Survival in Tough Competition

"A quarter of a century in the energy business has taught me to be careful about predictions,” states Robert Weener, Chief Executive of Shell Development Iran B.V.
With the experience of operating, and leading a major business in Iran, Weener addressed the IPF on some of the most important topics for the future development of Iranian petrochemical industry.

Competitive Differentiators: Iran is a country blessed with extensive natural resources and human skills. The demand for petrochemical products is likely to expand as living standards around the world rise. If we are to survive in the highly competitive world of the future, continuing innovation and a clear commitment to Sustainable Development will be required. They will be our competitive differentiators, our way of winning customers and investors. They will also determine how we work with our neighbors, our business partners, and perhaps most importantly of all - our own people.

Need to Look Forward: That said, it is necessary to prepare for the future and, looking forward, we can discern some basic indicators. The world’s expanding population has huge aspirations. It doesn’t really matter what political system is in power or what man-made barriers - such as national borders - are in place: the desire for a better material life is universal. In this overall picture of rising demand, we can see a growing role for the petrochemical products. The petrochemical industry is playing an increasing role in supplying necessary ingredients for the improvement of quality of life of all.

Role of Iran’s Natural Resources: Iran has formulated a challenging program of petrochemical developments. It is recognized that while the achievements of the indigenous petrochemical industry, with the National Petrochemical Company at its head, are significant, further support is needed. Many foreign companies have offered that support. Shell is certainly also interested in participating in the continued development of the Iranian petrochemical industry. One way that foreign companies can do this is by providing technology for projects being developed by the NPC. Shell’s leading ethylene glycols technology has been selected by two major NPC affiliates, Marun PC and Jam PC.
Additionally, Shell is actively discussing a number of other projects in Iran, namely Olefins 8, Gas to Liquids and Olefins 6. We are confident that these projects, all of which are currently entering into the feasibility study stage, will progress to final decisions – to the benefit of all parties. Shell, for its part, is committed to bringing its substantial technical expertise and project management experience to bear to make the projects in which it is involved a success. We want to contribute to Iran’s aspiration to create wealth from its natural resources, thereby further raising living standards in the country.
Speaking of Gas to Liquids, NPC and Shell have been undertaking a scouting study in the feasibility of constructing a second-generation Gas to Liquids plant in Assaluyeh. This plant will produce 75,000 bbl/d of synthetic diesel, naphtha and LPG based on a supply of 600 MMscf/d of natural gas from the giant South Pars gas field.

Sustainable Development: However, the creation of wealth through economic development - in and of itself - is not sufficient. Economic growth does not guarantee prosperity if it is not attuned to societal aspirations. Only by integrating economical, environmental and social considerations - balancing short- and long-term priorities - can one hope to meet societal aspirations for a better life now and for future generations. Sustainable development is the key. It is a complicated balancing act. Sustainable development is about meeting present needs without compromising future prospects.
Balancing competing demands is a key concept when considering how to contribute to sustainable development. We divide these demands into three different types: Creation of economic wealth, protection of the environment and contribution to society.
Any industrial activity will have an impact on the poeple living in its neighbourhood through increased traffic, noise and possibly its effect on the local environment. However, industry also brings benefits in the form of employment, increased wealth through local taxes and contributions to the community. If industry is to maintain its “license to operate”, it will have to make sure that the balance of these beneficial and negative effects remains firmly in the positive.
Looking towards the future, from a technological point of view, sustainable development will require the petrochemical industry to invert its focus on delivering volume to delivering higher “added-value” products and services using fewer natural resources.

We will need to accelerate our pursuit of dematerialization (doing more with less) and create truly closed-loop systems - recycling materials. Increasing the ecological efficiency of our operations will reduce the impact on the environment while maximizing resource productivity.
At first glance, this type of future may not appear to be comfortable for a major resource holder like Iran. But from my experience in this country, I believe Iran has little to fear.

More Than Natural Resources: Iran has more than just abundant raw materials: It has a large, well-educated population. The true, long-term sustainable resource for all countries is their people. Iran has much strength in this area and I am confident it will be able to create more in the coming decades. It will be the clever combination of natural and human - intellectual property - resources that drives development this century. This type of development is, of course, not going to happen overnight. I certainly would not want to predict when these developments would start making a major impact on Iran’s petrochemical industry as it is designed to become at present. However, I believe that any business or country would ignore these developments at its peril.