ECONOMIC VIABILITY OF THE SAUDI ARABIAN PETROCHEMICAL INDUSTRY: METHANOL AS A CASE STUDY (PETROCHEMICAL MARKETING).

摘要

In the pursuit of the diversification strategy, Saudi planners invested a sizable amount of oil surplus in export-oriented petrochemical projects at Jubail and Yanbu. For this strategy to be realized, the projects must be economically viable. Economic viability entails the presence of petrochemical plants that are self-sustaining and self-perpetuating in the longrun without state subsidies.;Confirming the capability of the Saudis to penetrate the world market, we proceeded to calculate the net present value (NPV) of the methanol plant. With a set of assumptions regarding methanol prices, captive and international demand, and costs, the NPV turned out to be positive. Even though the project proves to be commercially profitable, however, it does not appear to yield positive economic returns from the standpoint of the Saudi economy as a whole. According to our forecast of methanol revenues and costs, the Saudi petrochemical industry exemplified by the methanol project emerges to be as a net absorber of rather than contributor to the nation's financial resources and in this regard appears to impede the process of capital formation and economic growth.;In view of the projects, heavy reliance on state subsidies along with their location in a remote area, far from the source of demand, we hypothesize that barring a significant shift in development strategy, a dynamic industrial sector focusing on the development of the petrochemical industry is unlikely to emerge in Saudi Arabia and that the export-led growth strategy which accords it a key role in the nation's development is not likely to prove viable. In verifying our hypothesis, a comparative cost analysis was conducted comparing the cost structure at the Ibn-Sina methanol plant to a similar plant in Alberta, Canada. In the shortrun, the Saudi plant was proven to be competitive against the Canadian plant in the West European market. However, in light of the oil price collapse in early 1986, competitiveness was shifted away from Saudi Arabia and to Canada in the U.S. market. In the longrun, future cost estimates tend to reinforce the Saudi competitive position in the European market.