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The Hydrocarbon Chain

We are all familiar with oil and gas, with petrol and diesel, and with the plastic products that are an integral part of our daily lives. The oil and gas industry touches each and every one of us countless times every day, directly and indirectly, from the bottle of water on our desk to the mobile phone in our hand.

The Hydrocarbon Chain Explained

We are all familiar with oil and gas, with petrol and diesel, and with the plastic products that are an integral part of our daily lives. The oil and gas industry touches each and every one of us countless times every day, directly and indirectly, from the bottle of water on our desk to the mobile phone in our hand. Let’s look at just some of those daily encounters.

  • Alarm clocks
  • Toothbrushes and toothpaste tubes
  • Food packaging
  • Bottles for mineral water, fruit juices and soft drinks
  • Transport
  • Frames and lenses for spectacles or sunglasses
  • Casings and screens for mobile phones, desk phones, desktop computers, laptops and tablets
  • Power for lighting, air-conditioning, heating, Internet access
  • Carpets and rugs, cabling and fittings in homes and offices
  • Casings for TV sets, sound systems, games consoles
  • Sports shoes and sporting equipment
  • Interior finishes for cars
  • Shower gel, soap and shampoo

Indirectly, many of the things we own or buy have been made using power that is likely to have been generated by oil or gas. They have been transported to the warehouse and shop by a truck or van that needs oil and fuel to move. Those same shops may use power from oil and gas to maintain their lighting, air-conditioning, tills, credit card payment systems and security.

So the ultimate uses to which oil and gas are put are varied and almost infinite. Yet all these products and applications start with the same basic element – hydrocarbons buried beneath the earth and the seabed, which must undergo a series of processes to transform them from a basic natural resource into the complex fuels and materials which our modern world depends on.

It all starts with exploration – the rights to explore for oil and gas. Those rights are sold by sovereign governments to commercial interests, generally represented by oil companies. They use the latest technology to search for new oil and gas deposits deep under the surface of the earth or the sea. If those deposits are judged to be commercially viable, they then put the necessary equipment in place to drill for and extract the oil or gas.

The oil at this stage is known as crude oil and it is sent through pipelines and by ship, truck or railway either to a storage tank or to a refinery. There it is processed into fuel for our cars and aircraft, oil for our engines, and hundreds of petrochemical products that in turn can be processed into a range of plastics for those phone casings, toothbrushes, TV sets and thousands of other everyday products.

As scientific knowledge has increased, it has become possible to use the ethane that sits on top of the oil deposits to make the plastics polyethylene and polypropylene. In earlier times, the gas was usually burnt off. Now, in addition to ethane from other sources, it’s harnessed to make the raw material for a vast range of useful products, from wire and cables to water pipes, and from automotive components to advanced packaging materials and agricultural fertilisers. Other plastics produced by the refineries go on to help create anything from non-drip paints to touch-screens.

Scientists and chemical engineers work to develop new materials from those base plastics, new applications, and enhancements to existing plastics that improve the products we use. Without those innovations, our mobile phone screens would become scratched more easily; our iPad screens wouldn’t respond to the merest touch; our cling film wouldn’t cling; and life-saving airbags in our cars simply wouldn’t exist.
IPIC plays a role in every link in the hydrocarbon value chain. IPIC is the International Petroleum Investment Company, formed by the Abu Dhabi government almost 30 years ago in 1984 to invest in the energy and related sectors across the globe. Today it manages a portfolio of investments in more than 18 leading companies across the hydrocarbon value chain.

Companies such as CEPSA, OMV & Cosmo Oil are integrated companies, which means they are present across the oil value chain from exploration and production (known in the industry as “upstream”) to refining and marketing (referred to as “downstream”). Some of IPIC’s activities are focused on “midstream” areas, covering the storage and transportation of oil and gas; these businesses are GEM, Sumed, ADCOP & Emirates LNG.

At the downstream end of the value chain come companies such as Borealis, NOVA Chemicals, ChemaWEyaat, and the Duqm and Fujairah refineries. These businesses take the output of the upstream and midstream operations to convert them into diesel, kerosene, LPG, chemicals and plastics that are used in everyday life. IPIC is also engaged in power generation through its investments in EDP and Oasis International Power.

So the hydrocarbon industry – oil, gas and the plastics they are used to produce – is not only the foundation for the prosperity and growth of Abu Dhabi. It represents the very operating system for our modern world and offers exciting challenges to the hundreds of thousands of people who choose careers in the sector: using the latest technology to find new hydrocarbon fields and extract the oil and gas efficiently and safely; creating new materials with new properties that expand the possibilities of human experience; and caring for the environment that makes all of this possible. IPIC is proud to be an active contributor in these endeavours across the world.