Major potential for logisticsplayers in oil-rich Gulf nations
The old model for countries such as Saudi Arabia was to award contracts to overseas giants to extract oil and gas and wait for the royalties to pour in. The dynamics have changed. All these factors are having an impact: global supply constraints; the West seeking alternative energy sources; the determination among Gulf nations to build healthy industrial economies. Many Gulf nations are now re-examining what they export.
They see a need to win a lot more value from their finite resources. This means they will build an entirely new economy by engaging in industries that consume oil and gas, in direct competition with the countries to which they export. This will affect the logistics industry in a major way.
So instead of exporting primary resources - oil and gas exported in crude or LPG form - these resources will be more intensively used in the Gulf to produce secondary and tertiary products. This was seen when looking at the industrial strategy of a massive new port development in an oil and gas rich nation in the Gulf. The new port needed to be aligned with the strategy. That affected container berthing versus bulk berthing, silos versus pallet handling, back-up logistics resources and the like.
Secondary products are those directly derived from oil and gas. These extend way beyond petroleum and avgas, and include plastic resin and commodity chemicals.
Tertiary products are manufactured from the derivatives of oil and gas. Specialty chemicals and plastic products are a couple of examples, but the options are infinite, including all manner of steel and aluminium products. The main factor for these products is a high degree of automation, given that all labour is imported. Hi-tech plastic pipes win; Barbie dolls lose.
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