Critical Value of SEC to the Kingdom
Power Sustainability to the Sacred Cites
Contributing to the Real Image of Saudi Arabia
SEC Contribution to KSA Economical Growth KSA will maintain its vital role as global supplier of secure oil and G20 member
What is SEC to The Kingdom & The World
In reality, SEC is the battery of global economy
!!
1) Supports Kingdom Commerce & Industry including sustainable Export of Hydrocarbon and Petrochems to the world.
2) The largest utility in the MENA region and one of the largest globally
3) Direct economic driver to KSA, to maintain its position as one of the largest 20 global economies
WHAT SEC MEANS TO THE KINGDOM AND THE WORLD Kingdom Pride:
• SEC is the largest in the MENA Region and world
• Installed capacity 62 GW• 56,000 km of
Transmission (circle the globe)
• 500,000 km of distribution lines
Citizens of the Kingdom• 7.3 million Customers• Upto 500,000 New Customers
per year• SEC has Electrified 99% of
rural areas• 13,000 Villages• Growing at the fastest pace
in the world, 8% growth• 33,000 SEC direct Employees
Strategic • Savings towards 1.5 MBOE/D• Introduce smart grid and smart meters• Interconnection regionally & globally
GCC INTERCONNECTION
EGYPT INTERCONNECTION
EUROPE INTERCONNECTION
THE ENERGY VALUE CHAIN FROM WELL HEAD TO CUSTOMER
SEC is a major component in the energy value chain – producing the much needed electricity to move theeconomy forward and for the production of water
USA China S Korea Singapore SpainNorway MalaysiaBrazil IranRussia Venezuela UK Canada
Sim
ilar s
truc
ture
Sim
ilar o
bjec
tives
Selection criteriaSelection criteria
Large resources1
Demand outpacing supply2
Development level3
Geography & culture4
Geopolitical weight5
Competitive NOC6
Increase efficiency7
Diversify fuel mix8
Grow non oil & gas sectors9
Build expertise10
Impact on environment11
Overall fit for benchmark
Countries identified for benchmarking
Examples of failed strategic attemptsExamples of failed strategic attempts
Pockets of excellencePockets of excellence
N Zealand
Iran
Germany Germany: EfficiencyNZ: Renewable
Japan: R&D structureFrance: Leadership
UK: Integrated servicesIran: Fuel SubsidiesKorea: Localization
Norway: Governance
UK
Japan France
Indonesia NigeriaMexico
Korea Norway
2
3
1
2
3
4
5
6
7
8
Brazil Malaysia
NorwayChina Comprehensive Strategy Strong governance
Success storiesChallenges faced
USA
1 Country deep diveCountry deep dive
Source Aramco
What are we solving for ?? • Meeting Demand• Diversity of supply • Security of supply • Reducing hydrocarbon burning• Environmental Compliance• Maximize revenue • Increasing the standard to living • Optimizing the cost of energy• Leadership in the Kingdom and the world
SEC IS SOLVING FOR ALL FO THE ABOVE !!!!!!
STP regional roadshow - English.pptx 11
SEC RESPONSE TO ADDRESS THE OPPORTUNITY THROUGH THE STRATEGIC TRANSFORMATION PROGRAM (STP)
ANIMaTE!!
IMPACT OF STP / OUTCOME / Our response – linking it all together
Generation (meet demand )
Transmission
• 600,000 efficiency • Expansion to meet demand • 4000 MW per year • 300,000 renewable
• 54 KM • Increase capacity from 105 GVA in year 2000 to 203
GVA in year 2013. • Interconnection Local and international
Distribution• 146 km for overhead lines and 92 km for
underground cables• Increase capacity from 93GVA in year 2000 to
189 GVA in year 2013.
2 MMBDOE increase by 2030 2 MMBDOE increase by 2030
The cost of doing nothing: Future investments required over a period of 20 years
46$ Billion3X1 BSCFD Sales
Gas
3X 0.5 MMBD Refineries
30$ Billion
$35 Billion2 GW X10 Power
Plants
6$ BillionDistribution
System
50$ Billion5X300 MBD Crude
Oil Facilities
$165B in capex
$110B in operating cost
$7B in carbon credits
Total ~$300 B
Saudi Aramco’s incremental costs:CapEx of $131BOpEx of $88B
Utilities incremental costs:CapEx of $34BOpEx of $22B
Source Aramco
STP regional roadshow - English.pptx 15
SEC Quick Facts
1. Availability of power to serve 7.3 m customers is 99.9%2. SEC has one the lowest residential tariff globally3. The installed capacity in Kingdome is 62GW while total GCC capacity is 61 GW4. UAE Tariff subsidy serves only 20 % of total population(UAE citizen only ) while in
Saudi 100 % 5. SEC Saudization is 87%6. Sec is one of the largest 5 publicity trade companies in Kingdome stock market7. Annual growth in demand reach 8%8. Total Asset Value SAR 307 billion9. Telecom Example 10. SEC customer base split by consumption: residential (50%), industrial (17.4%),
commercial (16.3%), governmental (12.6%), and other (3.6%)
STP regional roadshow - English.pptx 17
Citizens of the Kingdom Kingdom & World Pride Strategic
• 7.3 million Customers• Upto 500,000 New
Customers per year• SEC has Electrified 99% of
rural areas• 13,000 Villages• Growing at the fastest
pace in the world, 8% growth
• SEC is the lowest provider and tariff structure
• Job Creation -Local Gas Turbine servicing and manufacturing (GE / Siemens)
• 33,000 SEC direct Employees
• Local contractor and manufacturers
• SEC is the largest in the MENA Region
• One of the largest utilities in the world
• Installed capacity 62 GW• 56,000 km of Transmission
(circle the globe)• 500,000 km of distribution
lines• All international companies
want to work with SEC• Strategic agreements with
EDF, TEPCO, KEPCO, EON
• SAR 50 Billion Expenditure per year
• SAR 10 billion local direct purchase
• SEC is the first KSA entity to launch 30 yr global Sukuk
• SEC Rating AA-
• Challenges converted to Opportunities
• Transformation on all activities while keeping the lights on.
• Daweyat fiber optic network (32,000 km) spanning the kingdom.
• Interconnection regionally • Going global• Inviting Global utilities to
participate in the local market
• Strategic Transformation of utility business to best in class.
• Strengthen the Kingdom name globally.
• Increase supply efficiency to save 600,000 BPD
• Participate in Demand reduction equivalent to 900,000 BPD
• Diversifying the energy mix – renewables …. Saving 300,000 BPD
• Introduce smart grid and smart meters
STP regional roadshow - English.pptx 18
18
STAKEHOLDERS – WAY FORWARD
WE STILL HAVE CHALLENGES
WE WILL WORK WITH ALL OUR STAKEHOLDERS …..
2.8 % of Fiscal Budget -
• TO create success the entire supply chain and SEC’s position within the entire value ---
• The supply chain
• Include Value Chain Pic / Supply / Demand
SEC is proud to Provide the Kingdom with the need Power to drive prosperity and development for the economy, the society and the Kingdom as a whole, for :1) Export of hydro carbon to the
world2) Keeping the lights on, water
flowing and economy growing,
3) Providing power for schools, universities, hospitals, commercial centers, critical facilities, government, military etc..