One does not need to look hard today to see the many opportunities and challenges in both the petroleum and petrochemical business worldwide.

This was stated by Bahrain Petroleum Company (Bapco) President Dr Mustafa Al Sayed during his keynote address at the 21st Annual Planning Seminar on the Middle East Petrochemical Industry.
"However, the theme of this conference is "Winning in a High Oil World" and I interpret that theme as being "How do we deal with the challenges of the industry when crude oil price is high?"," Dr Al Sayed said.
"Of course the first thing we have to address is "What is a high price?" The price of any commodity is what the customer is prepared to pay for it," he said.
"Customers are prepared to pay $60-70 per barrel for crude oil and possibly even higher; but does this meet the expectations of all stakeholders in the business?
"What price does the seller want, to ensure continued demand for the product without inviting alternatives?
"What price is acceptable to the buyer to still be able to economically survive? Is worldwide economic growth still possible with a high crude oil price?
If global economics prevail we will establish a true value for crude oil that will enable economic growth to be sustained," he said.
"Winning" means implementing successful strategies over the long term taking into account one's own configuration of resources, the business environment, the needs of the market, and the expectations of the stakeholders, Dr Al Sayed said.
"I am pleased to share with you some of the visionary projects Bapco is undertaking. Bapco refinery is undergoing a massive one-billion dollar modernisation programme that will add value to our assets and will give the Company an edge in the international markets.
"The Company is now moving smoothly and rapidly towards the completion of a major capital project, the Low-Sulphur Diesel Production Project (LSDPP).
"A little more than a year ago, Bapco awarded the Japanese contractor, JGC Corporation, an engineering, procurement and construction contract for grassroots construction in support of the project. This work involves the installation of the largest hydrocracker ever installed in a refinery. The project also includes major revamp to existing plant.
"At the beginning of 2007, the refinery will be commissioning the $685 million new plant, which will be producing diesel fuel to comply with the very strictest international regulations for environmental protection - the European Union's specification for the sulphur content of diesel.
"We, at Bapco, are naturally proud that our investment in the Low Sulphur Diesel Project will deliver a refinery that meets world class standards for product quality.
"We look forward to the opportunities this opens up for us as an exporter of diesel fuel that satisfies the requirements of the most demanding of markets," Dr Al Sayed said.
"The environment and its protection are of equal importance. The $140 million Refinery Gas Desulphurisation Project (RGDP), a key environmental compliance project and part of Bapco's Strategic Investment Program, is being planned.
"When completed and commissioned in early 2007, this project will make Bapco Refinery not only comply with current Bahrain regulations, but in many instances favourably exceed them. As by product, the Company will produce 500,000 tonnes of granular sulphur per year."
An agreement has also been reached between Neste Oil Corporation and Bapco to build a Group III tube base oil plant with a capacity of 400,000 tonnes per year, or approximately 7,700 barrels per day, Dr Al Sayed said.
"We also plan to improve our oil and gas fields operations, and continue exploring for oil and gas in new areas on land and offshore Bahrain.
"During this conference several speakers will be describing the current business environment for petrochemicals and one has to question whether investment reaction to the supply/demand situation will perpetuate the sinusoidal profitability cycle that has been associated with the petrochemical industry for decades.
"Certainly from a feedstock point of view, major investments are taking place in the region to capitalise on the availability of natural gas, and new refineries are being planned that will increase the availability of naphtha for petrochemical feedstock use.
"Whereas in the past there has been a well documented and justified preference for the use of ethane feedstock, I believe that over the next decade we shall see a resurgence of the use of naphtha for petrochemical feed as the demand for petrochemicals continues to grow with world economic development.
"In addition to a supply/demand situation that is leading to strong positive margins, there is sufficient liquidity in money markets to provide the funds for large investments.
"The opportunity for petrochemical manufacturers, therefore, appears to be great, however, in addition to the business cycle of boom and bust, we now have an extra challenge that has not been present in the past.
"Are there enough human resources to manage the projects, to staff the manufacturing sites and to market the products?
"Are we facing a pinch in terms of skills, knowledge and experience within the industry?
"Is the ageing workforce in many parts of the developed world going to constrain the investment in the industry?
How can we attract the brightest young graduates into the industry to sustain the growth?
"There are many challenges ahead of us and the price of oil may not be the factor that differentiates between being a successful company or being a laggard company in a high oil price world.
"For those of us with many years in this industry we can remember the times in the last decade when profitability has been difficult.
"We can remember times when we forecast that margins would not improve."
Creating a winning strategy can be very difficult, Dr Al Sayed said.
"We are all looking at the same business environment, and whatever investment we think is good could be jeopardised by others doing the same.
"Some of the more skillful among you can predict that certain events will happen, but then be off on the timing of such events.
"We can correctly assess the likelihood of future events but be sabotaged by unlikely events.
"Be careful when forecasting; particularly about the future," Dr Al Sayed said.