COMPANY PROFILE
2014
ZADCO
+9712-6050000 | www.zadco.ae/en/
Developing the Upper Zakum field for Abu Dhabi Editorial: Christian Jordan
ZADCO is continually coming up with new methods to sustainably develop the lucrative Upper Zakum field on behalf of ADNOC and for the benefit of the shareholders. Total World Energy takes a closer look at the artificial island project and how this pioneering idea is assisting in the field’s development.
Abu Dhabi; the capital and the second most populous city in the United Arab Emirates and also capital of the largest of the UAE’s seven member Emirates. It’s fair to say that this region has seen exponential growth over the past few decades and that growth has, in a big way, been down to the fantastic work that has been done in the oil, gas and wider energy industries. And in the future there are plans in place to further develop this
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magnificent metropolis by growing not only the oil and gas sectors, but also other industries and the Abu Dhabi UPC (Urban Planning Council) has built the Abu Dhabi 2030 Urban Structure Framework Plan to optimise the city’s development through a 25 year program of urban evolution. Economic diversification is a key pillar of the Economic Vision 2030 and the Emirate is setting ambitious targets for the performance of the non-oil sector. But one thing
remains certain; oil and gas will continue to be a huge driver of the economy and the development of other industries including financial services and tourism. Abu Dhabi is one of the world’s most important hydrocarbon suppliers, ranked among the top five exporters of crude oil and top 25 exporters of natural gas. The Emirate’s participation in the oil and gas sector spans the entire range of activities including exploration, production, transport, refining and
ZADCO marketing of oil and gas. It also covers the fabrication of high-value energy-related equipment and the provision of related services. In 2007, the global hydrocarbon market was valued at $2,150 billion with reported profit margins of around 15 per cent. However, Abu Dhabi easily exceeds this margin given its exceptionally low production costs and vast economies of scale. And one of the driving forces behind exceeding this margin is the business excellence displayed by the regions oil companies, one of the foremost being Zakum Development Company (ZADCO).
DECADES OF EXCELLENCE Founded in November 1977 as per Law No.9 for 1977, promulgated by
Sheikh Zayed Bin Sultan Al Nahyan, ZADCO’s mandate was to develop and operate the Upper Zakum field. Currently, ZADCO’s shareholders include Abu Dhabi National Oil Company (ADNOC) with a 60% share, ExxonMobil with a 28% share, and Japan Oil Development Company limited (JODCO) with a 12% share. Along with its work in the Upper Zakum field, ZADCO is also responsible for the operation and development of the Umm Al Dalkh and Satah fields. Oil in the Upper Zakum, Umm Al Dalkh and Satah fields was discovered in 1963, 1969 and 1975 respectively. The development of the Upper Zakum reservoir is considered as one of the major technical
achievements in Abu Dhabi and in the first shipment of Upper Zakum crude oil was exported on the tanker ‘Al-Ain’ in May 1983. Upper Zakum is located 84 km north west of Abu Dhabi Islands and covers around 1,200 km² of the Gulf marine area. Zakum field is the second largest field in the Gulf and the fourth largest field in the world. Umm Al-Dalkh is located 25 km north west of Abu Dhabi and Satah field is located 200 km north west of Abu Dhabi. Originally, operations at the Umm Al Dalkh field were managed by Umm Al Dalkh Development Company (UDECO) but in 1988, ADNOC decided to merge the operations of UDECO and ZADCO to rationalise operations, avoid duplication of functions and reduce cost.
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Today, oil from all three fields is processed at the plant on Zirku Island. Zirku Island is located 140 km north west of Abu Dhabi. With its advanced oil and gas installations, Zirku is considered the main industrial base for the processing, storage and export of oil from Upper Zakum, Umm Al-Dalkh and Satah fields. Alongside Zirku Island, ZADCO also manages Arzanah Island, the base for Satah field operations. Located 180 km north west of Abu Dhabi, Arzanah can accommodate around 100 people.
