Oil & Gas Middle East - Nov 2009 by ITP Business Publishing

NEWS, DATA AND ANALYSIS FOR THE MIDDLE EAST’S ENERGY PROFESSIONALS

November 2009 • Vol. 5 Issue 11

Badr Jafar, chief executive officer, Crescent Investments.

An ITP Business Publication

MESSAGE FROM HOUSTON Middle East projects hold key to recovery – ABB president

TOP OF THE DOCKS Business is booming at Dubai’s largest shipyard

PRESSURE POINT Pump providers ready for the bounceback

SHIFTING GEAR Tackling upstream project logistics

CRESCENT

RISING Badr Jafar on the pressing need to liberalise the region’s gas markets

BOOSTING QATAR’S OIL: SAAD AL MOHANNADI EXCLUSIVE: DEPUTY MANAGING DIRECTOR, MAERSK OIL QATAR, TALKS UP 2009 An ACHEIVEMENTS ITP Business Publication

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CONTENTS

Integrated Project Management

NOVEMBER 2009

Total commitment— why trust anyone else?

88 22 UAE COUNTRY PROFILE 35 SHIFTING GEAR

67 ASK THE EXPERT

A critical evaluation of the project pipeline with a focus on the Shah Sour Gas Development plan as tendering heats up.

The leading land, sea and air logistics providers in the Middle East pool their knowledge in the annual upstream logistics focus.

API standards come under the microscope with AESSEAL’s Richard Smith, director, oil and gas development.

25 YARDS AHEAD

42 PRESSURE POINT

69 SHOWBOATING

Drydocks World - Dubai managing director, Nawal Saigal tells Oil & Gas Middle East the yard’s project portfolio is widening in scope.

The Middle East is tipped as the driving force behind the upstream pumps recovery. The region’s top pumps providers tell it how it is.

Middle East Workboats splashed into Abu Dhabi last month. Meet the trend setters.

32 CRESCENT RISING

44 TROUBLESHOOTING

Exclusive: Crescent Petroleum executive director talks candidly about his Kurdistan project.

Padraig Nagle says tailored rapid response ﬂuid handling solutions are more cost effective.

REGULARS 2 COMMENT 4 WEB HIGHLIGHTS

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7 REGIONAL NEWS 40 BOOSTING QATAR’S OIL 49 DOHA DELIVERS Maersk Oil Qatar’s Saad AlMohannadi reveals what the Al Shaheen project means to him.

www.arabianoilandgas.com

The must-attend conference of the year starts next month. Oil & Gas Middle East previews IPTC 2009.

81 PROJECTS 88 FACE TO FACE

November 2009 Oil&Gas Middle East

WEB HIGHLIGHTS

The online home of:

MOST POPULAR NEWS

ONLINE SPECIAL REPORT

Tecnimont to win $1 billion 1 Exclusive: Fertil contract awards $200 million bulk 2 Aramco plant upgrade to Suwaidi petrochemical 3 ExxonMobil/SABIC plants to cost $5 billion awards KBR major Shaybah 4 Aramco gas contract sued for death of ‘beauty 5 Aramco queen’ camel

LATEST FROM THE BLOG

Top ten oilﬁeld technology ﬁrms ArabianOilandGas.com has decided to salute the companies who spend billions of dollars as well as millions of man hours on making the life of an average oil and gas worker productive, safer and easier. What many people outside of the oil & gas industry don’t know, is just how difficult getting to the precious black stuff can actually be. With many of the world’s largest oilfields maturing, more and more technological wizardry is required to enable the oil producers to keep on churning out oil and gas for an ever-growing global market. BREAKING NEWS AND VIEWS FIRST ZADCO PLANNING TO AWARD CONTRACTS The Zakum Development Company (Zadco), is planning to award around US$4 billion worth of contracts in the next 18 months. ArabianOilandGas.com ARAMCO LOOKS TO DEVELOP BRAZIL’S OIL Getty Images

Saudi Aramco is among the companies interested in helping the South American country to develop its pre-salt oil reserves, reports suggest. ArabianOilandGas.com

Oil&Gas Middle East November 2009

UAE TO AWARD $21BN WORTH OF CONTRACTS A senior Technip official has said that EPC contracts are to be awarded in the United Arab Emirates in the next six-to-nine months. ArabianOilandGas.com

READ THE INDUSTRY’S VIEWS Who’s got the inside track on Shah Sour Gas Field tenders? ArabianOilandGas.com SPOT POLL WHAT WOULD YOU LIKE TO SEE MORE OF ON ARABIANOILANDGAS.COM?

52.9% More project news 35.3% More jobs news 11.8% More company news

EMIR:QATAR COMMITTED TO SUPPLYING GAS Natural gas projects in Qatar have not suffered from the economic crisis, Sheikh Hamad bin Khalifa Al-Thani, the Gulf state’s Emir, has said. ArabianOilandGas.com

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COMMENT

UAE in pole position Project pipeline thrusts Abu Dhabi into global spotlight

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 Deputy Managing Director Matthew Southwell Editorial Director David Ingham VP Sales Wayne Lowery Publishing Director Jason Bowman Editorial Energy Group Editor Daniel Canty Tel: +971 4 435 6257 email: daniel.canty@itp.com Senior Energy Writer Peter Ward Tel: +971 4 435 6436 email: peter.ward@itp.com Contributors Ventures, Kevin Baxter, Edward Attwood Advertising Commercial Director Jude Slann Tel: +971 4 4356348 email: judith.slann@itp.com Sales Manager David Wheeler Tel: +971 4 4356376 email: david.wheeler@itp.com Studio Group Art Editor Daniel Prescott Designer Lucy McMurray Photography Head of Photography Sevag Davidian Chief Photographer Nemanja Seslija Senior Photographers Efraim Evidor, Khatuna Khutsishvili Staff Photographers Khaled Termanini, Thanos Lazopoulos, |Jovana Obradovic, Rajesh Raghav, Ruel Pableo, Lyubov Galushko

A real determination to push ahead with ambitious upstream projects has put oil centre stage again. n recent years a whole matrix of otherworldly real estate projects and luxurious developments has grabbed the headlines and the attention of millions around the globe where the United Arab Emirates is concerned. While diversification from a strictly hydrocarbon economy has been unapologetically bold and successful, perhaps for those of us in the industry, it’s not such a bad thing that oil and gas is coming back to the fore. This year’s resilience to a globally woeful 2009 is rooted in what lies beneath. The bountiful reserves that are awash beneath the Emirates have again this year become the focus of attention. This is no bad thing. The pockets of oil and gas found here are vital not just to the UAE, but to the millions of consumers around the world who use it every time they get in their car or turn on their lights. What’s more, it is in the UAE’s DNA. This edition of Oil & Gas Middle East is equally unapologetic for its UAE focused coverage. Of course we have industry leaders from the Arabian Gulf region, no less than Saad Al Mohannadi,

deputy managing director of Maersk Oil Qatar. And we have a region-wide upstream logistics special report, as well as all the news and views from across the Gulf. But the November edition comes with a detailed country profile on the UAE’s oil and gas assets and project developments, as well as a revealing interview with Nawal Saigal, managing director of Drydocks World - Dubai. Abu Dhabi is also praised by technology firms and oilfield service providers for its vision in making this year bearable through its commitment to upstream development. Our cover story traces the remarkable journey of Sharjah’s Crescent Petroleum. The company is at the forefront of delivering Middle Eastern gas to Europe through the Nabucco pipeline project, and in our exclusive interview with Badr Jafar, CEO of Crescent Investments, he pulls no punches about what needs to happen to local gas markets, as well as sharing his international gas - for - peace vision. Enjoy. Daniel Canty, Editor E-mail: daniel.canty@itp.com

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

Oil&Gas Middle East November 2009

Production & Distribution Group Production Manager Kyle Smith Production Manager Eleanor Zwanepoel Production Coordinator Devaprakash Managing Picture Editor Patrick Littlejohn Image Retoucher Emmalyn Robles Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami Circulation Head of Circulation & Database Gaurav Gulati Marketing Head of Marketing Daniel Fewtrell ITP Digital Director Peter Conmy 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 4 435 6000 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

ADNOC backs rail over pipe Spiralling costs, technical concerns and safety fears behind decision to opt for rail Abu Dhabi National Oil Company (ADNOC) is reported to be in discussions with the Union Railway regarding transporting over seven million tonnes of granulated sulphur per year from the Shah and Habshan gas fields to a treatment facility in Ruwais. The chairman of Union Railway, Hussain Al Nowais, told a Middle East rail projects conference that transporting the sulphur by rail offers a better solution than the proposed pipeline. “We are very excited to have the opportunity to work with ADNOC. This important strategic initiative will fulfill several strategic objectives,” he said. “It will support ADNOC’s ongoing investment program in the Shah and Habshan oil and gas fields. It will also contribute to the development of the oil, gas and petrochemical industries in the country.” “Finally, it will help to accelerate the development of the Western Region, in line with Vision 2030. This section of the railway will be fast-tracked to meet ADNOC’s schedule and requirements,” he added. The US$10 billion Shah gas project in Abu Dhabi that is being developed by ADNOC and the US energy company ConocoPhillips has struggled to find contractors willing to take on the $1 billion 275km sulphur pipeline contract that was part of the initial plans due to the problems in transporting sulphur over such a distance.

www.arabianoilandgas.com

The decision to build an overland rail solution solves a major, and expensive problem for ADNOC.

The project is massive as it will meet a large part of the country’s gas needs but its costs are expected to be high as well, because all the gas is sour. Transporting the sulphur by pipeline would have involved building the world’s longest liquid sulphur gas pipeline of at around 300km. The pipeline will transport about one billion cubic feet of gas to the Ruwais processing facilities south of Abu Dhabi. Industry sources believe the project will cost in excess of $10 billion (Dh36.72bn) given the topography of the field and the high sulphur concentrations in the gas. But they said costs were in the range of $13bn to $14bn in 2008 when construc-

tion materials and contracting expenses were at their peak. “I think the development of this field is vital for Abu Dhabi and the whole of the UAE as they need more gas given the rapid growth in consumption. I am sure it will meet a large part of the country’s gas requirements when it is completed, probably within five years,” one source said.

$10BN The Shah Gas ﬁeld development is estimate to cost around $10 billion Source: ADNOC

The Shah project is a joint venture between Adnoc and the US-based ConocoPhilips. Its initial output target is about one billion cubic feet of gas per day. Said Ahmed Al Ghafli, chief executive of the joint venture company, said in October that safety remains a key concern for the developers due to the high sulphur component. “The JV will pursue the development of a world-class facility that can process one billion cubic feet per day of very sour gas containing some 23 per cent of hydrogen sulphide,” he said. The bidding deadlines for the US$10 billion Shah gas field development are expected to be extended, sources close to the bidding process have said.

November 2009 Oil&Gas Middle East

REGIONAL NEWS

Vam Drilling starts UAE expansion Subsidiary of Vallourec agrees deal to buy DPAL and targets Middle East pipe business Vam Drilling has targeted an increased share in the Middle East drilling products market with the acquisition of drill pipe manufacturer DPAL. The firm, which is a wholly owned subsidiary of Vallourec,

unveiled the acquisition of the UAE based firm last month, and has immediately signaled its intent in the region. “The UAE is a place where our market share was way too low considering our ambition,

Nicolas de Coignac, deputy managing director of VAM Drilling.

so we felt the best way to make a significant step to increase our presence was to have a manufacturing base there,” Nicolas de Coignac, deputy managing director of VAM Drilling said. He added that the acquisition will enable the company to react quickly to customer needs in the region and also to shorten lead times. “We are enjoying a dual advantage competitively; being more local, because DPAL has been here for a long time and has gained a reputation, and to expand the products we offer. So we will combine both strengths to hopefully gain a significant market share in the region,” said de Coignac. Vam Drilling has grown in recent years through acquisitions, buying companies in 2005, 2006 and now 2009.

De Coignac also revealed that he believes new drilling techniques will drive industry trends in the future. “I think the main trend is the evolution of drilling techniques, for example; deviated drilling, extended reach drilling, more gas drilling and more deep offshore drilling. “So when you talk about the risk of depletion of oil and gas, we are far from this point, it only means we will have to go further to seek reservoirs that are in more remote places with access that can be a lot more complicated. “This for us is an important trend that the industry is calling for more technology and more technological products therefore this is exactly where we are positioning ourselves,” de Coignac concluded.

Qatar’s Ras Laffan scoops energy honours at Seatrade awards Ras Laffan Industrial City grabbed the spotlight at the annual Seatrade Middle East and Indian Subcontinent awards after walking away with a hattrick of awards. Ras Laffan Industrial City claimed the first of its three honours of the night by winning the Environment Protection award. This award was a first for Ras Laffan Industrial City and it was presented by Joseph Brincat, Vice President, ABS- Middle East to RLC director Sheikh Khalid Bin Khalifa Al Thani. Ras Laffan Industrial

City also won the coveted Port Authority Award honour. The celebration for the RLC team had already begun before the

“This is a dream run for us announcement of its second award. The Energy: Oil & Gas and it is a significant moment Award, was won by RLC for the for all of us at QP and Ras Laffan Industrial City. second year in a row. “We are thankful to HE Abdulla Bin Hamad Al Attiyah, Deputy Premier & Minister of Energy and Industry for his directives and support and to each and every employee of Ras Laffan, who were the crucial factors for this resounding success and the series of accolades received tonight,” beamed RLC Director Sheikh Khalid Bin Khalifa Al Thani. RLC director Sheikh Khalid Bin Khalifa Al Thani collected the Oil & Gas award.

Oil&Gas Middle East November 2009

www.arabianoilandgas.com

REGIONAL NEWS

Recovery will be steady

HIGHLIGHTS

TOPAZ chief says consistency will shape upstream service revival TOPAZ Energy and Marine chief executive officer, Fazel Fazelbhoy told Oil & Gas Middle East that sporadic ‘green shoots’ and V-shaped economic recovery are fanciful, and that strong energy fundamentals will dictate a more gradual return to form for the industry. Speaking from the Middle East Workboats conference and exhibition in Abu Dhabi last month, Fazelbhoy said that traditional marine business models had been disrupted in recent years by cheap credit and a rampant supply vessel construction boom. “The offshore support vessel sector is paying for the sins of our past in terms of the indisci-

380K

$ bill: Annual running cost of TOPAZ sponsored charity ship Flying Angel

Fazel Fazelbhoy, CEO, Topaz.

pline in building new vessels in South East Asia. There has been a lot of froth in the market so far and this is a period for coming to terms with that,” he said. Fazelbhoy said reasonable prices for newbuilds were back on the table again after a period of exuberance. “The good news is that vessel demand will be absorbed over the life of projects as they

go forward. Fortunately the Middle East is still continuing because it is very much the NOCs that continue to operate, continue to expand and continue to explore.” Fazelbhoy added that new oilfield development will require state of the art vessels, and owners and operators positioned to service this requirement will be the real winners in years ahead. “Simply put there is no such thing as easy oil now. New oil will be deep, it will be distant and it will be dangerous. The industry will be working with high pressures, with higher sulphur content with deeper water depths and further offshore. At some point demand for the right marine assets kicks in and we are planning for continued deployment at reasonable rates.” Read Fazel Fazelbhoy’s full Q&A on ArabianOilandGas.com

Bahrain Petroleum Company (Bapco) has signed an EPCM contract worth a total of US$63.4 million with Technip France - Abu Dhabi for the installation of new two 10 megawatts steam turbogenerators as well as the housing and substation. “This project marks a significant step towards improving the reliability and operability of the power generation system in the refinery and other facilities,” Oil and Gas Affairs Minister Dr Abdul Hussain Mirza said (pictured above). Tendeka, the Dutch registered technology provider, has announced that it has completed the acquisition of the Middle East-based completion company Flotech for an undisclosed figure.

