ADMA-OPCO

COMPANY PROFILE

2015

ADMA-OPCO

+971 2 606 0000 | www.adma-opco.com

Abu Dhabi counter flow for growth Editorial: Colin Chinery

As oil companies scramble to cut profit-doubtful projects, Abu Dhabi plans to invest over $25 billion in the next five years on boosting oil production capacity from offshore fields. Much of this investment will be directed through the Abu Dhabi Marine Operating Company - ADMA-OPCO - the pioneer with a mission to achieve optimum resource utilisation.

Undaunted by low prices and deep cuts in oil and gas venture expenditure, Abu Dhabi is set to secure its position as a leading oil producer, with state-owned Abu Dhabi National Oil Co (Adnoc) unrolling a $25bn-plus investment over the next five years to increase offshore oil production capacity.

The investment flow involves a $2.5bn annual spend on new offshore drilling activities, combined with an expansion of infrastructure to bring new wells on-line.

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The plan is part of the United Arab Emirates’ strategy of increasing its crude oil output potential to 3.5 million barrels a day by 2017-18 - current production is around 2.8 million bpd - and much of this investment will be directed through the Abu Dhabi Marine Operating Company (ADMA-OPCO).

ADMA-OPCO is a major producer of oil and gas from the offshore areas of Abu Dhabi, a pioneer with over 45 years of experience in oil and gas

production, and a mission to achieve operational and technical excellence and optimum resource utilisation and value.

UNDEVIATING FOCUS A continuous focus on progressive change and corporate advancement has seen the company maintaining its commitment to realising long-term projects such as facilities expansion, new installations, additional drilling, production development, inspection and integrity management.

Long prominent in ADMA-OPCO’s

ADMA-OPCO

portfolio are two established major fields - Umm Shaif and Zakum. Umm Shaif, 150 km from Abu Dhabi was first drilled in 1958, and Zakum 60 km out, five years later.

Drilling in the offshore areas is currently handled by a fleet of drilling rigs leased from National Drilling Company (NDC).

The techniques used have progressed throughout the years starting with vertical drilling, then deviated and are now horizontal. New concepts such as Drilling the Limit (DTL) have since been introduced to reduce time and cost of drilling operations while maintaining safe and high standards.

Logistical support to the offshore operations is provided by the Supply Base in Mussaffah, with a fleet of helicopters and boats utilised to ferry personnel and load or unload materials.

Oil and gas production and water injection is carried out at Zakum West, utilising Central Supercomplexes – giant structures installed in the 1960s and

1970s, made up of plants and platforms firmly placed in the sea like man-made islands and manned by skilled UAE and expatriate employees.

The crude is then transferred through a sophisticated pipeline network to Das Island the main industrial base 150 km from Abu Dhabi for processing, storing and exporting.

MEGA FIELD Upper Zakum is one of the largest offshore fields in the world, stretching over 750 square kilometres and containing reserves of 50 billion barrels.

However the field’s sub-sea base is low pressure with complex porous rock formations requiring the application of high-end technological and engineering skills.

To accelerate progress in the technically challenging field, Abu Dhabi has reinforced its effort by bringing in foreign expertise in the form of ExxonMobil as an equity partner.

The world’s largest privately-owned oil company, ExxonMobil has been awarded a 28.8% stake in Zakum Development, with ADNOC holding 60% interest and Japan Oil Development 12%.

Links with international oil majors have also been forged by Abu Dhabi’s International Petroleum Investment Company which has recently extended its partnership with Occidental Petroleum in the development of upstream and downstream ventures in areas in and outside the Middle East.

New fields are also opening up under ADMA-OPCO’s expansion programme with fast-paced developments such as Satah Al Razboot (SARB), Nasr and Umm Lulu.

Nasr, located offshore about 130 kilometres north-west of Abu Dhabi city began producing oil in January.

Starting out at a rate of 6,000 barrels a day with a year-end target of 22,000 bpd production, the second phase is

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scheduled to bring production up to 65,000 bpd by the end of 2018.

The SARB offshore oil field located 200km northwest of Abu Dhabi, is expected to add an additional 100,000 barrels per day of oil to the overall oil production capacity of UAE after commissioning next year.

The Nasr field is part of ADMAOPCO’s programme to add an extra 300,000 bpd capacity to Abu Dhabi’s overall production levels - itself part of the Emirate’s broader strategy to raise production capacity from a current level of about 3 million bpd to 3.5 million bpd by 2017-18.

In November, ADMA-OPCO signed three major contracts worth US$3 billion for the second phase of Nasr’s development, with Abu Dhabi’s National Petroleum Construction Company, Hyundai Heavy Industries of South Korea and Technip of France.

