Energy Outlook Q4 2016

In the Year 2016 Black Swans Doubled-Down on Unknown Unknowns

In a year that delivered a long list of significant Black Swan surprises both globally and regionally, from Brexit to Trump on the world stage, to Michel Aoun finally landing the prize of the Lebanese Presidency, we now have to add the return of OPEC to this growing list of Unknown Unknowns from only a few short months ago.

OPEC, like the proverbial cat, has nine lives. If the 50+ year-old oil exporters group can survive Carlos the Jackal, they can certainly withstand an assault on their market share from bootstrap shale drillers in North Dakota.

Forever dismissed as an irrelevant 20th century group of disparate and desperate member states, too many repeatedly fall into the trap of misdiagnosing a sleeping bear in hibernation as a dead bear. But like the sleeping mammal, OPEC usually wakes up with a roar when it is hungry from sustaining far too long on far too little, and clearly like $10 oil in the late 90s, we have moved beyond the pain threshold of sleeping indifference.

The question now is how starving are Saudi Arabia and Russia, how much output cutting are they willing to do to fill their fiscal coffers after a few years of deficit once the other sleeping giant of shale oil producers reawaken on Trump steroids?

I suspect, like the early 90s, we are in for a few rounds of supply reductions over the coming 24 months to clear the record oil inventories, accommodate the return of the Yankee roughnecks and a little cheating from OPEC.
 

This exclusive interview is a prelude to the 3^rd GCC Petroleum Media Roundtable Series, which will be held on April 19-20 in Abu Dhabi. The pioneering Series provides insights for local, regional and international media on the views of the leading decision makers in the Gulf and explores how the latest trends are impacting the global energy industry.

Special Guest: Dave Ernsberger, Global Head of Energy Pricing and Co-Head of Content, S&P Global Platts

Question (Q) Journalists often feel they are jumping into a vacuum of information. As part of the next six month journey to the GCC Petroleum Media Forum, how much commitment is there from your side and from your peers to access content so that it reduces the opportunity for speculation?

H.E. Suhail Al Mazrouei: We have witnessed increased interaction by major international organizations, independent organizations and OPEC to discuss oil markets in an open and transparent way. But, the problem sometimes occurs in the accurate sourcing, or analysis of that information by members of the media. Sometimes we see fluctuations in the market when information is taken out of context, or proportion.

What we want to do at the Forum is involve as many stakeholders as we can. Along with international oil companies (IOCs), we want to offer professional training on market mechanics and demonstrate how we study the market, where we source our information, how we analyze the market as professionals. Companies like Shell, BP, Total and ExxonMobil will be willing to come and discuss this. The objective is to increase transparency and give information on the market that is based on knowledge and on a diverse mix of opinions – from IOCs, from the International Energy Agency (IEA) and from OPEC ministers. Some of the media are very knowledgeable, but others just take the story and flip it so that it sounds reasonable for the reader. This means it can lack objectivity from the perspective of any professional who reads it.

Q OPEC meets at the end of this month with the expectation from the market that it will cut, or at least curb, output. Do you expect to see cooperation from non-OPEC producers?

H.E. Suhail Al Mazrouei: OPEC and others are working together. Everyone is keen to do their best to balance their own benefits as countries and for the benefit of the whole industry. We have seen encouraging commitment from non-OPEC producers. I would prefer to defer this question until we have the report from the committee, which meets this month to analyze and present options to ministers ahead of the OPEC meeting. I can assure you that we are committed, we are concerned and every major producer, even if they are not an OPEC member, has shown interest in this initiative to curb output.

Q We’ve had low oil prices for two years – what prompted the turnaround now for possible action on output?

 
H.E. Suhail Al Mazrouei: A year ago, we had more than 2 million barrels of oversupply in the market and shale oil production was a million higher than what it is today. It did not make sense to curtail output at a time when the market was over flooded. Secondly, we were not part of that oversupply and we were stabilizing our own production. Now, the glut in the market is almost gone, if not completely gone as some believe, so we can talk about a freeze or cut, which will have an impact and allow a rebalance. That is what we are trying to achieve, but this commitment needs to be from everyone. We are still of the opinion that OPEC unilaterally cannot fix the market, so our strategy has not really shifted, but we need consensus and cooperation.

"This economy cannot face another shock in 2 to 3 years’ time and that is the worry of the OPEC members and the main producers."

This time last year, no one was willing to join us, but now there is a certain level of concern from our friends in Russia, Kazakhstan, Azerbaijan, South America, Brazil and Mexico. I think everyone is ready.

Q Could you tell us what the plan is for upstream investment in the next year or two?

H.E. Suhail Al Mazrouei: The 2030 plan approved by the Supreme Petroleum Council is to continue to target raising our production capacity to the level of 3.5 million b/d by the end of 2018. And that requires investment. Others are cancelling projects, but that oil will be needed in the market in two years once stockpiles are used up. We cannot afford to see huge price spikes that affect our economy. Yes – shale oil will rebounce, but at what pace when you know that 450,000 people have been laid off from that sector? Those people are not going to come back overnight – to bring a million barrels back in the US needs time. That shortage needs to be met by responsible producers like us, like Saudi Arabia, who have a buffer, to ensure that we can attend to any crisis that happens. That is the bigger and most important picture for us – to encourage the minimal level of investment that is needed for this industry to survive. This economy cannot face another shock in 2 to 3 years’ time and that is the worry of the OPEC members and the main producers.

 
Q The UAE has taken some significant restructuring decisions in its energy sector in the past year – for example, the planned merger of Mubadala Group and IPIC. What are the benefits of this?

       
H.E. Suhail Al Mazrouei: Whenever you have downturns, people think of merging companies. We have seen it with the Shell and BG merger, for example. The rationale behind the Mubadala and IPIC merger was to be more focused and to achieve synergy from the whole spectrum of investments.

 
There are obvious overlaps between the two companies and I think we will build a stronger, more resilient company, which will enable Abu Dhabi to create champions, not only in the oil and gas sector, but also in aluminum and the semi-conductors business, for example. IPIC is already the fifth largest producer of  petrochemicals in the world and Mubadala Group is the third, or fourth largest producer of aluminum and second largest producer of semi-conductors. The idea is to create a group that is smarter and stronger and to capitalize on investments in different sectors.

Q Should we expect any more consolidation? 

