The final day of the Saudi Mega Projects 2005 conference saw the speakers talk about growing investment opportunities in the oil and petrochemical sectors. (AN photo by Imran Haider)

DAMMAM, 10 May 2005 — The three-day Saudi Mega Projects 2005 conference ended here yesterday urging Saudi and foreign businessmen to make use of the huge investment opportunities in the Kingdom, especially in oil, gas, petrochemicals, electricity and railroad.

“Saudi Arabia, which sits on a quarter of the world’s proven oil reserves and has the fourth largest gas reserves, offers promising investment opportunities in the energy sector and support services,” said Abdul Rahman Abdul Kareem, deputy minister of petroleum and mineral resources for company affairs.

The final day of the conference saw Mansour Al-Kharboush, vice president of Saudi Basic Industries Corporation, and Isam Al-Bayat, vice president of Saudi Aramco, talking about growing investment opportunities in the oil and petrochemical sectors.

Bayat explained how to attract local and international investors to create a platform for downstream industries and provide employment for Saudi nationals. He called upon international investors to participate in joint ventures with Saudi Aramco.

“Saudi Aramco’s projected expenditure on materials would exceed $20 billion through 2010 whereas the projected expenditure on services would cross $23 billion in the same period,” Bayat told the conference attended by nearly 900 Saudi and foreign delegates.

Bayat anticipated tremendous growth in the oil and gas sector over the next decade. He indicated that there would be vast opportunities in refining, petrochemicals and power generation. “Saudi Aramco is a stable partner and a reliable supplier of fuel and feed stocks. It strongly encourages local and international investors to participate in the Kingdom’s development,” he concluded.

Abdullah Al-Abdulgader, manager of projects at SABIC, said there were new projects worth $8 billion under study. “We have achieved 42 million man-hours without a lost time incident in 2004,” he said while talking about performance of SABIC companies.

Ahmed Al-Ohali emphasized the need to promote non-oil industry. “About 80 percent of our exports are crude oil and petrochemicals. Today we are witnessing a transition from dominant oil sector to non-oil diversified economy. The petrochemicals are a major driving force in the Saudi economy with an approximate 9 percent contribution to the GDP. This sector employs more than 20,000 people, 75 percent of them Saudi, and many more in related industries,” he said.

Dr. Moayyed Al-Qurtas, vice chairman of Tasnee, threw light on the projected private sector investment in petrochemicals and the case for joint venture projects. He also touched upon the pros and cons of joint ventures and advocated a cautious approach.

Majed Al-Ahmadi, president and CEO of Project Management and Development Co., gave startling figures on the petrochemicals industry. “The ratio of oil and gas reserves verses chemical sales for Saudi Arabia was perhaps one of the lowest in the world,” he said. He put the sales target for the year 2020 at $100 billion.

Dr. Aldo Belloni, the CEO of Linde Ag, was very positive when he noted that there is a great change in the quality and quantity of technical participation from the Saudis.

Mohammad Al-Juwaiser, director general of Investment and Development for Jubail and Yanbu, was eloquent when he described the development of Yanbu and plans for its future. He disclosed that as of February 2005, the total investment exceeded SR19.12 billion and indicated that the forecasted investment till around 2020 will be over SR130 billion. He also talked in details about the Yanbu II Phase I, predicting an almost 200 percent growth possibility in the production capacity in the next 15 years.

Mohammad S. Al-Jurais, deputy director for investment and development for Jubail, said it is now 30 years since Jubail I was initiated. He gave a vivid description of the growth pattern witnessed in the area. “In 1975 there were only nine primary industries as against the current 19. Jubail II will see this figure jump to 33 and the support industries will leap from the current 133 to 272,” he said.

The sessions on the challenges and opportunities in financing downstream energy projects was fascinating as Oscar Silva held the audience spellbound. “Islamic banking is a very suitable option in providing financing,” said Oscar. He envisages a staggering $30 billion investment in the coming few years. “The economy is very sound and resilient and offers a very bright future,” he added