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

Developing Qatar’s largest offshore oil reservoir

The Al Shaheen field, Qatar was deemed uneconomical for development until Maersk Oil’s pioneering horizontal well technology made development possible. Today its reservoirs are among Qatar’s biggest oil producers. Maersk Oil is now developing Qatar’s largest offshore oil reservoir, together with Qatar Petroleum. The Al Shaheen field development plan is currently the world’s largest and most complex, offering unique opportunities to work with the latest technologies and a rewarding career at the forefront of the oil and gas industry.

The Al Shaheen Field Development Plan (FDP 2005) encompasses the construction and installation of 15 new platforms and the drilling of over 160 wells. At Maersk Oil we foster a creative environment where employees are empowered to develop solutions to overcome these highly technical and complex challenges. With operations around the world including Qatar, the North Sea, Brazil, Algeria, Angola, Kazakhstan and the US Gulf of Mexico, Maersk Oil offer excellent prospects for your future, as part of an international and culturally diverse team. As we make the most of Qatar’s resources, you can make the most of the opportunities we offer. To find out more, come and meet our team at: Offshore Middle East, Qatar Exhibition Centre, Doha: 12 - 14 October 2010 ADIPEC, Abu Dhabi National Exhibition Hall, Abu Dhabi: 1-4 November 2010

Explore more at www.maerskoil.com

Part of the A.P. Moller- Maersk Group, and active since 1962, Maersk Oil operates some 800,000 barrels of oil equivalent per day. Maersk Oil has activities in several locations such as the North Sea, Qatar, Brazil, Algeria, Angola, Kazakhstan and the US Gulf of Mexico.

CONTENTS

ACTive Matrix

SEPTEMBER 2010

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LIVE DOWNHOLE COILED TUBING SERVICE

Optimized treatment, half the fluid volume 15 NEWS REVIEW

26 DOHA WPC PREVIEW

58 EVENT PREVIEW

Global players with a foothold in the Middle East’s upstream sector can thank regional performance for a strong half-year set of figures.

Qatar’s Minister Of Energy and Industry explains why Qatar is the logical host city for next year’s World Petroleum Congress.

October’s Iraq Mega-Projects conference in Istanbul is a must-attend event for upstream movers and shakers.

18 QATAR IN PROFILE

33 DIGITAL OILFIELD

69 OILFIELD HOUSING

Qatar’s journey from its first oil discovery in 1938, to its top spot as the world’s leading LNG exporter.

The roll-out of the digital oil field is helping oil companies optimise production and reduce costs.

Mike Bradley of oilfield accommodation specialist, HB Rentals discusses onsite housing.

21 BLACK CAT ROAMING

38 UPSTREAM LOGISTICS

The Qatari Engineering and Construction firm is poised to capture a majority of EPC and sub-contractor work locally and beyond in future.

MARKET SURVEY: Logistics providers are offering enhanced end-to-end solutions for their oil and gas customers.

REGULARS

24 MAERSK OIL QATAR

52 PAINTS & COATINGS

QP and Maersk recently pumped a landmark billionth barrel of crude from the Al Shaheen Field.

Paint manufacturers and applicators give their assessement of the region’s industrial coatings market.

An operator in Kuwait stimulated a carbonate well in just one run using ACTive* Profiling and Matrix services, saving approximately half the fluid volume. Distributed measurements analyzed in real time allow maximum fluid penetration and diversion— for the best possible treatment.

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2 WEB HIGHLIGHTS 4 COMMENT 7 REGIONAL NEWS

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71 PROJECT DATA 80 THE BIG PICTURE

September 2010 Oil&Gas Middle East

WEB HIGHLIGHTS

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and Rosneft in $US630m 1 Crescent Sharjah project to change Jazan refinery 2 Aramco location awarded Maissan refinery 3 KBR contracts rig contracts boost Lamprell’s 4 New interim results to invest US$35bn in major 5 Kuwait oil projects

LATEST FROM THE BLOG

Analysis: Half year in review The Middle East has proved to be a rock for IOCs and service providers in recent times, giving stability to their otherwise volatile financial performance in the second quarter of 2010. Emran Hussain takes a closer look at how these companies have fared with a focus on regional operations on www.ArabianOilandGas.com BREAKING NEWS AND VIEWS FIRST ABB WINS US$24M ABU DHABI CONTRACT ABB wins orders worth a total of US$24 million from Petrofac to design and deliver comprehensive power infrastructure for the ASAB Field Development Project in Abu Dhabi. ArabianOilandGas.com LEBANON OPENS UP FOR OFFSHORE E&P

BAKER HUGHES IN 3-YEAR TSA WITH SOUTH OIL Baker Hughes announced it has signed a three-year technical services agreement with Iraq’s South Oil Company (SOC) to provide technical services to SOC. ArabianOilandGas.com NEW ARAMCO BOARD MEMBERS NAMED

Lebanon’s parliament approved a law that opens its offshore areas for the first time to oil and natural-gas exploration.

Saudi King has called for the formation of the new board of directors of Saudi Aramco for the next three years effective from August 25 with two new members.

ArabianOilandGas.com

Oil&Gas Middle East September 2010

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COMMENT

Richest pickings are in most dangerous fields Iraq is still a risk, but that is why it’s called a frontier

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 ITP Business Publishing Ltd CEO Walid Akawi Managing Director Neil Davies Managing Director ITP Business Karam Awad Deputy Managing Director Matthew Southwell Editorial Director David Ingham Editorial

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Energy Group Editor Daniel Canty Tel: +971 4 444 3255 email: daniel.canty@itp.com Senior Writer Emran Hussain Tel: +971 4 444 3662 email: emran.hussain@itp.com Contributors Chris Sell, Ventures, RigZone Advertising Commercial Director Jude Slann Tel: +971 4 444 3693 email: judith.slann@itp.com Studio Group Art Editor Daniel Prescott Design Team Nadia Puma, Wasim Akande, Michel Al Asmar, Angela Ravi, Nicola Tatum Photography Head of Photography Sevag Davidian Senior Photographers Efraim Evidor, Jovana Obradovic Staff Photographers IIsidora Bojovic, George Dipin, Murrindie Frew, Lyubov Galushko, Shruti Jagdesh, Mosh Lafuente, Ruel Pableo, Rajesh Raghav Production & Distribution

Making intelligent use of the networking opportunities on your doorstep could open up Iraqi markets. he wild west was a mad, bad, and dangerous place to do business, but its lure and lustre were strong enough to drag people from rural and city life into an often lawless, and always hazardous environment, because the prospect of missing out on a gold-rush was just too terrible to countenance. Unfortunately, where opportunities are often greatest, so too are inherent dangers. Despite seven years of operations on the ground, Iraq is still an unsafe place to go and do business, and it’s not a posting many people today are clamouring for. The summer period once again saw a resurgence in violence across the country, a situation all the more worrying given the backdrop of a winding down of coalition peace-keeping forces and a hand-over to Iraq’s domestic police and army. However, many firms I have spoken to have begun doing brisk business in Iraq and on the most part have found a common model for success. Iraq is a big country, with a well educated and willing workforce, and a spirit of entrepreneurship is bubbling away excitedly

behind the grim headlines. Companies which have managed to tap into this latent energy source and build partnerships and agent agreements have been the first to capitalise on the growing, and urgent needs of the oil companies operating on the ground there. Whilst flying into Baghdad and coldcalling your way around Iraq may be one option, better opportunities are presenting themselves in abundance right now. No fewer than six major exhibitions and conferences, all dedicated to discovering business opportunities in Iraq, will take place between September and December right here in the GCC and Turkey. In October the Iraq-Mega-Projects conference launches in Istanbul, and in this edition we preview the opportunities that event may be able to deliver to help you get in on the action. Local partnerships, and more importantly local knowledge will keep your business in the game, and hopefully help you avoid the cowboys. Daniel Canty, Editor E-mail: daniel.canty@itp.com

To subscribe to the magazine, please visit: www.ArabianOilandGas.com 4

Oil&Gas Middle East September 2010

Group Production & Distribution Director 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 Marketing Manager Annie Chinoy ITP Digital Director Peter Conmy ITP Group Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin Circulation Customer Service Tel: +971 4 210 8000 Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages.com Printed by Color Lines Press Subscribe online at www.itp.com/subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

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LEAD NEWS

New UAE and Kuwait project awards gather momentum August activity bonanza led by Petrofac pipeline deal and ADNOC’s field programmes Last month saw a flurry of project awards across the Middle East, with two major upstream projects bursting out of Abu Dhabi. ADNOC’s major development programmes at Zakum and Asab stole much of the limelight in the UAE, and a US$404 million EPC deal from Kuwait dominated news from the northern Gulf. Petrofac announced in late July that it had been awarded the $400 million-plus contract by Kuwait Oil Company (KOC) for EPC services for the installation of fuel gas and gas oil pipelines. Work began in August. The project, with an anticipated duration of 23.5 months, will include a fuel oil pumping station, metering systems, utilities systems and associated electrical, instrumentation and telecommunication works, for the pipelines from Mina Al Ahmadi to the Azzour and Shuaiba Power Stations in Kuwait. “The Kuwait market is strategically important to our business and I am delighted that we have been selected by KOC to undertake this project. We maintain an excellent working relationship with KOC and look forward to strengthening this further as we move into the execution phase of this project,” said Maroun Semaan, Petrofac’s group chief operating officer. In Abu Dhabi, ABB confirmed it had won orders worth a total

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Veli-Matti Reinikkala, head of ABB’s Process Automation division

Maroun Semaan, Petrofac’s group chief operating officer.

of $24 million from Petrofac to design and deliver power infrastructure, systems and automation equipment for the Asab Full Field Development Project. Led by the Abu Dhabi Company for Onshore Oil Operations (ADCO), the Asab development is one of the largest upstream projects in the region. Petrofac International is the EPC contractor for the project. The rejuvenation of the Asab field is central to ADCO’s overall development plan to increase its production to 1.8 million barrels of oil per day. In addition to the production capacity upgrade of Asab, Petrofac’s EPC scope includes upgrading the facility’s capacity to accept increased production from Sahil, Shah and other south eastern fields. “ABB is proud to be a part of this important project that will mark the country’s active role in

future energy supply,” said VeliMatti Reinikkala, head of ABB’s Process Automation division. ABB will design and supply a host of power equipment, including air-insulated mediumvoltage switchgear and power transformers. The delivery includes a substation monitoring and control system and integrated motor control system, which covers nine substations and one central control building. Moving offshore, Mott MacDonald was commissioned in August by Zakum Development Company (ZADCO)

as front end engineering and design (FEED) consultant to replace diesel generators at Arzanah Island, and work is already under way. “The only way to access Arzanah is by fixed wing aircraft for people, or supply boats for shipments, so replacing generator equipment and power management systems is not straightforward,” explained Alex Jacob, Mott MacDonald’s project director. Arzanah Island has water injection facilities as well as utility and accommodation loads and requires around 3.5 to 4 megawatts of power. As natural gas is not available on the island, power turbines are operated on liquid fuel (diesel). To reduce fuel consumption, ZADCO had replaced some of its turbines with high speed diesel generators. The high speed generators proved to be more fuel efficient but operated with recurring problems and major breakdowns. Capital outlay for both phase one and phase two of the project will be around $18 million.

US $404 m

Estimated value of Petrofac’s contract by Kuwait Oil Company (KOC) for EPC services for the installation of fuel gas and gas oil pipelines. Source: Petrofac International

September 2010 Oil&Gas Middle East

REGIONAL NEWS

McDermott wins ADMA EPC deal Abu Dhabi Marine Operating Company awarded Zakum water injection contract in August Abu Dhabi Marine Operating Company (ADMA-OPCO) awarded an EPC contract to McDermott International to upgrade the Zakum Field Water Injection System in August. The project, estimated to cost approximately US$350 million, falls into two parts: pressure upgrade and capacity upgrade. The pressure upgrade involves installation of new pumps, piping and transformers, the modification of existing instrumentation and equipment and structural reinforcement work of the existing water injection modules at both the Zakum Central Complex and the Zakum West Super Complex. The capacity upgrade will take place on Zakum Central Super Complex and involves the EPC of a new 3250-tonne deck that will house the new water treatment and injection system, power generation equipment and six-legged jacket.

“It’s our pleasure to have McDermott with us in this major project, which is one of the largest on our agenda,” said Al-Jarwan. “The project will require maximum attention in terms of quality and in this particular project McDermott have demonstrated their competitive edge in terms of quality, schedule and willingness to do the project.” Steve Johnson, president and CEO of McDermott said: “This is a significant award Ali Rashid Al-Jarwan said the project is one of the largest on ADMA-OPCO’s agenda. and we are delighted to have this opportunity to work with The pressure and capacity J. Ray McDermott Middle East ADMA-OPCO again.” upgrades are planned for and India. Located approximately 48 completion within the second quarter 2012. Installation will be nautical miles north-west of carried out using vessels from Abu Dhabi, the field includes five water injection platform McDermott’s regional fleet. The agreement was signed modules at Zakum West Super The Zakum Field Water Injection System contract award from ADMAby Ali Rashid Al-Jarwan, ADMA- Complex and two modules at OPCO is thought to be worth US$350 OPCO chief executive officer Zakum Central Super Complex million to McDermott International and Stewart Mitchell, vice-pres- which are used to maintain presSource: ADMA-OPCO ident and general manager, sure in the surrounding wells.

$350m

Halliburton awarded project management role for Iraqi field

approval by the appropriate Iraqi authorities. Shell is lead operator and holds a 45% share, partner Petronas holds 30% and the Iraqi state holds 25% of the participating interests in all licences. Shell has announced that the consortium intends to increase production from the current 45 000 bpd to a targeted production plateau of 1.8 Dave Lesar, CEO of Halliburton. million barrels per day. “Halliburton has made a size- look forward to providing servable investment in Iraq and we ices to Shell and the consortium

Oil&Gas Middle East September 2010

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Halliburton has been awarded a letter of intent by Shell Iraq Petroleum Development for the development of the Majnoon field in southern Iraq, it confirmed last month. The giant Majnoon field is one of the world’s largest oilfields. The letter of intent provides that Halliburton will serve as project manager for the development work, in affiliation with Nabors Drilling and Iraq Drilling Company (IDC). The contract is still subject to final

in order to increase production at this historic oil field,” said Dave Lesar, Halliburton’s chairman, president and CEO. “We have in place the technology, equipment and personnel to ensure that we deliver the solutions that will help our customers in this region to meet their production goals.” Halliburton has more than 4000 employees in the Middle East, and construction on phase I of Halliburton’s 400-man base in Burjisia, Iraq is now complete.