H.E. Suhail Al Mazrouei: Yes. This is a journey, so it will not finish. We have seen lots of consolidation within the ADNOC group and I would like to commend His Excellency, Dr. Sultan Al Jaber and his team for all of the work that they have done. We have a plan to become one of, if not the most efficient producer in the world by reducing the cost per barrel. We already have some of the best reservoirs with the best reservoir management programs. We think we can compete and we can optimize our resources. Mergers create value, but it needs to be done with care and with a clear objective. 

Q How well are government, industry and academia aligned to deliver the solutions that the industry is looking for today? For example, example the challenge of $50/bl oil, creating innovative technologies to tackle difficult fields, meeting renewables targets?

 
H.E. Suhail Al Mazrouei: I think all of those three main stakeholders are aligned, because they all have that common interest. If we are more efficient, then we can survive any downturn. And this is what we have seen in this low cycle – improving efficiency was a common interest by the national oil companies (NOCs) and the IOCs and academia as well. If we survive, we can create jobs and also for the services sector where we have seen huge lay-offs. We need to continue this journey and cannot say we have done enough.

Q From a budgetary perspective, how do you see the lower oil price affecting investment in the research and development (R&D) of technologies for vital immediate solutions and also company expenditure on skills training?

H.E. Suhail Al Mazrouei: It will definitely have an effect, but we want to minimize this by setting priorities. I am encouraged to see more dialogue where we are all transparent in discussing the issues. I think it is the first time, for example, that we have seen OPEC put all of its historical data in an application that is free for everyone. This is yet another level of transparency.

 
And if you have noticed, at every meeting of OPEC, we also invite the IEA, the International Energy Forum (IEF) and other international organizations. I am sure in the future we will even invite the IOCs, because they are stakeholders. This level of transparency in the industry is needed and I think it will drive more efficiency and prioritization of spending in R&D. We definitely cannot afford to spend on all projects and we will defer some, but we need to continue innovating and spending on certain projects that contribute to reducing costs and increasing efficiency.

Q Abu Dhabi has set a very ambitious renewables target – to source 27% of the UAE’s energy needs from renewables by 2021. Is that too ambitious? Can that run in parallel with investments that are needed in traditional oil and gas?

H.E. Suhail Al Mazrouei: What we are trying to do here in the UAE is to attract and encourage competition between the different forms of energy. For example, we have seen a huge reduction in the cost of PV solar compared to where it was three years ago. If you tell anyone today that someone in 2030 could develop a technology, or a project at 2.5 cent per kilowatt hour, he would laugh at you. But technology, R&D and financing are all working together to find a solution, due to the competition out there. What threatens this competition in other parts of the world is the subsidy. If you subsidize gas and sell it cheaply, then you block the road for the development of solar energy.

 
We are looking objectively at competition for the benefit of the consumer, for the benefit of R&D and the benefit of the industry. I am encouraged by the energy policy that we are putting together at the Ministry of Energy for 2050, which will open up significant opportunities and allow for the greener forms of energy to compete.

The rapid evolution of the Middle East’s budding energy trading ecosystem is on track to create a new oil products hub alongside behemoths Rotterdam and Singapore within a decade. The UAE’s Port of Fujairah is leading this charge to become a global energy hub; a multifaceted and challenging goal.

Rising throughput and increasingly sophisticated infrastructure at the Port – the world’s second-largest bunkering hub behind Singapore – have galvanized local government and energy stakeholders’ intentions to carve out a trading identity. The ecosystem is developing the essential building blocks of a commodity hub: transparent data, regulatory and legal clarity, robust volumes, independent oil benchmarks and a strong talent pool. The location of the hub means that it is at the pivot point of global oil trade between east and west, both physically and in terms of the trading day.
 
Three key developments in the last few months may demonstrate the principle of ‘build it and they will come’ as the Port seeks to send a clear message to global trading communities that it is ready for the major leagues.
 
Fujairah’s launch of the first very large crude carrier (VLCC) jetty on the Indian Ocean coast of the Arabian peninsula in late-September places the port in a select group of globally focused oil locations, making it ‘arbitrage ready’. Much of the major flow of oil between global regions is carried on very largest vessels, and the $175 million jetty sits at the core of the key oil route between east and west. 

Trade flows for crude and oil products have changed dramatically over the last few years, marked by a clear shift towards satisfying Asian demand. Historically, crude was mostly shipped out of the Middle East to refineries abroad and re-imported as oil products, such as gasoline, diesel, gasoil, jet fuel and fuel oil to serve Middle Eastern demand. Today, the growth of refining capacity in the Middle East and increased demand for oil products are changing historical trading patterns, with oil products now flowing both ways through the Gulf.
 
Also in September, the Port announced that it would be publishing weekly inventory data for major oil products to provide insight on the market’s supply-demand balance.

"Improved transparency will whet the appetite of traders based in the Gulf, as well as at trading desks in the world’s major trading hubs of Houston, Rotterdam and Singapore." 

Information on market fundamentals is a key requisite for trading commodities, and this step lowers one of the barriers to entry for the Middle East oil market.  

Further support comes from S&P Global Platts’ launch of new Middle East assessments for oil products on October 3. This adds another vital layer of transparency, especially for the local spot market. Assessments  reflect loadings from the region’s ports – Saudi Arabia’s Ras Tanura, Kuwait’s Mina Abdulla, Oman’s Sohar and Qatar’s Ras Laffan, for example – and are normalized to loadings at the Port of Fujairah and, in doing so, help cement its global significance. These assessments offer the increasingly savvy market players in the Middle East an independent alternative to the netback prices derived from Singapore, but do not attempt to replace them.

However, challenges remain if Fujairah is to reach the status of the major energy trading hubs. An active market will require a clearer and firmer legal structure to boost participants’ confidence. The UAE’s legal architecture is just 45 years old and the speed at which greater clarity is provided will directly correlate with the motivation of traders, brokers, accountants, bankers and all other relevant professions to embrace what is largely an untested market. For example, will the Port of Fujairah fall under federal law that is spearheaded by Abu Dhabi, or are the country’s global energy interests best served by appointing the Port as a legal island, from a trading perspective?
 
The high cost of soft infrastructure also needs more attention, as escalating telecommunication costs for trading stakeholders in the Gulf threaten to curb momentum, especially for small and medium-sized enterprises. The most efficient connection provided by a leased line between, say, a US city and Dubai incurs crippling costs. An affordable alternative is required in today’s environment where profit margins are under stress. 

The pace of Fujairah’s efforts to establish itself as a key global energy trading hub to rival Rotterdam and Singapore is impressive. If it continues to pay attention to the needs of the oil trading community, Fujairah will reap the benefits of its geographical location and grow from strength to strength.

