Saudi Aramco: The Future of Oil and Gas - GineersNow Petroleum Saudi Aramco, The Future of Oil & Gas Industry | Page 15

A Time of Conviction with Caution
It is clear that oil producers and allied
stakeholders in the MENA region remain
undaunted by the bleak market outlook and the
headwinds blowing against the global oil & gas
sector. Looking at the slew of oil & gas projects
in the pipeline, it is not difficult to see the region’s
conviction to satisfy domestic and international
energy demands, achieve energy production
objectives, and maintain its role as the world’s
premier energy resource provider.
But in these economically trying times, it is
essential for oil & gas companies in the MENA
region to practice caution by controlling costs
while capitalizing on expansion prospects and
profitable opportunities. Oil & gas companies
in the region, the likes of the UAE’s Emirates
National Oil Company (ENOC) and Abu Dhabi
National Oil Company (ADNOC), should ensure
the efficient utilization of their working capital
while the industry is still on its way to recovery.
One area of operation where oil & gas companies
can make significant adjustments to their capital
expenditure is power generation.
While electricity remains one of the most
important components of an oil & gas operation,
regional oil producers do not have to confine
themselves with devoting a significant portion of
their scarce capital to a major expenditure, like
a permanent power plant. Instead of building
their own power generation facility, oil & gas
companies can choose to hire temporary power
plants.
Company, Iraq’s North Oil Company and Kuwait
Petroleum Corporation, will welcome the fact that
payment schedules for the rented power are fixed
and regular over a contracted term. This will help
them in formulating accurate financial forecasts.
Moreover, a complete rental power service
includes all ancillary and spare parts, as well as
expert on-site engineers and technicians. This
means that oil & gas companies will be shielded
from additional costs that come with building a
permanent power plant, and that they no longer
have to hire, train or re-allocate staff members to
manage the power plant.
Bucking the Trend
In defiance of growth forecasts and of the
impacts of global oversupply that prompted a
sharp fall in oil prices since 2014, oil producers
in the MENA region have been continuously
investing in the oil, gas and petrochemical
sector. While global oil & gas spend is expected
to continue to decline, oil producers in the
MENA region are looking to buck the trend
and to continue pouring funds into the industry
to maintain capacity and fulfill ambitious
production targets. But while the oil & gas sector
is still regaining its old glory, regional industry
stakeholders are expected to restrain their
aggression with a bit of caution.
By turning to rental power, oil & gas companies
can have a consistent, dependable and sufficient
supply of electricity throughout the lifecycle
of their operations without the need to strap
a large portion of their funds to a permanent
facility. Temporary power plants can adequately
provide for the power needs of various processes
of an oil and gas operation, from exploration
and extraction, through to development and
processing.
Aside from savings in capital expenditure, renting
power will also have an impact on the allocation
of funds for an oil & gas project. Regional
oil majors, such as the National Iranian Oil
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