Top Oil and Gas Leaders from Russia & CIS Revealing their Strategies and Future Plans for Project Developments & Financing in the Region

21 & 22 February 2013, Madinat Jumeirah, Dubai

For third successful year the Russia&CIS Executive Summit gathered together in Dubai the highest level executives in the Downstream Oil & Gas Industry, to reveal their future plans for development, discuss the challenges and opportunities that the industry in this region is facing today and share their experience on attracting investments and major projects financing. The unconventional format of the event encouraged interesting discussions among the participants and let them share their points of view on the pressing issues brought up by senior representatives of leading consultants, financiers, investors, technology and service providers during the presentations and panel session.  

                      

Sponsors of the conference included UOP, Axens, Foster Wheeler, Criterion, Escort, Air Products, Izhora Plants, Linde and GE Water.

During the first day of the conference Mr. Jean Sentenac, Chairman & CEO of Axens, who traditionally contributes as a speaker to this event, brought up the main challenges in the refining and petrochemical industry in the Russia & CIS region. In his presentation he explained the importance of developing new technologies and additional processes and services to answer the needs of this market.

Another presentation that raised the attention of the participants was delivered by Mr. Rustem Gimaletdinov, Head of Refining, Petrochemicals & Gas Processing Development Department in LUKOIL. He presented challenges and outlook in modernisation of Russian refineries from an end-user point of view, which most of the attendees found very useful and applicable.

The second half of the first day was dedicated to financing of major projects and attracting investments. Leading worldwide consultants such as White & Case and Ernst & Young participated in the extended panel discussion with high-level representatives from World Bank, Asian Development Bank, Financial Ministry of Russian Federation and more to discuss the key risks and solutions when attracting investments for major projects as well as legal aspects and government regulations influencing the outcome of those investments.

As always the Executive Summit provided invaluable networking opportunities and possibility for all attendees to expand their business contacts & sales leads in the region, for which contributed the expanded exhibition area which this year accommodated around 20 exhibition stands.

The networking was further enhanced by the Impressive Gala Evening sponsored by UOP and held on an open terrace at Rivington Bar & Grill with stunning view to the luxury Burj Al Arab Hotel.

Day two was dedicated to improving efficiency and profitability with a session chaired by Mr. Carlos Cabrera, Executive Chairman of Ivanhoe Energy known as one of the most respected names in the Oil & Gas Industry with more than 35 years of experience, granted seven U.S. patents and authored numerous publications.
With special interest were received the presentations of high-level speakers such as Mr. Nigel Orchard, General Director of UOP, Bill Bonkoski, Vice President Global UF/MBR of GE Power & Water, Igor Timofeev, General Director of Izhora Plants who focused on the latest technologies for improving refineries efficiency and profitability.

Undoubtedly the most interesting and impressive part of the conference for all delegates was the Leaders Panel Session which gathered in an extended discussion with end users and other top executives such as Sergey Merzlyakov, Vice President of Sibur, Anatoly Skoromets, General Director of Ryazan Refinery, Mikhail Davydov, Senior Vice President, Refining Downstream of TNK-BP, Oleg Belyavsky, General Director of OMSK Refinery and many more. During the Leaders Panel Session all attendees had the exclusive opportunity to raise their questions to the session participants or to share their point of view and experience with the rest of the high-level audience.

Exclusive interview with the Chief Investment Officer of the International Finance Corporation (World Bank) Mr. Anil Chandramani

Read an exclusive interview with the Chief Investment Officer of the International Finance Corporation (World Bank) Mr. Anil Chandramani, who provides a brief preview of his forthcoming presentation at the 3rd Russia & CIS Executive Summit, taking place in Dubai end of February. He also gives brief overview of the main challenges Russia & CIS region is going to face in the near future in terms of attracting investments, political factors influencing the industry, shifting of markets and other interesting topics.

 
 
                                                                               Mr. Anil Chandramani,

Chief Investment Officer, IFC – short biography here

              - Please describe your company briefly?

IFC helps companies strengthen their risk management capabilities so they can grow and compete globally.

- What are the main issues you are planning to address in your presentation at the 2013 Russia & CIS Executive Summit in Dubai?

I would like to discuss why companies today can hardly afford to ignore emerging markets if they want to retain their leadership position in the industry and remain profitable.  I would like to discuss some of the key risks that companies face when they consider expanding their business outside their home country in various emerging markets, and also how IFC can help them manage/ mitigate those risks so they become more comfortable in those other countries, maybe almost as comfortable as in their own home markets.  The good news is that even today, even in difficult economic and political conditions, many companies are investing and growing. We think most companies can do that, if they understand the challenges and are committed to fixing the issues.

- Could you please give us some brief information on the financial/investment challenges that Oil & Gas companies might be facing in 2013 when expanding to new markets or when planning large new projects?