The Emergence of Fujairah: Three Things You Need to Know

1. The Port has launched the first very large crude carrier (VLCC) jetty on the Indian Ocean coast of the Arabian Peninsula. 

2. The growth of refining capacity in the Middle East and increased demand for oil products are changing historical trading patterns, with oil products now flowing both ways through the Gulf. 

3. The Port announced in September that it will be publishing weekly inventory data for major oil products to provide insight on the market’s supply-demand balance. 

The traditional refinery projects long dominated by Europe have withered away and been reborn as major and complex refineries in the Middle East in an astonishingly short space of time.

 
China’s vast array of ‘teapot’ refineries – small and independent operators – and India’s bid to become a refining superpower by 2025 have added to the global abundance of refined oil products.

"The pressure on refiners’ operations is obvious. Global refining margins almost halved during the third quarter of this year versus the same period in 2015 and the Paris-based International Energy Agency (IEA) expects refinery runs in the second half of 2016 to grow at the lowest rate in a decade."

 
The agency put the global consumption of petroleum and other liquid fuels at 1.4 million barrels a day (b/d) last year, up to 1.5 million b/d in 2016 and back down to 1.4 million b/d in 2017. Squeezing Middle Eastern refinery margins further could result in a chunk of global demand being soaked up by stored products and the US’ supply of natural gas liquids (NGLs), according to BP. For example, naphtha could be substituted for US ethane naphtha.

 
This challenging short-term outlook comes amid a full pipeline of supply, with the majority of the 7.1 million b/d of new distillation capacity for 2015-2020 earmarked to be from the Middle East, China and the wider Asia-Pacific, according to OPEC’s 2015 World Oil Outlook.  

In the Middle East alone, an expansion to the UAE’s Ruwais refinery has ramped capacity by up to 900,000 b/d and Kuwait’s 615,000 b/d Al Zour refinery will likely come online by 2021. The refineries are amongst the world’s top ten largest such facilities and elevate the Gulf’s downstream prowess on the global map.

 
Kuwait is also increasing the combined capacity at the Mina Abdulla and Mina Al Ahmadi refinery to 800,000 b/d, while the aged 200,000 b/d Shuaiba refinery will be shut down by April 2017. All four of Kuwait’s refinery projects fall under the country’s Clean Fuels Project (CFP) – a significant undertaking that will position Kuwait as the most influential refiner in the Middle East.

 
In southwest Saudi Arabia, the 400,000 b/d Jazan refinery is due online in 2018, Abu Dhabi’s International Petroleum Investment Company (Ipic) is in the midst of confirming the main contracts for its $3.5 billion refinery project in Fujairah and up to $6 billion is being invested in Oman’s Duqm refinery through to 2021.

 
A third of Bahrain’s $15 billion of investment up to 2020 is earmarked for state-owned Bahrain Petroleum Company’s (BAPCO) modernization program that aims to bolster refining capacity by 37% to 367,000 b/d, according to research group Apicorp.

Iran has signed a memorandum of understanding (MOU) with ENI’s Saipem for the potential revamping and upgrading of the Pars, Shiraz and Tabriz refineries. The country’s planned investments in its energy sector over the coming five years makes up more than 10% of the total $611 billion across MENA at $71 billion, which is second only to Saudi Arabia’s $102 billion, said Apicorp.

 
As competition builds and profit margins are squeezed, there is a need to be savvier than ever. Better cross-border communication would help alleviate Gulf refiners’ long-running difficulty of matching their capabilities to market demands. This will prove especially important as appetites for certain fuels shift quickly. A case in point was refiners’ collective focus on supplying diesel amid worries of a shortage. However, lower oil prices since mid-2014 have boosted gasoline demand instead. China, the world’s second largest energy consumer, has reported a 4% decline in diesel demand this year and a 12% rise in gasoline demand. India is experiencing a similar narrative. 

 
Gulf refiners would also benefit from widening their downstream horizons to manage regional dependency, as illustrated by Saudi Arabia’s state-owned oil giant Saudi Aramco. It has taken over the 603,000 b/d Port Arthur refinery – the largest such facility in the US – and 26 distribution terminals as it ends its 50:50 agreement with Shell.

 
On the international policy front, the market is waiting for the Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) to decide on the implementation of the global 0.50% Sulphur cap for marine fuels – a move that will trigger a major shift in the industry. Reducing the cap is an environmental effort aimed at improving human and marine health, as Sulphur causes acidification of the ocean.

The market largely expects an announcement that a new policy will be implemented from 2020, giving stakeholders three short years to get ready. The cost of compliant low Sulphur could be as much as 50% higher than the current residual fuel used for shipping. If oil prices climb to $70/bl as anticipated by 2020, the differential between the two products could soar by up to $400 a tonne, according to the International Chamber of Shipping. 

The future may be about building infrastructure rather than more refineries – logistics are king. The Port of Fujairah’s launch of the first very large crude carrier (VLCC) jetty on the Indian Ocean in September is a good example, as the move complements Fujairah’s high quality blending and import-export capabilities. Customers at the Port can access various tanks to make whatever cocktail of specifications they need.

Refiners’ road to robust profit margins is riddled with challenges and requires seamless logistics, world-class infrastructure and an ability to react quickly to whatever decision is made by the IMO. Even refiners that smartly stockpiled cash during the $100/bl oil era for the inevitable price crunch cannot rest on their laurels. Those that that efficiently manage their storage, transport and blending will be the ones that emerge as champions of change rather than frustrated survivors of turbulent market dynamics.

Carving out innovative roadmaps to navigate intensifying global competition has climbed to the top of liquefied natural gas (LNG) producers’ playbooks.

Stakeholders are jostling to thrive and not just survive for three primary reasons; oil-indexed LNG prices have shadowed plummeting oil prices since mid-2014, the current glut of supply calls for increasingly competitive strategies and there is an ever growing environmental checklist.

Global LNG demand is weakening; the Paris-based International Energy Agency (IEA) expects natural gas demand to grow at 1.5% annually through to 2021 compared to the robust 2.2% annual growth seen over the last five years. Yet, global LNG production volumes climbed by 2% on 2014 to 250 million tons in 2015, with an additional 125 million tons of LNG under development likely to come to market next year, according to consultants Wood Mackenzie.

The disparity between supply and demand makes for dynamic market conditions and innovation is the ultimate tool to safeguard stakeholders’ profit margins until the outlook stabilizes, which may not start till at least 2020.