Four weeks earlier, first oil began flowing from Umm Lulu. Produced through ZADCO’s facilities at Umm

© ADMA-OPCO

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Al-Dalkh and Zirku Island, the 5,000 bpd start-out rate is expected to reach 22,000 bpd by the end of this year, with a full field development rate of 105,000 bpd by 2018.

The Full Field Development includes six new wellhead towers to host 78 new wells, sub-sea pipelines carrying oil, water and gas, an offshore Supercomplex consisting of multiple processing platforms, central control by data transfer through the latest smart fields technology fibre optic cable.

This is the first time ADMA-OPCO oil will be processed by another operator, and is a demonstration of the continued collaboration between the Adnoc Group of companies.

DYNAMIC EVOLUTION Set alongside the brilliant blue waters of the Arabian Gulf, Abu Dhabi is ambitious and dynamic, fast evolving across a multitude of industries and sectors. The largest of the seven Emirates that make up the UAE, it accounts for 96% of the

federation’s petroleum output, 9% of the world’s proven oil reserves and 5% of its gas reserves.

The Abu Dhabi National Oil Company was established in 1971 to operate in all areas of the oil and gas industry. Since then it has steadily broadened its activity, establishing companies and subsidiaries.

The result is an integrated oil and gas operation leading the way in exploration and production, support services, oil refining and gas processing and chemicals and petrochemicals, as well as maritime transportation and refined products and distribution.

Over this same period, Adnoc - which has a 60% shareholding in ADMAOPCO - has expanded its business activities, enhancing its competitive position to become one of the world’s leading oil companies.

Abu Dhabi’s $25 billion five year plan to ramp up investment to increase production at its offshore fields assumes a notably contrarian position to the oil price introspection and gloom.

ADMA-OPCO But as the IMF reported last month, the UAE economy is well prepared to withstand the impact of falling oil prices and consequent erosion in long-standing fiscal and external surpluses.

“The UAE has continued to benefit from its perceived safe haven status and large fiscal and external buffers that have helped limit negative spillovers from lower oil prices, sluggish global growth, and volatility in emerging market economies,” said Zeine Zeidane, Advisor, Middle East and Central Asia Department.

Unsurprisingly Adnoc is taking the long view. “You always want to build capacity, but the production rate is always governed by Opec and the government,” said Mr Al Kayoumi, manager of offshore division, exploration and production directorate at Adnoc.

Adnoc will “focus on gas development because of the growing demand for gas. We are already working with our current operator companies to do appraisal activities and also with some potential partners through technical evaluation agreements to develop these fields, with a focus on gas development. We have all the confidence that these projects will be delivered on these times and with good quality.”

The capacity enhancement programme has international significance, with the Emirate’s proven oil reserves of some 98.7 billion barrels representing 8% of global oil. And while there is considerable scope for the production increase, oil is currently produced at just 18 out of 67 potential fields and reserves are becoming harder and more expensive to extract.

So while the UAE is one of the most significant oil producers in the world, the likelihood of further major oil discoveries is low,

with the result that enhanced oil recovery (EOR) techniques are being deployed to increase the extraction rates of its mature oil fields.

AIMING HIGH “Our aspiration is 70% cent recovery of recoverable reserves, and that is very challenging. But you always aim very high when it comes to recovery,” says Mr Al Kayoumi.

EOR techniques are among those in which ADMA-OPCO excels. With its mission to develop oil and gas production to ensure maximum sustainability towards 70% recovery, the company uses state-of-theart technology whilst maintaining

responsibility, efficiency, the highest HSE, operational integrity and cost effectiveness standards.

Late last year it signed an agreement with British Petroleum – like Adnoc, an ADMA-OPCO shareholder - to develop a new EOR technology. Under this, BP will provide support to ADMA-OPCO to carry out laboratory and field tests to evaluate Carbonate Ionic Design EOR potential in ADMA-OPCO fields.

“EOR technologies will play a key role to meet the energy demand in Abu Dhabi in the years to come,” says ADMA-OPCO CEO Ali Rashid Al-Jarwan. “And we at ADMA-OPCO have an aspiration to reach an ultimate recovery factor of 70% for our fields.”

“Providing requisite technology for the oil and gas sector”

Head Office Bin Hamoodah Tower, Capital Centre (near ADNEC) 17th Floor (Reception) and 16th Floor Khaleej Al Arabi Road P.O Box 6203, Abu Dhabi, United Arab Emirates Email: Switchboard: Fax:

gasos@gasosauh.ae +971-2-8135900 +971-2-6276150

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