Oil & Gas Middle East - June 2010 by ITP Business Publishing

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CONTENTS

4D Reservoir Geomechanics

JUNE 2010

40 Getty Images

Predict an unprecedented range of reservoir behaviors

66 12 SCORPIONS & CAMELS

36 INFANT INDUSTRY

66 TECHNICAL FOCUS

Lamprell launched its newbuild offshore jack-up rig the Offshore Mischief for Scorpion at its Hamriyah yard. We were there.

Contax Partners Jaivime Evaristo examines how Saudi Arabia can reverse the unemployment trends and engage youth in industry.

David Snodgrass says a new water-soluble H2S removal chemical will revolutionise the additives business.

15 JET SUPPORT

40 DOLPHIN ENERGY

80 LONE STAR LAUNCH

Oil & Gas Middle East speaks to international air chartering firms involved in the BP-led response mission in the Gul of Mexico.

Ibrahim Al Ansari speaks exclusively to Oil & Gas Middle East about the possibility of securing more gas from Qatar.

In May SBM Offshore launched its Lone Star drilling semi-sub in Abu Dhabi.

22 AMERICAN NIGHTMARE 66 MARKET SURVEY BP has an uphill task turning around its reputation after refinery fires, pipeline and offshore spills.

The inudustry’s leading valve manufacturers profiled in our upstream market report.

30 CASPIAN PROFILE

68 BILLION $ VISION

Upstream activity has continued apace in the countries bordering the oil-rich Caspian Sea.

MIS CEO Kevin Hudson tells Oil & Gas Middle East his sights are set on becomming a $1bn company.

Data & Consulting Services (DCS) 4D reservoir geomechanics enabled the first successful horizontal drilling campaign in a large and environmentally sensitive field—without incidents, per development plans and budget. With DCS 4D reservoir geomechanics, our proprietary workflows allow us to integrate diverse sets of data, from seismic to production, into a single dynamic model. The result is accurate, reliable, far-reaching prediction of reservoir behaviors.

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Benefits: Better decision making, improved efficiencies, risk reduction, and optimized lifetime production

2 WEB HIGHLIGHTS

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4 COMMENT 7 REGIONAL NEWS

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69 PROJECT DATA 76 RIG STATS

June 2010 Oil&Gas Middle East

WEB HIGHLIGHTS

The online home of:

MOST POPULAR NEWS

ONLINE SPECIAL REPORT

Aramco at fault for 1 Court: beauty camel’s demise companies convicted 2 11of oilSaudi smuggling Aramco president warns staff 3 Saudi to stay prudent Dhabi-built Lone Star rig is 4 Abu set to sail billion procurement phase 5 US$4.3 opens for Nabucco

IN PICTURES

Gallery: BP’s massive response ArabianOilandGas.com provides four galleries displaying the ongoing offshore, subsea, coastal and strategic response efforts of the BP-led disaster response in the Gulf of Mexico. Check out the online gallery and daily updates and accompanying interiviews on-line. Track the response in numbers - already the largest oil spill response effort led, with over US$1 billion thrown at the problem by BP - on www.ArabianOilandGas.com BREAKING NEWS AND VIEWS FIRST REPORT FROM THE US SLICK: I’VE SEEN THE OIL Account of the spill from a first hand witness says scale of slick inspires a mood to get on with the clean-up job.

Middle East industry survey meets the leading oil spill response companies from across the region and hears from a man with a plan.

ArabianOilandGas.com

OVERCOMING LANGUAGE BARRIERS IN QHSE

OIL SPILL RESPONSE IN MIDDLE EAST

ARAMCO DEAL EXPANDS GE’S ROLE IN KSA

Aggreko provides a useful insight to managing complex oil and gas operations with a workforce of many languages. HSE must read and web smash hit.

GE Oil & Gas has signed landmark agreements in the Kingdom of Saudi Arabia and Qatar in May enhancing upstream cooperations.

ArabianOilandGas.com

Oil&Gas Middle East June 2010

LONE STAR LAUNCH GALLERY A look at the Abu Dhabi-built Lone Star semi sub drilling and development rig. Including shots of senior leadership of SBM. ArabianOilandGas.com SPOT POLL IS A MAJOR OIL SPILL IN THE ARABIAN GULF INEVITABLE OR AVOIDABLE??

47.6 % Inevitable. It’s only a matter of time 33.3% With better training its avoidable 19.1% Totally avoidable if procedures are followed

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COMMENT

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

Who could do more? The collective finger of blame shouldn’t be pointed at BP hroughout May the headlines generated in the wake of the Deepwater Horizon tragedy turned from bad to worse, to terrible for BP. The oil spill has turned out to be far worse than expected, and attempts to stem the gushing flow of oil into the Gulf of Mexico failed on after another. To add insult to an already tough injury, the collective American public appears to be placing all of the blame, and claims of negligent, even criminal activity squarely on the British oil major. Put into context, yes it is a disaster on a massive scale. But calls to have BP moved off the clean-up operation seem utterly bewildering to most who work in the industry. Whilst a certain knee-jerk reaction is inevitable, one wonders who these newspaper editors and members of the public alike would prefer to be doing the job. At the time of going to press BP was close to spending its billionth dollar on the massive clean-up operation. Spill containment gear had been seconded from around the globe and was being rushed in on charter flights (read more about that on page 15), world class experts jetted in from every corner of the planet, and compensation to victims was forthcoming. For BP the coming months will be painful, and for their top people, there is absolutely nowhere to hide. The CEO has made a couple of gaffes, which has not helped, but these seem to be off-the-cuff comments from a man under immense pressure. The first comment which drew the public’s ire was related to the future of offshore drilling. He said that neither the Three Mile Island nuclear meltdown in the US, nor the Space Shuttle Apollo disasters had prevented the

Editorial

Advertising Commercial Director Jude Slann Tel: +971 4 210 8693 email: judith.slann@itp.com Sales Manager David Wheeler Tel: +971 4 210 8582 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 Production & Distribution Group Production Manager Kyle Smith Deputy Production Manager Matthew Grant Production Coordinator Devaprakash Managing Picture Editor Patrick Littlejohn Image Editor Emmalyn Robles Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami Circulation Head of Circulation & Database Gaurav Gulati Marketing Head of Marketing Daniel Fewtrell ITP Digital Director Peter Conmy

Who the BP critics want cleaning up the GoM instead of a world-class oil co is a mystery. atomic power industry or space exploration missions, and as such, nor would the Deepwater Horizon tragedy derail the next generation of offshore drilling. He also said that the spill was a very small amount of oil in a very big ocean. Both are without doubt PR blunders, but neither are miles from the truth. The offshore sector should be braced for working in a new world after this, but rest-assured it will be working. Daniel Canty, Editor E-mail: daniel.canty@itp.com

To subscribe to the magazine, please visit: www.ArabianOilandGas.com Oil&Gas Middle East June 2010

CEO Walid Akawi Managing Director Neil Davies Managing Director ITP Business Karam Awad Deputy Managing Director Matthew Southwell Editorial Director David Ingham VP Sales Wayne Lowery Publishing Director Jason Bowman

Energy Group Editor Daniel Canty Tel: +971 4 210 8255 email: daniel.canty@itp.com Senior Energy Writer Peter Ward Tel: +971 4 210 8662 email: peter.ward@itp.com Contributors Ventures, Rigzone

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LEAD NEWS

PMC for Bab awarded to FW ADCO gives nod for onshore field expansion and Qusahwira project to Foster Wheeler Foster Wheeler AG confirmed in May that its global engineering and construction group has been awarded a project management consultancy (PMC) contract by the Abu Dhabi Company for Onshore Oil Operations (ADCO) for the Bab Field expansion and the development of the Qusahwira Field in the United Arab Emirates. The contract value for the Bab Field expansion was included in the company’s first-quarter 2010 bookings and the contract value for the development of the Qusahwira Field will be included in the company’s second-quarter 2010 bookings. Foster Wheeler’s primary role as PMC will be to manage the engineering, procurement and construction (EPC) tendering and award process and the EPC execution phase on behalf of ADCO. The Foster Wheeler contract value for this project was not disclosed. “Foster Wheeler looks forward to further developing our long-standing relationship with ADCO. We fully appreciate the importance of this multi-field infrastructure project and will bring our in-depth upstream project expertise to help to ensure the successful delivery of this key investment with minimum disruption to the overall production from the Bab and SAS (Sahil, Asab and Shah) hubs,” said Umberto della Sala, president and chief operating officer, Foster Wheeler AG. The contract value to Foster Wheeler was not revealed, but

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The Foster Wheeler project will encompass the Bab Field expansion and the Qusahwira Field development package.

National Oil Companies have been extremely astute in project awards throughout 2009 and 2010, with contractors willing to accept reduced margins for big ticket projects. Speaking to Oil & Gas Middle East in March, ADCO general manager, Abdel Munir Al Kindy has said that the company had managed to make significant cost savings on projects awarded when the project landscape was drying up. “With the blessing of the Supreme Petroleum Council, ADCO was able to push ahead with a lot of the projects it had slated, and has achieved quite exceptional gains from the timely access to EPC contr-

actors during a market downturn,” he said. “We have gained probably 30% on our budgets. This hasn’t just been approaching the market and demanding better prices, it can only come about through open and transparent competition.” The general manager says that once the marketplace understands and trusts the openness of the process, real competition comes into play. “The SAS project (Sahil, Asab and Shah field development) was budgeted at $4.5 billion but was awarded for $3.5 billion, and the Bab compression facility, which was tendered for $1.5 billion was awarded for

almost a 40% saving,” revealed Al Kindy. ADCO has almost come to the completion phase for many of its big ticket projects, so the emphasis from the operator’s perspective has shifted to one of timely execution, bringing projects in on time and on budget.

ADCO’s Abdel Munir Al Kindy.

June 2010 Oil&Gas Middle East

REGIONAL NEWS

GE pens KSA & Qatar megadeals GE Oil & Gas signed agreements with Aramco and Al Shaheen Energy Services in May GE signed a corporate procurement agreement (CPA) with Saudi Aramco which establishes a long-term framework for the supply of GE turbomachinery equipment and services to support the efficient production of oil and gas in the Kingdom last month. “We are delighted to have a solid framework of cooperation in place with GE Oil & Gas,” said Nassir Al-Yami, executive director of materials supply, Saudi Aramco. “I’m confident that today’s agreement paves the way for even greater accomplishments,” he added. John Krenicki, president and CEO of GE Energy said: “This agreement reflects GE’s commitment to Saudi Arabia and elevates our relationship with Aramco to an exciting new level.” Saudi Aramco’s installed

fleet of turbomachinery equipment, which includes over 60 gas turbines, 90 compressors and more than 100 pumps. The GE division also signed a strategic partnership with Al Shaheen Energy Services in

Cosmo expects 30-year Abu Dhabi E&P deal

Eleven Saudi Arabian oil smugglers convicted

Abu Dhabi Oil Co, a subsidiary of Japan’s Cosmo Oil Co and an operating company in Abu Dhabi, have agreed prinicpal terms and conditions for continuing discussions with the Supreme Petroleum Council of Abu Dhabi, for the renewal of the three operating fields in the current Concession Agreement, and the granting of a new concession area. The new three-decade long concession will be rubber-stamped by the SPC ahead of the 2012 expiry date for its existing interests.

Saudi customs investigation authority has convicted 11 companies among 19 for smuggling subsidised oil products, following two months of intensive investigations. The commission in charge of the investigation has imposed a series of sanctions against these companies, including withdrawing their trade licenses and steep financial penalties of at least US$300,000 each, according to local news paper Al-Madina. The list of convicted compa-

Oil&Gas Middle East June 2010

Qatar in May. Under the first agreement Al Shaheen Energy Services becomes a 50% joint venture partner in GE Oil & Gas’ PII Pipeline Solutions business. “GE has a long association with Qatar Petroleum,

and formalising a joint venture relationship with Al Shaheen Energy Services is a significant step forward in this important alliance,” said Jeff Nagel, vice president global services, GE Oil & Gas.

Getty Images

John Krenicki, vice chairman of GE and president and CEO of GE Energy said the agreement paves the way for greater collaboration.

nies has not been revealed and Saudi Arabia’s customs authority is unavailable for comment. revealed but sources close to the investigation said that two companies among the 11 are well known petrochemical companies. Last February, local news paper Okadh, reported that Saudi Arabian customs authorities are conducting investigations regarding smuggling petroleum products from King Fahd Industrial Port in Yanbu Saudi Authorities caught and convicted 11 to France and other European companies of smuggling subsidised oil.

www.arabianoilandgas.com

REGIONAL NEWS

UAE & Russian deal is on

HIGHLIGHTS

Deal with Cresecent Petroleum gives Rosneft a foothold in region Crescent Petroleum, the Middle East’s longest established private petroleum company, has today announced the signing of a Strategic Cooperation Agreement with Rosneft Oil Company, Russia’s leading oil producer and marketer of hydrocarbon products. The Agreement was signed in Moscow between Badr Jafar, executive director of Crescent Petroleum Group, and Sergey Bogdanchikov, President of Rosneft Oil Company. Also present at the signing was H.E. Omar Ghobash, UAE Ambassador to the Russian Federation and other dignitaries. This Agreement creates the framework for the joint pursuit of specific oil and gas exploration and development opportunities in the Middle East and North Africa region. Access to material and high quality new upstream projects will be facilitated by combining Rosneft’s Russian petroleum industry experience, financial strength and technical capabilities alongside Crescent Petroleum’s extensive international operating experience and unique access within the Middle East and North Africa region. This Cooperation Agreement creates a groundbreaking energy partnership between Russia and the Middle East, the world’s two largest oil and gas producing regions. “It gives us great pleasure to enter into this strategic cooperation agreement with Rosneft, Russia’s leading oil company, as the beginning of a long-term, fruitful relationship between our

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Cummins - in a Free Zone near you.

Cummins has announced the opening of the new joint headquarters of the Cummins Middle East Regional Distribution Organization (RDO) and Cummins Middle East FZE in the Jebel Ali Free Zone (Jafza), in Dubai. The 6000-square-metre complex opened in May and includes office, warehouse and training facilities equipped to host 160 employees. The building currently accommodates more than 120 employees.

Badr Jafar, Crescent Petroleum’s executive director.

two companies which will also greatly benefit the economies of the Middle East and North Africa Region,”said Crescent Petroleum executive director, Badr Jafar. Rosneft President, Sergey Bogdanchikov added: “We are happy to have entered into this partnership with Crescent Petroleum. This is a proud moment for the shareholders and management of Rosneft which will now create a foothold in one of the world’s most prolific hydrocarbon producing territories.” In a sign that additional Russian-

Middle Eastern deals were on the table, the UAE ambassador added that more cooperation was likely. “This important agreement comes in the wake of a series of high level contacts between the UAE and Russia over the last 18 months. We look forward to replicating such cooperation in other fields in the near future. The Crescent Petroleum and Rosneft deal is an excellent example of how we can strengthen economic ties in a rapidly changing world,” said H.E. Omar Ghobash.

RAK Petroleum, the oil and gas exploration and production company, announced that Bijan MossavarRahmani has been named Chairman of the Board of Directors and CEO. Mossavar-Rahmani was previously Chairman of the Executive Committee of the Board of Directors and managing director. He succeeds Abdul Aziz Al Ghurair who stepped down after four years as the Board Chairman. Kuwait Oil Company has signed a contract with ABB Engineering Technologies for the construction of a crude oil transit line from North Kuwait to the Central Mixing Manifold and North Tank Farm in Ahmadi. The project is part of KOC plan to boost North Kuwait oil production. The $166.6 million contract will be completed in 750 days and includes the construction of 123 kilometre, 30 inch pipeline with a capacity of 315 million barrels of oil per day. The new pipeline will be equipped with advanced control, monitoring and metering systems.

June 2010 Oil&Gas Middle East

REGIONAL NEWS

Chakib Khelil ousted by President Algeria’s Energy Minister never recovered from Sonatrach’s corruption scandal

Oil&Gas Middle East June 2010

tral Sahara regions,” said Samuel Ciszuk, Middle East energy analyst at IHS Global Insight. “The increasing production and development costs mean

that foreign companies are less interested in proceeding at the offered terms, while Sonatrach lacks some of the technical skills and know-how to develop

Getty Images

Algerian president Abdelaziz Bouteflika has replaced energy minister Chakib Khelil with a former Sonatrach CEO and ex-government minister Youcef Yousfi. The replacement of Khelil has been brought about as a consequence of an embezzlement scandal which has claimed the scalps of many of the company’s leadership since January. The new energy minister Dr Yousfi has a hard task ahead of him in trying to clean up the image of the national oil company which has been riven with scandal since the turn of the year. “Algeria needs to reform the terms it offers foreign investors, as the global oil and gas price environment has changed significantly from the 2006-2008 period and as more and more of its future large-scale gas production will come from its remote and relatively tight gas reserves in the south-west and south-cen-

Chakib Khelil was ousted from Algeria’s top energy job in May.

the more complex formations on its own,” he added. Algeria’s oil production, and even more so its refining sector, needs to see projects moving ahead more quickly, with many of these issues being addressable by reforming the Energy Ministry, regulator Alnaft, and Sonatrach’s chain of command and creating a climate where the large bureaucracies don’t have to rely on the highest levels for too much of their decision making. “The corruption crisis at Sonatrach has further exacerbated this problem, creating a situation where the decisionmaking system is in near paralysis. The recent naming of new Sonatrach leadership means that this process hopefully already has been set in motion, with Yousfi possibly being able to take hold of the strategic issues and build on the gains from Khelil’s first half in his post.”

