How is the company investing in R&D to enhance business opportunities?
Innovation is the foundation of our offering to the hydrocarbon industry and is part of Linde DNA. Our business model can basically be referred to as Technology-EPC. We possess a variety of in-house and patented technologies. The story of innovation at Linde is coupled with the work of its founder, Mr. Von Linde, who was basically the inventor of refrigeration technology, which is the cornerstone of today's industrial refrigeration and also cryogenic air separation. Hundreds of engineers in our R&D facilities are following his and also their dreams by innovating solutions for the challenges of tomorrow. Linde also takes great pride in being very active in jointly developing technologies and solutions with our customers. Linde's broad portfolio spans across different parts of the industry, from natural gas in upstream and LNG in midstream all the way to downstream petrochemical businesses. Linde group also addresses some of the new frontiers such as hydrogen based solutions in zero-emission mobility or enabling energized fracking with CO2-based solutions. The other dimension of the innovation is to make the existing processes and solutions safer and more efficient and economic. This is where we try to squeeze the last drops of hydrocarbon out of the process and into the bottom line and also enhance the reliability of the operations throughout their life cycle.
What do you feel is unique about Abu Dhabi and what does it have to offer to make it a focal point for the region?
Abu Dhabi is our regional headquarters for Linde Engineering across MENA. On the business side, the transparency, advanced infrastructure and logistics, ease of setting up and doing business, and availability of skilled resources are unique attributes, while on the social front the security, safety, and quality of life that the Emirate offers have made it a very convenient location for several operations and businesses to establish, operate, and expand and for all of us to call it home. We also have operations and companies in the kingdom of Saudi Arabia, and some of the other countries in the region. This is part of a business philosophy we follow and that is to ensure proximity to our customers and partners and also to be a part of the local communities in which we operate so that we can deliver on our commitments there too.
How do you feel the industry is reacting to the record-low oil prices?
Looking at this super cycle that has hit the hydrocarbon industry, you might notice that it is different from the one in the late 1990s or the financial crisis in 2008. This cycle is simply the challenge of fundamentals, sparked by the competition between conventional and unconventional producers. Flooding the markets with product in the quest for a higher market share, this rally stretched the boundaries of supply while the demand took a different turn with a slower China and a more resilient US shale industry that could sustain the price pressure far more than market expectations. Thereafter, it was only a matter of time to add logistics and storage capacity challenges to the overall picture and a very steep and persistent price decline. As all of this unfolded at a different speed and magnitude to what the industry could usually withstand, the initial reaction was a drastic CAPEX cut, hibernation, and as the price descended even further the feasibility hurdle began to knock off some more projects around the globe. However, like any turbulence, the initial shockwaves are almost gone and players started to adjust, optimize their cost and in the wake of a slower growth, rationalize their capacity.