A BRIGHT FUTURE Considering the significant infrastructure and personnel
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that ZADCO manages, and the importance of the fields under its management to not only Abu Dhabi but the global oil market, you would expect that projects in the pipeline would be significant, and you would be right. “ZADCO looks to the future with confidence,” the company states, and after 37 years of successful operation, there is no suggestion of resting on laurels. “The fourth decade is a decade of further maturity and progress in all areas, devoting its efforts and capabilities to serving Abu Dhabi and the UAE. Improved oil recovery will be a main target and accordingly, the introduction of the state-of-the-art technology will be available to serve
and streamline operations, increase growth and control expenditure. One more key element of the fourth decade strategy is to improve the human resources programs to enhance the Emiratization process as per the set target,” the company says. One of the projects that will help the company on its growth path is an on-going project which will see production in the Upper Zakum field increased from 550 thousand to 750 thousand barrels of oil per day by 2015. This idea has been a concept that has required a lot of attention from ZADCO and its partners as the investment required to up production is costly and requires
Lamprell has played a prominent role in the development of the energy industry in the Middle East for over 35 years and has played a significant role in construction of complex process modules. Our most recent contract award was for the ground breaking Zadco UZ750 Project in Abu Dhabi, in support of the incumbent EPC provider Petrofac Emirates. Our Jebel Ali centre of excellence has played a significant part in the support of modular construction projects and is synonymous with the fabrication of complex process, separation, gas compression, power generation and general topside modules. As a result, we are fully conversant with the handling and welding of exotic materials such as Inconel, duplex and super duplex, a common feature in complex onshore process trains and in the handling of hydrocarbons and associated gasses. We understand the stringent requirements in the commissioning and certification within this process environment. With multiple Middle East facilities we are able to produce pressure vessels and the columns that typically form part of module delivery, reducing the reliance on 3rd party supply for critical path items, a constant consideration for fast track projects. Building on this competence we are expanding our modular activities into other markets as the industry moves towards onshore modular construction versus stick build, in areas of the world where infrastructure does not lend itself to in situ construction and where operations already exist, but need to be extended. Total’s high profile North Sea development, Laggan Tormore, situated 125 miles West of Shetland, is one such example where in 2013, we delivered a total of 15 onshore process modules in a fast track ten month schedule. The modules are now installed and form part of the critical onshore gas process sirge system deployed within the Laggan Tormore gas plant. Finally, we see considerable synergy with Lamprell’s track record in the provision of complex onshore process modules for the emerging LNG, refining and petrochemical sectors.
VALUE DRIVEN BUSINESS Competitive Solutions for Complex Projects First Class Safety
Highly Skilled Workforce
Client Satisfaction
World Class Quality
Schedule Certainty
Lamprell has played a prominent role in the development of the energy industry in the Middle East for over 35 years and with multiple facilities, we are able to produce pressure vessels and columns, using exotic materials, which typically form part of module delivery. We are expanding our modular activities into broader markets as the industry moves towards onshore modular construction in areas of the world where infrastructure needs to be extended. www.lamprell.com
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new infrastructure solutions. Initially, the idea was to install an additional 25 wellhead platform towers, together with hundreds of kilometres of new flow lines, hundreds of new wells, significant well workover requirements, and investing in substantial gas injection expansion and gas capturing facilities. After some consideration, the company determined that this method was not the most efficient way to increase production and a new solution was devised. This solution, referred to as the ‘artificial island concept’, was developed in collaboration with ZADCO’s shareholder ExxonMobil. This idea suggested drilling and production centres could be located on artificial islands and to support the concept, ZADCO established a drilling division and began exploring the use of high-technology extended-reach drilling (ERD) – this is a technology widely used by ExxonMobil in locations such as the Sakhalin field in Russia. Also, to reduce the required number of new wells and unlock
