NEWS, DATA AND ANALYSIS FOR THE MIDDLE EAST’S ENERGY PROFESSIONALS
February 2010 • Vol. 6 Issue 2
An ITP Business Publication, Licensed by Dubai Media City
JACK UP MARKET APPRAISAL Qatar and UAE demand is driving regional rig rate recovery
DRILLING FOR SUCCESS
Ahmed Al-Arbeed, CEO Dana Gas.
Middle ddle East drilling firms to see double digit growth in 2010
PRIVATE POWER How Sharjah’s Dana Gas is transforming Egypt’s natural gas industry
DOING BUSINESS IN IRAQ - SPECIAL REPORT HOW TO GET IN ON THE ACT: OPPORTUNITIES ABOUND FOR MIDDLE EAST OIL & GAS COMPANIES An ITP Business Publication
Š 2010 Schlumberger. Company, product, and service names are the properties of their respective owners. 10-IS-0043
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CONTENTS
Deep Water:
FEBRUARY 2010
23 26
*Mark of Schlumberger. © 2010 Schlumberger. 10-DW-0002
REDEFINE BOUNDARIES
WELL CONSTRUCTION
40 15 TOUGH TANKER TALK
26 OPEN FOR BUSINESS
44 SOUR HOUR
Per Wistoft, chief executive officer of Gulf Navigation tells Oil & Gas Middle East that he’ll be cancelling $174m of newbuild orders this year.
What’s the best way to capitalise on the opportunities in Iraq? Our first ever Iraq Business Guide tackles the facts you need to know.
SOGAT 2010 Preview: The world’s leading H2S and CO2 conference kicks off in March. Read all about it here first.
16 PROJECT PIPELINE
32 DRILLING FOCUS
56 FACE TO FACE
Pan-Emirates pipeline deal is just the start for ABB’s regional upstream ambitions says ABB’s head of process automation, MENA.
The region’s most dynamic homegrown oilfield service providers reveal where demand is strongest, and what 2010 has in store.
Jorge Machnizh, G4S director - global oil and gas solutions, on Iraq Security.
18 PRIVATE POWER
36 GENERATION GAME
EXCLUSIVE: Oil & Gas Middle East mets Ahmed Al-Arbeed, chief executive officer of Dana Gas.
Power generator providers on overcoming the challenges of remote oilfield electrical needs.
23 WFES EVENT REVIEW
40 OFFSHORE REVIEW
The World Future Energy Summit delivered a roundtable discussion with real ministerial clout.
Insight and analysis from Dr Rina Samsudin, ODS Petrodata, on the 2010 Middle East Jack-Up market.
REGULARS 2 WEB HIGHLIGHTS 4 COMMENT
Using the Schlumberger EcoScope* multifunction logging-while-drilling service, an operator drilling a directional well in South East Asia reduced the risk of borehole instability by eliminating the need for a separate openhole logging run. The result was a 3-day reduction in rig time. Our experience with borehole integrity issues, accurate well placement, drilling reliability, and cementing services in harsh environments around the world helps to meet the complex challenges of deepwater well construction—safely. www.slb.com/deepwater
7 REGIONAL NEWS
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49 PROJECTS 55 PRODUCT FOCUS
February 2010 Oil&Gas Middle East
1
WEB HIGHLIGHTS
The online home of:
MOST POPULAR NEWS
ONLINE SPECIAL REPORT
rakes in $22.7 billion 1 Schlumberger in tough 2009 invites bids for oilfield 2 PDO expansion in Oman awards $141m EPC contract 3 Aramco to Sinopec to spend US$15 billion 4 Kuwait upgrading refineries predicts extra LNG supplies 5 ADGAS from Das Island
IN PICTURES
Online Exclusive: Jack-Up Focus When demand for oil started to decline in mid-2008, oilfield and marine services companies operating both on and offshore started to notice a dip in general activity across the Middle East. Dockyard across the region also noticed an upsurge in “warm stacking” – sending a jack-up rig back into port, but keeping the crew onboard and ready for work. Oil & Gas Middle East reporters speak to local heavyweights MIS, Lamprell, GMS, and DNV to gauge where the market is today. Read the feature only on ArabianOilandGas.com BREAKING NEWS AND VIEWS FIRST SHELL SELLS OFF ITS NIGERIAN ASSETS The Nigerian subsidiary of Royal Dutch Shell has announced that it has sold its interest in three production licenses in Niger Delta to a consortium led by two Nigerian companies. ArabianOilandGas.com PETROFAC EMIRATES: WE’RE HIRING Peter Warner, CEO, of Petrofac Emirates told an EIC gathering that the Mubadala joint venture company wants to expand from the current figure of 150 to around 400. ArabianOilandGas.com
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Oil&Gas Middle East February 2010
CNPC TO START WORK ON AL-HALFAYA IN FEB A senior official from the Missan province in Iraq has said that the winning bidders for the development contract for the al-Halfaya oilfield will start work in February. ArabianOilandGas.com
DUBAI OILFIELD GET TOGETHER: WERE YOU THERE? The afternoon of January 28th was a cordial mix of business and pleasure. Check the gallery today! ArabianOilandGas.com SPOT POLL WHICH CONTRACTOR HAD THE BEST 2009?
55.6 % Petrofac 33.3 % Samsung Engineerinf 11.1 % Technip
QATAR PEARL TO START PRODUCTION IN 2010 HE Abdulla Al-Attiya, head of Qatar’s oil industry has said that the massive US$19 billion Pearl Gas to Liquids (GTL) project headed by Shell should be operational before year-end. ArabianOilandGas.com
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COMMENT
Making Iraq work
Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: 00 971 4 210 8000, Fax: 00 971 4 210 8080 Web: www.itp.com Offices in Dubai & London
Can you afford to sit on the sidelines any longer?
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CEO Walid Akawi Managing Director Neil Davies Deputy Managing Director Matthew Southwell Editorial Director David Ingham VP Sales Wayne Lowery Publishing Director Jason Bowman Editorial Energy Group Editor Daniel Canty Tel: +971 4 435 6257 email: daniel.canty@itp.com Senior Energy Writer Peter Ward Tel: +971 4 435 6436 email: peter.ward@itp.com Contributors Ventures Advertising Commercial Director Jude Slann Tel: +971 4 4356348 email: judith.slann@itp.com Sales Manager David Wheeler Tel: +971 4 4356376 email: david.wheeler@itp.com Studio Group Art Editor Daniel Prescott Designer Lucy McMurray Photography Head of Photography Sevag Davidian Chief Photographer Khatuna Khutsishvili Senior Photographers G-nie Arambulo, Efraim Evidor, Thanos Lazopoulos Staff Photographers Isidora Bojovic, George Dipin, Lyubov Galushko, Jovana Obradovic, Ruel Pableo, Rajesh Raghav
Iraqi workers walk at the Halfaya oil field near the southern city of Amara in December 2009. he statistics are mind-boggling. Some of the biggest oilfields known to man. A project pipeline tipped to top $250 billion over the course of the next 15 years. The third largest reserves on the planet. Could any oil and gas company possibly ignore the business that is opening up in Iraq? Ignore it, no. But serious risks remain. For the time being the biggest business opportunities have been on the table for Big Business and Big Oil in particular. However, the opportunity landscape is growing for small and medium sized firms. Finding a foothold in Iraq was an insurmountable challenge two years ago. Not so anymore. Entering Middle Eastern markets has always required patience and partners on the ground. Finding those partners in Iraq is getting a whole lot easier. In our first guide to operating in Iraq, (see pages 26 through 30) Oil & Gas Middle East discovers that the structural difficulties of doing business in Baghdad are large, but not prohibitive. It is by no means a market for the feint hearted - and that won’t be changing overnight.
T
However, the feedback from people on the ground in Baghdad and Erbil is one of optimism and opportunity. With office space to rent within the International Zone (formerly the militarized Green Zone) in Iraq available, and an oil sector about to go stratospheric - service, technology providers and oilfield equipment companies need to get in on the act early. It is likely that many important decisions regarding how the major field development packages will come together will be held back until after the March elections. Hoping all goes well, work will have to begin very shortly afterwards. The IOC JVs which have been successful are contractually obliged to begin major works within three months of signing their contracts. The question for many managers will be how to get in on the act. There is no substitute for a local touch, so our advice is find a partner who can help you build a presence there now. For those that wait, major opportunities will be missed. Daniel Canty, Editor E-mail: daniel.canty@itp.com
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LEAD NEWS
Petrofac JV nets $4bn order UAE joint venture EPC firm has been awarded natural gas project in Turkmenistan
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Petrofac Emirates, an Abu Dhabi-based joint venture between the state-owned Mubadala and Petrofac, is among the companies who have been awarded US$9.7 billion worth of development contracts for Turkmenistan’s largest natural gas deposit. The company will be joined by CNPC of China as well as South Korea’s LG International Corp and Hyundai Engineering Co in developing the South Iolotan deposit, which is expected to yield around 30 billion cubic metres of natural gas per annum when work is fully completed. The scope of work at South Iolotan, which is believed to hold between 4 trillion and 14 trillion cubic metres of gas, includes drilling and the construction of gas processing facilities. “Petrofac Emirates won $3.98 billion worth of contracts,” reported newswire Reuters without giving exact details. “CNPC is obliged to produce up to 10 billion cubic metres (bcm) of gas a year and will get 3.13 bcm for itself,” the source added. The two South Korean companies, LG International and Hyundai Engineering, have won work worth $1.48 billion Turkmenistan, which produces about 70-80 bcm of gas annually, says its total reserves exceed 20 trillion cubic metres (tcm) -- much more than the 2.9 tcm estimated by BP in its annual statistical review.
Workers attend the opening of a refinery in Turkmenistan’s vast Karakum desert.
China has seen Turkmenistan as a potential supplier of gas for some time and recently completed a 1,833 km pipeline network connecting the two countries. Last year, Petrofac LLC (headquartered in Sharjah, UAE) was been engaged by
Maroun Semaan, group COO, Petrofac LLC.
Turkmengas, the state-owned national gas company of Turkmenistan, to provide services in relation to the development of the South Yoloten gas field, situated approximately 400 km south east of the capital Ashgabat. The first phase of the contract, which was signed with Petrofac International (UAE) LLC, valued at approximately US $100 million, will involve Petrofac completing a front end engineering and design study for the Project together with initial planning and set-up studies. After satisfactory conclusion of the first phase, the contract contemplates moving into a second phase, which will include the engineering, procurement and commissioning work for a 10 billion cubic meters per annum (bcma) gas processing facility
along with the infrastructure and pipelines for the entire 20 bcma development. Petrofac’s experience of designing and constructing facilities to handle and process sour gas was a factor in company’s selection for the project as the feed gas from the field contains around 6% H2S. The eventual scope for the South Yoloten development is likely to include: well pad facilities; gathering systems; gas processing and sweetening; sulphur handling, storage and export and condensate processing, storage and export facilities. Speaking soon after the announcement Maroun Semaan, group chief operating officer said, “This is Petrofac’s first project award in Turkmenistan although we have been building our relations with Turkmengas for some time. The development of the South Yoloten field is a critical part of Turkmenistan’s plans to exploit their very significant hydrocarbon resources and we are honoured to have been given the opportunity to work on this important project at such a strategic stage of its evolution.”
12%
Turkmenistan has 2.662 trillion m3 of recoverable natural gas, the twelfth largest natural gas deposits in the world.
February 2010 Oil&Gas Middle East
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REGIONAL NEWS
Koreans scoop Kuwait pipe deal SK Engineering awarded US$724m pipeline facilities and booster station contract The South Korean contractor SK Engineering and Construction has announced that it has been awarded a US$724 million contract to build crude oil pipeline facilities in Kuwait. In a statement the company said that the scope of works on the project will include the construction of a booster station as well as laying pipelines connected to other facilities. The
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102bn
Kuwait sits on top of 102 billion barrels of proven crude recoverable oil reserves, representing 9.9% of total OPEC reserves Source: OPEC
location of the project is 95 kilometres north of Kuwait City. The project, which started in January, is expected to take 41 months to complete. The company also said that the award takes the value of its overseas contracts to $4.8 billion in 2009. Abu Dhabi Company for Onshore Operations (ADCO) awarded the company a $805 million contract to install gas compressor units at its Bab oilfield in Abu Dhabi. The Saudi Aramco Total Refining and Petrochemical (Satorp) also awarded SK a $420 contract to construct the plant that will supply water and electricity to its Jubail Export Refinery. A Kuwait Oil Company worker inspects existing pipeline facilities at the Burgan Oilfield.
GS Engineering awarded Oman natural gas project by PDO Petroleum Development Oman (PDO) has announced that it has awarded an engineering, construction and procurement (EPC) contract for the Saih Nihayda gas compression project to South Korea’s GS Engineering and Construction. In a statement PDO said that the award also includes the de-bottlenecking of the Saih Nihayda gas processing plant. The value of the contract was not disclosed. “This is an important project which aims to ensure that the Saih Nihayda field produces gas at an optimum level for a maximum amount of time,” Abdulla al Lamki ,deputy MD, PDO said.
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Oil&Gas Middle East February 2010
Workers at Petroleum Development Oman’s Qalhat Oman LNG project.
Saih Nihayda was commissioned in 2005 and has been producing gas ever since. The gas is processed at treated at
the Saih Nihayda Processing Plant. Located near the field in Central Oman. “Based on current demand patterns,
reservoir pressure is expected to start declining within the next six years. The installation of the new compression facilities will enable PDO to maintain pressure for several years,” the statement said. “The de-bottlenecking of the processing plant will increase capacity from the current level of 20 million cubic metres a day (m3/day) to 25mn m3/ day,” it added. The award follows a competitive bidding process in which seven international companies participated. PDO produces gas on behalf of the Government of Oman which owns the gas in PDO’s concession area.
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REGIONAL NEWS
Sonatrach in disarray
Briefs Column
Meziane suspended over contract irregularities - Ministry insider The head of Sonatrach has been suspended from his position and placed under judicial control after the discovery of contract irregularities at the state-owned Algerian energy company. Media sources in Algeria have reported that Mohamed Meziane, who has been the CEO of Sonatrach since 2003, has been instructed to stay in Algeria until an investigation into the allegations has been completed. Abdelhafid Feghouli, vice president for the oil and gas company’s downstream division, has been named interim CEO. Sources in the North African state said that a total of 10 senior Sonatrach officials are under investigation and the charges stem from the discovery of a number of contract awards contractors that contain irregularities. “The investigation has a relation with the way of signing the
Associated gas being flared in Iraq.
Mohamed Meziane, CEO of Sonatrach since 2003 was suspended from duties in January.
contracts, which should conform to clause M15 of the new hydrocarbon law,” a source at the Algerian Energy Ministry told Oil & Gas Middle East. “But they didn’t follow it,” he added. Sources also said that Chawki Rahal, Sonatrach’s vice president for marketing was also placed under judicial control, while Boumediene Belkacem,
vice president of Sonatrach’s upstream division, and Benamar Zenasni, vice president for transport and pipelines, have been jailed. Sonatrach and Meziane were unavailable for comment. Read the interview with Mohammed Meziane at:
Massive Aramco pipeline is close to completion A pipeline expansion currently being carried at the Shaybah oilfield in the Empty Quarter of Saudi Arabia will be completed in the near future, sources have said. Work is being carried out for the state-owned hydrocarbons giant Saudi Aramco which will facilitate the transport of crude produced at the field to an oil and gas separation facility, and a major crude pipeline that transports the oil to processing facilities at Abqaiq.