 
Innovative strategies include ships being turned into floating storage regasification units (FSRU), which has piqued the intrigue of investors seeking business opportunities. The capital expenditure for FSRUs, floating LNG (FLNG) production units and floating storage units (FSUs) is expected to reach $41.6 billion between 2016 and 2022, compared to $11.4 billion during 2011-2015, according to Douglas Westwood’s World FLNG Market Forecast. FSRUs, for example, significantly reduce associated risks for cross-border transactions as they can circumnavigate political unrest – an offering unmatched by onshore pipelines. 
The players in the LNG market are also evolving as Shell’s $54 billion acquisition of BG Group in February this year – the deal includes some of Australia’s major LNG projects – illustrates major energy companies’ appetite for widening their LNG portfolios.

At the other end of the spectrum, the world’s small scale LNG terminals market is expected to more than double from the 50.47 million tons per year in 2015 to 102.44 million tons per a year by 2022, according to Transparency Market Research (TMR). The growth forecast largely relates to onshore developments, though the offshore profile will gain traction as energy companies explore more small fields. Investors and speculators’ confidence to support such projects will correlate to the growth of liquidity in the market, though financial support is required more immediately for small and medium-sized enterprises, whose bank balances are creaking amid low prices. Thinking outside the box must become a long-term strategy as competition in the LNG market intensifies. The US’ first LNG export from the country’s Sabine Pass on the Gulf of Mexico in February this year through the newly-widened Panama Canal signaled a seismic shift in the competitive nature of global LNG markets. Plus, despite a wave of delays, Australia is still likely to become one of the world’s biggest LNG exporters in the 2020s following the country’s $200 billion investment into that industry over the last decade.

The combined volume from the US and Australia could account for more than 90% of new LNG exports by 2020, which could challenge Qatar’s position as the world’s largest LNG exporter.

Iran, home to the world’s second largest natural gas reserves, is poised to become an LNG supplier during the next decade following the lifting of the majority of Western-imposed sanctions in January of this year.  It is still not clear how Iran will prioritize its pipeline export ambitions over developing an international LNG export business.

The glut of supply means up to 50 million tons of ‘un-contracted LNG’ – product without a pre-determined home – is anticipated by 2020 and buyers’ preference for shorter contracts is gaining traction at the negotiating table. This signifies a fundamental shift for a market historically characterized by agreements that stretch into decades in order to justify LNG producers’ high infrastructure capital costs. 

Political appetite for LNG, which is considered a stepping stone from a hydrocarbon to low-carbon world, will help soak up some of the oversupply over the next decade. Ports in northern Europe, Asia and the US agreed in October this year to collectively work on a standardized framework for LNG bunkering. Antwerp, Rotterdam, Zeebrugge, Singapore and the Port of Jacksonville are among those involved in a historical shift from using fuel oil to LNG as a marine fuel.  In addition, the new Emission Control Areas around port zones will propagate the use of cleaner fuels, of which LNG is one.

In the midst of such uncertainty, LNG stakeholders have little choice but to embrace change and use innovation and entrepreneurship as their allies in the battle for stability. But, a balance must be struck so that new roadmaps are not characterized by expensive and risky lone-wolf ventures. Knowledge sharing and collaborations by the greater industry are integral to reducing risks and bills for governments, companies and investors.

UAE Public Companies

GIQ Corporate Knowledge Index (CKI) is a standalone methodology that provides a quantifiable answer to a pertinent question – how much knowledge does a company create and make available to the public?

To answer the questions above, Gulf Intelligence created the GIQ Corporate Knowledge Index (CKI). By defining knowledge as content a company creates that is engaging and establishing engagement as the ability to attract, retain and educate a defined audience, we were able to produce a sophisticated methodology that measures the amount of knowledge a company creates and shares to its public audience. To see how things stacked up, we analyzed the Top 10 Publically Traded UAE Companies by market capitalization (2015) over the course of Q1 2016, Q2 2016 and Q3 2016.

In this era of mass communication via digital platforms, companies have the opportunity and obligation of publishing their own knowledge content directly. The GIQ Corporate Knowledge Index (CKI) quantifies the success of a company’s knowledge offering which holds global value as businesses in the UAE and the wider Middle East become increasingly interconnected with other countries and continents.

The increasingly vast amount of content that is available to the world today menas that companies must create though-provoking and engaging knowledge content to stand out to consumers who face constant waves of information. Quality and substance are paramount for companies to cut through all of the noise and educate their public audience.

Methodology: How does the GIQ Corporate Knowledge Index Work?  
Key Parameters of the GIQ Corporate Knowledge Index:

✓ The CKI defines Knowledge as content that is engaging – the content attracts, educates and retains a defined audience.

 
✓ The CKI defines an Audience as spectators on a given channel for publication consumption that are relevant to a company’s activities.

 
✓ The CKI defines Channels as platforms where content engagement can be monitored and measured, such as company websites, social media (Twitter, LinkedIn) and news.

 
✓ The CKI utilizes a branded GI Score to measure other channels, such as forums, press releases, reports, magazine features and interviews.

 
✓ The CKI uses Digital Analytic Tools to monitor channel engagements, which paints a broader picture of how engaging the knowledge content on those channels is.

Insights:

✓ Etisalat was the clear leader on the CKI, with a strong twitter engagement rate over the course of Q1, Q2, and Q3 coupled with above average positive sentiment towards its digital content online. The company also topped the list in programs supporting the UAE’s National Year of reading by distributing award winning books to public schools throughout the country and the Etisalat Literature Prize which aims at stimulating a reading and knowledge culture.

 
✓ Public engagement on social media for all companies was stronger for knowledge based content as opposed to promotion of services. Posts on both LinkedIn and twitter that shared market insights, interviews with senior company representatives, CSR and social responsibility programs, received more likes, shares, and comments than posts promoting products or services.

 
✓ Companies’ generation of knowledge and sharing with the public decreased significantly on social media over the course of Q2 and Q3. Factors that should be taken into consideration are summer leave, Ramadan, and Eid Holidays. However, the companies that received high rankings had a consistent social media strategy during the holiday periods.

 
✓ Regarding the lower tier companies on the CKI, Abu Dhabi Commercial Bank does not have critical social media platforms for knowledge sharing such as twitter, LinkedIn, or both, severely limiting their ability to share knowledge with the public and negatively impacting their CKI Score.

 
✓ National Bank of Abu Dhabi and First Gulf Bank showed strong results for Q1 and Q2 but greatly decreased in Q3. This may be the result of the coming merger.

✓ Telecommunication companies were the strongest on twitter content engagement whereas financial companies were stronger on LinkedIn content engagement.

 
✓ Spam and direct advertising negatively impacted the digital sentiment of company content online resulting in a lower CKI score.

