CRUCIAL TO US

Saudi Arabia 2017 | ENERGY | COLUMN

TBY talks to Salahaddin H. Dardeer, President, Saudi Aramco Base Oil Company (Luberef) on the sector.

Salahaddin H. Dardeer

What is the significance of Luberef's expansion at Yanbu to produce Group II-base oil?

We are working on a major expansion at our plant in Yanbu that will produce Group-II base oil, which is among the highest quality produced in the Middle East. The reason for doing this is that we are the leader in the Middle Eastern market, especially in GCC countries, and we go as far as India, Pakistan, and Asia. The base oil industry is moving to a higher quality now, and we decided to develop an expansion to our refinery to cope with the current changes in the industry. It will be on stream by the end of this year and we will provide our customers with this high-quality product. The Yanbu expansion is a capacity increase; therefore it will impact our revenues.

How does Luberef position itself within the Vision 2030 reforms?

Among other things, Vision 2030 talks about the quality of materials that can be used in the country, which helps us. Also, Vision 2030 encourages companies to be innovative, technology creators, and leaders in the market. All these are a plus for us, even though today we have a global trade deficit, when the market is open and everyone is allowed to import anything. Now, when we start focusing on materials, what we bring to the country, and what we export from the country, a company like Luberef represents the highest quality. This will help us, and it will also contribute to the success of Vision 2030. Finally, we are 100% Saudi here in our Jeddah operations and maybe 70% in Yanbu, and we want to see it grow. It is one of our main goals to employ Saudis; it is an important standard. We also need to keep a certain percentage for knowledge transfer. I do not think it will be 100% at any time, but to keep between 5 and 10% of people that carry the highest degrees of international expertise.

What are your expectations for 2017?

We are looking forward to the Yanbu expansion; it is a big achievement in Luberef's history. When this comes onstream, it means more exports to other markets, which is crucial to us. We will further grow the Luberef brand and keep producing high-quality base oil at a higher grade, Group-II. It will be a great achievement, and we are very proud. We will be open to other markets, we have been talking to customers about our new products, and have sorted everything with contracts in hand. Because some of the products cannot be used in nearby areas, like the GCC, we will perhaps go further to India or Pakistan, or even Europe. It is a big challenge and an extremely exciting time ahead.