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The 217 kilometre-long pipe- border with United Arab Emirline is called the Shabab 2 and ates) would take 18 months. will run alongside the already operational 640 kilometre pipeline, Shabab 1. Aramco awarded the EPC contract for Shabab 2, to Russian company Stroytransgaz in 2007. According to the original contract, the project price exceeded US$100 million. Originally PJSC Stroytransgaz said the pipeline from Sheiba field in Rub’ al Khali desert (near the The project broke ground back in 2007.
Delegates from the Italian supermajor Eni have met with the governor of Basra in Iraq to discuss the possibility of providing up to 15,000 job opportunities for local men and woman in the province. “The meeting with the ENI delegation has tackled the company’s plan to develop al-Zubair oilfield...,” Governor Shaltagh Abboud Mayyah is reported by Aswat al-Iraq news agency as saying. Eni won the development contract for the 5 billion barrel reserve al-Zubair field after submitting a belated bid a few months after the first oil licensing auction. Overseas Shipholding Group, a provider of energy transportation services, announced in January that the FSO Asia, a 432,023 dwt Floating Storage and Offloading (FSO) service vessel, was successfully hooked-up at the Al Shaheen oil field offshore Qatar and commenced operations for Maersk Oil Qatar AS. The vessel is jointly owned by OSG and Euronav N.V. The vessel is thought to be part of the replacement package for the recently retired Knock Nevis FSO – once the world’s largest oil tanker. Irish E&P company San Leon has entered into a joint venture with the Iraq-based Al Meinaa Oil Services that will see the companies look for suitable oil projects to work on in the Gulf state.
February 2010 Oil&Gas Middle East
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REGIONAL NEWS
Hyundai nets ADGAS plant deal Abu Dhabi Gas Liquefaction Company signs $1bn gas plant deal with Hyundai HI Abu Dhabi Gas Liquefaction Company (ADGAS) and Hyundai Heavy Industries Co have signed a US$1 billion deal for the construction of a gas processing plant on Das Island in the emirate. The plant will process 1 billion cubic feet of gas per day from Umm Shaif, an offshore field, andwill form part of the massive Integrated Gas Development (IGD) Project.
“The project we signed today on behalf of ADNOC is a major milestone which reflects ADGAS new vision and commitment to participate in the countr y’s national energy strategy, within an integrated project that also involves ADMA-OPCO and GASCO,” Fahim Kazim, ADGAS GM, said at the signing ceremony. “Due to the limited area on Das Island, we had to reclaim Total’s gas processing technology at Ras
an additional 108,000 square metres of land for the project facilities and to build a 100 metre-long jetty for offloading of heavy 1,500-tonne modules,” he added. The project is expected to take 49 months to complete. Adgas is a joint venture between the Abu Dhabi National Oil Company (ADNOC), Total, BP and Mitsui & Co.
Qatargas trains 6 and 7 on track for 2010 launch - Al Suwaidi The CEO of Qatargas has said that two massive new liquefied natural gas (LNG) trains that are due to come on-stream in 2010 will keep Qatar’s massive LNG export expansion plans on track. Faisal al Suwaidi told a news conference that the Qatargas trains 6 and 7 will boost LNG
capacity in the Gulf state by an extra 15.6 million tonnes. This should take Qatar’s LNG capacity to around 70 million tonnes per annum. “This is a fast-growing sector, especially for the hot economies of the world. China and India will have to import large quantities of gas,” Al Suwaidi
told ArabianOilandGas.com in an interview last year. “There are two main reasons. Firstly, they need to introduce this as part of their energy mix. Secondly, if they are to meet their Kyoto commitment, they will need to rely more on natural gas to reduce their emissions,” he added. Qatargas CEO says 2010 launch is on.
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Oil&Gas Middle East February 2010
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REGIONAL NEWS
CGG nets Aramco deals 18 month ocean bottom cable 3D seismic survey starts in June CGGVeritas said in January that ARGAS, its Saudi Arabian joint venture owned 49% by CGGVeritas and 51% by TAQA, has been awarded two major Ocean Bottom Cable (OBC) 3D data acquisition contracts by Saudi Aramco. The two contracts have a combined value of around $375 million. The first project is scheduled to start in June 2010 and operate for a period of 18 months while the second is scheduled to run from October 2010 for a period of 24 months; each contract respectively has an 18- and 24-month optional extension period. The projects will cover an initial 6,000 sq km over the next three years and require operational expertise working in complex environments, such as producing oil fields and busy shipping lanes within the Saudi waters of the Gulf with depths ranging from 20 to 60 meters. “We are very pleased that Saudi Aramco is continuing
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A fleet of vessels with the latest CGG Veritas positioning systems will be deployed in June.
its long-term relationship with CGGVeritas through this new award to our ARGAS joint venture with TAQA,” said Robert Brunck, Chairman and CEO of CGGVeritas. “These two major OBC surveys follow on from the successful completion by ARGAS of offshore projects for Saudi Aramco in 2009 which already covered close to 12,000 sq km in the Gulf. They also confirm the position of CGGVeritas as a
worldwide leader in OBC acquisition,” he added. ARGAS will mobilize two fully independent OBC crews equipped with the latest Sercel SeaRay 4C equipment and recording systems. These fully offshore operations will be managed through a fleet of vessels equipped with CGGVeritas deployment and positioning systems geared to operate in such environments.
7.4 million acres to be explored in Turkish Black Sea Exxon Mobil and Petrobras confirmed in January a deal has been struck with the Turkish National Oil Company (TPAO) to explore for hydrocarbons in the deepwater Black Sea offshore Turkey. Under the terms of the farm-in agreement, ExxonMobil Exploration and Production Turkey B.V. will acquire a 25 percent interest in the Sinop, Ayancik and Çarsamba sub-blocks of the AR/TPO/3922 exploration license. Petrobras will retain a 25% equity interest in the block and will remain the operator. TPAO holds the remaining 50% interest. “We look forward to utilizing the technologies and expertise of all three companies as we explore for potential commercial resources in the Black Sea,” said Mehmet Uysal, CEO of Turkey’s NOC. This agreement covers approximately 7.4 million acres and is subject to approval by the Turkish Government.
February 2010 Oil&Gas Middle East
13
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REGIONAL NEWS
Gulf Nav cancels fleet orders CEO says Korean yard SLS took on too many orders causing unacceptable delays The CEO of the Dubai-based tanker company Gulf Navigation Holding (Gulf Nav) has said that the company is likely to cancel a US$174 million order it has with a South Korean shipbuilder SLS, due to the late delivery of the three chemical carriers. Speaking at a round-table event at the company offices in Dubai, Per Wistoft said that the vessels, three 46,000 DWT IMO Type III chemical tankers worth $58 million each, are all close to the date that would allow Gulf Nav to trigger a cancellation clause in the contract. “In contractual terms you can cancel after the ships have been delayed by 210 days,” Wistoft said. “These ships will probably get cancelled by us, but that is a huge advantage because they were contracted by us when the market was high so if we cancel the ships we can probably go out and buy similar ships with a discount of 30-40%,” he added.However, Wistoft also said that Gulf Nav were not necessarily happy that SLS were so late in the delivery of the vessels. “These are sophisticated chemical carriers and we are sad in principle that the yard was late. Had the yard been on time and could have benefited from the market and secured some lucrative contracts,” he said. Wistoft also stressed that cancellation would put Gulf Nav in a strong financial position.
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Gulf Navigation owns and operates ships in the field of crude oil and petrochemicals. It has 11 subsidiaries and owns 15 tankers.
“If we do cancel it would put us in a strong cash position. When you contract ships you pay a lot of money in advance and we have paid about 50% of the construction costs already ($87 million),” he said.
Per Wistoft is CEO of Gulf Navigation.
“Once the ships have been cancelled that cash will be returned to us and that puts us in an even stronger cash position,” he added. The Gulf Nav CEO also hinted that the company could even eventually end up buying the vessels. “What if the market goes up? What if they close the Suez Canal closes tomorrow? The value of the ships would shoot up like a rocket,” he said. “If we go ahead and cancel they will have to find another buyer for the ships. That could also still be us,” he added. Wistoft believes that the reason SLS were so late in delivering the vessels is because the
South Korean yard took on too many orders without making enough improvements to its production line to handle the additional work. “My personal opinion is that the yard had a normal delivery schedule of 12-15 ships per year but they took in so many orders they tried to improve that to 25 ships per year,” he said. “They’ve been unsuccessful in doing that and as a result are only delivering about 16 ships per year.” SLS could not be contacted for comment. For the full interview with Per Wistoft go to:
February 2010 Oil&Gas Middle East
15
NEWS ANALYSIS
NEWS INTERVIEW Upstream market focus Pan-Emirates pipeline deal is just the start for ABB’s regional oil and gas ambitions ABB recently won a US$21 million deal to design and supply an integrated electrical system for the billion dollar Abu Dhabi Crude Oil Pipeline (ADCOP) project. With a length of 400 km and 48 inches diameter the pipeline from Habshan in Abu Dhabi, where it links to the Abu Dhabi Company for onshore Oil operation (ADCO), to Main Oil Terminal (MOT) in Fujairah, United Arab Emirates will transport 1.0 - 1.5 million barrels per day (bpd) of crude oil. The pipeline will develop a reliable export capability on the eastern seaboard of UAE which can accommodate larger vessels. “For this project ABB is supplying the electrical equipment, control system and the
related engineering to get the equipment and control system working. Later on they are going to need support and service for the operation so that will be dealt with separately but we hope in the end we are going to provide that as well,” remarks Bjarte Pedersen, head of process automation, MENA region, ABB. The project includes the construction of 12 million barrel of storage tanks in the Main Oil Terminal facilities (MOT) in the Emirate of Fujairah for crude exports. Construction started earlier in 2008 and is scheduled to be completed by August 2011. Pedersen reveals this is not the only project which the company has biod for. “There are so many projects coming up
in the region and if you look at the key customers here like the ADNOC related companies there is a lot coming up. In the Emirates alone there are quite a lot of opportunities coming up that we are bidding for.” Despite the financial crisis which hit companies hard in 2009, Pedersen insists this was not the case for ABB. “This is like a special situation because you could expect in a downturn that all the intake is going down but we actually see
ADCOP FAST FACTS
60% 400 km
ADCOP will enable the UAE to transport almost two-thirds of its crude oil directly to the Fujairah export terminal. The pipeline will stretch over 400km from Habshan in Abu Dhabi to the oil terminal in Fujairah.
INSPECTION
EPC 30,000
Germanischer Lloyd will deliver third party inspection and certification services for the 400 km crude oil pipeline.
China Petroleum Engineering and Construction Corporation (CPECC), the main EPC contractor.
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There will be more than 30 000 welds along the entire pipeline.
Oil&Gas Middle East February 2010
Bjarte Pedersen is ABB’s head of process automation for the Middle East and North Africa.
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NEWS ANALYSIS
that it is going up, so even in this type of situation we are picking up quite some business at the moment. Activity in the oil and gas sector is still high but hopefully ABB is doing a little better than last year as well,” Pedersen comments. In 2010, Pedersen states that the company is looking to increase its business further and as well as take advantage of new projects which are coming up, also move into new sections of the industry. “ABB is also into new areas such as electrification of oil and gas platforms, this is maybe a smaller investment but it is important,” Pedersen says. “Typically we see that customers have big constraints with the power supply on the platform and it is difficult to expand that supply with the
limited space and weight limitations. So it is very interesting for them to bring the power from the shore and ABB has the technology to do this.” Looking beyond this year, Pedersen also reveals that the Middle East is a key market for the firm with further upstream oil and gas infrastructure investment expected. “I think ME is one of the areas where still you see a high level of investment. Customers here have a long term view of the market and they keep investing despite low prices of oil. It is different than any other place where you see a bit of a slump at the moment, so this is putting MENA at the top of the pile and it is a very important region for ABB,” concludes Pedersen.
The pipeline will transport oil to the UAE’s eastern seaboard export terminal at Fujairah.
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February 2010 Oil&Gas Middle East
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INTERVIEW
Ahmed Al-Arbeed, CEO of Dana Gas.
PRIVATE POWER Egyptian business is paying real dividends for the Middle East’s first and largest private-sector natural gas company. Oil & Gas Middle East spoke with Ahmed Al Arbeed, CEO of Dana Gas to find what’s driving the gas bonanza hmed Al-Arbeed has unrivalled views out over Sharjah’s corniche waterfront. From the 11th floor elevation in Crescent Tower the chief executive officer of Dana Gas has an outstanding vista from which to reflect on a busy and hugely successful 2009. As much of the world’s private energy com-
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panies succumbed to the double edged sword of deflated energy prices and a drying up of capital, Dana Gas managed to buck prevailing trends and delivered a stellar performance. “I think what was important was that we had built the right foundations and were engaged in the right projects before the financial crisis,” beams Al-Ar-
Oil&Gas Middle East February 2010
beed. The company is one of only a handful in the energy game that can say it will emerge from 2009 with a robust balance sheet and in a stronger position than a couple of years ago. The figures at year-end 2009 show available cash of more than $190 million, plus available for sale assets valued at more than $272 million. The bulk
of the company’s revenue was generated from its operations in Egypt, with an additional contribution coming from its operations in the Kurdistan Region of Iraq. In the first nine months of last year, Dana Gas generated total revenues of $247.5 million. The full annual performance figures will be out in February.
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INTERVIEW
PROJECT FOCUS Dana Gas is involved in exciting upstream projects in Egypt, Kurdistan, the United Arab Emirates and is soon hoping to bring to fruition a gas deal with Iran (currently in arbitration). “The projects we are directly involved with have a huge amount of potential that will transform Dana Gas as a company from where it is today to an even more effective gas company throughout the MENASA region,” says Al-Arbeed. “All of the projects are at a stage where we are developing, producing more and yielding new discoveries so it is a very exciting time for the company,” he adds. The company’s operations in Egypt have garnered the lion’s share of media attention throughout last year, with fresh news of discoveries kicking off 2010 in the best possible way. “To double up your resource
DANA GAS: EGYPTIAN GAS DISCOVERIES IN 2009
“To double up your resource base in one year is of course exceptional, and we are naturally delighted with that” Ahmed Al-Arbeed base in one year is of course exceptional, and we are naturally delighted with that,” says the CEO. Last year Dana Gas achieved average daily production of 34 750 barrels of oil equivalent per day (boepd), a 20% increase on the average for 2008 thanks largely to production from three of Dana Gas’ recent gas discoveries that were brought on stream without delay. “Dana Gas Egypt is able to bring new fields on stream very quickly - just four months after discovery in late 2008 in the case of the El Basant, thanks to existing infrastructure in the Nile Delta area,” he says.