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REGIONAL NEWS

Dana Gas sees Iraq boost

HIGHLIGHTS

Egypt and Iraq deliver 29% aggregate production leap in Q2 Dana Gas has announced its financial results for the quarter ended 30th June 2010. Revenue from the sale of hydrocarbons increased to approximately US$116 million, with gross profit reaching $48 million. These figures represent increases of 41% and 84% respectively, compared to the same period last year. This is due to strong production growth, amounting in aggregate to 29%, from the company’s operations in Egypt (where 10 fields are now producing) and in the Kurdistan Region of Iraq, where production from the Khor Mor field continues to increase. It is also due to higher market prices for condensate, LPG and oil during the quarter, as compared to Q2 2009. Dana Gas Egypt concessions produced 3.80 million boe during the second quarter, an increase of 19% compared to the same period last year. This included production from the Orchid field, which was brought on stream in April 2010. The company also added its third new gas field discovery of 2010, Ward Delta-1 in the Nile Delta, which follows on from the El Panseiya-1 and South Faraskour-1 discoveries in the first quarter of this year. This continues the Dana Gas exploration track record with three discoveries from four wells in the first half of 2010, building on the 2009 performance of eight discoveries from twelve exploration wells. In the Kurdistan Region of Iraq Dana

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Weatherford are active in Iraq.

Weatherford began drilling a new oil well in Iraq near al-Amara city in August, as part of a US$224 million deal to drill 20 wells in 31 months. Amara lies 390km south of Baghdad. “Weatherford has started drilling the new well in the al-Bazrakan oilfield, which is 70km east of Amara,” said Ali Abbas al-Tarfi, director of Missan Oil Company. “This step is the first in a deal to drill 20 wells to increase productivity from the province’s oilfields that are now hitting 100 000 bpd,” he added.

Dana Gas CEO, Ahmed Al-Arbeed, says Kurdistan production continues to grow.

Gas, through its 40% share, produced 1.06 million boe of gas and condensate during the quarter, an increase of approximately 88% over the same period in 2009. The first train of the LPG Plant at Khor Mor is in partial operation, producing gas and condensate. Production of LPG will start later in 2010, which will further increase production. “In Egypt, our development programme continues to bring our gratifying stream of undeveloped discoveries into production and our 14 well exploration programmes for 2010 continues to deliver class leading results with three discoveries from our first four wells,” said Dana Gas chief executive officer, Ahmed Al-Arbeed. “We continue to target a 20% increase in produc-

tion for the full year compared to 2009 and, with the majority of our exploration drilling in the second half of the year, I look forward to hopefully being able to bring more positive news,” he continued. “In the Kurdistan Region of Iraq, production continues to grow as we supply gas to meet the demands of the Erbil and Bazian power stations and it remains a source of pride to Dana Gas that this region of Iraq is one of the few with a reliable electricity supply. We are producing gas and condensate through our new permanent facilities and the first train of the LPG plant at Khor Mor will commence LPG production very soon. Consequently, Dana Gas’ growth is set to continue,” concluded Al-Arbeed.

Tethys Oil said in August that the Saiwan East-4 well (SE-4) on Oman’s onshore Block 4 has successfully been drilled and preliminary results evaluated. The well was drilled to a total depth of 2463 metres. Several oil bearing layers were encountered including the Khufai limestone formation, from which 78 metres of core was extracted. The Bourbon Supporter, the second of a series of two IMR (Inspection Maintenance Repair) vessels has been delivered, strengthening the company’s existing fleet of 15 IMR vessels in July. The Bourbon Supporter is currently on its way to Saudi Arabia for a two year contract, where it will operate from the end of August as a support vessel in subsea seismic testing.

September 2010 Oil&Gas Middle East

REGIONAL NEWS

RasGas powers Portugal

DIARY PLANNER

Qatar producer delivers first supply of spot cargo LNG to Sines

27-28 September

IRAQ FUTURE ENERGY Qatar’s RasGas delivered its first cargo of LNG to Portugal in August. The spot sale cargo was delivered to an affiliate of Galp Energia, at the Sines LNG Terminal in Portugal, from the LNG tanker Al Deebel. “As of today, RasGas has supplied LNG to 14 different countries and we continue to look for opportunities to deepen existing relationships and further diversify our portfolio of customers,” said RasGas marketing executive Khalid Sultan Al Kuwari. Earlier in the year RasGas started LNG output from its massive train 7 production facility. The facility has capacity to chill enough natural gas to produce 7.8 million tonnes per year (tpy) of LNG for export. Qatar started three equally large facilities last year. The trains are the largest in the world and the gas supply to each of the giant plants for one

Conference Istanbul, Turkey www.theenergyexchange.com 10-12 October

SAOGE 2010 Conference & Exhibition Damman, Saudi Arabia www.SAOGE.org 26-28 October

IRAQ MEGA-PROJECTS Conference & Exhibition Istanbul, Turkey www.cwcimp.com 1-4 November 2010 Qatari LNG was sold to Portugal on the spot market for the first time in August

day alone is enough to supply 22 000 homes for a year. “RasGas currently connects the reservoirs of Qatar’s North Field to customers around the world via seven LNG trains, 27 long-term chartered ships including the Nakilat Q-Flex and Q-Max LNG carriers and

Oil&Gas Middle East September 2010

access to regas terminals in Europe and the United States,” Al Kuwari said. “Today’s historic cargo further demonstrates our credentials as a trusted supplier of LNG, and builds on our reputation for operational excellence and contract flexibility,” he concluded.

ADIPEC 2010 Conference & Exhibition ADNEC, Abu Dhabi www.adipec.com 14 December 2010

OIL & GAS MIDDLE EAST AWARDS The Westin Hotel, Dubai www.arabianoilandgas.com

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REGIONAL NEWS

NEWS ANALYSIS Rig refurbs and newbuilds boost Lamprell half-year results $317 million contract for NDC will see Sharjah yard fabricate two LeTourneau jackups ew rig contracts in the UAE worth nearly US$360 million were highlighted in Lamprell’s first half results, although the firm recorded a 27.2% drop in revenue compared to the first half of 2009. Lamprell had a total of thirty jackup rigs under construction at its Hamriyah and Sharjah facilities during the first six months of 2010, with a revenue

Nigel McCue, Lamprell CEO.

Oil&Gas Middle East September 2010

of $189.3 million compared to $259.9 million for the same period in 2009. “We experienced a higher level of rig refurbishment activity through our facilities than in prior periods, although it continues to be at a lower level of average expenditure,” explained Lamprell chief executive, Nigel McCue. “Whilst we are experiencing a reduced level of offshore construction activity, mainly in the area of Floating Production, Storage and Offloading vessels, we remain confident of the long term future of this market sector,” he added.

In July the company won a $317 million contract from Abu Dhabi’s National Drilling Company for two jackup rigs. Following the award to construct the two LeTourneau S116E jackup drilling rigs, construction activities have commenced on the first rig at the company’s Hamriyah facility. This particular rig was previously under construction for Riginvest GP, and the engineering and procurement elements of the project are well advanced, the company said. The procurement activities associated with the second rig have begun and construction of this unit will commence in the third quarter of 2010. As part of the contract, NDC has options for Lamprell to build two further jackup rigs for $158.5 million per rig, exercisable over the next 11 months. Each option includes additional optional equipment orders of $12.6 million. The company also won a $39 million contract from an undisclosed integrated energy provider.

$890 million

LAMPRELL BOOKED NEW CONTRACTS WORTH $890 MILLION IN THE FIRST HALF OF 2010. Source: Lamprell

The contract is for the construction of an offshore topside structure comprising of a two level utility deck and five level accommodation module for 38 personnel. Lamprell said the project will be constructed to North Sea standards and is scheduled for delivery alongside the Jebel Ali quay in the first quarter of 2012. In April, Lamprell delivered the deepwater drilling rig Offshore Mischief for Texasbased Scorpion Offshore. Lamprell said it is looking into in new business areas such as the refurbishment and construction of semi-submersible drilling rigs and drill ship refurbishment, which will be carried out at its new Hamriyah Free Zone facility. The company’s oilfield engineering operation is being relo-

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Regional News

cated in the new Hamriyah facility, which will release capacity at its Jebel Ali facility, allowing oilfield engineering operations to benefit from the synergies between its land rig and jackup rig projects. Fabrication and refurbishment projects will be transferred to Hamriyah by the end of 2010 and a new workshop will be completed in Q2 2011. McCue said the company is seeking new opportunities in Iraq and other Middle East countries in the medium term.

McCue told Oil & Gas Middle East that the first half has been a busy one for the company, during which it won new contracts worth $890 million, including the NDC contract. He said: “Executing our work to the highest standard, both on time and on budget, remains central to our business and we believe is the basis on which we have won recent contracts and added new customers. We completed the Scorpion Offshore Mischief in April 2010, on time and on budget, and this Lamprell’s new Hamriyah facility.

approach is underpinning the future growth of our business” “We continue to see a high level of interest for the wide spectrum of new build services we offer and our proposals pipeline remains strong,” concluded McCue. A day-rate analysis from ODS Petrodata currently featured on ArabianOilandGas. com suggests low, but stable rates in the Middle East for the remainder of 2010, news which bodes well for the region’s fabrication and service yards.

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September 2010 Oil&Gas Middle East

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NEWS REVIEW The Mukhaizna Field in Oman has helped Oxy increase production output and revenue this year.

FINANCIAL FOCUS: MIDDLE EAST BUSINESS IS LIFELINE TO MAJORS Second quarter and half year results for operators in the region have been something to write home about, with Middle Eastern production and revenue streams playing a significant role, writes Emran Hussain iddle East production activities the second quarter saw increases in productivity and output with Saudi Arabia, Qatar, Bahrain and Oman leading the way for IOCs and oilfield service providers. The quarter for oil majors such as ExxonMobil and Chevron, has been a particularly profitable one with major gains from their international operations. Chevron said that higher crude oil prices and favourable foreign currency effects had helped boost its international upstream earnings for the second quarter to US$3.45 billion compared to $2.08 billion in Q2 2009. “Current quarter earnings from upstream operations benefited significantly from

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higher prices for crude oil and natural gas and higher net oilequivalent production. In the downstream, improved margins for refined petroleum products contributed to increased earnings,” said Chevron chairman and CEO John Watson. “During the second quarter, we continued to make significant progress toward building a leading natural gas business to supply Australia and the Asia-Pacific region. We also progressed several new upstream opportunities in other areas,” said Watson. ExxonMobil announced massive earnings of $7.5 billion, up by 85% from $3.5 billion in the same period last year with major contributions from the company’s Qatari assets.

“Oil-equivalent production increased by 8% over the second quarter of 2009 driven by contributions from our world-class assets in Qatar,” said chairman Rex Tillerson. High crude realisations; better downstream margins and strong results in chemicals also played their part. First half earnings for the company were up by nearly $14 billion representing a 60% increase over the first half in 2009. Smaller players such as Occidental Petroleum

85%

ExxonMobil announced earnings of $7.5 billion, up by 85% from $3.5 billion in the same period last year with major contributions from Qatari assets.

made significant gains also attributable to increased volumes in the Middle East. A significant proportion of the company’s $1.1 billion net income -

“Production has increased by 8% over 2009, driven by contributions from our world-class assets in Qatar” Rex Tillerson, ExxonMobil chairman

September 2010 Oil&Gas Middle East

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NEWS REVIEW

“Results in the second quarter were mixed. Our focus is now on improving efficiency and operating margins” Chad Deaton, Baker Hughes CEO compared to $682 million in Q2 2009 -was down to new production coming online in Bahrain and increased production from Oman’s Mukhaizna field. US oilfield operators with significant interests in the region have on the whole been left unscathed by the fallout of the Gulf of Mexico disaster. Baker Hughes, which recently signed a three-year technical services agreement with Iraq’s South Oil Company and also acquired fracturing service provider, BJ Services posted a post-acquisition net income of $93 million compared to $87 million in Q2 of 2009. Chad Deaton, Baker Hughes chairman and CEO, said: “Results in the second quarter were mixed,” said Chad Deaton, Baker Hughes chairman and chief executive. “Operationally, our performance improved in North America, Russia and Asia Pacific, each making significant improvement sequentially. However, in Africa and Latin America, where we have invested heavily, revenue has lagged and our profit was below our expectations. With our organisation now well established, our focus is on improving efficiency and operating margins.” Deaton also said his company had deployed people and equipment to the company’s US land operations in response to the Gulf of Mexico drilling moratorium, and to international

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offshore markets where deepwater drilling continues. Regionally, the company’s order book was boosted by Saudi Arabia, Baker Hughes received a purchase order for 30 permanent downhole monitoring systems, including advanced pressure and temperature sensors, to be used in conjunction with intelligent well systems in the Kingdom. In addition the company achieved the milestone of completing and controlling more than 1,000,000 feet of reservoir section in the Kingdom. Bahrain Petroleum Company’s (BAPCO) 260 000 barrels per day petroleum refinery recently awarded several water treatment applications to Baker Petrolite Saudi Arabia – the company’s Saudi arm, in a three-year contract which was transitioned starting in June from the incumbent supplier, the company said. Halliburton reported significantly better-than-expected Q2 results despite the impact of the Gulf of Mexico oil spill. This was helped by the strength and sustainability of the all-important North American onshore activity levels where it operates its pressure-pumping business. The company made a net income of $480 million for the second quarter of 2010, more than doubling the $206 million it made in the first quarter. The company said that all its product service lines and

Revenues have been up for service companies involved the Middle East.

IOCs in the Middle East saw a profits upswing thanks to regional revenues. geographic regions experienced sequential revenue growth from the first quarter which it said was driven by strong demand in the United States and seasonal activity improvements internationally. “We are taking appropriate actions to mitigate the impact of the reduced activity in our Gulf of Mexico business, including redeploying our people and equipment to other areas of stable or increasing activity,” said Halliburton president and CEO, Dave Lesar. Despite these moves,

we estimate that the deepwater drilling suspension will negatively impact our earnings,” warned Lesar. The second quarter of 2010 has been a profitable one for many of the international companies doing business in the Middle East. Looking forward, contract wins in upcoming areas such as Iraq, and the boosting of production from existing facilities in the established Gulf market should further improve operators’ results.

September 2010 Oil&Gas Middle East

QATAR COUNTRY PROFILE

SNAPSHOT:

QATAR

Qatar’s vast North Field gas and Al Shaheen oil resource wealth have made the small Gulf State a regional activity hotspot

Qatar plans to have all of its major gas development plans completed by 2011.

espite being a minor onshore producer, Qatar is a major offshore oil and gas player. Oil was first discovered in 1938 by Petroleum Development Qatar, now Qatar Petroleum Company (QPC), at the onshore Dukhan field – and production reached 40 000 bpd before the onset of the WW2. Onshore production started in the same year and is believed to have reached peak production at around 368,000 boe/day in 2008 – around 25 times less than Saudi Arabia. The discovery and development of the Idd-al-Shargi field by Shell in 1960 marked the beginning of a significant period of offshore activity. In 1972 the Idd-alShargi, Maydan-Mazham and Bul-Hainne fields were brought into production and, for the first time, offshore production levels exceeded those onshore.