Eaton expands GS Engineering nets $1.37bn South Pars contract local business Industrial manufacturer Eaton Corporation has entered into a JV in the UAE through SEG Middle East Power Solutions & Switchboard Manufacturer of Abu Dhabi. “This JV provides Eaton with an operation that has built a successful business supplying switchboard and control solutions in the Middle East,” said Frank Campbell, Eaton electrical sector president, EMEA.

www.arabianoilandgas.com

A senior official from GS Engineering & Construction (GS E&C) has confirmed that the company has been awarded a US$1.37 billion gas contract in Iran. Moo-ik Chang, vice president of the South Korean contractor reportedly said that a deal to sweeten gas from the South Pars gas field had been agreed with Pars Oil and Gas Co, which is a subsidiary of the state-owned South Pars development has been slow.

firm, the National Iranian Oil Company (NIOC). GS E&C will carry out the work as part of a consortium that includes Iranian International General Contractor Co. The company agreed to complete phases 6, 7 and 8 of South Pars by May 2013. South Pars accounts for Iran’s largest gas reserves. Due to the immense size of the field, the development plan has been divided into 24 different phases.

November 2009 Oil&Gas Middle East

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REGIONAL NEWS

Eni agrees Zubair deal

EVENTS SAOGE

Italian-led consortium agrees Iraqi oilfield terms in Baghdad Eni has announced it has been awarded the licence for the development of the Zubair oilfield in Iraq, following a successful first round bid. The Italian supermajor is leading a consortium consisting of Occidental Petroelum Corp from the US and the Korean Gas Corporation. Eni’s share is around 40% although the company said that there may be minor adjustments to that figure in the near future. “The award of the explorative licence for the Zubair field strengthens the long-term collaboration between Eni and Iraq, which dates back to the 1970’s, and will allow Eni to

further grow its production and reserves,” a statement released by the company said. “The service contract will last 20 years and can be extended to 25. It also includes the participation of Iraqi State Company, Southern Oil, with a 25% share,” it added. The Zubair field, one of the largest Iraqi oil fields, and has a current production rate of 195,000 barrels of oil per day. In the next seven years, under the field’s expansion programme, production is expected to reach a plateau level of 1.125 million barrels of oil per day. The project includes the drilling of over 200 wells, the

1 - 3 November, Dammam SHOW PREVIEW - PAGE 35

NON DESTRUCTIVE TESTING CONFERENCE 8-11 November 2009 Exhibition - GICC, Gulf Hotel, Bahrain

MIDDLE EAST GAS SUMMIT 2009 (MEGAS) 24-25 November 2009 Conference - Beirut, Lebanon

Iraqi Oil Minister Hussein al-Shahristani

construction of treatment facilities and the required collection network, as well as the refurbishment of the existing plants.

Oman looks to Lamnalco inks services deal marine services response services for the duraup gas export Sharjah-based provider Lamnalco has signed tion of the contract Oman Gas Company (OGC) has announced that it is carrying out work on its gas network in a bid to raise the transportation capacity of the existing pipe. Domestic media reported that the modifications are being made to the southern network of OGC’s gas transportation system. The scope of work includes the construction of a 252 kilometre 32-inch pipeline that will run from Saih Rawl to Sadad by the Indian contractor Punj Lloyd. The project also involves the construction of other associated facilities at seven different intermediate stations.

www.arabianoilandgas.com

a 10-year contract for integrated marine services with the Caspian Pipeline Consortium (CPC) in Moscow, Russia. The contract, announced at the Middle East Work Boats conference in Abu Dhabi, includes a turnkey package of services for CPC’s pipeline and related infrastructure operations that link the oil fields of West Kazakhstan with the marine terminal located on the Russian Black Sea Coast, close to Novorossiysk. Lamnalco said that it will also provide a permanent on-site dive team and maintenance for two single buoy moorings (SBM) as well as oil spill

“This will involve the deployment of a modern fleet of 15 vessels including a multi-purpose service vessel (MSV), tugs, line handling boats and boom boats as well as a full IMCA approved dive spread housed on the MSV,” a statement released by the company this month said. The full value of the contract was not disclosed.

INDUSTRIAL & HAZARDOUS WASTE MANAGEMENT CONFERENCE 8 - 9 Nov 2009 Conference, Dubai, UAE

ABU DHABI CONFERENCE 2009 10 – 12 November Emirates Palace, Abu Dhabi, UAE

IRAQ ENERGY EXPO 5-7 December Meridian Hotel, Baghdad, Iraq

INTERNATIONAL PETROELUM TECHNOLOGY CONFERENCE 2009 7-9 December Sheraton Resort, Doha, Qatar (For a full IPTC event preview see pages 64-65, and follow the buildup live on ArabianOilandGas.com)

6 MILLION Barrels of oil export that Lamnalco vessels support each day Source: Lamnalco

November 2009 Oil&Gas Middle East

REGIONAL NEWS

Ghanem set to return as Libyan oil chief The mystery regarding September’s resignation of Dr Shokri Ghanem as the Libyan energy minister and chairman of the state-owned National Oil Corporation (NOC) deepened in October after a senior source in Tripoli told ArabianOilandGas.com that he is expected to be re-appointed to both of his former roles as part of a major re-structuring of the oil industry in the North African state. “I can ensure you more than 90% that Dr Ghanem will be reappointed as a head of the NOC,” the source said. “He is in holiday, he will back to his position soon,” he added.

Dr Shokri Ghanem: Reappointed.

DNV launches academy Tailored training solutions prove successful draw for DNV Norwegian classifications society DNV has launched a fully fledged Maritime training academy, and is expecting a huge draw for the oil and gas offshore and support sector. Speaking to Oil & Gas Middle East from the Middle East Workboats conference and Exhibition held in Abu Dhabi last month, Malcolm Beere, head of DNV Academy Middle East, said the response from owners, operators and oil and gas related yards in the region has been encouraging. “I think that in a recession, when cost consciousness is top of everybody’s agenda, people will be more reluctant to send staff thousands of miles and meet accommodation costs when there is now a very capable option on their doorstep,” he said. Beere said that DNV were involved in ongoing negotiations with customers to deliver a course schedule tailored to

Oil&Gas Middle East November 2009

local needs. “Our purpose isn’t just to have a local academy for the sake of having people on the ground. We’ve spent a lot of time dealing with customers of our other facilities worldwide and potential clients here in the Middle East, so that we deliver something worthwhile and valuable to the local sector, and also make a difference to their overall manpower sustainability.”

Beere said that the Academy, working out of Dubai, has a public schedule but is in the process of developing in-house tailor made offerings. “These courses can be mixed and matched with all of the courses we have available worldwide, to suit the local market. A good example would be a tailored superintendent’s course for workboats,” he concluded.

Malcolm Beere, head of DNV Academy Middle East.

www.arabianoilandgas.com

REGIONAL NEWS

Libya’s energy cities launch with US$54 billion price tag Libya has launched a US$54 billon master plan to construct two energy cities at Al Brega and Ras Lanuf, located on its Mediterranean coast. The government of Libya, has commissioned US engineering firm Fluor Corporation to develop a master plan for the scheme in July 2007. The fund approved the final version of the plan in July 2009, but has only now disclosed its contents. “The $54 billion project will be executed in three phases and will be implemented in 15 years,” Amir Nemr, director of process technology at Fluor told ArabianOilandGas.com. “The energy city of Al Brega will include the expansion of a liquefied natural gas plant and a new grassroots natural gas liquids plant.” “It will also include a 350,000 barrel per day refinery,” he added. Libya has mooted a redevelopment of Ras Lanuf and Marsa el-Brega since the 1980s, but trade embargoes crippled Tripoli’s plans. The US lifted the last trade embargoes in 2004.

Amir Nemr, Fluor Corp.

ADSB looks to offshore With Mubadala backing yard can take a real lead says VP Abu Dhabi Shipbuilding has signalled that, with Mubadala backing, it may enter the oil and gas workboats industry as a major player within the next few years. Speaking candidly to Oil & Gas Middle East at the Middle East Workboats 2009 event in Abu Dhabi last month, ADSB vice president, marketing, William Stewart indicated that the expertise developed through naval vessel building would stand the firm in good stead within the upstream support industry. The Mussaffah based yard has recently renewed longterm drydock agreements with Esnaad and Irshaad for the oil and gas offshore industry. Esnaad, a wholly owned ADNOC offshore support company. Military vessels account for 90% of the company’s current order book, but the firm has also engaged in building commercial workboats and tugs. “One has been delivered to National Dredging already, and the others are in completion stage for delivery early next year,” revealed Stewart. “Mubadala are beginning to take a big interest in Abu Dhabi Shipbuilding and they are looking at how they are going to position us in the future. That could mean expanding the facility into another commercial yard here, or it could alternatively mean acquiring or joining forces with another shipyard elsewhere in the world commercially,” he added.

Oil&Gas Middle East November 2009

Abu Dhabi Ship Building’s yard is currently engaged in building naval vessels.

Stewart noted that much of standard class shipbuilding has migrated away from European yards, to cheaper building environments in Asia, but high-end vessel manufacture remained strong in the European market. “As the industry goes into more complex fields and deeper waters, you need much more sophisticated vessels, and they are still built in the knowledge

centres. I believe the next generation of specialised vessels will start to come through Middle Eastern yards and that’s the point at which we enter that market. We are already building advanced naval quality vessels, so we are capable of delivering to that high-end custiomer.” Stewart revealed that the company had already begun using 3D modelling technology in order to join the world’s leading yards in terms of design capability, and that the oil and gas industry was a likely target for new business. “There is a huge opportunity for Abu Dhabi Ship Building, through Mubadala, to take a real lead in this field.”

90% ADSB’s order book is heavily dependent on naval newbuilds William Stewart, ADSB.

Source: Abu Dhabi Ship Building

www.arabianoilandgas.com

INTERNATIONAL NEWS

October sees oil soar to 2009 high $80 barrier is broken amid bullish global trading in New York while gas prices fall concern sluggish US crude demand may not justify further gains. Despite significant builds in stockpiles and lackluster oil demand, oil prices have almost trebled from December’s low of $33 and have consistently traded between $65-$75 throughout summer. Oil producers and upstream service companies will be hoping the trend signals a steady trading zone of between $70 and $80, ensuring all but the most expensive projects will go ahead in early 2010. Oil surged to an annual high in October on the New York Mercantile Exchange.

Getty Images

Oil surged to its highest price of the year in October, topping out at more than $80 a barrel on New York’s Mercantile Exchange. Analysts said that the price hike was largely driven by the dollar’s fall against a basket of currencies. Conversely, the price of natural gas in the US continued its downward spiral. Crude surmounted $80 a barrel early on Tuesday 20th October, capping a two-week rally, before sliding on investor

UK’s Hi-Force continues expansion roll-out with new delivery October saw the fifth brand new Mori Seiki CNC Machining Centre arrive at the Hi-Force machine shop in the UK, bringing total spend on new machines in the past 18 months to over US$1.6 million. Group managing director Kevin Brown commented: “This

will be the last new machine to be delivered to our existing machine shop, as all future purchases will be installed directly into our brand new facilities in Daventry after we relocate in June 2010. An order has already been placed for a state of the art 9 axis Mori Seiki

machining centre costing over US$800 000. “The move to this brand new state of the art facility will allow Hi-Force to accelerate our ambitious growth plans over the coming years. We are a company that exports over 85% of its products to more than 100 countries,” said Brown.

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NEWS INTERVIEW

Service sector picks up A swift recovery of the oil price has given renewed hope to the upstream service sector Oman is deploying cutting edge enhanced oil recovery techniques to capitalise on its hard-to-get assets.

ising oil prices should result in an upturn in fortunes for the service sector of the oil and gas industry, experts have reported. After a year of testing conditions, there now appears to be hope in sight for service companies in the region. “There is no question it has been a tough year for the service sector. Oil companies have been using many means and techniques for cutting costs. That has ranged from talking tough over the negotiating table to actually renegotiating contracts and looking for lower rates,” reports John McCreery, partner, energy practice, global oil and gas expert, Bain & Company. Although there has been a recovery in the market and hope is at hand for the service sector, McCreery believes this

is no time for them to get over enthusiastic. “As oil prices have recovered, quite a few of the service sector companies are breathing a sigh of relief. What we have seen in the past couple of months, despite the recovery in the oil price, many companies are looking for savings and reductions in cost, trying almost to restructure the cost base,” he states. In seeking to reduce costs, oil companies in the Middle East appear to have increasingly looked to the East for support services, and this has led to increased competition. “There is competition coming from the East and particularly coming from the Chinese and Indian service sector companies,” McCreery affirms. “What we have seen generically is things like 20% price

Oil&Gas Middle East November 2009

reductions in areas such as drilling, seismic and other exploration related activities and some areas of the capital project activities like engineering design and construction. But it has been really the maintenance and operational types of expenditure which have remained pretty robust,” he adds.

PROJECT ANALYSIS Project activity in the Middle East region has remained steady, reports McCreery. “Despite the downturn in oil price the Middle

East, and certainly Bain & Company’s experience in the Middle East supports this, the area has held up pretty well in terms of activity,” he states. “Many of the large NOCs have quite ambitious project schedules and plans to expand production. If you add in their existing fields, some of which are getting quite complex with maturing reservoirs, there is quite a lot of activity.” McCreery adds that new techniques are also being deployed in the Middle East,

“If the oil prices settle at around $6070 and stay in that kind of range, then the industry will generate a lot of cash, particularly in the Middle East” John McCreery

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NEWS INTERVIEW

in particular Oman. The long term oil output of Oman is relying on the success of the deployment of enhanced oil recovery (EOR) projects and they are to be found in several fields in the country. This continuation of investment has not been without casualties, however. “The NOCs and many of the big major oil companies have largely continued to invest through the cycle and it’s been the independents and the smaller oil companies that have struggled,” McCreery explains. With oil prices at a healthy level, NOCs in the Middle East will need to invest the money they are currently generating wisely, McCreery believes. “If oil prices settle at around $6070 and stay in that kind of range,

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then the industry will generate a lot of cash, particularly in the Middle East where you have got fairly low production costs. “So both the NOCs and the international companies operating in the region have got some quite important decisions to make on where they deploy that additional cash because at $60-70 dollars, they are generating pretty good returns.”

COLLABORATIVE ACTION In the wake of the downturn, there were renewed calls for greater collaboration between the NOCs and the IOCs in the Middle East, and this is something that Bain & Company has witnessed in its research. “We have seen participation and collaboration evolving in

recent years and we believe that trend can and will continue,” McCreery stresses. “The driving force is that some of the NOCs have developed their capabilities and can be much more equal partners in areas like technology, field development planning and people development.” McCreery sees no real barriers to future partnerships. “All the ingredients are in place for collaboration, so we see the opportunity being there for it to evolve and become more partnership-based over the next few years,” McCreery concludes.

John McCreery, partner at Bain & Company

November 2009 Oil&Gas Middle East

NEWS ANALYSIS

NEWS ANALYSIS Gains start in Mid East Middle Eastern countries to kick-start upturn in global upstream spending - report

Morris Reid, is managing director of BGR Group.

Stable oil for much of 2009 is enabling the region to spend its way to recovery.