Financial/ investment challenges include volatile exchange rates,  low interest rates which make it unprofitable for banks to lend specially to those perceived as more risky borrowers,  Basle III guidelines which are expected to force banks to reduce lending further, crowding out of private capital by government borrowings in EU zone,  reluctance of financial institutions to lend long term because of risks of interest rates going up,  growing nationalism and protectionism in some parts of the world. On the equity side, the challenges might be different – how to raise equity capital in small doses.  But of course, even today we are seeing many investments in many countries in the region, just for example in Turkey, Uzbekistan, Russia, Ukraine, among others.  The idea is to build on strengths and mitigate the weaknesses. Not investing, not modernizing, not exploiting opportunities is not really a viable option because it can weaken your company and make it increasingly more vulnerable to risks.

- Could you share with us your perspective on the economic and political factors that might challenge the companies from the industry in 2013-2014? How about other factors that might influence the industry?

Economic and political factors that affect the industry, include among others, the following: slow economic growth in the EU Region and its impact on the economies of Russia & CIS countries;   stressed financial institutions that are pulling back credit, specially from emerging markets;  political instability in the Middle east and North Africa region and its impact on feedstock costs and supply;  debt burden in the US and its potential impact on interest rates and currency exchange rates worldwide;   shale gas in the US and maybe China in 5 years – and how they will affect the competitive position of companies around the world, including Russia & CIS;  an aging European population and how it impacts oil & gas companies;  continuing expansion in China and its impact on cost of raw materials and supply of products, etc.

-  What would be your first advice on attracting new sources of capital for the downstream industry?

It is important to understand that the issue is not so much shortage of financing but rather projects or investment plans that are well structured to mitigate risk and thus attract capital.  For that the most important thing is to have the right people - if you have the right people they can take care of everything, whether it is finance or operations or marketing or procurement.  Similarly to attract new sources of capital, you need people who understand both what the investing company is trying to do and also what financial institutions and other sources of funding want to see. If you can understand both those aspects, a company will then be able to structure its project so it becomes a fully bankable project. Bankability is all about risk mitigation: a good project that attracts capital is one which identifies the risks well and then lays out strategies to mitigate those risks.

-  Do you expect a major shifting of markets in the mid-term perspective and if so what in your opinion would be the main factor to cause this? How does the investment climate in Russia & CIS compare to other emerging markets in the industry?

Barring major unforeseen events, shifts are definitely going to happen but incrementally and continuously rather than overnight. They will be driven by politics, economics and resources.  These have all been mentioned above briefly.  Change is inevitable – the key is for companies to be prepared to meet emerging challenges so that they can maintain their competitiveness even in a changing environment. In every industry there are companies that are faring better than others. The key therefore is can you do the right things and avoid or mitigate the problems. 

             - The petrochemical sector traditionally faces more difficulties when it comes to attracting investments    than refining and of course upstream. How can IFC assist petrochemical companies in this respect?

IFC can help in several ways by helping companies understand risks and options for mitigating those risks.  IFC can provide both equity and debt, IFC can provide long term local and foreign currency financing,  IFC can help mitigate political risks; IFC can bring other partners in, IFC is counter-cyclical and hence not subject to the vagaries of the market place. IFC understands emerging markets like few others do, by virtue of the fact that IFC is a part of the World Bank Group. In the current fiscal year, IFC will invest more than US$1 billion of its own money and mobilize about $2 billion of other people’s financing that together will finance projects up to maybe US$15 billion.  So IFC is very active even in today’s market and we are keen to engage with good proactive clients.

-  What do you expect from you participation at the Russia & CIS Executive Summit?

To meet companies and to share IFC’s perspective on risk mitigation and financing; to meet people from different companies.

-  Please answer a question of your choice.

Another trend is that of companies from emerging markets, particularly from Asia (but also from the Middle East) acquiring companies in Europe and America.  This trend can both be a source of support (for example, Chinese companies come with lots of money) but can also be a challenge, bringing another somewhat new breed of competitors.  Again, the goal is to be one of the successful companies that can benefit from this trend and IFC can help companies that are proactive and ready to move.

Air Products and Sibur celebrates the start up of the new ASU plant in Voronezh, Russia

Voronezh, Russia (October 19, 2012) Air Products and Sibur inaugurated the opening of a  new  air separation unit (ASU). The grand opening ceremony is being held in conjuction with the 80th anniversary of Sibur’s OAO Voronezhsynthezkauchuk’s facility.