Production and export of gas and LNG from Qatar is driven in the main by the giant offshore North field. It was discovered in 1979, and covers over 6000km2. With estimated non-associated gas reserves of 14 Tcm, it is one of the world’s largest gas fields, and accounts for 98% of Qatar’s gas production. In 2004 Qatar Petroleum and Qatar Shell GTL Limited signed terms for the Pearl GTL project. The project involved installing upstream gas production facilities and an onshore GTL plant that would allow production of up to 140 000 bpd of GTL products – as well as significant volumes of associated condensate and LPGs. The continued exploitation of the offshore North field should see Qatari oil and gas production climb rapidly over the coming years and reach 4.7 million boe/d by 2015.

Oil&Gas Middle East September 2010

Much of the gas will be liquefied for export in facilities such as Ras Laffan. Today, Qatar boasts one of MENA’s most rapidly growing offshore markets, which is set to see a substantial increase in expenditure over the next five years and beyond. An estimated $403 million was spent on focus segments in 2005 and this had more than tripled by 2008. 2009 saw some decline as oil price and service pricing pressure impacted negatively on the rig market. Recovery, however, is expected and strong visibility for rig contracts will enable expenditure growth to reach

just under $2 billion by 2014 – average annual growth of 8.7% over the forecast period. Like many other countries in the region, Qatar has initiated policies aimed at increasing oil production and locating additional oil reserves before existing reserves become too expensive to recover. It is also investing in advanced oil recovery systems to extend the life of existing fields. To accomplish this, in recent years the government has improved the terms of exploration and production contracts and production sharing agreements (PSA). The improved terms are designed

“Qatar will see a substantial increase in offshore expenditure over the next five years” Lucy Millar, lead LNG analyst, Douglass Westwood www.arabianoilandgas.com

QATAR COUNTRY PROFILE

to encourage foreign oil companies to improve oil recovery in producing fields and to explore for new oil deposits. xxxxxxxxxxxxxxxxxxxxxxx Excluding the North field, xxxxxxxxxxxxxxxxxxxx Qatar has six offshore producing fields: Bul Hanine, Maydan Mahzam, Id al-Shargi North Dome, al-Shaheen, al-Rayyan, and al-Khali. Almost all wells drilled off the shore of Qatar are deviated and wellstock growth is healthy, driven strongly by flourishing drilling volumes. Some of the growth expected over the next five years can be directly attributed to completion of the first phases of the Pearl project. Annual growth in producing wellstock is estimated at 7.3% and this will significantly boost the requirement for offshore workover including fracturing and perforation over the coming years.

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ONSHORE PRODUCTION Given relatively limited prospects and fluctuating drilling activity, onshore drilling expenditure is relatively volatile in Qatar, although expenditure has seen a general upward trend over the last five years to exceed $46 million per annum. It is likely that fluctuations will continue over the coming years, although expenditure will be above $35 million for the forecast period. It is not expected that directional drilling or MWD to take a significant proportion of this expenditure as vertical wells dominate Qatari onshore activity. A small base of active development wells leads to only a minor onshore work-over market. It is estimated that expenditure of between $25-30 million a year is likely, of which fracturing & perforation will take the lion’s share. Fracturing is

driven particularly strongly by gas-dominated wells and Qatar will become a very significant region in this respect over the coming years. Within focus segments, work-over expenditure of an estimated $166 million in 2005 will grow to reach $1.3 billion by 2014 – an average of 15.6% annual growth. By this point, Qatar will be MENA’s primary centre for offshore fracturing & perforation expenditure – greater than neighbouring Saudi Arabia by over $200 million per year.

LNG IN QATAR Qatar is the LNG capital of the world, with healthy export markets to India, Japan, Korea, Spain, UK, and the US. In addition, the country has the world’s third largest proven natural gas reserves, estimated at 25.46 Tcm (899.3 Tcf), 13.8% of the

world’s total. The low cost of gas gives Qatari projects a major cost advantage over all other LNG sources. Qatar aims to complete all of its current LNG developments by 2011, which would then boost production to 77.10 mmtpa. Beyond 2011, the increase in Qatar’s capacity is expected to flatten because no new trains are planned due to a 2005 moratorium. Data for this article is taken from Douglas-Westwood’s Middle East & North Africa Oilfield Services Market Report 2010-2014 Report and World LNG Market Report 2010-2014. Analysis and statistics in this report were authored by Rod Westwood, senior analyst and Lucy Miller, lead LNG analyst at Douglas-Westwood. The company is a leading provider of business research, strategy and commercial due diligence on the global energy services sectors. For more information please visit www.douglas-westwood.com

September 2010 Oil&Gas Middle East

QATAR COUNTRY PROFILE

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Many of Qatar’s major energy projects will be complete in the next few years, so Black Cat E&C is looking beyond its native borders for new business.

BLACK CAT TO ROAM REGION

Qatar’s Black Cat Engineering & Construction has ambitious regional expansion in its sights, and is chasing region-wide energy EPIC deals

atar’s home-grown Black Cat Engineering and Construction is going from strength to strength, and is positioning itself to capture much of the high-end EPC and sub-contractor work in the Gulf state and beyond in the coming months and years. The company, which began with a small office in Doha and a single portacabin site office in the Dukhan oil and gas field, is today stamping its mark upon many of Qatar’s most ambitious upstream and energy related projects. Black Cat’s evolution into Qatar’s largest EPIC and

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maintenance contractor for the upstream oil and gas industry has coincided with quite unparalleled activity in the small Gulf state. Today the company claims a manpower base of over 2500 men and anticipated annual turnover just shy of the US$100 million mark. Now it is starting to look around the Gulf, as well as international markets, in the search for more projects to make its mark on. “We have also begun to properly invest in areas outside our traditional energy remit, in particular civil engineering,” Adnan Al-Mubarak, the general manager of Black Cat Engi-

neering and Construction tells Oil & Gas Middle East at the firm’s Doha HQ. “Doha will see around $60 - $70 billion worth of rebuilding and civil engineering projects in the coming years.” “We obviously want to be aligned with those opportunities. Roads, utilities and MEP work is all something we can bring with our background.” Al-Mubarak has been with Black Cat since 2007 and has presided over a period of significant growth. This period has seen company turnover grow from around 40 million Qatari riyals in 2007 to 450 million riyals in 2009. Like other specialist

contractors who have migrated from the demanding field of oil and gas, with its detailed specifications, civil engineering work is something well within the company’s scope. Currently much of the civil work it does is to support other company divisions. “A lot of our experience in the oil and gas business is geared around the support infrastructure of the massive engineering sites and projects, which have sprung up in Qatar,” says Al-Mubarak. “In Qatar we have become known for the strength of our technical ability. Trust is a massive issue in Qatar, so once

September 2010 Oil&Gas Middle East

QATAR COUNTRY PROFILE

Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Black Cat Engineering & Construction has an impressive pedigree in delivering early works packages for many of Qatar’s largest EPC energy projects. you have fostered that sort of relationship with companies here then life becomes much easier when the big contracts come up.” The company has expansionist ambitions. It is eyeing work in the UAE and Iraq and is looking to establish itself as a skilled engineering contractor in these markets, but is aware that competition for work will be tough. “The system we have put in place to handle the type of complex jobs we are undertaking is totally suitable to being rolled out further,” says Al-Mubarak. “I think the Emirates will be a good place for us to do business, plus, we all hope Iraq.” “Abu Dhabi is, of course, the energy hub for the UAE and the greatest potential business area for us there. We have already begun negotiations to form a company in Abu Dhabi. Once

$124m

Black Cat Engineering & Construction had a turnover of 450 million Qatari Riyals, approximately US$124 million in 2009

Iraq is stabilised it will be a good place to move in for a company with our skill sets.” Black Cat is also investing in an operation in India, which it hopes to use as a vast source of engineering manpower. “With more engineers in the organisation we can take even bigger jobs, as well as enabling a faster in-house implementation of engineering tasks,” said AlMubarak. The kind of work he has an eye on is civil engineering, especially the associated packages that come with big oil and gas jobs. The civil work is intended as an additional business stream for the company, which is well aware that the competition will be stiff. “Around the Middle East there is a tendency not to invest top dollar in civil projects, but in Qatar they will,” he said. “When quality becomes the watch-word for the civil projects we want to be ready and there with proven capabilities under our belt, and that’s how we will position ourselves.” Al-Mubarak acknowledges that developing know-

Oil&Gas Middle East September 2010

how and management systems takes time, so the company is not rushing into new markets. He raises a concern that operating companies are looking for the highest technical and safety standards, but ‘aren’t really willing to pay for it’. “Often we have seen technical competency and safety compliance like a finish line,” he says. “Once you cross a certain threshold – that’s enough. Going much further than that isn’t valued as highly as it should be. Because of this, performance

throughout the market doesn’t improve. It’s like saying to contractors I don’t want injuries, so firms just hide them and deliver a clean safety record.” Naturally safety is a big issue for a company which started out in the oil and gas business – just as dangerous as regular construction, with the added risk of explosion – but there is a price to pay as a contractor building a record like Black Cat’s. “The difference between having all the best systems in place is ultimately higher overheads,” explains AlMubarak. “We have layers of safety managers and technical advisors, which other firms do not bother with, so our base operating cost is obviously higher. But we want to go for-

Adnan Al-Mubarak, general manager of Black Cat Engineering and Construction.

QATAR COUNTRY PROFILE

“I think the UAE will be a good place for us to do business. Plus, once Iraq is stabilised, it will be a good market for a company with our skill sets” Adnan Al Mubarak, GM, Black Cat E&C wards, and this is the way to do it. “It’s the same with those companies who do not pay salaries for six months. For a responsible company to compete with cowboys is impossible, so I think there should be more responsibility on the client to understand who he is doing business with.” Al-Mubarak knows his company’s strength lies in EPC work and lays claim to being the only Qatari contractor with its engineering capabilities in-house, something he believes creates an advantage. “All the others have alliances with international companies,

but for us that is a big handicap,” he said. “Having engineering in house is much more flexible, otherwise you are not much more than a paper-pusher.” That said the company is not averse to developing the right partnerships and JVs, if they can strengthen its position. In October last year AMEC, one of the largest international engineering and project management companies, joined forces with Black Cat E&C, forming a joint venture agreement to offer asset support services to the oil, gas and petrochemical sectors working in Qatar.

Providing Engineered Solutions

“Ras Laffan in quite an amazing sight these days, and these vast investments will take a great deal of looking after,” says Al-Mubarak. “I think the technological know-how is vital when you are dealing with such safetycritical, and valuable assets and infrastructure. That’s one of the primary reasons for the joint venture with AMEC. Through the joint venture we can bring vast international know-how and experience to the Black Cat offering.” The JV should be seen as part of a wider trend, which is accelerating in the region, of forming top tier, preferred bidder status firms with global competencies, but national backing. But this large-scale international co-operation doesn’t mean Black Cat’s business development work is just focused on scooping up the biggest jobs.

Al-Mubarak is a strong advocate of looking out for smaller projects too, especially where involvement may help build valuable bridges for the future too. “We are engaging with as many customers as possible, even on quite small jobs,” he said. “I am often asked by the board ‘why do you take this small job?’ The answer is because this is the best way to learn the [clients] characteristics and processes, direct from our customers. This is hugely valuable when future projects come up, and the value of trust and familiarity cannot be overstated,” he enthuses. “I want my guys everywhere, learning all the time. That way when the big jobs come, we are there and we know how they operate.” Other contractors take note, when the big jobs come round, there may well be a Black Cat waiting to take them.

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BILLION BARREL TRIUMPH QP and Maersk Oil Qatar recently pumped the landmark billionth barrel of crude form the offshore Al Shaheen Field

Oil&Gas Middle East September 2010

www.arabianoilandgas.com

QATAR COUNTRY PROFILE

n July Maersk Oil and Qatar Petroleum reached the phenomenal production landmark of 1 billion barrels from the Al Shaheen field in Qatar. When other oil companies shunned the field as uneconomical, Maersk Oil saw opportunities to unlock the tight reservoir. Since taking over and developing the field in 1992 to first oil in 1994, the production curve has increased steadily to the current level of 300 000 bpd whilst reducing gas flaring to a minimum. “This is a very difficult reservoir that was thought to be impossible to produce oil from,” said Deputy Prime Minister HE Abdullah bin Hamad Al Attiyah. “Original estimates were that the field would produce no more than 50 000 barrels per day, even in the best conditions.” Yet due to Maersk Oil’s expertise in developing marginal reservoirs, today the Al Shaheen reservoirs form one third of Qatar’s total oil production, as the country’s largest oil producer. The latest US$6 billion field development of Al Shaheen includes the installation of 15 new platforms, 163 new production and water injection wells and 140,000 tonnes of new

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facilities. During the comprehensive installation work, Maersk Oil managed a production uptime of over 99% without compromising safety whilst reducing gas flaring to a minimum. “This is a great accomplishment that emphasises how efficiently this field has been operated and is a fine example of what an international oil company and a national oil company can accomplish when they work together,” said director of Oil and Gas Ventures Qatar Petroleum, Saad Al Kaabi. “We are very proud of the fact that together with Qatar Petroleum we turned this challenging field into a commercial success, within such a short time frame,” said Maersk Oil CEO Jakob Thomason. “It is a significant achievement which has only been possible due to our strong technical skills, innovative mindset and commitment. The Al Shaheen field has also provided unique employment opportunities in Qatar, as one of the world’s most complex offshore development plans. Maersk Oil in Qatar currently employs 130 Qatari nationals as part of its international team of technical experts and

managers. Maersk Oil is also an active partner and contributor to Qatar Science and Technology Park, where it will engage in research on improved and enhanced oil recovery as well as studies related to the environmental impact of offshore operations. “Our relationship with Qatar is much more than a production sharing agreement,” said Sheikh Faisal Al Thani, Maersk Oil Qatar Acting General Manager. “It is founded on the vision of HH the Emir Sheikh Hamad bin Khalifa al-Thani to maximise the recovery of oil while provid-

163 wells The latest US$6 billion field development of Al Shaheen includes the installation of 15 new platforms, 163 new production and water injection wells and 140 000 tonnes of new facilities.

ing sustainable long-term benefits to the Qatari people.” As part of its sustainability drive and commitment to ecoefficiency, Maersk Oil has also succeeded in reducing gas flaring in the Al Shaheen field to a minimum. By exporting gas onshore and by using gas injection in the field, the company has managed to further boost recovery while reducing flaring significantly, despite a significant increase in oil production in recent years. “Our multi-billion dollar development of Al Shaheen, delivered on time and on budget, showcases our ability to innovate and manage large, complex projects. Moreover, our participation in Qatar Science and Technology Park demonstrates our commitment not only to local oil production, but to development of the Qatari nation as a whole,” said Maersk Oil CEO Jakob Thomason.

