ExxonMobil Lubricants face a bright future in the region

ExxonMobil_Lubricants_bright_future

ExxonMobil Industrial Lubricants have a bright future in the Middle East region with the Saudi Arabian market seen as the biggest market for Mobil Lubricants products and Iraq as a vital upcoming sector according to key members of Lubricants & Specialties (L&S) division.

At a recent roundtable, L&S ExxonMobil experts discussed how Mobil Industrial Lubricants can play a significant role in the global energy market which is going to be driven by growing global energy demand. ExxonMobil expects energy demand to increase by 35 per cent by 2030, compared to 2005 levels, and demand for natural gas will make it the fastest growing major energy source.

"Iraq is really picking up for us. With its production potential and good governance you can imagine what Iraq will look like five years down the road. Oil revenue triggers everything from construction to infrastructure," Michel Gouzerh, Chairman and CEO, ExxonMobil Middle East Marketing Corporation stated.

Lubricants will play an increasingly important role in the energy sector, especially as oil and gas continue to be a major source for overall, global energy supplies. Significant advances in technology and system design have yielded a generation of equipment that is more sophisticated, compact and efficient than ever before.

The roundtable was attended by the key Mobil L&S team including Michel Gouzerh, Ian Davidson, Global Industrial Marketing Manager, ExxonMobil L&S Company and Michael Hawkins, Global Brand Manager - Mobil SHC, ExxonMobil L&S Company.

Regional operations

Michel Gouzerh is in charge of ExxonMobil Middle East Lubricants & Specialties operation which has its headquarters based in Dubai. The company has its manufacturing facility and blending plant in Jebal Ali. Mr Gouzerh talked about Mobil's L&S operation which comprises of a small team of technical experts and sales executives.

The key for ExxonMobil is its strategy to partner with one group or family in each Middle East country which has proved very successful as the company's partners around the region have been developed over many years. Mobil L&S operates across the whole Middle East, apart from Iran and Syria due to international sanctions. "But should the sanctions be lifted we would be very happy to go back to Syria, which was a good market for us," Mr Gouzerh stated.

Saudi Arabia is Exxon's biggest market, especially after the kingdom privatised Petrolube which gave other companies a chance to compete on a level playing field. Mr Gouzerh stated: "We believe Saudi has huge potential as does Abu Dhabi. We also have a big presence in Qatar thanks to our big involvement in the gas business in Qatar, we are partners with Qatar Gar, Ras Gas. Qatar will remain big."

Saudi represents roughly 70 per cent of Mobil's L&S sales last year and they expect that to grow in the next few years. Iraq is a very important market for Mobil's growing Lubricants business, especially since the company won a deal to develop Iraq's West Qurna field along side Royal Dutch Shell. The joint venture saw Shell take a 20 per cent stake and Exxon take 80 per cent.

Mr Gouzerh stated at present Exxon is working on roughly doing 0.2mn bpd with the aim to bring the field up to 2mn bpd. As Ian Davidson pointed out, Iraq is a great example of how lubricants can be used to make sure that an oil field is operating at the highest level. As once ExxonMobil's operations are up and running, "to make sure it is operating at the highest level. The lubricants department plays an extremely important role in achieving this."

Exxon's Iraq operations are in their early days with Exxon just starting-up in mobilising contractors and equipment. Exxon started 6 months ago with 20 workers but now has up to 150. "We are doing a big, huge operation on the upstream side and we will feel the lubricant business will follow," Mr Gouzerh added.

Energy Demand

Ian Davidson talked about how the energy sector was changing and how it was "increasingly not just about producing but about producing safely and with the highest level of environmental care". According to ExxonMobil's own data, the energy outlook to 2030 will increase by 35 per cent from 500 BTU's in 2005 to 650 by 2030. The oil and gas business is driven by energy demand.

According to Mr Davidson, the primary driver for energy demand will be the massive population growth across the globe as the demand this is going to impose upon energy reserves is going to be huge. We see that the world is going to need all of the energy resources with oil, gas and coal being the predominant sources of energy to 2030, he added.

In order to meet this demand the oil and gas sector will need to improve energy efficiency by 95 per cent over the period until 2030 just to meet that demand. Which is why ExxonMobil, "believes that the right lubricants and right supplier can help and improve oil/gas productivity on a global basis," added Mr Davidson.

Lubricants

Exxon's lubricant products have provided the oil and gas industry with comprehensive maintenance solutions that help companies boost productivity, enhance the performance and life of their equipment and reduce downtime.

As Glen Sharkowicz, Global Industrial Business Development Advisor, ExxonMobil L&P said: "Drivers of industry have the need to be productive, need to be safe, lower energy intensity and protect the environment. By selecting the right lubricants you can extend oil life."

Mobil is leader in synthetic lubricant technology with its Mobil SHC lubricants which are designed specifically to reduce operating temperatures, minimize component wear and extend oil change intervals.

Outlook

The roundtable ended with a look at what impact the current unrest is having on ExxonMobil's lubricants business which is linked very closely to GDP growth. Healthy GDP translates into increased demand for lubricants. Mr Davidson argued that political situations are always difficult to forecast an took a pragmatic approach.

"If the situation in the Middle East was going to materially impact upon hydrocarbon production then crude and gas prices rise typically, so the commodity that uses our lubricants becomes more valuable. As a consequence of that we are more able to justify our technology leading services, our product services to ensure that higher priced commodity is produced more reliably," he observed.

The main conclusion was that the fundamentals will not change and there will remain a big demand for energy.

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

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