JEDDAH, 12 January 2007 — Negotiations are under way between a government agency and an international company to establish an institute of energy and gas in the Eastern Province, informed sources said yesterday. The institute is likely to be launched within two years.

The Eastern Province was selected for the institute because it is the center of the Kingdom’s petroleum industry. The institute, which will be first of its kind in the Kingdom, is designed to train Saudis to work in this sector.

The move comes after the discovery of large quantities of gas in various parts of the Kingdom, especially in Dalam and Houtat Bani Tameem. The Kingdom has also signed deals with international energy companies to explore and produce gas.

The institute will meet the growing demand for the right workforce in this vital sector. Abdullah Jumah, the CEO of Saudi Aramco, has said that the global oil industry was now reaping a poor harvest from the shortsighted human resource policies of the past.

According to the American Petroleum Institute, the average employee in the oil and gas industry is now nearly 50 years old. In the next decade, more than half the people currently working in the industry will retire, leaving a huge void not only in terms of numbers, but more importantly in terms of knowledge and experience.

“Filling that hole requires a new approach to developing new professionals,” Jumah said while addressing the Society of Petroleum Engineers.

“It will take a decade or more to close the gap, especially when it comes to specialized personnel like geologists, geophysicists, petroleum engineers and senior scientists and researchers,” he pointed out.

He emphasized that Saudi Aramco was in a better position compared with other international companies in manpower development. This is “because we have consistently followed a long-term approach of educating, hiring, developing and retaining our people,” he said.

Mohamed Ramady, visiting associate professor at the Department of Finance and Economics at King Fahd University of Petroleum and Minerals in Dhahran, welcomed the plan to establish a specialized institute for energy and gas, saying it was long overdue.

“Saudi Arabia needs to develop expertise in the government and private sector to make prudent decisions concerning long-term investment in this vital sector,” Ramady told Arab News.

However, he said the new institute must be practical oriented rather than focusing on theories. “This expertise will take time to develop, especially in acquiring the necessary skills and tools in monitoring international energy changes that would be translated into effective strategic decision making for the private sector,” he said.