The Evolution of Energy in the Middle East: The Project Manager’s Role

The energy sector is changing rapidly, driven by technological advancements and a growing urgency to embrace renewable power. Project professionals can prepare for the future by understanding the forces reshaping the sector.

Few areas of the global economy are undergoing as much disruptive change today as the energy sector, which holds the potential to dramatically reshape the world in the years ahead. At its essence, energy is essential to creating opportunity—in health, in safety, and especially in environmental sustainability—affecting the lives of virtually everyone on the planet. 

Few regions will see as much change as the Middle East—traditionally reliant on oil and gas as a key economic driver—where seismic changes are underway in regard to the supply and demands for energy.  

Fossil fuels have faced considerable headwinds recently, particularly during the era of COVID-19. Demand for oil  has fallen by more than 15%, leading to steep declines of over 70% in oil prices and presenting the largest industry challenge in a century. Analysis from Rystad Energy  forecasts that global spending on oil and gas will reach its lowest levels in 15 years, with major implications for the region’s supply chain and service sector.  

However, these economic challenges also present an opportunity in regard to transitioning to cleaner and more sustainable sources of energy including renewable and nuclear power. Government and corporate leaders alike have focused on diversifying the region’s energy mix to meet today’s environmental and economic challenges—building new smart cities rooted in sustainable practices and leveraging emerging technologies to use resources more efficiently. 

I see these changes underway each day in my dual capacity as Managing Director of PMI’s Middle East/North Africa region and Head of Energy for PMI, building and maintaining relationships between PMI and our partners in the region.  

Here area few key insights for project professionals as I survey today’s energy landscape in the region. 

A Growing Demand for Renewable Power

The world will continue to grapple with the challenge of tackling rising global temperatures and ensuring a sustainable future—while still meeting the standard of living expected by a growing global population. 

While sources like oil and natural gas currently provide about 80 percent  of the global energy supply, analysts predict that renewable sources like wind and solar will play an increasingly vital role in the years ahead, especially as they fall in cost. Thanks in large part to technological innovation, solar costs have dropped  from US$371/MWh in 2010 to US$85/MWh in 2018, while the average cost of onshore wind projects have fallen from US$85/MWh in 2010 to US$56/MWh in 2018. 

But these technologies must be rapidly adopted at greater scale in order to move the needle on warnings from the scientific community. PMI’s Signposts research has cited climate change as a key future trend impacting The Project Economy—and the single greatest threat to global stability, with young people in particular demanding bold action before we have reached the point of no return. In response, governments are increasingly under regulatory pressure to reduce their carbon footprint and expand the production of renewable energy.  

These challenges underscore the urgency at companies making record investments in promoting sustainability around the world; for just one example, see Shell’s commitment  to providing a reliable supply of electricity to 100 million people by 2030, primarily across Africa and India. 

Meanwhile in the Middle East, large industry providers like Saudi Aramco are working to reduce their carbon footprint in alignment with multilateral commitments like the Paris Climate Agreement. Recognizing the need for collaborative action, Saudi Aramco has joined efforts with peers like Exxon and BP to begin curbing emissions  at their operations by as much as 13% from 2017 levels. 

A Growing Need for Innovation

Along with an expanded focus on sustainability, innovation lies at the heart of the energy sector in the region. 

Major players in the oil and gas sector are increasingly likely to invest more resources into research of emerging trends and technologies that are reshaping how energy is produced, delivered, and consumed. A range of exciting projects across the Middle East are stretching the boundaries of imagination on how we can build and power our communities in a sustainable fashion.  

One example is the Mohammed bin Rashid Al Maktoum Solar Park , a megaproject underway worth AED 50 billion and developed by the Dubai Electricity and Water Authority. The project—slated to be the world’s largest single-site solar park upon completion in 2022 and projected to power more than 1.3 million homes—aims to advance the bold sustainable development goals set by the United Arab Emirates. Dubai Clean Strategy 2050  has laid out a goal of producing 75% of Dubai’s total power output from clean energy sources by 2050.  

Another prominent example is the Neom project in Saudi Arabia , a US$500 billion smart city—33 times the size of New York City (!)—that will employ 100% renewable power and a city-wide network connected sensors to capture data on the most efficient use of energy, quickly analyzing the data and making it available to citizens and public officials alike. (Not to mention other ideas straight out of science fiction—from flying taxis to robotic dinosaurs and an artificial moon to illuminate the night sky.) The project reflects Saudi Arabia’s own ambitious efforts to reduce dependence on oil and further establish the Kingdom as a central hub for technology and innovation. 

A Growing Role for Project Professionals

The growing complexity of the region’s energy needs—and the need for urgent action to meet increasingly bold goals for reducing carbon emissions—requires that project professionals develop a broader set of skills and capabilities. For the foreseeable future, the global economic terrain will require teams behind major megaprojects to identify efficiencies and find creative ways to achieve outcomes on tight budgets. 

Today’s project manager in the world of energy needs to be capable of thinking like an economist when the need arises, and a technology wizard at other times. She must be able to understand the implications of new technologies and the market conditions of the broader business landscape.  

While many project managers will continue to succeed as generalists, specialization in sub-sectors of the energy field can enable project managers to increase their impact in leading projects and managing stakeholders. Technical skills will remain crucial, but must be complemented by strengths in leadership, strategy, and what PMI calls “power skills” centered on managing people, such as empathy, communication, and collaboration.  

Regional partners like Saudi Aramco—recently recognized as a finalist for PMI’s PMO of the Year award—have invested heavily in developing the leadership skills of the professionals responsible for taking their sustainability strategy and implementing it through a range of projects.  

These skills will also be in demand for practitioners who may not consider themselves to be formal project managers, but find themselves leading projects throughout their career journeys. This trend is reflected in findings from the McKinsey Global Institute , which recently identified project management as a key cognitive skill poised to grow in importance in the future, along with enduring human capabilities like creativity and critical thinking that will take on outsized importance as more routine work is automated.

We are clearly poised to see a comprehensive re-imagining of the world’s energy supply in the 2020s. However, the pace of the global transition away from fossil fuel systems is still not clear—nor is it a foregone conclusion that the world will act in time to prevent or mitigate the worst effects of climate disruption.  

The final outcomes will significantly depend on how business leaders and policy-makers around the world respond to the combined challenges of the sudden pandemic shock and the underlying realities of the energy system. 

But as we begin to emerge from this pandemic, humanity has a unique opportunity to build a better world. When I see the incredible projects underway in the region and meet the people behind them, I’m optimistic that the years ahead will see the creation of more sustainable systems—ultimately delivering reduced pollution, new professional opportunities for a growing youth population, and more reliable and resilient power for communities around the world.