And while the challenges coming from the two former countries/regions were taken due note of, the latter (Iran) with its target (and serious effort) of doubling their current 65mtpa petrochemical capacity by middle of next decade was rarely discussed. For me though the highest challenge for GCC petrochemicals sector is the incompatibility of their wishful model of replicating similar value chains as in the advanced economies with their demographic, competitive advantages, integrative and socio-cultural realities.  Saudi Arabia and to some extend other GCC countries have achieved an impressive and admirable growth and profitability in certain petrochemicals value chain thanks to advantaged feedstock, fit-for-purpose portfolio / business models, partnering with key global players for organic growth and some significant acquisition and investment abroad. Going forward though some of these elements such as availability of advantaged feed, aspired new portfolio versus the limited local market size for such product mix … in addition to the aforementioned challenges will continue to limit the growth and profitability. We shall see in a year time at 12th GPCA how these themes, challenges and (hopefully) new opportunities would evolve.

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Recent personal and process safety incidents in the Middle East

 Recently we’ve observed some major incidents in some hydrocarbon and petrochemicals operations in the Middle East. Saudi Arabia and Iran as two major players have been among the scenes. Iran has experienced in recent months several fire and explosion incidents in some petrochemicals plants, leading to fatalities, injuries and severe damages to the environment, neighborhoods , assets and certainly (corporate and individual) reputations. The latest in the series has been a major fire on Wednesday 6th July 2016 in the para-Xylene tower and tanks of Bu-Ali-Sina petrochemical complex in Bandar-Imam-Khomeini. The complex belongs to the Persian Gulf Petrochemical Holding, Iran’s largest petrochemical producer, which belongs partially to National Petrochemical Company, a subsidiary of Ministry of Petroleum (MoP), and partially to some (private and quasi-private) institutions. In the last days there have been much updates and news from the MoP and other sources on this incident. Fortunately and till now there hasn’t been any fatality or major injuries reported. Not knowing yet the root and contributing causes of this incident and based on mere reading of these news and comments, I wish to share some initial observations and “hunches”:  1) The fact that the Minister, several deputy ministers and senior executives have gone to the location and stayed there until the fire is under control sends mixed messages: sense of urgency and responsibility, but also tells something about the “management systems and management styles” … , 2) The decision to let all liquids in the tank(s) to be burnt for several days for the fire to (self) extinguish seems very strange ! Even if the risk to people working there and assets may have brought under control, yet how about (civil and industrial) neighborhoods and overall environmental impacts in this densely industrial and populated area? There sure can and must be solutions at local and national levels to actively fight and distinguish the fire at much shorter times.  Going on such a path, again, gives a flavor of the quality, processes, tools and techniques of the decision (making or taking).  3) What remains to be hoped is a thorough and professional RCA (root cause analysis) with lessons learnt plus clear implementable remedy plan(s) for across the plants and sites. The least helpful approach -in case the cause hasn’t been sabotage, willful act or gross negligence- would be a mere search for culprit(s) and punishing them. Training, re-training, work place motivation/satisfaction, introducing and continuously improving “management systems”, utilizing of best-practices nationally and internationally, empowering and trusting in those trained and competent staff and most importantly:  promoting and achieving a progressive and “regenerative” HSSE culture and battle for winning “hearts and minds” across the organizations. Starting at the very top level and cascading throughout the organization. These seem to me as some key milestones of a journey towards safer, more reliable and sustainable operations.

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Middle East Petrochemicals: Portfolio Choices - tailoring the Value Chain or just pushing Downstream ? 