 
✓ For all companies measured, there was very little CEO participation in forums, conferences, and summits.

 
✓ English-generated content received stronger audience engagement than Arabic on both LinkedIn and Twitter.

✓ As can been seen from the results of the GIQ CKI, the market capitalization of a company does not produce an equivalent level of knowledge generation and sharing. For example, Dubai Islamic Bank and Mashreq Bank have low market capitalizations but strong CKI scores. 

The Middle East is at the precipice of what will be the second most innovative chapter in its unique energy narrative – the first being defined by the region’s role as the epicenter of global oil production.

A growing appetite by governments for low carbon is more than a silver lining to the dark economic cloud caused by two years of low oil prices – it has created an entirely new horizon.

The previous era of $100/bl oil and investors’ general aversion to expensive technology costs stalled the decade-long conversations in the Middle East to embrace a low-carbon ethos. But, a now settled range of lower oil prices and the Abu Dhabi Water and Electricity Authority’s announcement in September that it received the lowest bids ever for solar power are two key developments that help reaffirm the dawn of a new energy roadmap in the Middle East.

 
The Gulf Cooperation Council’s (GCC) – Saudi Arabia, Qatar, Kuwait, Oman, Bahrain and the UAE – support for the United Nation’s Framework Convention on Climate Change (UNFCCC) meeting in Paris last December saw a region with one of the worlds’ highest rates of pollution solidify its status as an environmental ally.

The US and China, the world’s two biggest contributors of global emissions, agreed in September to join the 180 countries who have signed the Paris Agreement over the last year. The Agreement aims to reduce emissions of greenhouse gases (GHG) and to limit global warming to 2°C and ideally no more than 1.5°C. American and Chinese support of the climate agreement is the first time so many of the world’s leaders have united under a single framework. 
Environmental concerns affect every piece of the global oil and gas puzzle. In South America, for example, a third of organizations responding to a LR survey said curbing the sector’s negative environmental impact is the primary driver for their research and development (R&D) spend.

 
As global global momentum increases, the Middle East’s sunny climate, flourishing R&D ecosystem and penchant for innovation means that it has the opportunity to champion and export clean energy technologies, especially for solar power.

 
At current rates, the Middle East’s energy consumption by 2035 will rise by 60% and oil consumption per capita will be over three times the global average. These sobering statistics laid out by BP’s Energy Outlook underscore the urgency of environmental reformation. The region has already made hard-won progress in what is an economic blink of an eye.

 
The World Bank estimated in 2014 that the Middle East and North Africa accounted for 48% of global energy subsidies, despite being home to just 5.5% of the world’s population. The economic toll of subsidies at a time when balance sheets are cracking under the pressure of low oil prices prompted some governments to start reducing subsidies last year; a politically-sensitive move considering that subsidies have been ingrained in the region’s psyche as a national right thus far.

 
The UAE, which the International Monetary Fund (IMF) estimated spent an annual $7 billion on petroleum subsidies, took the plunge and deregulated gasoline and diesel prices from the 1 August 2015, for example.

"The Abu Dhabi-based International Renewable Energy Agency (IRENA) said the GCC has the potential to save 400 million barrels of oil and reduce the combined per capita carbon footprint by 8% by 2030 by meeting the renewable energy targets that governments have put in place."

The UAE aims to have 30% of its power generation from clean energy by 2030, with Kuwait and Qatar targeting 15% and 20% during the same period, respectively.

 
A low carbon future does not mean a one-track journey in which the Middle East ignores valuable hydrocarbon infrastructure and reserves, as illustrated by Oman’s Miraah project. Miraah will be one of the world’s largest solar plants when it starts coming online in 2017 and will save 300,000 tons of emissions per year, which is the equivalent of taking 63,000 cars off the sultanate’s roads. GlassPoint is spearheading the project for Oman’s state-owned and Shell-led Petroleum Development Oman (PDO). The project will feed 6,000 tons of solar steam per day directly into PDO’s thermal enhanced oil recovery (EOR) operations at the Amal oil field.  

Three key lessons can be taken from this project. Low carbon technologies are compatible with some of today’s extensive and typically-profitable hydrocarbon operations; supporting small and medium-sized enterprises’ entrepreneurial spirit is crucial; and private-public partnerships are highly effective.

 
All three points could be applied to resolving the disparity between the region’s water scarcity and its swelling population and booming industry. Qatar already uses desalinated water to meet 99% of municipal demand, amidst a forecast that the country’s population of 2.6 million is likely to multiply eightfold by 2050, for example.

A note of caution accompanies Middle Eastern governments and energy companies’ ventures into a low-carbon frontier as the Paris-based International Energy Agency (IEA) expects oil prices to hover around today’s $50/bl range until mid-2017. As pressure builds on already strained budgets, the region must block out the bearish noise and focus on R&D and talent creation for clean energy to accelerate the downward cost spiral.

From left to right: H.E. Ambassador Thembisile Majola, Deputy Minister of Energy, South Africa; H.E. Suhail Al Mazrouei, UAE Energy Minister; H.H. Sheikh Hamad bin Mohammed Al Sharqi, Ruler of Fujairah; H.H. Sheikh Mohammed bin Hamad bin Mohammed Al Sharqi 

A New Centre of Gravity for Global Energy Flows

 All eyes in the global energy industry are fixed on the Port of Fujairah, as enhanced transparency and world-class infrastructure signal a new chapter in its narrative of ambition and innovation.

Fujairah is rapidly evolving from a critical and regional infrastructure hub into a global brand of efficiency and capacity that comfortably sits alongside the world’s largest energy hubs in Singapore and Rotterdam.

 
In September, the Port officially launched its very large crude carrier (VLCC) jetty – the first of its kind on the Arabian Peninsula and Indian Ocean. In the same week, it also announced that it would be publishing regular data on oil inventories to increase transparency. Both steps are paramount to solidifying the Port’s role as the primary facilitator of energy trade on the South-South Corridor.

 
At a time when energy investments are plummeting – spending on global oil and gas fields could drop by 24% to approximately $450 billion this year – the Port is adding 55% more storage to reach 14 million tons by 2020 and toying with the idea of adding another VLCC jetty.

 
The bullishness surrounding the Port’s potential is easy to understand as it lies just south of the Strait of Hormuz, one of the world’s most important oil chokepoints through which nearly a third of global seaborne oil passes. As the world’s second largest bunkering hub after Singapore, the Port is an ideal parking space for the swelling commodity trades along the South-South Corridor. The Corridor stretches from Beijing to Lagos and is earmarked as the primary source of the 48% increase in global energy demand between 2012 and 2040 that has been forecast by the US’ Energy Information Administration (EIA). Fujairah also acts as a one-stop shop offering fuel, engine repairs and crew. 