Last year, in Egypt alone, a total of 12 exploration wells were drilled, yielding eight discoveries. “This year work will progress to bring the remaining discoveries on stream with various development schedules and alternatives being studied to optimise production and profitability consistent with a prudent capital investment programme,” says Al-Arbeed. Production this year is forecast to average just over 40 000 boepd rising to potentially 50 000 boepd in mid 2011 as new facilities are brought on stream. When asked why, after many years of exploration, Egypt is yielding such a strong discovery
Salma Delta-1 Sondos* Azhar-1* Tulip-1 Sharabas-1 Sama-1** Faraskur-1 Marzouk-2 Orchid-1 * Already on-stream ** on stream Q1 2010
rate, Al-Arbeed sums the timing up in two words: “Technology and knowledge. Having spent many years in the oil industry this is what you come to expect, but crucially with these two factors improving we can go and drill in areas which were once considered too challenging or
BREAKING NEWS – STRIKING OIL
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Getty Images
As Oil & Gas Middle East went to press in Januray, Dana Gas confirmed the Al Baraka-4 well, drilled as an appraisal of the Al Baraka Field in the Komombo Concession in southern Egypt, has discovered a new pool in the Six Hills “E” reservoir. The Al Baraka-4 well is currently on-stream producing at a rate more than 5 times the sustained flow rate from any previous well in the field. The Al Baraka-4 well was spudded on December 5th, 2009 and reached total depth of 1470 meters. It is located 470 meters to the southwest of Al Baraka-2 well. The well encountered 16 meters of net oil pay in the previously defined reservoirs in addition to 8 meters in the new Six Hills “E” layer. The new reservoir is proving to be more productive than the currently producing zones, having tested oil with natural flow to surface at a rate of 220 bopd. It is the first well on the Concession to flow oil to the surface through the natural energy of the reservoir, without requiring artificial lift. The well was also tested with artificial lifting at a maximum rate of 1300 bopd. The volume of reserves discovered is under evaluation.
Dana Gas had its most prolific year in 2009, a record the CEO is keen to build on.
February 2010 Oil&Gas Middle East
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INTERVIEW
“All of the projects are at a stage where we are developing, producing more and yielding new discoveries so it is a very exciting time for the company” Ahmed Al-Arbeed
in formations which were not well understood.” The success rate in Egypt has been prolific, and Al_arbeed says with the accrued wisdom from last year, 2010 will be an even busier year for his drilling engineers. “We are now in a position to drill more – Essentially taking more risks – because they are calculated risks. We have a lot of confidence that the areas where we have our concessions will yield even more gas than thought possible.”
KURDISTAN CALLING
Oil & Gas Middle East met Ahmed Al-Arbeed at his Sharjah HQ.
CEO PROFILE: In April 2009, Ahmed Al Arbeed was appointed CEO of Dana Gas, bringing with him more than three decades of regional oil and gas experience, including being Managing Director of Kuwait Oil Company and Kuwait Foreign Petroleum Exploration Company (KUFPEC) within Kuwait. He has been with Dana Gas since 2005 as a founder board member. On Management: “My abilities best lie in managing people. More than anything else in business this is crucial. I have been successful in building a team which can make things happen. The company has stepped up a gear in the last couple of years and we now have the right people in place to take the company to another level. I support empowering my people – I find this the best and most rewarding way to operate”
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Oil&Gas Middle East February 2010
Dana Gas, through its 40% shareholding in Pearl Petroleum Company, has become an important foreign investor in the oil and gas sector of the Kurdistan Region of Iraq. At the end of September 2009, the Dana Gas investment in the region was in excess of $272 million. Gas production from the Khor Mor field at a rate of 90 million standard cubic feet per day (“MM scfpd”) which was delivered to power stations at Erbil and Bazian, ensuring that families in a long-neglected region received a reliable source of energy. “Supplying this area and its people with a reliable electricity supply was one of the key reasons Pearl Petroleum got on board with this project,” explains Al-Arbeed. Throughout last year work progressed on construction of the LPG plant at Khor Mor, which will enable production to increase to 300MM scfpd in 2010, with the increased condensate production and LPG that will be extracted from the gas stream considerably increasing revenue to PPCL. Studies continued throughout the year to evaluate the Khor Mor and Chemchemal reservoirs which
are highlighting the fact that these are two potentially world class gas fields. In May 2009 the extent and value of these fields was demonstrated by the fact that OMV, the Austrian oil and gas company, and the Hungarian oil and gas company, MOL, each purchased a 5% interest in PPCL from Dana Gas in exchange for $175 million in cash, and MOL shares to the value of $175 million respectively. This transaction also brings a major strategic advantage to Dana Gas because MOL and OMV, two major European energy companies, between them own one third of the proposed Nabucco pipeline which will provide an attractive potential export route for gas from the PPCL fields to Europe.
REGIONAL VISION Al-Arbeed says that opportunities remain strong in other countries, stretching the reach of the Sharjah-based company across focus areas as diverse as Oman, Yemen, Egypt, Algeria and Syria. “Wherever we feel there are countries in the MENASA region which fit with our strategy then we feel we are a good partner to optimise the benefit of the whole gas cycle, both for our shareholders and for the host nation.” The chief executive says in that regards, the mission and vision of Dana Gas is unique in its field. “We explore and produce gas, but we are equally interested in building an integrated gas infrastructure throughout the midstream and downstream. I think that is exactly what countries in this region want – to develop their wider economies.”
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INTERVIEW
HOME FRONT Closer to home, Al-Arbeed confirms that work is continuing on the 1000km2 offshore concession in Sharjah, which includes the Zora gas field, discovered in 1979. Development costs of the field are estimated at around $150 million. “The Zora Field can produce between 40 – 55 million scfpd. That will be an important asset to Sharjah and we hope we can get gas flowing as quickly as possible.” Part of the field actually sits in Ajman, (a neighbouring Emirate). “We look forward to being an important strategic partner to both Emirates. It’s also great to be involved in an importnat project on our home turf,” he adds. The CEO is hopeful that the project will lead to more work in the UAE.
“Once we bring this online we hope we will be involved in bigger projects too, because the United Arab Emirates has a lot of fields, and a lot of potential, and we are building this company to help the residents of countries in this region take the maximum benefit from their reserves.” Reflecting on past successes does not occupy much of Al-Arbeed’s time. He remains resolutely focused on what is yet to come. “Ultimately we see host governments, our shareholders and the companies we form alliances with all as our partners and stakeholders. We are working for all of them and I am completely focused on making Dana Gas a company everyone wants to align with,” he concludes.
A team of engineers inspect the Dana Gas processing plant in Egypt.
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February 2010 Oil&Gas Middle East
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NEWS REVIEW Abdulla Al-Attiyah, Deputy Premier and Minister of Energy, Qatar, shakes hands with Dr Farooq Abdullah, Minister of New and Renewable Energy, India. Mohamed Bin Dhaen Al-Hamli, Minister of Energy, UAE is centre.
THERE IS NO QUICK FIX – WE NEED OIL AND GAS Even government ministers can lose sight of rationality when eco-talk reigns. Daniel Canty reports from The World Future Energy Summit in Abu Dhabi anuary saw an impressive gathering of global dignitaries and energy companies convene in Abu Dhabi for the third instalment of the World Future Energy Summit. Let me start by stressing that I think it is, of course, commendable that
J
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Abu Dhabi recently became the official home of the International Renewable Energy Agency, and much important work is to be done in this field if the world is to meet its energy requirements in the coming decades. It was with a little disappointment, however, that
I left the forum roundtable discussion between energy ministers (from no less than eight countries), gathered together on day one of the conference. A lot of urgency was stressed. Familiar, if still impassioned rhetoric was, of course going to be the order of the day. “We have
no alternative. The time is now. Copenhagen was a disaster. We need results not talk,” we were all reminded. Again. A smattering of mutual admiration (and self congratulation) for renewable and alternative investments to date was inevitable and forthcoming.
February 2010 Oil&Gas Middle East
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NEWS REVIEW
HH General Sheikh Mohammed bin Zayed bin Sultan Al Nahyan (c) Crown Prince of Abu Dhabi and Deputy Supreme Commander of UAE Armed Forces.
Panel guests included ministers from Ghana, China, Korea and Japan. However, as one would expect, a great deal of it amounted to nothing more than hot air. What a warming world needs like a fish needs a bicycle. Energy diversification is now more achievable to the countries of the Middle East and Asia, and represents an eminently sensible path to follow and promote. Investing in solar power, geothermal technologies and nuclear power production are all sensible alternatives to burning fossil fuels for energy in the Middle East. If nothing else, this will free up more oil and gas to be sold to energy starved nations of the world. The development of a peaceful nuclear energy industry in
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particular paves the way for lower greenhouse gas emissions and better air quality across the region. All good stuff. However, what was disappointing from the roundtable discussion was the black brush that was being swept across the oil and gas industries – still the lifeblood of economic development throughout the GCC and for the many other countries blessed with such resources. Not to mention all their terribly willing customers. The language had turned a vitriolic green and thankfully before the pressing issue of energy security was forgotten completely in favour of a call to eco-warrior arms, HE Abdullah
Oil&Gas Middle East February 2010
Abdulla Al-Attiyah, Deputy Premier and Minister of Energy & Industry, Qatar. bin Hamad Al Attiyah, Qatar’s Deputy Premier, Minister of Energy & Industry took the microphone and delivered some home truths. “The debate, not just today’s, but for a long time in the media, paints oil and gas producers as the enemy of the environmental movement. This is not true and not helpful. Today we face a situation where all of the energy we can produce, from all sources is needed urgently. We need to dial down the rhetoric and stop making oil and gas the scapegoat for all the world’s problems.” Quite right. The frustrated Al Attiyah added that it would be far more productive to have a meaningful conversation
where ‘bad’ and ‘good’ were not pinned to the essential energy resources we have. Let’s not forget that growing crops for biofuels diverts that resource away from hungry people’s stomachs and into petrol tanks. There is no single button we can press that solves all the world’s ills. By burning natural gas instead of coal many major economies are already making the green switch, and one which requires a considerable infrastructure investment. “We can’t phase fossil fuels out – we all have to play together to meet the energy challenge,” said Al Attiyah. With this it is hard to argue. It’s a crime today that in a world of iPods and air
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NEWS REVIEW
conditioning, over 2 billion people remain without electricity (a number that in spite of many wondrous advances in green technology will only grow in step with Asia’s ballooning population), and it is simply wrong to suggest a few billion more dollars in solar panels will ever meet these needs. As India and China’s people move into cities, for the time being anyway, fossil fuels will be what keeps their lights on, and ovens warm. Dr Farooq Abdullah, Minister of New and Renewable Energy, India conceded that the needs in his home country were indeed great and urgent. We are a growing population with a growing energy demand. 60 years on from Independence, 40% of India’s population is still without electricity.” This shortfall will
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not, by any stretch be met without considerable increases in oil and gas imports. Reflecting on the Middle East’s immediate needs H.E. Mohamed Bin Dhaen Al- Hamli, Minister of Energy of UAE weighed in and agreed that alternative energy solutions were just part of a much needed diversified energy mix. “All of us know the world economy is going to grow, and fossil fuels will not be enough. There is room for nuclear energy, fossil fuels, and renewable energy.” The proceedings ended with Qatar’s energy minister reminding the audience (and one feels some of the panel) that four of Qatargas’ best customers were assembled on stage with him. “We have 62 million tonnes of LNG production per year on
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ENERGY MINISTER’S PANEL H.E. Abdulla Bin Hamad Al-Attiyah, Deputy Premier and Minister of Energy & Industry, Qatar H.E. Mohamed Bin Dhaen Al- Hamli, Minister of Energy of UAE H.E. Dr. Hasan Younes, Minister of Electricity and Energy, Egypt H.E. Dr Farooq Abdullah, Minister of New and Renewable Energy, India Hon. Hanny Sherry Ayittey, Minister of Environment, Science and Technology, Ghana Hon. Wang Xue Xian, Ambassador to the United Nations, China H.E. Tadahiro Matsushita, Senior Vice Minister of Economy, Trade and Industry, Japan H.E. Young Hak Kim, Vice Minister, Ministry of Knowledge Economy, Republic of Korea
stream today, and we will be increasing that by 15 million tonnes this year to meet the demand from our customers on three continents. Everywhere you need us we will be there.” It’s easy to get swept up
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in one side of a debate, but it is important that common sense and rationality do not become the first victims of the green revolution. Daniel Canty is the Editor of Oil & Gas Middle East.
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ID C ’10 International Digital OilField Conference Best Practices for Design and Implementation of DOF April 20–21, 2010: Hilton Hotel, Abu Dhabi Keynote Address: Mr Abdul Munim Saif Al Kindy, General Manager, ADCO IDOC ‘10 is a unique event focusing on the current and potential use of Digital Oil Field (DOF) Technology in the Middle East. DOF is also known through its synonyms as Smart Fields, Field of the Future, i-Field, e-Field, Real-time Operations and Real Time Optimization and holds great promise for higher productivity, increased recovery, lower losses and reduced HSE exposure. Speakers are from: ADNOC, ADCO, ADMA OPCO, Shell, TOTAL, PDO, Saudi Aramco, KOC, Statoil, Schlumberger, Microsoft, SAS Institute, Weatherford, Baker Hughes, ABB, Kongsberg, Accenture, SAIC and Step Change Global, among others. Delegates will benefit from each presentation which will have at least two pointers for future DOF guidance and implementation and also will find the debate format of the event of great benefit. To receive full details, see our website www.idoc-uae.com or contact: IDOC Secretariat DOME Exhibitions PO Box 52641 Abu Dhabi U.A.E. Email projects@idoc-uae.com Tel: + 971 2 674 4040 Fax: +971 2 672 1217
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February 2010 Oil&Gas Middle East
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IRAQ COUNTRY PROFILE
OPEN FOR BUSINESS Doors of opportunity have been flung open on Iraq’s collossal upstream developments IRAQ TODAY Iraq has abundant human and natural resources: a population of 30 million, the world’s thirdlargest oil reserves, considerable gas reserves, and ample water resources. It attained the status of a middle-income country in the 1970s, developing good infrastructure and well-performing education and healthcare systems. However, over the past 25 years, dictatorship, wars, and international sanctions have undermined the country’s institutions and crippled its economy.
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Oil&Gas Middle East February 2010
The oil sector still dominates Iraq’s economy, accounting for two-thirds of GDP and over 98 percent of exports and government’s own revenues. Between 2004 and end 2007, oil production averaged at about 2 million barrels per day (mbpd), below government targets and below the pre-2003 levels. Oil production and export volumes have picked up as well during 2008, reaching record highs since 2004 of 2.4 mbpd and 1.9 mbpd respectively. This is mostly due to the recent security gains in Iraq.
Iraq has also undergone rapid political transition. A constitution was approved through public referendum in October 2005, followed by parliamentary elections in December 2005, and a constitutional government was appointed in May 2006. The current government – in power since 2006 – has moved to get key reforms back on track, and is working flat out to encourage much needed foreign direct investment. The highly insecure environment of the years 2005 – 2008, and the transitional nature of
Iraq as a state and an economy have impeded reconstruction efforts, and the delivery of basic services. Iraq’s abundant hydro-
EXPORT BOOST Iraq’s Oil Ministry announced that revenues from oil sales increased by US$300 million in December, 2009. Local newspaper Aswat al-Iraq reported that revenues were up to $4.499 billion in December after sales of 61.3 million barrels of oil at $73.39 per barrel.
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IRAQ COUNTRY PROFILE
carbon and human resource base could be the engine for a remarkable economic diversification and revival if conditions in Iraq are conducive.
OPPORTUNITY KNOCKS
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ade is based on Iraq’s estimated oil reserves today - but these may prove far short of the real resource wealth that is in place. “Exploration is Iraq hasn’t really been going on in any meaningful way for the last 30 years. Deeper horizons haven’t been investigated,” says Ciszuk. Indeed, where superma-
jors have done work in Kuwait (where geophysical similarities are high), it has been proved there is a huge potential for even greater reserves in deeper terrain. “The general feeling is one of optimism regarding the fields being greater rather than smaller then currently thought,” he adds.