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EVENT COVERAGE

CAMELS & SCORPIONS Lamprell recently handed over the keys to the Offshore Mischief rig at a spectacular launch at its Hamriyah facility corpion Offshore accepted delivery of its 7th jackup rig, the Offshore Mischief on time and on budget at Lamprell’s new Hamriyah facility in Sharjah, UAE, at the end of April. Oil & Gas Middle East was there and delighted to find the guest of honour was a camel. Scorpion has completed construction on all seven of the LeTourneau Super 116 jackup rigs that it has ordered. Keppel AmFELS built the first five units in Brownsville, Texas, and Lamprell constructed the last two rigs, including the Offshore Mischief, in Sharjah, UAE. Jon Cole, Scorpion’s president and chief executive officer was brimming with praise for on the launch day. “We are

Oil&Gas Middle East June 2010

extremely impressed by the high quality of construction on both rigs delivered from Lamprell. The Scorpion construction team and the Lamprell’s shipyard management are to be congratulated for their efforts. We feel certain that Scorpion’s Everyone wanted their picture with the guest of honour, an Arabian camel. future customers will be very pleased by the performance of the Offshore Mischief.” Scorpion has entered into a drilling contract with an Anadarko Petroleum Corporation for a drilling program which will

$638m Lamprell’s order book, consisting of $501 million from EPC projects and $84 million from offshore construction projects.

Nigel McCue, Lamprell’s chief executive officer speaking at the rig launch.

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EVENT COVERAGE

see the Offshore Mischief perform offshore Brazil. The contract is expected to begin on or before 1 July 2010. Nigel McCue, Lamprell’s chief executive officer was also in good spirits at the launch, and outlined how 2010 was shaping up to be an excellent year for the engineering and fabrication company. “In rig refurbishment we have worked on a total of 24 jackup rigs in 2010 year to date and these projects have included work scopes covering the full range of our upgrade and refurbishment service,” said McCue. These projects have been shared between Lamprell’s UAE facilities, with Sharjah working on 10 rigs and the Hamriyah facility working on 15 jackups, whilst in Thailand

the firm is currently working on a tender barge refurbishment project for MRT-1 Ltd. “In Jebel Ali the spud can extensions for Master Marine ASA were successfully delivered back in March and work is proceeding on the Livorno and Aquila process modules for Saipem S.p.A. and Saipem Energy Services S.p.A. respectively.” Lamprell maintains a substantial order book extending to 2012 which at the end of March was approximately US$638 million, comprising approximately US$501 million from EPC projects and approximately US$84 million from offshore construction projects, including offshore well head platforms, Floating Production, Storage and Offloading units and accommodation modules. The Lamprell-built Offshore Mischief rig is off to Brazil.

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June 2010 Oil&Gas Middle East

NEWS INTERVIEW Chapman Freeborn chartered a Dassault jet to ferry a team of seven experts to New Orleans within hours of the Deepwater Horizon explosion.

JET SUPPORT Relief operators call on aircraft charter specialists in massive tactical response to Gulf of Mexico oil spill hapman Freeborn Airchartering has coordinated a series of aircraft charters to New Orleans, USA, to help tackle the leak from the site of the Deepwater Horizon rig in the Gulf of Mexico. The global aircraft charter specialist has arranged flights departing from Europe and the Far East in response to the spill – described by US President Barack Obama as “potentially unprecedented.” Chapman Freeborn’s UK office coordinated an initial cargo charter using a B747-400F aircraft to transport around 60 tons of technical oil spill equipment from East Midlands Air-

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port in the UK to New Orleans. A B747-200F charter, managed by the company’s Singapore team, also departed to New Orleans from Singapore with an additional 55 ton consignment. Chapman Freeborn also arranged two further B747-200F charters to transport 80 tons of equipment from Qingdao, China, to New Orleans. Qingdao Airport (TAO) reported that the charters were the first time they have supported direct flights to the United States. The company’s passenger charter expertise was also called upon by a Netherlands-based salvage specialist company who were dispatched to the region in the immediate aftermath of the

Deepwater blow-out. International response teams are using a variety of measures in attempts to manage the Deepwater Horizon spill, which covers an area of around 2,000 square miles and presents a major threat to the region’s eco-system as well as its economy. The firm, which has its Middle East headquarters in Dubai’s Airport Free Zone has a long standing relationship with Oil Spill Response, whose specific role is to provide equipment Eliska Hill of and support to Chapman Freeborn. oil spills all over the world.

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“We have been working with them for over ten years as their preferred charter partner, so if they need to move equipment or goods such as dispersant to an area where there has been a spill, we provide cargo charter aircraft to do that,” explains Eliska Hill, general manager of Chapman Freeborn in Dubai. The company has an impressive pedigree of working with the upstream oil and gas business. “We are often called upon by the offshore industry, typically in situations where something has broken down and urgent parts or personnel are needed. Everything from small parts which just require a jet and an on board courier, right up to the largest equipment which can be lifted by air is within our remit.” When dealing with an oil spill speed is of the essence, so relationships with the carri-

ers and where they are based, is vital in determining how fast they can move. “Some carriers are more organised and ready to deal with crisis scenarios such as oil spills,” says Hill. Flights from Singapore, China and the UK have attended to the oil spill in the Gulf of Mexico. The response has called on a wide variety of aircraft, including ferrying key personnel to New Orleans. “Our Amsterdam office arranged for a Dassault Falcon 7X executive jet to transport a team of seven experts to Chapman Freeborn regularly charters planes for oil and gas companies. New Orleans - arriving within hours of reports of the incident,” says Hill. For large cargo loads where palletised loading can be used Hill says the Boeing 747 remains the aircraft of choice, “The 747 is a more cost-effective aircraft to use, and when size and shape limitations don’t

“The main reason for using a charter is to move equipment into a dedicated area at the time that you want to move it” Eliska Hill Oil Spill Response Ltd cargo being loaded for the Gulf of Mexico operation.

Containment boom being palletised for loading destined for New Orleans.

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exist it makes sense to go with the most fuel efficient aircraft. Dispersants are all packaged in drums, so standard aircraft are perfectly suitable. You can move around 100 tonnes on a 747, but we actually shifted around 80 tonnes for the Gulf of Mexico job.” Chartering aircraft avoids many potential problems which crop up when trying to send freight on passenger, or even courier flights. “The main reason for using a charter is to move a certain amount of equipment into a

dedicated area at the time that you want to move it,” she adds. “With passenger flights there may be available bellyhold capcity, but if you need to move 80 tonnes of dispersant then there simply won’t be room for that. Splitting it up over four or five flights runs the additional risk of losing material, breaking up the goods to be sent, and some may get delayed, all of which pose problems in an emergency situation, so really chartering is considered the best option,” says Hill.

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9TH ARAB ENERGY CONFERENCE REPORT

OPEC’s Mid East message O

Abdalla El-Badri tells Doha conference that upstream energy projects are back on track “The world has faced its PEC Secretary General, HE Abdalla Salem longest, deepest and mostEl-Badri has delivered widespread contraction in more a cautious but upbeat than six decades. This, in turn, message to the 9th Arab Ener- adversely affected the energy gy Conference in Doha, Qatar. sector.” Between 2008 and 2009 was His speech, entitled International Developments in the Oil the first time since 1981 that and Natural Gas Markets and global oil demand declined their impact on Arab Countries, in two successive years. The outlined that potential instability cumulative impact was a fall of in the global economic recovery 1.8 million barrels a day. The puts the 2020 OPEC outlook price of a barrel of crude lost demand figure anywhere almost 100 dollars in less than between 29 million barrels a day, six months from mid-2008, or as high as 37 million barrels explained El-Badri. “The resulting supply adjusta day. He warned that this translates into an uncertainty gap for ment by OPEC Member Counupstream investments in OPEC tries led to a significant increase Member Countries of over 250 in unused production capacity. Today, this figure is 6 million billion dollars. However, the Secretary barrels a day.” El-Badri pinpointed some General did says that key projects which had been shelved during the crisis were being restarted throught the OPEC member states, and that oil demand would grow during 2010. “The changes that the energy scene has witnessed over the last few years have been dramatic. They stem from two main causes: the global financial crisis, and the subsequent economic downturn, and the inefficient functioning of oil markets in terms of price discovery,” said the secretary OPEC Secretary General, general. HE Abdalla Salem El-Badri.

of the tell-tale signs of the global recession hitting the Middle East, citing reduced trade, declines in the value of stock markets and investments portfolios values and lower economic growth. He also said these effects illustrated just how deeply interconnected Arab economies are with the rest of the world. “It underlines the need for even more diversified economies and the importance of policies to mitigate the effects of economic cycles and volatility in commodity markets,” he warned. However, El-Badri was also keen to shine a light on the strengths of the region, and outiline the beneficial role OPEC still plays today. “We should also remember that while there is a richness and diversity about the economic culture of the Arab world, in both the traditional and modern sectors, it is an undeniable fact that a viable petroleum industry provides an important economic stimulus for the area as a whole. Regarding oil exports revenues, the crisis demonstrated once again the positive role that OPEC plays

as a producer organization in contributing to stable oil markets, for the benefit of all.” OPEC’s top man told the Doha crowd that thanks largely to massive monetary and fiscal stimulus packages, the global economic recovery is proceeding at a satisfactory pace, in particular in developing countries. He said oil demand is in fact growing again, albeit at an expected modest rate of 900,000 barrels a day for 2010. “And prices are at a reasonable level that is satisfactory to both producers and consumers.” An area of significant remaining risk was the inefficient oil markets, he said. “Oil markets have over the past few years been characterized by excessive volatility and large price swings. Many recognize that the emergence of oil as a financial asset traded through a diversity of instruments in futures exchanges and over-the-counter markets may have helped fuel excessive speculation to drive price movements and stir up volatility. It led to a situation where futures prices were, to a certain extent, detached from the fundamentals of the underlying commodity.”

“Regarding oil exports revenues, the crisis demonstrated once again the positive role that OPEC plays as a producer organization”

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June 2010 Oil&Gas Middle East

9TH ARAB ENERGY CONFERENCE REPORT

Through continued project investment OPEC member countries have managed to increase production capcity, and reserve wealth by a huge margin. Economic growth, expanding populations and higher standards of living mean that energy demand is set to rise in the future, despite significant improvements in energy efficiency. El-Badri said he expects energy use to increase by more than 40% by 2030, according to OPEC’s World Oil Outlook reference case. Fossil fuels, and in particular, oil and natural gas, will continue to satisfy most of the world’s energy needs. This means that the Arab world, with considerable petroleum resources, will continue to play a leading role in the energy scene, far into the future. However, while it is known that energy use is set to grow over the long-term, the actual pace of this growth remains highly uncertain. OPEC’s World Oil Outlook shows that as early as 2020, demand for OPEC crude could be as low as 29 million barrels a day or as high as 37 million barrels a day. “This translates into an uncertainty gap for

Oil&Gas Middle East June 2010

All these efforts and achievements are to be praised, he said. “Nevertheless, these economies often remain highly sensitive to both price volatility and to the uncertainties surroundingfuture energy demand. This underscores the importance of continuing to push economic diversification, especially given the needs of a younger population and the ensuing huge need for job creation in many countries. Heralding the organisation’s 50th anniversary El-Badri said OPEC is more important than ever. “OPEC reserves have increased by a factor of five to reach one trillion barrels and Abdallah El-Badri, OPEC Secretary General its daily production has multiplied by nearly four, to reach dizing alternatives and putting products, developing tourism 29 million barrels a day. Its heavy tax burdens on the use and creating logistical port production capacity exceeded hubs. Many have also recog- 35 million barrels a day in 2009.” of oil. “Inconsistent, unrealistic nized the importance of human and wishful-thinking policy capital and have invested in universities and To read OPEC Secretary General, announcements can only provide advanced the wrong signals to markets research centres in coopera- HE Abdalla Salem El-Badri’s and investors, creating a lack of tion with some of the best global speech in full visit certainty and predictability that institutions. This also includes www.ArabianOilandGas.com undermines the ability of the oil investing in solar and nuclear.” upstream investments in OPEC Member Countries of over 250 billion dollars. There is, therefore, the very real possibility of wasting financial resources on unneeded capacity.” El-Badri took the opportunity to point the customary finger of blame at the policies of consuming countries which are geared towards reducing oil demand, subsi-

industry to invest to meet future energy demand.” Of the Arab countries, the secretary general said it is clearly evident that huge and successful efforts have been undertaken by many countries to diversify their economies. “This includes investing in industries that bring more added-value energy-intensive

“OPEC reserves have increased by a factor of five to reach one trillion barrels, and its daily production has multiplied by nearly four, to reach 29 million barrels a day”

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Following the Texas City refinery explosion in 2005 and Prudhoe Bay pipeline spill in 2006, BP’s operations in America have once again bbeen placed under the spotlight sp in the wake of the Deepwater Horizon trag tragedy. Oil & Gas Middle East examines the fallout between betwe the US government and BP www.arabianoilandgas.com

SPECIAL REPORT: BP IN AMERICA

The fires on the Deepwater Horizon oilrig burned for two days before the structure collapsed and the rig sank, triggering the largest spill in US history. he fatal explosion on the BP-controlled Deepwater Horizon oilrig in the Gulf of Mexico and the subsequent environmental fallout has delivered major financial and political consequences for BP. But it has also had major ramifications for the oil industry in general as the Gulf Coast accounts for almost a third of America’s oil production and new discoveries. Eleven rig workers died in the accident, which occurred on 20 April, with a further seventeen workers taken by sea or air to hospital. The remaining crew were safely evacuated from the rig, which was located approxi-

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mately 50 miles south-east of Louisiana’s tip. The rig, which was owned by Transocean, sank two days later, following which oil started pouring at a rate of 5,000 barrels a day (210,000 US gallons) into the Gulf, threatening ecologically fragile areas from Louisiana through to Alabama and Mississippi and Florida. At the time of going to press, the spill measured 130 miles by 75 miles. Following uncertainty over the cause of the explosion, an initial investigation by BP has revealed the blast was triggered by a bubble of methane gas. As the primary shareholder leasing Deepwater (the junior

partners are America’s Anadarko and Japan’s Mitsui) BP has bore the brunt of anger from the US and the costs to deal with the spilt crude, which had been estimated at $6m per day to clear up. This figure is expected to rise significantly as activity increases. BP chief executive Tony Hayward accepted the firm is the ‘responsible party’ for the clean-up and has pledged to cover all ‘legitimate and objectively verifiable’ losses caused by the disaster. Questions have also been raised about whether BP should have installed a secondary cutoff valve and why it had not featured an ‘acoustic switch’ on the

blowout preventer, located on the seabed, which is designed to stop pressure from the oil well damaging the rig, so it could be activated remotely. BP has a number of plans to stem the flow. On May 4, BP announced that work had begun to drill a relief well via a second oil rig to intercept and isolate the oil well. Drilling began on Sunday 2 May, the company said. The new well, in 5,000ft of water, is planned to intercept the existing well around 13,000 feet below the seabed and permanently seal it. The new drill site is about half a mile on the seabed from the leaking well in Mississippi Canyon. Drilling is

June 2010 Oil&Gas Middle East

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estimated to take three months. In that time, however, up to half a million barrels of oil could have escaped (19m gallons) or almost twice the amount that decimated the Alaskan coastline 21 years ago following the grounding of Exxon Valdez. Therefore work is underway to establish a successful, but quicker method. “This is another key step in our work to permanently stop the loss of oil from the well,” said Hayward. “At the same time we are continuing with our efforts to stop the leak and control the oil at the seabed, to tackle the oil offshore, and to protect the shoreline through a massive effort together with

leak, and be siphoned off. Over the weekend of May 8, the containment dome was placed over the leak to ‘plumb’ the flow in a more manageable direction. It was the first time such an operation has been attempted at such a depth (1.5km) leading some to urge circumspection: Rear Admiral Mary Landry of the US coastguard said: ‘‘I know we are all hoping that this containment system will work, but I want to remind everybody that this is a first of its kind deployed in 5,000 feet of water.” Fears however, that such an operation would falter due to the extreme depth were founded. Following the procedure to fit

“We are continuing with our efforts to stop the leak and control the oil at the seabed, to tackle the oil offshore, and to protect the shoreline.” Tony Hayward, CEO, BP

The site of the explsion and fire at BP’s Texas City refinery in 2005.

