MENA's energy industry to reach US$1.1 trillion

This is a significant capital outlay that needs to be carefully managed. However, the region's track record is mixed when it comes to executing large capital projects. Management consulting experts from Booz & Company have identified the root causes the root causes of inefficient development, management, and execution of capital projects that may impede taking full advantage of the anticipated capital outlay, and examined ways in which they can be overcome.

MENA's oil-exporting coun?tries have made impressive strides in consolidating their posi-tion in oil markets (e.g. Saudi Arabia's national oil company (NOC), Saudi Aramco, built infrastructure facilities in 2009 to increase its oil production capacity to 12.5 million barrels per day (bpd), including the development of the massive 1.2 million bpd Khurais field, at a cost of $10 billion) and crafting a leadership position in new adjacent industries, such as bulk petrochemicals, natural gas, liquefied natural gas (LNG), steel, and aluminium. The industry has achieved this diversification by executing a number of ground-breaking new mega projects across the Middle East.

For instance, Saudi Arabia has become one of the largest players in the bulk petrochemicals market,with its flagship company, SABIC,among the top five producers worldwide. This has been achieved by establishing massive industrial sites with world-scale petrochemicals complexes in Jubail and Yanbu.

Qatar has become the largest LNG exporter in the world during the past decade, by setting up 14 LNG mega trains through its two flagship companies: Qatargas and RasGas. In addition, Qatar also built the largest gas-to-liquids project in the world (in collaboration with Shell).

Also, the United Arab Emirates has been an early pioneer in developing LNG from the Middle East and is building highly complex sour-gas fields, along with a planned increase in oil production capacity.

During the coming decade, the MENA energy industry is expected to continue this massive investment program by executing projects worth approximately $1.1 trillion across the energy value chain. According to the International Energy Agency, the MENA region is expected to represent about 25% of global energy investments. Predictably, large resource holders such as Saudi Arabia, the UAE, Iraq, and Iran are expected to lead the way in spending.

"However, the next wave of capital projects will be larger and more complex, and will represent a significant capital outlay that needs to be carefully managed. History suggests that the region's companies have a mixed record of executing large capital projects. Cost overruns, schedule slippages, and inconsistent quality have become recurring concerns for senior management. Some of these problems come from market-related issues, such as a surge in commodity prices in the middle of the last decade," said Raed Kombargi, partner with Booz & Company.

He added, "Many of these problems, however, arise from within the industry itself. In our experience, the root causes include inadequate engineering and project management (E&PM) strategies, a lack of clear governance, inadequate checks and balances, insufficient standardization, and a shortage of local capabilities."

THE SEVEN HABTS OF SUCCESSFUL PROJECT DELIVERY
Today, MENA energy companies have a rare opportunity to fundamentally review the way they develop, manage, and execute capital projects. Specifically, the industry will need to master seven key habits to build world-class project delivery capabilities. These are:

1. Develop a Clear E&PM Strategy
"MENA companies should develop a clear E&PM strategy to ensure that they are well-equipped to manageArtículos deportivos para ni?os