Avast amount of hot air has been exhausted by the international trade press in 2008 concerning the threat that the rapid expansion of the Middle East downstream sector poses to established producer markets.
Gone are the days where Europe and the US retained a monopoly on the value added, more luctative end of the petrochemical industry, and hello brave new world which puts the Arabian Peninsula at the heart of refining and plastics manufacturing.
Indian and Chinese producers are doing it, if not better, then certainly cheaper, and buyers are going to be scrutinising their costs very closely in
the months ahead.
The local industry has for too long missed out on the juicy profits made by turning its vast supply of crude feedstock into refined product and consumer goods.
The recent spate of downstream mega-projects, petrochemical hubs, and global acquisitions speak volumes about the fact that these days are over.
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Two interesting things outside the polymers and refining business will have a massive impact on the industry in October. Talk of a possible recession has turned to talk of being in a recession for much of the world, and with that chatter came the collapse of the oil price.
With more than 60% wiped off crude since its July high, polymer producers will be looking at a deflated raw materials bill, if that fall is sustained.
A drop in consumer spending will, of course, filter down to plastics producers, but at the same time, cheaper feedstock and the gleaming, cutting edge technology being installed across the region, will provide opportunities for a profitable export market which has the capability to ride out a slump.
Local companies will have to tighten their belts along with the rest of the world, but lean operators will have the chance to establish themselves on the global stage like never before.
Daniel Canty is the editor of Oil & Gas Middle East.