As a part of the agreement signed in 2010, Air Products will own, operate and maintain the ASU which is located at the Voronezhsintezkauchuk’s site. The ASU has been designed to satisfy the industrial gas requirements  for the main production facilities of OAO Voronezhsynthezkauchuk, in particular, gaseous nitrogen and compressed dry air. It is  managed remotely from the control center located in Czestochowa (Poland).The ASU will have the capacity to produce up to 3,000 /hour of gaseous nitrogen, plus up to 16,000m /hour of dry compressed air.   In addition to providing Voronezhsintezkauchuk with all of its industrial gas requirements, Air Products will also supply liquid product to the Russian market and start up of operations  will help enhance volume and quality of the products manufactured by OAO Voronezhsynthezkauchuk.

“Building reliable, mutually beneficial relationships with Russian firms, is a key enabler in capitalising on long-term growth opportunities in this territory.  As Voronezhsintezkauchuk recognise, the benefits of on-site gas production facilities in a rapidly expanding marketplace are significant and can bring substantial commercial advantages to both the customer and supplier.” commented Rob Mills, General Director, Russia and Commonwealth of Independent States at Air Products.

The investment in Voronezh follows the previously announced agreement signed with Rostov administration to continue the company’s strategy of investment in growth regions. Air Products will construct and operate an oxygen, nitrogen and argon liquefier, with a 200+ ton per day capacity, and a cylinder gases depot , in Krasny Sulin, in the Rostov region. The region has a well-established manufacturing base, strong historic growth rate and very promising development forecasts. The total value of both investments is in excess of USD $30 million (€ 25 million) and both the liquefier and packaged gases depot are expected to be on-stream in early 2014.

Only at ME-TECH 2013: FERTIL to Present their Urea Project FERTIL-2 for the First Time

Latest Media Information: 

The leading Petroleum Conference & Consulting Company Euro Petroleum Consultants has announced the programme for ME-TECH 2013 - their annual Middle East Technology Forum. The event, taking place next February, will be the 3^rd edition and will be held once more in the grand surroundings of the Madinat Jumeirah Conference Centre in Dubai. The conference has proven to be the essential meeting place for the Middle East Downstream Industry and an excellent platform to keep up-to-date with the latest key projects & technologies in this important region.

The Forum will take place over two days; running with two parallel conference streams on each day.

Day 1 will focus on latest technological developments in the Gas Processing & Oil Refining sectors with a strong focus on the key global market factors and their impact on the industrial development in the Gulf region.

Special attention will be paid to the impact of the US shale gas boom on Global LNG and Petrochemicals; the effects of the high crude oil price: impact on margins; latest proven technologies for clean fuels and how fuel substitution & energy efficiency could lead to a Zero (net) carbon Refinery.

Important areas to be covered in these two streams also include monetization of unconventional gas (shale gas, coal-bed methane), project updates on large scale urea plants, main issues of sour gas field development, accelerating process & catalyst development for syngas.

One paper expected to attract high interest is the presentation from FERTIL, which will focus on their highly anticipated Urea project – FERTIL-2.

The plant, located in the Ruwais Industrial Zone, will produce ammonia and urea, with a production capacity of 2,000MTPD and 3,500MTPD respectively. The start-up of the plant is planned for January 2013 and is one of the most discussed fertiliser projects in the region.

Day 2 of the conference will provide insight into development trends, major producer perspectives, technology updates and optimization strategies in Residue Upgrading & Petrochemicals sectors.

The Residue Upgrading stream will also include presentations by Chevron Lummus Global, UOP, Grace and many more.

NRL Pakistan will present at ME-TECH 2013 a joint paper with UOP looking at investing in the heavy oil refinery expansion project.

Taking a closer look at the Petrochemicals Stream, there will be wide ranging topics presented such as Refinery & petrochemical integration; Technology updates: Ethylene Technology, Propylene production, Synthetic rubbers; Optimisation Strategies & Tools:  Life Cycle Management Tools, Beyond Asset Monitoring for Improved Reliability, Standardising & Accelerating R&D.

At the end of each day there will be a Round Table Discussions aimed to provide the delegates with the opportunity to exchange professional points of view, suggestions and ideas.

The Middle East Downstream Sector is facing numerous challenges including low margins, overcapacity and increasingly stringent quality environmental regulations (such as CO2 emissions) - meaning that the role of technology providers is now more important than ever to look at ways to improve efficiency and to process heavier sour crudes.

Adapted Technology solutions will help plant operators improve margins, move ahead of the competition and optimize their potential in this ever-changing market environment.

In the current climate, downstream industry professionals realize that in-depth industry knowledge, expertise and flexibility are imperative for success. For this reason specialised industry events are the ideal way for sharing ideas, exchanging practical advice/experience with their international colleagues, business partners and potential clients.

ME-TECH 2013 will be directly followed by the Russia & CIS Executive Summit – an event uniting top executives of the Downstream Industry, consultants, investors and financial institutions to discuss their strategies and business vision for the Russia & CIS markets.

For more information about both conferences please contact the EPC Marketing Team at:

marketing@europetro.com or visit www.europetro.com