“BP and CNPC have targeted a production plateau of 2.85 million barrels per day over the next six years - a level of growth from a single field which is almost unparalleled in the history of the oil industry” Colin Lothian, Wood Mackenzie Getty Images
Although the first field development bid round was widely reported as a failure, the allocation of the super giant Rumalia Field, west of Basra was in itself a massive achievement. The Iraq Oil Ministry’s award to BP and CNPC is of genuine global significance, and could see the Rumaila super-giant oil field become the second highest producer in the world, after the Ghawar field in Saudi Arabia. “BP and CNPC have targeted a production plateau of 2.85 million barrels per day (mmb/d) over the next six years - a level of growth from a single field which is almost unparalleled in th the history of the oil industry,” say says Colin Lothian, Middle East up upstream research analyst for W Wood Mackenzie. Indeed, the largest fields, inc including West Qurna 2 (12.9 billion barrels), and Majnoon bil (12.58 billion barrels) have been (1 awarded. If output targets from aw these two fields are achieved, th they alone will bring an extra 2.6 million barrels of oil each day to the surface. The BP led partnership on Rumalia is expected to invest over $20 billion alone over the course of its contract. If other supermajors are to achieve their production targets (the ramping up of production will be prolific over the coming three years), then foreign direct investment in the upstream business alone is likely to see that figure balloon by a factor of ten. However, much work beyond upstream field development
must also be factored in if the oil produced can successfully find its way to market, according to Samuel Ciszuk, IHS Global Insight’s Energy Analyst for the Middle East and North Africa. “Iraq has a huge problem with infrastructure bottlenecks. The pipeline system in Iraq is a shambles. In some places dilapidated, in other completely destroyed. On top of that the export facilities are in a bad state, and simply do not have the extra capacity to handle the millions of extra barrels of oil each day that the country has targeted for production in a relatively short timeframe,” he says. The Iraqi Oil Ministry has demanded, as part of the contract agreements that work progresses quickly. “Large incremental increases in output, initially from the southern fields such as Rumalia, West Qurna 1 will come within the next 36 months. Getting that extra oil to market is a massive challenge. If they are to come close we would need to see pipeline and terminal improvement contracts awarded this year,” observes Ciszuk. On top of the physical export infrastructure work, many millions, possibly billions of dollars will also need to be spent on basic civil infrastructures such as housing, roads and power and water projects to support the hoards of workers needed to facilitate these massive projects. The current planned investment figure is sufficient to dwarf what else will be going on throughout the region for the next ten years. However, the work outlined above may be just the tip of the iceberg for EPC firms and oilfield service providers. Much of the outlay we can safely expect in the coming dec-
An Iraqi engineer walks along the Zubair oil field in southern Iraq in January.
February 2010 Oil&Gas Middle East
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IRAQ COUNTRY PROFILE
BUSINESSGUIDE OPERATING IN IRAQ The overwhelming potential that work in Iraq holds for the majors embarking on their mammoth tasks will deliver an immense opportunity for hundreds of Middle East based oilfield service companies, EPC contractors and niche technology providers. If the work is to be done in the timeframes suggested, domestic knowledge and skills will be nowhere near enough. However, doing business in Iraq can be a costly, frustrating and difficult business. For the first time in many years, however, the opportunity is so great that it easily outweighs the pit-
$3.5bn
Basra’s oil exports of 47.6 million barrels worth $3.5 billion in December 2009, while Kirkuk’s 13.7 million barrels brought in $993 million. Source: Iraq Oil Ministry
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falls, as many first-movers from the international and Gulf region are finding. To open the lid on the business environment in Iraq, Oil & Gas Middle East tracked down Baghdad residents John Desrocher, minister counselor for economic coordination, US State Department, and Gary Soper, first secretary, head of UK Trade and Investment, Iraq. “The Iraqi message is very much one of investment. They are very keen to see more companies establish operations there, but also to broaden that whole dialogue to include trade as well,” explains Soper. However, getting your investments off the ground in Iraq will be an uphill task. “It is clear that in some ways this is a challenging place to do business. This is a country which is essentially rejoining the world economy for the first time in decades,” outlines Desrocher.
Oil&Gas Middle East February 2010
For small and medium size enterprises Iraq remains a small but growing opportunity landscape. For the time being the biggest rewards are there for the multi-national companies which carry the clout of global support with them. Breaking into to Iraqi markets also represents challenges quite beyond those of the rest of the region. “It’s
Gary Soper, first secretary, head of UK Trade & Investment in Iraq.
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IRAQ COUNTRY PROFILE
important to bear in mind that the private sector is still small in Iraq. Over 43% of the working population is employed by the government or state owned enterprises, so there isn’t the same dynamism in private hands that you find elsewhere,” explains Soper. “However, it’s still early days and there is a very steep learning curve under way. You can see from the difference in the way the first and second oil bid rounds were undertaken that the improvements are being made swiftly.” A further consideration is that a great deal of international work is predominantly handled by the ministries. SME’s might not have the level of financial backing required to stay in for the long haul currently required. In terms of getting started, both Desrocher and Soper agree that your home country’s embassy or trade mission is the best place to start. Following that step, the National Investment Commission, which was established in 2006, is the next port of call. The NIC, led by its Chairman Dr. Sami Al-Araji, is the face of private investment in Iraq, with a mission to serve as promoter, facilitator, monitor and policy advisor for firms looking to invest in Iraq. “The NIC is one of the first places we would direct people and can help companies clear all the hurdles and challenges which are out there. They are really very dedicated and they work very hard promoting investment, as well as being good people to work with,” says Desrocher. Whilst a number of agencies have sprung up focused on specific industries, in theory to
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streamline processes and procedures, but it is not always clear where the lines of demarcation between them lie, and vested interests still have a habit of coming to the fore. Clearly not a market for the feint hearted, but things are improving. Government ministries don’t have the pedigree of making important decisions. The ingrained system is that everything goes up to the highest level. “There have been The heavily guarded International Zone remains the safest base in Baghdad. instances of $40,000 projects which aren’t signed off because trade and development contracts do not have a framework in place. There is a natural tendency to send everything towards the presidential office for authorisation,” says Soper. John Desrocher - minister counselor, US State Department For companies looking to set up in Iraq and finding office space in the International Zone (formerly the Green Zone) the consensus is be prepared to progress slowly. “There are companies on the ground in the International Zone which have facilities for rent – either for flying visits, kitted out as a standard board room, as well as temporary and medium term office units,” explains Soper. For long-term partnerships the model appears to be that once companies have the confidence to set up a local joint venture that will facilitate moving out of the International Zone. The market is clearly not one for the feint hearted, and much ground work must be laid before embarking on your business plan. Rich pickings won’t come quickly, and finding a suitable JV partner looks to be the best vehicle for medium-term penetration. For the firms that successfully crack the major projects, the rewards are unparalleled in the coming decade. John Desrocher, minister counselor for economic coordination, US State Dept.
“It is clear that in some ways this is a challenging place to do business. This is a country which is essentially rejoining the world economy for the first time in decades”
February 2010 Oil&Gas Middle East
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IRAQ COUNTRY PROFILE An engineer and security guards walking in the Barjisiya oil ďŹ leds in Zubair One, 550km from Baghdad.
Getty Images
GROUND SUPPORT Logistics and manpower services are a top priority for oilfield service companies IAFI Group has been operating in Iraq since 2004 when it was initially involved in logistics, security, maintenance and training. On the back of increased demand from customers, the company has expanded its service offering to include construction and life support. The company is offering solutions across environmental, pipeline and manpower services. Upstream customers are looking for integrated infrastructure solutions to support their entry into Iraq, explains Ragdan El-Akabi, CEO, FIAFI Group.
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How are you placed to handle the expected influx of oil related business in Iraq?
I believe there will be a significant increase in demand for our services from the upstream oil sector and my company has been ramping up its operations during the last year to increase our operational capacity. This included a period of re-investment to expand our logistics fleet. We have undertaken largescale infrastructure services programs within tight mobilisation timeframes to date and so I feel that our preparation and experience puts us in a position of strength. Which sectors have dominated your workload so far?
Ragdan El-Akabi is CEO of FIAFI Group.
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Our logistics and camp services have to date been dominated by providing support on US Military contracts and the various contractors operating in Iraq. However, this is now geared to move towards supporting the oil and gas sector, although it has to be said there are huge construction contracts pending outside the upstream sector that will also require very similar services.
Oil&Gas Middle East February 2010
What housing is suitable for remote oilfield sites?
The preferred choice of housing for our clients is usually prefab units which come in flat packs and are erected on site. In areas where security is an issue, some clients prefer containers which are converted into living accommodation, the steel structure offer more durability. We have also erected large dining facilities from prefab housing. What role do you play once a site is built?
Naturally, building the camp is just the beginning. What counts after that is the life support services coupled with operations and maintenance. This ranges from catering and laundry through to power, water and sewage. Our life support department has a history of life support services sometimes in remote locations in Iraq.
increasing its capabilities and what we do not currently have, we either source locally for the purpose of the task at hand or purchase and import specifically to cover any capability shortfalls. Availability of specialist equipment is dependant upon supply and demand in the market at any given time, but it is possible to cover most requirements. We also provide cross border logistics and full customs clearing solutions, though problems in that regards are less common today. Do remote sites cause additional security concerns?
Remote sites need not cause additional security concerns as much depends on where in Iraq it is located and the measures taken to protect the site. Effective management and a sympathetic approach to the local population can pay dividends with the micro security situation surrounding the site. Engaging Upstream projects frewith the local people and providquently require heavy lift equiping employment brings untold ment for its projects. How does rewards. Hearts and minds are this work in Iraq? We do have the capability to deal the way forward - everyone with outsize cargo and heavy lift needs to be able to provide for operations. FIAFI Group is ever their families.
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INFRASTRUCTURE SERVICES
FIAFI Group is committed to the development of Iraq through education, economic growth and social tolerance. As a trusted business partner with many yearsâ&#x20AC;&#x2122; experience, FIAFI Group supports customers as they operate in remote and sometimes hostile environments. The company provides a broad range of secure and professional infrastructure services to international standards allowing customers to concentrate on growing their own successful businesses.
W W W . F I A F I G R O U P . C O M
DRILLING SERVICES
DRILLING FOCUS Cautious optimism is the order of the day for Qatar and the UAE’s most dynamic drilling service providers rilling service providers had to tackle a hostile environment in 2009. From reduced exploration work and a tight cost-control mindset from the National Oil Companies across the region, the sector picked up again in Q4 2009. With hopes pinned on a busier year across the region, Oil & Gas Middle East met two of the region’s fastest growing providers to sound out where demand is expected to be strongest.
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QATAR FOCUS Mohammad Yacob Al-Sayed, Al-Shaheen Well Services CEO, says that an oil price that has stabilised could see activity in the region pick up, though demand increases are likely to be sluggish as OPEC members curtail their production ambitions. “The price range of $70 to $80 is suitable for GCC countries to reactivate drilling activity. However, since GCC countries are proportionately bigger suppliers of oil globally, I think they are looking for more stabilisation in the price in order to go back to the drilling activities.”
Al-Sayed adds that whilst a return to the boom period seen two to three years ago is unlikely, this year could see an upswing in projects advancing. “2010 will be a slow year due to supply exceeding the demand for oil in global markets, which will cause the slow down of the drilling and well services activity. However, by the third quarter of 2010 there is the expectation that demand for oil will increase. This will be due to the start up of hundreds of energy production facilities and refineries which were planned and built around the globe during the boom times.” A focus on its home turf in Qatar has insulated Al Shaheen from the steepest of activity declines, and will remain a robust market, says the CEO. “The state of Qatar was less affected than other markets, both in the region and particularly worldwide. The growth rate in Qatar is much higher than elsewhere, which has helped to offset the worst of the recessionary down turn.” The most resilient service line from the Al Shaheen sta-
“With all the information we have, I think the MENA drilling industry can probably expect growth of 5 to 10% over the course of the coming year” Faroohar Farzadnia
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Oil&Gas Middle East February 2010
ble has been directional drilling packages, notably directional drilling surveys and logging while drilling. “We have been expanding our offering in this market thanks to a strong product line of technologies available to support these services. Deploying these services can solve many problems for endusers and allow operators to improve their success in complicated reservoir areas - which was impossible just a few years back,” notes Al-Sayed.
efforts to go global. The company today has over 1300 employees working in 19 countries providing a variety of oilfield services and producing specialised products for the upstream industry,” he says. In 2008, the company dissected into two independent stand-alone holding companies to streamline the management of the businesses of the company. These are: AlMansoori Petroleum Services (AMPS) for
UAE AND BEYOND Faroohar Farzadnia is corporate business development and marketing director at the UAE’s largest homegrown oilfield service company, AlMansoori Specialized Engineering. “The firm has played a leading role in bringing new technologies and cutting edge services to the Middle East, and has recently renewed its
Faroohar Farzadnia, marketing director, AlMansoori Specialized Engineering.
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DRILLING SERVICES
Mohammed Yacob Al-Sayed, CEO, Al Shaheen Well Services.
managing the business units of the oilfield services group and AlMansoori Petroleum Industries (AMPI) for managing the business units of the manufacturing/fabrication group. “While our area of operations has traditionally been in the Middle East, we are currently expanding our operations into North Africa, the Far East and South East Asia as well,” comments Farzandnia. Locally the early signs of recovery are becoming more evident, he adds. “In the GCC rigs that went idle in 2009 are coming back into service and some of the projects that were suspended will come back into play this year. With all the information we have, I think the MENA drilling industry can probably expect growth of 5
-10% over the course of the coming year.” Important lessons have been learned during the crunch last year, and Farzadnia says that offering clients more than a portfolio of services will be the key to unlocking the potential of the recovering sector. “From discussions across the board with upstream project managers and oil companies, the thing we will be focusing on is being an integrated energy solution provider to the sector. “Most companies want their services and equipment provision to be bundled; essentially delivering a one-stop shop solution so they have one point of contact. This is easier for them to manage and it’s a more costeffective solution too,” he concluded.
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February 2010 Oil&Gas Middle East
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DRILLING SERVICES
WELL INTEGRITY â&#x20AC;&#x201C; EXPERT VIEW Expert: Salim Taoutaou, business development manager, Middle East & Asia, Schlumberger Cement placement is a critical component of well architecture for ensuring casing mechanical support, protection from fluid corrosion, and most
importantly isolating permeable zones at different pressure regimes in order to prevent hydraulic communication. It has been estimated that 1% of the total operating costs of the petroleum industry could be saved by the correct application of existing corrosion protection technology. By predicting problem areas, prevention budgets may be spent wisely. It is worthwhile to monitor for weak points since corrosion or damage prevention is cheaper than repair. Finally, precise identification of failure can be used to minimise repair expense. How should I approach my well integrity programme?
Salim Taoutaou, Schlumberger.
Well integrity management is looked at in three distinct stages. The first stage is during the well design which includes material selection, engineering design, cement
design, coating and inhibitors and cathodic protection. The second stage is monitoring of well integrity during the life of the well, locating possible leaks and/or loss of metal. The last stage is how to manage and control any well integrity issues, using specialised products and services. Schlumberger has a full portfolio of unique cementing technologies that can be used during the design and construction of the well for primary and remedial cementing. In addition, we have a full suite of logging tools namely ultrasonic cement and casing evaluation tools, electromagnetic metal thickness tools and mechanical calipers that will help during the pipe integrity monitoring and inspection of the well. With our logging tools we can identify internal and external wall loss, holes and pits and total metal loss in addition to cement evaluation.
