Gulf oil producers should follow the US lead and convert a greater share of their crude to chemical products, according to the Saudi Oil Minister, Khalid El Falih, The National reports.
Only 18% of the region’s oil production is converted to higher-value products, El Falih said, adding, “[t]his compares to only one-third of commodities [crude oil] being exported by the US and two-thirds being converted to higher value products.”
He urged Gulf producers to match the US by 2030, according to The National.
Production of petrochemicals in the Middle East is equal to 3% of world supply, significantly less than the almost 25% produced in the US, the newspaper reports.
Saudi Arabia, under the leadership of its flagship oil company, Saudi Aramco, is leading the effort to increase regional production of petrochemicals.
Earlier this week, the company signed a memorandum of understanding (MoU) with Saudi Basic Industries Corporation (SABIC) for a $20 billion petrochemical plant. Saudi Aramco’s CEO, Amin Nasser, indicated that the company is also planning additional investments in the sector.