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government agencies and local communities.” In an interview with the BBC’s flagship news programme, Today, Hayward attributed primary blame to the operator of the rig, Transocean, which was ‘accountable’ for the safety and operability’ of the socalled ‘blow-out preventer’. Currently the onshore activity is focusing on six locations: Venice and Port Sulphur; Louisiana; Pascagoula and Biloxi, Mississippi; Mobile, Alabama; and Pensacola, Florida. Hope had centred on the deployment of a containment dome (cofferdam), a four-storey, 100-tonne specially constructed metal tower that would cap the

the tower, it quickly became clear that another solution will be needed. A build-up of crystallised gas (methane gas partly frozen into slush) blocked the pipes in the tower, which then had to be lifted from the seabed. BP Chief Operating Officer, Doug Suttles said: “I wouldn’t say it has failed yet. What I would say is that what we attempted to do last night didn’t work because these hydrates plugged up the top of the dome.” He added that solutions could include heating the area, or adding methanol to break up the hydrates. A remotely operated underwater vehicle has been dispensing nine gallons a minute of dis-

June 2010 Oil&Gas Middle East

SPECIAL REPORT: BP IN AMERICA

persant close to the leaks, thousands of feet below the surface. It is hoped that the oil can be broken up before it reaches the surface. In addition to dispersants, booms are being deployed to prevent the oil damaging the ecologically-sensitive and threatened regions of the coast. Engineers are also investigating the possibility of plugging the leak using a ‘junk shot’, which means firing debris comprising bits of tyres and golf balls into the well at high pressure to block it. Speaking at a press conference in Houston, Texas on 10 May, Kent Wells, senior vice president in BP’s exploration and production business said, once again that this technique, while successful in the past had not been proven at

5,000ft – nothing has. Over the weekend of May 8th and 9th, a three-mile boom was laid across the mouth of Mobile Bay, Alabama, the ninth largest port in the US. It is also home to beach resorts and commercial and lei-

ban is wreaking havoc across the region. The financial fallout on BP itself has been severe. On 4 May it was reported that its share price fell nearly 5 per cent – slashing £5bn off the com-

“You turn on the TV and see this enormous disaster; you say to yourself, why would you want to take on this kind of risk?” Arnold Schwarzenegger, Californian governor

sure fisheries, including oyster beds. The seafood industry alone in Louisiana is worth an estimated $2.4bn when fishing, processing, selling and cooking in restaurants are all taken into account. The current fishing

pany’s value – after it warned the cost of tackling the oil spill was exceeding $6m per day. In total, since 20 April, BP’s share price has fallen 14% since the explosion, wiping £19bn off the value. The final bill has

been estimated at up to $12bn. The incident has prompted a backlash against oil firms and has angered many democrats and environmentalists, already bristling over Obama’s plans to expand offshore drilling. The president himself has described the incident as ‘a massive and potentially unprecedented environmental disaster’, which ‘could seriously damage the economy and the environment of our Gulf state and…jeopardise the livelihoods of thousands of Americans.’ Arnold Schwarzenegger, California’s governor announced he was reversing his support for expanded drilling to help the state’s $20bn budget crisis. In a press conference he said: ‘You turn on the TV and see this enormous disaster; you say to

The cofferdam containment dome is lowered onto a supply vessel before heading out to its ultimately fruitless mission to stem the gushing flow of oil.

Oil&Gas Middle East June 2010

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SPECIAL REPORT: BP IN AMERICA

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BP Exploration Alaska President Steve Marshall holds up a photograph of a August 2006 oil spill while testifying before the U.S. Senate Committee

yourself, why would you want to take on that kind of risk?’. The governor of Florida, Charlie Crist also withdrew his support for offshore drilling. As a result, a number of senators are calling for the cap to be raised on legal damages oil firms must pay after a spill from $75m to $10bn. Such limits do not apply, however, if BP is found to be negligent or has violated government regulations at the time the rig exploded.

DISASTER PEDIGREE

“I know we are all hoping that this containment system will work, but I want to remind everybody that this is a first of its kind deployed in 5,000 feet of water” Mary Landry, US Coastguard

The US Army is active in trying to stop the oil reaching the shore.

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BP has a recent history of disasters derived from incomplete maintenance and faulty equipment. This included the 2005 blast at a refinery in Texas City when 15 workers died when a fuel tower was powered up without following protocol This was followed by the Prudhoe Bay oil spill that was discovered in March 2006, which came four years after BP had been warned over corroded pipelines. Initial estimates said that up to 267,000 US gallons (6,400bbl) were spilled over 1.9 acres (7,700 m2), making it the largest oil spill on Alaska’s north slope to date. The company pleaded guilty to felony in the first instance and a misdemeanor charge in the second, accruing fines of over $62m. In congressional hearings after the Prudhoe Bay spill, BP management was accused of making ‘draconian’ budget cuts that affected safety, including limiting the use of a corrosion inhibitor inside the pipeline, a step that could have prevented the deterioration that led to the 2006 spill. While its recent history with the US has hardly endeared BP, it would be pertinent to note the Deepwater incident will surely pale in compari-

son to the worst recorded oil spill. Also in the Gulf of Mexico, in June 1979 a blowout on a Mexican rig called Ixtoc-1 saw 3.3 million barrels released. For comparison, the Exxon Valdez fiasco released just 260,000 barrels. At the same time, by and large oil firms are not the worst polluters of the world’s seas. According to The Economist, average annual spills from underwater pipelines shrank from 2.5 million gallons in 1980-84 to just 12,000 gallons in 2000-2004, according to figures from the Congressional Research Service. America’s National Research Council estimates that offshore drilling accounts for 1 per cent of the oil floating in the country’s waters, and tankers and pipelines just a further 4 per cent, compared with 33 per cent from other shipping and 62 per cent from natural seepage. Perhaps the US Department of Interior - which has temporarily suspended issuing permits for new offshore drilling rigs and production platforms until a department report is delivered to Obama - should take note. It would be remiss not to highlight the other players involved in the Deepwater disaster. While BP is bearing the brunt of anger, there are a number of other sizeable named players who were responsible. The rig was owned and operated by Transcocean, the world’s largest offshore drilling firm. The blowout preventer was made by Cameron International, a specialist engineer. The complex process of cementing the wellhead was being carried out by Halliburton, an engineering services firm. How blame is allocated once the dust settles remains to be seen.

June 2010 Oil&Gas Middle East

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GIANT

AWAKENING Demand for E&P work in the Caspian region is booming, and Middle Eastern firms are strategically located to cash in on the action Words: Chris Sell he Caspian Sea is a 700mile body of water in central Asia bordered by Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan. Among the five nations, only Iran is a member of the Organisation of Petroleum Exporting Countries (OPEC). Azerbaijan, Kazakhstan and Turkmenistan became independent when the Soviet Union dissolved in 1991 following the fall of communism. Historically, the Caspian region has

Oil&Gas Middle East June 2010

produced oil and natural gas, but the region is considered to have large resources of oil and gas capable of much greater production. The region has been affiliated with exploration for many years. The world’s first offshore wells and machine-drilled wells were made in Bibi-Heybat Bay, near Baku in Azerbaijan. In 1873, exploration and development of oil began in some of the largest fields known to exist on the Absheron peninsula near the vil-

lages of Balakhanli, Sanbunchi, Ramana and Bibi-Heybat. Total recoverable reserves were more than 500 million tons. And by 1900, Baku had more than 3,000 oil wells, 2,000 of which were producing at industrial levels. By the end of the 19th century, Baku was known as the ‘black gold capital’. This centre of the oil industry came under the control of the Soviet Union in the 1920’s following the Bolsheviks capture of Azerbaijan and confis-

cation of all private property – including oil wells and factories. By 1941 Azerbaijan was producing a record 23.5 million tonnes of oil and the Baku region supplied nearly 72 per cent of all oil extracted in the Soviet Union. Today the oil in the Caspian basin is estimated to be worth over US$12 trillion. Following the collapse of the Soviet Union and the opening up of the region, intense investment and development has followed by international oil companies. Former

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In winter, parts of the Caspian Sea freezes up. Getty Images

US Vice President and Halliburton chief executive officer Dick Cheney commented that he could not “think of a time when we’ve had a region emerge as suddenly to become as strategically significant as the Caspian.” Bernard Gelb, specialist in industry economics writing in a CRS report for Congress in 2006 said it is likely there are large reserves of crude oil and natural gas production in the area. “There is a likelihood of much greater additional reserves of crude oil and natural gas being found in the Caspian Sea region. This is supported by the fact that a number of oil companies have

to increases in the Caspian Sea region production of oil and gas that may slow development.” These obstacles derive primarily from status issues and the establishment of contentious water boundaries. Disputes between Azerbaijan, Turkmenistan and Iran could affect future plans to open up the region to the west. In the immediate term this includes the proposed TransCaspian oil and gas pipelines, which would allow western markets easier access to Kazakh oil, and potentially Uzbek and Turkmen gas as well. While the US has granted its support for such

“There is a likelihood of much greater additional reserves of crude oil and natural gas being found in the Caspian Sea region. This is supported by the fact that a number of oil companies have large stakes here.” Bernard Gelb, industry economics analyst

Total divisional president Darricarrere and SOCAR president Abdullayev.

Foreign oil and gas firms are trying to get their share of business.

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large stakes here. Much of the known reserves have not been developed yet, and development usually leads to discovery that prospects are larger than originally estimated. Moreover, many areas remain unexplored. It is estimated that an additional 184 billion barrels of crude oil reserves are possible, which would raise the total to almost five times its present level.” If proved, the report added, such a level of reserves would almost equal the amount held by Saudi Arabia and would come to about 15 per cent of world reserves. However, the report also stated that there were “obstacles

schemes, Russia has opposed them, ostensibly on environmental grounds. It is worth noting that the pipelines would bypass Russia completely, denying it valuable transit fees and eliminating its current monopoly on westbound-hydrocarbon exports from the region. The status of the Caspian Sea is the key problem. There are three major issues here: access to mineral resources, access for fishing and access to international waters. If a body of water is labelled as a sea, there would be some precedents and international treaties obliging the granting of permits to foreign vessels. If the body of water is

June 2010 Oil&Gas Middle East

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Oil&Gas Middle East June 2010

mian sandstone reservoirs. The Morskaya-1 exploration well, situated in the Lagansky block, discovered a large accumulation of oil after drilling to a depth of 2,082 metres in water less than two metres deep. “This is a world class oil discovery which has confirmed excellent prospectivity of the Lagansky block. It is clearly positive that the discovery is predominantly oil but based upon the data acquired it appears the size of the discovery will be An oil field in near Baku, Azerbaijan. below pre-drill estimated,” said Ashley Heppenstall, Lundin’s president and CEO. The Australian-headquartered firm Caspian Oil + Gas has six projects currently underway. Estimated hydrocarbon reserve wealth stored in the Caspian Basin. Source: www.ArabianOilandGas.com These are at Mailisu III, with five exploration wells completed. Completion work on Mailisu III Number 2 well is expected in May. Charvak, where deeper prospects have been identified by a seismic survey completed in mid-2009, is another. AkBura, Sulukta and Katran complete the remaining projects. In April, the company announced that following the resumption of operatorship of the company’s Kyrgyz assets, it had identified a total of 25 prospects and leads with prospective resources totalling 242 million barrels (mmbbl). Fazel Falzelbhouy is chief executive officer of TOPAZ Energy & Marine. The opportunities range up to 55mmbbl mean prospective resource (unrisked) and an average of around 10mmbbl across the portfolio. Consequently the company is now looking to farm out an interest in over 7,000 square kilometres of prospective ground in the Fergana Basin. “A number of good opportunities have come out of our Fazel Falzelbhouy, CEO, TOPAZ recent work. For example the West Mailisu 3 lead, which is

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labelled as a lake, then no such obligations exist. According to a treaty signed between Iran and the Soviet Union, the Caspian Sea was recognised as a lake, which would be divided into two sectors and the resources shared. The line between the two sectors would act as an international border and the Soviet Union’s sector sub-divided among the four littoral republics. However, following the dissolution of the Soviet Union, not all independent states assumed continuation of the old treaty. Currently, Russia, Kazakhstan and Azerbaijan have reached agreement on delineating ownership of the Sea’s resources or the rights of development. There is no agreement between Kazakhstan and Turkmenistan, while Azerbaijan and Iran are at loggerheads due to joint claims over oil fields. In summary, Turkmenistan has oil reserves of 600 million barrels and gas reserves of 8 trillion cubic meters. Azerbaijan has oil reserves of 7 billion barrels and gas reserves of 1.2 trillion cubic meters. Kazakhstan has oil reserves of 40 billion barrels and gas reserves of 1.8 trillion m³. The total recoverable hydrocarbon reserves of the Caspian basin, excluding the Iranian and Russian sectors, represent 6% of global gas reserves and 4% of global oil reserves. Turkmenistan’s gas reserves are the fourth largest in the world after Russia, Iran and Qatar. Despite the controversy, the region is a magnet for oil and gas firms. In 2008, Swedish firm Lundin Petroleum announced it had made a major oil discovery in the northern Caspian Sea at the Aptian and Neoco-

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“Governmental policies affect business and it’s important to understand the priorities of the political leadership. The organisation must be sufficiently agile to be able adjust itself to changing political climates and tax regimes” www.arabianoilandgas.com

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A platform being towed to an offshore production field in the Caspian Sea.. 100 per cent Caspian owned, has the potential for up to 25bcf as well as 10mmbbls of oil,” says Caspian chief executive officer Graeme Parsons. “To evaluate its potential we have contracted Kyrgzgeophysika, a local geophysical company, to record additional seismic over the lead commencing in May 2010 with the view to drilling the prospect later in

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up alongside existing ships; Caspian Server, which began operations in 2009 and the anchor handling tug supply vessel the Caspian Power, due for delivery later this year. In addition, Topaz Energy and Marine announced in 2009 that its subsidiary, BUE Kazakhstan, had secured a $100 million contract to build, own and operate six specialised barges

the year if the extra seismic confirms structural closure,” Parsons added. Dubai-based Topaz Energy and Marine continued to strengthen its presence in the Caspian region, with the delivery of the ‘Caspian Protector’, a vessel that will be deployed in Azerbaijan in support of a 10-year $225 million BP contract won in 2008. The vessel will line

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for Agip KCO in Kazakhstan. The deal will see BUE Kazakhstan operate the barges over a 10-year period to support Agip’s development programme in the Kashagan field in the northern Caspian Sea. Such lengthy contracts are beneficial in seeing out the recession, says Topaz CEO Fazel Falzelbhouy “In the Caspian market, oil majors and

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National oil companies typically award medium to long-term projects that grant Topaz strong earnings visibility and consistent cash flows. This made Topaz able to straddle the recessionary cycle and mitigated the effect of the downturn.” In Azerbaijan, the firm’s anchor handling tug supply vessels and platform supply vessels actively support BP’s development of the east, west and central Azeri fields in addition to the major Shah Deniz gas field. Upcoming projects in Azerbaijan include the Chirag Oil Project (COP) and Total’s development of the Absheron field. Topaz also operates seven vessels offshore Turkmenistan in the Carigali field serving Petronas and Technip.

There are a number of oil majors, national oil companies and independents working in the Caspian through production sharing agreements, but the major operators are BP, Agip, Shell and Petronas. The Kashagan oilfield is one of the largest hydrocarbon discoveries in the last four decades with estimated recoverable reserves of more than 10 billion

barrels. The field is expected to double Kazakhstan’s output to approximately 3 billion barrels per day. The whole project is expected to cost $136bn, with production due to start late 2012. The field is operated by an international consortium under the North Sea Caspian Sea Production Sharing Agreement. It is comprised of seven companies consisting of Eni,

“A number of good opportunities have come out of our recent work: The West Mailisu 3 lead, which is 100 per cent Caspian owned, has the potential for up to 25bcf as well as 10mmbbls of oil.” Graeme Parsons, CEO, Caspian

Shell, Total, ExxonMobil and KazMunayGas – all with a 16.8 percent stake – and ConocoPhillips (8.4 percent) and Inpex (7.5 percent). Access to such an output is not without its challenges. “The project is facing immense technical difficulties such as high pressure, high hydrocarbon sulphide content, exceptionally shallow waters and extreme weather,” says Fazelbhoy. These challenges also extend to politics, he added. “As with any region, Governmental policies affect business and it’s important to understand the priorities of the political leadership. The organisation must be sufficiently agile to be able adjust itself to changing political climates and tax regimes. Because

A platform supply vessel of the type used to supply BP’s developments off the Azeri coast.

Oil&Gas Middle East June 2010

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Jack-up rigs lie in waiting near the coast of Azerbaijan ready to be tranported to the oil fields near Baku. of our extensive experience operating from the Caspian we have built capabilities and relationships that allow us to effectively operate in the market.” Economic and political pressures aside, there is one further pressing issue in the region. “In the Caspian, the issue of workforce nationalisation is very important and is a definite Gov-

ernment priority,” says Fazelbhoy. “Recruiting National seafarers is a challenge but it’s an area where we have made great progress especially in Azerbaijan where Topaz now has over 90 percent workforce nationalisation.” “Ongoing training and knowledge transfer have allowed numerous Nationals to take up

senior positions both on board the vessels and in the shorebased organisation. 100% of our marine crews in Azerbaijan are now local and are only supported by expatriate technical advisors to ensure compliance with our client’s requirements. Topaz also contributes to the local economy by procuring the vast majority of its

materials and services locally,’ he added. Dubai’s Dragon Oil recently announced further details regarding two contracts awarded for the construction of two new platforms in its Cheleken Contract in off-shore Turkmenistan.The first was awarded for the construction of the Dzhygalybeg A platform, which will see up to eight wells drilled from the platform in the Zhdanov Field, due for completion in Q1 2012.The second was for a Dzheitune C platform, which, again will see up to eight wells drilled in the Lam field and due for completion in Q42011. Dragon Oil expects to spend around $250 million this year and $600-700 million in total on infrastructure projects in the planning period 2010-2012. Other key projects in the region include the controversial and drawn-out $5bn TransCaspian Oil and gas pipelines (opposed by Russia and Iran) and the Nabucco pipeline (a proposed pipeline from Erzurum in Turkey to Baumgarten an der March in Austria), which would diversify natural gas suppliers and delivery routes for Europe.