 
Despite suffering its first economic wobble in nearly three decades last year, China is still the world’s second largest oil consumer after the US and the Paris-based International Energy Agency (IEA) expects India to be the fastest growing crude consumer up to 2040. The latter especially bodes well for the Port’s growth as India’s import terminals are just a short eastward journey from the UAE’s shores.

 
Let us not forget the growing energy demand and historical trade ties between the Middle East and East Africa, with its increasing number of energy-hungry middle class economies. Iran is also a consideration following the lifting of the majority of Western-imposed sanctions in January. While Tehran’s tendency will be to use Oman’s ports, its proximity to the Port of Fujairah means the volume of Iranian business there will inevitably rise. Looking at demand closer to home, BP expects the Middle East’s energy consumption to climb by 60% by 2035.

"The Port of Fujairah is also the region’s most well-equipped gateway for local refineries’ exports." 

As Europe’s role as a refining giant fades, the industry is booming in the Middle East. The majority of the 7.1 million barrels a day of new distillation capacity expected in 2015-2020 will be coming from this region, China and the wider Asia-Pacific, according to OPEC’s 2015 World Oil Outlook. Yet again, the global energy compass swings towards Fujairah.

"One of the next and most innovative steps in the Port’s narrative could be the establishment of independent Middle East oil benchmarks that would truly reflect the region’s market dynamics instead of relying on pricing from Singapore." 

The Port’s decision to publish weekly inventory data is a key stepping stone in this journey to pricing independence, as it provides a clearer picture of the region’s supply-demand balance and will help galvanize traders’ appetites. The time zone in the UAE and wider Gulf also means the region is well placed to straddle trading desks in Rotterdam and Singapore.

 
The establishment of independent oil benchmarks could materialise in as little as three to five years, but this conversation should transcend the UAE’s borders and reach a global audience, so that the energy market at large is aware of Fujairah’s ever-widening and world-class offering. Starting locally, linking the UAE’s state-owned ADNOC facilities with third party storage at the Port would help promote transparency and liquidity for ADNOC, Fujairah and all the Port’s customers.

Our job is far from done as we explore opportunities in this new phase of the Port’s journey with our customers and allies at each point of the global compass from the US, to Europe, to South Africa and to the Far East. The best is yet to come.

The Fujairah Oil Industry Zone (FOIZ)signed an MoU with the independent data agency S&P Global Plattsto distribute weekly inventory storage data starting 2017.
Back row, left to right: Sohail Iqbal, Development Committee, FOIZ; Sharief Habib Al Awadhi, DG, Fujairah Free Zone Authority; Capt. Mousa Morad, GM, Port of Fujairah; Stuart Wood, Vice President Global Product Development & Management, S&P Global Platts; Dave Ernsberger, Global Head of Energy Pricing & Co-Head of Content, S&P Global Platts; Ameer Wassef, S&P Global Platts. 
Front row, left to right: Dr. Sheikh Rashid bin Hamad Al Sharqi, FOIZ Vice Chairman; Martin Fraenkel, President, S&P Global Platts 

Qatar’s successful development as an oil producer and the world’s biggest LNG exporter means the country has posted an average national growth rate of over 7% since 2012. Now, the unpredictable nature of commodity prices means Qatar and many other countries around the world have started diversifying their economies away from hydrocarbons. For Qatar, the goal is to create a knowledge economy as per the country’s National Vision 2030.

Qatar’s goal requires improving national awareness and interest in learning STEM. This cannot be achieved by small changes to the school curriculum, or a collection of after school programs. Transforming the country’s economic mandate will take time; time to establish learning goals, guidelines, training and eventually, application. Human and capital investments are required to upgrade teaching capacity, enhance connectivity with STEM-related industries in Qatar and improve the accessibility of STEM education nationwide.

The education cycle of a single student from kindergarten to their first pay cheque takes over sixteen years. Qatar is addressing its STEM education in order to see significant change up to 2030 and beyond.

"Like many countries, Qatar will face a learning curve as the country focuses on increasing its number of STEM graduates and becoming a centre of intellectual activity." 

Students’ performance in mathematics in Qatar’s schools, for example, is below the average set by the Organisation of Economic Co-operation and Development (OECD), according to its 2014 report titled ‘Education at a Glance’.
 
The quality of a country’s education usually correlates to its gross domestic product (GDP) per population. Qatar has one of the world’s highest such rates, so the current mismatch is something that Qatar could address to help build national capacity.

Qatar’s growing emphasis on STEM is underpinned by the country’s Ministry of Education and Higher Education. The Ministry of Education and Higher Education is the authority in Qatar that is responsible for the development and advancement of the education sector, which includes educational policy and goals to ensure that Qatari students are well equipped to deal with the high demands of the workplace in the 21st century.
 
Industry and Academia also have a vital role to play. Qatar also benefits from Qatar Foundation, a semi-private and non-profit organization established by the Father Emir, H.H. Sheikh Hamad Bin Khalifa Al-Thani. Over two decades, Qatar Foundation has created partnerships that stretch around the world.

Entities based out of Education City include Texas A&M University at Qatar, which offers Chemical Engineering, Petroleum Engineering, Electrical and Computer Engineering and Mechanical Engineering undergraduate degrees, for example. Other entities under the umbrella of Qatar Foundation include The Academic Bridge Program and the Qatar Computing Research Institute.

Increasing Interaction with Industry
Around the world, rarely are a young student’s perception of their ‘dream’ job and the reality in the workplace the same. Companies in Qatar that promote STEM-related careers are best placed to answer students’ queries and to inspire them to pursue a career in one of the fields.

Such queries include which pathway in science is pursued the most in Qatar – chemistry, physics, or biology? What are the different types of engineering jobs and which is most common in Qatar? Why is learning such high-level mathematics important – when will I ever need advanced algebra? What can I do in the field of technology when I grow up?

Companies’ engagement with students and their STEM learning cannot lessen when the student becomes a graduate and secures a job. Instead, employers can continue enhancing the skill set of their workforce by providing flexible working hours for those pursuing higher education, such as PhDs. 

Importantly, companies can also help clarify the correlation between students’ STEM studies and how a relevant career could contribute to Qatar’s economic future. An advisory board could help foster greater coordination within Industry and therefore strengthen the message to Academia and Government on the pathways and benefits of STEM-related careers.

