Petronas and Qatar Fertiliser Company

Part
01
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Part
01

Profile: Mark Fitzgerald

Mark Fitzgerald is an oil and energy professional with over 27 years of experience in the oil and gas industry. He is currently the president and CEO of Petronas Canada.

Summary

  • Mark Fitzgerald has over 27 years of experience in the oil and gas industry.
  • Throughout the course of his career, Mark Fitzgerald has "held senior executive roles in development, production operations, strategy, and corporate development.
  • He is currently the Chairman of the Board of Governors at the Canadian Association of Petroleum Producers. He is also on the Board of Directors at the Shock Trauma Air Rescue Service.
  • Mark Fitzgerald describes himself as a "high performing professional engineer with significant leadership skills."
  • He brings a wide variety of knowledge, experience, and exposure to several oil and gas properties in Western Canada.

Education

  • Mark Fitzgerald attended the University of Alberta between 1984 to 1989, earning himself an engineer's degree in chemical engineering with distinction.
  • He then obtained an M.B.A at Royal Roads University, attending between 1999 to 2001.

Work History And Experience

  • Mark Fitzgerald worked for Chevron for a total of 10 years between 1989 and 1999, taking on various technical and leadership roles.
  • Between 1999 and 2003, Mark worked in Dominion taking on various technical and leadership roles.
  • In 2003, Mark Fitzgerald joined Canetic Resources Inc for a total of five years. He started as the manager of the western business unit and then became the vice president of engineering between 2004 and 2006. He then became the vice-president of operations, serving in this role for two years between 2006 and 2008.
  • After his departure from Canetic Resources Inc, Mark Fitzgerald joined Penn West. He spent a total of six years there, first being the senior vice president of operations and later on becoming the senior vice president of production. He then became the senior vice president of development in 2011.
  • In 2014, Mark Fitzgerald joined Progress Energy Canada Ltd where he started off as the senior vice president of production and facilities and then became the senior vice president of production of development. He became the president and CEO of the company in November 2016.
  • As of today, Mark Fitzgerald is the president and CEO of Petronas Canada.

Work Accomplishments

  • There is little information on Mark Fitzgerald's work accomplishments publicly.

Recent Press

  • Mark Fitzgerald was interviewed by Gastech Insights in May 2019. This interview was conducted at Canada Gas & LNG Exhibition and Conference in Vancouver.
  • Mark Fitzgerald appeared in several news sites within the past 12 months. Some of these are Squamish Chief, the Calgary Herald, and S&P Global Platts, and Vancouver Sun.
  • In September 2019, Mark Fitzgerald and Petronas executives met with Shell executives to discuss about their efforts to reduce CO2 emissions.
  • In the Vancouver Sun article, Mark Fitzgerald mentioned that there is a clear need to reduce emissions globally.
  • Mark Fitzgerald also spoke about the LNG industry with Shell Canada's CEO, Michael Crothers.
  • Mark Fitzgerald said that Canadian steel plants do not have "the capacity to build LNG modules on the scale required for a project like LNG Canada."

Volunteer Work

  • Mark Fitzgerald is a founding board member for Classroom Champions. He also sits on the Board for the Edge School Foundation, a unique learning community where students can pursue academic excellence while striving to reach their full athletic potential.
  • He was a board member of Edge School for Athletes Society between April 2014 and October 2016.

Research Strategy

While the research was generally straightforward, there is little information regarding the awards and achievement of Mark Fitzgerald. We searched for this information on his LinkedIn profile, the official websites of his former and current workplaces such as Petronas Canada, Canetic Resources, and Penn West, as well as news articles and YouTube videos. We also searched for his accounts on Facebook, Twitter, and Instagram, hoping to find the requested information; this approach was unsuccessful, as Fitzgerald does not have profiles on any of these social media platforms. Because he does not have the aforementioned social media accounts, we were unable to provide an in-depth look into his personal life. We were successful, however, in getting information regarding his volunteer experience through LinkedIn, which we have included in the report above.
Part
02
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Part
02

Petronas: Deep Dive

Petronas has had a multitude of challenges in their attempt to initiate and maintain production in Canada, mainly due to the cost of oil and gas prices, such as cuts in jobs and spending, project delays and cancellations, lack of infrastructure, and legal challenges because of politics and environmental factors.