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June 2010 Oil&Gas Middle East

SECTOR ANALYSIS: KNOWLEDGE TRANSFER

INFANT INDUSTRY ANALYSIS Jaivime Evaristo from Contax Partners examines policy in the GCC energy sector, identifying unemployment and knowledge transfer as key drivers t the core of the infant industry argument lies the proposition that young industries need to be protected from their older, more advanced rivals and that they should be allowed to build efficiency either through economies of scale or through a consequential learning process. Perhaps even both. When the United States and Germany, in the late 18th and early 19th centuries respectively, championed the intellectual foundations of the infant industry argument, it was believed that the intent was to strategically insulate the two countries’ nascent industries from the more developed industries of Britain. Seemingly rightfully so, the US and Germany ricocheted in light-speed trajectory well into and beyond the Industrial Revolution. This, however, came with mixed attributions as to whether or not the fundamentally protec-

tionist premise of the infant industry argument deserved taking all the credit. Sceptics to this argument suggest that the development of an industry would occurr anyway as a result of a gradual and sustained build-up of technological, physical and human capital. They make the point that even in the absence of an active, restric-

sectors and industries, and even in social development. A case in point was the notable success story in the creation of a petroleum industry cluster in Norway in the 1970s in which Norwegian oil companies, Statoil and Hydro, and key suppliers, Aker and Kvearner, were able to gradually build up their competence under the umbrella of an aggressive protectionist policy. Indias development of its lowcost pharmaceutical industry against the colonial patent law of 1911, which shackled the Indian market to the British, is another landmark example. In contemporary times, and in the Gulf Cooperation Council (GCC) energy sector in particular, adopting the protectionist policies outlined above is done in the hope of developing the sector’s indigenous service industries, with a particular emphasis on tackling a particularly pressing issue: unemployment.

“The private sector response to increasing pressure from the Saudi government has been varied”

Oil&Gas Middle East June 2010

tive regulatory policy, industry growth would have happened as a result of natural progression. Yet, some empirical evidence suggests that government intervention, by protecting its vulnerable industries from usually more dominant foreign competitors, plays a crucial role in the development of

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SECTOR ANALYSIS: KNOWLEDGE TRANSFER

SAUDI ARABIA CASE STUDY: UNEMPLOYMENT AS KEY DRIVER

eign players in the Kingdom, urging a more stringent application of employment quotas for Saudi nationals. Strategic capital spending plans in the hydrocarbon sector are directed to projects that provide more jobs. This entails exporting less crude oil, while more refining into high value products or petrochemicals will take place in the Kingdom. Oil and gas will also increasingly be used domestically as feedstock for materials such as aluminium. The private sector response to increasing pressure from the Saudi government has been varied. While the overriding objective of the Saudi government’s regulatory interventions seems to be employment rather than development, it is comforting to see some clear signs of innovative and developmental thinking.

In January, Saudi Aramco is believed to have received nine bids from joint ventures of foreign and local engineering firms in an initiative called General Engineering Services Plus (GES+). The initiative aims to improve the engineering skills of local players by forming integrated, locallyregistered entities with equity ownership between GES contractors and international partners thereby forming a GES+ entity that could undertake pre-FEED, FEED, PMC and EPCM contracts for Saudi Aramco. A similar initiative is targeted at the development of In-Kingdom EPC (IK-EPC) partnerships in which Japan’s JGC has recently been awarded a contract worth between US$90-100m in relation to the Jubail Refinery Project for Sasref. These developments among others are

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Nationalisation programs, (Emiratisation, Qatarisation, Saudisation etc), have been in effect in the GCC labour market for years. While these national initiatives have been successful, they are not without its critics and remain a contentious social. political and economic issue. The issue looms largest in Saudi Arabia, where the government estimate of unemployment amongst male Saudis was at around 10 percent in 2009. Estimates from the private sector range between 10 and 25 percent. The total jobless rate – the proportion of people without jobs whether or not they are looking for one – however, was estimated to be as high as 45%. While the availability of jobs per GCC national in 2009 was not much of an issue in some countries like Qatar (12 jobs per Qatari), the UAE (11 jobs per Emirati) and Kuwait (6 jobs per Kuwaiti), the proportion of available jobs in Saudi was much lower at less than 2 jobs per Saudi national. To combat this issue, US$93m was spent during the first half of 2009 to provide training and jobs for Saudi nationals in the private sector. However, it is safe to say that the quest to provide jobs for Saudis is far from over yet. Given the sheer scale of the unemployment challenge, the Saudi government has tightened, and is expected to further tighten, its grip on local industries and for- The Saudi Arabian government wants more homegrown engineers in its upstream energy business.

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June 2010 Oil&Gas Middle East

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SECTOR ANALYSIS: KNOWLEDGE TRANSFER

Source: Contax Partners 2010

Infant industry policy intensity

LOW

HIGH LOW

Firm’s competitiveness

driven by the need to address the unemployment issue in the Kingdom and create an indigenous knowledge base. The resulting value added of these initiatives could very well exceed the foreseeable benefits of reduced unemployment, provided governmental oversight and proactive private sector support is sustained.

NORWAY CASE STUDY: DRAWING PARALLEL Drawing from the “birthing pains” of the Norwegian petroleum system between 1977-80, one may expect to see a hefty labour and training price being paid in the ongoing and planned Saudi initiatives. Conversely, the same could eventually result in a highly innovative petroleum system in Saudi Arabia as was the case in Norway some 30 years ago. When all companies in Norway were required to choose Norwegian nationals during this period, a bureaucratic, labourintensive management model emerged. It proved costly to develop and train Norwegians. Nevertheless, socio-political considerations and strategic foresight appeared to have overwhelmed the huge, yet transient, economic implications of Norway’s infant industry policy. Needless to say, unemployment, like in the case of today’s Saudi, was also one of the key drivers of Norway’s then protectionist policy. The debate, however, did not end at meeting employment quotas but instead moved on to include the strate-

HIGH

gic importance of building internal competence in the assimilation of knowledge from extrinsic sources – another key driver in the Saudi initiative. The emergence of Aker and Kvearner as main suppliers to the industry implies an increasing emphasis on the development of internal sources of innovation. The scheme resulted in an increasing absorptive capacity by Norwegian players allowing them to identify, assimilate and utilise technology and knowledge being brought in by international players. With sustained government intervention that called for an expanded Norwegian participation in technology production, development and supply over the following years, it became apparent that a growingly independent and innovative petroleum system of Norway was on its way. Today, Aker Solutions operates successfully internationally and is highly regarded in the Saudi Arabia market and expected to participate in the GES+ initiative – a real example of growing up.

complying with regulatory changes that may arise. There is no doubt that the economic prospects reserved for international players in the Kingdom’s energy sector will remain attractive, and this will form part of the incentive system necessary for the evolution of regulatory frameworks. Having a 360-degree view of the market landscape and full understanding of the capabilities of key players across functions and disciplines in capital project development are paramount requisites to a firm’s successful business development in the KSA. As the prospects for further industry consolidation increase, players should carry out exhaustive due diligence on potential opportunities and partnership options. Elsewhere in the GCC, a growing popularity of the infant industry argument amongst policymakers is inevitable. As such, firms that are equipped and highly adaptable to change are likely to make the list of the next generation of players in the GCC energy sector.

SAUDI ARABIA: THE FUTURE SCENARIO AND IMPLICATIONS TO INTERNATIONAL PLAYERS It appears highly likely that the Saudi economy will continue to rely on expatriate skills over the coming years, albeit in an increasingly regulated fashion. International firms that wish to retain and grow presence in the Kingdom should have the strategic foresight in dealing and

To further discuss how the Business Advisory Team can help you fully understand your growth opportunities and the associated key success factors, please contact Ann-Marie Carbery Antoun at AnnMarie.Carbery@contaxpartners com. We look forward to speaking with you!

Jaivime Evaristo from Contax Partners.

June 2010 Oil&Gas Middle East

INTERVIEW: DOLPHIN ENERGY

The pipeline connecting Taweelah directly with Fujairah has to cross the UAE’s largest mountain range.

DISTRIBUTION

TRIUMPH Ibrahim Ahmed Al Ansari, general manager of Dolphin Energy – UAE, speaks exclusively to Oil & Gas Middle East as the finishing touches are being put to its $800 million Taweelah – Fujairah pipeline project 40

Oil&Gas Middle East June 2010

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INTERVIEW: DOLPHIN ENERGY

t’s astonishing to think that the UAE, one of the world’s most important energy exporters, is actually energy short itself. However, with rapid economic development has come a colossal expansion in its energy needs, as residential, commercial and heavy industrial facilities vie for the precious gas available. To meet demand across the Emirates, Mubadala, Oxy and Total combined forces to deliver the region’s most ambitious energy grid, which kicked off its gas exports from Qatar’s vast North Field to Abu Dhabi almost two years ago.

Indeed, Dolphin Energy will be celebrating the two-year anniversary of gas flows from its Ras Laffan Processing Plant to the receiving terminal in Taweelah, Abu Dhabi in July. The main subsea 48-inch, 364kilometer pipeline is the largest and longest gas pipeline in the Middle East. The export pipeline is currently carrying up to a maximum of 2 billion standard cubic feet a day (scf/day) of refined methane gas from Qatar. Its design capacity is 3.2 billion scf/day. Usage of the additional 1.2 billion scf/day capacity is subject to a future agreement

between Dolphin Energy and Qatar. Bringing that vision to completion was no easy task, and Ibrahim Ahmed Al Ansari, general manager of Dolphin Energy – UAE, says that proving wrong the hoards of pessimists is the proudest achievement of his career to date. “I’ve been with Dolphin since the negotiation of the agreement with the Qataris. From the early days – in discussions with my peers, whenever we discussed the deal, they said Dolphin Energy was a dream – and a dream that was too difficult to come true,” explains Ansari. “We told them then: You

talk, but we will achieve it…And finally we achieved it. We proved that we could get the support of the governments from Qatar, UAE and Oman, and the support of the shareholders. There is no question this is the biggest achievement that I am proud of. People said it wouldn’t happen, but it happened,” he beams. The fact that the 2 billion standard cubic feet of gas so critical to the UAE’s ongoing development flows from Dolphin Energy is significant, but even this is not enough to satisfy the country’s rapidly expanding demand for energy. There is an extra 1.2 billion scf of capacity

“Today in the UAE we are short of energy, which means our potential customers have to use other kinds of fuel for their projects and developments” Ibrahim Ahmed Al Ansari

Ibrahim Ahmed Al Ansari, general manager, Dolphin Energy.

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View of the Dolphin Energy gas processing facilities in Ras Laffan, Qatar.

June 2010 Oil&Gas Middle East

INTERVIEW: DOLPHIN ENERGY

in the principal pipeline from Qatar, as well as extra capacity engineered into the UAE and Oman network. “The forecast in the UAE is around an 8% to 10% increase in gas demand each year, and we expect this to continue for a few years to come. Today in the UAE we are short of energy, which means our potential customers have to use other kinds of fuel for their projects and developments,” says Ansari. Ansari says that expanding the Dolphin Energy network to other countries in the Middle East is not on the company’s horizon. “We have no plans to roll the network out beyond the United Arab Emirates and Oman. This is our territory and our mandate. Bringing enough gas to these customers throughout the project life will in itself be a significant achievement.” Demand for gas comes in peaks and troughs, with demand highest in summer when the region’s air conditioners are all working at maximum capacity and lowest during the winter. As well as seasonal variation, it may, quite sensibly be expected that during economic slowdowns demand for gas would slump. However, demand across the UAE, and in particular the Northern Emirates, has continued to grow, in spite of the recessionary impact on economic development. “That is what we expected too. Certainly

it was widely expected to drop, but in fact we saw an increase in demand for gas. One would have thought that the downturn in Dubai would prompt a fall in demand but the opposite was the case. Demand increased in Abu Dhabi, in Dubai and throughout the Northern Emirates.”

GETTING GAS Qatar has placed a moratorium on any new exploration and production on the North Field from which Dolphin receives its gas. This is not due to expire for at least three more years, but Ansari is optimistic about the chances of securing more gas for the Dolphin Energy project. “The moratorium which has been put in place by the government of Qatar has been enacted with good reason. They want to finish all of their projects and then evaluate the reservoir condition and behaviour before giving the green light to any new projects,” explains Ansari. “However, there are other projects already operational in Ras Laffan, and some of those will have surplus gas, particularly at certain times of the year – which could be made available to us,” he continues. This interruptible gas is not in any way guaranteed for Dolphin, but the possibility of surpluses being made available seems to be growing. Much of the LNG capacity which has been brought on

CORE CUSTOMERS: Dolphin Energy’s average daily contracted gas volumes are as follows.

April 2010 Oil&Gas Middle East

Oil&Gas Middle East June 2010

• ADWEC (Abu Dhabi Water & Electricity Company) 929 million scf/day • DUSUP (Dubai Supply Authority) 730 million scf/day • OOC (Oman Oil Company) 200 million scf/day • TOTAL 1.85 billion scf/day

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INTERVIEW: DOLPHIN ENERGY

Some 120,000 tonnes of line pipe were delivered between 2008 and 2009 for the Taweelah to Fujairah pipeline. Work is expected to be completed this year. stream in the last two years was originally earmarked for US markets. However, with significant gas finds and the ongoing development of shale resources in the US, it is thought less Qatari gas will go to the West. In May, Qatar’s Energy Minister said the projected flows of gas to America was dropping significantly. Qatar may end up exporting just 6 million metric tonnes a year (mty) of LNG to the US after diverting as much as 20mn mty to other countries,

Deputy Prime Minister and Minister of Energy and Industry HE Abdullah bin Hamad al-Attiyah said in an interview published by the Middle East Economic Survey last month. Al-Attiyah said that Qatar “may divert 12-20mn mty” away from the US market. “This means our gas exports to the US would remain in the range of 6mn mty,” he said. Qatar’s LNG trains will no doubt pick up this slack and package the gas for sale to the

country’s Asian trading partners, but the example shows that even the largest projects can divert gas from original capacity plans to flexible projects and seasonal demand.

DOMESTIC PRODUCTION Abu Dhabi itself is sitting on huge gas resources, but much of it is extremely rich in sulphur and carbon dioxide content, making it highly corrosive and expensive to process and to market for commercial sale.

That said, ADNOC and its group of subsidiary companies are pushing ahead with several gas related projects, including the hugely sour Shah Field. Ansari says he is not worried by additional gas coming on stream from domestic fields. “The new projects in Abu Dhabi will be complimentary to our gas. Today the deficit stands at around 2 billion scf, and much of the new gas being produced in Abu Dhabi will be used for reservoir con-

June 2010 Oil&Gas Middle East

INTERVIEW: DOLPHIN ENERGY

The new 240 km, 48 inch pipeline will cross 240 km of desert and mountain – linking receiving facilities at Taweelah with the ADWEC Plant in Fujairah. trol and pressure maintenance, not explicitly for retail gas. Dolphin will remain relevant for the whole of its 25-year scheduled lifespan.”

PROJECT EXECUTION The Dolphin Energy story has largely shifted from project execution to its operational stage now, but exciting new developments are still underway, and a major pipeline extension from Abu Dhabi to Fujairah is due for completion later this year. The challenge of deliver-

Oil&Gas Middle East June 2010

ing huge quantities of gas from Qatar to Fujiarah, crossing the Emirates’ most extensive mountain range in the process is a colossal undertaking in its own right, as the stunning images from Oil & Gas Middle East’s site visit show. The Taweelah – Fujairah pipeline extension project, which is slated for completion in December of this year, involves the design, build, and laying of a substantial, 48 inch pipeline, which traverses some 240 kilometers through the heart of

the UAE. The pipeline crossed through desert areas of Abu Dhabi, Dubai and Sharjah then over the mountains of Ras Al Khaimah and Fujairah itself. The line pipe has been provided by Salzgitter Mannesmann International of Germany. When complete the pipeline will supply gas to the upcoming Fujairah 2 Power and Desalination Plant. This will be built next to the existing Fujairah 1 plant at Qidfa, on the Arabian Sea north of Fujairah city, which already receives gas from Dol-

phin Energy via the company’s Al Ain to Fujairah pipeline. The geographical and engineering challenges are evident from the photographs depicted here, but the administrative process also posed significant hurdles for the Dolphin Energy team to overcome. “Getting the appropriate approvals from all the relevant authorities for a pipeline crossing through four municipal jurisdictions – Al Ain, Sharjah, Ras Al Khamaih and Fujairah was also quite difficult,” explains Ansari.

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INTERVIEW: DOLPHIN ENERGY

“Yet despite all of the challenges we faced we are delighted with how smoothly everything has come together. We achieved our first completion target ahead of schedule, and we are on target to finish in the fourth quarter.”