Oil&Gas Middle East November 2009

Spending by the Middle East national oil companies (NOCs) is underpinning the return to previous levels of global spend in the upstream sector, according to a report from Wood Mackenzie. The report reveals that the Middle East, along with the US, West Africa and the states of the former Soviet Union, will contribute to the majority of growth in the sector, as the economy recovers. The report also found that the major areas of growth have been underwritten by NOC’s such as in Saudi Arabia, Abu Dhabi and Brazil. Morris Reid, managing director of the BGR Group, affirms that NOCs in this region are in a strong position. “They are bullish, as long as they are running their prices at a steady level, they are in great shape. If we had every renewable known to man available, it would still only be able to produce 50% of our energy, so crude is still a big part of our lives,” Reid states. Reid adds that the Middle East region is looking extremely healthy in general: “This region is still the most important region because it has all the capital, the major oil reserves and a young population,” he comments.

Production capacity is expected to grow globally over the next few years, and the Middle East is expected to lead the way in this respect. Iain Brown, vice president, upstream energy research for Wood Mackenzie explains in the report: “By far the greatest growth in the five year period to 2014 is in the Middle East, with installation of new oil capacity in Saudi Arabia, Iraq and Abu Dhabi, and incremental gas in Qatar, Abu Dhabi and Iran.” Part of the reason for this projected increase in capacity is the relatively low cost of expansion in certain regions in the Middle East. “New capacity in Iraq is amongst the lowest cost in the world, but at the same time it is the most tenuous. We expect that over US$24 billion dollars could be spent in the five years to 2012, with the prospect of increasing production capacity by 850,000 b/d,” reveals Brown. “However, the scale and schedule of any significant development spend is fundamentally uncertain due to the prevailing security situation, and growth in oil capacity is reliant on renovation and expansion of key distribution and processing infrastructure,” he adds.

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COUNTRY FOCUS: UAE

UAE IN PROFILE The state of play in the region’s most dynamic upstream market he United Arab Emirates derives the overwhelming majority of its State revenues from the rich oil and gas reserves which sit beneath the Emirates. Of course, strictly speaking, the lion’s share of that is concentrated in Abu Dhabi, the capital city and production hub. However, a good number of the support and service industries that dot the Fujairah and Sharjah coasts, and the massive enterprises nestled into the booming Freezones of Dubai can attribute their success to those reserves too. The UAE has managed to deliver business and enterprise

throughout the country from that oil and gas base in a much more successful way than many of its neighbours. Whilst chinks have appeared in the armour in 2009, the successful diversification programmes it has embarked upon, including aluminium manufacture, petrochemical production and its hard-won status as a genuine logistical hub for the region, all remain solid and viable business ventures, and will remain so for decades more.

remain a major revenue earner long into the future. Proven recoverable oil reserves are estimated in the 97 to 98 billion barrels range, depending on where you look. This equates to a phenomenal 9.5% of the global crude oil proven reserves. As for natural gas, the proven recoverable reserves are estimated at around 214 trillion cubic feet (Tcf). The small Gulf nation holds the fourth largest proven natural gas reserves in the Middle East after Iran, Qatar, and Saudi Arabia. As with oil, the largest reserves of 198.5 OVERVIEW Oil and gas production has Tcf are located in Abu Dhabi. been the mainstay of the UAE government sources estieconomy in the UAE and will mate that such reserves, at cur-

Oil&Gas Middle East November 2009

rent production will, excluding any new discoveries, last for over 150 years. The UAE ’s oil production is limited by quotas agreed within the framework of OPE C to 2.25 million barrels per day (mbd). Production capacity, however, is slated to rise to approximately 5 million bpd by 2014, though the impact of current OPEC quotas and sluggish global demand recovery may see those plans strategically slowed. Japan is a major trade partner for the UAE, and in 2008 Japan imported 369.2 million barrels of crude oil from the UAE, covering 25.1 per cent of Japan’s total crude oil imports.

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COUNTRY FOCUS: UAE

The big question of course is what projects and developments are in the pipeline over the course of the next decade? Information from a variety of government sources has been compiled and digested in the following snapshots. For detailed coverage and analysis of the UAE’s major oil and gas projects and plans, and a special report on the ADNOC group of companies go to ArabianOilandGas.com.

$43 BILLION PORTFOLIO Turning to the future, upstream oil and gas entities in the UAE continue to identify new projects aimed at boosting the nation’s crude oil production capacity to nearly 4 million barrels per day by 2020, which would amount to an additional increase of approximately 40 percent over current production levels. Reaching this ambitious target will represent a massive undertaking of resources and investment, particularly in light of persistent manpower and materials shortages that have afflicted the global oil and gas sector since 2003. The UAE has invested roughly $7 billion in upstream production infrastructure since 2004 and anticipates investing some $43 billion more in the coming years. At the same time, the UAE will invest more than $6 billion to expand its domestic refining capacity, which will significantly expand

4 BILLION

The 4 billionth barrel of crude oil from Zirku Island terminal was shipped in April this year Source: Zadco

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Ali-Al Jarwan general manager of Abu Dhabi Marine Operating Company (ADMA-OPCO). its ability to export refined prod- a variety of ways to reduce its carbon footprint, meet its own ucts from the region. domestic energy needs and expand exports: PRESSURE POINT To reduce hydrocarbon conMuch of the UAE’s current crude oil production is made sumption, and pave the way for possible by the reinjection of a new generation of planned natural gas to boost pressure communities, Abu Dhabi is in the nation’s major oil res- investing more than $20 bilervoirs. Without this massive lion in the famous Masdar proprogramme, the UAE’s crude gramme (See www.Utilitiesproduction would stagnate and ME.com for more on Masdar). decline. The UAE is testing Additionally, the UAE is a piocarbon capture and sequestra- neer in the region’s peaceful tion technologies to replace the nuclear energy programme. reinjection of natural gas. This Tremendous population growth would enhance exports of natu- as well as intense water desaliral gas, create more flexibility in nation requirements require oil production and provide glo- a huge electricity supply, and bal environmental benefits. that demand is only set to grow. This reduces domestic demand for natural gas and the need for BOOSTING EXPORTS In 2005 the UAE became the oil-burning power plants used to one of the first major oil-pro- meet peak demand during hot ducing countries to ratify the summer months. Kyoto Protocol to the UN Convention on Climate Change. As REGIONAL FIRST part of its energy diversification In the first major cross-border strategy, the UAE is working in energy deal between Gulf coun-

tries, the UAE is importing natural gas by pipeline from Qatar. The gas supports domestic electricity demands and frees Abu Dhabi’s natural gas supply for crude oil recovery. The project began delivering gas to power companies in the second quarter of 2007. Among other energy efficiency drives, is Dubai’s devel-

QUICK UAE FACTS • Proven recoverable oil reserves are estimated in the 97 to 98 billion barrels range • The proven recoverable gas reserves are estimated at around 214 trillion cubic feet (Tcf). • In 2008 Japan imported 369.2 million barrels of crude oil from the UAE • Oil production capacity is slated to rise to approximately 5 million bpd by 2014

November 2009 Oil&Gas Middle East

COUNTRY FOCUS: UAE

opment of the region’s first light rail system, the Dubai Metro. Phase one launched this year, with a more comprehensive network going live in 2010.

WORKING WITH GLOBAL PARTNERS The UAE has a history of welcoming private-sector investment into its upstream oil and gas exploration and production sector. Abu Dhabi was the only OPEC member not to nationalise the holdings of foreign investors during the wave of nationalisation that swept the global oil and gas industry in the mid1970s, and it continues to benefit from high levels of privatesector investment. Today international oil companies from the United States, Japan, France, Britain and other

countries continue to hold combined equity stakes of between 40 and 100 percent in Abu Dhabi’s vast oil concessions. Occidental Petroleum of the US and Total of France each has a 24.5 percent equity stake in the Dolphin Energy gas pipeline project. ExxonMobil recently won a tender for the redevelopment of the Upper Zakum field, which will ultimately increase oil production by more than 220 000 barrels per day. Last year, US supermajor ConocoPhillips won a multibillion dollar open tendering bout for the development of massive sulphur-rich gas reserves in Abu Dhabi, further limiting the amount of crude oil that would need to be burned domestically for internal electricity generation.

SOUR GAS - $10 BILLION PROJECT This huge sour gas project involves the development of natural gas condensate reservoirs within the Shah gas field, located onshore approximately 180km southwest of the city of Abu Dhabi. The project will involve the construction of a new one billion cubic feet per day natural gas processing plant at the Shah gas field, new natural gas and liquid pipelines and sulphur-exporting facilities at Ruwais in Abu Dhabi. ADNOC will have a 60% interest and ConocoPhillips will have a 40% interest in the project. Recently the decision to move away from a pipeline solution to an overland rail link has come to the fore. Local reports suggest that Union Railway is enlarging the scope of its UAE heavy railway network so it can transport sulphur from Al Gharbia for the project. The proposed rail link will carry granulated sulphur, a byproduct of processing sulphur-rich oil and natural gas, from the Shah field, the Ruwais petrochemicals complex and port. Sulphur, at times a valuable commodity (though prices have fallen somewhat since the field development plan was initially announced), could then be exported by ship to global markets. Don’t Miss: Sour Oil and Gas Advanced Technology 2009, March 29 – April 2nd, Abu Dhabi Hilton.

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Oil&Gas Middle East November 2009

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COUNTRY FOCUS: UAE

YARDS AHEAD Nawal Saigal, managing director of Drydocks World Dubai says upstream conversion work is booming and more offshore work is in the pipeline rydocks World – Dubai is one of the most prolific shipyards in operation. The shipyard is the largest facility in the Middle East and is the flagship company of Dubai World subsidiary Drydocks World. A ship repair yard of choice, it is also a preferred location for vessel conversions, new building and, increasingly, offshore oil and gas construction. The facility handles around 400 vessels in a typical year, most of them ULCCs (Ultra Large Crude Carriers) and VLCCs (Very Large Crude Carriers). It completed 25 years of operation in 2008.

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Several of the world’s largest dredgers and jack-up rigs are serviced every year and the yard has specialised LNG handling capabilities. Among the yard’s numerous claims to fame is the conversion work carried out on the Knock Nevis, the world’s largest crude carrier, and by most measurements, still the world’s largest ship. Sitting at the helm of the Dubai operation is managing director Nawal Saigal. In a year when most comparable yards around the world have seen the order book wither away, an upbeat Saigal says the hype of the economic crisis has surprised him to an extent.

“People keep talking about the world being a different place, but I’m a firm believer that if you have a stable business plan then you are ready to deal with the troughs as well as ride the peaks. Business has not stopped, it may have slowed down, but it’s not ground to a halt. If you are good you still get your share.” The Dubai yard is testament to this fact. The yard may not be at full capacity, but is currently executing five huge conversion jobs including two floating storage and offloading vessels, one floating production, storage and offloading vessel and a landmark floating storage and regas-

ification unit, but more about those later. Saigal says the firm is run along three core business streams. One is ship repair and ship maintenance, one is shop conversion, and the other is newbuilds. “About 50% - 55% of the business share is still made up of ship repairs.” At a time when lines of credit for such expensive work may be thin on the ground, Saigal says that whilst not immune, such revenue streams are relatively untouched by the collapse of cheap credit. “Repair work typically does not require credit or financing from outside organisations,

November 2009 Oil&Gas Middle East

COUNTRY FOCUS: UAE

Drydocks World - Dubai is among an elite group of yards worldwide which can carry out simultaneous ULCC conversions to FPSO vessels. the owners plan for this as part of the vessels lifecycle. Additionally, when you look at conversions, owners undertaking these jobs have good credit lines with their financiers and institutions built up over decades, and finally, newbuild owners tend to have the credit organised before they come to the yard.” Saigal adds that owners have tried to tempt the yard into becoming strategic partners, taking a share in vessels built there, but the Dubai yard has chosen not to go down that route. “It’s flattering, but we have taken a back seat on that. I think that blurs boundaries.” The Drydocks World group on the other hand has engaged in this sort of business, (See Seismic Shift on arabianoilandgas.com).

The company began newbuilds back in 1995, but made some major investments in capability and infrastructure to support this in 2002 and 2003.

Focusing on the offshore upstream business sector of course makes sense in the Middle East, but other UAE yards have built solid reputations for

“Today, clients are moving towards environmentally sound energy, so wind and wave related yardwork could well be carried out at the Dubai yard” Nawal Saigal “From that point onwards we became a real player in that field,” says Saigal. The managing director explains that the newbuilds part of the business has come about thanks to a desire to capture more offshore oil and gas work.

Oil&Gas Middle East November 2009

jack-up related work. In a relatively short stretch of coastline there are several world class jack up maintenance and fabrication facilities, but the high concentration does not dampen Saigal’s enthusiasm for the market in this region.

“That is something we are looking into, and we recognise that there are players well into the jack-up market, but I think we can deliver a value added product in the years ahead. Some of the jack-ups in the region have really come of age, and will need replacements. Most of the operators in these waters are tied in with, or owned by government related entities, and ultimately we are here to serve the nation. We are, ultimately, a national asset. Current oil and gas related work includes two FSOs for a joint venture between Euronav of Belgium and Overseas Shipbuilding Group (OSG). Each of them have put a ULCC into the yard’s massive conversion dock. The vessels measure up at 318 metres in length and 68 metres

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COUNTRY FOCUS: UAE

Saigal says capturing more of the offshore oil and gas work is in his sights. beam. It is thought these vessels will eventually go to work on the Al Shaheen Field, operated by Maersk Oil Qatar, to replace the giant Knock Nevis. In April last year, the first of two 16 000 tonne hulls constructed for Aker Solutions was delivered from the Dubai yard. Considered amongst the most advanced drilling rigs of its kind, the H6E rigs will be able to drill in water depths up to 3000m, with a maximum drill string length of 10 000m. Asked whether the successful delivery of the H6E hulls opened new doors to Drydocks World – Dubai, Saigal is unequivocal. “Definitely. The end product that left this yard has made a real impact in the offshore industry. That’s where the market is moving in the years to come, deeper

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E&P work, and we have proved we are both capable, and leaders in this field.” A reputation for on time and on budget high-end conversion work also helped deliver the Golar Frost vessel to Drydocks World – Dubai. The 290 metres by 48 metres regasification unit marks what Saigal says is just the beginning of a growing market for such vessels. The concept of FSRU vessels is widely regarded as providing shore based safety to terminals and population centres. Most cities would rather not have large liquefied natural gas storage nestled amongst the population centres, for obvious reasons. “Parking the vessel 30 miles offshore and pumping the gas in through a pipeline to the grid is much safer. More and

more countries want to be safety conscious and reduce risk exposure to their citizens, so I think this is something that we will see more of.” Emerging trends are a particular focus for Saigal. Despite the yard’s impressive heritage in upstream, greener technology is a slice of the business he only sees growing, and the UAE’s increasing emphasis on this should position the yard to capitalise on a whole new revenue

stream in the years to come. “Today clients are moving towards environmentally sound energy, so wind and wave will come to the fore in time. We have strategic conversations about the future and wind and wave work will almost definitely be an arena we work in. With Masdar and the International Renewable Energy Agency IRENA coming up in Abu Dhabi, all these things are possible. It’s really exciting.”