Project & Operational Challenges

  • In 2016, Petronas cut down jobs and announced approximately $12 billion in spending cuts over the next four years due to a decrease in oil and gas prices.
  • Petronas backed out of the Pacific NorthWest $36 billion LNG project in 2017 which was meant to produce 12 megatonnes per year and further develop shale play in Canada due to the state of natural gas prices. The project figures included $11 billion for the export terminal, $6.5 billion in pipelines, $5.5 billion the company paid for Progress Energy and natural gas assets, and $2 billion a year spent on natural gas production.
  • The company invested heavily in natural gas exploration and was running 30 rigs continuously around 2013 to 2014; however, that number has drastically dropped down to one after Petronas began drilling to bolster its share of natural gas for the LNG Canada export project after a hiatus of over 2 years.
  • Petronas acquired a 25% stake in Shell’s $14 billion LNG project, but supercooling natural gas and shipping isn’t expected to be ready until around 2024 and is estimated to cost $31 billion. The project will comprise two LNG liquefaction processing units and aims to produce a total of 14 million tons per annum, with the potential to expand to four units.
  • According to a late 2018 report, Petronas curtailed production by 50 and 200 million cubic feet per day in northeastern British Columbia's wells capable of producing 700 million cf/d of LNG. The company’s chief executive officer has claimed this is to avoid selling natural gas at prices that don’t cover the cost of pipeline transportation.
  • Brent crude prices swinging between $28 billion and $122 billion throughout the decade of 2010-2020, caused Petronas to cut 1,000 jobs and renegotiate contract terms to cut costs. Because of this, the company also saw the most periodical change in presidents since its founding.

Infrastructure Challenges

  • Only 10% of the 60 trillion cubic feet Petronas has in its LNG project in Canada would be absorbed in over 40 years, the CEO has said in an interview.
  • Lack of sufficient pipeline infrastructure makes it difficult to move large quantities from Canada down towards the United States, so they are considering expansion opportunities or additional LNG export projects westward to Asia via tanker as the best solution.
  • Petronas has had to defend the company’s decisions as rumors arose that LNG projects would result in $42 billion of offshoring. The company's CEOs have declined to disclose how much will be spent overseas and claim liquefaction trains for the plant in Kitimat will be built in Asain steelyards, but that it only accounts for $17 billion capital cost of the plant.

Legal Challenges

  • In 2017, CEO Tan Sri Mohd Sidek Hassan confirmed that Petronas was considering moving the loading terminal, addressing concerns over the impact on salmon habitat off Flora Bank, as well as because of the political factor relating to John Horgan’s vow to find a better location for the LNG project.
  • Aboriginal and environmental groups filed lawsuits to overturn the permit for the $27 billion LNG project in British Columbia because of habitat greenhouse gas concerns.
  • The Sarawak government has filed a 2020 lawsuit against Petronas for failure to pay the 5% state tax on petroleum products.



Part
03
of four
Part
03

Profile: Abdulrahman M. Al-Suwaidi

Abdulrahman Al-Suwaidi was appointed as the CEO of ORYX GTL'S in 2009. He held two managerial positions for QP’s gas processing and gas distribution facilities in Mesaieed.

EDUCATION

  • Abdulrahman Al-Suwaidi received his undergraduate degree in chemistry from Qatar University.
  • From Bradford University in England, he earned a Higher National Diploma in Mechanical Engineering.

WORK HISTORY

  • Abdulrahman Al-Suwaidi began his career in 1987 with Qatar Petroleum (QP) where he undertook various technical and operational roles.
  • Between 1998 and 2007, he held two managerial positions for QP’s gas processing and gas distribution facilities in Mesaieed and in due course, gas production and reinjection facilities located offshore and in Dukhan.
  • His responsibilities during this period included production and maintenance operations, inspection, and engineering.
  • In January 2007, he was appointed as the Deputy General Manager responsible for the administration of the world’s largest LTFT GTL plant. In 2009, he was appointed as ORYX GTL’s CEO. Eventually, he was assigned as the managing director and CEO of Qatar Fertilizer Company.
  • Currently, Sheikh Thani Bin Thamer Al Thani is the CEO of ORYX GTL.
  • Al-Suwaidi is currently serving as "the Chairman of the Board of Directors for Qatar Chemical Group Companies Ltd, Member of the Board of Directors of Industries Qatar, Member of the Board of Directors of QAFCO, and Member of the Board of Directors of Muntajat. He is also a Member of the National Human Rights Committee (NHRC)".
  • Additionally, he is also a director on the board of RasGas, a member of the Dolphin Energy executive management committee, a member of the Ras Laffan chief executive committee, and the chairman of the Gas Processors Association GCC chapter.