LOOKING AHEAD As the focus of daily business has shifted to operations and maintenance, Ansari says cost control and optimisation have become the watchwords. Whilst many major upstream projects

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across the region have increasingly outsourced major maintenance contracts for a period of years, the general manager says Dolphin Energy has retained its principal gas and infrastructure work in-house. “There are many schools of thought about how to best manage operations and maintenance contracts and what should be farmed out. What we do at Dolphin is operate and support our own facilities in house, in conjunction with supporting contractor services. We have our

June 2010 Oil&Gas Middle East

INTERVIEW: DOLPHIN ENERGY

An engineer inspects the progress being made as the pipeline sliced through the Fujairah mountains.

of choice for UAE national and Qatari’s to join.” Ansari says the current approach is proving successful, but that he remains mindful of maintaining the special corporate culture which the Mubadala, Total and Oxy partnership has built to date. “We are like a coin with two faces,” he says. “We are local, but we have the partnership of Total and Occidental too, and by integrating all of these together we have created the Dolphin culture. When we compare ourselves to our peers we talk about the leading oil and gas companies operating in the United Arab Emirates, Abu Dhabi and Doha, which includes a mixture of national and international companies.” Ansari wraps the interview up by noting that Dolphin Energy’s overall objective is to create long-term economic wealth and new business opportunities for GCC citizens, far into the future. Having overcome some lofty barriers to get where it is today, and with the notable success the company has delivered to date, it’s difficult to imagine that it won’t.

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June 2010 Oil&Gas Middle East

own manpower which can handle the core of our operations, supplemented by contractors for non-core operational maintenance, such as building and airconditioning support.” A further challenge incumbent on all major companies in the region is building and maintaining a strong national workforce amongst its ranks. Ansari believes that so far Dolphin has achieved much, but he is still punching for a higher level of nationalisation in the United Arab Emirates and Qatari divisions.

“The measure for success should be judged by the percentage of UAE nationals within the workforce. In the UAE itself we have reached 40%, and our target is to reach 50% by 2012. To me this represents a challenge,

but it is achievable. In Qatar we have reached around 23% of the workforce, comprised of Qatari’s and UAE nationals. We benchmark ourselves against our peers, and we make sure we continue to be an employer

“We proved that we could get the support of the governments from Qatar, UAE and Oman, and the support of the shareholders. There is no question this is the biggest achievement that I am proud of“

VALVES MARKET SURVEY

VALVES Oil & Gas Middle East surveys the regionâ&#x20AC;&#x2122;s leading valve suppliers and finds that demand is coming back and responsiveness to customer demands is separating the winners from the losers alve suppliers to the oil and gas industry are witnessing a bounceback in demand as upstream projects and drilling operations get the green light in the Middle East The valve industry plays a vital role in oil and gas upstream production, a role which is val-

V 48

Oil&Gas Middle East June 2010

ued ever increasingly by project operators as they look to ensure operations run smoothly and effectively, with as little downtime as possible. But with many of the technologies and services provided having existed for many years, how does the industry continue to improve its services and cater

for a changing energy industry? Not only is demand and investment in oil and gas production continuing to grow, pushing demand for valves, there are also issues of increasingly arduous practices involved in harsher upstream environments, with more corrosive products coming up the well.

Even further downstream these corrosive elements can wreak havoc unless the right materials are selected right from the start. Valve specialists are under increasing pressure to provide products that can not only perform under such circumstances, but also which will have a long

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VALVES MARKET SURVEY

operating life and require as little servicing as possible. Valves essentially are used to stop, regulate and divert the flow of liquids, gas, slurries or dry material. They can be operated remotely and can control various parameters like flow, temperature, pressure and volume. The global valve market is estimated to be worth around US$45 billion, with an annual growth of 4-5%. Out of this market oil and gas makes up 18%, with refining operations taking a 14% share. In terms of demand it is no secret that projects in the oil and gas industry have been slower coming through to execution phase, and providers had to compete for a smaller market in 2009, and the start of 2010. Project owners have also been

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rathcheting up increasing cost pressure, whilst keeping their service and quality expectations as high as ever. The level of expectation to meet these demands has been constant, and superior quality still attracts a premium from oil and gas buyers. There is nothing worse for a project manager than when a valve designed and built ten years ago develops a sudden problem. The knock-on effects are huge. On top of cost and delivery pressures, new frontiers in the Middle East are delivering technical challenges which the region is just becoming accustomed to. Operators are seeing ever increasing amounts of water produced in the wells and also volumes of hydrogen sulphide and carbon dioxide,

which are necessitating, in certain instances, deployment of exotic materials which include super duplex materials, monels, hastelloys and even titanium in some cases. If that wasnâ&#x20AC;&#x2122;t challenging enough, there is also the desire for valves that can cope with much higher pressures. Operators are also discovering that they are as much the victims of legacy as any other industry. There are examples in this part of the world where the end-user has got old products which were perhaps supplied to the correct specification when ordered, but because of the changes to the wells, the actual product coming from the fields is not as easy to work with as when the product was specified. Inventories have largely

VALVE SUPPLIER PROFILES T3....................................Page 50 Dresser Masoneilan.........Page 52 Control Seal Valves..........Page 54 Valvitalia..........................Page 56 NOV Anson......................Page 58

been replenshined following the massive boom in demand experienced in 2008 and early 2009, and the validity of valve pricing at early tender stages in more reliable than when the industry was working at break-neck pace. However, a sustained high oil price has shown that the energy industry will be the first to come out of the recessionary cycle for valve suppliers, and as our market survey shows, for the leading brands appetite remains strong.

June 2010 Oil&Gas Middle East

VALVES MARKET SURVEY

Drilling rates in Oman and Kuwait have kept business brisk for T3.

or put on hold. There was also a notable reduction in drilling rigs within some regions. More recently the cost of oil has stabilized and oil companies have been able to prepare budgets based on this stability. There has also been substantial interest and growth into Iraq as the country has matured from it’s turbulent past. How is this region faring in comparison to other markets?

Even during the difficult times, Kuwait actually placed contracts to increase it’s rig count and Oman was virtually unchanged. It is always prudent to control spending during a recession and that was notable on a global sscale in all indusHowever, you only need tries. However to look at how tthe construction industry was iimpacted within understand that this region to u we may have faired better markets. We need than other ma to understand tthat the oil marnotably fluctuated kets have not due to changing over the years d oil prices and as such we are possibly now better equipped at managing ourselves. I envissix of the world’s largest esti- age a steady but progressive mated oil reserves being in the growth as budgets and shelved Middle East, it is easy to under- projects are released. stand the logistical importance of having a strong presence The Middle East is lookwithin this region. This was of ing to develop increasingly sour paramount importance when oil and gas. What challenges does T3 Energy chose to expand and this pose to valve manufacturers? invest here. We are currently, Not only high H2S and CO2 conhave been working on and have tents but also now pressures been successful with quite a few up to 20 000psi and at temperanotable contracts within Oman, tures exceeding 350F in some Iraq and Saudi Arabia.

T3 ENERGY SERVICES Bill Crighton, regional sales manager, MENA for T3 Energy Services says that even when development across the region was suppressed there were important deals to be had. Where are your customers concentrated in the region?

We have customers in all the GCC countries, and handle sales into Egypt and Iraq, obviously energy is our core business, and the Middle East is a hotbed of activity and potential for us.

Has the energy market bounced back at all this year?

There was definitely a slow down in demand as most of the major With four countries in the top projects were either cancelled What proportion of your revenue is generated here?

Oil&Gas Middle East June 2010

cases. It is usually not just one aspect which can effect valve integrity and operational qualities but a collection of pressure, temperature and hydrocarbon gases. Our valves are a non elastomeric design. Elastomers are known to have been compromised by high temperatures, pressures, explosive decompression and harsh or erosive substances. Our valves are generally supplied in alloy steel with stainless wetted parts which serve most applications. With higher concentrate H2S/CO2 expected in very severe conditions, our valves can be internally clad with a corrosion resistant alloy or manufactured in full Stainless steel. What is the most significant change to the valves you sell into the oil and gas business?

Our HPT gate valves and HXE choke valves were exclusively designed for the harsh service conditions expected in our industry whether it be drilling, well servicing, underbalance drilling, production, Sub Sea, flowback or fracturing applications. We designed our products to be resilient and hard wearing, require low maintenance due to an effective sealing mechanism and cost effective with a commonality of spare parts throughout the range. We also manufactured and qualified our valves to the highest industry standards recognised globally, API 6A – PR2, API 6FA, API 16C monogrammed.

ABS Certified

In May this year T3 Energy Services announced it had received the ABS Certificate of Conformance for their Middle East Facilities located in Dubai, UAE.

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Dresser Masoneilan control valves and Dresser Consolidated safety and safety relief valves lead the industry in quality, technological innovation, technical support and aftermarket services. Our experience, expertise, and true dedication has made Dresser Masoneilan and Dresser Consolidated trusted names for over a century. r

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VALVES MARKET SURVEY

Dresser Masoneilan has supplied 600 valves for the Shell and QP Pearl project in Qatar.

DRESSER MASONEILAN Stéphane Leledy, EMEA Marketing Manager, Global Product Manager, Liquid Levels, Dresser Masoneilan says enquires and orders are up, helped by a massive contract win with the Pearl project in Qatar. “Saudi Arabia of course dominates our valves business in the Middle East, not just because it’s a huge market space, but also on account of the number of projects which are ongoing there.” Approximately 40% of Dresser Masoneilan global business is done in the Europe, Middle East and Africa region, and of that, 15% is done directly in the Middle East. A lot of the business is handled through the major

Oil&Gas Middle East June 2010

MAY CONTRACT WIN Dresser Masoneilan has been named the emergency shutdown device (ESD) supplier for BP’s floating production, storage and offloading (FPSO) vessel in the Plutao, Saturno, Venus and Marte oil fields off the coast of Angola, Africa. Dresser Masoneilan will supply SVI II ESD analog safety demand units for integration into the Yokogawa Pro-Safe-RS safety instrumented system and Yokogawa PRM asset management suite. “Project engineers wanted a solution that provides continuous diagnostics during a safety trip, enables partial stroke testing of the emergency shutdown valves at regular intervals and withstands the harsh offshore environment,” said Sandro Esposito, global marketing manager for digital products. “The SVI II ESD is the only SIL3 smart ESD that remains live during and after a shutdown, capturing shutdown events as a full-proof test, allowing continuous HART communications during a trip and providing local panel annunciation using the built-in discrete outputs. In addition, partial stroke testing functions are provided on a single wire pair, reducing installation costs, and SIL3-certified stainless steel housing ensures its durability.”

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VALVES MARKET SURVEY

DRESSER IN THE KINGDOM Dresser Inc expanded its operations in the Kingdom of Saudi Arabia with the opening of a new valve manufacturing and repair facility in 2009. The newly expanded facility is owned and operated by Darvico (a joint venture between Dresser and the Al Rushaid Group). Darvico has an established record of success in the region, including the recent Khurais project, a major oil and gas production facility for the Saudi Aramco Oil Corporation.

contractor offices, which are often in Europe, so it is possible that the orders come through a European order, but can end up in the Middle East too. “We have seen an impact of the economic slowdown, mainly when projects which had the go-ahead were postponed. Also customers have been under pressure from management to reduce their maintenance costs as much as possible, and that

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typically means extending the intervals between replacement or servicing for valves.” “Also, there is a tendency to focus purely on the mandatory or critical situations when people are under this sort of pressure. Clearly the maintenance orders slow down quite a lot, but the good news is no that we are seeing an increase in 2010 with additional requests from customers, and what we have seen

in the Middle East is a willingness to re-engage some projects, so that is very encouraging.” Leledy says both enquiries and orders are up, but order recovery typically starts out quite slowly because final investment decisions in the current climate still take time to get signed off. “2010 will be a better year than 2009 for sure, but it won’t be like 2007 and 2008, which were remarkable years of activity.” Dresser Masoneilan is strong in the refining and petrochemical markets, but Leledy notes upstream energy is an important market too. “We supply control and safety valves wherever they are needed throughout the energy value chain. One area of notable success we are very

proud of is a project in Qatar. We have recently shipped 600 control valves for the Pearl project in with Shell. We are very proud of that contract of course.” In order to serve local clients more responsively the company has invested in two major workshops and maintenance centres specifically to serve the Middle East, one of which is in Abu Dhabi, the other in Saudi Arabia. “In terms of innovation I would say there is a clear trend towards adopting online diagnostics. Our clients are driving this as they migrate more towards preventative maintenance. They want to be more aware of the valve health before any failure, and also move towards a generally safer installation,” explains Leledy.

June 2010 Oil&Gas Middle East

VALVES MARKET SURVEY

CONTROL SEAL VALVES Michael Bovey, regional manger, Middle dle East of Dutch firm Control Seal Valves says further downstream there is a growing need for perfect seal valves, and as long as the regionâ&#x20AC;&#x2122;s hydrocarbon processing, storage and transfer projects keep going ahead, there is a promising market in the region. Which Middle Eastern countries dominate your revenue stream?

The Middle East is an area that has been growing in importance for us over the last few years. It is hard to say which country has dominated our revenue stream as our products are quite application specific so quite project reliant. This said Saudi Arabia is quite a consistent market for our expanding plug double block and bleed valves which typically are used on fiscal metering systems, in tank farms and jetty loading facilities for liquid hydrocarbons. Iran for our Rising Stem Ball Valve has remained strong with the amount of LNG plants in country. Others that remain high on the list are the U.A.E, Qatar, and Oman.

age and exposure in the market place. As a company we strongly believe that product service, after sales support and onsite training are an important part of our growth strategy

tracts but also by contracts be- rising stem ball valves are used ing let through overseas EPC in gas applications with high concentrations of both carbon companies dioxide and hydrogen sulphide.

Was the market impacted much by project slow downs?

We perhaps are fortunate as our products fall into a very niche sector where there are less competitors than in the wider valve industry. This said there are of course far less valves of our type bought numerically. So long as there are gas processing plants, liquid hydrocarbon facilities and custody transfer opportunities we remain buoyant. The Middle East has many such opportunities both currently and anticipated for many years to come.

We like so many companies that are reliant on the hydrocarbons industry have been through slower times but with the investment generally in our industry we are very positive for the future. Indeed, we are anticipating at least a 50% growth over the previous period. Could you put this yearâ&#x20AC;&#x2122;s market into context? 2010 from a

Middle East perspective we are sure will yield a record year as a final destination for our products. This is being driven by locally based con-

How is the Middle East faring in comparison to other markets?

Without being name specific, we can say that recently we have supplied the critical Molecular Sieve Switching Valves to 2 projects in Syria, a couple in Iran, a significant project in Qatar and are working on several good opportunities in other regions. With our Double Block and Bleed valves we are currently executing an airport expansion project for the safe handling of Aviation fuel and many fiscal metering projects for the region. The expansion of tank farms Do you and storage facilities is also an have valves in your important part of our business inventory which are activities.

able to cope H2S rich content?

Yes we do. A very large proportion of our single seated

How important is the Middle East to your company?

The Region is very important for us which is one of the reasons we have an increasing cover-

Oil&Gas Middle East June 2010

What key markets are you currently seeing success in?

Michael Bovey, regional manger, Control Seal Valves

Do you have a strategy in place to tackle the market in Iraq?

Control Seal Valves are currently supplying our Double Block and Bleed valves to Iraq into the Basra area and expect this activity to increase. We are currently not bidding to any major EPC companies but feel confident that there will be, in time, great opportunities as the majors start to let contracts and as the rebuilding of existing operations continues in Iraq.

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VALVES MARKET SURVEY

Top entry 48’’ valves ready for shipment

VALVITALIA Pierluigi Davico, area sales manager and operation manager for Valvitalia says specialist valves for tougher environments give the company a sales edge in an ever-more challenging Middle Eastern market “Valvitalia has a strong consolidate presence in UAE, Saudi Arabia, Iran, Iraq, Kuwait, Qatar and Oman. The middle east market is extremely important for Valvitalia, in the last few years 40% of the total revenue has been generated by our bookings in gulf countries. Davico says the market impacted was definitely impacted by project slow downs in the Middle East, but a robust portfolio has helped the company ride out a difficult period in relative comfort. “The Valvitalia Group is manufacturer of: all types of on off valves, control valves, safety valves, all type of actuators, filters & heat exchangers, oil and gas metering stations & regulations, pip-

Oil&Gas Middle East June 2010

ing fittings and flanges. Basically we were not affected by the project slow downs, because Valvitalia Group is the sole manufacturer worldwide for such a huge range of products and this uniqueness can grant us continuity of business and the fact that we supply to nearly 80 countries worldwide compensated any areas affected by project delays.” Regional valves sales 20062008 were astronomical for most major providers, and whilst that gloss may not yet be back on the horizon, the latter stages of 2010 will year’s figures look to be back on the rise. “The second part of this year will very promising for us because a lot of large projects have been

awarded and we are working in order to obtain the maximum share,” explains Davico. Even in a tough 2009, and heading through into 2011 Davico says the Middle East is a key foothold for the Valvitalia Group.”This region continues to be our principal market and we foresee 2010 to be yet another success for Valvitalia Group. The local market is very selective and at the moment, there

are no important local producers in the gulf able to supply the special products required by the local clients, although we can see the early signs of increased competition from Far East producers.” As the Middle East looks to developing its increasingly sour oil and gas, higher spec equipment will separate market leaders from those which cannot meet the challenge, says Dav-

IRAQ ORDERS BECKON Valvitalia is already working extensively on Iraqi projects and is introduced with all the main customers. “We are currently executing many orders for SCOP for valves and fittings and over the next two years we believe Iraqi projects will account on over 20% of the total Valvitalia business share in the Middle East,” says Davico.