September 2010 Oil&Gas Middle East

QATAR COUNTRY PROFILE

20TH WORLD

PETROLEUM CONGRESS

Doha will host the upstreamâ&#x20AC;&#x2122;s Olymian event in December next year. Here H.E. Abdullah Bin Hamad Al-Attiyah, Deputy Premier Minister Of Energy And Industry, Qatar Petroleum Chairman And Managing Director And Chairman Of The Higher Organising Committee For The 20th World Petroleum Congress explains why Qatar is the logical place to congregate, and what will dominate the conference sessions

Oil&Gas Middle East September 2010

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QATAR COUNTRY PROFILE

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n December 2011 over 4000 delegates from the global upstream community will descend on Qatar’s capital city, Doha as the gas giant hosts the Middle East’s first World Petroleum Congress. The event is held over five days and will attract more than 600 media and 550 presenters participating in a programme that covers all aspects of the industry, from technological advances in upstream and downstream operations, to the role of natural gas, renewable and alternative energy, the management of the industry and its social, economic and environmental impact. Known as the “Olympian Event of the Oil and Gas Industry”, it is attended by a global oil and gas audience and outside stakeholders such as govern-

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Qatar will play host to the first World Petroleum Congress to be held in the Middle East in December next year. ments, other industry sectors, NGOs and international institutions who also join in the dialogue. The World Petroleum Exhibition, held alongside the congress, and in the same venue, features exhibits from the national

committees of the World Petroleum Council, which include the most prestigious national oil and gas companies and agencies of the world. It also showcases the most important international oil and gas companies alongside key suppliers, service compa-

nies and manufacturers. This is the most significant global exhibition dedicated to the oil and gas industries, and will follow the largest Abu Dhabi International Petroeleum Exhbition and Conference (ADIPEC), to be held this coming November.

September 2010 Oil&Gas Middle East

QATAR COUNTRY PROFILE

Al-Attiyah: The theme – Energy Solutions for All: Promoting Cooperation, Innovation and Investment – provides an excellent opportunity for delegates to discuss the petroleum industry’s role in delivering reliable, affordable and sustainable energy to the global market. A broad range of topics are to be discussed – such as the role of gas in the global energy mix, innovations in the supply chain, complementary energy sources and, most importantly, the industries commitment to sustainability. Given the high calibre of the speakers that will be present at the congress, I am sure that even the most experienced industry professional will come away from the congress having learnt something new.

Al-Attiyah: Qatar is already the number one producer and exporter of LNG in the world and home to the largest and most modern fleet of LNG tankers. At the same time, it continues to pioneer in the gas-to-liquids industry, as well as be one of the leading suppliers of petrochemicals, fertilizers and other manufactured and byproducts from its natural resources. Qatar is on track to be the world capital of the gas-to-liquids industry and has embraced a number of commercial-scale GTL projects based on various processes developed by the leading technology providers in the world. These clean, low sulfur products will play a key role in reducing localized emissions. The Oryx GTL project, which commenced operations in mid 2006, will at full capacity use around 330 million cubic feet per day of lean gas to produce 34 000 barrels per day of GTL products. The QP-Shell Pearl GTL project will at full operation produce around 140 000 barrels per day of GTL products as well as significant quantities of condensate and LPG. The first stage is expected to come onstream during 2010. Gas-based petrochemical industries are rapidly expanding with 12 projects under construction and further ventures are in the planning stages. The total cost of existing or near completed petrochemical ventures, refineries and metal industries is estimated at over US$20 bil-

Oil&Gas Middle East September 2010

Abdullah Al-Attiyah attracts huge media interest both home and abroad. Getty Images

What do you anticipate will be major themes for discussion at the WPC?

What are the next big GTL and LNG developments planned for the coming years?

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Al-Attiyah: On behalf of His Highness Sheikh Hamad Bin Khalifa Al Thani, and the people of the Qatar, I would like to say how honoured we are to have been selected to host this important global event. It has taken 74 years for the largest petroleum congress in the world to come to the Middle East region, where most of the world’s oil and gas reserves are. I am sure the Congress will be a successful and memorable occasion that will not only celebrate the achievements of the petroleum industry, but also make a valuable contribution to the sharing of information and ideas within the industry.

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INTERVIEW WITH H.E. ABDULLAH BIN HAMAD AL-ATTIYAH, DEPUTY PREMIER MINISTER OF ENERGY AND INDUSTRY FOR THE STATE OF QATAR:

H.E. Abdullah Bin Hamad Al-Attiyah.

Qatar will host the 20th WPC next year.

lion, some US$7.04 billion of which has already been spent on expansion plans with around US$13 billion expected to be spent on ventures planned to be completed and commissioned by the end of year 2010.

with this level of flexibility. Customers need someone to move very quickly. In the 1990s there were cargoes but there were not enough ships. Today we have the ships, we have the cargoes and we are ready to move quicker than anyone. One of our biggest challenges is the disconnect that exist in some markets between the gas price per BTU and the oil price. Therefore, one of our key challenges is convincing the world of the need for a more equitable pricing arrangement for natural gas. Ultimately, this will benefit both producers and consumers by providing a sound investment environment and adequate supplies of gas at fair prices.

With global recession and additional gas supply from the US, the LNG business is experiencing some challenges. What is Qatar Petroleum’s strategy for tackling these challenges?

Al-Attiyah: When you are in this business you need to be resilient to external shocks. We manage changing market conditions by diverting our cargoes to take advantage of opportunities in other parts of the world. Today we are the only country

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QATAR COUNTRY PROFILE

Al-Attiyah: The Gas Exporting Countries Forum, with its secretariat now established in Doha, aims at enhancing cooperation amongst producing and consuming countries. Its goal is the exchange of expertise in gas exploration and transportation, and to draw up frameworks for world gas markets.The GECF is not just about cooperation between exporting countries. The founders actively seek the participation of consuming countries in the development of the gas industry. Long term energy trends suggest that world natural gas consumption will increase by an average of 1.6 percent per year from 104 trillion cubic feet in 2006 to 153 trillion cubic feet in 2030. Natural gas will remain a key energy source for industrial sector uses and electricity generation. The industrial sector currently consumes more natural gas than any other and is expected to continue that trend through 2030, when 40 percent of world natural gas consumption will be for industrial purposes. In particular, new petrochemical plants are expected to rely increasingly on natural gas as a feedstock.

It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the challenge of natural gas supply and demand. The industry needs greater mutual support to ensure the uninterrupted supply of energy to the world and wise and prudent utilization of our natural resources. In this context, the role of the Gas Exporting Countries Forum is essential.

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Will there be closer cooperation between gas exporting countries in future?

Al-Attiyah is a passionate advocate of the Gas Exporting Countries Forum. The shortage of skilled engineers is often mentioned as a risk for the industry as it ramps up to meet demand. How can this be solved and what is Qatar doing in this regard?

Al-Attiyah: The shortage of skilled and qualified manpower is an issue facing the energy industry worldwide. At Qatar Petroleum we have several strategies for ensuring that we have the human resources that we need to keep pace with our ambitious expansion programmes. For example, we are developing strategic links with the educational institutions within Qatar to increase the number of home grown engineers and other specialists. This cannot solve the shortfall overnight, but it will build up the national knowledge base going into the future.

Oil&Gas Middle East September 2010

â&#x20AC;&#x153;Long term energy trends suggest world gas consumption will increase by 1.6% per year from 104 trillion cubic feet in 2006 to 153 trillion cubic feet in 2030â&#x20AC;? Is Qatar looking into developing any other energy sources?

Al-Attiyah: Qatar recently signed a MOU with the US Department of Energy in the field of renewable and alternative energy science and technology cooperation. The agreement acknowledges the strategic importance of promoting energy security through diverse energy sources and types, improving cooperation in renewable and

alternative energy partnerships, economic growth through clean energy, and reducing global greenhouse gas emissions. Among the initiatives we aim to jointly pursue are advances in carbon capture, transportation, and sequestration technologies. We also look forward to opportunities for co-investment in areas such as photovoltaic technologies and co-generation of electricity from the oil production process.

www.arabianoilandgas.com

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DIGITAL OIL FIELD

Saudi Aramco has a vast oilfield infrastructure which could reap real benefits from embracing the digital oil field concept.

DOF DEPLOYMENT The roll-out of the digital oil field is helping Middle Eastern firms optimise production and reduce operating costs Words: Chris Sell n business, it can be the finest margins that make the difference. Any new application, methodology or innovation can be expected to be exploited by firms keen to procure greater efficiency, productivity and added value. Which makes the stuttered evolution of the ‘digital oil field’ (DOF) all the more intriguing. Major international oil com-

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panies such as Shell with its ‘Smart Fields’, BP with ‘Fields of the Future’ and Saudi Aramco have pursued DOF initiatives for the past five to seven years. Yet its impact on the sector is still being felt, and its clear benefits have not been enjoyed across the sector. This is despite the fact the industry is projected to spend over $1 billion over the next five years on DOF invest-

ments, plus hardware, software and affiliated services. Simply put, the digital oil field is an array of interactive and complementary technologies that enable companies to gather and analyse data throughout the job site. Intelligent wells provide constant data – via fibre optic sensors in the drilling apparatus – about the well and its environment, which enables

operators to respond to changing circumstances in real time. It is also known as i-Field, e-Field, integrated operation, realtime operations and real time optimisation, Increasingly, it is innovations in various technologies that are assisting in DOF’s greater deployment. Practical examples include sensor data being delivered to skilled personnel who,

September 2010 Oil&Gas Middle East

DIGITAL OIL FIELD

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having remotely researched the data, converted it into usable knowledge and used it via advanced visualisation technology. This assists analysts in detecting complex patterns and avoiding potential production problems before they occur. As an example, operators can adjust fluid pressure or valve settings as the drilling surface becomes more or less permeable. Such cases lead to improved reservoir management, production optimisation and enhanced drilling operations. In turn, superior business performance is realised by increased reservoir recovery, accelerated production, lower costs and reduced risks for both the company and its employees as a result of a new and improved real time and remote monitoring technology employment. For an industry that would previously keep field data in hard form on paper, or via Excel spreadsheets in local field offices, to have access to shared information is a major shift. Alan Baird of Emerson explains further: “The digital oil field of today is far different from yesterday. Yesterday, information was old, it could be months old for any wellhead. Today, information is key and the more that is available the better planning that can be done. This starts at any wellhead, moves to the production plants and then finally out to customers. Engineers, maintenance and toplevel management are driven by uptime and production, so data is key,” says Baird. Some of the reported benefits of employing DOF include lower operational costs, earlier and increased production, lower capital investment and increased recovery of oil and

Embracing the digital oil field means approaching the project more holistically than a traditional IT project. gas. Furthermore, a number of studies have concluded that field operator productivity can be significantly increased by as much as 200%, operating costs reduced by up to 30% and production rates expanded by eight to 10 per cent. Nick Coles, organiser of the International Digital Oilfield Conference (IDOC) event, which brought together members of the oil and gas industry earlier this year to explore current and potential use of DOF in the Middle East believes the

Oil&Gas Middle East September 2010

sector needs to be more open to new methods: “Oil companies have a reluctance to embrace new methods. To get them integrated is by no means a short and easy accomplishment.” He continues: “It is a combination of three aspects; collaborative environment, people and progressive technology. But if firms implement this there have been many examples of improved production. And good payback on investment costs and improvement on all aspects of production.”

The IDOC event, which was held in May in Abu Dhabi was a clear illustration of an evolving technology gaining credence with the industry. Focusing on the potential use of digital oil field (DOF) technology in the Middle East, the conference attracted major players in the field, from ADNOC and Emerson, to Microsoft and Schlumberger. It is expected that a follow-up event will be taking place in Abu Dhabi in 2011. It would be a mistake, however, to label this a ‘new’ tech-

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DIGITAL OIL FIELD

nology or in fact a technology at all, according to Tony Edwards, CEO of StepChangeGlobal, a market leader in the application of digital oilfields and integrated operations. Edwards was a workshop leader at the IDOC event in May this year. The technology label is also a misnomer, said Edwards as it is more about implementing existing technologies in a particular way to maximise efficiency and deliver better results. “To call it a technology is a mistake. Yes, it uses technology but it is more to do with a fundamental shift in the way you work. Technology enables is but it is what you do with it,” says Edwards. “The classic mistake some companies made was to treat it simply as an IT project. But it is not like installing SAP. Fundamentally it is how people work together, how they operate in real time and over long distances. A huge element is to do with management and process change,” Edwards adds. With each company operating in its own unique way, Edwards said that this means there isn’t one approach to employ DOF programmes. “There is no one fixed way. It is dependent on the way the company works. You cannot just pick one approach from Shell and stick it into BP for example. Some companies don’t recognise that and consequently haven’t done so well. Whereas

in some companies it is easier to implement depending on the structure.” If firms do invest, the payback is significant Edwards said. Shell has attributed $500m in incremental added value through the use of DOF programmes while BP has attributed an increase in production of 100 000 b/d. Other anecdotal evidence states there has been up to 20 per cent improvement in well delivery times. While it may be inaccurate to state DOF is a ‘technology’, there is no doubt that such an initiative is only possible through the latest advances in digital technology and systems which enable remote monitoring. “The technology is already there now. Technology such as foundation fieldbus, HART, WirelessHART, asset management systems, distributed control systems,’ said Baird. “Producers are all looking at how they can make their fields and plant more intelligent. How they can reduce the downtime, how they can maintain their outputs. It is extremely important that producers have the right technology that fits the right applications. It is these technologies and the latest innovations – from the multiphase flowmeter to the digital control system to asset management delivering the information which will be key to DOF’s success within the

“Fundamentally DOF is about how people work together, how they operate in real time and over long distances” Tony Edwards, CEO, StepChangeGlobal April 2010 Oil&Gas Middle East

September 2010 Oil&Gas Middle East

DIGITAL OIL FIELD

IDOC ‘11

Event: International Digital Oil Field Conference 2011 Dates: May 16th – 18th Location: Hilton Abu Dhabi (Corniche) The IDOC ’11 Conference Programme will explore key issues surrounding the roll-out of the Digital Oil Field concept, including key sessions on: How will digital oilfields change the E&P business? The imapact on business processes, key competencies and tools, the value of DOF for the regions’ NOCs from ROI, as well as exploring what KPIs and metrics will serve to drive further initiatives and digital oilfield to dollars. Website: www.IDOC-UAE.com

oil and gas sector. “Its hard to say which aspect has been most beneficial for the industry, as it is when they (technology) are combined this is what gives it true value,’ said Baird. “If I have to choose one breakthrough for industry, then I would feel that I/O on demand is significant as this drives the speed of implementation, yet also brings that high level of data to not only management but also the process and maintenance engineers. “The beauty of the latest technology,” Baird continues, “is that that many challenges have already been addressed. From the reduction in cabling by using foundation fieldbus or WirelessHART devices to latest DeltaV, technology of I/O on demand which gives faster project implementation and startup. All combine to reduce cost and get the operations online much faster, thereby production quotas are met quicker.’ In the Middle East there are significant plans to embrace

DOF to assist production levels increases. In the UAE, plans are underway to improve crude production levels from 2.8 million b/d in 2009 to 3.5 million b/d. ADCO is set to increase its current oil production capacity of 1.4 million b/d by 22 per cent in 2017. One of the main contributors to this plan is the implementation of ADCO’s Automation and Smart Fields programme (ASF). This will identify and apply fit-for-purpose technologies and tools to enhance asset management and optimising the use of infrastructure, facilities and manpower resources. Elsewhere in the Middle East there are other examples of new technology being implemented. DOF programmes are underway in Saudi Arabia, Oman and Kuwait. Saudi Aramco has reported that all their new fields are intelligent fields with the latest being Abu-Hadriyah-Fadhil-Khursaniyah (AFK) field. In the Haradh increment, 32 such wells are reportedly doing

“The beauty of the latest technology, is that many challenges have already been addressed, from the reduction in cabling to faster project implementation” Alan Baird

Oil&Gas Middle East September 2010

Monitoring remote sites in real time without laying cable is already a reality. the work that would otherwise require 280 conventional wells due to being equipped with remote operations, permanent downhole monitoring systems, compact multiphase flow meters and smart well completions. Oman is expected to increase its oil output by 5.8 per cent in 2010 due to future enhancements through its digital oil field programme. A recent significant announcement is its Fahid Collaboration Centre (FCC), which is the region’s first integrated virtual oilfield operations facility. While the implementation of DOF in the Middle East has been steady rather than meteoric, a more pressing need than simply corporate desire to see profits rise will doubtless drive its implementation further. Figures from US

consultant Booz and Co. reveal a disturbing decline in skilled labour in the oil and gas industry with a current shortfall of 500 000 - and a deficit that could reach 1.7 million by 2030. With demand for oil in the region steadily increasing, the need to invest in oil fields initially deemed too expensive or remote could well become reality. Should this occur firms will doubtless embrace strategies which offer less labour-intensive set-ups with no loss of productivity.