Aman Amanpour opines : Going downstream, producing specialties  instead of commodity chemicals, ‘adding value’, avoidance of ‘raw selling’, multiplying effect on GDP … industrial clusters, job creation … have been on top of countries’ agendas in the region: KSA, Iran, UAE, … as if there’s a new trend and no one wants to stay behind! But can a one-size-fits-all approach really fit all? Here are some key factors (in no order of importance) to test against for the “fitness” of a choice: state and prospect of national economy, history of petrochemicals (and related industries) development, current value chains and capacities, human capital, resources (feedstock, energy), availability, degree of industrialization, upstream/downstream  integrations / synergies (existing and potential), nature of markets and customers (domestic, export), demographics, state-vs.-private sectors, country’s macroeconomic priorities, availability of foreign and/or indigenous technologies and best-practices, state of international  markets and competitive scene for existing and targeted product-businesses, (geo)political imperatives, availability of technology and market leaders to partner with. Such factors should be analyzed in depth with the help of own available experts and experienced consultants to help determine whether certain aspired portfolio choices are feasible in a specific country / entity or otherwise. Let’s take the regional countries with current (petro)chemicals footprint and ambitions : Saudi Arabia, Iran, UAE, Qatar, Oman, Kuwait, Bahrain, Iraq, Turkey, Egypt, Algeria. Take also: China, India, US, Europe (West/East/South), Japan, Korea, Russia, Singapore, Thailand, Malaysia  …  and reflect on the above factors! European Chemical players have already admitted their lack of competiveness with Middle Eastern, US and Chinese player in base and intermediate chemicals and are stressing on their strength which is in downstream of the chain and “solution provision”. Japanese players take a similar approach – see the recent feature in Chemical Week Could all of these very different countries, regions and their entities be successful in adopting a sophisticated and/or full value chain of chemicals? Which ones (who?) are better off focusing on certain (what?) portion of the value chain and based on their “comparative advantages” and leave the other (what?) portions to others (who?)? Coming back to the Middle East, I’d just take few countries and offer some brief views: Saudi Arabia: after two decades of heavy “production-mainly--for-export-and-highly-profitable” of base and intermediate chemicals, banking on cheap and ample feedstock and mainly in joint ventures with major foreign partners, the country has embarked since middle of last decade on an ambitious and partially successful journey of global expansion (SABIC), adding more potent players (Aramco, private sector), expansion of value chain and integration with refineries. The combination of the old and new model has proven so far viable - in economic as well as developmental terms. Yet delivery on the full “clusters program” and plans for further massive expansion of the (lower paid) labor intensive consumer and fabricated goods industries will be difficult to achieve -in view of country’s specific labor market and other societal/cultural aspects.

Iran:  the country has already a large petrochemicals manufacturing base (second only to KSA in the region) and a moderately developed downstream of chemicals production. Post sanctions, plans and engagements are in place to finish a plethora of incomplete projects –mainly in base and intermediates chemicals- which, if successful, would double the current capacity to 120 mtpa within a decade from now. There are though gaps, especially in propylene and aromatics value chains, which if filled, could help broadening and deepening the downstream of chemicals and their consuming sectors, creating more value and employment.  Yet I’d challenge the current notion of “avoidance of raw selling” if that’s meant at making and selling base and intermediate chemicals which in fact add in their own way significant value to the country’s ample and low cost feedstock, supply / integrate with local downstream and provide major clout in the global markets and value chains. In addition and commercial best practices have shown, there are further scopes for creative deals (incl. “virtual integration”) for even more value with international clients and partners. UAE, Qatar, Kuwait, Oman: these countries have also developed their cracker complexes plus the immediate derivatives and target – to different extends- at completing the chemicals value chain and its downstream manufacturing industries. Apart from several questions which can be raised here, let’s pick just a very simple one:  with what workforce? Even for projecting and running of the current less labor intensive facilities they are heavily relying on the expatriates at all levels. Conclusion: “horses for courses” as the saying goes. (Petro)chemicals manufacturing and businesses are global, so are their value chains and integration. Notwithstanding and within macro-economic plans based on national interests which the governments’ need to device / implement and strategic corporate objectives that enterprises need to achieve, there are ways and means to optimize the (‘triple’)bottom lines based on inherent and/or comparative advantages within and outside of national boundaries or corporate fences. No part of the (petro)chemicals value chains is of less or more value per se. The right mix and design make it.

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Global Petrochemicals: How the Scene has Changed? Why? What to come Next?

Aman Amanpour opines : Oil, China, Shale, Coal, Biotech, Economy, Demographics, Geopolitics, Iran are some key words.  In short: there are more questions (uncertainties, risks, volatilities) than answers (confidence, clear trend lines). Below I’ll try to tackle each and their interplays addressing the 3-in-1-questions posted above.

Oil: the slump in crude oil prices has dramatically flattened the curve of (e.g. ethylene) production cost. With that the advantages of US and Middle Eastern gas/NGL-based producers have become less pronounced compared to European and Asian liquid-based makers. The latter, marginal, “price maker” (least competitive) producers, with reduced cash cost due to cheaper naphtha/liquids, brought the prices down, yet overall improved their margins too. The lower oil and Chemicals prices are expected to spur the demand over time – but will they? See next:

China: as the country took on their “rebalancing”, away from production-for-export-focused model and towards more services and domestic consumptions, the rate of petrochemicals’ demand growth slowed compared to what the world was used to / planned for in the previous decade.  This factor will play against the demand stimulating effect of lower oil prices – for China, but also for other emerging economies such as Brazil, Russia which are in trouble for different reasons. This has created a high level of inventory not only for oil and its fuel products but also for petrochemicals, which in turn are creating another ceiling for the prices.