KNOCK NEVIS - WAITING IN THE WINGS The longest ship ever constructed recently retired from Qatar’s Al Shaheen Field is waiting for decommissioning in the Arabian Gulf. Name: Knock Nevis Owner: First Olsen Tankers Length: 458.45 m Draft: 24.6 m (fully loaded) Longer than: Empire State Building and Petronas Towers

November 2009 Oil&Gas Middle East

COUNTRY FOCUS: UAE

LOCAL TOUCH PAYS OFF The UAE’s homegrown oilfield service provider, AlMansoori, is determined to keep its phenomenal growth momentum up throughout 2009 and beyond eading oilfield services provider AlMansoori Specialized Engineering (MSE) has stuck to its ambitious growth strategy in 2009, and is looking to consolidate its position as an ambitious player in the Middle East throughout 2010. The company, which has its principal yard in the Mussafah Industrial Zone, was established in 1977. “The company grew very rapidly and although that growth was in many different parts of the oil and gas industry, the core of our business has always been services,” says CEO, Nabil Alalawi. “As we evolved we added more and more services and at the present time offer nine different services to the industry. As well as the services we also got involved with trading and representing foreign companies, who by law have to have a local sponsor. So we added a commercial arm to our business. Then as we grew we started producing some specialised products for the oil and gas industry,” he adds. Last year the company reorganised its many branches and split the company into two independent standalone companies. One is called AlMansoori Petroleum Services and the other one is called AlMansoori Petroleum Industries. “There is a manager for each company who reports directly to me, so these elements of the business were essentially

streamlined. It was too unwieldy as one operation,” says Alalawi. His vision of the next few years will see a renewed push into the supporting heavy industries which typically sit side-byside in other global oil hubs. “If you look at Aberdeen, for example, most of the products are being produced there for the North Sea. If you look at the Far East most of the products are being produced in Singapore. However, if you look at the Middle East you hardly have any industries to provide support. So, we believe it is a fantastic growth area for us,” Despite the reduced service and maintenance budgets of the major NOCs in the region, Alalawi remains focused on strong growth this year. “In 2009 we are on target to achieve 25% growth. This is exceptional when you think some of our competitors have said that they are going to be 6% under forecast. We are very bullish and have set ourselves some formidable growth targets. Every four years we double in size - and we are still doing it,” he beams.

Oil&Gas Middle East November 2009

“We are on target to achieve 25% growth this year. We have doubled in size every four years, and we are still doing it” Nabil Alalawi The company is involved in several joint ventures, including the Global Chemical Company which opened its chemical manufacturing facility in Abu Dhabi this year, CORT SAS (Sulphonated Asphalt – a drilling mud additive), a revolutionary product being brought to the Gulf market.

“New technologies are important to AlMansoori in order to continuously improve our services and at the same time offer our clients the latest in the industry so that we can be competitive and innovative in the market place,” he concludes.

AlMansoori is targeting 25% growth this year.

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COUNTRY FOCUS: UAE

CAPITAL CHOICE Brisk business in Abu Dhabi is steering the UAE down the path to recovery, says Cor Corbeek, general manager, for Emerson Process Management bu Dhabi has proved to be the regional rock amidst the global storm which lashed much of the industry this year. Amongst those reaping the benefits of being on the ground in Abu Dhabi is Cor Corbeek, Emerson Process Management’s general manager for the Central Region, Middle East and Africa. The energy business is a major driver for Emerson in the region, accounting for the lion’s

reduce their maintenance costs. That has impacted upgrade work considerably.” This year’s still considerable oil-revenues have spurred activity centres like Abu Dhabi to push ahead with new projects. “A lot of our business comes from projects, and that has remained strong in the UAE. ADNOC wants to increase its production capacity from 2.5 million barrels per day up to 3.5mbpd, and that means a lot of new business,” says Corbeek.

“ADNOC wants to increase its production capacity from 2.5mbpd up to 3.5mbpd, and that means a lot of new business” Cor Corbeek share of revenue streams. “In the Middle East around 60%, up to maybe 70% of our business is in the oil and gas industry. Petrochemicals, chemicals and power make up much of the remainder for our central region business, and those sectors are growing too,” he adds. With a reduced cost environment, now seems like the ideal time to perform maintenance and upgrade programmes. “Actually almost the opposite has been the case for us. After the oil price went down so much, ADNOC, and most of its national oil company counterparts in the region, instructed all of their operating businesses to

One of those projects which hold immense opportunity is the Shah Sour Gas Field development, currently in an advanced stage of tendering. “Shah is a huge project. They are still selecting EPC contractors, but behind the scenes there is a lot of lobbying and positioning for those instrumentation and automation packages,” explains Corbeek. Process automation only accounts for a small percentage of the overall EPC bid, though on a US$10 billion project, that in itself is substantial. Corbeek says that UAE appe-

Oil&Gas Middle East November 2009

tite and enquiries for the wireless automation solution, PlantWeb, have been very strong, specifically with oil and gas related companies. “Takreer recently placed a large wireless automation contract with us. Other heavy industries here in the UAE are also interested now, such as Dubal, so wireless has really taken off this year.” Part of the appeal of the PlantWeb solution is that, thanks to its wireless properties, installation costs are greatly reduced. However, it’s not just that cost benefit which is seeing demand grow. “It would not really be feasible to run cabling to many of the places wireless sensors can go. The PlantWeb solution opens new opportunities to improve monitoring capabilities, and that’s what is exciting the market.”

Corbeek is unequivocal about where the largest opportunity sits in his region. “It is Abu Dhabi for sure. That’s where everything is happening. ADNOC has something like $50-$60 billion worth of capital projects on the table. Even from a regional perspective, not just a national one, the activity there, both upstream and downstream, it’s a genuinely prolific market right now. It’s really quite amazing,” he concludes.

Cor Corbeek, general manager, Central Region, Middle East and Africa, for Emerson Process Management

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RISING Exclusive: Badr Jafar, executive director of Crescent Petroleum, speaks candidly about Iraq, the need for gas liberalisation, and arbitration with Iran’s national oil company 32

In 1969, two years before the Trucial States joined to form the United Arab Emirates, and predating the era when National Oil Companies shot to the fore of the regional oil and gas industry, Sharjah-based Crescent Petroleum marked itself out as a firstmover and incorporated itself as the region’s earliest indigenous, private energy company. The company’s first major project was the Mubarak Field which is offshore Sharjah, which began production in 1972 and produced over 60 000 barrels

Oil&Gas Middle East November 2009

per day at its peak in 1976. In turn, that led to operations right around the world, at one point holding petroleum concessions in Argentina, Canada, former Yugoslavia, France, Tunisia, and the UAE and in the 1990s adding Egypt, Pakistan and Yemen to its global portfolio. “Our diverse international operations throughout the 80s and 90s brought valuable experience as an upstream petroleum company, in a wide range of operating conditions,” explains executive director of Crescent

Petroleum, Badr Jafar. From that global presence, the company in the 1990s began a process of reining back its international positions, a strategic move in a turbulent time for the industry. “At least 40% of the world’s remaining gas reserves and 60% of global oil reserves are here in our region. We felt that with our well-developed core competencies, and being an indigenous Middle-Eastern upstream operator with regional business knowhow, meant we had advantages over many of the IOCs (Interna-

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tional Oil Companies) operating here,” he says. A coveted presence in the most prolific hydrocarbon region in the world remains the ultimate aim of IOCs from across the globe, but entry into National Oil Company interests comes at a price many deem steep. Better to be known as a local company, says Jafar. “We decided to bring back our original focus on the Middle East and North Africa. Over the years, we divested these operational assets and brought the core of our business back home.” In the 1990s the company pioneered the development of a real Middle Eastern integrated project by recognising the region, even then, was heading towards a gas imbalance. “There was an emerging disparity between gas rich producers and energy hungry gas short markets. As a company we saw that disparity would continue and exacerbate.” Initially the company began looking at filling that gap, starting with the major asset holders, Qatar and Iran. “As a private sector company we wanted to facilitate the supply from those countries into the gas short regions in the Gulf and beyond.” Widening its net, the company also began looking at hugely ambitious international projects, such as feeding the energy hungry India and Pakistan markets with surplus Middle East gas. The Gulf-South Asia Gas Project (GUSA), first launched by Crescent in 1990, was the first workable scheme for producing, transmitting by pipeline and delivering natural gas from Qatar to South Asia and was initially developed by Crescent to

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service markets in the UAE as a result of rapidly increasing gas demand. Due to prevarication in Pakistan over the years, “After 4 years of intensive negotiation, we signed a long-term interthe project has yet to come off nationally binding gas supply agreement with the National Iranian Oil the drawing board and enter Company (NIOC) in 2001. Both sides invested over 2 billion dollars an execution phase. “Pakistan in facilities in our respective countries to prepare for this project. missed the opportunity which Due to huge delays on the upstream development in Iran, which was would have saved the counbeing carried out by NIOC’s contractors, that gas which was due to try over US$50 billion at curcommence delivery in Dec 2005 has not been supplied yet. The piperent prices,” Jafar says. When line is built and connected, the upstream facilities are in place, but the this project did not go ahead commissioning of their facilities has not yet been completed. We were the Dolphin project emerged extremely patient with NIOC’s contractors’ delays; however, we had and implemented the Qatarrelied upon this contract and committed to our customers as a result. UAE pipeline. “The MubadalaNIOC is now almost four years late. As a result, and because of the led Dolphin project did a great stress that this delay was placing on our customers, we felt we had no thing to engage with this opporoption but to proceed with the arbitration route to seek independent tunity, and the benefits and sucjudgement on specific performance to put an end to negative public cesses of this particular project debate, and that’s where we are today. We always strive to maintain are evident to all,” Jafar said. good relations with our contractual counterparties, but contractual The desire to build a truly commitments are just that, and business is business. We are totally regional, private sector, but pubconfident about our contractual position. Incidentally, NIOC has never licly listed gas company spurred defaulted on an internationally binding contractual commitment and the development and launch of we don’t expect that NIOC will start reneging on its deals now.” Dana Gas in 2005. “Dana Gas was the first and still is the only private sector and publically listed firm really concentrating on the full natural gas value chain and with a regional focus in the MENASA (Middle East, North Africa, and South Asia) region,” he says. Crescent Petroleum essentially became the founder of private-sector monetising of the region’s natural gas, and is striving to deliver value throughout the value chain. “From upstream, through midstream distribution and transportation, even into downstream gas processing and facilitating gas based industries, we as a local regional company have sought to realise the maximum addedvalue of locally-produced gas, as opposed to focusing just on exports as many IOCs tend to do.” Crescent Petroleum, as the key founder, holds around one fifth of the stock in Dana Gas. The gas project in the Kurdistan Region of Iraq came together in record time.

BADR JAFAR - IN HIS WORDS: THE IRAN GAS DEAL

November 2009 Oil&Gas Middle East

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The scale of enthusiasm for the company is undeniable, judging from the IPO which attracted US$80 billion in less than two weeks, setting a world record for an IPO over-subscription. Traditionally, gas reserve development partnerships in the Middle East with IOCs tend to be based predominantly on the concept of sourcing energy for exports. With natural gas,

Badr Jafar is executive director at Crescent Petroelum, and chairman of Gas Cities and Pearl Petroleum.

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that usually entails export pipeline projects when markets are close, and LNG shipping for farther export markets. “Once that gas molecule reaches the border you’ve exchanged its value and that’s it. However, by using that molecule locally, whenever possible, you maximise the netback value of that gas, and that has a major economic multiplier effect,” enthuses Jafar. This logic led to Jafar establishing Gas Cities LLC in 2007, a joint venture between Crescent Petroleum and Dana Gas, which is developing mega gas-based industrial cities in the region, based on the concept of clustering. Jafar, also chairman of Gas Cities, says “The Gas City concept is unique in that it is a private-sector initiative that provides a onestop-shop for gas-intensive industries and communities in an integrated and energy efficient environment.” Gas Cities is now well on its way to signing up a number of these cities in the region, includ-

ing in Iraq, Egypt and most recently Yemen. The idea of a country using its gas is a relatively simple concept, but Jafar is passionate about how much such a basic change could transform regional gas, and gas-based industries. He concedes that export has many positive effects beyond the cash flow, and that better use of gas domestically, whilst a priority, should not rule out export deals where reserves are sufficient to support both. “I’m not saying everything should be hoarded for domes-

and the growing burden of air conditioning the region in summer. Of course, the Middle East is more fortunate than much of the rest of the world, in that it has the resources to hand to support these demands, but without a liberalised pricing structure, a vast amount of those assets will be squandered in the years ahead. “Regionally speaking, natural gas rich countries are underselling their product to subsidise power generation and many of the downstream projects. In my opinion, without

“Gas has something that oil doesn’t, and that is the fact it can act like an umbilical chord between two nations which then promotes long term stability” Badr Jafar tic consumption. Gas is a great facilitator to build political and economic bridges between two countries. I think that gas has something that oil doesn’t and that is the fact it can act like an umbilical cord between two nations, which in-turn promotes long-term stability and good relations between them because the economic imperative is there.”

GAS LIBERALISATION One topic which comes to fore in conversations with Jafar is the real and pressing need to liberalise gas markets in the region. Population growth and rampant economic development is driving a huge demand increase for desalination,

gas market liberalisation going forward there is little prospect of the Middle East to capitalise fully on its reserves. Why? Simply because artificially low gas prices have a double-whammy effect. On the one hand it increases demand unrealistically and leads to wastage without regard to conservation and the detrimental environmental impact, while on the other hand robs our people of the economic incentive to develop our vast reserves,” he says. Meaningful reform in the Middle East will require a dramatic shift in regional government’s long term policies. In order to promote the diversification of economies, most of the Gulf States have for a long time set gas prices well below unsubsidised market rates to support their rapid expansion

November 2009 Oil&Gas Middle East

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Crescent Petroleum began life producing oil and gas from Sharjah’s Mubarak Field in 1971.

and building of nascent industries. Additionally, consumers have been largely blessed with access to low price, heavily subsidised electricity and water. “What happens in this situation is that the provision of low cost electricity and gas feedstock to consumers and downstream industries becomes economically unsound when all the other factors are included in the picture, such as population growth and future power generation investment. This then leads to major drains on government budgets and its ability to keep subsidising, which in turn leads to gas and power shortages, eventually heavily taxing the consumer.” Despite the political implications of charging the real price for power, water and fuels, it is a topic which has sailed up the agenda across the Middle East. Egypt and Iran have already seen proposals drafted at the highest levels of governments.

However, political will is just one bump on the road to a fully liberalised natural gas market. If one jurisdiction hikes its gas prices, the temptation for energy intensive industries would surely be to locate to a cheaper environment. Jafar does not seem deterred. “We’ve seen in the past that a unified approach doesn’t necessary work in this region, or even worldwide for the gas industry for that matter. What drives fundamental shifts in policies is first movers. You have to set examples, and we have done that in the past, including when we pioneered the region’s first two cross-border gas pipeline deals in the 80s.” The landmark deal Jafar is referring to was the Sharjah to Dubai onshore gas transmission and supply project promoted by Crescent in the mid 80s, followed a few years later by an offshore pipeline built and owned by Crescent. Back

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then, Dubai burnt liquid petroleum fuels for power generation in the summer, whilst in Sharjah gas was being flared. “Crescent came in as a private company to talk to the Dubai government. The logic was simple. At the time the price Dubai was paying for fuel oil was approximately $2.50 per MMBTU. We were burning the gas at zero value! Between the willing buyer and the willing seller, we ended up splitting the difference. So the very first cross border sale of gas in the Middle East was set at $1.25 per MMBTU. Unfortunately this mindset with gas pricing continues until today where the

alternative is more than seven times what it was back then, ultimately to the detriment of the consumer and producer.” Jafar says that when Saddam Hussein was looking to sell gas to Kuwait in 1989, the Ministry had no idea what to charge for it. So he asked his Ministry to look for precedents and they came and found the Crescent Petroleum gas price to Dubai, and so the Iraq-Kuwait price was set at the exact same $1.25. When the Dolphin Energy pipeline began deliveries the price was thought to be in the $1.25 - $1.35 price range, at a time when energy commodities were trading at record levels.

“In my opinion, without gas market liberalisation there is little prospect of the Middle East to capitalise fully on its reserves”

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“This illustrates that the mentality in this region is usually set by first movers. Gas is more efficient, cleaner, cheaper, and producers need to start to set prices at a rate that is mutually beneficial for everyone in the region in the long-term, and I don’t think this will happen if we wait for a unified approach. It just needs to get done. When it is successful, it will then be used by all as the correct and sustainable benchmark.”