Alan Baird, Emerson Process Management.

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EXTRA MILE

Logistics providers both big and small across the region are finding that offering enhanced end-to-end solutions for their oil and gas customers is giving them a competitive advantage

Oil&Gas Middle East September 2010

he global logistics market is by any stretch of the imagination a lucrative one and with revenues of US$3.56 trillion (2008), it is easy to see why. Forecasts predict this figure nearing $4 trillion by the end of 2013. Catering for upstream oil and gas operations is a niche area of the market where a delay in delivery by a logistics operator could mean losing millions of dollars in downtime waiting for a replacement part on an oilfield site. Most of these operators pride themselves in being able to provide value added services to

their discerning clientele in the oil and gas sector. Whilst the regionâ&#x20AC;&#x2122;s larger global logistics solutions providers are looking to enhance their well-established market share with increased capacity, smaller outfits are getting creative by capitalising on their specialist knowledge and expertise of the region. Oil & Gas Middle East speaks to the regionâ&#x20AC;&#x2122;s logistics experts to analyse the state of the logistical support currently on offer to the upstream oil and gas industry in the Middle East. Gulf Agency Company (GAC) is a marine shipping provider which started its operations in Kuwait

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UPSTREAM LOGISTICS

TNT operates one of the world’s largest cargo fleets and offers tailored solutions for upstream operators.

recently carried out similar infrastructure setups in Algeria and Mozambique. “You won’t see any places where GAC has shut down an office because when we go there we go there with a 25-year plan,” Manzil says. In order to further strengthen its position in the oil and gas industry, the Jebel Ali headquartered company recently set up a yard and a logistics warehouse in Houston.

“We had shipping agency offices in Houston for about 10 years but we never had our own infrastructure for the logistics business, we were using our partner’s facilities,” Manzil says. The company prides itself on giving customers a single point of contact to its array of logistics services around the world. Manzil says: “The energy marketplace is complex, with many parties involved at every stage.

“A lot of companies would have difficulty operating where we operate, we’ve made that our business and we’ve developed that capability and we have had a pretty impressive track record over the past several years” Mike Douglas, president and CEO, SKA Arabia

in 1957 moving onto Iraq and the rest of the Gulf before spreading its operations further afield into Africa, Asia, Europe and the Americas. “GAC in Dubai is quite big, we thought about the warehousing concept before anyone else. We had these warehouses up and running in the late 1980s,” boasts Ismayil Manzil, group energy logistics manager, GAC. “Our strategy is that if a customer is going to a new country or business, we go with them,” says Manzil. GAC sets up infrastructure for a customer in a country that does not currently have it. The company

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Customers want the full range of services delivered at the highest standard no matter the location. As a single contact point, GAC Energy cuts out the middleman.” Compared to other regions, the Middle East presents a comparatively more matured marketplace for upstream logistics according to Manzil. He cites the peaking of exploration and production activity immediately after the oil shocks in the early 1970s and the shallow hydrocarbon deposits in the region which makes it easier to strike oil. GAC’s offshore logistics operations are supported by its own fleet. In all, the company runs a fleet of nearly 50 anchor handling tugs, utility boats, landing craft, tugs and barges supporting its global operations in the Middle East, the Gulf, the Caspian, West Africa and off the west coast of India.

Mike Douglas, CEO of SKA Arabia, says providing logistics solutions in hostile environments sets his company apart.

September 2010 Oil&Gas Middle East

UPSTREAM LOGISTICS

35,000 SKA Arabia ran 35,000 logistical flight missions in Iraq alone in the last three years Source: SKA Arabia

“The biggest challenge in this part of the world is attrition. It is very difficult to find quality HR especially in upstream logistics. Fortunately for GAC, we have a very good team of qualified and experienced hands who have been working with us for a long period.” He also says that bureaucracy in the region is an ongoing problem for the company’s operations. ”If you have a project in three or four countries in the same region your lead time for getting the equipment from one country to another country is going to be a real factor in the overall cost of the project,” he comments. However, good planning and knowledge of local rules and regulations goes a long way to mitigate bureaucracy-related delays, Manzil says.

A jack-up rig under tow by a GAC tug.

The global downturn has not left the region’s oil and gas operations unaffected, but looking ahead, Manzil is optimistic about growth in both existing markets and new areas in the Middle East. “You have to agree that the regional economy is battered to the bottom. The only question is whether we hit the real bottom or not. If we have already done so, then there is only one way and that is upwards,” he says. “We need to look at the economic cycle. Growth is followed by recession and boom is followed by growth. Like many other industries, the upstream logistics industry is also poised for growth. The opportunities are plenty – Iraq is one side; Saudi Arabia is getting its act right in the west coast; Bahrain is looking at revamping its onshore field at Awali, Oman is looking offshore, Dubai’s recent offshore find, Al-Khajfi Joint Operations (KJO) – these are all positive developments,” Manzil concludes. Global express service provider TNT has recently been developing its road network capabilities across the region with the planned acquisition of 200-250 trucks operating out of the company’s Jebel Ali facility in Dubai, UAE. It is also beefing up its air freighter service with the addition of a dedicated Boeing 767 aircraft connecting the east coast of the US to the Middle East via Liège in Belgium, where previously commercial charters were relied upon. Brandon Grieve, regional multi country accounts director for

Oil&Gas Middle East September 2010

the Americas, Middle East and Africa says the increase in TNT’s fleet capacity is a reflection of the increased logistical activity namely in the oil and gas sector, where the flow of traffic is importantly for TNT, bidirectional. “Our focus on oil and gas is fairly new, from the beginning of this year we targeted the oil and gas industry as being one of big growth and untapped industries for us,” Grieve says.

“We’ve been servicing the oil and gas industry for quite some time now but without any real focus or aligned efforts across our countries. Towards the end of last year we started looking at the oil and gas industry a lot more seriously and started investing in structures and support mechanisms to actually focus on it.” With the regions under Grieve’s remit holding much of the world’s known oil reserves, he says it’s a

“The oil and gas industry is an important market in the supply of air charter services. Business is affected by the downturn - but in terms of logistics there remain considerable requirements” Eliska Hill, general manager, Chapman Freeborn

Eliska Hill is general manager of Chapman Freeborn.

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UPSTREAM LOGISTICS

no-brainer that TNT should focus on the oil and gas industry. “We’ve put in place some key support structure around the industry, we have specialist oil and gas account managers in every country that just focus on oil and gas,” he says. Grieve says the ratio of upstream to downstream related activity regionally is 70:30, adding that there is a criticality in the upstream sector that is not as apparent in downstream as the supply chains are a lot shorter with transit time being of the utmost importance. “Oil and gas companies are looking to differentiate against each other because there’s a lot

of vertical integration so the key differentiator is how quickly they can get the goods to market so that is critical for us,” Grieve says For many logistics providers, the key to gaining a competitive advantage is to develop integrated service solutions for their clients in order to retain business. For TNT this means looking into becoming more involved with the region’s dynamic regulatory environment. Bodies that govern border controls and customs duties have a significant impact on return and repair times and having prior knowledge about these is valuable to oil and gas companies with critical equipment in transit. “There’s always a challenge when

you’re dealing with the regulatory environments here in the Middle East,” Grieve explains. “It changes everyday almost but I think it’s down to building a relationship letting [authorities] understand where we’re coming from and us understanding the restrictions that they’ve got.” In terms of new markets and opportunities, Grieve sees a lot of movement in Iraq despite the current instability in the country. “There is a shortage of technical components in the market already, with Iraq opening up – 400 fields in the next 5-10 years there will certainly be an influx of new equipment into the market,” he says. He adds: “Once Iraq and Afghanistan settle down they will take off in several sectors not just oil and gas but automotive for spare parts especially for construction machinery, telecoms and power generation.”

SPECIALIST SERVICES Air chartering is another useful option for upstream oil and gas companies in need of urgentlyneeded replacement parts on oilfield sites. International air chartering firm, Chapman Freeborn, which has operated in the Middle East for over a decade, has seen business for its specialist services grow regionally. “In this year alone we have seen a continued demand for our expertise - particularly for urgent and

Offshore logistics operations require access to, or ownership of a specialised fleet of vessels.

outsize cargo charter services”, Says Eliska Hill, general manager, Chapman Freeborn’s Dubai office. While the company’s Sharjah office deals with commercial traffic, its Dubai office handles cargo and passenger charters. The company, which operates out of 25 countries around the world, saw a general slowdown in air charter movements during the global downturn last year with clients often choosing to utilise cheaper methods of transport such as over land or sea freight. Over the last seven months, the company witnessed resurgence in the demand for specialist air

“The biggest challenge in this part of the world is attrition. It is very difficult to find quality HR especially in upstream logistics” Ismayil Manzil, Group Energy Logistics manager, GAC Ismayil Manzil, group energy logistics manager at GAC is based in Dubai.

Oil&Gas Middle East September 2010

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UPSTREAM LOGISTICS

charter services for cargo movements particularly in the oil and gas sector, moving technical oil spill equipment, heavy, outsized and urgent goods. Internationally, Chapman Freeborn coordinated a series of aircraft charters into New Orleans, USA, to help tackle the leak from the site of the Deepwater Horizon rig in the Gulf of Mexico. Recently its large movements saw the firm coordinate the air

transportation of numerous heavy and outsized deep-sea drilling items, urgent tools and dangerous goods to support projects in regional and remote locations. Whilst the global economic downturn affected air chartering operations for the company, Iraq was a notable exception, although in its early stages, it has created enormous charter opportunities for both passenger and cargo, according to the company.

70:30 The approximate ratio between TNTâ&#x20AC;&#x2122;s upstream and downstream logistics activity in the Middle East

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September 2010 Oil&Gas Middle East

UPSTREAM LOGISTICS

The company has seen a sharp increase in the requests for tailored charter flights in 2009 to places such as Basrah, Baghdad, Najaf, Sulaymaniyah and Kirkuk increasing month-on-month in

2009 as the reconstruction efforts in the country stepped up. 2010 has seen a definite swing back towards air chartering, as the transit time factor outweighs the cost issues. The rapid development of some projects has generated a significant demand for all types of charter movements. “The oil and gas industry is an important market in the supply of air charter services. Business is affected by the downturn - but in terms of logistics there remain considerable requirements,” explains Hill. “Across our worldwide network of offices we’re seeing continued demand for our expertise - particularly for outsize and urgent cargo charter services,” she adds.

FRONTIER LOGISTICS

Brandon Grieve, regional multi country accounts director for TNT.

Oil&Gas Middle East September 2010

As oil and gas and reconstruction projects pick up speed in post-war Iraq, there are good opportunities for experienced logistics providers with an integrated security element. With its

“We’ve put in place some key support structure around the industry, we have specialist oil and gas account managers in every country that just focus on oil and gas” Brandon Grieve, regional Multi Country Accounts director for the Americas, Middle East and Africa, TNT

company mantra of “Doing difficult jobs in difficult places”, Dubai based air chartering and ground logistics provider SKA Arabia sets itself some ambitious standards. It is more than a marketing slogan according to CEO and president Mike Douglas. “Most of the big freight forwarders don’t have the kind of on-the-ground presence we do. What we call in the logistics game ‘the final mile’ is where we probably have a unique capability,” he says. “A lot of companies would have difficulty operating where we operate. We’ve made that our business and we’ve developed that capability and we have had a pretty impressive track record over the

past several years. It’s a high risk business but we try to limit our risk, we take care of our people and we try to do a professional job.” The company specialises in providing logistics solutions in unsecured and hostile environments with particular focus in Iraq and Afghanistan. It operates a tanker fleet in Iraq in excess of 60 trucks and has access to about 300 additional trucks for containerised and flatbed cargo. “We’ve developed a unique concept for moving fuel: We operate convoys throughout Iraq down into the south into Basra and into the north in Kurdistan,” Douglas says. The company has been contracted by the Iraq Ministry of oil to support operations at the

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UPSTREAM LOGISTICS

Dora refinery in Baghdad and the Baiji refinery in northern Iraq. It is seeking to increase its activity in the oil and gas sector in the country and is making efforts to meet the audit standards of the oil and gas community. “We’re focused on fixed-wing and rotary operations, moving contractors in and out of Iraq and also from the UAE, from Kuwait and hopefully in the near future, we’ll be moving contractors to other destinations in Europe where some of the oil and gas companies are planning to move their personnel from,” Douglas says. “We operate warehousing in Baghdad and the Basra region. We are focused on developing the supply chain distribution capabilities, we’ve had significant experience and we hope to leverage that with a lot of the oil and gas clients,” the CEO says. Douglas predicts that there will be a shortfall in refined products in Iraq in

SKA Arabia CEO Mike Douglas says the company’s ability to operate in difficult areas of Iraq is a major selling point.