What are the advantages of using this technology?
Using these technologies will primarily ensure the long term well integrity, which will increase the longevity of the well. This provides more production, less workover and finally big savings to our clients. In addition, for wells that suffer from integrity problems, we can help find the problem using our logging tools before catastrophic failure occurs and if possible, correct it. What would be your top tips for 2010?
Well integrity is a serious business and needs collaboration between service companies and operators to ensure the long term zonal isolation at the design stage and also to find out the root cause of the loss of the well integrity and how to remedy it.
P.O. Box 2752, Dubai, U.A.E Tel: +971 (4) 3472646 Fax: +971 (4) 3472148
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Oil&Gas Middle East February 2010
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POWER GENERATION
Aggreko’s temporary power solutions sit alongside an FPSO undergoing maintanence.
POWER HOUSE Power generation companies in the Middle East are seeing oil and gas as an increasingly important sector upplying power to the oil and gas industry can be fraught with difficulties, remote locations and difficult access offer challenges that perhaps no other sector can. However with the market currently performing admirably, it’s a challenge they are more than willing to take up. Aggreko provides temporary power and temperature control solutions to both the upstream and downstream sectors in the Gulf. “The services that we offer are not just about power generation; they are to do with a total power supply solution for every stage of oil and gas production,” states
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Phil Burns, managing director, Aggreko Middle East.
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Oil&Gas Middle East February 2010
Phil Burns, managing director of Aggreko Middle East. The first of the applications which Burns mentions is power rental during the construction phase of oil and gas facilities, which can power anything from the cranes on site to the work camps. “Early production is another application of rental power due to the enormous commercial pressure to produce oil as early as possible to maximize cash flow for projects. To facilitate this, the conversion of existing vessels and refurbishment of production facilities is a practice which is common,” adds Burns. “Temporary power systems are well suited to power these applications, both during the
fabrication and refurbishment phases as well as providing power for the facility when it is fully operational.” The firm also offers rental power on an emergency basis, providing support to oil and gas companies which experience unexpected power shortages. “One such case occurred at a large oil refinery, when torrential rain and flash floods caused severe damage to much of the power infrastructure at the facility. Within a matter of days Aggreko was able to provide a 12 MW power package which enabled the refinery to continue operations during the clean-up operations,” explains Burns. The Middle East now offers power generation firms a fertile,
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POWER GENERATION
if differing, market. “The last six years the GCC has enjoyed tremendous growth with the enormous volume of construction underway,” comments Michael Sagermann, regional manager, portable division, Atlas Copco. “Very few sites operated without a generator. Our expectation for the GCC is very positive despite the economy not fully recovered from the crisis effect. Country to country there are wide gaps in expectations, however specific markets (like Saudi Arabia and Iraq) show enormous potential. The current demand for power still overshadows supply, feeding the need for temporary portable power solutions,” he adds.
The challenges presented to these firms in supplying power are clear. “Logistics, transportation and sometimes, security are a great challenge in remote locations. Each country, province and district has different rules, terrain, weather and security conditions,” reveals Robert Bagatsing, sales and marketing manager of RSS. “That is why RSS thoroughly assess the project and plan its installations to avoid mistakes. A proactive approach has been an integral part of our process. So no matter how difficult the challenges are, we always find a way, or make one,” he adds. When supplying a power generation service to the oil and
We create
the solution
“Logistics, transportation and sometimes, security are a great challenge in remote locations” Robert Bagatsing, RSS
Dr Mostafa Al Guezeri GM of ABB’s Power systems division also believes the market is looking positive. “If you look at the new ambitious oil and gas projects rolled out in the UAE, the market is going to be buoyant and plenty of tenders are expected. The basic drivers do not change much. “We have seen some movement in the direction of the grid providing power to oil and gas plants. This means there won’t be large captive power plants in oil and gas industries. Stability of grid and having enough reserve capacity of production is going to be the focus. This means the quality of power produced by the IWPPs is going to be under the scanner.”
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gas sector, there are a number of factors which can make one company’s services stand out from the rest. “Customers should request their own tailored power package to ensure that it is right for the situation. Being able to work in remote and difficult environments is key, as is the flexibility to have power supplied quickly and for the time period necessary,” Burns explains. “At Aggreko, we do not simply rent out the power package and expect our customers to know how to do the rest. Providing an optimum power supply can be a very complex task, so we ensure that our teams are highly skilled and trained to install, commission and run
world-class Where safety knows no compromises _ R. STAHL sets new standards. As one of the leading suppliers of systems and components for hazardous areas, we offer the complete spectrum for the following fields: > Automation > Distribution and Control > Operating and Monitoring > Installation Equipment > Lighting > Alarm and Signalling. R. STAHL stands for modern explosion protection worldwide. With their great commitment, competent teams attend to the safety of people and facilities. We will gladly assist you. R. STAHL Middle East FZE, Dubai, U.A.E., Tel. + 971 4 8835855 or info@stahl.ae
February 2010 Oil&Gas Middle East
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POWER GENERATION
the equipment to optimum efficiency,” he adds. “There are a number of important aspects in portable generators, since oil and gas is a very specific and demanding market sector. Is the scope of supply suitable for oil and gas applications? Is the product safe? What are the lifecycle costs, such as fuel use, service costs, residual value? There are plenty of low cost generators in the market, but is that low price then offset by much higher operational costs?” questions Sagermann. The oil and gas division is the main driver of business in the region. Steady and sustainable growth of this industry is essential not only for the region, but also for other parts of the world, where it supplies much needed
fuel. When we talk about this field, what comes first to my mind is the reliability,” reveals Al Guezeri. “There are many interlinked processes, which cannot be shutdown without going through a pre-defined step or procedure. An interruption of power can cause major safety risks and damage of equipments in addition to the obvious loss of production,” he adds. With the market performing well, certain regions within the Middle East are showing huge potential. “Thus far our biggest growth market has been Saudi Arabia, Qatar and Iraq. Saudi and Qatar are very active in upstream activity in oil and gas. There’s any number of applications where a generator needs to be used, whether in providing
power in remote locations, sup- upgrades and rig maintenance plying temporary maintenance as well as new investment,” conpower, or supplementing any cludes Burns. activities needing portable electricity,” says Saggermann. With the market performing well, the power generation sector, is looking at oil and gas as one if it’s prime sectors and hopes for the year ahead are high. “Despite some market instability in 2009, the oil and gas industry has been one that has continued to grow for us, as a result of Dr Mostafa Al Guezeri GM of ABB’s Power systems division
NO.1 IN HYDRAULIC PERFORMANCE. Deah Hydraulics is a full line distributor of hydraulic pumps & motors, fluid power components, offering fabricated systems. We are the Authorised distributor for: • BRADEN and GEARMATIC WINCHES, USA – PACCAR WINCH DIVISION. • HYDROCONTROL Italy, dealing with all kinds of monoblock, sectional valves, joystick controls, etc.... • ING BONFIGLIOLI, Italy, dealing with truck mounted cranes. • SUNFAB, Sweden, Hydraulic Piston Pumps & motors. We supply, install and repair all types of truck mounted cranes, manufacturing recovery equipment, repair and manufacturing of all types of hydraulic cylinders. Client satisfaction is our first priority. As we are based locally we are better positioned to assist you with all of your needs for each of our partners in less time and more efficiently.
Deah Hydraulics L.L.C… ”Your Total Hydraulics solution.”
Authorised Sales and Service Centre for PACCAR Winch Division. WEBSITE: www.deahhydraulics.com • EMAIL: deah@emirates.net.ae • P.O.Box 84781 • Dubai, U.A.E. A.E. A distributor for
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Oil&Gas Middle East February 2010
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MIDDLE EAST JACKUP MARKET REVIEW
Drilling rig owners can expect a better year on stronger day rates.
FINDING THEIR FEET s in other parts of the world, last year the offshore drilling rig market in the Middle East witnessed a dramatic decline in rig utilisation and hire day rates as a result of the global financial crisis. Working utilisation (based on total regional supply) in the Middle East region, which is predominantly a jack-up market, fell from around 84 per cent in January 2009 to approximately
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67 per cent at time of publication. This change is significant given that utilisation in the region has not dropped below 80 per cent since around mid2001. At present, more than 30 of the 120 jack-up rigs located in the Middle East are idle without any future contracts. Due to a large amount of availability and thus fierce competition for drilling contracts, daily rig hire rates have also softened considerably. For exam-
Oil&Gas Middle East February 2010
Dr Rina Samsudin, senior analyst, ODS-Petrodata says modest demand increases can be expected from UAE, Omani and Iranian waters in 2010 ple, in the Persian Gulf, day rates for independent-leg, cantilevertype jack-up rigs rated for water depths of up to 91 msw (300 fsw) were around US$130,000 in the earlier part of 2009, but the year concluded with a contract at a rate of just $54,000 per day. Again, this drop signals a significant downturn in the market. The past year has been a challenging one for most rig owners, and ODS-Petrodataâ&#x20AC;&#x2122;s forecasts for 2010 suggest that
global jack-up rig supplies will continue to outstrip demand â&#x20AC;&#x201C; which means continued strong competition for work and low day rates in most places. Some drilling contractors are coldstacking units to help tighten up the active fleet, but more rigs will need to be mothballed to offset the large numbers of newbuilds to be delivered by shipyards in the coming years. This year (and perhaps for some time yet) the Middle East
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MIDDLE EAST JACKUP MARKET REVIEW
“The Middle East is predicted to see demand growth this year thanks to the South Pars and other Iranian projects, coupled with anticipated modest increases in the UAE, Oman and Bahrain” Dr Rina Samsudin, ODS-Petrodata
is expected to maintain its position as the world’s largest market for jack-up rigs, having more than twice as many marketed units as its nearest competitor, the US Gulf of Mexico. And unlike areas such as Northwest Europe, Latin America and the Indian Ocean where jack-up rig demand is forecast to shrink in 2010 from 2009, the Middle East is predicted to see demand growth this year thanks to the South Pars and other Iranian projects, coupled with anticipated modest increases in the UAE, Oman and Bahrain. However, the region’s top two jack-up rig users – Saudi Arabia and Qatar – could disappoint this year. After scaling back drilling programmes and releasing a substantial number of rigs in 2009, it remains to be seen if/when Saudi Aramco, the region’s largest jack-up rig operator, might restore its offshore fleet to previous levels. (The operator recently tendered for the provision of several jack-up rigs – an encouraging sign for drilling contractors.) Meanwhile, rig activity offshore Qatar, after a decade of growth, has begun to taper off as various
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projects reach completion; the country has put a freeze on further development of the enormous North Field and the moratorium is not likely to be lifted before 2014. These two countries have the capacity to greatly influence the market. Drilling budgets will to some extent depend on commodity prices. Fewer offshore E&P projects are likely to be sanc- Dr Rina Samsudin, senior analyst, ODS-Petrodata. tioned with oil prices below $50/ barrel. Some of the region’s influential figures have indicated that a price range of $70-80/barrel would be sufficient to sustain E&P activity. Rig utilisation data seems to support this; in the Middle East, jack-up utilisation started to drop in late 2008 when oil prices fell below $70/barrel but stabilised again during the second half of 2009 when prices rose above $70/ barrel. ODS-Petrodata Ltd is a world leader in providing offshore market news, data and research to the oil and gas industry. It is an international company with offices in Aberdeen, Houston, Oslo, Dubai and Singapore. The Middle East continues to be the single largest jack-up market worldwide.
February 2010 Oil&Gas Middle East
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ASK THE EXPERT
Ask the
Alan Roddis, AESSEAL.
Expert Question: Which seal management systems both reduce initial capital expenditure cost and increase equipment reliability?
Expert: Alan Roddis, B.Eng, M.Dip, AESSEAL plc Engineering Director.
If you have a question you want answered, or a topic discussed, please send it to daniel.canty@itp.com raditionally off/onshore Figure 1 â&#x20AC;&#x201C; Single Seal in Plan 31 System. production platforms installed on new fields processed clean, relatively solid-free, hydrocarbon liquids.
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Therefore many of the older platforms were furnished with traditional centrifugal pumps, which run typically at minimum speeds of 3000rpm. This kept the pumps small and compact which was important given the space and weight constraints offshore. The mechanical seals furnished with equipment such as the Main Oils Line Pump (MOL), Sea Water Injection (SWI), Closed Drains, Test Separators and Flare Drums were nearly always single seals with single helical coil springs or multiple spring designs. Single mechanical seals were often favoured by operators as the supporting system, pipework, instrumentation and operation of them is far less complicated than that of dual seals. However, single seals rely on the process fluid to lubricate the seal faces. Increasingly sand contaminants are being extracted with the oil. Sand is unfortunately not a good lubricant and seal and equipment longevity is reduced.
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SEPARATOR ISSUES In an attempt to improve the sealing conditions at the single seal faces of such applications, cyclone separators have traditionally been recommended. Cyclone separators, used in Plan 31 arrangements, shown in Figure 1, are designed to separate solids from the process fluid. The separated clean fluid is then used as the flush medium over the mechanical seal faces. However, cyclone separators have drawbacks, specifically
Oil&Gas Middle East February 2010
their inability to operate successfully if the particles being filtered are lighter than the mother liquor or where a constant pressure drop is not maintained across the unit. This means there will always be a degree of carry-over of abrasive particles, which are injected into the sealing chamber causing further damage and impairing equipment longevity. A major concern for plant engineers using cyclone separators in Plan 31 arrangements is internal
wear on the separator body given that the failure mode of the unit is catastrophic once the wall thickness of the separator is no longer sufficient to withstand the internal operating pressure of the system. Since cyclone separators are treated as part of the flush recirculation pipework, there has been no way for an operator to detect how much wear has taken place. This compromises platform safety and reliability-focused owner-users try to avoid them.
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ASK THE EXPERT
CASE STUDY In 2004, four AESSEAL CAPI Type A dual cartridge seals were installed in CPC vertical inline API 610 process pumps (Figure 3), sealing natural gas liquid on an offshore platform in Alaska, USA. Before the AESSEAL installation, the equipment had a Mean Time Between Failure of 6 weeks. The four CAPI dual seals were supplied by a single innovative stand mounted support system – the AESSEAL Compact 107. The Compact 107 is a hybrid Plan 53/54 system with a small footprint, (0.7m x 1.0m), therefore ideal for restricted offshore space, with an installed cost of $40,000. By 2007 the seals had successfully operated for over three years without failure. The customer was clearly delighted with the seal and system performance and subsequently ordered an additional Compact 107 system for a similar application. To date, the systems are still performing excellently and the savings for this one application are over $350,000 based on repair costs, prior to the AESSEAL installation. This represents a payback period of less than 15 months based on cost savings alone and an Internal Rate of Return (IRR) of 38.7%. This benefit excludes the significant gains from production improvements while using the AESSEAL solution. If this solution was offered with a traditional Plan 53B system and dual seal arrangement, the initial capital cost would be more than 30% greater than with the Compact 107 Solution. Figure 2 – Hybrid Plan 53/54 System What options do I have to replace single seals? Dual seals work differently to single seals as the inboard seal faces mostly operate in a pressurized clean barrier fluid environment (Plan 53) and are therefore lubricated and cooled by the barrier fluid rather than the abrasive process fluid. This dramatically improves the reliability of the equipment as the seal face conditions are now much more favourable. In addition to the clear reliability advantages, many modern thinking exploration operations install dual mechanical seals in their operations because of the emission reduction advantages. However, while the cost difference between a dual and single seal may not be that great, the cost of the supporting dual seal system
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can be. Dual seals essentially need an independent pressure system connected to a pressure source. This not only increases initial capital equipment costs, it dictates the need for increased physical space and space is a premium in confined applications as found in offshore platforms.Plant operators are therefore faced with a commercial and physical dilemma when looking to upgrade single seals to dual seals and systems on offshore platforms.