WORK ACCOMPLISHMENTS

  • Due to the superior operation and management of Al-Suwaidi, Qafco is considered to be the key player in the global fertilizer market and one of the largest exporters of urea.

BUSINESS PHILOSOPHIES

  • As the CEO of Qafco, Al-Suwaidi’s business philosophy is to efficiently utilize earth’s resources that are both profitable to the company and shareholders as well as moves the country forward to achieve its goal — Qatar National Vision 2030.

RECENT PRESS ARTICLES

  • Qatar University recently signed a Memorandum of Understanding (MoU) with Qatar Fertiliser Company (Qafco) to “conduct research in the agricultural field and support the development of the agricultural sector in Qatar to achieve sustainable and reliable production of the required quantity and quality of agricultural products”.
  • According to the source, Al-Suwaidi stated that “Qafco is proud to partner with the local education sector as part of its support towards Qatar’s vision of a knowledge-based economy. By signing the cooperation with Qatar University, Qafco hopes to facilitate the development of a world-class educational system in Qatar, in alignment with the human development pillars of QNV 2030”.
  • On November 12th, a pilot water-saving greenhouse was launched at one of Hassad’s greenhouses in Al Shahaniya which was engineered by Yara International in collaboration with Qafco and a few other companies. Al-Suwaidi was one of the chief guests who were invited to commemorate the occasion. He stated that “Qafco is proud to support such initiatives in line with Qatar’s Food Security objective”.

RESEARCH STRATEGY

Despite a comprehensive search, we were unable to locate the personal details and work accomplishments of Abdulrahman Al-Suwaidi. To identify the information, we first examined social media platforms — Twitter, Instagram, Facebook, and LinkedIn. But we were unable to trace his profile. In other words, he doesn’t own an account on the aforementioned platforms. Next, we scanned media sources such as Gulf Times and The Peninsula Qatar. This approach provided a few articles mentioning his recent activities which we included under ‘Recent Press Articles’. However, the articles did not mention anything about his work accomplishments and personal details. Subsequently, we also checked the official websites of companies and boards he is operating and managing. Nevertheless, the websites only provided his professional biography and did not include his work accomplishments or personal details. In the course of our research, we identified that Qafco is considered to be the key player in the global fertilizer market and one of the largest exporters of urea under the operation of Al-Suwaidi. We provided this as proxy data for work accomplishments. His work experiences and educational details were pulled from third-party sources. His business philosophy was provided based on the assumption that it will resonate with the company’s vision and mission. This information tallied with Al-Suwaidi's statement that “Qafco hopes to facilitate the development of a world-class educational system in Qatar, in alignment with the human development pillars of QNV 2030” when he signed an MoU with Qatar University. We only went with this information because no direct statements on his business philosophy were found in the public domain. We examined several popular media sources such as Gulf Times and Aljazeera. As for his personal details such as hobbies and volunteer work, there is no domain or source available that carries the required information.
Part
04
of four
Part
04

Qatar Fertiliser Company: Deep Dive

The challenges faced by the petrochemical products segment of the IQ group were identified as: 1. Decreasing demand in petrochemical products, 2. Excess production capacity, 3. New environmental regulations in some economies, 4. Falling prices, and 5. Planned and unplanned maintenance shutdowns. The challenge faced by the fertilizer segment of Industries Qatar (IQ) group, Qatar Fertilizer Company (QAFCO), which affected the 2019 revenue, was the imbalance in demand and supply.

Introduction to the Industries Qatar (IQ) Group

  • The IQ group owns two companies which deal with petrochemical products: 1. Qatar Petrochemicals Company (QAPCO), and 2. Qatar Fuel Additives Company (QAFAC).
  • Key products manufactured by QAPCO are 1. Ethylene, 2. Low Density Polyethylene (LDPE), 3. Linear Low Density Polyethylene (LLDPE), 4. Sulfur, which is generated as a by-product of the ethylene production process, 5. Pyrolysis Gasoline, and 6. Mixed LPG, C3 / C4 (propane and butane).
  • Key products manufactured by QAFAC are methanol and methyl-tertiary-butyl-ether (MTBE).