Shale: low oil price has put massive pressure on the viability of significant number of shale resources in US. However, forces which contributed to low oil price (see Geopolitics) are surprised to see how resilient shale has so far been. Yet with time the trend is clearly towards less shale oil production and with that and to a large extend also with adverse impact on supply security of shale gas and associated ethane – a key plan premise of a plethora of new US petrochemical complexes announced and being built. Which portion of these announcements –apart from those already under construction and/or FID’d- will go ahead? Answer to this question will determine to a large extend the ability of supply side to put a lid on, otherwise, looming overcapacity.

Coal: again China! The country has managed within few years to commercialize and expand significantly on the coal-based chemicals production. Not only the older routes such as calcium carbide -> acetylene -> VCM -> PVC, but more importantly the modern processes of coal-to-methanol-to-olefins (ethylene and propylene): CTO/CTP MTO/MTP, as well as cola-to-MEG and coal-to-acetic acid. Self sufficiency targets, monetizing on their vast coal reserves and cost advantage during the high oil price era have been the main driving forces. Now lower and volatile oil prices -one would expect- could retard this development? Yet the strategic nature of the initiative and the “sunk capex” would overall keep this trend in China in place. Therefore a certain –significant or moderate, depending on economics- element of global overcapacity would be expected to come from this angle.

Biotech: the renewable, carbon-neutral, bio-based feed-stocks and routs have been under rapid developments in the last several years. From ethanol or butanol (from sugar, corn or cellulosic raw materials) as drop-in solutions or as ‘platform chemicals’ to get, for example,  ethylene from, to new bio-degradable plastics such as poly lactic acid (PLA) … have been commercialized and were about to become competitive as the oil price was high. The latter, again and among other factors, has and will further impact this value chain, compete with petro-chemicals.

Economy & Demographics: Europe, Japan and North America have so far not fully recovered from the tremors of the 2008-10 financial and economic crises.  Major BRICS and other emerging economies have either entered into a more moderate growth (China, South Africa) or into stagnation and recession (Russia, Brazil). India being an exception with still healthy growth rates, hence well growing chemicals demand. Besides, the aging population in the developed economies and “baby boomers” retiring is putting another lid on future demand patterns of this part of the world which enters into a “new normal” in terms of quantitative and chemicals-related consumptions of goods and services. 

Geopolitics: many if not all of the factors discussed so far are impacted –directly or indirectly- by the global political dynamics and power plays. Many decisions and behaviors which have impacted macro-economies, oil price, shale, China have been highly political having their roots in (mostly zero-sum) national, regional and global power plays and conflicting vested interests. A prime example: Saudi Arabia’s move to increase output and veto production cuts at OPEC to mainly push out more costly productions (shale, deep water, arctic), as well as hurting certain rivals (Iran, Russia) was a key factor in creating the oil oversupply and price plummeting.  These realities are key to understand and based on which design a tailored risk-based-approach for the decisions touching organization, investment, partnership, trade … which chemical players are taking. On the other side many (geo)political impacts stem from “unintended consequences” (e.g. wars, interventions, terrorism) which are even not fully understood and forecast by all direct players and their think-tanks, let alone industry professionals.  

Iran:  putting the complex politics around this country aside for a moment and looking at Iran purely from petrochemicals (beside oil) perspective.  It was clear that once nuclear sanctions were lifted, Iran would push massively though completion and commissioning of their plethora of unfinished petrochemical projects. Surprisingly though very few of the players have heeded this factor and considered it in their analysis, forecasting and investment planning. Take just two examples from the key value chains: ethylene and methanol. Having already a capacity of 5.2 mtpa ethylene, Iran stands a good chance to add another 7 mtpa within next 5 years –if not earlier. Also with a current methanol capacity of 5mtpa, the country is planning to add another 15 (if not 20) mtpa of capacity within the same time frame. These are massive additions! Part of their methanol though could be converted to propylene (MTO/MTP) which in turn would boost the C3 / derivatives capacities. With a similar willingness to increase the oil and gas production and export, and in turn their influence on chemicals cost/competitiveness, Iran will be impacting heavily both chemicals and energy markets. 

Conclusions:  It seems a good chunk of investments to come on stream in this decade in the base and intermediate chemicals (from those already on the drawing boards and in the pipelines)  and outside China and Iran [which will push ahead regardless of market supply and demand] will run the risk of failing to achieve their premised targets plus contributing to global oversupply. Unless they get delayed, phased and some cancelled. 