Figure 3 – CAPI Dual Seal installed on a CPC vertical inline API610 pump
I want a Dual seal but what is the best solution? There are many API Plans that have been designed for various applications. Clearly the Plan selected needs to consider a whole host of issues, from reliability to maintenance, but most importantly the
safety of the operators and plant. Unfortunately there is no one magic system or plan solution for all applications. However, whenever a pressurized barrier fluid system is selected, a modern system favoured in many off/onshore platforms is a hybrid Plan 53/54 system. This
system, marketed by AESSEAL as the Compact 107 and shown in Figure 2, offers all the benefits of Plan 53 and Plan 54 systems, yet saves significant space and capital equipment costs. It also increases the reliability of the operations, as highlighted above.
February 2010 Oil&Gas Middle East
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SOGAT PREVIEW
The huge sour gas Shah Field in Abu Dhabi will soon begin its development phase.
Getty Images
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Oil&Gas Middle East February 2010
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SOGAT PREVIEW
UNLOCKING SOUR POWER Abu Dhabi’s $10 billion Shah Gas development project will kick off this year. Ahead of the world’s leading sour O&G conference, SOGAT 2010, we delve into the issues that are dominating the Middle East’s hottest gas project he ink has dried on the landmark joint venture contract between ADNOC and ConocoPhillips, and this year will see battle really commence for the major EPC and technology contracts to bring the region’s most ambitious, and technically challenging sour gas field
T
on stream. With billions of dollars worth of business up for grabs, Abu Dhabi’s natural gas projects, including the broader Integrated Gas Development (IGD) project has made the Emirate the hottest ticket for upstream firms in the Middle East. Indeed, as the sun sets on the largest of Qatar’s colossal gas undertakings, so it rises over Abu Dhabi’s. Chief amongst these developments is the upcoming Shah Field development plan. With gas so rich in H2S and CO2, the field was once deemed both too difficult and too costly to ever be a viable energy project, especially in a land awash with oil. However, as the economic development of the UAE has outstripped all but the most opti-
mistic of predictions, the pressing need to fuel that growth has become the prime motivator for tackling the challenges head-on. Simply put, the gas locked in the sour Shah and Bab Fields is the key to unlocking Abu Dhabi’s economic vision. However, the field comes with many challenges, chief amongst them the issue of safety, or more broadly, HSE when dealing with H2S. Equally pressing are the technical issues that come with recovering and processing gas so corrosive. Tackling these issues head on is the region’s leading technical conference targeted right at addressing those core challenges. This year’s Sour Oil & Gas Advanced Technology conference and exhibition kicks off on March 28th and runs through April 1st. Given the timely nature of such a dominant issue the
SOGAT 2010
Event: Sour Oil and Gas Advanced Technology Location: Hilton Hotel, Abu Dhabi (Corniche) Workshops: 28th – 29th March Conferences: 30th March – 1st April Web: www.sogat.org
www.arabianoilandgas.com
DON’T MISS: The conference session on day one, March 28th, begins with three major presentations by leading expert from Saudi Arabia, Qatar, and the UAE.
event has been inundated with interest from the world’s leading innovators of sour hydrocarbons and sulphur handling says conference director, Nick Coles. “The interest in this year’s SOGAT event is evident from the fact that we received over 50 offers of papers from which the Advisory Committee have selected the programmes for the 6th International SOGAT Conference and the 4th International CO2 Forum.” Additionally, there will be four workshops covering Amine Treating, Acid Gas Injection, Sulphur Recovery, Processing & Handling and the critical issues surrounding Contingency Planning for Major H2S Emergencies. “To date we have 23 exhibitors coming to Abu Dhabi from all corners of the globe. The workshops, conference and exhibition elements combined will make this year’s SOGAT the biggest yet,” reveals Coles. The Contingency Planning workshop will be led by David Jackson of Scott Health & Safety’s regional headquarters, based in Abu Dhabi.
February 2010 Oil&Gas Middle East
45
SOGAT PREVIEW
TOP PICKS – MARCH 30TH WASIT GAS PLANT: New sour gas developments in Saudi Arabia Saudi Aramco has identified the development of Arabiyah and Hasbah non-associated gas fields as the most economic alternative to meet the additional sales gas demand required from 2014 onward. This new Wasit Gas Plant (WGP) project will provide grass roots facilities for gas sweetening, dehydration, acid gas enrichment, sulphur recovery, sulphur handling and storage, sales gas delivery, electrical and non electrical utilities, and industrial support facilities to process 2 500 MMSCFD of non-associated sour gas. Processing Arabiyah and Hasbah gas is expected to produce 1 700 MMSCFD of sales gas and 4 200 MTD of sulphur. This paper will present different process options considered during preliminary process selection phase and discuss the most economical process configuration selected with emphasis on sulphur plant recovery efficiency optimization.
Presented by: Ismail A. Alami, Saudi Aramco, Saudi Arabia LESSONS LEARNED DURING COMMISSIONING AND STARTUP OF AGR & SRU IN QG II TRAINS 4 & 5 During 2009 Qatargas started up the two largest LNG trains in the world, each having a capacity of 7.8 MTPA. This paper will provide an overview of the start-up experience and key lessons learned such as modifying the degreasing procedure for cleaning the AGR, AGE, and Selexol solvent systems, modifying the tube bundles of the AGR & AGE regenerator overhead condensers, change in trim air purge’s flow logic to process air nozzle in Claus burner to avoid sulphur fire, increasing the recycle gas flow to the Claus tail gas line to prevent overheating the Claus tail gas burner nozzle, change in ignition logic for pilot burners in SRU’s Incinerator to enable successful firing of the pilots and modification of the sulphur trap sight port vents to prevent H2S leakage.
Presented by: Rajesh Shetty, Qatargas, Qatar SHAH SULPHUR PIPELINE DEVELOPMENT: Challenges and choices The Shah Gas Development Project faces the challenge of transporting 10 000 tonnes of elemental sulphur per day from the Main Plant in the large dunes 140 km southeast of Abu Dhabi City to a new sulphur terminal in Ruwais. Presented in this paper is the unique combination of engineering design, material selection and construction methodology that will lead to a successful Shah liquid sulphur transportation project using a hot water jacketed pipeline.
Presented by: Nick Lenstra, WorleyParsons, Canada and, Ken Lunsford, Abu Dhabi Gas Development Co. UAE
46
Oil&Gas Middle East February 2010
“I’m very excited about SOGAT because it is an opportunity for us to meet face to face with the guys who will be working right on the edge and engaging with upstream sour gas projects. It’s an area of safety that is so critical to get right because quite simply if you don’t, people die,.” says Jackson. The words may be strong, but not without warrant. Although relatively few in number, deaths in recent years that have hit the oil and gas industry across the Middle East, with the exception of helicopter transport disasters, have nearly all been linked to H2S safety issues. H2S is particularly dangerous to work around, because even a small leak can prove fatal. When inhaled, if the concentration is sufficient, then that’s essentially game over. “At Scott Health & Safety we place education, training and re-education at the top of our priority list for the region, because in many instances you have to ask why? We aren’t talking about rookies; these are often people who have been working with sour gas for decades. Is it complacency? If it is it must be addressed because with H2S there are no second chances. You can even have all the best equipment in the world in place, but without adequate and regular
DON’T MISS: TUESDAY MARCH 30TH Official Opening - Saif Ahmed Al Ghafli, Chief Executive Officer, ADNOC-ConocoPhillips JV.
training there will be accidents,” says Jackson. Scott has worked closely with its industry partners to ensure its units are able to handle H2S conditions. “As manufacturers we have to be attuned to what an H2S rich environment demands of equipment. The gas is corrosive, as well as being quite a sticky gas, so we have to make sure the composites which we manufacture our units out of do not corrode under H2S exposure. Maintaining that equipment after it has been used in a hazardous environment is critical too, and that’s an issue we cover extensively in training.”
Nick Coles, conference director, says SOGAT 2010 has attracted a record number of offers for technical papers.
www.arabianoilandgas.com
SOGAT PREVIEW
Jackson is confident the strong project pipeline coming through Abu Dhabi, as well as ongoing work and contract awards from Saudi Arabia will see the oil and gas service companies reap a better year in the region after a painful contraction in 2009. “I think that a lot of the storms that hit the industry in the last year have been painful, but also delivered some important lessons that have been learnt from. I would imagine that a lot of the spending that was held off in 2009 will come back on in 2010. Also, a lot of the smaller firms which sprang up to capitalise on the booming market have probably gone now and it’s the established players who are around and ready to serve the industry again.” SOGAT 2010’s contingency planning workshop will be led by Dave Jackson, Scott Health & Safety’s regional director.
www.arabianoilandgas.com
February 2010 Oil&Gas Middle East
47
Introducing the boom truck crane concept combining American and German technology
DARWISH BIN AHMED & SONS PO Box 28883 Abu Dhabi United Arab Emirates Tel: +971 2 5584800 Fax: +971 2 5582242 e-mail: trucks@dbasons.com web: www.dbasons.com
DARWISH BIN AHMED & SONS PO Box 1728 Al Ain United Arab Emirates Tel: +971 3 721 3256 Fax: +971 3 721 2984 e-mail: dbaalain@dbasons.com web: www.dbasons.com
UNITED MOTORS & HEAVY EQUIPMENT CO. LLC PO Box 22804 Dubai United Arab Emirates Tel: +971 4 282 9080 Fax: +971 4 282 7740 e-mail: trucks@utdmotors.com web: www.utdmotors.com
PROJECTS
Ongoing and upcoming projects Information is supplied by Ventures Middle East. Tel: +971 2 622 2455. URL: www.ventures-uk.com BAHRAIN Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Redevelopment of the Refinery in Bahrain
Bapco
Chevron Lummus Global (US)
Not Appointed
100
FEED
Redevelopment of Awali Onshore Oil Field
Bapco / National Oil and Gas Authority (NOGA) / Occidental Petroleum Corporation (US)
Not Appointed
1000
Study
Lube Base Oil Project
Bapco / Nestle
Jacobs Engineering
Samsung Engineering Company
430
Execution
Offshore Field Development
Bapco
Fugro Robertson Limited (UK)
Occidental Petroleum Corporation / PTT Exploration and Production (PTTEP)
2000
Execution
Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Water Flowlines on GC 24
KOC
Not Appointed
141
EPC Bid
Crude Oil Transit Line
KOC
Not Appointed
280
EPC Bid
Booster Station 171
KOC
Not Appointed
800
EPC Bid
KUWAIT
Gathering Center 16 in West Kuwait
KOC
Fluor Corporation
Not Appointed
750
EPC Bid
Gathering Centre 24 at Sabriya
KOC
AMEC
SK Engineering & Construction
621
Execution
Water Flowlines on GC 18
KOC
Not Appointed
151
EPC Bid
Pilot Water Injection Plant at Dharif Marrat Oil Field in West Kuwait
KOC
Not Appointed
14
EPC Bid
Effluent Water Injection Phase I & Sea Water Injection Phase II
KOC
Not Appointed
750
EPC Bid
Pipeline between GC-7 and manifold TB-1 at Burgan Field
KOC
Heavy Engineering Industries & Shipbuilding Company (Heisco)
20
Execution
Not Appointed
110
EPC Bid
Not Appointed
132
FEED
Combined Group Contracting Company
52
Execution
Not Appointed
100
EPC Bid
Almeer Techical Services Company/ Flour Corporation
140
Execution Execution
AMEC, Kuwait
Crude Oil Flow Pipelines in North Kuwait
KOC
Sulphur Handling Facilities at Mina al-Ahmadi
KNPC
Crude Oil Export Pipelines at Gathering Center 16 and Water Flowlines at Minagish
KOC
LPG Filling Plant at Umm Alaish
KOTC
Mina Al Ahmadi Refinery Upgrade - Phase 1
KPC
KOC Facilities at Kuwait's Key Oil Fields
KOC
National Petroleum Services Company (Napesco); Halliburton (US);
206
Maintenance & Repair of Pipelines
KOC
O & G General Engineering & Contracting
72
Execution
Mechanical Maintenance Works for Shuaiba Refinery
KNPC
Not Appointed
150
EPC Bid
Mina al Ahmadi - Doha West Pipeline
Ministry of Energy (Electricity & Water)
Penspen International (UK)
Heavy Engineering Industries & Shipbuilding Company (Heisco)
128
Execution
Gas Booster Station 160
KOC
AMEC, Kuwait
Pipeline from Shuaiba North to Mina Abdulla
Ministry of Energy
Not Appointed
55
FEED
Jurassic Early Production Facility (EPF)
KOC
Not Appointed
1500
EPC Bid
Booster Station 132
KOC
SK Engineering & Construction, Kuwait
724
EPC Bid
Fourth Gas and Condensate Train at Mina al-Ahmadi Refinery
KNPC
Not Appointed
679
EPC Bid
Al Zour North Project - Pipeline Packages
Ministry of Energy
Not Appointed
136
EPC Bid
Maintenance of Oil Production Facilities in West Kuwait
KOC
Not Appointed
150
EPC Bid
Dry Crude Storage Tank at Gathering Centre 1
KOC
Bridge and Roof Company
9
Execution
Gathering Center 14 in the South East
KOC
Almeer Technical Services
45
Execution
Thyssenkrupp (Germany)
Fluor Corporation
NJS Consulting/Al Dowailah
Snamprogetti Kuwait
649
Execution
OMAN Project Title
Client
EPC Contractor
Budget ($M)
Status
Fuel tank at Mina Al Fahal Refinery
ORPC
Consultant
Daewoo Engineering & Construction,Oman
17.1
Execution
Propane Recovery Unit at Mina Al-Fahal Refinery
ORPC
Not Appointed
50
Upgradation of Refinery at Mina al-Fahl
ORPC
Not Appointed
60
EPC Bid
Sea Water Supply at Sohar Refinery
ORPC
Not Appointed
20
EPC Bid
Duqm Refinery & Petrochemical Complex
ORPC
Not Appointed
7000
Study
Oil Exploration in Blocks 3 & 4
CCED /Tethys Oil (Oman) Ltd
CCED
100
Execution
Gas Compressor Station at the Nimr field
Oman Gas Company
Tecnicas Reunidas / Worley Parsons
Galfar Engineering & Contracting, Oman
36
Execution
Octal Petrochemical Project at Salalah Free Zone
Octal Holding
Uhde
National Construction & Trading Co. LLC (NCTC)
700
Execution
Kauther Gas Compression Project
PDO
350
Execution
Marmul Polymer Flooding Project
Petroleum Development Oman (PDO)
Bahwan Engineering Company (BEC)
150
Execution
Two New Gas Pipelines in the South of the Sultante
PDO
Not Appointed
101 - 250
EPC Bid
Depletion-Compression Project at Saih Nihayda
Petroleum Development Oman (PDO)
GS Engineering & Construction, Dubai
350
Execution
Storage Tanks and Terminals at Sohar
Oiltanking Odfjell Terminals & Company
Oiltanking (India); Larsen & Toubro, Oman;
80
Execution
Marmul Central Development - Phase 3
Petroleum Development Oman (PDO)
Gulf Petrochemicals Services, Oman
61
Execution
Qarn Alam EOR Project - Off-plot Package
PDO
Galfar Engg. & Cont.