Petrochemical Products (QAPCO and QAFAC) Challenges

  • In Dec 2019, the net profits reported in this segment were QR 1.3 billion, which was a 47% decline compared to the profits reported in Dec 2018. This decline was reported to be primarily caused by factors such as: 1. Decreasing demand for petrochemical products in key markets, 2. Excess capacities, 3. New environmental regulations in selected economies, and 4. Declining prices.
  • Due to weaker demand and rising capacity, the sales volumes in this sector fell by 12%. The net profit in FY2019, was reported as QR 4.4 billion, which was a 25% decrease in its revenue compared to that in FY2018.
  • The planned and unplanned maintenance shutdowns, which were critical to 1. Health, safety, and environment (HSE) standards, 2. Plant life, and 3. Product reliability, caused a 10% decline in production volumes in this segment.

Fertilizer Products (QAFCO) Challenge

  • Due to imbalance in supply and demand, this segment saw a 9% decline in selling prices in 2019. Compared to the net profit in FY2018, that in FY2019 had decreased by 37%, and was reported to be QR 873 million.
  • Despite this demand and supply imbalance, the sales volume in 2019 was maintained the same as it was in 2018. The overall production volume in 2019 had increased by 2% compared to that in 2018.

Relevant Findings

  • According to Qatar Petroleum CEO Saad al-Kaabi, QAPCO has teamed up with Chevron Phillips for a joint venture to set up an ethylene production plant. He mentioned that it would have an annual ethylene production capacity of 1.9 million tonnes, and that it would increase Qatar’s polyethylene output capacity by 82%.
  • Chevron Philips has a 30% share in this project and Qatar Petroleum has 70% of the share. (100 – 30 = 70)
  • In terms of LNG production, the US is planning on becoming the closest rival of Qatar by planning to produce 106 million tonnes per annum (mtpa) of LNG by 2025. However, Qatar is planning four additional production facilities, and will increase its LNG production to 110 mtpa by 2024.

Research Strategy

We looked at the official website of IQ group, which is the majority owner of the Quatar Fertilizer Company (QAFCO). The website provided details about the products manufactured by QAFCO, but it didn't mention any oil and gas business owned by QAFCO. However, we found that among the other companies owned by IQ group, the Qatar Petrochemicals Company (QAPCO), did have a gas business. We could find some data about QAPCO, QAFAC and QAFCO, and the challenges faced by these companies, which was provided in the annual report 2019 of the IQ group, but it wasn't detailed enough.

Initially, we tried searching for any detailed and useful data that discussed any of the challenges it faced in fields such as the competitive space, expansion, change management, organizational shifts, or changes in senior level management in the petrochemical products and the fertilizer segments of the IQ group. We could not find any detailed and useful data even after we expanded our scope to search for operational challenges and threats faced by the entire IQ group of companies. We did come across some relevant data for Qatar Petroleum (QP), which is provided as relevant findings.
Sources
Sources

From Part 02
From Part 04
Quotes
  • "Qatar Petroleum has signed an agreement with Chevron Phillips Chemical to build a new petrochemicals complex, part of plans by the world’s top liquefied natural gas (LNG) exporter to broaden its energy interests."
  • "Qatar is one of the most influential players in the LNG market due to its annual production of about 77 million tonnes, which is expected to grow about 43 percent by 2024 from a major expansion to the country’s North Field, the world’s largest natural gas field, which it shares with Iran. The new petrochemical plant will be built north of Doha in Ras Laffan Industrial City and will come online by 2025 and tap the increased North Field production for feedstock, Qatar Petroleum CEO Saad al-Kaabi told a news conference. “The decision was driven by the ongoing development of the expansion project of the North Field ... which will yield significant quantities of ethane which can be used as feedstock,” Kaabi said."
  • "Qatar’s plant will include an ethane cracker with an annual ethylene capacity of about 1.9 million tonnes, making it the Middle East’s largest and one of the biggest in the world, said Kaabi, adding that the plant will increase Qatar’s polyethylene output capacity by 82%."