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Saudi Arabia increasses the Petrochemicals feeedstock prices

 After decades of cheap feedstock prices, which gave Saudi petrochemical producers a massive cost advantage— the government is significantly increasing the prices of ethane and methane, starting in 2016. The move follows the country's decision to reduce subsidies and raise government revenues following higher defense spending and the collapse in the? price of oil. The price of ethane, as of 2016, will rise 133%, to $1.75/million Btu from 75 cts/million Btu, bringing Saudi ethylene producers closer to those in the United States in terms of feedstock costs. The price of methane, a feedstock used to produce methanol ?and ammonia, among others, as well as source of energy for the petrochemical plants, rises by 67% from from 75 cts/million Btu to $1.25/million Btu. The increase in feedstock costs in Saudi Arabia has long been anticipated, albeit lobbyed to avoid, by the petrochemical producers in the Kingdom. Yet the country still has the lowest gas prices in the region and possibly the world.  

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Aman Amanpour's next "Masterclass in Petrochemicals" and "Strategic Management in Petrochemicals" will be in Dubai 31 Jan-4 Feb 2016.

 The programs are separate modules, yet complementary and could be combined as the dates are back-to-back. Please click on ["Masterclass"] and  ["Mini-MBA"] for more details on the programs’ content, target audiences, locations, further details and for registration. These programs are organized and supported by the Euro Petroleum Consultants - a reputable consulting, training and event management company ("EPC")

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Iran’s Petrochemical Industries: Opportunities, Challenges and immediate Requirements.

 Iran Petrochemicals industry is and could further be country’s most prominent industrial sector based on considerable potentials in terms of natural and human resources as well as large domestic and established export markets. Also from the regional and even global perspective, Iran is one of the countries with still large untapped investment potential in terms of human (educated & skilled work force) and natural (feedstock) resources as well as some unique infrastructure and integrative elements. Iran’s petrochemicals’ history and developments demonstrate both achievements and setbacks. However, international sanctions, NPC’s pre-mature “privatization” (chaotic fire-selling of best assets to rich but unprofessional individuals/institutions), mismanagement , lack of clear strategy,  ambigeous feedstock policy with contrarian views , investment funding issues , limited access to best practices (project, operations, international relations and commercial management) and some technologies … have retarded and in some cases stopped the progress in the last 10 years. There’s currently a heated debate on some key policies and the way forward, as well as some corrective actions in the country to address the issues. These all, post JCPOA signed in July/2015, having already achieved  IAEA’s compliance confirmation (incl. clearance on past activities: “PMD”) on 15th December, awaiting now the “Implementation Day (I-Day)” which is pending Iran’s remaining actions and the expected suspending/lifting of nuclear related sanctions during early  2016. On the other side, the risk (real and perceived) of sanctions' “snap-back” will remain in case IAEA and G(5+1) observe non-compliance on the Iranian part. This risk however, although of “high impact”, is being assessed by most geo-political analysts, as well as by International companies interested in trade with and investment in Iran, as of “low probability”. There’s already a significant international interest in Iran’s petrochemicals sector – as observed at the latest Iranian Petrochemicals Forum (“IPF”) in Tehran, mid December- in all aspects by different entities in terms of: equity partnership, trade, EPC, technology licensing, other services and consulting. Most if not all of those entities are aware of potential risks but, overall and for the reasons mentioned, are attracted to create, revive and maintain the foothold and relationship with Iran’s key petrochemicals players. On the other side and given the choice, Iranian players are also keen to create, revive and maintain the relationship with the international providers of: excess capital, market know-how, technologies and (commercial and operational) excellence. Besides and to create a balance to the current Chinese players, European and Japanese firms are quite clearly the preferred options for Iran. However, foreign investment and partnership – even if available to fullest potentials- represent only some important “necessary conditions” for reviving and further developing Iran’s petrochemicals industry to the heights it deserves. Yet addressing the domestic issues mentioned earlier plus setting out and implementing a grand strategy would create the key “sufficient conditions” for achieving the much announced objectives and targets. Besides capable engineers and scientists which the country undoubtedly posses and further requires, there’s an acute need for best-practice-trained, nurtured, properly deployed and developed next generation of world-class managers and leaders for the industry. A close interplay between the public (ministries, other entities) and private sector sure is needed to address these issues and requirements. Yet as many examples of successful (China, India, Singapore, Malaysia, Saudi Arabia, even Europe and US in their earlier phases) and failed (post Soviet & Eastern Europe industrial disintegration in the name of “privatization”) cases show: the public sector leadership for planning, investment partnership (domestic and foreign), integration, infrastructure and project executions for developing industries at similar stage of evolution is paramount – despite many hypes and noises to the contrary!

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Two events on Iran Investment opportunities in Dubai (29 Sep) and Muscat (25 Oct) 2015 were organized by the MEED magazine

 Aman Amanpour was invited as one of the three panelists to provide insight and address the questions. Read more. Themes and topics presented by the speakers included: Opportunity Iran: State of the economy & financial sector,  preparing for re-entry: The legal frameworks in Iran & on-going compliance with outstanding sanction obligations, snapshot of Iran’s energy and infrastructure projects market and those likely to be green-lighted early 2016. Then the panel candidly explored and addressed the questions of: entry strategies for international companies and potential approaches to the market, practical ideas and tactics about entering Iran, what the difficulties and risks are, where the opportunities lie, establishing a branch office & appointing an agent, participation in tenders, JVs, service contracts & BOT/BOO, using free zones, considerations in stakeholder strategy , negotiating contracts, cultural aspects and brief sector opportunities.

