Saudi Aramco: Non-Business Use

OIL DRIVES THE WORLDBUT – WHO DRIVES OIL?

Saudi Aramco: Non-Business Use

AGENDA

Energy

History

Value Chains

Global Market

Bangladesh

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Saudi Aramco: Non-Business Use

ABOUT THE SPEAKER

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Born and grew up in Dhaka

G-Lab, Dhaka College, DU – IBA

Netherlands Fellowship Program

Shell 2000-2013

UK, Singapore, Malaysia, Brunei, Western Europe, Russia, West and Southern Africa, UAE, Qatar, Saudi Arabia.

Gas and Oil Production, Refining, Chemicals, Chemicals, Renewables.

Saudi Arabia 2013 –

Large Integrated Projects

Saudi Aramco: Non-Business Use

JARGONS

Barrel – 42 Gallons or 159 Liters, originally used to store beverages

MMBtu - Amount of work needed to raise the temperature of one pound of water by one degree Fahrenheit (one four-inch match consumed completely).

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Saudi Aramco: Non-Business Use

WHAT IS PETROLEUM

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Saudi Aramco: Non-Business Use

WHAT IS PETROLEUM

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• Fossilized organic materials, such as zooplankton and algae.

• Vast quantities of these remains settled to sea or lake bottoms, mixing with sediments and

being buried under anoxic conditions.

• As further layers settled to the sea or lake bed, intense heat and pressure build up in the

lower regions.

• This process caused the organic matter to change, first into a waxy material known as

kerogen, and then with more heat into liquid and gaseous hydrocarbons via a process known

as catagenesis.

• Formation of petroleum occurs from hydrocarbon pyrolysis in a variety of mainly

endothermic reactions at high temperature and/or pressure

Saudi Aramco: Non-Business Use

HISTORY OF PETROLEUM

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600BC –AchaemenidEmperor Kir – II

400 BC Herodotus -Babylon

300 AD China Drills for Oil using Bamboo

900 AD Baghdad paves street with Tar

1000 AD al Razi distills kerosene

Saudi Aramco: Non-Business Use

EVOLUTION OF THE GIANTS

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Saudi Aramco: Non-Business Use

RECAP

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PetroleumIs Fossil Fuel Formed Millions of Year Ago.

Part of Human History

People have been using it for ages…

It’s a world of Giants

Saudi Aramco: Non-Business Use

VALUE CHAINS - STAKEHOLDERS

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Michael Porter, HBS

Suppliers New Entrants

Buyers Substitutes

IOCs and NOCs

Saudi Aramco: Non-Business Use

VALUE CHAIN - ARCHETYPE

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Saudi Aramco: Non-Business Use12

VALUE CHAIN – SECTORS

Saudi Aramco: Non-Business Use

SANGU AND EE-IV

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Saudi Aramco: Non-Business Use

RECAP

Complex Eco-system

A demand pull industry

As population grows, more energy

will be need

Transparent Market

Market forces influencial

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Saudi Aramco: Non-Business Use

BANGLADESH

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Source: BIDS, Mujeri, Chowdhury, Shahana 2013

Saudi Aramco: Non-Business Use

BANGLADESH – TRANSPORT SECTOR

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0

10

20

30

40

50

60

70

80

90

2009-10 2010-11 2011-2012

BD

T / ltr

Diesel

Diesl Cost Diesel Price Diesel Subsidy

-40

-20

0

20

40

60

80

100

2009-10 2010-11 2011-2012

BD

T / ltr

Octane

Octane Cost Octane Price Octane Subsidy

-20000

0

20000

40000

60000

80000

2009-10 2010-11 2011-2012

Cons

umption

MM

Litr

es

Subsidy

Diesel Consumption Octane Consumption Diesel Subsidy Octane Subsidy

Saudi Aramco: Non-Business Use

BANGLADESH – TRANSPORT SECTOR

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Saudi Aramco: Non-Business Use

GLOBAL MARKET – PRODUCTS PRICES

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Saudi Aramco: Non-Business Use

BANGLADESH – POWER DEMAND

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Saudi Aramco: Non-Business Use

BANGLADESH – POWER GENERATION

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0%

20%

40%

60%

80%

100%

120%

2015 2030

Fuel Mix

Natural Gas Furnace Oil Diesel Power Import Coal Hydro Nuclear

Saudi Aramco: Non-Business Use

BANGLADESH GAS

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Saudi Aramco: Non-Business Use

BANGLADESH GAS – COMPARISON

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Saudi Aramco: Non-Business Use

RECAP

Subsidy Burden

Far from global benchmark

Demand Growth

Necessary to support

industrialization

Changing Fuel Mix

The coal challenge

Role of Renewable

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Saudi Aramco: Non-Business Use

RHAZES

الاسرارسر

The Secret of Secrets

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Muhammad ibn Zakariyā Rāzī

Rey – Persia 854 – 932 AD

Saudi Aramco: Non-Business Use25

Ahmed Zaki Yamani, Saudi Oil Minister 1962-1986

"The Stone Age came to an end not

for a lack of stones and the oil age

will end, but not for a lack of oil."

Saudi Aramco: Non-Business Use

THANK YOU

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