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VALVES MARKET SURVEY

Pierluigi Davico, area sales manager and operation manager, Valvitalia.

ico. “Valvitalia is leader in the manufacturing of special valves for sour service, high pressure and H2S rich content, we already have dedicated products and a team of people focused on this special market.” The company has recently worked on several major regional projects, including the Abu Dhabi Crude Oil Pipeline Project (ADCOP) where Valvitalia supplied all the mainline 48” ball valves, actuators, station ball and gate valves, station surge relief skids and all the fittings and flanges – across the entire project. “We also worked on the Dolphin Taweelah – Fujairah Project supplying on off valves, control valves, actuators and fittings; we worked on the GCS Expansion Project with Dubai Supply

Authority supplying all the on off valves; on the Halul Project with Qatar Petroleum supplying all the gate valves, on the Karan and Manifa projects with Saudi Aramco providing on shore and subsea valves and actuators,” beams Davico. In terms of technical developments, the most significant change to the valves sold to the oil and gas business have been driven by material selection. “We realised that the most significant changes are applicable to the selection of the materials; since the majority of the projects require components able to perform in sour service and aggressive conditions, every year we are supplying more valves manufactured using exotic materials and cladding technologies,” he concludes.

ISO 9001 – 2000 & ISO 29000 – 2007 Certiﬁed.

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June 2010 Oil&Gas Middle East

VALVES MARKET SURVEY

NOV ANSON Deeb Deeb, director- sales & operation, Middle East, North Africa & SE Asia, National Oilwell Varco, Mission Products says that the buyout of Anson valves just over a year ago was a good fit for National Oilwell Varco. “Anson was a great buy for NOV because it is a good

Deeb Deeb, director- sales & operation, MENA & SE Asia, NOV.

Oil&Gas Middle East June 2010

product with a fantastic reputation in the market. We offer is a range of high pressure flow lines equipments. The NOV Anson E Type Through Conduit Gate Valve has been developed to satisfy the need for a high quality, high specification valve which is reliable and reasonably priced. We make full use of modern materials and manufacturing techniques. The valve is robust, easy to maintain, which is what our clients want,” says Deeb. “The initial cost of our upstream valves is very competitive, but the longer term cost saving resulting from robustness, and low cost of spares, we think, makes it the most cost effective valve on the market today.” Deeb says Saudi Arabia is the company’s biggest Middle East market for volume and revenues, followed by Kuwait. “The part of Mission I work for mainly deals with

drilling and well services. This means we work closely with KDC, Burgan, and Weatherford as major customers.” Deeb says that after the acquisition of the Anson brand the NOV Mission products division has embarked upon an aggressive growth plan. “The market won’t accommodate our targets by growing this year, so growing our market share is definitely our goal. That said, the market is better than last year. Getting closer to the client is a key part of growing that business. To facilitate better support services Deeb says the company will have a new edge, and better flexibility when their modular service centres arrive. “Right now we are extending our existing facility in Jebel Ali Freezone. We have plans to open new locations across the region for service and rental support. On top of this an interesting

project we have right now is our new service containers. These are essentially mobile service centres, which come as a pair of converted 20 ft shipping containers. One is a workshop and small office, and the second is the test bay,” says Deeb. “We can send these direct to the oilfield where they carry out the service and pressure testing in the field, and they can carry out most functions including issuing certification, so the customer doesn’t have to ship equipment to any workshops.” The units are being built in the US, and the first set will be ready for shipment in June. “We have already had some enquiries from interested parties in Kuwait, Saudi Arabia and Egypt. We also have plans to roll out a new service workshop in KSA, in addition to the service containers.” Deeb is excited about initial client feedback. “I think it will be very popular. I expect at least four sets here before the end of 2010. Appetite in the market is encouraging. It’s not a revolutionary concept, but the flexibility and service capabilities I think will be unparalleled.”

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MIS SPECIAL REPORT

BILLION DOLLAR VISION

Oil&Gas Middle East June 2010

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MIS SPECIAL REPORT

Kevin Hudson, group managing director of Sharjah’s MIS, says the opportunity pipeline in the Middle East is as exciting as ever. stablished in the Middle East back in 1979, Maritime Industrial Services Co (MIS) has seen its fair share of the industry’s peaks and troughs. Emerging from tight times has always been challenging for the upstream industry’s engineering and fabricating firms. However, Kevin Hudson, the man at the helm of MIS as group managing director, is in good spirits - not only is the company hitting new highs in terms of the projects it is taking on and delivering, it is actually in great financial shape too. “People, certainly in the oil and gas business, have a tendency to talk themselves into submission when times are tough. What I see at the moment is a great portfolio of newbuild rigs being delivered, a company first, and a market brimming with opportunity again,” he says confidently. In the run up to the financial crisis and accompanying oil price nosedive, Hudson asserts that the company had put itself in an extremely strong position to not only weather the storm, but also to come out fighting when activity picked up. Hudson joined MIS in early 2009, just as regional activity

and upstream investment began to teeter on what many feared was an industry-wide precipice. “In 2008 and early 2009 the company managed to create quite a broad backlog of work. That meant we actually spent most of last year executing those key projects. Overall, considering what was going on elsewhere in the industry and the economy we had a pretty strong year,” asserts the chief executive. “We walked into 2009 with U$800 million worth of backlog orders and got busy with those. We posted record profits in 2009, and halved our debt position – so from a financial position it was actually a very good year.” Hudson says the early signs are there that the industry has turned, or is turning a corner, in terms of upstream project investment. “Towards the end of last year we saw activity picking up. You get a fairly accurate feel for the industry and which direction its heading from the volume of enquiries coming in. People have been placing orders at an increased rate – particularly in this region.” There is no question that for companies in the project EPC business, both onshore and off-

“Performance isn’t just tangible based on finishing on time and on budget, it’s also very much about client feel. It may have been a difficult job, so feeling that he got value for money is vital”

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shore, margins across the board have been squeezed extremely tight. Hudson says that though material costs come down, they come down for everybody, so a level playing field has forced competition to address what margins are acceptable, without compromising on other core values. “What firms can compete on is quality, reputation and price. With price in mind, it’s worth noting that the National Oil Companies here have been incredibly smart. They have definitely taken advantage of a down market to place large contracts at a discounted price. It’s been very good business for those Nationals which have maintained some forward momentum.” Hudson says that upstream project managers actually represent a small community, in terms of clients. “Performance

Kevin Hudson, group managing director, MIS

June 2010 Oil&Gas Middle East

MIS SPECIAL REPORT

is very important. If you have a reputation for not performing it doesn’t matter how cheap your price is you will simply be written off as unreliable. Performance isn’t just tangible based on finishing on time and on budget, it’s also very much about client feel. It may have been a difficult job, so feeling that he got value for money is vital.”

ORDER BOOK In March, Hudson was able to announce a US$55.4 million contract with Abu Dhabi’s National Drilling Company (NDC) for the refurbishment of jack-up drilling rig NDC Al Bzoom. The contract, which is MIS’ high-

est contract to date in its refurbishment value stream, will cover the Rig Integrity Assurance Programme (RIAP) as its base scope for the modification and refurbishment work on the rig. The signing ceremony attracted special attention as it was held under the patronage of His Excellency, Mr. Abdalla Nasser Al Suwaidi, chairman of NDC, and Abu Dhabi National Oil Company (ADNOC) deputy CEO and exploration & production director, with the contract being signed by Mr. Abdalla Saeed Al Suwaidi, NDC’s general manager. The company had extra reason for good cheer when Al

The Sharjah yard is bustling with activity for various jack-up rig owners,

Oil&Gas Middle East June 2010

Suwaidi confirmed more work would be coming their way. “We enjoy a solid business association with MIS. This is not the first time that NDC contracts MIS for its specialised rig refurbishment works, nor will it be the last time,” said Mr. Abdalla Al Suwaidi at the signing ceremony. “We look forward to a continued strong relationship with MIS.” Rig NDC Al Bzoom, which is a Baker Marine BMC- 150-IC design with a rated water depth capacity of 110 ft and drilling depth of 18,000 ft., will be used to drill oil wells in Abu Dhabi’s offshore fields upon completion. A month earlier, in February, the

MIS-built KS Endeavor, a Friede & Goldman Super M2 design, is MIS’ and the third new build offshore jack up drilling rig from the Sharjah company was delivered, marking something of a milestone for Hudson. “The experience we gained on Hulls 104 and 105 helped MIS in the final stages of the KS Endeavor’s progress, although we faced a few challenges during the process. We were particularly pleased with this achievement and the delivery of the rig on schedule,” he says.

BROAD BASE Whilst the lion’s share of attention which MIS has drawn in

Inside the power plant room of the KS Endeavour.

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MIS SPECIAL REPORT

View from the drill floor from the control room aboard the freshly handed-over KS Endeavour. 2009 and 2010 has been derived from its offshore, and notably jack-up business lines, Hudson is keen to assert that the company has much more to offer, and its broader project scope has been key to building the backlog of orders it has today. “We span quite an arc throughout the upstream industry. We’re not solely dependent on jack-up rigs, and that is one of the company’s strengths which has seen us perform solidly. Our client base in international although we are MENA based. We get orders from EPC contractors, which, for example could be Petrofac, but it could equally be Technip which is based in France.” Outside the jack-up business the company’s engineering strengths have enabled

it to enter and execute markets across the Gulf, and EPC projects in the $50 million range are not unusual. “In 2009 we completed a heavy fuel oil bunkering facility in Qatar. We’ve handled aviation fuel lines in Sharjah and various tank farm projects in the region, and even some desalination project work. Our EPC work spans a wide energy remit, and geographically straddles the whole MENA region,” asserts Hudson. The company has traditionally been more involved in brownfield EPC work than region’s greenfield projects. “We will take on the full EPC risk, but because its brownfield it tends to be inside an existing facility, and covers conversion or additional work. Within

the UAE, to date that has been dominated by the Northern Emirates rather than Abu Dhabi, but that is our next big push strategically.” In Kuwait MIS has an operation which is focused principally on mud systems for land rigs, an area of the company which Hudson says has grown satisfactorily. “Our Kuwait business is part of a joint venture with the Burgan Company.” Burgan has a relationship spanning almost 40 years with KOC and its parent, Kuwait Petroleum Corporation, and Hudson says it is certainly a useful ally in the Northern Gulf.

NEW OPPORTUNITIES The company already has a sour gas detection division, Sunbelt, operating in Erbil, Iraq, but

BREAKING NEWS: DISPUTE RESOLUTION As Oil & Gas Middle East was going top press it was announced that MIS has signed an agreement with Mosvold Middle East Jackup Ltd (MEJU) to settle the contractual dispute that began in August 2009 and which has since then been the subject of arbitration. The agreement is will see MEJU enter into a new contract with MIS for the construction and delivery of Hull 106 for a total price of $160 million. The new contract represents $100.5 million in cash, originally paid by MEJU as an advance payment on Hulls 106 and 108, will be reassigned wholly to Hull 106. Additionally $30 million will be paid in cash on the date that the agreement becomes effective (the “effective date”), which is expected to be in July 2010. The balance will be paid on delivery, or, at MEJU’s option and subject to interest and an arrangement fee, by no later than 30th June 2011. The rig will remain in MIS’ possession until all sums due under the new contract are paid. On the effective date both parties will withdraw all claims and counterclaims under the existing agreements that relate to Hulls 106 and 108 and the arbitration and any related legal action will formally cease. MEJU will transfer to MIS unencumbered beneficial and legal title in Hull 108, which MIS will complete for its own account.MIS is in discussion with potential partners with a view to the provision of any necessary operational and financial support.

June 2010 Oil&Gas Middle East

MIS SPECIAL REPORT

Hudson hopes that the demand for land rigs and land rig services will soon pick up, and the scope of project work there is a tempting proposition. “Iraq is certainly promising. I think drilling work in Iraq has to start fairly soon, but we just don’t know enough to talk specific timetables just yet. Sunbelt’s business tends to be a front runner with new areas for MIS and then we go in and build on the relationships they make, so you could say we have laid the ground work in Iraq.” MIS does not yet engineer and furnish complete land rigs from new, but the prospect of a vibrant onshore market has pushed it onto the company’s agenda, reveals the CEO. “For land rigs, what we have done to date is rehabilitate, refurbish and install new systems on existing rigs, but we are moving up that value chain right now. It’s not just Iraq, we see that Kuwait and Saudi Arabia both have a push on for land rigs, but of course Iraq will definitely will have a major drive, so the demand pipeline for land rigs in this region looks very healthy right now.” “We have a facility in Saudi

Arabia. It’s a joint venture company of which we hold 30% and that’s been up and running for around six years now and is doing very well. It just won the biggest ever pressure vessel order that’s been awarded in the Kingdom.”

NEW HORIZONS Offshore EPC contractors across the world have been waking up to an alternate use of their talents in recent months. As global governments seek to reduce their reliance on carbon-based energy, offshore wind farm licenses have been popping up in littoral waters the world over. The latest round of concessions in Europe has prompted a spate of wind farm installation vessel contracts which are currently up for grabs. “We are actively tendering for that wind farm installation work right now, and we expect that business stream to be cyclical in nature, largely based on the projected volume of work coming out of the European license rounds.” Essentially the marine and jacking structures are very similar to traditional drilling rigs, but the installation equipment is

KS ENDEAVOUR – FEB DELIVERY Maritime Industrial Services delivered the jack-up rig “KS Endeavor” (Hull 107), from its client, KSAM2 Petrodrill Offshore within its scheduled contract delivery date in February 2010. KSAM 2 Petrodrill Offshore is a joint venture company led by Singaporebased KS Energy Services Ltd., Saudi-based Amwal Al Khaleej and MIS. The “KS Endeavor”, a Friede & Goldman Super M2 design, is MIS’ third new build offshore jack up drilling rig to be delivered and as such has benefited from the learning curve on the first two SeaWolf rigs. “The experience we gained on Hulls 104 and 105 helped MIS in the final stages of the KS Endeavor’s progress, although we faced a few challenges during the process. Today, we are pleased with this achievement and the delivery of the rig on schedule,” MIS group managing director Kevin Hudson said at the time. The Port Khalid yard in Sharjah is a hive of maintenance and refurb activity.

Oil&Gas Middle East June 2010

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MIS SPECIAL REPORT

very client dependent. “Increasingly we are seeing more complex installation equipment being proposed, but in many ways that is similar to the drilling packages on drilling rigs, because that configuration is totally client dependent too.”

FUTURE SCOPE

Looking ahead, Hudson says that although timeframes have shifted from when he first arrived, his ultimate goal has not changed. “MIS has the potential to be a billion dollar company by 2013 or 2014. We have built an expertise in newbuild and our

reputation in terms of refurbishment work has grown over the course of the last 18 months.” He says to that end the company is facing a massive opportunity in terms of regional activity expectations. “It’s about timing. A lot of big

“What I see at the moment is a great portfolio of newbuild rigs being delivered, a company first, and a market brimming with opportunity again”

jobs have been awarded on very tight budgets. There is still lots more work in the Middle East to come. Perhaps the pot isn’t as big, but I think there is a niche opportunity out there today because other yards will be busy with lower margin work accepted at the low point in the cycle.” Now that oil has settled around the $80 mark, and OPEC predictions of demand increases are back on the table, MIS may indeed be well placed to step into the fray just as project prices begin their cyclical climb north again.

Hudson says he is proud of much that much has been achieved since he came on board in 2009. Whilst it is easy to look to the numbers, he stresses that one of the most successful initiatives introduced under his stewardship has actually been to drive through a rethink of HR and talent management. “One of our values is people. Like ‘safety’ a lot of people say it but not a lot of people mean it. One of the things I am most proud of is building a capable and competent workforce so that we are not constantly going to the open market for our talent,” he says. One of the tools created to this end has been a partnership with the American University of Sharjah. “With them we developed an executive development Inside the KS Endeavour. Finishing touches are put to the jack-up rig as testing begins by the owners. course. Our third batch of graduates has just completed the course, and it’s a great way to keep people developing.” In addition to the development programme, Hudson has brought in a to boost productivity throughout the organisation. “Every salaried individual within the company works with a scorecard target system which has been extremely interesting. This rewards performance and we actually paid out over $3 million in bonuses based on people hitting personal targets – that’s not for management – that’s for every individual in the organisation,” beams the CEO. Blast-proof windows offer a view of the drilling package and the Arabian Gulf out to the right.

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June 2010 Oil&Gas Middle East

TECHNICAL FOCUS Removing mercaptins and H2S is a growing concern for many producers.

Sulphur’s new enemy Revolutionary water-based H2S removal system will generate huge savings for oil firms hipping of oil and gas liquids around the region and the world is hazardous at the best of times. Add to that Mercaptan levels of 500-1000ppm plus and similar levels of H2S (Hydrogen Sulfide) and you have a product that needs processing before sale. Higher H2S content and high levels of produced water are inevitable consequences facing most of the region’s major oil companies.

David Snodgrass of No Heat Resources.