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Aman Amanpour was invited to speak at Iran's "First High-level Symposium on Industrial and Trade Policies" on "Challenges and prospects of downstream petrochemical  industries" in Tehran — 10th and 11th of October 2015

 Aman's speach scope was "Developing downstream petrochemical industries: opportunities, challenges   and the way forward: A cluster, value chain and integrative approach. Requirements for tailored model(s) based on local specifics and international best practices".  Here's the gist of what he presented which was very well received and lively discussed - both at the Symposium, as well as at a dedicated workshop few days later with senior managers of different institutions and industries :  Looking at drivers in different countries and regions, two main tendencies in developing (petro)chemicals industries are recognized: “Resource Push” and “Market Pull”. The former relates to the intention of adding value to (raw) resources destined for export or being used domestically –e.g. oil and gas and their initial products-.  The latter has been the approach taken by nations with large consuming markets and to create value chains for their economic development and industrialization. Iran   fulfilling to different extends both aspects, requires a dedicated approach, yet utilizing the existing best practices and experiences. Integration –an important factor to create synergy and efficiency- was discussed with examples of configurations and as related to chemicals value chains. Clusters: after introducing the cluster concept and drivers, examples of industrial clusters were given and their characteristics, followed by mapping some successful   clusters across the world. Then was discussed the high-level cost structures of different element of chemicals value chain and the impact of these differences on investment planning / decision  and overall competitiveness of such chemicals. Considering (chemicals, plastics) consumption curves, behavior of consumptions per capita and the intensity of chemicals consumptions in each consuming industry are   other important aspects which in turn impact on optimal development of the downstream chemicals industries. Then was presented: some detailed facts and discussing some International best practices in world’s different regions. Europe, Asia, Middle East and some countries focusing with special attentions to the paths which two renowned organizations took –with different philosophies and historical backgrounds- for developing   their chemicals assets and value chains.

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Aman Amanpour's next "Masterclass in Petrochemicals" and "miniMBA in Petrochemicals will be in Dubai 8-12 November 2015 ans 29Nov-3 Dec in Doha/Qatar

 The programs are separate modules, yet complementary and could be combined as the dates are back-to-back. Please click on ["Masterclass"] and  ["Mini-MBA"] for more details on the programs’ content, target audiences, locations, further details and for registration. These programs are organized and supported by the Euro Petroleum Consultants - a reputable consulting, training and event management company ("EPC")

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International Oil Companies (IOCs) and their positions on Climate debate ahead of Paris/Dec 2015

Aman Amanpour comments: 

 Recently BP’s CEO was asked about the company’s position on Climate debate and he gave this comment: “”At the end of May, BP signed a letter with other oil and gas companies calling for a global carbon price. Why did the business do that? This year is important as we have the United Nations Climate Change Conference in Paris in December, at which around 200 countries will gather to try to achieve a universal agreement on climate change. Early this year, I was at another conference with the heads of Total, Statoil and Shell and the audience was asking us about our position. We realized that we needed to speak with a common voice and language. We were later joined by Eni, BG and Repsol. The timing is right for us to have our voice heard. Gas is an important bridge to a lower-carbon future. Replacing coal consumption with gas for power generation by 1% has the same impact on emissions as increasing renewables by 11%. Today, our portfolio is 50/50 oil and gas. In a decade, we expect it will be around 60% gas.”” 