139
Execution
Not appointed
Petrofac International, Oman Mott MacDonald, Oman
EPC Bid
Qarn Alam EOR Project - On-plot Package
PDO
MEG WorleyParsons
Dodsal
450
Execution
Methanol Plant in Salalah
Oman Oil Company (OCC) / UK GTL Resources / Mubadala Development Company, Oman / Vitol
Jacobs Engineering
GS Engineering & Construction
910
Execution
Oil & Gas Pipeline in Musandum
Oman Oil Company (OCC)
Not Appointed
500
EPC Bid
Saih Rawl Gas Depletion Project
PDO
Tecnicas Reunidas, Oman
Bahwan Engineering Company (BEC)
545
Execution
QATAR Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Petrochemical Complex at Ras Laffan
QP/Total
Not Appointed
Not Appointed
3000
Concept
Low-Sulphur Condensate Storage Facility at Ras Laffan
Dolphin Energy Limited, Qatar
Qatar Engineering & Construction Company
212
Execution
Gas Recovery Project at Ras Laffan
Qatargas
Fluor Corporation, Abu Dhabi
Not Appointed
800
EPC Bid
Block 4 North
Qatar Petroleum/Anadarko
Not Appointed
Wintershall, Germany
150
Execution
Acid Gas Removal Plant in Dukhan
Qatar Petroleum (QP)
Technip, Qatar
Not Appointed
350
EPC Bid
www.arabianoilandgas.com
February 2010 Oil&Gas Middle East
49
PROJECTS Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Melamine Project at Mesaieed
Qatar Melamine Co.
Eurotecnica/Urea Casale
QECC
250
Execution
Petrochemical Complex at Ras Laffan
QP /ExxonMobil Corporation
Not Appointed
Not Appointed
3000
Concept
Oily Water Effluent Pipeline in Dukhan Field
Qatar Petroleum (QP)
Galfar Al Misnad Engineering & Contracting
11
Execution
Oryx GTL - Phase 2
QP/Sasol/Chevron
Not Appointed
1400
Study
Gas Pipeline Network within Ras Laffan Industrial City
Qatar Petroleum
Mott MacDonald Qatar
Larsen & Toubro, Qatar
117
Execution
Q-Chem 2
Qatar Chemical Company (Q-Chem)
Aker Kvaerner,Qatar
Daewoo Engineering & Construction, Qatar
700
Execution
Condensate Refinery at Ras Laffan - Phase 2
Laffan Refinery Company
Not Appointed
800
Study
Acid Gas Removal Pant in Dukhan
Qatar Petroleum (QP)
Technip, Qatar
Not Appointed
350
EPC Bid
Barzan North Field Development
ExxonMobil Corporation/Qatar Petroleum (QP)
Chiyoda Corporation/J Ray McDermott
Not Appointed
8000
FEED
Pearl GTL Project - Package C8
QP/Royal Dutch/Shell
JGC Corporation/Halliburton
Veolia/Saipem/Al Jaber
101 - 250
Execution
Plateau Maintenance Project
Qatargas
Technip, Qatar
Not Appointed
1200
EPC Bid
QVC Expansion Project
QVC
Not Appointed
Not Appointed
31 -100
Study
Oxygen & Nitrogen Production Unit at Ras Laffan
Gasal
Air Liquide Engineering
70
Execution
Nitrogen Pipeline Network at Ras Laffan
Gasal
Black Cat Engineering & Construction
12
Execution
Gas to Liquids Project-3 (Pearl GTL)
QP/Royal Dutch/Shell
JGC Corporation/Halliburton
Consolidated Contractors International Company (CCC)
16000
Execution
Low Density Polyethylene Unit at Mesaieed - LDPE 3
Qapco
Uhde
Uhde/Tefken
549
Execution
Polyacetal Resins Plant at MIC
National Qatar Industries; LG Chem; Tasnee;
Not Appointed
137
FEED
Qafco VI
Qatar Fertilizer Company (Qafco)
Saipem / Hyundai Engineering & Construction Company
610
Execution
Condensate Refinery at Ras Laffan - Phase 2
Laffan Refinery Company
Not Appointed
800
Study
Al Khaleej Gas Development Phase 2 - Onshore Package
Exxon Mobil/ Ras Gas
Chiyoda
Chiyoda/Technip
1600
Execution
Plateau Maintenance Project
Qatargas
Technip, Qatar
Not Appointed
1200
EPC Bid
Al Shaheen Project - Package 13
Maersk Oil Qatar
J Ray McDermott
185
Execution
Two New Glycol Regeneration Trains in Dukhan
Qatar Petroleum
Qatar Kentz
300
Exectution
Worley Parsons
Ras Gas 3 - Trains 6 & 7
Rasgas 3
Chiyoda Foster Wheeler
Chiyoda/Technip
13000
Execution
Qafco V
Qafco
Not Appointed
Saipem/ Hyundai Engineering & Construction Co
3200
Execution
Maintenance on Platforms at Measieed Refinery
Qatar Petroleum (QP)
Not Appointed
50
EPC Bid
Headworks for Muaither RPS and Associated Pipelines
Qatar General Electricity & Water Corporation (Kahramaa)
Al Waha Contracting
109
Execution
Receiving & Loading Facility at Ras Laffan
Qatargas
Qatar Kentz
100
Execution
Common Sulphur Project
DEL
Washington Group International
Not Appointed
101 - 250
FEED
Pearl GTL Project - Wellhead Platforms Package
QP/Royal Dutch/Shell
JGC Corporation/Halliburton
J Ray McDermott
300
Execution
Al Khaleej Gas Development Phase 2 - Offshore Package
ExxonMobil Corporation/ RasGas Company limited
Chiyoda Corporation, Qatar
J Ray McDermott, Qatar
300
Execution
Gas Sweetening Facilities Integrated Project at Mesaieed
Qatar Petroleum
Worley Parsons
Not Appointed
350
EPC Bid
Doha Urban Pipeline Relocation Project
Qatar Petroleum
Tebodin
Punj Lloyd
181
Execution
Pearl GTL Project - Package C2
QP/Royal Dutch/Shell
JGC Corporation/Halliburton
Linde
900
Execution
Project Title
Client
Consultant
Safaniya, Marjan, Berri & Zuluf Oil Fields Upgrade
Saudi Aramco
SAUDI EPC Contractor
Budget ($M)
Status
J Ray McDermott/ National Petroleum Construction Company (NPCC)
400
Execution Execution
Jubail - 2 Export Refinery - Interconnection between Refinery Units and Plant Utilities
Saudi Aramco / Total
Technip, Saudi Arabia
Technip/ China Technical Consultants Incorporate(CTCI)
700
Yanbu Export Refinery - Coker Unit Package
Saudi Aramco / ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
1200
EPC Bid
Shabab-2 Oil Pipeline Project
Saudi Aramco
Stroytransgaz
200
Execution Execution
Sasref Refinery - Ultra-low Sulphur Diesel Complex
Sasref
ABB Lummus Global
ABB Lummus Global
350
Jubail-2 Export Refinery - Pipeline and Offsite Package
Saudi Aramco/Total
Technip
Gulf Consolidated Contractors (GCC)
300
Execution
Yanbu Export Refinery - Crude Unit Package
Saudi Aramco / ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
970
EPC Bid
Sasref Refinery - Ultra-low Sulphur Diesel Complex
Sasref
ABB Lummus Global, Saudi Arabia
ABB Lummus Global, Saudi Arabia
350
Execution
Gas Oil Separation Plant at Hout Field in Divided Zone
Al Khafji Joint Operations (KJO)
Toyo Engineering Company
Consolidated Contractors International Company (CCC)
400
Execution
DILLINGER MIDDLE EAST FZE Sales & Marketing Office of DILLINGER HÜTTE GTS, for direct Mill supply of all grades of STEEL PLATES & FABRICATED PRODUCTS, Eg. Dished Heads & Shells Specialist STOCKIST of extensively specified Plates at Jebel Ali - Dubai ■ Boiler & Pressure Vessel Grade Plates to SA 516 grade 60 / 65 & 70 ■ Alloy steel grade plates in SA 387-12-2/13CrMO4-5 & SA 387-11-2 ■ Structural Plates to Grade S355K2G3 / EH36 ■ Offshore Grade Plates to BS 7191 355EMZ / AP12H50 / S355G8+N Middle East Office: DILLINGER MIDDLE EAST FZE Road 1241, Between Junction 12 & 13 Postfach: 17592, Jebel Ali, Dubai, United Arab Emirates Phone: +971 4 8 83 38 94 Fax: +971 4 8 83 38 95 randhir.venugopal@dme.dillinger.biz pjnarayanan@dme.dillinger.biz sales@dme.dillinger.biz
50
Oil&Gas Middle East February 2010
Iran Branch Office Office 1301, Sarve Saeii Tower Valiasr St., Tehran, Iran Phone: +98 21 887 282 90 / +98 21 887 013 26 Fax: +98 21 887 279 66 behrangsamadi@dme.dillinger.biz
Head Office: DILLINGER HÜTTE GTS P.O. Box 1580 66748 Dillingen Germany Phone: +49 6831 47-3453 Fax: +49 6831 47-3089 info@dillinger.biz • www.dillinger.de
www.arabianoilandgas.com
PROJECTS Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Sasref Refinery - Jubail Sulphur Treatment Unit
Saudi Aramco Shell Refinery Company (Sasref)
CBI Lummus in Middle East
Not Appointed
350
EPC Bid
Jubail-2 Export Refinery - Distillation and Hydrotreating
Saudi Aramco / Total
Tecnicas Reunidas (TR)
1200
Execution
Petrochemical Complex - Polyolefins Package
SCP
Parsons E&C
Daelim Industrial Company
1200
Execution
Kayan Petrochemicals Complex at Jubail - PP Package
Saudi Basic Industries Corporation (Sabic)/Saudi Kayan Petrochemical Company
Fluor Arabia Ltd., Saudi Arabia
Samsung Saudi Arabia Ltd.
400
Execution
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
125
EPC Bid
Not Appointed
250
EPC Bid
Not Appointed
300
EPC Bid
Yanbu Export Refinery-Offsites & Utilities-Package 8
Saudi Aramco/ ConocoPhilips
Wasea Bulk Plant
Saudi Aramco
Kayan Petrochemicals Complex at Jubail - Amines Package
Saudi Basic Industries Corporation (Sabic) Saudi Kayan Petrochemical Company
Fluor Arabia Ltd., Saudi Arabia
Dammam 7 - Petrochemicals Complex
Dammam 7 Petrochemicals
Not Appointed
400
FEED
Ethyl Vinyl Acetate Plant
Saudi International petrochemical Company (SIPC)/ Hanwha International Private Ltd.
Not Appointed
800
FEED
Rabigh Refinery Expansion & Petrochemical Complex - Phase 2
Rabigh Refining & Petrochemical Company (Petro-Rabigh)/Sumitomo Corporation
Not Appointed
4000
Study
Concept
JGC Corporation
Polysilicon Plant in Jubail
First Energy Bank/ Cosmos Industrial Investment Corporation/PMD
Not Appointed
1200
Jubail - 2 Export Refinery - Aromatics Plant
Saudi Aramco / Total
Axens
Samsung Saudi Arabia Ltd.
650
Execution
Jubail-2 Export Refinery - Coker Unit Package
Saudi Aramco / Total
Foster Wheeler
Samsung Saudi Arabia Ltd / Chiyoda Corporation
850
Execution
Karan Field Exploration - Platforms Package
Saudi Aramco
Clough-Zuhair Fayez Partnership
J Ray McDermott
500
Execution
Yanbu Export Refinery - Gasoline Unit Package
Saudi Aramco / ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
2300
EPC Bid
Kayan Petrochemicals Complex at Jubail - LDPE Package
Saudi Kayan Petrochemical Company / Saudi Basic Industries Corporation (Sabic)
Fluor Arabia Ltd., Saudi Arabia
Daelim Industrial Company,Saudi Arabia
400
Execution
Petrochemical Complex - Ethylene Cracker Package
Saudi Chevron Phillips Petrochemical Company (SCP)/ Saudi Polyolefins Company (SPC)
Parsons Engineering Corp.
JGC Corporation,SaudiArabia
1200
Execution
Karan Field Exploration - Onshore Elements Package - Gas Facilities
Saudi Aramco
Foster Wheeler /A. Al Saihati , A. Fattani & Al Othman Consulting Engineering Company (Sofcon)
Hyundai Engineering & Construction Company (HDEC)/ Petrofac
600
Execution
Jazan Economic City Export Refinery
Ministry of Petroleum and Mineral Resources
Not Appointed
12000
EPC Bid
Petrochemical Complex - Polymer Package
Saudi Chevron Phillips Petrochemical Company (SCP)/ Saudi Polyolefins Company (SPC)
Daelim Industrial Company/JGC Corporation
5000
Execution
Al Khafji Oil Processing Facilities Expansion
Al Khafji Joint Operations (KJO)
Not Appointed
400
FEED
Yanbu Export Refinery - Hydrocracker Package
Saudi Aramco/ConocoPhilips
Kellogg Brown & Root (KBR)
Not Appointed
1200
EPC Bid
Jubail-2 Export Refinery - Storage Tank Package
Saudi Aramco / Total
Technip, Saudi Arabia
Punj LIoyd Ltd / Petro Steel
1000
Karan Field Exploration - Offshore Elements Package
Saudi Aramco
Petrocon Arabia, Saudi Arabia
Fertiliser Complex Expansion at Jubail - Urea & Ammonia Plant
Saudi Arabian Fertilizer Company (Safco)
Dammam Oil Field Development
Saudi Aramco
Jubail - 2 Export Refinery - Plant Utilities Package
Saudi Aramco / Total
Technip
Manifa Oil Field Redevelopment - Onshore Package
Saudi Aramco
Kayan Petrochemicals Complex at Jubail - EO/EG Package
Saudi Basic Industries Corporation (Sabic)/ Saudi Kayan Petrochemical Company
Parsons Engineering Corp.
Execution
J Ray McDermott
1000
Execution
Not Appointed
150
EPC Bid
Not Appointed
1000
Concept
SK Engineering & Construction
150
Execution
Foster Wheeler
JGC Corporation / TR / Snamprogetti
2360
Execution
Fluor Arabia Ltd., Saudi Arabia
China Technical Consultants Incorporate(CTCI)
500
Execution
Pipeline from Ras Tanura to Riyadh
Saudi Aramco
Nacap-Suedrohrbau, Saudi Arabia
350
Execution
ASU at Jubail
National Industrial Gas Company (GAS)
Samsung Saudi Arabia Ltd.
