Jun. 7, 2018


Hashem Sayed Hashem

Kuwait

Hashem Sayed Hashem

CEO, Kuwait Integrated Petrochemical Industries Company (KIPIC)

“The downstream sector is an important part of the 2030 strategy of maximizing the value of hydrocarbons in Kuwait.”

BIO

Mr. Hashem Sayed Hashem is one of the most recognized leaders of the oil and gas industry in Kuwait. He earned his bachelor’s degree in Chemical Engineering from Kuwait University in 1987, and subsequently joined Kuwait Oil Company (KOC), one of the world’s top ten oil producers, in 1987. From 1998 onward, he assumed a variety of senior leadership roles at the company, before being appointed as CEO in May 2013. In January 2016, Mr. Hashem was appointed as Managing Director of Integrated Refinery & Petrochemical Project, to eventually become CEO of KIPIC when it was legally established in November 2016. Mr. Hashem served as Chairman and Managing Director of Kuwait Oil Tankers Company (KOTC) from July 2013 until January 2016, and is Board Member of the College of Engineering & Petroleum since February 2014.

What was the vision behind the creation of KIPIC in 2016?

The downstream sector is an important part of the 2030 strategy of maximizing the value of hydrocarbons in Kuwait. The Al Zour Refinery has been approved and is now under execution, and an LNG import terminal (LNGI) was part of the 2030 strategy for supply of clean energy to Kuwait' industrial & power sector. After a study, KIPIC was established in late 2016 as an integrated company to manage the integration between refining and petrochemical activities to gain synergies and maximize the value of hydrocarbons. KIPIC was initially mandated to construct and operate three mega-sized projects at Al Zour: the Al Zour Refinery, LNGI, and downstream petrochemical production facilities. Ensuring that these three megaprojects are as integrated as possible is the essence of this company despite the fact that these projects were approved and being implemented on different time schedules.

How has the organization evolved since it was founded over a year ago?

After the plan to create KIPIC was formed in late 2016 and the legwork was done, the process of establishing the legal entity was finalized in November 2016. We have come a long way from forming the articles of association and objectives of the company and receiving approval from Kuwait Petroleum Corporation (KPC), the Kuwait Supreme Petroleum Council, and several ministries. Considering the size of the company, the time it took to finalize all the necessary legal steps was short and commendable. Once the legal entity was established, we needed to determine the organization structure of the company and its vision. This was approved in November 2016, along with the appointment of the board and the management. We had to be absolutely sure we were ready to assume responsibility; because the last thing we wanted was to hinder the progress of the ongoing projects during the transition of these projects to KIPIC. We developed a detailed plan that ensured a smooth transfer of responsibilities without interruption. This plan saw to it that by May 2017 the foundation and systems would be in place to have everything transferred to KIPIC, and it is heartening to note that all went according to plan. Before the establishment of KIPIC, the progress of Al Zour Refinery was around 15%, and now it is around 42%. LNGI progressed from 12 to 20%. Things are also moving forward at the petrochemical Project. The company faces many challenges in terms of the resources to be brought in and the right systems to be established. Things are now moving according to plan and I hope that by 2018 that many of the well detailed systems that are needed to equip the company will be in place.

What are the advantages of integrating refining and petrochemical activities?

The ultimate goal is to maximize the value of Kuwait's hydrocarbon assets. We enhance the margin of crude oil by refining it. These refined products can be used as feedstock to produce petrochemical products such as Poly propylene, p Xylene, benzene etc., to increase the margins even more. The integration of refining and petrochemical activities leads to important synergies. It ensures that we do not seek for profit maximization in isolation, but rather, look for the approach for maximized profit across the value chain and help us achieve the greatest margins. By having everything under one umbrella, we will save on investment and reduce our operating costs.

How do you assess the growth potential of downstream industries in Kuwait?

There is a great deal of potential in the petrochemical and refining industries. Today Kuwait is producing 3 million bpd crude oil majority of which is exported: Less than a third is refined within Kuwait. Our 2030 strategy is coming into play as well and we are increasing hydrocarbon production to 4.75 million bpd. A large portion of this crude will be refined here; our refining capacity is set to increase to 1.4 million bpd. It is better to maximize the value of the petrochemical industry than to just refine more crude.

How do you see KIPIC contributing to the future of Kuwait and generating employment opportunities?

Our growth programs will tap into Kuwait's many strategic goals. Maximizing the value chain of crude will be a great resource for the economy of Kuwait, and the investments in the three megaprojects will create a positive environment for many industries and raw materials. Moreover, it will create 2,700 direct employment opportunities, as well as the jobs that are available for contractors and maintenance. The investments will provide an avenue for the private sector to be involved in the downstream industry. In addition, we will supply the country with clean and high-quality fuel that will help reduce the impact on the environment. Together, these points make up KIPIC's contribution to the future of Kuwait.

What is your outlook for the year ahead?

We will focus on the future to ensure the progress of the project within our time and budget limits, and that things move according to plan. According to our schedule the refinery should be completed by 2019. We need to ensure that our readiness plan for commissioning, operating, and maintaining the refinery is ready, and are working hard on this. To obtain the synergies and capital efficiency we are seeking, it is important that the different megaprojects do not experience delays. In this way, we will have the benefits of integration right away.

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