British Petroleum (BP), is the leading British company in the oil and gas sector. It is another possible partner in the Saudi gas project. The partner will be announced soon according to Andrew Barton, BP’s chief representative. In an interview, he spoke to Arab News on BP’s plans and new ideas for the near future.
BP recently ran an advertising campaign “Beyond Petroleum” and changed its logo. What were the reasons?
BP has merged with Amoco, Arco and Castrol, and we are trying to promote a major brand, rather than a set of brands. We also did some rethinking about how we relate to the world, to our customers and to our partners. We emphasize our commitment to the communities in which we operate. For example, in Saudi Arabia we are emphasizing the recruitment of Saudis, that we are training them and that we expect to run our business with them.
Does your strategy work with Aramco and your Saudi partners? Do you have the same aims, or did you find it difficult to negotiate with them?
No, we find it very easy to negotiate with all our partners. Anywhere in the world working in a consortium is nothing new. One thing about the oil business is that we all compete for access but once you get it, most projects involve more than one company.
Are you planning to cooperate on oil only, or do you have other ways of cooperation?
Our entire focus in the Kingdom is on natural gas and the natural gas economy, and developing the natural gas economy in Saudi Arabia. By that we mean everything from exploration to gas treatment, conversion of gas, transportation of gas right through to the conversion of gas into air, water and petrochemicals. BP’s commitment to gas has grown tremendously in recent years. Five years ago gas made up about 15 percent of BP’s production and now it is approaching 40 percent.
In 1998 BP merged with Amoco, and in 1999 with ARCO. Is it now British or American?
We are a British-registered company, and we are the largest company in Britain in terms of market capitalization. That said, we operate in hundreds of other countries. BP is the largest oil producer in the United States and we employ more Americans than British nationals in our company.
What do you think of employing Saudis — at least a Saudi work force for the gas project?
Obviously there will be training and employment of Saudis in our work force. We have some business in Saudi Arabia at the moment with local partners: Some solar energy business and the Castrol lube business. Last week we attended Career Day at King Fahd University for Petroleum and Minerals. We want to recruit young Saudis and I was greatly impressed by the quality of Saudi graduates. This country is blessed with numbers of young qualified people.
How long have you been in Saudi Arabia?
For about 8 months but I have been visiting Saudi Arabia for the last ten years. In my previous job, I was in charge of oil & gas market analysis in BP as an economist. I used to come to Saudi Arabia to make presentations.
Is living here what you expected?
It is very different looking at Saudi Arabia from the outside and then living here. You have to be impressed by the sheer speed of growth of the major cities. Riyadh is growing very, very fast indeed and the infrastructure in the country is impressive. There is also the location of Saudi Arabia in relation to the markets of Asia, and it is also near the Mediterranean and Europe. The pre-conditions to go into economic growth on a broad scale are here: young, well-educated people and a strategic location. Put them together and Saudi Arabia has the potential to grow very rapidly.
Do you think the economy is ready for this growth?
I think it is. More reforms are needed for liberalizing certain parts of the economy but the Saudi government is very determined to see the reforms proceed. I think that the Foreign Investment Law, the General Investment Authority and the application to join the WTO are all intended to liberalize the economy, to kick-start it and to accelerate growth.
Is this commitment on the part of the Saudi government or the Saudi population?
First of all the Saudi government. The Saudi people are natural traders and entrepreneurs. Given the right environment, these skills can be used for rapid growth.
How do you regard the gas initiative?
Saudi Arabia has another outstanding strategic advantage — low energy costs and plentiful energy resources. The gas initiative is all about releasing that potential on the gas side. So you make available plentiful power and water, plentiful petrochemical production and you have the precondition for the further growth of the economy. For certain, the Saudi economy can not grow with a shortage of power and water which is why the gas initiative is so important.
How many jobs do you think will be created by the gas initiative?
It is very difficult to say but it will be thousands. Of course I cannot say how many thousands since that depends on the multiplier growth of the economy. One must consider that the Kingdom’s total expenditure will exceed $50 billion, and the project will add some $25 billion over ten years.
Is BP planning to get involved at all in petrochemicals?
BP will be involved in all elements of the gas initiative, including petrochemicals, electricity and water desalination. And we can contribute tremendously given our experience in exploration for gas.
More than the other companies who are involved in the initiative?
BP’s record in gas exploration is extremely strong; we have some of the lowest costs for finding oil and gas.
Where has BP explored for gas?
All over the world. We are major gas producers in North America, in the North Sea, Indonesia, China, Vietnam and have found substantial gas reserves in all those places over the past ten years.
Are you interested in any of the core ventures?
We focus on core venture one. It is particularly attractive to gas. Our strategy is very much along the lines of core venture one.
What do you think you can provide as a project leader?
I think if we become a project leader, we can provide excellent project organization as well as technology and training.
How long will it take to find gas in case of core venture one?
Basically three or four years.