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“The rigs have advanced equipment to achieve the desired drilling depths with ERD, in addition to the Rig Walker System to allow the move on the cluster pads”
tighter areas in the reservoir, the company explored the use of Maximum Reservoir Contact (MRC) technology. Previously, MRC and ERD had not been widely used in the region and although they had been proven in other parts of the world, their use on the scale planned by ZADCO was unprecedented. In the past, ZADCO has drilled wells of approximately 10,000 feet but, in the pursuit of growth, the company wanted to go deeper. Using the artificial island concept, the company hopes that it will be able to drill to 30,000 to 35,000 feet. So far, ZADCO has completed drilling a pair of record-breaking MRC wells both of which are almost 20,000 feet total drilled length. These are classed as pilot wells and the knowledge and experience gained during their operation will be used to aid in planning for the future. ExxonMobil’s experience with drilling technology has been paramount in the development of this project, so much so that the company has organised a Technology Centre co-located within
ZADCO the ZADCO HQ allowing for access to innovation, technology and bestin-class idea sharing between the two companies. The artificial island concept will also be supported by NDC (National Drilling Company) and industry leading directional drilling and completion service providers to ensure success in the execution stage. In June, a new rig, the ND 66, was inaugurated on one of the artificial islands - the South Island. Provided by NDC, the rig has been described as ‘state-of-the-art’ and ZADCO’s Senior Vice President, Development, Mr Ali Hassan Al Marzooqi said: “These up-to-date rigs will support ZADCO’s mandate to achieve sustainable production based on full field development. The rigs have advanced equipment to achieve the desired drilling depths with ERD, in addition to the Rig Walker System to allow the move on the cluster pads. “The artificial islands concept will significantly reduce life-cycle development costs and enable long term maximum recovery levels to be achieved. To that end, this effective partnership between ZADCO and C NDC will contribute considerably to M tackle the challenges and meet the Y targeted production levels.” CM
A KEY PARTNER
MY
Being such an important player in CY the local and international industry, CMY ZADCO does not only focus on its own operations in its own fields. The K company is always seeking to build mutually beneficial relationships with partners to grow the industry for the benefit of all. Recently, it was reported that the ZADCO’s facilities at Umm Al-Dalkh and Zirku Island had been used by The Abu Dhabi Marine Operating Company (ADMA-OPCO) after the company brought its Umm Lulu Phase-1 facilities online and produced
its first oil from the Umm Lulu Field. Located in the Arabian Gulf 30 km north west of Abu Dhabi, the Umm Lulu field has the potential to produce 105,000 barrels per day; Phase-1 of the project will add 22,000 barrels per day by end of 2015 and the rest will be added by full field development in 2018. The Phase-1 development includes two new wellhead towers to host 10 new wells, powered by solar energy, subsea pipelines, fibre optic cables for data transfer and a flexible pipeline for water disposal and all oil produced will go through ZADCO’s facilities at Umm Al-Dalkh and Zirku Island. HLG TotalWorldEnergy Ad This is the first time that ADMA-
OPCO oil will be processed by another operator shows the success of the continued collaboration between the ADNOC group of companies. With many other projects in the pipeline, some planned for completion during the end of 2014, it seems that ZADCO is taking steps towards its goal of successfully developing the Upper Zakum field on behalf of ADNOC and for the benefit of the shareholders. As progress towards this goal is made, ZADCO will continue to assist Abu Dhabi and the wider region to grow and excel, not only in the oil industry, but across 88x125mm.pdf 1 10/29/14 11:55 AM the entire economy
LOCAL KNOWLEDGE. INTERNATIONAL EXPERIENCE. HLG is one of the leading contractors in the Middle East. With a reputation for delivering complex projects in remote locations, HLG specialises in the provision of onshore and offshore infrastructure and facilities. The Group’s oil and gas capabilities include pipelines, earthworks, tank farms, jetties, camps, roads and structures, modular buildings, mechanical, electrical and instrumentation installations, as well as logistics handling and other supporting infrastructure for production and processing facilities.
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