Saudi Arabia can lead on cleaner fuels

21 August 2009

Regulatory oversight of imported fuel products is tightening and producers will need to respond.

The launch of the second big contract on Saudi Aramco’s clean fuels project, which aims to reduce the sulphur content of its refined oil products to 10 parts per million by 2013, takes the value of environmental upgrades planned or under way at the region’s refineries to almost $30bn.

While the investment programme is a welcome development for contractors and consultants across the region, it also highlights the value that could be delivered by becoming a market leader in research and technology.

As the world’s largest producer of crude oil, Saudi Arabia needs to be sensitive to trends in world energy markets, and one of the biggest is environmental regulation. Environmental concerns are increasingly the focus of attention for the governments of significant energy consumers in the US, Europe, and even China.

As a result, regulatory oversight of imported fuel products is tightening, and any producer failing to respond to these changes will suffer a catastrophic loss of position in the market. Producers in the region must become more forward looking to avoid finding themselves in a near-permanent position of playing catch-up.

By looking ahead to likely changes in market demand and then investing in the development of technology that can pre-empt these trends, the region’s producers can lead, rather than follow, the world’s rapidly changing energy markets.

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