PANALPINA’S BRAND NEW OIL & GAS SINGAPORE LOGISTICS HUB Panalpina officially inaugurated their dedicated logistics facility in August to service the oil and gas industry in Singapore. Panalpina World Transport (S) Pte Ltd., the wholly owned Singaporean subsidiary of Panalpina World Transport (Holding) Ltd., will base the facility out of the high-tech hub, further strengthening the company’s industry-specific competence. The new facility will exclusively serve shippers from the oil and gas industry by offering Panalpina’s full portfolio of services including air, ocean and overland transportation management with a focus on the specific oil and gas trade lanes, charters, port agency for supply vessels and rigs, husbandry services, multimodal rig solutions, customs clearance, packing, warehousing, expediting as well as other related supply chain management solutions. The new built-to-suit oil and gas complex, located within the Loyang Offshore Supply Base, Singapore, offers 1100 square metres of office space, a 7000

Oil&Gas Middle East September 2010

square metres covered warehouse and 14 000 square metres of open yard space. It increases Panalpina Singapore’s total warehousing capacity to more than 30 000 square metres. The facility also enjoys close proximity to the base jetty providing natural deep water conditions that facilitate the handling of floating installations and oilfield supply and service vessels. Panalpina group COO Karl Weyeneth speaking at the inauguration of the Singapore hub.

the future as the current refinery infrastructure cannot produce enough to satisfy demand. Indeed, multi-billion dollar investments are planned, but will take several years to come to fruition. The Iraqi government is currently negotiating with several potential partners to overhaul its ageing downstream infrastructure. “We’re investing in developing a fuel supply chain, we’re intending to build fuel storage tanks in the Khor Al-Jabir port near Basra. We intend to develop a fuel supply chain logistics solution where we will import refined products, diesel primarily, and hope to supply a number of clients in the future,” Douglas says. “Throughout the world wherever there are disasters, conflict situations, there’s a need for this kind of ‘frontier logistics’,” Douglas concludes.

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EVENT REVIEW

FACTS AND STATS

Jack Ahart, Jimmy Larsen

Where: Ruth’s Chris Steak House At: The Monarch Hotel, SZR, Dubai When: Last Thursday of every month Attendees: 98 Sponsors: Holborn Assets & Hurricane Marine Scott Lamberson of AOSS, with Buck Kilgour of Swanberg.

taz Bakhiet of Terry Willis and Mu es Council (UK). tri the Energy Indus

DUBAI’S OFG Oil Field Get-together provides muchneeded antidote to summer lethargy s the heat cranked up and August approached, Abu Dhabi, Sharjah and Dubai’s resident upstream professionals sought some summer refuge on the cool and classy Ruth’s Chris Steakhouse for the July instalment of the Oil Field Get-together. In another sell-out event the booming business lunch brought together a wide variety of the oil and gas ser vice sector’s management figures and welcomed some new additions to the region. July’s event sponsors were Holborn Assets and Hurricane Marine, an oilfield

Oil&Gas Middle East September 2010

equipment provider based in Dubai. Quickly established as the monthly networking event in the business, the event was a final instalment for many before the annual summer exodus to cooler climes, and the final opportunity to partake until September, with the Holy Month of Ramadan falling across the August slot. The next event will be held as usual at Ruth’s Chris Steak House at the Monarch Hotel on Sheikh Zayed Road in Dubai, on Thursday September 30th. See you there!

$/. 4 -)33 Thursday

September The next Oilfield get-together will be held on September 30th. Check out the full gallery from July’s working lunch at www.ArabianOilandGas.com

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PROTECTIVE COATINGS

FIRST LINE OF DEFENCE Painted coatings are the visible barrier protecting any structure exposed to the brutal elements and extreme temperatures found throughout the Middle East aints and coatings providers in the Middle East have a long pedigree in the region. This is perhaps not surprising given the ubiquitous nature of their core product, and the leading multinational paints manufacturers have established strategic production bases and supply chains across the Gulf. The region’s oil and gas companies often turn to these silent protectors to shield their mission critical projects, where every hour of production downtime translates into millions of dollars in losses. Whilst promoting environmentally friendly products is important to many coatings

manufacturers operating in the Middle East, the reality for many here is that their clients will often opt for the cheaper and conventional solvent based paints. Some in the industry say this is down to a lack of knowledge as well as customers watching out for their bottom line. With the establishment of a regional paints and coatings industry body, the Society for Protective Coatings (SSPC), it is hoped that a greater level of knowledge transfer and awareness will take place between coatings professionals, contractors, applicators and end-users. Hempel Paints’ director of Protective Coatings and Marine Coatings and Technical Serv-

Oil&Gas Middle East September 2010

ices, Ian McCahill is optimistic about the flow of work expected to come from offshore and upstream energy projects. The company has recently bagged two major contracts on world-scale projects, namely the Qatar Pearl GTL and Saudi Aramco’s SATORP (Saudi Aramco Total Refining and Petrochemical) projects. “The bears are out, and the bulls are back,” says McCahill. “Right now you’re looking at double digit growth scenario for the Middle East markets. The barometer as always is oil price and it’s comforting to note that oil revenues are stabilising at solid levels after the volatile boom and bust period.”

Being an integrated business partner with oil majors such as Saudi Aramco has gone a long way in helping the company secure these contracts. McCahill says that embracing change; adding and creating value for customers; understanding customers’ requirements; their working procedures and systems is key to gaining a competitive advantage in an increasingly uncertain marketplace. “The last time there was a really stable business environment was 1992-1993, and at those times I would have said we are competing in the market on quality and service, they are the benchmarks,” McCahill explains. “Since then these have

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PROTECTIVE COATINGS

Cost remains a principal driver in the selection of upstream coatings. become more internal than external benchmarks because we’ve integrated ISO; health and safety legislation; and internal and external audits.” “If you can save three or four hours in turning around that structural steel, handling it and getting it to site and then you multiply that by 10 000 tonnes of steel work, you’ve saved a lot of money,” he explains. Regional sales since 2004, he says, had double digit growth up until 2009 when the recession reached full tilt. In addition to attributing lower volume to recessionary trends, a lack of confidence stemming from the reduced foreign investment in Saudi Arabia has been to blame.

However, due to the longer lag time involved in upstream projects, coatings providers have been somewhat cushioned from the brutal boom and bust scenario the civil sector has seen in the Middle East. Jotun has been experiencing similar levels of growth in the region, with ME and Asia accounting for a major portion of its operations and revenue. The company, which had an operating income of approximately US$1.79 billion in 2009, up from $1.67 billion in 2008, finds that many of the petroleum based economies are faring better in the current economic climate. Jotun opened a new state of the art factory in Yanbu, Saudi

“The bears are out, the bulls are back. Right now you are looking at a double digit growth scenario for the Middle East markets. The barometer as always is oil price and it’s comforting to note that oil revenues are stabilising at solid levels after the volatile boom and bust period” Ian McCahill, PCMC & TS Director, Hempel Paints

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A contractor applies the final coating to an oil pipeline in Saudi Arabia. Arabia in November last year, is witnessing strong growth in the region, particularly Abu Dhabi, with its ongoing and planned mega infrastructure projects. “Last year was very good for us in the oil and gas sector and in protective coatings in general. We are quite optimistic with regards to the oil and gas sector over the next 12 months,” says Erik Aaberg, managing director at Jotun Paints. The company is seeing growth of almost 10% worldwide this year with its operations in the Middle East delivering growth of 5%. Despite such positive gains for providers’ order books, there are some areas of the market that cannot be controlled, such as the rising cost of raw materials. This has been largely attributed to a double hit of increased demand from China, following a reduction in production capacity of resin manufacturers, which have been mothballing or even scrapping plants because margins became uneco-

nomical when the recession hit. China is now prepared to pay much higher prices which has in turn affected other markets. “Raw material prices have risen quite a lot, but the overall demand for coatings has not grown in the last 12 months,” says Aaberg. “Many of the raw material suppliers cut capacity and closed plants, so there is much less production available. This ultimately affects our prices, which is difficult because there is no

Erik Aaberg (Jotun).

Sep SSe September eepptem pte tem embber err 20 22010 010 10 O Oi Oil&Gas il&Ga Gas G ass Mi a Middle M idd ddl dd ddl dle E East ast as a st st

53 53

PROTECTIVE COATINGS

increase in demand. This situation is difficult to explain to our customers when we say that our costs have gone up.” Market forces aside, operating in the Middle East for foreign companies traversing local cultural practices presents some unique challenges explains Andy Holt, regional manager of UK based Leighs Paints. “Every place that you operate has its differences and it’s important to be culturally aware and to try and understand what the local business requirements are, and try and focus your business in that way,” Holt says. The heavy duty coatings manufacturer, which focuses on steelwork protection, has seen a linear level performance since 2008. Its most recent involvement in regional oil and gas projects have included Habshan 5, the Shah gas fields in Abu Dhabi, and loading berths for Qatargas in Qatar. For the Qatar job Leighs Paints provided specially formulated cryogenic and fire protection coating systems. Unexpected project delays or cancellations pose further challenges due to the time-sensitive nature of the paints and coatings supply chain, which is usually tailored to industrial scale clients’ requirements and specifications. “You have to be careful when you are forecasting that you don’t end up with too

much stock for projects which are cancelled or delayed due to unforeseen circumstances,” says Sigma Paints’ Dubai based general manager, Arno Meister. “For production times, getting the raw materials in on time, you cannot take any risk in delay in shipping because all the raw materials aren’t manufactured or stored in great volumes locally in the GCC, and so need to be imported,” he says. Meister notes that whilst the decorative paints side of the market is seeing an increase in demand for environmentally friendly products, the same cannot be said for industrial paints and coatings. Ultimately cost remains the main driver for customers who often opt for the more conventional solvent based products. Marwan Salem, managing partner at MBS Coating, a UAE based contractor believes this is also partly due to a lack of awareness amongst the region’s customers. “We try to advise the client to use water based paint but of course there is the cost factor involved, so we have to convince and discuss with arguments, but not just by ourselves as a contractor. We also bring in paint manufacturers to further strengthen our view,” he says. Pradeep Radhakrishna, founding chairman of the newly-

“Raw material prices have risen quite a lot, but the demand for coatings has not particularly grown in the last 12 months. This is because suppliers have cut production capacity by mothballing plants, and that has impacted our bottom line” Erik Aaberg, managing director, Jotun Paints

Oil&Gas Middle East September 2010

Pradeep Radhakrishnan, SSPC chairman with Marwan Salem of MBS Coating.

Arno Meister, general manager of Sigma Paints, Saudi Arabia. inaugurated UAE chapter of the SSPC says that encouraging industrial customers to use environmentally friendly coating products will take time but is hopeful they will be accepted as the standard in the future. “As it’s used more, companies will start producing it in greater volumes, and as more companies start producing it there’s more competition. This trend of paints going towards using less solvent is already happening,” he explains. “Water based technology has been around for a while but at the moment it has still not

crossed the major threshold levels,” he concludes. Speaking about the important role a certification body like the SSPC plays in the regional context, Salem says it helps to set a standard that vendor, service provider and client recognise, ensuring quality delivery. “If there’s an urgent job like maintenance, then a shut down costs millions of dollars for anything energy related. You don’t have to be just professional, you have to be highly specialised and people have to trust you - and that’s where the SSPC comes in,” says Radhakrishna.

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PROTECTIVE COATINGS

Q&A: What challenges do you face when coating upstream installations?

Saudi Aramco facilities are exposed to harsh climatic conditions. In addition, the application conditions vary, including exposure applicable to: offshore, onshore, wet and dry soils, elevated temperatures, highpressures, and aggressive chemicals. These variables create significant challenges to Saudi Aramco’s coating and corrosion engineers, requiring that we diligently search for the best coating technologies available that will provide the correct protection system for every unique condition that applies. Saudi Aramco has established stringent standards and qualification programmes ensuring that only qualified products are approved.

Saudi Aramco’s protective coatings specialist, Mana Al-Mansour, tells Oil & Gas Middle East that demanding conditions make KSA a hotspot for product development

These programmes have earned a strong reputation in the region, resulting in coating manufacturers requesting Saudi Aramco’s approval as a primary condition ahead of launching their new products. Saudi Aramco makes significant investments in the development and maintenance of its operations. We work very hard to eliminate all potential interruptions to our supply, process and delivery facilities, ensuring the continuity of our production. As part of this process, Saudi Aramco utilises the latest technologies available to maintain the quality of our facilities and extend the design life of all its assets. Protective coatings are one of the important tools available to prevent corrosion and ensure longer service life for the facilities. The quality of coating contractors is a key issue for Saudi Aramco. If the products are not applied correctly or do not comply with application standards, the quality of the coating becomes irrelevant as the applied system will fail, more so if the contractor is not qualified and incapable to perform the application properly. This is why we are working closely with local contractors in conjunction with

coating manufacturers, improving their capabilities and ensuring that they are qualified to carry out important application practices. We always encourage contractors to be certified by international organizations, such as the Society for Protective Coatings (SSPC) and NACE International and coating manufacturers.

Does Saudi Aramco work with industrial paints and coatings providers to develop new products and services?

We participate in the development of the products based on our practical experience with coating performance, applications and failures. Saudi Aramco works closely with vendors to develop coatings. Sometimes, Saudi Aramco sets certain criteria for the intended What trends do you see products and shares this informaemerging in the coatings sector? Saudi Aramco has a large number of tion with the coating manufacturers. new projects, expansion of existing Once the product is ready, we conduct lab tests at our facilities and the ongoing rehabiliResearch and Development Center tation programmes for older facilifacilities to ensure that the product ties. I believe that this large project meets our standards. Later, the base, combined with the climatic conditions in the region, necessitate coating performance will be evaluated in actual conditions in an the development of new products operational facility. Saudi Aramco for use here in the region, prior to is one of the few companies worldmanufacturers marketing them the man wide providing its facilities to test in less ddemanding conditions. This new technologies and does not rely Aramco to have a first look allows A solely on laboratory test results for at new pproducts currently under the approval of new products. development. There are a lot of develop Saudi Aramco is always supportive exciting new technologies that after of new technologies and allocates proper iinvestigation and approval a significant budget solely for that should rresult in our goal of mainpurpose and we are always ready taining ccontinuity of Saudi Aramco to adopt new technologies and supply aand extending production innovations. longevity. and operational ope

“Saudi Aramco has established stringent standards and qualification programmes ensuring that only qualified products are approved and deployed”

Mana Al-Mansour, Saudi Aramco.

Oil Gas Oil&Gas as Mi as Middl Middle d eE dd ddl East ast September Septem Sep teemb mbber er 201 22010 20 01100

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PROJECT WATCH: ABU DHABI

IRAQ MEGA PROJECTS

IRAQ MEGA PROJECTS October’s Iraq Megaprojects 2010 conference in Istanbul will focus on the challenges facing firms building operations in the world’s oil and gas superpower in waiting Words: Chris Sell

Oil&Gas Middle East August 2010

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IRAQ MEGA PROJECTS

or a country that had been ravaged by three decades of sanctions, two Gulf wars and ongoing civil unrest, the announcement in December 2009 of a successful second oilfield bid round by the Iraq Oil Ministry was a significant step forward in its bid to attract the investment it needs to modernise its oil infrastructure and rebuild its ravaged economy.