Here’s Aman Amanpour’s comment which he published in a social media group debating the issue: “”Yes the oil majors have long jumped on the band-wagon of sympathizing with climate problematic, presenting themselves as part of the solution rather than the problem. This is partially for image cleaning (or "green wash" as activists call it) and partially genuine. Genuine because, a.o., they can recourse to gas a (comparatively) cleaner fuel. Shell has been leading the way with their portfolio being (especially post BG take over) clearly 60+% gas. True is the statement that gas would be a fair low CO2 transition/bridge to fossil fuel-free future (note their language: “a lower-carbon future”!). But how long are we to reach this future? Here's where the divergence in views and vested interests starts to crystallize. Major oil/gas companies and their (in this respect) aligned institutions such as OPEC, OECD/IEA, EIA etc. forecast a still lion’s share dependency on fossil fuels even till 2050 which, to them, is manageable in terms of climate with the provisions they suggest (shift from oil/coal to gas, CCT, CO2 pricing/cap-and trade, some limited shares of renewables etc.) . And of course they base such forecasting on their "impressive" scenario-planning with huge data base and complex modeling capabilities. While this is and will remain part of reality of the energy world, it can and to some extend will –if not challenged-  partially lead to a self-fulfilling-prophecy effect as, with such views becoming dominant, the breathe and depth of R&D and investment in renewable would be negatively impacted – the major drive to a fossil-fuel –free future.  Needless to also remind that cheap oil and gas prices will play an impeding role and the ability of some major players to strive for such an environment.  On the other side the developments in renewable, foremost solar followed by wind, are already breathtaking. The technological and commercializing pace is very much mimicking those of IT/communication/internet/consumer electronics space in the last two decades. This has, despite all those forecastings, influencing and opposing vested interests, the potential for further disruptive leap-frogging , so that by the middle of this century the share of renewable energy could be much higher – perhaps the lion’s share- in the energy mix.  There are strong and emerging forces pushing in this direction too. Middle East in general and countries such as Iran in particular are among  rare countries which are not only blessed with vast fossil fuel resources but mind-boggling potentials in renewable, foremost in solar, which must and will (sooner or later) take a leading role in their developments. “”

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US Cracker investments are moving ahead despite changed (market, oil/gas) environments, yet with added risks and uncertainties. Aman Amanpour comments. 

 US Cracker investments are moving ahead despite changed (market, oil/gas) environments, yet with added risks and uncertainties .. Looking into different sources and deducing from dialogue with diverse stakeholders: there are 6 cracker (and derivatives) projects which are under construction with total ethylene capacity of ca. 8mtpa, one recently taken FID: with 0.5mtpa and one very likely to take FID this year with 1.5mtpa. This brings us to a firm additional US ethylene capacity from these 8 crackers to over 10mtpa by 2019/2020 (8mtpa by 2018). Besides, there are 5 more crackers in feasibility/permitting phase with an additional not-yet-FID capacity of ca. 6.5mtpa.  From this list one has a targeted FID of Q3/2016 but for the rest there are no public FID dates. Hence out of the above total of 16.5mtpa ethane cracker capacity, I’d conclude that 10 mtpa will be built before/at the end of this decade. As these are under construction or FID’d with secured ethane supply, it’s safe to assume they will come on stream, regardless of the crude oil or gas/ethane price and supply/demand developments within this decade or beyond. Besides these uncertainties,  there is another unquantifiable risk building all these assets, even those already under construction or FID’d – and that is : EPC / labor market and contracting strategies. Many of the companies building already the assets have gone for “cost reimbursable” model instead of lump-sum-turn-key (LSTK), outsourcing some key construction to Asia, “modularization”, etc. This is due to the very tight EPC market and shortage of skilled labor and technical staff which forces the EPC contractors to add a conservative (high) premium if they are to accept LSTK/fixed. Despite all the creative measures, it could still mean that the capex might go [significantly?] higher than what had been assessed on the eve of FID, rendering the projects less competitive on the life-cycle basis than assumed during the planning phase. Adding to the lower oil/gas ratio than perhaps initially premised and EPC and skilled-labor challenges, there are significant Asian capacity additions –foremost Chinese CTO/MTO, but also Naphtha crackers- as well as the “wild card” of Iranian incomplete and planned projects to be completed once sanctions are lifted.   Add to this the uncertain state of world and regional economies, setting the upcoming demand scene, make all market participants bracing for another “interesting” ride on the petrochemicals’ never-ending cyclical journey.

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Saudi Arabia has slashed its massive Renewable program but intensifies Nuclear plans. Why?

Aman Amanpour comments : Saudi Arabia has slashed its massive Renewable program but intensifies Nuclear plans. Why? Establishing of 'KA-Care' (King Abdullah City for   Atomic and Renewable Energy) and announcing 54 GW of renewable (mainly solar) energy last couple of years came as a big bang not only for the country, but also for the whole solar industry world-wide. Rumored since last year but clear since the new King Salman started his reign, it became public that the solar plans -at least in that scale have stopped. And in the last few days (21 June 2015) we're hearing that KSA has sigend a sizeable nuclear deal with Russia's Rosatom. KA-Care's original plans  for Nuclear power capacity was 18 GW. The Kingdom has also signed cooperation agreements with France and South Korea in this space ... But why slashing solar and  proceeding with Nuclear in a country with world's highest irradiation ? It seems there has been internal debates and different preferences based on different  interests. Ministry of Petroleum and Saudi Electricity Company (SEC) seem to be "aligned players" here. SEC has been advocating since a while its preference to increase the utilization of existing power plant capacities (at 63 GW by end of 2014), enhancing efficiencies and reducing transmission waste etc. before investing in any further generation capacities. The debate on internal transfer prices for crude oil (Still being burned for power in KSA!) and gas (less and less available) has sure played a role too. And of course the recent slump in oil prices hasn't been helpful for renewable / solar either. Yet would the decision to kill big and long-term solar program is a signal from the highest levels in the kingdom that the era of high oil prices is over, perhaps indefinitely, from their perspective? And if so, why then picking the Nuclear with its massive capex need and other obvious risks? There are already some guess works and speculations ... but the matter will sure be clearer in the coming weeks and months.