NEW IRAQ Amongst the most well-known activities of Crescent Petroleum’s group of companies is it’s participation in Iraq’s Kurdis-

tan Region. Crescent Petroleum is in partnership with its affiliate Dana Gas, and is currently implementing a major integrated natural gas project there. The company is working under a risk service agreement with the regional authorities to, as a first phase, produce, process and deliver 200 million cubic feet per day of gas supplies urgently needed for power generation free of charge to the government, in return for guaranteed off-take of associated liquids by the government, and subsequently to ramp up production of petroleum for local sales and eventual exports. The Kurdistan interests are cur-

$700 MILLION Sum invested in pure equity by Crescent Petroleum in Kurdistan Source: Crescent Petroleum

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rently held by Pearl Petroleum, of which Crescent Petroleum and Dana Gas are the major stakeholders, with Austria’s OMV and Hungary’s MOL each acquiring minority stakes earlier this year. Pearl Petroleum’s interests are concentrated on the Khor Mor and Chemchemal gas fields in the Kurdistan Region of Iraq. The combined project investment of around $700m (spent to date) is the largest privatesector investment ever undertaken in Iraq, and involves the fast track appraisal and development of the gas fields, construction of two LPG plants and laying of 180km of pipelines. The project will sustain two power plants to generate 1250 MW providing cost effective electricity for over 4 million Iraqis, freeing the extra 300 MW of electricity to other provinces and saving Iraq over $2.5bn a year in fuel subsidies. “We were asked by the Prime Minister of

the Kurdistan Regional Government to assist with a problem they had. They had contracted two Independent Power Plant projects (IPP) – one 500MW plant and a 750MW plant – and as is standard, they guaranteed feedstock for these power plants. The plants were one year away from completion, with no gas supply which was promised to them by the central government, in sight,” explains Jafar. That presented two problems for the Kurdistan Regional Government. First, contractual obligations to provide gas for the IPPs, and second, it had promised the people of the region, who were greatly neglected during Saddam’s era, that they would have electricity. “They requested us to come in and solve this major problem. We quickly undertook major studies on two fields, which at the time had uncertain reserves, but were good candidates. On this basis, we entered

November 2009 Oil&Gas Middle East

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into a risk service agreement which provided for the very fast-track appraisal and development of these fields, as well as installation of all the related facilities and infrastructure.” The company rapidly embarked upon getting the fields ready for production, and building the 180km of pipeline in difficult rocky and mountainous terrain. “We literally had to move mountains, clear many square kilometres of minefields, and import over 65 000 tonnes of equipment into Kurdistan, all in record time!” explains Jafar. The initial risk service agreement was signed in April 2007, and by the end of summer 2008 Crescent was delivering gas. That gas is now feeding turbines, which in turn is providing much needed electricity to over 4 million Iraqis. On top of the gas needed to fire up the power stations, recent appraisals of the fields have revealed that the reserves are sufficient to support local industry, and also enough to export. “During our efforts on the appraisal we discovered that the reserves in place could satisfy not just local - which is the priority - but also parallel export plans,” beams Jafar. Kurdistan is a landlocked country, but neighbours gas hungry Syria and Turkey. Crucially, of course, Turkey is a gateway to Europe. “Natural gas, unlike oil, is worth nothing unless you develop markets for it, and this is what we have set out to do for the region.” The addition of OMV and MOL, central Europe’s largest energy companies, is particularly exciting for Jafar. “The great thing about this partnership is that it brings four privatesector energy companies, two

Crescent began its earliest operation in the Mubarak Field, offshore Sharjah in 1971. The ﬁeld peaked in 1976. from the Middle East and two from Europe, together with the support of host governments, to create a market for this gas and bring excess Middle Eastern gas supplies to Western Markets,” he says. The JV company, Pearl Petroleum, (which Jafar serves as chairman), is

trillion cubic feet may well fall short of the real figures. “Those figures are based on estimates published by the Ministry of Oil in Baghdad from studies done a long time ago. Nothing has been done since. Based on our extensive appraisal work we felt con-

“Natural gas is a great facilitator to build political, social and economic bridges between two countries” Badr Jafar an integrated natural gas partnership with 40% Crescent, 40% Dana Gas, 10% MOL and 10% OMV shared ownership. Whilst declining the opportunity to reveal the full extent of the resources at the Khor Mor and Chemchemal Fields, Jafar notes that the often cited figures of between 2.2 and 4

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fident enough to announce that we would be in a position to produce and supply over 3.5 billion cubic feet of gas daily from these fields combined, which would leave ample supply left after satisfying local requirements to support additional export projects, such as the Nabucco Project.”

MEGA-PROJECT The Nabucco project represents a new, 3,300 km gas pipeline connecting the Caspian region, and Middle East via Turkey, Bulgaria, Romania, and Hungary to Austria, and further on to the Central and Western European gas markets. When the project was initially conceived, it was thought the main source of gas supply will be the second stage of the Shah Deniz gas field in Azerbaijan, slated to come on-stream in 2013, but that date has since slipped to 2016. Slow progress on the Azerbaijan projects has opened a massive opportunity to Pearl Petroleum. Through Turkey, the Khor Mor and Chemchemal gas-condensate fields in Kurdistan will now at least be able to provide the initial supplies of gas to Europe, and potentially substantially more. “Initially 2014 was announced

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by the Nabucco consortium as an aim for the Nabucco project to commence gas supplies. At that time they were relying predominantly on Azerbaijan and Turkmenistan. The estimate of supply from those countries recently got revised to 2016. More recently the Nabucco management announced they are sticking to 2014 because the first gas supplies will be coming from Northern Iraq, which is the Pearl project,” says Jafar. Despite the political, logistical, and financial challenges that lay ahead, Jafar is confident in Pearl Petroleum’s ability to deliver gas to Europe. “We will absolutely not be the bottleneck in terms of supplying Nabucco, or any other European projects that get their act together.”

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Constitutional wrangling and uncertainties surrounding Iraq’s Hydrocarbon law, has kept many players out of the Iraqi energy arena, but Jafar remains utterly confident in the company’s presence, and role in the embattled nation. “We providing a tremendous service to the Region and are operating fully within the bounds of the Iraqi Constitution which has been ratified by over three quarters of the population, and the Kurdistan Oil and Gas Law which is constitutionally recognised. We are fully confident of the legal, technical and moral status of our operations in Iraq. We wouldn’t have invested over $700 million dollars in pure equity if we had not been comfortable with that!” he concludes.

Over 180 km of pipeline has been laid for the Pearl project in Kurdistan.

November 2009 Oil&Gas Middle East

QATAR FOCUS

START TO FINISH

Saad Al-Mohannadi, deputy managing director of Maersk Oil Qatar speaks exclusively to Oil & Gas Middle East as completion moves into sight for the giant Al Shaheen expansion project

n b 6 $ JECT PRO

Oil&Gas Middle East November 2009

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QATAR FOCUS

he Al Shaheen Block 5 field, which sits just shy of 80 kilometres off the Qatar coast has seen oil production grow to over 300 000 barrels per day, and for a time was generating Qatar’s largest hydrocarbon revenue stream. The Field Development Plan (FDP) signed in 2005, has positioned Maersk Oil Qatar at the heart of QP’s oil producing future. The extension project, (2005 FDP), aims to increase production beyond the 330 000 bpd recorded in 2008, and includes an investment package estimated at US$6 billion, which covers EOR expenditure as well as infrastructure investment. The 2005 FDP is a huge undertaking. The project encompasses the drilling of more than 160 production and water injection wells over a six year period. Fifteen new platforms were required, (several currently on barges inching their way towards Qatar’s waters from overseas international contractors). These platforms are to be twinned with accommodation and production facilities and the whole project interconnected by subsea pipelines. Saad Al-Mohannadi, deputy managing director of Maersk Oil Qatar reveals where the landmark project is at today.

How is the expansion plan progressing?

SAM: We are currently on schedule with the FDP which is a real achievement considering the size and complexity of the FDP, with significant installations and hook-ups taking place, whilst maintaining high levels of production uptime. We’re understandably pleased by the progress being made

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which is currently about 90% complete and of the cooperation with Qatar Petroleum, which has enabled such progress. 126 out of 169 planned long horizontal wells have been drilled within the FDP 2005; the drilling campaign is 75% complete. This includes the world’s longest well at a depth of 40,320 feet drilled in May. Also, Seven of fifteen platforms (weighing 140,000 tonnes in total) have been installed, with the remaining eight either in the process of being installed offshore or to be loaded in Asia and the Middle East for offshore installation later this year. Jackets have been installed for seven of the eight outstanding platforms. Final hook-up and commissioning will take place in early 2010. On top of this, the laying of 300km of inter-field pipelines and 50km of subsea cables has been finalised and these are currently being tied-in to the completed platforms, and a major 3D seismic survey, including interpretation Saad Al-Mohannadi surveys a scale model of the 2005 FDP expansion project. of the data has been finished. What are your goals this year?

SAM: Our goal is to continue with the progress we’ve been making, without accidents and without any significant delays. We’re currently in the last phase of work and I would say our main goal is to simply focus on the successful completion of the project - around the end of Q1 next year. Our major milestones from 2009 include the installation of four major decks including the largest (13,500 tonnes) in the Middle East later this year. The commissioning of a central utilities platform including the power generation plant supplying 32 MW of power to the satellite platforms is significant, and

“A highlight for me was being in charge of the ﬁrst shipment of crude oil from the Al Shaheen ﬁeld in 1994, to see and realise we’d been successful and acheived our goal” commencing oil production and gas compression through new central processing platforms is a big step forward. What is the most challenging part of your job?

SAM: In the beginning of this project we set out to do something that had never been done before, that clearly brings challenges on a scale that you

wouldn’t normally experience. I would say the biggest challenge is to adapt to the daily, evolving challenges to remain on time and on budget whilst maintaining significant up-time in our production operations. Seeing the progression of the Al Shaheen field development from start to finish is hugely rewarding though. I’ve been involved from the very begin-

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ning when there was nothing. What was your backI’ve since watched the company ground prior to joining MOQ? and this project grow steadily SAM: I joined Maersk Oil with no breaks in development, Qatar in 1993 from Qatar Petroleum, becoming the Deputy which is a real achievement. Managing Director in 1996. I have a background in opera: If you had to pick one tions with QP with a BSc in moment as an absolute highlight Petroleum Engineering. of your time with MOQ, what I was given the opportunity would it be? SAM: There’s so many to to join Maersk as a position for choose from! One that stands a Senior Qatari was available. out is being in charge of the At the time, Maersk Oil was first shipment of crude oil from virtually unknown in Qatar; a the Al Shaheen field in 1994, to small company which few had see and realise we’d been suc- heard of. At that time it was a cessful. Also the drilling of the risk to join such a company and world’s longest horizontal well many didn’t believe that Maersk in 2008 at 40,230 feet (12.3km) would succeed in developing Saad Al-Mohannadi is deputy managing director at Maersk Oil Qatar. marked a real milestone in our the Al Shaheen field. However, I believed in their potential as capabilities as a company. But the real highlight has been the geological conditions of the AL SHAHEEN IN NUMBERS my involvement with the first North Sea, which Maersk Oil Field Development Plan (FDP). had been developing over the It was an exciting and challeng- previous decades, were similar ing time, we had really good sup- to the Al Shaheen Field to some port from HH the Emir Sheikh extent. They also had an expeMaersk Oil Qatar drilled the world’s longest well in May 2008. Hamad bin Khalifa Al-Thani rienced team involved with the and Deputy Prime Minister and development of the field and Ministry of Energy and Indus- who would share their knowltry HE Abdullah Bin Hamad edge on cutting-edge technoloAl-Attiyah. We were embarking gies new to Qatar at the time, on a project that if successful, such as long horizontal wells. Weight of the 15 platforms which have been installed to date. would give and enormous boost This made me ready to take on the challenge. to the country’s economy.

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feet

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tonnes

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UPSTREAM LOGISTICS

Outsized cargo readies for its departure from Abu Dhabi to be shippied to Asia.

SHIFTING GEAR Challenges in the logistics industry are plentiful, but throw in outsized oil and gas cargo and finance driven deadlines, and things can step up a notch 44

Oil&Gas Middle East November 2009

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UPSTREAM LOGISTICS

ogistics in the oil and gas industry can be much more complex than in any other sector. Sheer weight, complexity, or quantity of items being moved makes the whole process a challenging one. Besides the issues surrounding the size and shape of the cargo, there are also major challenges in their final destination. Often these are integral parts of oil and gas equipment and need delivering to remote locations in short time frames, and under huge pressure. Despite this, there is no shortage of companies taking up the challenge. One such company is GAC, which has been involved in the oil and gas sector in the Middle East region since the 1950s. “We pride ourselves on having helped build the region’s oil and gas infrastructure ‘from the seabed up’,” explains GAC group energy logistics manager Ismayil Manzil. “We are unique in the energy sector in being able to provide service packages that integrate a range of services across shipping, logistics, and marine services that can be tailored to specific client demands wherever

“Time is a huge factor, especially if there are spills or breakdowns. That is massive, because you have to get the aircraft in the air very quickly” Eliska Hill, general manager, Chapman Freeborn.

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the project is. GAC Energy was created in 2008 to provide a single point of contact and bring the range of our services under a single umbrella,” he adds. Another company involved in the sector is TNT, which operates a global import and export system of road vehicles and aircraft for transport and a support network for managing the customs and paperwork flows. In the UAE the firm also operates warehousing facilities in JAFZA for storage and redistribution. The firm’s major challenges derive from the tight deadlines and short time frames being operated within upstream logistics. “It would be easy to focus on the size of oil and gas pieces and the weight causing handling concerns, however, that is a day to day process,” says Bryan Moulds, country general manager, TNT Express UAE. “The most challenging part of servicing the oil and gas sector is the time sensitivity of some of the movements, matched to the distances and borders that some of the shipments have to cross. Added to the paperwork for temporary exports and managing the expiry dates of

pieces on loan some days can be more exciting than others,” he adds. Manzil agrees that the majority of GAC’s challenges revolve around time and, more specifically, the occasional lack of it. “We always talk about the value of time

Bryan Moulds, country general manager, TNT Express UAE.

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time sometimes aircraft will be restricted in certain areas, mostly due to noise restrictions,” explains Smith.