Of the second round of bids for 11 oil and gas field contracts, seven were awarded to consortia led by Shell, China National Petroleum Coprporation (CNPC), Lukoil, Petronas, Gazprom and Sonangol. Coupled with the three major deals awarded from the first rounds (BP with CNPC on the Rumaila field and ExxonMobil and Eni on West Qurna Phase 1 and Zubair) it stands to double its existing output in the next few years.

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According to Iraq’s Oil Minister Hussain al-Shahristani, the fields announced by the government could increase oil production by up to 2.5 million barrels per day (bpd) in a few years, up from the current 2.3 – 2.4 million bpd. In total, the undeveloped fields are estimated to contain 41 billion barrels of oil, more than a third of Iraq’s total reserves. Iraq hosts the world’s third largest oil reserves. While the per-barrel profit of these fields to oil companies is very low – ExxonMobil and Occidental Petroleum signed deals at prices similar to that which they had rejected in the summer 2009 – the chance to get a foot in the door of Iraq’s oil industry is too good to miss. On the West Qurna field, the ExxonMobil-Shell partnership accepted $1.90 for each barrel of oil produced above the field’s current production level, precisely what the government asked for in

$1.90 P/B On the West Qurna field, the ExxonMobil-Shell partnership has accepted $1.90 for each barrel of oil produced above the field’s current production level.

“The country as a whole is attractive, but especially the south region, which features most of the oil reservoirs and which has proportionally more projects” Alan Baird, Emerson June 2009 and less than half the $4 a barrel the IOC’s were after. Those fields being bid for included the massive Majnoon and West Qurna 2 (with an output target of 1.8 million barrels per

day (b/d), Halfaya, Qaiyarahand Badra. The Eastern Fields and East Baghdad field (located in part under Sadr City) received no bids and could now be developed directly by the state.

September 2010 Oil&Gas Middle East

IRAQ MEGA PROJECTS

Following the results on 11 December, a number of international players are now gearing up to capitalise on the greater willingness of the Iraqi government to exploit its natural resources and attempt to kickstart its economy and social structure following years of conflict and stagnation. So confident is the ministry that Al-Shahristani recently announced a third round of bids will take place on 1 October. According to the oil minister, Iraq will invite all 45 international companies, which were prequalified in the two oil auctions in 2009 to develop three further gas fields. The fields on offer are Akkas in Iraq’s western desert, Mansuriya in eastern Iraq and Siba in the southern oil hub of Basra. The gas produced will be used to develop for domestic power generation as well as export revenue (an estimated 50 per cent will be exported). But securing contracts is merely the start. The reality of operating in Iraq means that safety is just one of many practical issues confronting those looking to operate in the country. Political, social, legal and technical challenges are just as pressing. According to the Economist Intelligence Unit, once its current orders have been deliv-

ered, Iraq will have 46 drilling rigs available, which would be barely capable of delivering the production increase for one of its fields, let alone 10. IOC’s will also face other constraints. Prices for steel, for example, are expected to rise dramatically in the face of increased demand. A shattered infrastructure means roads and bridges will need upgrading. There are bottleneck fears and access to the prodigious quantities of water required to conduct operations could be another major obstacle. Loss of technical expertise, with many

Iraqi experts either having left or been pushed out of the country means another key resource is lacking. A further possible conflict with its oil-producing neighbour, Saudi Arabia over OPEC quotas will surely transpire if Iraq brings its production up towards seven billion b/d. Since 1990 Iraq has been exempt from quotas due to imposed sanctions. Concerns have been raised by OPEC members that should Iraq double its output, it could have a destabilising effect OPEC and the oil price. It is therefore imperative that those firms

31M

Iraq’s population stands at 31.23 million inhabitants Source: OPEC

2.3M Iraq’s crude oil production in 2009 averaged around 2,336,000 barrels per day Source: OPEC Annual Statistical Review of 2010

Halliburton was awarded the project management consultancy role for the giant Majnoon field in Iraq in August.

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Oil&Gas Middle East September 2010

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IRAQ MEGA PROJECTS

looking to enter Iraq are wellversed in all the practical, procedural and logistical challenges inherent in such a market. The Iraq Mega Projects 2010 conference aims to focus on these inherent challenges that accompany firms operating in Iraq, identify the strategies to ensure quotas are met and highlight the operations that are essential to help rebuild the country. Those expected to attend the conference will be operators, ministry representatives, local governors, service providers and Iraqi experts with the express aim of highlighting the requirements needed to enable Iraq to ‘support society, jumpstart economic growth, improve security and become one of the world’s largest oil producers’. CWC Group, the organisers of the event in Istanbul

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has announced it has included a panel discussion on Corporate Social Responsibility into the programme, highlighting the benefits to the contract winners of adopting a suitable social responsibility approach when conducting business in Iraq. Two sessions will be dedicated to the full range of issues involved with this issue, including the focus on training, technology transfer, recruitment, community engagement, security, local suppliers and human resources. Falah al-Khawaja, former director general of state-owned oil company, SCOP (State Company for Oil Projects), which operates the design and engineering of upstream and downstream projects in Iraq, and chairman of the conference committee, explained the conference aimed to not just high-

Iraq’s downstream industry is set to receive $20bn investment over five years.

September 2010 Oil&Gas Middle East

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IRAQ MEGA PROJECTS

Left: BP’s former CEO, Tony Hayward, at the signing of a major oil deal in Baghdad in November 2009. Right: Iraq’s Oil Minister Hussain al-Shahristani. light such problems but look to deliver solutions to operating in the Iraq market. “Notably there is the huge infrastructure that will be required for petroleum projects as well as civic infrastructure. Is the timeframe achievable? And what about other aspects such as conducting exploration?’ he said. ‘Companies from all over the world will be working in a new environment. There has been lots of change, disruption, people have changed, how will they react?” The conference, he continues, will be about talking about working in Iraq and what it could offer. “For the contractors it is about opportunities. It is about opportunities for service companies, for Iraq’s private sector, for manufacturing companies and drilling companies.” Al-Khawaja says a conscious decision was taken to ensure that Iraqi politicians attended the conference to offer their expertise though not in an official capacity. “We avoided making the Iraq government’s involvement official and went for non-government sponsorship so there can be free and non-restricted discussions. But we were keen to get government officials so there could be a discussion of ideas and solutions.”

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Furthermore, the well-publicised environmental disaster in the Gulf of Mexico which has so damaged BP’s international standing has merely highlighted the need for a greater awareness of corporate social responsibility and the need to engage with the community, he added. The question of how it is to be done will also be addressed at the conference (speakers include NOC’s, stakeholders and the Iraqi private sector). The focus of the whole event will be on implementation, consequently, one aim of the conference will be to draw up a draft of what can be done. For example, on day three of the conference, there will be workshops where a number of top Iraqi lawyers and bankers will be present and will provide a clear and detailed description of national regulations affiliated to the banking and legal sectors. Furthermore, there will be an interactive exchange covering legal, financial, accounting and insurance issues. The lack of any clear oil law is one concern which will surely be addressed. The sector was nationalised between 1972 and 1975. The lack of any law means firms have little legal recourse, should the government decided it doesn’t like

“Our job is a business enabler. To allow other industries to focus on their core business efforts while we carry out best practice solutions” Peter Lalor, director of oil and gas solutions, Olive Group the deals. A situation that prevented a number of firms from bidding for the latest rounds of contracts. Relying on previous experience is not a green light to efficient and successful practice in the country, however. Peter Lalor, director oil and gas solutions with the Olive Group - the first security firm to enter Iraq following the US-led invasion in 2003 –and who is speaking at the conference explained the likelihood of a firm entering the market is predicated on three key issues. “To me, the conference will enable those attending to develop a better understanding of the environments and whether they can

adapt. In particular, there is the question of a security budget, risk appetite in terms of due diligence and corporate responsibility and perception of threat,” says Lalor. “Conferences are important so that potential customers can come and hear first hand what is involved and what choices need to be made,” he explains. “All companies that are looking to get involved need to make decisions. Some may feel it is not an appropriate operating environment whereas some may say now is the ideal time.” What is essential, Lalor says, is that international oil firms can work alongside national oil compa-

$41.85BN

Estimated value of Iraq’s petroleum exports in 2009 was US$41.85 billion. Source: OPEC Annual Statistical Review

September 2010 Oil&Gas Middle East

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Conference Steering Committee Conference Committee Chairman: Falah Al- Khawaja, Former Director General, SCOP & Legal Affairs and Former Board of Directors Member of SOC and NOC

Committee & Speakers Include: Natiq Al- Bayati, Former Director General: Exploration Company - Reservoir and Field Development Petroleum Licensing, Ministry of Oil Asri Mousa, Technical Adviser, Chief of Operations-South Dr. Ahmed B. Al-Ahmed, Vice Governor, Central Bank of Iraq Salah Abdul Karim, Director ďŹ elds, South Oil Company & Head of Department, Rumaila - Field Oil Development Mounir Bouaziz, Vice President of Middle East and North Africa, Shell Nasyrov Iskander, Director General, Lukoil Mid-East Limited Myeong Nam Kim, Vice President, Kogas

For speaking opportunities please contact

To ďŹ nd out about stand availability and prices please contact Shunker Goel: sgoel@thecwcgroup.com or call +44 20 7978 0080

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Shane White: swhite@thecwcgroup.com or call +44 20 7978 0090

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IRAQ MEGA PROJECTS

“What is needed is a clear master schedule that connects the development of the fields, pipelines, gas processing, and refineries amongst other practical matters” Alan Baird, Emerson Process Management

nies to enable suitable technology transfer. “This will go some way to relieving the stagnation caused by conflict and sanctions. But there is no panacea, no quick fix,” he warns. “Our job is a business enabler. To allow other industries to focus on their core business efforts while we carry out best practice solutions. As a result of these bids, a lot of firms will be deployed to brownfield and greenfieldsites. Before thinking about large mega projects, you need to look at initial methods of security, both deterrent and detection abilities.” Ultimately such events, which gather like-minded people who can acquire information that can then be used to make informed decisions before entering a potentially volatile market can only be beneficial. Alan Baird, director, plantweb and wireless marketing, Middle

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East & Africa, Emerson Process Management, agrees that the presence of such events are important for those businesses wishing to get involved. “Such conferences are essential and a very good opportunity to engage directly with the customer and collect and compare information. Customers have the opportunity to now see who can be key to helping them through this difficult period and they will get the opportunity to meet the experts.” More directly, it is a chance to engage with those multi-nationals who will be operating on the oil fields and consequently will require additionally expertise to work effectively. “We are looking at meeting end users and making contacts with the oil majors working on the different concessions on Iraq. We are also looking to meet potential services partners

whom we can identify are capable of providing us with resources in the field specialised in our automation industry,” he says. Iraq as a market, while promising, suffers from a lack of any systematic approach or transparency for those firms considering whether to risk entering. “It has a very promising potential but currently we see it is moving in a very erratic manner where we are getting requests from everywhere (especially traders) without knowing who is serious and what projects have real financing capability and will happen,” explains Baird. “What is needed is a clear master schedule that connects the different projects together, for example the development of the fields, the pipelines, gas processing, refineries amongst other practical matters,” Baird says. Safety concerns apart, Baird adds that the key issues are identifying capable resources and being able to support the multinational companies and to meet their aggressive schedules. “The country as a whole is attractive, but especially the south region, which features most of the oil reservoirs and which has proportionally more

projects and developments we are interested in.” Despite the obvious risks, Iraq is facing a surge of interest in the wake of the oil bid rounds held last year. If it can capitalise and secure much needed investment, the country could well see its oil output increase rapidly and strengthen its damaged infrastructure. Conferences such as Iraq Mega Projects are fundamental in ensuring those willing to participate in the next chapter of Iraq’s oil history are prepared for all the challenges ahead.

DON’T MISS Iraq Mega-Projects 2010 Exhibition & Conference 26 – 28 October Istanbul, Turkey Website: www.cwcimp.com

September 2010 Oil&Gas Middle East

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OILFIELD ACCOMMODATION

HOMES FROM HOME

Mike Bradley of accommodation specialist HB Rentals says the challenge of meeting local upstream demand for modular living quarters and offices prompted investment in a new UAE support facility

HB Rentals are a major oil and gas field supplier in the Middle East. ilfield operations, whether onshore or offshore, are made possible by the presence of a dedicated workforce onsite. Appropriate life support solutions are needed for the lengthy stints these personnel will spend in these remote and often hostile locations. HB Rentals is a Louisiana, based accommodation unit and auxiliary equipment manufacturer for the oil and gas industry since the 1980s. It has offices serving the world’s major exploration and production regions of the Americas, Europe and Asia. The company manufactures land based wheel mounted trailer units and cold weather skids and stackable offshore accommodations for fixed platforms and floating rigs. The company also provides a host of services for all its accommodation units including project management, plan-

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ning, engineering and design. “We have been established in the industry for 30 years,” says Mike Bradley, sales and marketing manager for the Eastern Hemisphere of HB Rentals. “We operated from bases in most oil and gas producing regions worldwide. We support our regional locations by way of independent business hubs as well as agents. Our A60 fleet is the largest and the most dispersed around the globe as well as being the most diverse in terms of specifications and layouts,” he claims. Bradley says the HB Rentals modular designed units can be configured to provide anything from a single two-man accommodation sleeper up to a 180+ man multi module/level living quarters including galley, mess rooms, laundries and offices. The company also provides specialist offshore engineering and general purpose cabins that

Offshore enquiries are booming for HB.

include laboratories, workshops and recreational cabins in addition to other technical amenities, and owns and operates a large fleet of smaller specialised well service A60 cabins to meet Zone 1 and 2 hazardous areas. “All our accommodation and well service cabins are designed for use offshore in safe and hazardous areas. In addition and as standard options we provide for rental, walkways, sewage systems and power generation plants,” says Bradley. Bradley explains how the company can offer its customers the option to pick up or mobilise its housing units in one part of the world and drop off or demobilise the same unit in another. With a strategically-placed manufacturing base in the UAE to complement its other bases in Singapore, UK and the US, the company is seeing steady growth of business in the Middle East and inter-

nationally. He highlighted the UAE, Qatar and Saudi Arabia as particular areas of growth in business opportunities especially with an increase in enquiries for offshore projects locally. Around 70% of the units HB Rentals manufactures are leased out to its global client base on flexible finance terms. It does, however, receive enquiries to build units to be sold which are handled by its engineering, design and manufacturing hubs in the UK and the US. Speaking about the region’s current market conditions, Bradley is resolutely upbeat: “Our biggest challenge at present is to meet demand for our products and support services. We have recently opened a facility in the UAE to support existing customers and maintain the high standard of service necessary to keep our offshore cabins and facilities operating smoothly.”

