Low oil price opportunity for Gulf Arab industrials: petrochemical producers

The chief executives of the major petrochemical producers in Kuwait and Saudi Arabia said here on Thursday that whilst constant low oil prices are challenging for Gulf Arab countries, they also provide chances to spur innovation, productivity and partnerships abroad.

Speaking at the Gulf Petrochemicals and Chemicals Association (GPCA) annual forum, Nizar Al-Adsani, the vice chairman and CEO of Kuwait Petroleum Corporation, said the low price of the "black gold" provides an opportunity to improve energy pricing, reform subsidies, reduce dependence on fossil fuels and to expand investments in renewable energy for electricity production.

The oil price fell from 110 U.S. dollars per barrel (159 liter) in July last year to 42 dollars per barrel nowadays amid a sharp increase of shale oil production in the United States and elsewhere.

Yousuf El-Benyan, the acting vice chairman and CEO of Saudi Basic Industries Corporation (SABIC), the world's biggest producer of petrochemicals, said corporations in Gulf countries should invest in innovation, business excellence, economic diversification and human resources.

"Innovation and technology requires vision and patience, these changes can only be achieved in a joint effort and by finding new partners abroad," El-Benyan said.

While the Middle East was still the most competitive oil and petrochemical industry in the world, the U.S. emerged to the most competitive petrochemical industry outside the Middle East, El-Benyan explained.

According to a GPCA report, chemical trade by the six Gulf Arab states has quickly recovered from effects of the global crisis, but "it has grown modestly since 2012. The slower than usual growth can be attributed to weaker global demand and the decline in commodity prices."

Nevertheless, the effect has partly been offset by growth in chemical production, which demonstrated a four percent annual growth during the same period. Endit