RESTRICTIONS

GAC owns a ﬂeet of marine logistics vessels which serve the Arabian Gulf offshore industry. at every opportunity. In a timesensitive market, the value a logistics provider adds may be measured in days, hours or even minutes. Only experience and planning can help us meet the expectation of the industry. “Like in any other business GAC is involved, we don’t treat our customers as an outsider but we are part of them to ensure we add value constantly. We work and plan with the clients, and follow-up on every stage of the process to ensure success,” he states. Manzil adds that this can mean great difficulty in making sub contractors and authorities appreciate the importance of the time factor for the company’s clients. “It is not uncommon that delays could cost US$50 000 or more per day, and in some cases that figure can pass the million dollar mark, so time is of the essence,” Time is the crucial factor in all of the operations involving oil and gas equipment, Eliska Hill, general manager, Dubai, Chapman Freeborn, reveals: “Time is a huge factor,

especially if there are spills or breakdowns. That is massive, because you have to get the aircraft in the air very quickly and you can be dependent on the piece being manufactured or made available.” Abnormal Load Engineering (ALE) is a worldwide logistical engineering company which is heavily involved in the oil and gas sector. “We are an engineering company which specialises in transportation and installation of heavy loads, we are not a transport company, and that is a big difference from some of our competitors,” James Roberts, regional commercial manager, ALE, says. While GAC and TNT are in the air, Roberts is using the roads and the seas to transport heavy equipment, with the roads in particular presenting challenges. “I think because it’s a rapidly developing region, the road networks are constantly changing which results in unforeseen challenges.” While it may be a day to day process, the awkward shape and size of the cargo being

Oil&Gas Middle East November 2009

Further restrictions exist on which aircraft can land in particular airports. “You are tied into airports when you are flying by air, some of the larger aircrafts can’t land in regular airports. It’s a difficult one,” reveals Hill. Onshore locations of oil and gas facilities can sometimes be extremely remote. This is an opportunity for logistics companies to again show versatility. Some sites in onshore drilling locations

handled is undoubtedly a big challenge. Stuart Smith, cargo sales director – Middle East, Air Charter Service explains: “Large heavy outsized awkward pieces of equipment are a big challenge. You have often got really awkward long pipes, the biggest piece we had was a 13m piece of pipe and trying to maneuver it into the aircraft can be difficult.” Air Charter Service primarily uses Russian planes to transport oil and gas equipment, as it claims they offer the best option when trying to fit huge pieces of equipment into an aircraft. However, there are further issues caused by these as regulations can restrict the use of certain aircraft. Russian airplanes can be old airplanes; not all of them are old but aviation Nikolai Sorensen, general is constantly manager, Boxit. evolving, and Eliska Hill, general manager, from time to Chapman Freeborn.

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Your heavy lift and project cargo expert For further information please visit us online or contact: BBC Chartering, Dubai

BBC Chartering, Singapore

Phone +971 4 355 1910

Phone +65 6576 4130

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UPSTREAM LOGISTICS

CASE STUDY: SHIFTING LNG FACILITIES FOR KUWAIT’S MINA AL-AHMADI GAC helped Kuwait meet its high summer demand for electricity by handling all the parts and equipment shipments for a new natural gas import terminal.

do not even have access roads. “So our job starts with working with the clients on building access roads to ensure easy access for the supplies to the site,” stresses Manzil. “Having been in the region for over half a century, perhaps we can safely say that nothing can really catch GAC by surprise! This is a highly demanding environment where precision in planning and execution are critical. At the same time, backed by our extensive experience and expertise in this field, we have the flexibility to respond to last minute client demands or changes in circumstances.” Due to the complexity of some of the processes in logistics in the Middle East, the services offered by firms here have actually expanded. “We recognise this is the Middle East, and Middle East shippers in particular appreciate all inclusive solutions,” comments Smith. “We get involved in that by having airport agents at many of our hub points, we can appoint nominated agents in airports of arrival. We can send repre-

250

TONNES

The only Antonov 225 in service can lift a payload of 250,000 kilogrammes at takeoff.

Source: ArabianSupplyChain.com

The Challenge Kuwait’s own gas supplies are not enough to generate the power needed in summer when air conditioning units are at full blast. To cover the shortfall, Kuwait signed a US$150 million contract with Excelerate Energy to build import facilities for liquefied natural gas (LNG) at Mina Al-Ahmadi about 40 kilometres from Kuwait City. The Excelerate Energy supplies are based in several countries in North America, Europe and Asia.

The Solution Parts and equipment for the project shipped from various origins including the USA, UK, Italy, Holland, Belgium, Canada and Korea.

sentatives and managers, we can tailor the service according to the position of the company. If it is a big oil and gas company they tend to want an all inclusive service.” Claudio Lietaert, passenger charter analyst, Air Charter Service, reveals: “We are a very global company, we have around ten offices worldwide, which I think is an advantage we have over local competitors. There is nowhere we don’t cover, otherwise what is the point in chartering?” “We often arrange the pickup if it is coming out of a freezone. We can do the trucking pick up, with specialist vehicles and take care of everything from the shipper at the end,” says Hill. “You have to have local knowledge of the area and the problems; if you are moving things in and out of the UAE, it can be a challenge especially with dangerous equipment. We have operational staff who deal with all of that, the papers and the documentation,” she adds. Air Charter Services calls in the Antonov 225 for upstream project cargo.

UPSTREAM EXPANSION While some of the firms in this industry such as Abnormal Load Engineering and GAC treat oil and gas as their primary focus, others are also involved in other areas, although oil and gas is usually an area these companies want to be more involved in.

Oil&Gas Middle East November 2009

“We have a wide range of vertical markets but oil and gas is an important part, accounting for around 10% of volumes. This year’s challenges with the economy have meant that oil and gas become more interesting due to the stability of the sector,” explains Moulds.

“It’s not a huge part of us, because it’s a very ad-hoc business. Perhaps 10-15% of our cargo, so we are working on getting more and developing that in the Middle East. We are definitely targeting it and that is an area where we want to do more work,” affirms Hill.

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UPSTREAM LOGISTICS

Project Execution GAC was entrusted with door-to-door handling of all shipments whereby the logistics team took care of the logistics from all the origins including customs clearance all the way through to final delivery to Mina Al-Ahmadi GasPort (MAAGP) project site in Kuwait. In all, GAC has flown in 900,000kg of cargo and shipped in 125 TEUs for the project.

Cross border logistics operations can present major tests to a firm’s capabilities, particularly with the clock ticking. Problems can arise in this regard, on both land and in the air. “The problem in this part of the world is that airspace is very much a point of national pride, where each country tries to protect its airspace,” reveals Lietaert. “They don’t like to see aircraft

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from certain countries overfly other countries let alone land somewhere. When you have an aircraft on route and you get a call from operations saying you cannot fly across a country, you have a problem.” Smith suggests a solution to this problem may be an open skies policy in the Middle East, to increase trade between countries in the region.

The Outcome All the client needed to do is issue purchase orders and leave a copy with GAC. The Kuwait office was following up every purchase orders with the origin office to ensure that the parts were in the site at just in time without increasing the transport cost or timeframe.

There are many challenges being faced by these companies on a daily basis. However, it seems it is these situations that get logistics industry members out of bed in the morning. Roberts describes the most exciting part of his job as “trying to find solutions to complex logistic situations”. In essence the job is a problem solving one, however,

with a fast ticking clock and an awkward cargo, the oil and gas sector is permanently keeping the logistics industry on its toes. “No single day is comparable to any other day. You are seeing different challenges and different opportunities every single day. What more does one need to be excited?” concludes Manzil.

November 2009 Oil&Gas Middle East

COUNTRY FOCUS: UPSTREAM LOGISTICS UAE

MARITIME MOVERS BBC Chartering has seen steady upstream project cargo volumes in 2009 oving giant oil and gas installations from hub to hub falls to the capable hands of specialist project shipping firms. One such firm growing its regional operations and presence in the Middle East is BBC Chartering. Despite the disastrous year container shipping has suffered, Denis Bandura, managing director of BBC Chartering MidEast, says that project shipping demand in the Gulf has remained strong. “Project cargo is pretty much 100% of our business, and oil and gas and mining make up a huge proportion of what we do. We do carry other cargo’s, such as bulk shipping, but that’s traditionally a repo-

sitioning cargo for us,” explains Dubai-based Bandura. Inbound project logistics into Dubai in recent years has been huge business for the company, but strong links with oil and gas projects has kept the volumes up throughout the downturn. “Our vessels can lift up to 500 tonnes, which covers all but the heaviest outsized cargo for the oil and gas business.” The notion of lifting, through cranes attached to the vessel, a 500 tonne piece of kit worth several million dollars seems tricky to say the least, but Bandura says technological developments in positioning and monitoring onboard BBC’s fleet of ships take such loads in their stride. “When lifting something very heavy the ballast tanks are flooded so the ship sits lower in the water, this way it’s more balanced and incredibly stable. The pumping system onboard shifts water around the vessel if it starts to list (lean to one side). Modern systems are so efficient they can keep the ship balanced to within a few centimetres, even during the heaviest lifts.” Since establishing an office in the Gulf five years ago, Bandura says the business has gone from strength to

Denis Bandura is managing director of BBC Chartering in the Middle East.

Oil&Gas Middle East November 2009

Some BBC Chartering vessels have a lift capacity of 500 tonnes. strength. “We have seen very steady growth in the Gulf over the last three years in particular, with volumes in the region up by around 35%.” Although project work for the oil and gas industries has dominated the regional flow of cargo, some project shipping jobs continue to surprise. Today the region’s exports go way beyond just liquid hydrocarbons. “As the Gulf economies have diversified, cargo flows have begun to change, which is interesting. We shipped the stadium for the 2010 World Cup final in South Africa next year. It was produced in Kuwait,” Bandura adds.

The biggest single market is, unsurprisingly, Saudi Arabia. “Abu Dhabi has been busy recently, but Jubail is possibly the busiest port for project movements in the Gulf – almost all of it inbound, very little come out!” explains Bandura. Asset repositioning plays a big part in the upstream cargo BBC moves. “We deliver offshore and onshore rigs from Houston into Jebel Ali, and then after maybe six months we might be asked to reposition it to Malaysia. Wherever the demand for drilling is highest we deliver for owners such as TransOcean.” From January to May of this year, BBC Chartering Middle East actually carried more cargo than in 2008. “Margins have been eroded to a certain extent, but it’s still at a very reasonable level for us today. Globally, this region is performing very well,” concludes Bandura.

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UPSTREAM LOGISTICS

MOVING MOUNTAINS Beluga Shipping CEO Niels Stolberg says transporting a 1100 tonnes buoy across the ocean requires thorough planning and meticulous execution ransportation specialist Beluga Shipping was founded in 1995 and offers heavy lifting and transportation services. The Beluga team consists of 1300 seafarers and 500 experts, experienced in chartering and engineering. The firm provides tailored transportation solutions that are professionally conducted worldwide. “Whether it is a long and heavy demethanizer, a complex defractionator, structures and equipment for offshore platforms, modules for a plant system or a dismantled plant itself which has to be shipped, whether the cargo has to be loaded from the pier onto the

carrier or discharged from the ship onto a barge offshore, Beluga Shipping offers creative, safe and sound solutions,” Niels Stolberg, president and CEO of Beluga. Among the many projects undertaken by Beluga, Stolberg lists the transportation of a particular buoy as among the toughest and most rewarding. “The dimensions of this buoy outrange many conventional vessels: A weight of 1100 tonnes and a height of 27 metres making it the world’s largest in its category. The loading of such an object requires absolute precision and detailed preparation,” states Stolberg. Due to the massive size of the cargo,

1100-tonne cargos require steady hands.

Oil&Gas Middle East November 2009

the firm was forced to restructure the deck of the ship which was carrying it, as it restricted the sight from the bridge of the vessel. Stolberg describes the other changes which were necessary: “A specially designed grillage had been welded and was fixed to the weather deck of the vessel. One of the main tasks was guaranteeing the structural integrity of the vessel: The weight and size of the buoy and the grillage put tremendous loads on the ship’s structure, in some parts they exceeded 200 tonnes per square metre.” Beluga is to launch a series of specifically designed multipurpose heavy lift vessels late this year.

“From late 2009 onwards, the new Beluga P class, a series of specifically designed multipurpose heavy lift vessels, leaves the docks,” reveals Stolberg. “The Beluga P class provides for 16 powerhouses with combined 800 to 1400 tonnes crane capacities, tonnage of up to 20 000 tonnes deadweight, moderate bunker consumption and ice class Finnish/Swedish 1A.” “These vessels can operate in any port of the world and thus fulfil the market requirements for flexibility and a wide range of applications. They also underline the company’s strategic focus on the stable and growing super heavy lift market segment,” says Stolberg.

This buoy was so tall it restricted vision from the special heavy lifter vessel’s bridge.

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SPECIAL REPORT: PUMPS

PRESSURE POINT Pumps represent a mission critical investment for oil producers and field operators. Here, the region’s leading pump specialists provide an upstream perspective umps perform a mission critical role for upstream operators. Despite a setback in worldwide demand, Middle Eastern oil, gas and desalination projects have helped to prop up the global pumps market. According to a global market report by Freedonia, worldwide demand for fluid handling pumps is forecast to increase at a 4.4% annual rate to $47 billion in 2012. In the Middle East, upstream demand has remained strong-

est in countries where National Oil Companies have pushed projects through in spite of prevailing economic conditions, namely Saudi Arabia, Qatar and the UAE with growth from Oman helping. From the Oil & Gas Middle East survey of leading pump manufacturers, vendors and suppliers in the region there has been no question that the economic crunch has had an impact on local markets, notably with small to medium sized clients ability to pay having been curtailed somewhat.

However, healthy economic conditions support the view that by 2010 the sector will have seen the bottom of the downturn, and expectations remain high for a positive rebound from third quarter next year, through to sustained growth in 2011. The twin pillars of the recovery for pumps sector will be rising energy consumption throughout the region, coupled with major infrastructure development projects geared to enable each of the major producers to increase their production

capacity. Both prerequisites seem to be in place for local producers to capitalise in the coming months. The worldwide pump market is expected to be roughly $30 billion next year. Estimates range from roughly $22 billion (ITT), to $29 billion (McIlvaine), to $35 billion (Elsevier). Freedonia estimates the market will grow 4.8% annually through 2010 to reach $36 billion.

GE OIL & GAS Francesco Falco, pumps, valves and systems business leader for GE Oil & Gas is upbeat about both the potential, and performance of the Middle East upstream outlook, and delighted with recent contract wins. “The Middle East is one of the key growth regions for our products and services in general, including pumps. Recently we were contracted to supply a centrifugal pump system to Saudi Aramco, to help increase the shipping capacity of the Saudi Aramco refinery in Ras Tanura,” he says. The massive Ras Tanura expansion is designed to help Aramco increase its shipments to the central region of the Kingdom, which is facing a shortage of refined oil and gas products. GE Oil & Gas provides pumps and valves specifically for oil and gas applications, providing its pump technology with flexible engineering capabilities across a wide variety of upstream and midstream applications including oil pipelines, CO2 pumping for Enhanced Oil Recovery and subsea multiphase pumping. “Our experience with projects around the world and strong synergies with key sub-vendors has enabled us to build a proven track record when it comes to supplying complete advanced pump technology solutions for some of the world’s largest oil and gas projects,” says Falco. As enhanced oil recovery techniques increasingly come to the fore in the Middle East, Falco says that the company is well positioned to capitalise on the need for intelligent pumping solutions. Excitingly, GE Oil & Gas is playing a critical role in the development of Brazil’s Tupi field,

Oil&Gas Middle East November 2009

providing CO2 re-injection pumps for oil recovery. “These pumps can operate at 540 bar pressure: the highest pressure ever reached globally by a liquid CO2 pump. GE is the only company able to combine the technical content and capability to make this CO2 re-injection pump because it can apply to pump technology the engineering required for compressors, which is a critical part of the solution.” Falco says that reactor charge pumps, process pumps, oil pipeline pumps and high speed pumps have seen the strongest demand this year. Despite a relatively strong outlook, he concedes there are significant challenges for pump providers. “We do a lot of business with both national and major oil companies including ENI, Saudi Aramco and Shell. We also work a lot with EPCs such as Technip, Chiyoda and Petrofac. Like everyone else involved in these projects, managing increasing pressure on costs as a result of the recession is my major challenge this year.”

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SPECIAL REPORT: PUMPS

The GE Oil & Gas pumps for the Transnet project in South Africa will be centrifugal pumps designed for high efﬁciency and a high degree of ﬂuid dynamic optimisation (pictured).

Francesco Falco, GE Oil & Gas.

