RIYADH, 15 April — Royal Dutch/Shell is one of eleven companies bidding on three gas projects for which the Saudi government requested proposals three years ago. A Dutch Muslim, Floris Ansingh, the president and chief executive of the Shell Companies in Saudi Arabia, has led the company’s negotiations to win the bid. Arab News had the chance to interview him at his office.
— How do you view the current investment climate in Saudi Arabia?
Last year we saw some positive changes as a result of Saudi government decisions — the formation of the Supreme Economic Council, the Investment Law, including taxation and the General Investment Authority or GIA.
Let us look at the GIA. Under the governorship of Prince Abdullah ibn Faisal ibn Turki, everything is done to facilitate investment. Questions about where investment is allowed were answered by the so-called negative list — where investment is not allowed. Promises have been given to reduce the negative list. There will be a level playing field for all investors; a rule for one will be a rule for all with no exceptions and total transparency.
Opening up to the global economy is vital for Saudi Arabia. Increased competition will be good for consumers even if it is not as profitable for all the present players. At the same time, I have great respect for another strong argument. Saudi Arabia wants change but change that does not threaten the Kingdom’s unique cultural heritage and traditions. In other words, change through investment but carefully considered and equally carefully managed.
Joining the WTO is an important objective. Through bilateral negotiations, we have learned one thing: The WTO is not a club you join and automatically get what you deserve. The WTO is a group dedicated to free trade and you do not get what you deserve; you get what you negotiate. It is a long and difficult process which has been well managed by the Minister of Commerce Dr. Osama Faqeeh.
— Why do you believe Saudi Arabia is in a good position to exploit its gas?
Let us look at history. There have been two important waves of investment in the Kingdom. The first was the creation of Aramco, totally based on oil, which had a tremendous effect on economic growth and the creation of employment. The second was the development of the petrochemical sector and the creation of SABIC. The basis was to build the master gas system, stop flaring off gas and to use it for industry, mainly petrochemical. In addition, some important decisions were taken to improve and make available a world-class infrastructure. The Royal Commission of Jubail and Yanbu was formed and the two industrial cities were built from swamp and desert.
As for your question, the crown prince invited certain oil companies to explore investment possibilities, aiming at accelerating economic growth and creating jobs. The Kingdom has one of the fastest growing populations in the world, and job creation is realized by all to be the country’s number one priority.
We have the following strategy:
Hydrocarbons in the Kingdom offer a chance for global competitiveness. Oil is restricted by OPEC policy while gas is restricted by under-investment. Let us join Aramco and kick-start the economy by making gas abundantly available at a competitive price. By doing that, you create ripples throughout the economy. We call this the multiplier effect: Growth and jobs all over Saudi Arabia, new uses for gas and new ideas. What an opportunity and what a challenge for investors! When I say “investors” I also mean Saudi investors whose money is now outside the Kingdom for lack of opportunity here.
— Will you train Saudis in your projects?
We strongly believe in using Saudis in the new projects. Can you imagine the future if Saudis have no jobs? Do you see how it is in our own interest to ensure that there are jobs for Saudis?
Let me mention what Shell has done in Saudi Arabia. Sasref, one of the world’s largest refineries, in partnership with Aramco, has more than 90 percent Saudization. Sadaf, the Kingdom’s first and foremost mega-chemical project, also has more than 90 percent Saudis. Not only that, of the management team only one is an expat; the other six, including the president, are Saudis. Let me be clear: The Saudis we employ are interchangeable in any part of the Shell Group or anywhere in SABIC. They are all competent and professional which has been achieved by career-long training, both formal and informal — in the classroom and on the job, in the Kingdom and outside. We and our partners have created a journey of no-stop learning.
— Do you prefer one of the core ventures to the others?
That question comes under the confidentiality agreement as directed by Prince Saud Al-Faisal in his position as chairman of the Ministerial Committee entrusted with the supervision of negotiation. What I can say is that we made our proposals to suit our capabilities and, at the same time, meet the Kingdom’s objectives.
— What use will you make of the gas?
Let me tell you about the gas in my country, Holland. In the early 1950’s, Shell discovered a huge gas field in the country but for various reasons, the company hesitated to develop it. Our government, however, needed the economic growth and jobs that would result from changing an oil-fired economy to a gas-fired one. Finally there was a joint venture between the government, Shell and Esso and it was a fantastic success! When the first studies tried to determine the potential for gas use, they could only think in traditional ways but what happened was totally unexpected. When gas was made available in abundant quantities at a competitive price, a new wave of investments began, things we had never foreseen. For instance, if you fly over Holland at night, you see thousands of lights. These are greenhouses. By using gas, we have created a subtropical climate in them and we produce competitively priced vegetables, fruit and flowers for worldwide use all year round. If anybody in the early teams had suggested such a possibility, he would probably have been asked to take a few days off and rest his brain! That is what I mean by unforeseen developments.
— Has the Saudi government established a market policy?
We have not come this far in our discussions. I expect these issues to be raised in the coming talks.
— Why did you convert to Islam?
I became interested in Islam twenty-two years ago because of my Turkish wife. What I like most about Islam is that it is a tolerant religion. Shell did not know that I was a Muslim when they sent me to Saudi Arabia more than six years ago.