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GCC Petrochemicals: an update on the growth pace, changed investment model and new trends in regions' different countries

Aman Amanpour contributed.

http://analysis.petchem-update.com/engineering-and-construction/gulf-region-set-5-petchems-growth-downstream-attracts-funds

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Iran Petrochemicals in a tension field between different forces: current status and upcoming prospect.

  Aman Amanpour comments: Iran Petrochemicals in a tension field between different forces: current status and upcoming prospect.  Summary: Iran Petrochemicals industry is and could further be country’s one of if not the most prominent industrial sector based on considerable potentials in terms of key resources as well as large domestic and established export markets. Also from the regional and even global perspective, Iran is one of the countries with still large untapped investment potential based on human (educated & skilled work force) and natural (feedstock, energy) resources as well as some unique infrastructure and integrative elements. Iran’s petrochemicals’ history and developments demonstrate both achievements and setbacks. However recently and currently, international sanctions, NPC’s pre-mature “privatization” (chaotic fire-selling of best assets to rich but unprofessional individuals/institutions, weakening of NPC’s central planning and execution), mismanagement / lack of clear strategy,  feedstock policy with contrarian views and unresolved debates , investment funding issues , limited access to best practices (projects, operations, international relations and commercial management) and some technologies … have retarded and in some cases stopped the progress in the last 10 years. There’s now a heated debate, as well as some corrective actions in the country to address such issues on the eve a possible final nuclear deal (to be achieved by end of June/2015). One of the (among several other key) areas impacted by these challenges is the overall portfolio management both at producers and overall country level. A prime example: Methanol. Besides current considerable 7 mtpa Methanol capacity, there’s a mind boggling new investments list announced to come on stream in the next five years. The rationale being heard is a “full steam” utilization of Methanol-to-Olefin (MTO) and particularly Methanol-to-Propylene (MTP) to develop the underinvested propylene value chain, as well as the hope that China which is currently the front runner in CTO/MTO/MTP utilization would remain and further expand to be an attractive export market for excess Methanol, plus the fact that the technology side looks manageable based on some purchased licenses and domestic capabilities. There are many debates going on currently for and against such initiatives. Yet the simple question which seems unanswered is: whether there have been sufficient risk/value based market, value chains and economics studies which have been independently reviewed by competent experts supporting or otherwise such investment decisions? And this is just one example among many … Iran petrochemicals industry offers much higher potentials and deserves much better treatments and destiny as it is currently observed.

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Leadership Insight by Aman Amanpour - Petrochemicals Industry: 

 Leadership Insight by Aman Amanpour - Petrochemicals Industry.  Business and Strategic Excellence is vital – especially during Tough Times! Falling / uncertain oil and erratic regional gas prices, shale plays, North American capacity additions, emerging technologies, new feedstocks and on-purpose routes, Middle Eastern countries transforming their business models…‘Sleeping giants’ getting up, the threat of Asian and Chinese demand slump, European and North Asian economic woes, environmental and legislative challenges, historical and ever-lasting restructurings, mergers and acquisitions,  substitutions of products and transformations of applications, clients industries and end consumers… Fore reading the whole text and Aman's upcoming Petrochemicals training courses click here.

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Aman Amanpour delivered a keynote speech at Platts European Petrochem Conference 11&12 March 2015 in Dusseldorf/Germany.

 Aman Amanpour delivered a keynote speech at Platts European Petrochem Conference 11&12 March 2015 in Dusseldorf/Germany . The title of his speach was: "Petrochem Business & Investment: Some key Impacts and Outlooks in a shifted Economic and Oil /Gas World". Some of the topics he discussed were: " 2015: state of macro-economy, oil/gas, NA (shale) feedstock …, Impacts on cash cost curve / competitiveness, New crackers investments: ethane vs. naphtha, plan vs. realities …, Europe: old predicaments and new hopes , Propylene and Methanol: the “on-purpose” journey …, Middle East: shifted strengths and challenges, Conclusions and outlook for Petrochemicals in 2015." 