September 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 in Mina Al Ahmadi

KOC

Hyundai Engineering & Construction Company, Kuwait; Petrofac International, Kuwait;

1792

Execution

Crude Oil Transit Line (TL4)

KOC

ABB

167

Execution

Booster Station 171

KOC

Saipem

906

Execution

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

Petrofac International / Independent Trading Group

428

Execution

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

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

Combined Group Contracting Company

Execution

LPG Filling Plant at Umm Alaish

KOTC

Mina Al Ahmadi Refinery Upgrade - Phase 1

KPC

KOC Facilities at Kuwait's Key Oil Fields

KUWAIT

Fluor Corporation

AMEC, Kuwait

Thyssenkrupp (Germany)

Not Appointed

100

EPC Bid

Almeer Techical Services Company/ Flour Corporation

140

Execution

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

114

EPC Bid

New Acid Gas Removal Plant in Mina Al Ahmadi Refinery

KNPC

Worley Parsons

Tecnimont, Italy; Mohammed Abdulmohsin Al Kharafi & Sons, Kuwait;

404

Execution

Gas Booster Station 160

KOC

AMEC, Kuwait

Snamprogetti Kuwait

649

Execution

Fluor Corporation

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

Daelim Industrial Company, Kuwait

886

Execution

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

LPG Tank Farm in Mina Al Ahmadi Refinery

KNPC

Gathering Center 14 in the South East

KOC

Fluor Corporation, Kuwait

AMEC, Kuwait

Not Appointed

1200

EPC Bid

Almeer Technical Services

Execution

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

www.arabianoilandgas.com

Consultant

September 2010 Oil&Gas Middle East

PROJECTS Project Title

Client

Upgradation of Refinery at Mina al-Fahl

ORPC

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

Kauther Gas Compression Project

Consultant

EPC Contractor

Budget ($M)

Status

Not Appointed

EPC Bid

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

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

Amal Steam Surface Facilities -Off Plot

Petroleum Development Oman (PDO)

Not Appointed

125

EPC Bid

Qarn Alam EOR Project - Off-plot Package

PDO

Galfar Engg. & Cont.

139

Execution

Qarn Alam EOR Project - On-plot Package

PDO

Dodsal

450

Execution

Amal Steam Surface Facilities - On Shore

Petroleum Development Oman (PDO)

Not Appointed

200

EPC Bid

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

Gas Pipeline Scheme Between Ras Laffan & Mesaieed

Qatar Petroleum (QP)

Mott MacDonald, Qatar

Punj Lloyd, Qatar

800

Execution

Not appointed

MEG WorleyParsons

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 September 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

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

300

Execution

Melamine Project at Mesaieed

Qatar Melamine Co.

Eurotecnica/Urea Casale

QECC

250

Execution

Petrochemical Complex at Ras Laffan

QP /ExxonMobil Corporation

Not Appointed

6000

Concept

Oily Water Effluent Pipeline in Dukhan Field

Qatar Petroleum (QP)

Galfar Al Misnad Engineering & Contracting

Execution

Oryx GTL - Phase 2

QP/Sasol/Chevron

Not Appointed

1400

Study

Gas Pipeline Network within Ras Laffan Industrial City

Qatar Petroleum

Larsen & Toubro, Qatar

117

Execution

Olefins Complex

Qatar Petroleum (QP) / Shell Chemicals

Not Appointed

2500

Study

Condensate Refinery at Ras Laffan - Phase 2

Laffan Refinery Company

Not Appointed

800

Feed

Pearl GTL Project - Package C4

QP / Royal Dutch/ Shell

Halliburton /JGC Corporation

Chiyoda Corporation / HHI Company

1750

Execution

Barzan North Field Development

ExxonMobil Corporation/Qatar Petroleum (QP)

Chiyoda Corporation/J Ray McDermott

Not Appointed

8000

EPC Bid

Pearl GTL Project - Package C8

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

Veolia/Saipem/Al Jaber

101 - 250

Execution

Mott MacDonald Qatar

EPC Contractor

Budget ($M)

Status

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

Gas to Liquids Project-3 (Pearl GTL)

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

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

Al-Wukair RPS and Associated Pipelines

Qatar General Electricity & Water Corporation (Kahramaa)

Qatar Building Company

120

Execution

Al Shaheen Project - Package 14

Maersk Oil Qatar

Larsen & Toubro

250

Exectution

Two New Glycol Regeneration Trains in Dukhan

Qatar Petroleum

Qatar Kentz

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

Worley Parsons

Not Appointed

Black Cat Engineering & Construction

Execution

Consolidated Contractors International Company (CCC)

16000

Execution

Receiving & Loading Facility at Ras Laffan

Qatargas

Qatar Kentz

100

Execution

Common Sulphur Project

DEL

Washington Group International

Not Appointed

101 - 250

FEED

Sulphur Handling Facilities

Qatar Gas 2

Washington Group International

Al Jaber Energy Services / Washington Group International

360

Execution

Pearl GTL Project - Package C5

QP / Royal Dutch / Shell

JGC Corporation / Halliburton

Toyo Engineering Corp. / Hyundai Engineering & Construction Company

1480

Execution

Gas Sweetening Facilities Integrated Project at Mesaieed

Qatar Petroleum

Worley Parsons

Petrofac International

350

Execution

Headworks for the Mesaimeer RPS & Associated Pipelines

Qatar General Electricity & Water Corporation (Kahramaa)

HBK Contracting

128

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

Not Appointed

1200

Execution

Shabab-2 Oil Pipeline Project

Saudi Aramco

Stroytransgaz

200

Execution

SAUDI ARABIA

www.arabianoilandgas.com

September 2010 Oil&Gas Middle East

PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Caustic Chlorine / Ethylene Dichloride Factory in Jubail

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

CMAI Consulting Company

Daelim Industrial Company,Saudi Arabia

400

Execution

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

Execution

Gas Oil Separation Plant at Hout Field in Divided Zone

Al Khafji Joint Operations (KJO)

Toyo Engineering Company

Consolidated Contractors International Company (CCC)

400

Execution

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

EPC Bid

Jubail - 2 Export Refinery - Aromatics Plant

Saudi Aramco / Total

Samsung Saudi Arabia Ltd.

650

Execution

JGC Corporation

Axens

inted appo ficial of

the daily show er

publ

ish

Dammam, KSA on 10th-12th October 2010

Advertising in the show daily is the best way to reach exhibitors and visitors at this dedicated show. Available each morning, every day of the exhibition Delivered to each exhibitor every day Available at all entrances to the exhibition for visitors and delegates

Oil&Gas Middle East September 2010

To book a stand at SAOGE, contact:

For advertising in the show daily, please contact:

Giulia Malcangio SAOGE Exhibition Manager Tel: +39 0761 527976 Email: gm@ies.co.it

Jude Slann Commercial Director Tel: +971 4 4443693 Email: judith.slann@itp.com

www.arabianoilandgas.com

PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Jubail-2 Export Refinery - Coker Unit Package

Saudi Aramco / Total

Foster Wheeler

Samsung Saudi Arabia Ltd / Chiyoda Corporation

850

Execution

Karan Field Exploration - Platforms Package

Saudi Aramco

Clough-Zuhair Fayez Partnership

J Ray McDermott

500

Execution

Yanbu Export Refinery - Gasoline Unit Package

Saudi Aramco / ConocoPhilips

Kellogg Brown & Root (KBR), Saudi Arabia

Not Appointed

2300

Execution

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

Concept

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

Kellogg Brown & Root (KBR)

Not Appointed

1200

Execution

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.

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

Study

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

Execution

Pipeline from Ras Tanura to Riyadh

Saudi Aramco

Nacap-Suedrohrbau, Saudi Arabia

350

Execution

ASU at Jubail

National Industrial Gas Company (GAS)

Samsung Saudi Arabia Ltd.

300

Execution

Yanbu Export Refinery - Tank Farm - Package 5

Saudi Aramco/ ConocoPhilips

Kellogg Brown & Root (KBR), Saudi Arabia

Not Appointed

900

Execution

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

Umm Al Lulu Oil Field Development

Adma -Opco

Fluor Corporation, Abu Dhabi

Not Appointed

1500

EPC Bid

Borouge Complex Expansion - Phase 3 - Offsites & Utilities Package

Abu Dhabi Polymers Co. (Borouge)

Tecnimont SpA, Abu Dhabi

Hyundai Engineering & Construction Company, Abu Dhabi

935

Execution

Zirku Production Facilities Debottlenecking

Zadco

Technip

Crude Oil Pipeline Replacement

Zadco

OGD-3/ AGD-2 - Pack 2

GASCO

OGD-3/ AGD-2 - Pack 4

GASCO

Green Diesel Project in Ruwais

Takreer

UNITED ARAB EMIRATES

Not Appointed

450

EPC Bid

Not Appointed

300

EPC Bid

Bechtel

1460

Execution

Bechtel

Snamprogetti

1420

Execution

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

500

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

www.arabianoilandgas.com

September 2010 Oil&Gas Middle East

PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Sahil Phase-2 Development

ADCO

Foster Wheeler

Tecnicas Reunidas / CCC

250

Execution

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

Zakum Central Super Complex - Seawater Injection Facilities

Adma-Opco

Technip, Abu Dhabi

J Ray McDermott, Dubai

400

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

Washington Group International / Veco Engineering

National Petroleum Construction Company

1800

Execution

Sour Gas Development - NGL Transport Pipeline

ADNOC

Fluor Corporation, Abu Dhabi

Saipem S.p.A, Abu Dhabi

196

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

EPC Bid

Borouge Complex Expansion - Phase 3 - LDPE Plant

Abu Dhabi Polymers Co. (Borouge)

Tecnimont SpA, Abu Dhabi

Technimont / Samsung Engineering

400

EPC Bid

Interconnecting Pipelines in Fujairah Oil Terminal 2

Port of Fujairah

Nico International

100

Execution

Sour Gas Development - Sulphur Pipeline

Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;

Fluor Corporation, Abu Dhabi

Not Appointed

125

Concept Stage

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

Technimont / Samsung Engineering

3000

Execution

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 September 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

Workover

MidEast - Red Sea

Ocean Heritage

Diamond Offshore

Jackup

Drilling

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

Workover

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

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

PERSIAN GULF Manager

Rig Type

Current Status

Current Region

Rig Name

Aban Offshore

Jackup

Drilling

MidEast - Persian Gulf

Aban VI

Aban Offshore

Jackup

Ready Stacked

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

Drilling

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

COSLCraft

China Oilfield Services Ltd.

Jackup

Drilling

MidEast - Persian Gulf

COSLForce

China Oilfield Services Ltd.

Jackup

Drilling

MidEast - Persian Gulf

COSLPower

China Oilfield Services Ltd.

Jackup

Drilling

MidEast - Persian Gulf

COSLStrike

China Oilfield Services Ltd.

Jackup

Drilling

MidEast - Persian Gulf

COSLSuperior

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

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

www.arabianbusiness.com

September 2010 Oil&Gas Middle East

RIG STATISTICS

Manager

Rig Type

Current Status

Current Region

Rig Name

Great Offshore

Jackup

Ready Stacked

MidEast - Persian Gulf

Amarnath

GSP

Jackup

Drilling

MidEast - Persian Gulf

GSP Atlas

GSP

Jackup

Drilling

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

Drilling

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

Maritime Industrial Services

Jackup

Under Construction

MidEast - Persian Gulf

MEJU Jackup TBN 2

Mermaid Drilling

Tender

Enroute

MidEast - Persian Gulf

MTR-1

Mosvold Middle East Jackup

Jackup

Under Construction

MidEast - Persian Gulf

MEJU Jackup TBN 1

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

Oil&Gas Middle East September 2010

www.arabianbusiness.com

RIG STATISTICS

Manager

Rig Type

Current Status

Current Region

Rig Name

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

Under Construction

MidEast - Persian Gulf

NDC Jackup TBN 1

National Drilling

Jackup

Under Construction

MidEast - Persian Gulf

NDC Jackup TBN 2

National Drilling

Jackup

Under Construction

MidEast - Persian Gulf

NDC Jackup TBN 3

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

NIDC

Jackup

Drilling

MidEast - Persian Gulf

Shahid Rajaiee

Noble Drilling

Jackup

Modification

MidEast - Persian Gulf

Noble Alan Hay

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

Modification

MidEast - Persian Gulf

Noble Kenneth Delaney

Noble Drilling

Jackup

Modification

MidEast - Persian Gulf

Noble Roger Lewis

Noble Drilling

Jackup

Drilling

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

Rowan

Jackup

Ready Stacked

MidEast - Persian Gulf

Arch Rowan

Rowan

Jackup

Drilling

MidEast - Persian Gulf

Bob Keller

Rowan

Jackup

Ready Stacked

MidEast - Persian Gulf

Charles Rowan

Rowan

Jackup

Drilling

MidEast - Persian Gulf

Gilbert Rowe

Rowan

Jackup

Drilling

MidEast - Persian Gulf

Hank Boswell

Rowan

Jackup

Drilling

MidEast - Persian Gulf

Rowan California

Rowan

Jackup

Ready Stacked

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

www.arabianbusiness.com

September 2010 Oil&Gas Middle East

THE BIG PICTURE

Gas giant goes nuclear Getty Images

Getty Images

US$5 billion has been earmarked by Iran for the development of its South Pars Gas Field.

21st August 2010: The first nuclear fuel rod was loaded into Iran’s Bushehr reactor, 35 years after the project began.

Oil&Gas Middle East September 2010

OUTH PARS: Image shows phase 5 of the South Pars gas field development in the southern Iranian port town of Asaluyeh on July 19, 2010 as a top official announced that global energy majors are welcome to help develop oil and gas projects in Iran despite new sanctions imposed on the Islamic republic. Earlier this year ArabianOilandGas.com reported that the government of Iran has allocated $5 billion of its internal resources for the development of the South Pars gas field in the Persian Gulf. “This sum will be spent for developing phases 20 and 21 of the oil layer of South Pars and setting up the 1000-megawatt Pars Combined Cycle Power Plant,” said Pars Oil and Gas Company managing director Ali Vakili.

USHEHR: This handout image supplied by the Iran International Photo Agency shows a view of the reactor building at the Russian-built Bushehr nuclear power plant as the first fuel is loaded, on August 21, 2010 in Bushehr, southern Iran. The Russian built and operated nuclear power station has taken 35 years to build due to a series of sanctions imposed by the United Nations. The move has satisfied International concerns that Iran were intending to produce a nuclear weapon, but the facility’s uranium fuel will fall well below the enrichment level needed for weapons-grade uranium. The plant is likely to begin electrictity production in a month.

www.arabianoilandgas.com

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