Qatar’s STEM-related goals could benefit if Industry stretched beyond mainly interacting with colleges and universities and started sharing its knowledge with primary schools. Companies could use interactive techniques, such as experience days in offices and site visits to energy fields, or factories.

Industry leaders could visit classrooms once a month for two hours, expanding a bottom-up approach – show students how STEM can be applied in the workplace on a day-to-day basis. Alternatively, the Industry could hold week-long internships and field trips for students across the entire age spectrum.

Teach for Qatar (TfQ) is an example of how Industry involvement can increase students’ appetite for STEM and raise the likelihood that students will pursue teaching, or a STEM-related profession. Maersk Oil Qatar became the first company to have one of its young Qatari professionals undertake a secondment as a Teaching Fellow for TfQ. TfQ recruits professionals in Qatar to teach in local schools for two years in a bid to inspire a love of mathematics and science, for example, amongst the younger generations.

Increasingly, the organization touches on the importance of academic tools for Qatar’s economic future and national identity. Of those recruited directly from Academia or Industry, 60-70% opt to remain in education once their two-year contribution finishes.

 

H.E. Salim Al Aufi, Undersecretary, Ministry of Oil & Gas, Oman (far left) and Steve Kelly, President and General Manager, Occidental of Oman (far right) present the Occidental Oman Student Awards 2016 for the Advancement of Post-Graduate Education to the four winners.

Education is the foundation of civilization; it is what enables communities, companies and countries to excel and push the boundaries of knowledge.

A well-educated and committed population is integral to a successful economy, especially as a national vision evolves.A post-graduate community of Masters and PhD students are supporting Oman’s transition from being a hydrocarbon-based economy for nearly half a century – oil was first exported in 1967 –  to a knowledge-based economy with a rich research and development (R&D) ecosystem, as per the National Vision 2020.

 
Muscat’s plans for economic diversification into sectors such as manufacturing, mining, transport and tourism do not dampen the need for an innovative and cost-efficient energy sector, as oil and gas accounted for nearly 80% of government revenues last year. It is more important than ever to recognize and support the country’s brightest minds.

Herein lies the value of the inaugural OXY Oman Student Awards for the Advancement of Post-Graduate Education, which was hosted by Sultan Qaboos University (SQU) in Muscat on October 18. The Awards aim to enhance the prestige and attitudes toward research-focused education by providing an environment in which the most skilled and ambitious students can put their best foot forward and gain recognition from the industry, academia and government for their contribution to Oman’s future.

The Winners of the 2016 Awards were chosen by esteemed members of the Selection Review Committee, who have international standing in the energy markets, including Dr. Rahma Al-Mahrouqi, Deputy Vice-Chancellor of Postgraduate Studies and Research at SQU, Dr. Khalil Al Riyami, Vice President of Exploration at Occidental Oman and Professor Dr.-Ing. Michael Georg Modigell, who is the Rector at German University of Technology in Oman.

"The Award Winners will become positive role models for the advancement of post-graduate education in Oman, which will help inspire the next generation to strive for professional excellence that can directly benefit Oman’s economy and national vision."

 
The bar of success within Academia, Industry and Government for post-graduate success is forever rising in Oman and employers increasingly require talents that have a mix of ‘hard’ and ‘soft’ skills. Hard skills generally fall under the umbrella of science, technology, engineering and mathematics (STEM) learning, while soft skills tend to be an ability to think critically and be a strong communicator.

Cross-leveraging skill sets means that petroleum engineers are expected to communicate well and public relations professionals must understand the intricacies of oil and gas production, for example. Almost half of the world’s petroleum engineers are scheduled to retire over the next decade, which highlights a shortage in just one highly-skilled area. Economists, accountants and analysts are just a few of the professions that are vital to the success of Oman’s energy sector, along with traders, lawyers, financiers and regulatory experts.

 
Consequently, post-graduate students face an increasingly steep learning curve. But, this will stand them in good stead as they look to take advantage of the knowledge-based jobs that will be on offer. Such opportunities will be supported within Oman as the first phase of the Innovation Park Muscat (IPM), which aims to become a hub of R&D in Oman, becomes operational by the end of this year.  

Employers’ support of the post-graduate community can have rewarding results, as illustrated by Occidental of Oman’s instrumental role in enrolling 33 employees in the company’s scholarship program since 2013.

 
After securing Masters and PhDs, Omanis can push back against fierce competition to secure jobs overseas in multi-national energy companies and then import their newly-found knowledge when they return home. The energy sector has a global face and Oman’s energy professionals who understand such practical and cultural complexities will have a sharper competitive edge and capacity to support Oman’s national vision.

Oman has timed its economic transition well as global demand for expertise in energy R&D is strongly correlated to global energy demand, which the US’ Energy Information Administration (EIA) expects to climb by 48% between 2012 and 2040. Nurturing the development of post-graduate communities and a R&D ecosystem in Oman through initiatives like the OXY Oman Student Awards will enable Muscat to export knowledge to other energy producers in the Gulf and beyond.

 
Occidental of Oman has done a magnificent job developing Omani staff and improved oil recovery (IOR) and enhanced oil recovery (EOR) technologies. A massive EOR steam flood using gas injection and water flooding was implemented at the Mukhaizna heavy oil field, for example. State-owned and Shell-led Petroleum Development Oman (PDO) is also gaining international renown for its innovative EOR strategies. Such innovation will help Oman climb higher on the global university rankings and encourage Omani students to register their patents locally and not via foreign universities.
 
The recognition and celebration by industry, academia and government of today’s post-graduate thought leaders, as facilitated by the OXY Oman Student Awards, is a vital step in enabling future generations to steer Oman down a prosperous path.

Industry plays a central role in ensuring that Oman nurtures an agile and well-educated talent pool, which is the linchpin to creating a research and development (R&D) ecosystem to address the country’s energy challenges.

The primary challenges include cutting operating costs amid today’s low oil prices, continually improving enhanced oil recovery (EOR) innovations to sustain output at the country’s hydrocarbon fields and diversifying into new sectors to reduce the country’s reliance on oil and gas.

 
Muscat is amongst a competitive crowd of energy producers positioning themselves on the global energy stage as beacons of innovation and knowledge – two goals that are front and center of Oman’s National Vision 2020 and 2040. Countries that improve the education of their populations and foster a culture of innovation will establish robust R&D hubs, thus thriving intellectually and economically.