Oil&Gas Middle East June 2010

The presence of H2S in hydrocarbons poses three major, and expensive, challenges to the

region’s entire hydrocarbon value chain, from drilling and production, through to the refining, shipping and trading firms. Firstly, from a safety perspective contact with H2S in gas form is toxic, and at certain concentrations deadly. Secondly the compound is so corrosive it can degrade and destroy installations and process equipment at an alarming rate. Thirdly, high levels of mercaptans and Hydrogen Sulfide reduces an end product’s value. No Heat Resources is bringing a new weapon to the oil and gas trader’s armoury to reduce the processing and time required for the removal of mercaptans and H2S and one which is revo-

lutionary in the potential impact it could have for it’s adopters in the Middle East, explains David Snodgrass, managing director of No Heat Resources Middle East. “We’re bringing new technology from Asia called HydraScav which is a targeted additive for H2S and mercaptan removal in a single process. It’s a water-based product which has significant implications for companies shipping liquids with non-specification levels of mercaptans and H2S,” he says. HydraScav is not a Triazene based scavenger for treating H2S, and there is no requirement for caustic washing to deal with the mercaptans, instead it is a blend made from inorganic compounds

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TECHNICAL FOCUS

that form an aqueous solution. It is extremely fast acting and converts Hydrogen Sulfide (H2S) and Mercaptans into sulfate salt in water. The result is water and soluable sulfate salt that is non hazardous with a very low Chemical Oxygen Demand (COD). The reaction is stable and nonreversible. HydraScav is effective in water, gas, condensate, crude and naptha. “HydraScav drastically reduces the amount of chemicals operators and traders require and most importantly, costs. The reaction with the hydrogen sulphide and Mercaptans is non-reversible, noncorrosive and instant. The required injection rate with HydraScav is a fraction of our competitors,” explains Snodgrass. The H2S is converted instantly to a non-hazardous salt in water that is easily disposed of. The reaction is instant and irreversible and has no effect on oil, gas or fuel quality. HydraScav can be pumped into a discharge line under pressure as a cargo leave the vessel and with good contact, HydraScav will react instantly with both the Mercaptans and the H2S and will keep reacting as long as the liquids are circulating. “HydraScav is also very used in normal production as a production scavenger or H2S remover and can be used anywhere in the production process from the well head to the flare tip, including pipelines, and is compatible with most production fluids. HydraScav can be pumped into a gas pipeline under pressure, where it encapsulates the H2S and drops it into the water phase, where it then separates out. It stays in the water but has been rendered safe by the process, so it can be reinjected downhole or pumped to a dehydration pit,” explains Snodgrass.

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No Heat is working with several Middle Eastern oil and gas companies to reduce the H2S in the production or formation water, leading to save H2S free disposal. Rival chemicals to the No Heat’s product are abundant and cheap to produce, but as companies move towards being more environmentally sensitive, and conscious of what damage the toxic chemicals they produce do, Snodgrass says the cleaner, greener solution is vastly more appealing. New refining and processing facilities tend to be built with Sulphur Recovery Units which remove the H2S, but often oil and gas companies just want to quickly and safely get rid of the H2S. “Their primary task is producing oil and gas, and they don’t necessarily want to get into the sulphur retail business, although it can be a profitable bi-product,” says Snodgrass. HydraScav’s environmental credentials are not limited to general good health, safety and environmental practices, but with no emulsions or bi-products, disposal costs and problems associated with some caustic products. HydraScav is an attractive option. As towns and cities in the region expand and distances to upstream facilities are cut, early and safe removal of H2S from oil and gas production and storage facilities is more vital than ever. “The bottom line is that for clients the savings are significant, but it’s difficult to change established and proven practices in the oil and gas industry. We are excited to introduce our technology and guide people’s perceptions of what can be done to treat and eradicate H2S and mercaptans in the energy business,” he concludes. For a fuller exploration of the H2S and mercaptins removal system visit ArabianOilandGas.com

Removing sulphur from flared gas is a major challenge to local operators.

June 2010 Oil&Gas Middle East

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

Oil & Gas Pipelines at Mina Al Ahmadi

KOC

Not Appointed

2000

EPC Bid

Crude Oil Transit Line (TL4)

KOC

Not Appointed

280

EPC Bid

Booster Station 171

KOC

Not Appointed

800

EPC Bid

Gathering Center 16 in West Kuwait

KOC

Not Appointed

750

EPC Bid

Early Production Facilities- Phase 2

KOC / Processes Unlimited

Abdulaziz Abdulmohsin Al Rashed Sons Company

117

Execution

Crude Oil Flow Pipeline

KOC

Combined Group Contracting Company

135

Execution

Pilot Water Injection Plant at Dharif Marrat Oil Field in West Kuwait

KOC

Not Appointed

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)

Execution

Crude Oil Flow Pipelines in North Kuwait

KOC

Not Appointed

110

EPC Bid

KUWAIT

Fluor Corporation

AMEC, Kuwait

Sulphur Handling Facilities at Mina al-Ahmadi

KNPC

Not Appointed

132

FEED

Crude Oil Export Pipelines at Gathering Center 16 and Water Flowlines at Minagish

KOC

Thyssenkrupp (Germany)

Combined Group Contracting Company

Execution

LPG Filling Plant at Umm Alaish

KOTC

Not Appointed

100

EPC Bid

Mina Al Ahmadi Refinery Upgrade - Phase 1

KPC

Almeer Techical Services Company/ Flour Corporation

140

Execution

KOC Facilities at Kuwait's Key Oil Fields

KOC

National Petroleum Services Company (Napesco)/ Halliburton

206

Execution

Maintenance & Repair of Pipelines

KOC

O & G General Engineering & Contracting

Execution

Mechanical Maintenance Works for Shuaiba Refinery

KNPC

Not Appointed

150

EPC Bid

New Acid Gas Removal Plant in Mina Al Ahmadi Refinery

KNPC

Worley Parsons

Not Appointed

522

EPC Bid

Gas Booster Station 160

KOC

AMEC, Kuwait

Snamprogetti Kuwait

649

Execution

Pipeline from Shuaiba North to Mina Abdulla

Ministry of Energy

Not Appointed

FEED

Jurassic Early Production Facility (EPF)

KOC

Not Appointed

1500

EPC Bid

Booster Station 132

KOC

SK Engineering & Construction, Kuwait

724

Execution

Fourth Gas and Condensate Train at Mina al-Ahmadi Refinery

KNPC

Not Appointed

679

EPC Bid

Upgrade of South Ghudair Gathering Centre

KOC / Saudi Arabia Texaco (SAT)

Arabi Enertech

Execution

Maintenance of Oil Production Facilities in West Kuwait

KOC

Not Appointed

161

EPC Bid

Fifth Gas Fractionation Train at Mina al-Ahmadi

KNPC

Not Appointed

888

EPC Bid

Gathering Center 14 in the South East

KOC

Almeer Technical Services

Execution

Fluor Corporation

OMAN Project Title

Client

EPC Contractor

Budget ($M)

Status

Fuel tank at Mina Al Fahal Refinery

ORPC

Daewoo Engineering & Construction,Oman

Execution

Propane Recovery Unit at Mina Al-Fahal Refinery

ORPC

Not Appointed

Feed

Upgradation of Refinery at Mina al-Fahl

ORPC

Not Appointed

EPC Bid

www.arabianoilandgas.com

Consultant

June 2010 Oil&Gas Middle East

PROJECTS Project Title

Client

Sea Water Supply at Sohar Refinery

ORPC

Duqm Refinery & Petrochemical Complex

ORPC

Oil Exploration in Blocks 3 & 4

CCED /Tethys Oil (Oman) Ltd

Gas Compressor Station at the Nimr field

Oman Gas Company

Octal Petrochemical Project at Salalah Free Zone

Octal Holding

Consultant

Not appointed

EPC Contractor

Budget ($M)

Status

Not Appointed

EPC Bid

Not Appointed

7000

Study

CCED

100

Execution

Tecnicas Reunidas / Worley Parsons

Galfar Engineering & Contracting, Oman

Execution

Uhde

National Construction & Trading Co. LLC (NCTC)

700

Execution

Kauther Gas Compression Project

PDO

Petrofac International, Oman

350

Execution

PTA Plant at Sohar Port

Oman Oil Company (OCC)/ JBF Industries Ltd.

Not Appointed

680

Study

Crude Oil Stabilisation Unit at Mukhaizna

Occidental Mukhaizna

Not Appointed

100

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

Execution

Marmul Central Development - Phase 3

Petroleum Development Oman (PDO)

Gulf Petrochemicals Services, Oman

Execution

Qarn Alam EOR Project - Off-plot Package

PDO

Galfar Engg. & Cont.

139

Execution

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 and Processing Plant in Musandum

Oman Oil Company (OCC)

Not Appointed

500

EPC Bid

Harweel Cluster Phase - 2

PDO

AMEC

Petrofac International / Galfar Engineering & Contracting

960

Execution

Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Petrochemical Complex at Ras Laffan

QP/Total

Not Appointed

3000

Concept

Low-Sulphur Condensate Storage Facility at Ras Laffan

Dolphin Energy Limited, Qatar

Qatar Engineering & Construction Company

212

Execution

QATAR

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

Oil&Gas Middle East June 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

PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Jetty Boil-Off Gas Recovery Project

Qatargas

Fluor Corporation, Abu Dhabi

Fluor Corporation

800

Execution

Block 4 North

Qatar Petroleum/Anadarko

Not Appointed

Wintershall, Germany

150

Execution

Acid Gas Removal Plant in Dukhan

Qatar Petroleum (QP)

Technip, Qatar

Petrofac International

350

Execution

Melamine Project at Mesaieed

Qatar Melamine Co.

Eurotecnica/Urea Casale

QECC

250

Execution

Petrochemical Complex at Ras Laffan

QP /ExxonMobil Corporation

Not Appointed

Oily Water Effluent Pipeline in Dukhan Field

Qatar Petroleum (QP)

Oryx GTL - Phase 2

QP/Sasol/Chevron

Gas Pipeline Network within Ras Laffan Industrial City

Qatar Petroleum

Mott MacDonald Qatar

Q-Chem 2

Qatar Chemical Company (Q-Chem)

Aker Kvaerner,Qatar

Condensate Refinery at Ras Laffan - Phase 2

Laffan Refinery Company

Pearl GTL Project - Package C4

QP / Royal Dutch/ Shell

Halliburton /JGC Corporation

Barzan North Field Development

ExxonMobil Corporation/Qatar Petroleum (QP)

Chiyoda Corporation/J Ray McDermott

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

Chiyoda/Technip

1200

Execution

QVC Expansion Project

QVC

Not Appointed

31 -100

Study

Oxygen & Nitrogen Production Unit at Ras Laffan

Gasal

Air Liquide Engineering

Execution

Nitrogen Pipeline Network at Ras Laffan

Gasal

Black Cat Engineering & Construction

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

TSE Pipeline from STP to Dukhan

Qatar Petroleum (QP)

Petroserv Limited

Execution

Pearl GTL Project - Pipelines Package

QP / Royal Dutch / Shell

J Ray McDermott

150

Execution

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

South Field Development

Qatar Petroleum Development Company (QPD)

National Petroleum Construction Company (NPCC)

Exectution

Qafco V

Qafco

Saipem/ Hyundai Engineering & Construction Co

3200

Execution

Maintenance on Platforms at Measieed Refinery

Qatar Petroleum (QP)

Not Appointed

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

Pearl GTL Project - Package C5

QP / Royal Dutch / Shell

JGC Corporation / Halliburton

Toyo Engineering Corp. / Hyundai Engineering & Construction Company

1480

Execution

JGC Corporation / Halliburton

Worley Parsons

Not Appointed

3000

Concept

Galfar Al Misnad Engineering & Contracting

Execution

Not Appointed

1400

Study

Larsen & Toubro, Qatar

117

Execution

Daewoo Engineering & Construction, Qatar

700

Execution

Not Appointed

800

Study

Chiyoda Corporation / HHI Company

1750

Execution

Not Appointed

8000

EPC Bid

Gas Sweetening Facilities Integrated Project at Mesaieed

Qatar Petroleum

Worley Parsons

Petrofac International

350

Execution

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

EPC Contractor

Budget ($M)

Status

Safaniyah Offshore Infrastructure

Saudi Aramco

J Ray McDermott

1000

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

Execution

Yanbu Export Refinery - Coker Unit Package

Saudi Aramco / ConocoPhilips

Kellogg Brown & Root (KBR), Saudi Arabia

Shabab-2 Oil Pipeline Project

Saudi Aramco

Caustic Chlorine / Ethylene Dichloride Factory in Jubail

Arabian Chlor Vinyl Company /Maaden /Sahara Petrochemical Company (Al Waha)

SAUDI ARABIA

www.arabianoilandgas.com

CMAI Consulting Company

Not Appointed

1200

EPC Bid

Stroytransgaz

200

Execution

Daelim Industrial Company,Saudi Arabia

400

Execution

June 2010 Oil&Gas Middle East

PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

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

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

Sasref Refinery - Jubail Sulphur Treatment Unit

Saudi Aramco Shell Refinery Company (Sasref)

CBI Lummus in Middle East

JGC Corporation,SaudiArabia

350

Execution

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

Yanbu Export Refinery-Offsites & Utilities-Package 8

Saudi Aramco/ ConocoPhilips

Kellogg Brown & Root (KBR), Saudi Arabia

Not Appointed

125

EPC Bid

Wasea Bulk Plant

Saudi Aramco

Dar Al Riyadh Architecture & Engineering

Sinopec

250

Execution

Kayan Petrochemicals Complex at Jubail - Amines Package

Saudi Basic Industries Corporation (Sabic) Saudi Kayan Petrochemical Company

Fluor Arabia Ltd., Saudi Arabia

China Technical Consultants Incorporated(CTCI), Taiwan

300

Execution

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

Polysilicon Plant in Jubail

First Energy Bank/ Cosmos Industrial Investment Corporation/PMD

Not Appointed

1200

FEED

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

JGC Corporation

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Oil&Gas Middle East June 2010

MAINTENANCE

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SERVICE

www.arabianoilandgas.com

PROJECTS Project Title

Client

Consultant

EPC Contractor

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.

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

Study

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

EPC Bid

Yanbu Export Refinery - Hydrocracker Package

Saudi Aramco/ConocoPhilips

Not Appointed

1200

EPC Bid

Jubail-2 Export Refinery - Storage Tank Package

Saudi Aramco / Total

Technip, Saudi Arabia

Punj LIoyd Ltd / Petro Steel

1000

Execution

Karan Field Exploration - Offshore Elements Package

Saudi Aramco

Petrocon Arabia, Saudi Arabia

J Ray McDermott

1000

Execution

Parsons Engineering Corp.

Kellogg Brown & Root (KBR)

Budget ($M)

Status

Fertiliser Complex Expansion at Jubail - Urea & Ammonia Plant

Saudi Arabian Fertilizer Company (Safco)

Not Appointed

150

FEED

Dammam Oil Field Development

Saudi Aramco

Not Appointed

1000

Concept

Jubail - 2 Export Refinery - Plant Utilities Package

Saudi Aramco / Total

Technip

SK Engineering & Construction

150

Execution

Manifa Oil Field Redevelopment - Onshore Package

Saudi Aramco

Foster Wheeler

JGC Corporation / TR / Snamprogetti

2360

Execution

Yanbu Export Refinery - Offsite Pipelines Package

Saudi Aramco

Not Appointed

300

EPC Bid

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

Yanbu Export Refinery - Tank Farm - Package 5

Saudi Aramco/ ConocoPhilips

Kellogg Brown & Root (KBR), Saudi Arabia

Not Appointed

900

EPC Bid

Yanbu Export Refinery - Battery Limits and Solids Handling - Package 6

Saudi Aramco / ConocoPhilips

Kellogg Brown & Root (KBR), Saudi Arabia

Not Appointed

450

EPC Bid

Upgrade of the Oil Refinery at Yanbu

Samref

Worley Parsons, Saudi Arabia

2000

Execution

Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Replacement of Oil & Water Pipelines

Adma - Opco

Technip / Worley Parsons, Abu Dhabi

Costain

900

Execution

Borouge Complex Expansion - Phase 2: PE and PP Units

Abu Dhabi Polymers Co. (Borouge)

Fluor Corporation, Abu Dhabi

Tecnimont SpA, Abu Dhabi

1850

Execution

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

749

Study

Crude Oil Pipeline Replacement

Zadco

Not Appointed

300

EPC Bid

OGD-3/ AGD-2 - Pack 2

GASCO

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

EPC Bid

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

LNG Trains Replacement at Das Island

ADGAS

Not Appointed

3000

Study

Gas Pipeline from Nitrogen Plant to Habshan Oil Field

Gasco

Dodsal, Abu Dhabi

Execution

Sahil Phase-2 Development

ADCO

Tecnicas Reunidas / CCC

250

Execution

UNITED ARAB EMIRATES

www.arabianoilandgas.com

Foster Wheeler

June 2010 Oil&Gas Middle East

PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Onshore and offshore Sour Gas Development

ADNOC / ConocoPhilips

Fluor Corporation

Saipem / Samsung Engineering/ Tecnicas Reunidas/Punj Lloyd/Al Jaber Group

10000

Execution

IGD - Gas Processing Platform - Pack 6

Adnoc / Adma-Opco

Fluor Corporation Abu Dhabi

NPCC

405

Execution

Flowlines & Wellhead Installations to ADCO

ADCO

Mott MacDonald, Abu Dhabi

Al Husam General Contracting

100

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

CCC

400

Execution

OGD-3/ AGD-2 Pack 3

GASCO

Bechtel

1241

Execution

Borouge Complex Expansion - Phase 2: Ethane Cracker

AUH Polymers Company

Linde

1100

Execution

Development of Bab, Qusahwira & Bida Al-Qemzan Fields

ADCO

National Petroleum Construction Company

1800

Execution

Taweelah-Qidfa Gas Pipeline

DEL

Stroytransgaz, Abu Dhabi

418

Execution

Asab Gas Development (AGD) Modifications - Package 1

GASCO

Veco Engineering

Technip

408

Execution

Inter Refineries Pipeline Project at Ruwais - 2nd Stage - Pipeline

Abu Dhabi Oil Refinery Company (Takreer)

Technip, Abu Dhabi

Not Appointed

700

FEED

Borouge Complex Expansion - Phase 3 - LDPE Plant

Abu Dhabi Polymers Co. (Borouge)

Tecnimont SpA, Abu Dhabi

Not Appointed

500

EPC Bid

Washington Group International / Veco Engineering

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

PTA & PET Complex in Abu Dhabi

IPIC /CPC

Not Appointed

1000

Concept Stage

Borouge Complex Expansion - Third Polyolefin Plastics Project

Abu Dhabi Polymers Co. (Borouge)

Tecnimont SpA / Jacobs Engineering

Not Appointed

3000

EPC Bid

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

Daewoo Engineering & Construction Ltd.