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November 2009 Oil&Gas Middle East

SPECIAL REPORT: PUMPS

CALDER

LEWA Sriram Iyer, regional manager, LEWA pumps and systems says that the emerging trends in the upstream field this year have been a more focused approach in relation to lifetime cost of project. “End users are thinking both in terms of reduction in capital outlay and also lifecycle costs. This means that the customer would like all his equipments to do much more than in the past in terms of efficiency, productivity, ease of operation and of course, safety. The strongest business line for Lewa this year has been in relation to upstream and midstream gas handling solutions. “Demand for gas has been growing very much in this region, and delivering the pumps and systems required for gas processing is still showing healthy growth.” Whilst the year has been challenging, Iyer notes that the pumps market is still developing in the Middle East. “Sales are buoyant, and it’s only the growth rate that has taken a dip. While we have had some extraordinary growth in the past, the dip we see developing now keeps expectation under control. The average trend is still towards growth and this will be visible clearly as global demand for energy recovers.” The Middle Eastern countries dominating Lewa’s revenue stream have unsurprisingly been the most willing to press ahead with capacity building projects. “Currently Saudi Arabia and UAE have some very exciting expansion plans and these countries show the biggest investment in oil and gas related projects.” Iyer adds that is spite of the downturn 2009 will deliver the highest sales for Lewa in region to date.

Oil&Gas Middle East October 2009

Calder Limited is a supplier of high and ultra high pressure pumps, which also manufactures high and ultra high pressure pump units and a wide range of water jetting accessories including nozzles, water blasting guns, and process pumps. The company has been steadily growing its global reach in recent years, and as well as Europe and Asia; its equipment is supplied directly or via representatives in UAE, Kuwait, Qatar, Oman, Syria, Yemen, Bahrain, and Iran. Ian Calder Potts, managing director of Calder Limited, says that as a new entrant into the Middle East market the only way is up, but that enthusiasm is tempered with some economic realism. “In discussions with many of our potential clients there is no doubt that the international downturn in the world markets is also impacting the GCC but probably to a lesser extent. The longer term future for high pressure pumps within the Middle East should be steady, but this is dependent on the oil price and continued investment in new projects.” With the potentially lucrative business of the oil and gas industry in mind, Calder-Potts says the company is bringing its most cutting edge product portfolio to the Middle East. “As a packager and supplier of very special high pressure and ultra high pressure pumps we are in the unique position of being able to offer a comprehensive range of zero emissions reciprocating plunger pumps in full compliance of API 674 and capable of pressures up to 60 000 PSI with flowrates up to 160M³ an hour. Our range of Hammelmann ‘Zero Emissions’ pumps has the added advantage of the labyrinth sealing system

which is unique to our range of high pressure pumps providing significantly extended life resulting in reduced operating costs and a much safer working environment.” That oil and gas pedigree is standing the company’s business in good stead in the Middle East. “Our range of well service pumps have been the least affected in the current market downturn. Well maintenance must continue as long as oil and gas is required to meet demand, which inevitably results in a strong demand for large 500 kW to 2000 kW diesel engine driven and electric motor driven pumps capable of delivering high flow rates at pressures up to 20 000 PSI.” Certain key trends are emerging in the regional upstream pumps arena, says Calder-Potts. The decision-makers in the Middle East are increasingly aware of the importance of high quality high pressure pumps which can deliver low life cycle costs on a 25 to 30 your life where as in years gone by purchase decision was all too often made on the net buy price without much consideration for quality and longevity. Echoing the sentiments of other leading pumps providers, Calder-Potts sees the flight from quality as a major challenge in the coming months. “Persuading end users that ‘cheap-tobuy does not necessarily mean, cheap-to-own’ is a top priority for us right now. The idea that one should always purchase the least expensive product on the market can often prove a disastrous policy and no less so when it comes to high pressure pumps which are particularly sensitive to cost.”

Calder High Pressure (10,000 psi) Methanol injection Pump Skids.

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SPECIAL REPORT: PUMPS

TECH TALK: PULSAFEEDER With the introduction of its newest range of pumps, Pulsafeeder says it has re-invented the hydraulically balanced diaphragm pump design. The new range called Pulsa Pro 900 pumps is specifically developed to handle demanding applications in oil and gas and petrochemicals industries. “Pulsa Pro 900 pumps incorporate ease and simplicity of start up and maintenance, modularity of design, the best dosing accuracy and the longest warranty in the industry. This new range of pumps is available in Simplex, Duplex and Quadruplex configurations with Triplex configuration to follow by the end of the year,” explains Ashok Rekhi, director, international sales, Pulsafeeder Inc. In Simplex design, in phase one, the pump is capable of pumping 15,570 Liters/Hour and is rated for a pressure of 300 Bars. The phase two will increase the capacity and raise the rated pressure to 1,000 Bars. The four-bolt tie bar design on the PulsaPro 900 pumps resists pipe stresses, holds the check valves rigidly in position and promotes leak free operation.

The Pulsa Pro 900 from Pulsafeeder.

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November 2009 Oil&Gas Middle East

SPECIAL REPORT: PUMPS

HYDROLINK Bogdan Fatu, business development manager – Triplex Pumps, for Hydrolink, says delivering high and ultra high pressure pumps for tank cleaning, heat exchanger cleaning, surface preparation and pipe cleaning operations has been the mainstay of the company’s oil and gas related business this year. “The pumps market is growing and the demand on special equipment, especially for the upstream companies remains high. We are busy delivering custom build equipments for the local conditions as high ambient temperature and high humidity.” Fatu says that whilst growth has slowed, 2009 and 2010 will still be years of expansion for Hydrolink. “We are working across the most dynamic markets in the region, but Saudi Arabia and the UAE represent our biggest markets, but we are also seeing strong growth from Qatar.”

Hydrolink’s primary fabrication site is based in Dubai, UAE.

AL MAZROUI Abu Dhabi-headquartered Al Mazroui Engineering Co began life in Abu Dhabi in 1986, providing services to ADMA-OPCO. That relationship continues to this day and has grown to include Takreer, Borouge and GASCO amongst others. EPC contractors and consultants such as Petrofac, Technip and NPCC have become important partners too, according to Drew Steedman, business development manager at Al Mazroui. “We also represent some of our principals in other GCC countries, we are proud to include the likes of QVC, QAPCO, Dolphin Energy and SABIC amongst our customers. Steedman says the wealth of hydrocarbon resources concentrated in the Middle East, and the associated industries it supports, has helped keep local suppliers busy this year. “Due to the natural resources in the Middle East, many projects in the oil, gas and petrochemical industries are still going ahead, and therefore there is still buoyancy in the pump market that is just not available in other regions of the world,” he adds.

Oil&Gas Middle East November 2009

However, not every market has been as determined to push ahead with its projects. “Kuwait, for example, has seen the majority of its projects cancelled or postponed. Saudi Arabia, Qatar and the UAE are largely pushing ahead, particularly with expansions to existing facilities,” says Steedman. Al Mazroui represents several major pump manufacturersand provides a full range of services, including: Design engineering, fabrication, modification and upgrading, as well as installation and commissioning services. As the projects going ahead in the region are predominantly expansions to existing oilfield and downstream facilities, demand for pumps meeting API 610 specifications seem to dominate Al Mazroui Engineering’s business streams. “Behind this we see LPG pumps, vacuum pumps and compressors, as more vapour recovery systems are introduced as an alternative to venting or flaring, thereby preserving natural resources and reducing greenhouse gas emissions.

Steedman says that in tight times the temptation for oil companies to cut costs is understandable, but if this translates to cutting quality also, the gains may prove to be a false economy. “Our main challenge in the current economic climate, is to convince clients without the financial resources of the oil companies that cheap alternatives may very well be much more expensive in the long run. At a time when companies need to be at their most profitable and productive, downtime as a result of trying to save a few Euro’s or Dollars at the purchasing stage could be catastrophic. We believe that buying the right product with full service support is a far more economical proposition for any customer.”

$36 BN

Worldwide pumps market is expected to grow annually by 4.4% to $36bn in 2010 Source: Freedonia

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SPECIAL REPORT: PUMPS

Trouble shooting Bespoke pumping solutions can save oilfield service companies and producers money and time says Padraig Nagle of Action International Services ction International Services is a pump services company based in Dubai, specialised in providing engineered pumping solutions to customers, with a business unit dedicated to the oil and gas industry. Padraig Nagle, managing director, talks to Oil & Gas Middle East.

What’s different about Action International Service’s offering from a typical hire company? PN: With our technical expertise and the largest and most diversified fleet of specialised equipment in the region, we have the ability to provide superior cost effective solutions that meet customers’ budgets and timelines. We have a dedicated division focused on providing the upstream oil and gas and industrial sectors with temporary pumping solutions. How would an operator benefit from choosing a service partner as opposed to buying in trusted brand pumps? PN: We differ from many players in the pumps market because we offer pump services as opposed to being a pure hardware provider. We assemble the pump pack-

ages to order, and the specifications for that come direct from the customers. We hold the distributorship for a number of different major pump manufacturers, such as Godwin and Hughes pumps from the UK, but when customers come to us, we deliver Action’s services complemented with the reliability of well maintained industry leading equipment. Action stands for innovative engineering solutions, operational excellence and product reliability, and we are strongly complemented by our principal partner’s products. What has demand been like in 2009? PN: Each sector is quite different. The oil and gas business is quite robust for us. I expect that this year’s business will be at least the same, probably a bit higher than in 2008. That’s a combination of our growth, product diversification and capturing market share from our competitors. Action has recently expanded its industrial services capabilities to include shutdown equipment and associated services.

Oil&Gas Middle East November 2009

Padraig Nagle, managing director of Action International Services.

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SPECIAL REPORT: PUMPS

“We can deliver bespoke, rapid solutions in the event a pump fails. We can have operations running again in a very tight turnaround.” Padraig Nagle, Action International Services

What’s a typical upstream call-out for you? PN: Typically in the oil and gas business it would be a contractor who is experiencing problems. Usually it is water supply issues. In many cases small to medium sized service providers, which don’t maintain many assets, but may be specialists in their field, contact Action in order to expand their scope and capabilities. What we have developed is a reputation for delivering bespoke,

rapid solutions in the event a pump fails. We can be there and have operations running again in a very tight turnaround. It’s very rare that we don’t have a solution in house. We have our own fabrication crew which means we can turn a bespoke solution round in just a couple of days. Because the solutions are tailored, fuel consumption is optimised, bringing associated cost-benefits over the course of the project. What support offering comes with the equipment? PN: We very much prefer to send a team along with the products. We highly recommend it, but it all boils down to how much risk the client wants to take on. What we are very good at is listening to our clients and gathering all the data we can from our clients in order to resolve an issue or provide a solution. We have a level of competence inter-

Nagle says the Saudi Arabian market is a top priority for future growth.

nally which is on a par with many specialist consultants. We have geologists, hydrologists, pipeline engineers, hydraulics experts, so we can do the A to Z of design internally. Additionally we have a very strong construction knowledge base which we can marry with our technical ability to deliver the solutions our clients need. Have you seen regional variation in business this year? PN: The oil and gas business is quite different in each territory. For example the Abu Dhabi market is very different to the general Arabian Gulf market, and even from the Dubai and Fujairah markets. We have quite a high and growing proportion of our business outside the UAE and the Gulf, and have recently sent equipment to Iraq, Pakistan and Azerbaijan. How are you tackling the Saudi Arabian market? PN: Saudi Arabia isn’t a country we have exploited fully yet, but that said, it’s very much in our sights. Every market has slightly different dynamics in the region, so how we penetrate the Saudi Arabian market may involve acquisition or partnership, and we’re looking at the best vehicle for us now.

AL MAZROUI ENGINEERING.CO .LLC Since its inception back in 1986, the trademark of Al Mazroui Engineering is its approach to problem solving. The company's strategic approach yields solutions that integrate client n ee ds with long term sustain ability. Services Design engineering. Fabrication. Modification and upgrading. Supply. Installation and commissioning. Preventive maintenance. Post sales service for pumping stations. Consultancy, design and supply for corrosion protection requirements. Environmental services. Specialised recruitment services (engineers, skilled technicians etc).

Oil&Gas Middle East November 2009

VOITH

NETZSCH

AL MAZROUI GROUP

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EVENT PREVIEW

IPTC 2009 will play host to a stellar line-up of upstream energy leaders.

DOHA DELIVERS Oil & Gas Middle East previews the upcoming event of the year, December’s IPTC conference and exhibition in Doha ext month will see Doha play host to the The International Petroleum Technology Conference (IPTC), with an expected draw of over 3000 upstream professionals. The conference is tipped to be the industry event of the year, with a stellar list of dignitaries and energy leaders flying in from all over the world. The conference programme will address technology and relevant industry issues that challenge industry specialists and management around the world, with a strong focus on the gas business, as well as topical issues such as HSE, Security, HR and training.

THINK TANK Conference organisers, the SPE, have said the industry has responded in record numbers to the call for papers for this year’s IPTC. With 1128 papers submitted, the highest amount ever to be received in the history of the IPTC, the programme committee selected 600 papers for presentation, representing 130 companies from 35 countries. The select committee, which includes some of the world’s foremost leaders in the oil and gas sector, set high selection criteria for the papers, as part of their efforts to make the conference a must-attend event for everyone working in the upstream oil and gas business.

Oil&Gas Middle East November 2009

“The response has been unprecedented and we applaud our industry colleagues for making such a valuable contribution to the development of the oil and gas sector,” says Khalid Al-Hitmi, manager gas development at Qatar Petroleum and co-chairman for the IPTC conference programme. “The conference is an important date in the calendar, coming to the Middle East only every two years. All 52 technical topics we initially proposed for the event will be addressed and due to the calibre of the papers, we have added a further six technical discussions so that delegates truly get the most out of the conference,” adds Al-Hitmi.

Olivier Dubrule, director of Total Research Centre – Qatar, also co-chair for the conference, says the topics up for discussion will have real value for attendees. “The programme will focus on the dissemination of new and current technology, best practices and multi-disciplinary activities, designed to emphasise the importance of the value chain and the maximisation of asset value,” says Dubrule.

BIG HITTERS The conference has become a platform of choice for global energy leaders to address their international counterparts, and this year’s event will be no exception. Andrew Gould, chair-

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EVENT PREVIEW

Getty Images

ALL UNDER ONE ROOF The IPTC is a collaborative effort among: • American Association of Petroleum Geologists (AAPG) • European Association of Geoscientists and Engineers (EAGE) • Gas Processing Association (GPA) • Society of Exploration Geophysicists (SEG) • Society of Petroleum Engineers (SPE)

$178 BILLION

The GCC gas sector alone has 155 projects worth US$178 billion in pre-construction or execution phase. Source: Proleads

man and CEO of Schlumberger, will be joined by Olivier Appert, chairman and CEO of Institute Français du Pêtrole, Rich Kruger, president of ExxonMobil Production Company and Saad Al-Kaabi, director of Oil and Gas Ventures for Qatar Petroleum. The theme of the fourth edition of the IPTC, held under the patronage of His Highness Sheikh Hamad Bin Khalifa Al Thani, Emir of the State of Qatar, is ‘World Energy Challenges: Endurance and Commitment’. The event, which returns to the Middle East from Kuala Lumpur in 2008 has become established as a biennial event and has been endorsed by OPEC as well as the Organisation of Arab Petroleum Exporting Countries (OAPEC). Industry heavyweights ADNOC, Saudi Aramco, and Qatar Petroleum are taking a leading role in this year’s event. Whilst the impressive portfolio of conference sessions will no doubt prove the biggest draw, this year’s IPTC is augmented by a strong exhibition element. “IPTC’s exhibition space has grown by 40%

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since the inaugural event in 2005. This year the conference presentations and networking events will take place on the exhibition show floor, maximising interaction among industry colleagues,” explains Waleed Refaay, the project director for IPTC 2009.