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Aman Amanpour's next "Masterclass in Petrochemicals" and "miniMBA in Petrochemicals will be in Dubai 1-5 February 2015

 The programs are separate modules, yet complementary and could be combined as the dates are back-to-back. Please click on ["Masterclass"] and  ["Mini-MBA"] for more details on the programs’ content, target audiences, locations, further details and for registration. These programs are organized and supported by the Euro Petroleum Consultants - a reputable consulting, training and event management company ("EPC")

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Aman Amanpour's next "Masterclass in Petrochemicals" and "miniMBA in Petrochemicals will be in Dubai 2-6 Nov 2014

The programs are separate modules, yet complementary and could be combined as the dates are back-to-back. Please click on ("Masterclass") and ("MiniMBA") for more details on the programs’ content, target audiences, locations, further details and for registration. These programs are organized and supported by the Euro Petroleum Consultants - a reputable consulting, training and event management company ("EPC")

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Aman Amanpour conducted "miniMBA in Petrochemicals in Moscow 8-10 Oct 2014

The course was organized in cooperation with Euro Petroleum Consultants (EPC) and visited by senior managers from the renowned oil/gas/ petrochemicals companies and the related service providing industries. Much ground was covered ... and the Delegates participated interactively during the 3 course days. At the end they provided very positive and encouraging accounts of their experience of this Premier Event in Moscow.

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2 Sep 2014: China’s chemical demand is still growing at a double-digit ratepushing large domestic and international chemical corporations to strive to capture that growth with more investments in the country.The picture is much more positive than a year ago as the concern about the China’s (rate of) growth slow-down and its impact on our industry was looming. Quite evidently the CTO/MTO/CTMEG/PDH … have been among powerful vehicles from the supply side. However, the urbanization and growth of the middle class which spur the increase in per capita consumer goods and performance chemicals' demand- mainly propylene based- have been the main driving forces. On coal-to-chemicals projects: it is projected that ca. 30% of the Ethylene production of 80 mtpa by 2020 will come from these routes. However, some of the challenges here are the heavy capital cost, water shortages in the western region of China, high carbon emissions, and waste disposal. Yet all the key Western and Asian players are adapting themselves to the new realities, new technologies/value chains and government policies in terms of investing in higher value added products, end-use-focused activities, partnership and technology transfer and investment relocation from coastal areas to inlands. The impact of China on the global chemicals is and will be significant. China's output of Chemicals has been 1.3 trillion US-dollarin 2013  which is roughly one-third of the world's output! Yet China's impact needs to be put in the context of other two key regions' new dynamics:  ME’s shifted investment model from light-to-heavy feedstocks and US/NA's shale plays and the reverse shift: from heavy to light. The changed global trade flows as the consequences of the new trends in China, Middle East and Noth Americas will impact all regions and shape up new forces. 

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Latest on Responsible Care: 

"Chemical makers historically have had to contend with regulators where product safety was concerned but now have to develop new tools to address concerns across the supply chain and respond to the private sector deselecting products as retailers, brand owners, and consumers push to eliminate certain chemicals", reporsts 'IHS Chemical Week' and further: "At ACC’s annual Responsible Care conference in May, ACC CEO Cal Dooley said that product deselection efforts in the private sector, encouraged by NGOs and consumers, was one of industry’s biggest threats. NGOs and consumer groups are increasingly targeting retailers because they “realize that Walmart and Target are not in the business of convincing the public that their products are safe,” Dooley says. “They are in the business of meeting consumer needs.” If consumer fears can be exploited in the absence of a response that takes into account exposure risks, life cycle analysis and overall health, sustainability, and environmental risks, it could lead to product deselection, he says. Product safety codes, which commit to communicating with the public, reflect that retailers, standard-setting bodies, and brand owners can just as effectively and easily regulate chemicals in commerce as regulators can. Product safety is likely to expand to areas such as collaboration on assessment tools that incorporate more than just hazard assessments. Industry needs to extend that advocacy through the value chain to communicate the safety and effectiveness of its products and counteract deselection pressures." for full report visit: Link.

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Aman Amanpour will chair the 2nd day of the 11th Global Petrochemicals Conference -  3 & 4 June 2014 in Berlin/Germany and also leading a session on “Joint Ventures”. 

For more information on the event please visit: Link

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Aman Amanpour delivered the Keynote Speach at the Platts European Petrochemicals Conference in Dusseldorf, Germany on 18.03.2014. The topic of his Speach being:      “Regional & global petrochemicals - Mutual Dynamics in view of changed games in feedstocks, technologies and markets”, covering (main topics): World Economy: a snap-shot,  Emerging Feedstocks  and Technologies,  Impacts on Markets and Competitiveness, Some Open Questions …,  Conclusions on global Petrochemical trends, Current Middle Eastern Environment, Middle East Petrochem: Past, Current -> upcoming Phase in view of Changes, Conclusions on Middle East Petrochemicals trends.

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