300
Execution EPC Bid
Yanbu Export Refinery - Tank Farm - Package 5
Saudi Aramco/ ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
900
Yanbu Export Refinery - Battery Limits and Solids Handling - Package 6
Saudi Aramco / ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
450
EPC Bid
Kayan Petrochemicals Complex at Jubail - HDPE Package
Sabic / Saudi Kayan Petrochemical Company
Huanqiu Contracting & Engineering Corporation (HQCEC)
600
Execution
UNITED ARAB EMIRATES Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Replacement of Oil & Water Pipelines
Adma - Opco
Technip / Worley Parsons, Abu Dhabi
Costain
900
Execution
Adnoc Storage Facility in Hamriyah Free Zone
Takreer
Not Appointed
150
EPC Bid
Borouge Complex Expansion - Phase 3 - Offsites & Utilities Package
Abu Dhabi Polymers Co. (Borouge)
Tecnimont SpA, Abu Dhabi
Not Appointed
500
EPC Bid
Hail Field Development
ADCO / Gasco
Not Appointed
Not Appointed
749
Study
Crude Oil Pipeline Replacement
Zadco
Not Appointed
300
EPC Bid
OGD-3/ AGD-2 - Pack 2
GASCO
Bechtel
Bechtel
1460
Execution
OGD-3/ AGD-2 - Pack 4
GASCO
Bechtel
Snamprogetti
1420
Execution
Green Diesel Project in Ruwais
Takreer
Wood Group Mustang
GS Engineering & Construction
350
Execution
Umm Shaif Gas Injection Facilities
Adma - Opco
WorleyParsons
Hyundai Heavy Industries
1597
Execution
Base Oil Plant in Abu Dhabi
Abu Dhabi Oil Refinery Company (Takreer); Neste Oil (Finland);
Neste Jacobs / Technip
Not Appointed
1000
FEED
Zakum West Gas Processing Facilities Project
Adma - Opco
Technip
Technip / NPCC
300
Execution
Asab Full Field Development
ADCO
Foster Wheeler
Petrofac
1000
Execution
Bab Oil field Development - Phase 2
ADCO
Technip
SK Engineering & Construction Company
805
Execution
Crude Oil Storage Tanks at Umm Al-Nar Refinery
Abu Dhabi Oil Refinery Company (Takreer)
Engineers India Limited (EIL), Abu Dhabi
Al Husam General Contracting
33
Execution
Gas Pipeline from Nitrogen Plant to Habshan Oil Field
Abu Dhabi Gas Industries Company (Gasco)
Dodsal, Abu Dhabi
85
Execution
Sahil Phase-2 Development
ADCO
Foster Wheeler
Tecnicas Reunidas / CCC
250
Execution
Onshore and offshore Sour Gas Development
ADNOC / ConocoPhilips
Fluor Corporation
Not Appointed
10000
EPC Bid
IGD - Gas Processing Platform - Pack 6
Adnoc / Adma-Opco
Fluor Corporation Abu Dhabi
NPCC
405
Execution
Borouge Complex Expansion - Phase 2: Olefins Conversion Unit
AUH Polymers Company
ABB Lummus Global, Abu Dhabi
Samsung Corporation, Dubai
300
Execution
Fertil Plant Expansion
Fertil
Jacobs Engineering
Samsung / Uhde
1200
Execution
OAG Network-Das Island Compression Facilities
Adgas
Fluor Corporation
Technip
610
Execution
OAG Network-Pack 2 - Das Island to Ras Al Qila Pipeline
Gasco
Fluor Corporation
NPCC
241
Execution
OAG Network-Pack 3 - Ras Al Qila to Habshan Pipeline
Gasco
Fluor Corporation
OGD-3/ AGD-2 Pack 3
GASCO
Bechtel
Borouge Complex Expansion - Phase 2: Ethane Cracker
AUH Polymers Company
Development of Qusahwira & Bida Al-Qemzan Fields
ADCO
52
Oil&Gas Middle East February 2010
Washington Group International / Veco Engineering
CCC
400
Execution
Bechtel
1241
Execution
Linde
1100
Execution
National Petroleum Construction Company
1800
Execution
www.arabianoilandgas.com
Under the Patronage of His Royal Highness Prince Khalifa bin Salman Al Khalifa, Prime Minister of the Kingdom of Bahrain
9th Middle East Geosciences Conference and Exhibition
www.geobahrain.org
Conference Programme now available online ! Visit www.GeoBahrain.org
7-10 March 2010: Conference 8-10 March 2010: Exhibition Bahrain International Exhibition Centre GEO is offically supported by these industry leading associations
PROJECTS Project Title
Client
Taweelah-Qidfa Gas Pipeline
DEL
Consultant
EPC Contractor
Budget ($M)
Status
Stroytransgaz, Abu Dhabi
418
Execution
Asab Gas Development (AGD) Modifications - Package 1
GASCO
Veco Engineering
Technip
408
Execution
Inter Refineries Pipeline Project at Ruwais â “ 2nd Stage
Abu Dhabi Oil Refinery Company (Takreer)
Technip, Abu Dhabi
Not Appointed
300
FEED
Borouge Complex Expansion - Phase 3 - LDPE Plant
Abu Dhabi Polymers Co. (Borouge)
Tecnimont SpA, Abu Dhabi
Not Appointed
500
EPC Bid
Interconnecting Pipelines in Fujairah Oil Terminal 2
Port of Fujairah
Nico International
100
Execution
Sour Gas Development - Sulphur Pipeline
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Not Appointed
125
FEED
Expansion of Ruwais Refinery - Package 3
Abu Dhabi Oil Refinery Company (Takreer)
Foster Wheeler, Abu Dhabi
Samsung Engineering
2700
Execution
Demothballing Project
Abu Dhabi Marine Operating Company (Adma-Opco)
Technip, Abu Dhabi
Not Appointed
400
EPC Bid
Borouge Complex Expansion - Third Polyolefin Plastics Project
Abu Dhabi Polymers Co. (Borouge)
Tecnimont SpA, Abu Dhabi; Jacobs Engineering, Abu Dhabi;
3000
FEED
Upper Zakum - Fujairah Oil Pipeline
IPIC/Conoco Phillips
WorleyParsons
China Petroleum Construction Corporation
3290
Execution
Expansion of Ruwais Refinery - Package 4
Abu Dhabi Oil Refinery Company (Takreer)
Foster Wheeler, Abu Dhabi
Not Appointed
400
EPC Bid
Sour Gas Development - Gas Processing Plant
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Not Appointed
800
EPC Bid
Sour Gas Development - Sulphur Recovery Unit
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Not Appointed
800
EPC Bid
Integrity Enhancement of Fire Protection System at Umm Al Nar Refinery
Takreer
Not Appointed
Not Appointed
15
EPC Bid
Integrated Gas Development (IGD) - Das Island Process & Utilities Package
Adnoc / Adgas
Fluor Corporation
Hyundai Heavy Industries(HHI),Abu Dhabi
1000
Execution
Satah Full Field Development
Zadco
Tebodin Middle East, Abu Dhabi
Not Appointed
250
Expansion of Sulphur Handling Facility in Ruwais
Takreer
Washington Group Int'l
Dodsal
272
Execution
Sour Gas Development - Offsites & Utilities
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Not Appointed
1000
EPC Bid
FEED
Sour Gas Development - Sulphur Handling Terminal
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Not Appointed
450
EPC Bid
Expansion of Ruwais Refinery - Package 1
Takreer
Bechtel
SK Engineering & Construction Company
2100
Execution
Expansion of Ruwais Refinery - Package 2
Takreer
Bechtel
GS Engineering & Construction
3100
Execution
New SCADA System at Umm Shaif and Lower Zakum
Adma - Opco
WorleyParsons
Telvent
50
Execution
Integrated Gas Development (IGD) - Ruwais Storage Tanks Package
Gasco / Adnoc
Fluor Corporation
Chicago Bridge & Iron (CB&I), Dubai
533
Execution
NGL Pipeline from Asab to Ruwais
Gasco
VECO
Dodsal
153
Execution FEED
Gas Injection Topsides at Upper Zakum
Zadco
Technip
Not Appointed
12
Shah Full Field Development
Adco
Foster Wheeler
CCC / Tecnicas Reunidas
250
Execution
Integrated Gas Development (IGD) - Ruwais 4th NGL Train Package
ADNOC / Gasco
Fluor Corporation, Abu Dhabi
Petrofac International / GS Engineering & Construction
2100
Execution
Refinery in Fujairah
IPIC
Foster Wheeler
Not Appointed
5000
Study
reliability focused engineering
www.aesseal.com
contact: don van rooyen email: donvr@aesseal.co.za tel: +971 4 2669595 / +971 2 6778700 cell: +971 (0) 508120142
54
Oil&Gas Middle East February 2010
dry gas mechanical seals & repair engineered mechanical seal support systems advanced air coolers bearing protection mechanical seals
• • • • •
solutions extending equipment life
www.arabianoilandgas.com
PRODUCT FOCUS
Drill Bits: Diamonds in the rough Mohammad Swadi, district manager at Baker Hughes says R&D in PDC drill bits is delivering longer running steerable drilling tools which can slash operational costs drilling tool that uses polycrystalline diamond compact (PDC) cutters to shear rock with a continuous scraping motion is better known as a PDC bit. These cutters are synthetic diamond disks about 1/8-in. thick and about 1/2 to 1 inches in diameter. PDC bits are effective at drilling shale formations, especially when used in combination with oil-base muds. Mohammad Swadi, district manager at Baker Hughes spoke to Oil & Gas Middle East about the latest advances in both development and field performance of its range of drill bits.
A
Where is drill bit research being focused today? Over the last decade R&D has largely focused on highly stable PDC bit designs that are capable of mitigating torsional and lateral vibrations, combined with advancements in polycrystalline diamond cutters. Do you have any regional examples? When Baker Hughes introduced the EZSteer PDC bit technology (2002) in Abu Dhabi, we transformed steerable motor drilling capabilities. During the first year after the introduction of EZSteer, we were able to double the rate of penetration and triple the penetration rate compared with earliergeneration bit technology. This has allowed us to make fewer trips, which minimized non-productive time and maximized efficiency.
www.arabianoilandgas.com
â&#x20AC;&#x153;We have designed roller-cone (tricone) bits especially for Middle East carbonate drilling to mitigate heat check (heat damage) of the tungsten carbide insertsâ&#x20AC;? Mohammad Swadi, district manager at Baker Hughes
Baker Hughes has set a new benchmark in Oman with the introduction of a Quantec PDC bit design; this bit drilled hard and abrasive rocks found in the Al Khlata, Gharif, and Khuff formations with improved rates of penetration, which was not possible just two years ago. In another recent example, we achieved record runs in Iraq. The Quantec QD506X allowed the operator to drill the entire 8½-in. section in 23 hours compared with one week 10 years ago.
Middle East, for the most part, is carbonates. The geology can be challenging in terms of steerability, which affects drilling efficiency and durability of the bits. Interbedded formations (different rock strengths within a small interval) can lead to steerability and durability issues when using conventional PDC bits (non-EZSteer technology). Drill bit
instability is another contributing factor which adversely affects the penetration rate. Additionally, we have designed roller-cone (tricone) bits especially for Middle East carbonate drilling to mitigate heat check (heat damage) of the tungsten carbide inserts, which can lead to premature insert damage and, consequently, affect penetration rate.
Which materials are best suited to the Middle East? What we drill in the
PDC drill bits from Baker Hughes.
February 2010 Oil&Gas Middle East
55
FACE TO FACE
FACE TOFACE
Jorge Machnizh, G4S director - global oil and gas solutions
Security solutions for oil companies in Iraq Why the new push behind the oil and gas sector? G4S recognised that the upstream industry represents a growing and important market. Security is going to be a key consideration for the industry as it expands its footprint to produce new oil and gas. Today that focus is Iraq as the government opens its doors to international firms and consortiums to develop its reserve base, which will require a significant security component. How extensive is your role in Iraq? We have an operational presence in both North and South Iraq. We have developed local capabilities on the ground which oil and gas companies can utilise. We provide intelligence and security information which is tailored to the needs of companies looking to do business in Iraq. Educating our customers from their home base so that they are prepared and have some background training before they arrive in Iraq is useful too. What do you mean by local capability? When we talk of local capabilities one of the key elements of that is recruiting and training Iraqi’s and equipping them with appropriate skills, tools and the G4S ethos.
56
The governing factor here is the availability of getting high-calibre local resources. The company in general has developed a culture of hiring, training and promoting local individuals to management and supervisory roles. That’s had a good track record for us for both language and cultural understanding issues.
Now that Iraq is entering a new phase of development we will see how that impacts the specific security targets. We see an emergence of National Oil Companies that have become partners in Iraq, such as Sonangol, CNPC, Gazprom and LukOil – So we see a combination of different players going in there, not just the supermajors.
“We are planning to have support bases distributed around Iraq which will be capable of supporting various different upstream activities” Jorge Machnizh What oilfield work is needed at this stage? We support several of the supply convoys in Iraq, many of which include vital logistics supply lines for construction and reconstruction projects. In addition, we provide coverage for some of the oilfields which may still have mines and other ordnance which need clearing. As conditions in some places improve, the focus is moving away from armed support. There are areas within Iraq that offer a bigger security challenges, but that’s not just governed by location. Some activities are targeted more than others.
Oil&Gas Middle East February 2010
Is this a steep learning curve for security firms? The industry has always been involved in dealing with the challenge that the infrastructure for major oilfield developments entails. These projects can be spread out over a large area in often remote sites. Today, there are a lot of technologies that enable oil to be produced in a less distributed manner than in years gone by. For example, today from a single drilling location, wells can be drilled to 20 or 30 different parts of the reservoir through horizontal or directional drilling techniques. There are also technologies, such
as radar or infra red sensors which can monitor infrastructure, such as pipelines, over a very wide area. What is important in this situation is to have a process in place to react quickly to that information, so that environmental impact is contained and kept to a minimum by dealing with the situation promptly. In which areas do you anticipate work to start soon? The oil and gas industry will, for the most part, have their HQs in the more heavily protected areas in Baghdad, such as the International Zone, but the oilfields are all over the countryside. We are developing a plan today to have support bases distributed around Iraq, which will be capable of supporting the various different activities, such as construction, seismic surveys, drilling activities etc.. This will evolve one step at a time, and will begin with the low hanging fruit for the industry. Are you optimistic about the coming year in Iraq? If we can help the oil industry produce these important resources we will be helping the Iraqi government generate the funding to run their economy in a much more efficient manner. Oil and gas represents the best opportunity for Iraq to come out of the situation they are in today.
www.arabianoilandgas.com
local expertise in Qatar.
Established in 2008, Al-Shaheen Well Services Company (ASWSC) is a joint venture between Al-Shaheen Energy Services (ASES) and Weatherford International Ltd. (NYSE:WFT). Our primary purpose is to maximize the value of our clients’ oil and gas assets in Qatar. Drawing on the strengths of both stakeholders, we are well positioned to help operators meet critical objectives, such as optimizing production in the country’s maturing oil fields and exploiting the vast natural gas resources of Qatar’s North field. To learn more about our offerings in Qatar, contact us on P.O. Box 31774, Doha; or +974 4532777 (tel). You can also visit us on alshaheenwellservices.com and weatherford.com. Drilling Aluminum Alloy Tubulars Cementation Systems Drilling Hazard Mitigation: Controlled Pressure Drilling® (CPD®) Services Drilling with Casing (DwC™ & DwL™) Systems Solid Tubular Expandable Systems Drilling Services: Directional Geosteering MWD/LWD Systems RSS
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