1200

Execution

Sour Gas Development - Gas Processing Plant

Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;

Fluor Corporation, Abu Dhabi

Saipem

1900

Execution

Sour Gas Development - Sulphur Recovery Unit

Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;

Fluor Corporation, Abu Dhabi

Saipem

1450

Execution

Integrity Enhancement of Fire Protection System at Umm Al Nar Refinery

Takreer

Not Appointed

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

FEED

Expansion of Sulphur Handling Facility in Ruwais - Phase 3

Takreer

Washington Group Int'l

Dodsal

272

Execution

Sour Gas Development - Offsites & Utilities

Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;

Fluor Corporation, Abu Dhabi

Samsung

1500

Execution

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

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

Gas Injection Topsides at Upper Zakum

Zadco

Technip

Not Appointed

FEED

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

Oil&Gas Middle East June 2010

www.arabianoilandgas.com

RIG STATISTICS

Rigzone report on current rig contracts by operator

Information is supplied by RigZone.com

RED SEA Manager

Rig Type

Current Status

Current Region

Rig Name

Atwood Oceanics

Jackup

Drilling

MidEast - Red Sea

Atwood Aurora

Diamond Offshore

Jackup

Drilling

MidEast - Red Sea

Ocean Heritage

Diamond Offshore

Jackup

Workover

MidEast - Red Sea

Ocean Spur

Egyptian Drilling

Platform Rig

Drilling

MidEast - Red Sea

EDC 34

Egyptian Drilling

Jackup

Drilling

MidEast - Red Sea

Kamose

Egyptian Drilling

Jackup

Ready Stacked

MidEast - Red Sea

Zoser

KS Energy Services Ltd.

Jackup

Ready Stacked

MidEast - Red Sea

Bennevis

Maersk Drilling

Jackup

Drilling

MidEast - Red Sea

Maersk Endurer

Rowan

Jackup

Drilling

MidEast - Red Sea

JP Bussell

Saipem

Jackup

Ready Stacked

MidEast - Red Sea

Perro Negro 4

Seadrill Ltd

Jackup

Drilling

MidEast - Red Sea

West Prospero

Transocean Ltd.

Jackup

Drilling

MidEast - Red Sea

GSF Adriatic X

Transocean Ltd.

Jackup

Drilling

MidEast - Red Sea

GSF Key Singapore

Transocean Ltd.

Jackup

Cold Stacked

MidEast - Red Sea

GSF Rig 103

Transocean Ltd.

Jackup

Drilling

MidEast - Red Sea

GSF Rig 105

Transocean Ltd.

Jackup

Drilling

MidEast - Red Sea

GSF Rig 141

Transocean Ltd.

Jackup

Cold Stacked

MidEast - Red Sea

Interocean III

Transocean Ltd.

Jackup

Drilling

MidEast - Red Sea

Transocean Comet

Transocean Ltd.

Jackup

Cold Stacked

MidEast - Red Sea

Transocean Mercury

Transocean Ltd.

Jackup

Drilling

MidEast - Red Sea

Transocean Comet

Transocean Ltd.

Jackup

Cold Stacked

MidEast - Red Sea

Transocean Mercury

PERSIAN GULF Manager

Rig Type

Current Status

Current Region

Rig Name

Aban Offshore

Jackup

Drilling

MidEast - Persian Gulf

Aban VI

Aban Offshore

Jackup

Accommodation

MidEast - Persian Gulf

Aban VII

Aban Offshore

Jackup

Drilling

MidEast - Persian Gulf

Aban VIII

Aban Offshore

Jackup

Drilling

MidEast - Persian Gulf

Deep Driller 2

Aban Offshore

Jackup

Drilling

MidEast - Persian Gulf

Deep Driller 4

Aban Offshore

Jackup

Drilling

MidEast - Persian Gulf

Deep Driller 5

Aban Offshore

Jackup

Ready Stacked

MidEast - Persian Gulf

Deep Driller 6

Arabian Drilling

Jackup

Drilling

MidEast - Persian Gulf

Arabdrill 17

Arabian Drilling

Jackup

Ready Stacked

MidEast - Persian Gulf

Arabdrill 22

Arabian Drilling

Jackup

Drilling

MidEast - Persian Gulf

Arabdrill 30

Arabian Drilling

Jackup

Drilling

MidEast - Persian Gulf

Arabdrill 8

BassDrill Ltd.

Tender

Ready Stacked

MidEast - Persian Gulf

BassDrill Alpha

China Oilfield Services Ltd.

Jackup

Drilling

MidEast - Persian Gulf

COSLPower

China Oilfield Services Ltd.

Jackup

Drilling

MidEast - Persian Gulf

COSLStrike

Delba Perforadora Internacional S.A.

Semisub

Under Construction

MidEast - Persian Gulf

Delba III

Delba Perforadora Internacional S.A.

Semisub

Under Construction

MidEast - Persian Gulf

Delba IV

Egyptian Drilling

Jackup

Drilling

MidEast - Persian Gulf

Sneferu

ENSCO

Jackup

Drilling

MidEast - Persian Gulf

ENSCO 54

Oil&Gas Middle East June 2010

www.arabianbusiness.com

RIG STATISTICS

Manager

Rig Type

Current Status

Current Region

Rig Name

ENSCO

Jackup

Drilling

MidEast - Persian Gulf

ENSCO 76

ENSCO

Jackup

Cold Stacked

MidEast - Persian Gulf

ENSCO 84

ENSCO

Jackup

Drilling

MidEast - Persian Gulf

ENSCO 88

ENSCO

Jackup

Drilling

MidEast - Persian Gulf

ENSCO 94

ENSCO

Jackup

Drilling

MidEast - Persian Gulf

ENSCO 95

ENSCO

Jackup

Ready Stacked

MidEast - Persian Gulf

ENSCO 96

ENSCO

Jackup

Ready Stacked

MidEast - Persian Gulf

ENSCO 97

Foresight Group

Jackup

Drilling

MidEast - Persian Gulf

Foresight Driller 5

Foresight Group

Jackup

Cold Stacked

MidEast - Persian Gulf

Foresight Driller VII

Global Petro Tech

Jackup

Cold Stacked

MidEast - Persian Gulf

Global Pearl

Great Offshore

Jackup

Ready Stacked

MidEast - Persian Gulf

Amarnath

GSP

Jackup

Drilling

MidEast - Persian Gulf

GSP Atlas

GSP

Jackup

Inspection

MidEast - Persian Gulf

GSP Orizont

Gulf Drilling International

Jackup

Drilling

MidEast - Persian Gulf

Al Doha

Gulf Drilling International

Jackup

Drilling

MidEast - Persian Gulf

Al Khor

Gulf Drilling International

Jackup

Drilling

MidEast - Persian Gulf

Al Zubarah

Gulf Drilling International

Jackup

Modification

MidEast - Persian Gulf

GULF-2 (Al-Rayyan)

Gulf Drilling International

Jackup

Drilling

MidEast - Persian Gulf

GULF-3 (Al-Wajba)

Hercules Offshore

Jackup

Ready Stacked

MidEast - Persian Gulf

Hercules 170

Hercules Offshore

Jackup

Drilling

MidEast - Persian Gulf

Hercules 261

Hercules Offshore

Jackup

Drilling

MidEast - Persian Gulf

Hercules 262

Hercules Offshore

Jackup

Under Construction

MidEast - Persian Gulf

MENAdrill Hercules I

Hercules Offshore

Jackup

Under Construction

MidEast - Persian Gulf

MENAdrill Hercules II

Japan Drilling

Jackup

Drilling

MidEast - Persian Gulf

Sagadril 1

Japan Drilling

Jackup

Modification

MidEast - Persian Gulf

Sagadril 2

KS Energy Services Ltd.

Jackup

Ready Stacked

MidEast - Persian Gulf

KS Endeavor

Maersk Drilling

Jackup

Drilling

MidEast - Persian Gulf

Maersk Resilient

Mosvold Middle East Jackup

Jackup

Under Construction

MidEast - Persian Gulf

MEJU Jackup TBN 1

Mosvold Middle East Jackup

Jackup

Under Construction

MidEast - Persian Gulf

MEJU Jackup TBN 2

Nabors Offshore

Jackup

Drilling

MidEast - Persian Gulf

Nabors 240

Nabors Offshore

Jackup

Workover

MidEast - Persian Gulf

Nabors 655

Nabors Offshore

Jackup

Drilling

MidEast - Persian Gulf

Nabors 656

Nabors Offshore

Jackup

Drilling

MidEast - Persian Gulf

Nabors 657

Nabors Offshore

Jackup

Drilling

MidEast - Persian Gulf

Nabors 660

Nabors Offshore

Jackup

Ready Stacked

MidEast - Persian Gulf

Nabors 867

National Drilling

Jackup

Modification

MidEast - Persian Gulf

Al Bzoom

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Al Ghallan

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Al Hail

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Al Ittihad

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Al Yasat

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Beynouna

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Brakah

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Delma

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Diyina

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Junana

National Drilling

Jackup

Drilling

MidEast - Persian Gulf

Yemilah

Navymar Shipping Company

Jackup

Drilling

MidEast - Persian Gulf

Oriental 1

NIDC

Jackup

Drilling

MidEast - Persian Gulf

Alborz

NIDC

Jackup

Drilling

MidEast - Persian Gulf

Alvand

NIDC

Jackup

Modification

MidEast - Persian Gulf

Shahid Modarress

www.arabianbusiness.com

June 2010 Oil&Gas Middle East

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RIG STATISTICS

Manager

Rig Type

Current Status

Current Region

Rig Name

NIDC

Jackup

Drilling

MidEast - Persian Gulf

Shahid Rajaiee

Noble Drilling

Jackup

Ready Stacked

MidEast - Persian Gulf

Noble Charles Copeland

Noble Drilling

Jackup

Accommodation

MidEast - Persian Gulf

Noble Chuck Syring

Noble Drilling

Jackup

Modification

MidEast - Persian Gulf

Noble David Tinsley

Noble Drilling

Jackup

Drilling

MidEast - Persian Gulf

Noble Dhabi II

Noble Drilling

Jackup

Ready Stacked

MidEast - Persian Gulf

Noble Dick Favor

Noble Drilling

Jackup

Accommodation

MidEast - Persian Gulf

Noble Gene House

Noble Drilling

Jackup

Accommodation

MidEast - Persian Gulf

Noble Gus Androes

Noble Drilling

Jackup

Drilling

MidEast - Persian Gulf

Noble Harvey Duhaney

Noble Drilling

Jackup

Drilling

MidEast - Persian Gulf

Noble Jimmy Puckett

Noble Drilling

Jackup

Accommodation

MidEast - Persian Gulf

Noble Joe Beall

Noble Drilling

Jackup

Drilling

MidEast - Persian Gulf

Noble Kenneth Delaney

Noble Drilling

Jackup

Drilling

MidEast - Persian Gulf

Noble Mark Burns

Noble Drilling

Jackup

Modification

MidEast - Persian Gulf

Noble Roger Lewis

Noble Drilling

Jackup

Ready Stacked

MidEast - Persian Gulf

Noble Roy Rhodes

Odebrecht

Semisub

Under Construction

MidEast - Persian Gulf

Norbe VI

Pride International

Jackup

Ready Stacked

MidEast - Persian Gulf

Pride Hawaii

Pride International

Jackup

Drilling

MidEast - Persian Gulf

Pride Montana

Pride International

Jackup

Drilling

MidEast - Persian Gulf

Pride North Dakota

Pride International

Jackup

Cold Stacked

MidEast - Persian Gulf

Pride Pennsylvania

Pride International

Semisub

Modification

MidEast - Persian Gulf

Pride Venezuela

Queiroz Galvao Oleo e Gas S.A.

Semisub

Under Construction

MidEast - Persian Gulf

Lone Star

Riginvest GP

Jackup

Under Construction

MidEast - Persian Gulf

Riginvest Jackup TBN 1

Rowan

Jackup

Modification

MidEast - Persian Gulf

Arch Rowan

Rowan

Jackup

Drilling

MidEast - Persian Gulf

Bob Keller

Rowan

Jackup

Modification

MidEast - Persian Gulf

Charles Rowan

Rowan

Jackup

Drilling

MidEast - Persian Gulf

Gilbert Rowe

Rowan

Jackup

Drilling

MidEast - Persian Gulf

Hank Boswell

Rowan

Jackup

Modification

MidEast - Persian Gulf

Rowan California

Rowan

Jackup

Modification

MidEast - Persian Gulf

Rowan Middletown

Rowan

Jackup

Drilling

MidEast - Persian Gulf

Rowan Paris

Rowan

Jackup

Drilling

MidEast - Persian Gulf

Scooter Yeargain

Saipem

Jackup

Drilling

MidEast - Persian Gulf

Perro Negro 2

Saipem

Jackup

Drilling

MidEast - Persian Gulf

Perro Negro 3

Saipem

Jackup

Workover

MidEast - Persian Gulf

Perro Negro 5

Saipem

Jackup

Drilling

MidEast - Persian Gulf

Perro Negro 7

Saudi Aramco (NOC)

Jackup

Drilling

MidEast - Persian Gulf

SAR-201

Scorpion Offshore

Jackup

Drilling

MidEast - Persian Gulf

Offshore Freedom

Scorpion Offshore

Jackup

Drilling

MidEast - Persian Gulf

Offshore Intrepid

Thule Drilling ASA

Jackup

Under Construction

MidEast - Persian Gulf

Thule Energy

Thule Drilling ASA

Jackup

Under Construction

MidEast - Persian Gulf

Thule Force

Thule Drilling ASA

Jackup

Modification

MidEast - Persian Gulf

Thule Power

Transocean Ltd.

Jackup

Drilling

MidEast - Persian Gulf

GSF High Island II

Transocean Ltd.

Jackup

Drilling

MidEast - Persian Gulf

GSF High Island IV

Transocean Ltd.

Jackup

Drilling

MidEast - Persian Gulf

GSF Key Hawaii

Transocean Ltd.

Jackup

Drilling

MidEast - Persian Gulf

GSF Main Pass I

Transocean Ltd.

Jackup

Drilling

MidEast - Persian Gulf

GSF Main Pass IV

Transocean Ltd.

Jackup

Cold Stacked

MidEast - Persian Gulf

GSF Rig 127

Transocean Ltd.

Jackup

Drilling

MidEast - Persian Gulf

GSF Main Pass IV

Transocean Ltd.

Jackup

Cold Stacked

MidEast - Persian Gulf

GSF Rig 127

www.arabianbusiness.com

June 2010 Oil&Gas Middle East

BIG PICTURE

Lone Star ready to ride The Lone Star readies for its blessing at Abu Dhabi’s Port Zayed.

gathered crowd braved the soaring May temperatures at Abu Dhabi’s Port Zayed this morning to witness the official launch of the Lone Star semi-submersible drilling rig, built in Abu Dhabi’s very own Mussafah industrial yard and completed on site at Port Zayed.

The rig was accepted by its new owners, Queiroz Galvão Óleo e Gás, and will join the company’s fleet of six onshore oilrigs, four conventional and two helicopter type rigs, three semi-submersible oilrigs and a partnership with a FPSO vessel. CEO of the IMCC Group, Fritz Hofbauer explained the engineering achievement. “She is built to work in 2000 metres of water, to face 110 km/hour wind conditions, and waves roughly the size of a five storey building. The combined thrusters keeping her on station represent 25,000 horsepower.” Wishing the rig

Oil&Gas Middle East June 2010

well in its duties offshore Brazil (she has been signed to Petrobras on a seven year contract), was Bernard Van Legello, President of SBM Offshore. “May she never drill a dry hole Good luck Lone Star!” he said. The Lone Star semi-submersible rig is a massive drilling unit designed with state of the art equipment suitable for drilling, work over (completion and intervention), exploration as well as development drilling. Lone Star was designed to operate in environmental conditions of the Gulf of Mexico, West Africa, Brazil and similar conditions up to 7,880 ft. (2.400 m) water depth, and can drill up to 24,600 ft. (7.500 m) with a variable drilling load of up to 6,470 tonnes (7,131 short tonnes). The vessel is designed to keep station with eight azimuth thrusters using a dynamic positioning system. SBM Offshore led the project in conjunction with IMCC Group and Gulf Piping Co - the platform constructor yard.

“May she never drill a dry hole - Good luck Lone Star!”

Bernard Van Legello, SBM Atlantia with Antonio Augusto de Queiroz Galvão of Queiroz Galvão Group.

www.arabianoilandgas.com

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