 
Industry is in urgent need of R&D specialists in Oman and beyond to improve energy efficiency, renewable markets and EOR technologies in order to meet swelling global energy demand profitably and in accordance with increasingly strict environmental legislation. Global energy consumption is forecast by the US’ Energy Information Administration (EIA) to rise by 48% between 2012 and 2040 and BP’s Energy Outlook expects energy demand to climb by 60% by 2035 in the Middle East alone. As the age-old maxim goes: necessity is the mother of invention.

 
Overall, Oman would benefit from a National Talent Master Plan that is aligned with the Oman Energy Master Plan 2040, which was drafted in late-2015 and aims to unite the R&D and energy goals of industry, academia and government.

As part of a Master Plan, industry can do more to facilitate easily-accessible sabbaticals and mentoring to enhance the understanding of R&D for those transitioning from their academic lives into employment. Establishing internal avenues through which students and employees in industry can submit novel ideas – regardless of age and professional standing – would ignite a communal passion for brainstorming and R&D. 

Oman’s industry and academia are already making bold steps to merge their agendas. In addition to their degrees from the newly opened Muscat University, the students will receive a degree from the UK’s Aston University and Masters students will receive a degree from the UK’s Cranfield University. The universities are two of the UK’s top establishments for industry engagement and graduate employment.

 "Half of the students attending Muscat University will be from abroad, which will expose Omani students to different ways of tackling challenges and developing their business relationships." 

Masters students will also complete industry-based projects as part of their thesis. Plus, the first phase of Innovation Park Muscat – Oman’s flagship R&D center – is opening in early 2017 with close ties to industry.

 
Industry’s efforts to publicly celebrate the achievements of young Omani thought leaders – of whom there are many – would also deepen the country’s sense of pride in intellectual rigor. Reviewing Oman’s immigration rules would transfer foreigners’ creativity into the country’s wider innovation cycle, be it in industry or academia. The creation of an Innovation Index that measures businesses commitment to R&D would help gauge progress and accountability.

The reawakening of Oman’s innovative spirit must be supported by accessible and user-friendly financial guidance for entrepreneurs and small and medium-sized enterprises. Oman’s government, industry and academia must collectively improve the way intellectual property (IP) is captured and managed. A government-led regulatory body could orchestrate the use of IP created by Omani students studying at universities abroad to ensure that their new-found knowledge is fed back into supporting Oman’s national goals.

 
Building a theoretical bank of IP is a fundamental step in galvanizing industry’s appetite for innovation, especially as some IP can evolve into a commoditized export. The sharing of ground breaking R&D in EOR technologies has solidified Oman’s role as a global leader in the field, for example.

 
To prepare Oman’s students and employees for changes to the long-term job market, industry must actively guide educational reforms to ensure that the learning of ‘hard’ skills in science, technology, engineering and mathematics (STEM) is complemented by ‘soft’ skills in creative and critical thinking. The artificial splitting of STEM from humanities and social sciences encourages silos and employees have a greater chance of getting stuck in a rut.

 
The intellectual agility of Oman’s workforce is a must with global forecasts outlining that up to 65% of the world’s university students today will have job titles that do not yet exist. Greater industry engagement is vital to ensuring that the brightest minds in Oman are not chasing the wave of innovation, but are at the crest of the wave as it breaks new ground in energy R&D.

A National Policy to Orchestrate Oman’s Zest for R&D

Transforming creativity and critical thinking into a profitable and commercial research and development (R&D) ecosystem requires a National Policy, which provides a clear roadmap for the members of Oman’s triple helix model; government, academia and industry. A united effort is required to create an ecosystem that will accelerate Oman’s journey to becoming a knowledge-based and innovative economy, as per the National Vision 2020 and 2040.

The Royal decree that helped establish The Research Council (TRC) in 2005 marked the first vital step in what will be a multifaceted journey. Now, TRC and all the other entities in the triple helix model are working together to carve out a detailed and nation-wide policy that boosts the level of inspiration and accountability associated with research and R&D.

 
Low oil prices since mid-2014 mean many oil producing countries are diversifying their economy to be less dependent on revenues from hydrocarbon production. The Paris-based International  Energy Agency (IEA) warns that oil prices could stay within the current $50/bl range until mid-2017 at least.

A National R&D Policy has been developed by TRC as part of the National Research Strategy to activate collaboration between government, academia and industry so that the rapidly-evolving R&D efforts in all are aligned. R&D completed by Oman’s public energy entities must support the commercial goals of the private energy sector and vice versa. Such cooperation encompasses energy efficiency, data management systems and enhanced oil recovery (EOR) and renewable energy technologies.

"In particular, academia and industry can do considerably more to jointly define key performance indicators (KPIs) for individual and joint projects to maximise their financial and human capital."

 
Joint efforts by Sultan Qaboos University (SQU) and Oman’s state-owned and Shell-led Petroleum Development Oman (PDO) provide a useful example of cooperation between academia and industry. A joint committee of researchers from SQU and PDO meet regularly to share challenges and brainstorm solutions. Such efforts would also accelerate the rate of locally-registered patents, which will strengthen Oman’s R&D ecosystem and attract more investors at home and abroad to commercialise novel ideas and crossover technologies. These are tools that are used in other industries – such as medicine, aviation and mining – that can most easily be adapted to cut costs and boost operational efficiency in the energy sector.      

KPIs will help decide funding structures, so that the primary beneficiary of the innovation makes the greatest managerial and financial contribution to the R&D process. Contributions do not need to only be financial. Industry can offer the use of its facilities and historical data, academia can allocate scientific and technical talent, while government can help market the project at home and abroad, for example. 

Different funding structures can also be laid out to support the three primary R&D routes; basic, applied and experimental. Applied R&D solves a specific problem and exploratory R&D is characterised by engaging in more practical ideas. All three hold equal importance in creating a culture of innovation. They each require a variety of scientific and technical skills and are appropriate at different points in the innovation ecosystem.

Through TRC, Oman is on the right track towards creating an innovative ecosystem that aligns R&D with national needs. Various programs have been launched, which includes encouraging innovation at young ages in schools to establishing research centers where the triple helix entities are the main stakeholders.

Competition is essential to creating a culture of innovation, but duplicating activities and wasting time and resources are not. With a population of 4.3 million, it is vital that Oman uses its relatively small pool of human resources wisely. Focus and careful planning would enable established R&D centres to support the ever-growing community of small and medium-sized enterprises and entrepreneurs, which are a key part of Oman’s creative engine.

Last, but certainly not least, a National R&D Policy would be strengthened by a national innovation strategy that would enhance the collaboration between the triple helix stakeholders. These R&D efforts will boost the national ability to think critically, complete qualitative and quantifiable research, communicate new ideas and create socioeconomic benefits.