DON’T MISS

IPTC is being held under the patronage of Sheikh Hamad bin Khalifa al-Thani. On the other hand, it is clear that long-term energy demand will continue to surge, thanks to a growing global population of over 6 billion and the rising standards of living, especially in places like China and India. The session, to be chaired by Nasser Al-Jaidah, chief executive officer of Qatar Petroleum International and Yves-Louis Darricarrère, president, Exploration and Production at French Supermajor Total, will address how the industry will continue to meet the growing demand for energy and how supplies will be sustainable in the future. The session will also examine how companies should maintain stable investment conditions to secure funding to

This year’s opening plenary session, taking place on Monday 7th December at 11.15am, will address world energy challenges, with a focus on endurance and commitment. The energy industry is poised to enter a new phase of its growth, facing huge challenges due to the significant drop in demand for oil and gas and energy products across the world. This has led to a dramatic reduction in the hydrocarbon prices, which M led to the reconHE HEL T T A E P sideration of S um Petrole iety of e lead the investment c o S e h T rs is th conditions and Enginee tion in the a resulting in organis ment and g postponing a mana e control of l financia event. few of the most he t costly projects.

develop the current and future energy resources, particularly the more difficult and unconventional resources. The morning session will also shine a spotlight on the issue of recruitment and retention of people with the skill sets to overcome those challenges.

Olivier Dubrule, director of the Total Research Centre in Qatar.

November 2009 Oil&Gas Middle East

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ASK THE EXPERT

Richard Smith, AESSEAL.

Ask the

Expert Question: What developments in API standards for pumps and seals should I be aware of?

Expert: Richard Smith, director, oil and gas development, AESSEAL, met Oil & Gas Middle East in Abu Dhabi. If you have a question you want answered, or a topic discussed, please send it to daniel.canty@itp.com What does the API 682 standard involve? The American Petroleum Institute issues standards for all aspects of oil and gas production and has a number of standards relating to equipment, of which API 682 is the standard for our product range, which is mechanical seals. It is an important standard because it allows purchasers to get a degree of confidence that a product is of a certain quality and the standard provides certain criteria for performance standardisation. And the standard is primarily aimed at improving reliability of plants and reduction in fugitive emissions. What new ground does it cover? The standard is currently on its third edition, while the fourth edition is being worked on. It is offering improvements primarily in the comprehension of the standard, which is quite complicated to follow. The work that is being done by the taskforce on the new standard is added comprehension, which should make it easier to read. There are no substantial changes, only ones intended to make the standard a little more comprehensible.

www.arabianoilandgas.com

What makes these types of standard important? I think the major importance of it, is that if you apply these standards when you are specifying equipment, you know that you are guaranteed to get equipment that is safe and reliable, particularly when the equipment is going to be used for hazardous and possibly toxic type services.

years ago for equipment. However I believe that is a short term situation and when the global economy picks up, the demand for new plant equipment will probably outstrip supply. So I am very optimistic that it is going to be extremely busy in a few years time. I think the Middle East has been largely unaffected. The global slowdown has affected the developed nations such as the

“Pump vendors and users need to look at the total cost of ownership, throughout the lifetime of the plant” What’s topical in the pumps and seals business? I think pump vendors and users need to look at the total cost of ownership, obviously there is the initial costs involved in purchasing seals, but over the lifetime of the plant, selection of the seals can impact on maintenance costs considerably and energy costs can be impacted as well. Consideration should be given for these long term costs at the design stage. The seals project market is suppressed to what it was a few

US, Western Europe and the Far East. The Middle East has probably benefited from investing at this time because the costs are lower. AESSEAL as a business is still showing strong growth throughout this period. What challenges are you facing? Our business is not typical to other businesses. Finding good people is always a challenge and fortunately we have been able to assemble a very good team. I think one of my

challenges is trying to get people to understand the total costs of ownerships and for that you need to look a little bit further than just pure equipment costs. You also need to consider the periphery equipment associated with seals and pumps, and their lifetime costs. What developments should readers be aware of? There are a number of breakthroughs currently taking place in the seals market. One of the things that has happened in recent times is that machine tool technology has moved forwards, allowing us to offer more elegant designs that provide better performance and improve reliability. That is a manufacturing breakthrough that has opened up the scope of designs. We have also had breakthroughs in technology associated with cooling seals, which offer improved methods. What are your hopes for the next six months? My hope for the business is that the brand grows and gets recognition throughout the globe and in particular the Middle East market, I’m hoping that we will have more market awareness of our brand.

November 2008 Oil&Gas Middle East

MIDDLE EAST WORKBOATS

SHOWBOATING Middle East Workboats was held in Abu Dhabi.

Middle East Workboats was opened to the sound of bagpipes, but was the event in tune with industry requirements, or just hot air? Oil and Gas Middle East reports from the exhibition

www.arabianoilandgas.com

iddle East Workboats 2009 was held in Abu Dhabi last month, and the topics of interest varied widely. The economic situation was considered throughout, while more industry specific topics such as piracy were delved into on a much deeper level. The exhibition was opened with a marching band boasting a number of bagpipers, and as the music died down, the buzz of the exhibition was ramped up. A number of exhibitors commented on the ‘right people’ being present, and there was certainly a community atmosphere at the show as partners, clients and competi-

tors put their companies and their services on display. The future for workboat companies appears to be mixed. Geir Sjurseth, managing director and global head of offshore for DVB Bank said at the event: “The majority of Middle East companies will see a satisfactory 2009 but 2010 is far more uncertain. The well established players that survive will have a fantastic future. “The strong companies, and there are many in the Middle East, will preserve capital, cut costs and the smartest guys are planning how to benefit in the longer term. When the dust finally settles, the outlook is favourable but before that we

will likely see defaults and consolidation among highly leveraged, recent entrants into the workboats market.” A seminar and conference programme ran alongside the exhibition. The seminar sessions gave companies the chance to showcase their specific abilities, as well as giving technical advice to the industry, while the conference covered more widespread issues. Kicking off the conference was Darwish Al Qubaisi, general manager, ESNAAD, who covered the approach to quality in vessels. “I want to say that trying to save a little bit of capital will cost you a lot in the long run,

November 2009 Oil&Gas Middle East

MIDDLE EAST WORKBOATS

Among the products on show was a simulation training programme.

in terms of maintenance. To end up with a good finished product you must start with a clear operation requirement,” Al Qubaisi revealed. Another topic covered in this conference opening, was the issues attracting new personnel to the sector, which was a heavily discussed subject throughout the exhibition. Al Qubaisi described one of his firm’s solutions. “We have started working with the UAE navy and we are trying to rehire ex-navy people. Of course you have to get them ready through training and I’m very happy to say we have had some good success back from the Navy.” A presentation was also held showcasing the capabilities of

the International Marine Contracting Association (IMCA). Roy Donaldson, chairman, Middle East and India Section, IMCA, revealed: “We promote self regulation within the industry. We are given an indication of good practice from our members, we supply advice to our members and we issue guidelines through clients.” With a good turnout, interesting conference debate, not to mention an original and interesting way to open the show, it is fair to say Workboats Middle East was more than useful for all involved. For full coverage of Middle East Workboats, visit www.arabianoilandgas.com.

IRSHAD Captain Cheikh Atbi, marine recovery and training specialist, Irshad What services does Irshad offer?

Captain Cheikh Atbi of Irshad.

Oil&Gas Middle East November 2009

We are primarily service providers to the maritime industry. Firstly, our role consists of being on-board pilots. So when a ship is coming in from London, from Lisbon or Sydney, or wherever it may be, we are waiting for it. In the shipping industry, you need to work ahead of time so the ship has to be ready on arrival and the terminal has to be ready because time is money. So we make plans before the ships arrive and when she arrives we are ready for her. Our mantra is that we wait for the ship; she doesn’t wait for us. The closer the ship is to the shore, the higher the risk, so our pilot work is crucial. We meet the ship 20 miles out, before boarding her to bring her in. Once she gets close to the dock, tugs complete the journey. At that stage, we swap hats to become loading masters. This is our mission; to wait for a ship, to bring her in and to unload her.

Why did you choose to exhibit at Workboats?

As far as marketing is concerned, right now we already have ten ships loading so we don’t need marketing. So in actual fact, I don’t need to talk about what I do; I believe the service we offer does the talking for us. However, we do need to have the latest technology, so we are here to see different engines amd also simulators for training. Luckily, there are a lot of engine makers here, so we’re happy to discuss our needs with them. What challenges are you facing?

In summer here, sea temperatures are 37 degrees, and that water is designed for cooling. However, water that warm won’t cool your engine. So we are here to talk to companies and see how their technology can fit into our environment. Some firms here are offering simulators; if I have a difficult situation, I will not take a chance, so I will use the simulator. And with the wealth of tugs available, which should I use in my operation? You have to look at your needs, starting with the environment, and build out from there.

www.arabianoilandgas.com

MIDDLE EAST WORKBOATS

The W Tug 80, designed for 80 ton bollard pull, can attain a speed of 14.5 knots.

WÄRTSILÄ SHIP POWER INTERVIEW: Bram Kruyt, director, Ship Power, Special Vessels Arthur Boogard, business manager, Ship Power, Special Vessels What brings you to Abu Dhabi?

BK: We have a special focus at Workboats on the W-Tug, a new Wärtsilä tug design. This is a high performance escort tug of 35m, capable of carrying out ship assist duties at offshore terminals, as well as high-speed escorting, push-pull operations, and coastal towing. What’s special about the W-Tug?

AB: Due to its compact size and two Wärtsilä steerable thrusters, the tug is highly manoeuvrable. The rounded bow profile with moderate flare is optimised for pushing and reduces the risk of slamming. The towage and escorting duties are served well with a forward 112t towing/anchor winch. A 91t towing winch is sited aft of the superstructure. The tug can be equipped for fire-fighting duties, and can operate 200 nautical miles from the coastline. Also, because everything on board in finely tuned to this particular hull, we envisage fuel savings of around 7%.

hear what people like, and maybe what they don’t like about the vessel. Diesel and electric hybrid engines are also exciting. The response so far from customers has been enthusiastic, obviously from a green environmental approach. The whole industry is getting greener and whilst the emissions legislation is not yet in force in the Middle East as it is in some European waters, we think from a corporate social responsibility and environmental angle there will be appetite here. Are oil and gas vessels keeping local demand strong?

2009?

BK: We hope to get a lot of feedback on what customers in the Middle East think of the vessel. It’s still in design stage so it will be useful to

BK: The second half of next year is probably a cautious timeframe to say orders

www.arabianoilandgas.com

Are owners having difficulty financing right now?

BK: For the right vessel and the right owners there is still finance out there. To help our customers we have developed a model so we can become a partner in newbuild vessels, which eases the pressure on owners to find finance from distressed banks.

AB: The Middle East is relatively favourable to other marine environments right now. The latest results from our global studies show that this region is more dynamic than the rest of the world, also the market for tug boats is more resilient than merchant shipping, which is having a tough time right now. When do you think the market will be back up to strength?

What are your hopes for Workboats

will start increasing again. Owners are being more cautious with placing orders. For tug and workboats we expect recovery by third quarter next year, however, merchant shipping may take another one to two years to fully bounce back.

Bram Kruyt, and Arthur Boogard (left to right).

November 2009 Oil&Gas Middle East

MIDDLE EAST WORKBOATS

DNV

NOBLE DENTON

Omar Abu Omar, district manager, DNV

Captain Ian Bacon, general manager, Noble Denton What services does Noble Denton

What challenges are you facing?

offer?

We are a technical assurance and consultancy company. The merger of GL and Noble Denton in April this year brought together two very strong companies in the marine industry. GL is best known for its clasifications and also for industrial services, while Noble Denton is famous for its marine operations. How much of your business is in the UAE?

A lot of our business is based in the UAE and the surrounding GCC countries. We currently have a combined staff of around 300 people. We wanted to be here because it’s very important to meet our local clients and show what we do; one of our problems is that we do so many different types of work that clients aren’t aware of the full range of our business. What are your hopes for the show?

More business! We’ve got strong technical values but equally both companies are commercially minded. It is a competitive market and the only way you can win is through delivery of a good product to your clients. We also want to let people know about our office opening in Sharjah. This is a unit that we designed the detailed engineering for; the office there has approximately 70 people.

Everybody is sceptical about the future, and everyone is studying what everybody else is planning for. What we see in this part of the world, and in the workboats and supply business, is there is still a demand. There are still rigs under construction, there is still oil exploration and production, and there is still a need for workboats to carry out offshore work. Today, I believe that this market is stable, perhaps with a little bit of growth. What are you doing to help customers?

We have tried to increase the confidence of our customers with respect to cost cutting. There are a lot of laid-off ships from owners and we are offering laid-off services as a result. We are also trying to increase training to customers and increase awareness of how they can work in these circumstances with more quality, safety and efficiency. What are your hopes for the next six months?

I hope the market is going in the right direction; I hope that the confidence flows back to the shipping market in particular; and I hope to see growth. Omar Abu Omar, district manager, DNV.

SVITZER Jaap-Jan Pietersen, commercial manager, Svitzer. What services does Svitzer offer?

In a nutshell, Svitzer delivers marine services globally and that ranges from the towage business in salvage to ocean towage. We also have rescue and safety services, which is training and products. So I would say we are quite a diversified company in this particular industry and we can offer safety and support in a number of significant and different ways. Why did you choose to sponsor Workboats?

What we like about this exhibition is that it covers a high niche, it is focused and it attracts the right people. Our potential customers, our customers and suppliers, in fact everybody we deal with or compete with are here. It is also a great place to be seen. What are your hopes for the show?

Captain Ian Bacon, GM, Noble Denton.

Oil&Gas Middle East November 2009

We hope to talk to existing clients and potential new ones. This forum presents a good opportunity to allow people to work together. Our goal here is to network; we don’t expect any major deals to be signed here. For that we normally need a little Jaap-Jan Pietersen, more time but our market is here, along with a Svitzer. nice crossover to the Asian sector.

www.arabianoilandgas.com

MIDDLE EAST WORKBOATS

COUNTERFIRE Region must buck up training ideas, says Richard Lucas What services does CounterFire offer?

We do fire monitors and we do a whole system design. If someone comes up to us and says we want a certain system then we will select the correct gearboxes, the pumps, the valves, do the water deluge system for the boat, commission the system and if asked we can also give training to the ship crews. Normally the shipyards are in such a panic to get things commissioned and the boat delivered, that part of it very rarely happens. Our products are made in the US. How much of your business is in the Middle East?

As a percentage for the whole company its probably only 5-7.5%

www.arabianoilandgas.com

but we are seeing an increase in activity at the moment, certainly in regards to enquiries so hopefully that situation will change . That is one of the reasons for our presence here at Workboats as well â&#x20AC;&#x201C; to remind everyone we are here. How can fire and safety improve in the Middle East region?

You would need to evaluate what equipment they have got over here at the moment to be honest with you. We have supplied quite a few systems to vessels but these tend to be the first line of the systems and you probably need more of the bigger systems which are more substantial and have higher volumes of water. I think there is a

need to educate some of the ship owners and the operators of the equipment, which does tend to be forgotten. They tend to buy the equipment but then very little training is done after that. Especially when you are using the water to keep a structure cool when the fire is in place, it needs training to get the most out of the equipment.

Richard Lucas, CounterFire.

November 2009 Oil&Gas Middle East

MIDDLE EAST WORKBOATS

ALBWARDY MARINE ENGINEERING Mark Pearson, deputy general manager, Albwardy Marine Engineering What services does Albwardy offer?

Why did you choose Workboats to exhibit at?

As a marine engineering company, we have been around for 30 years. We build ships, we repair ships, we dry-dock vessels and we work offshore as well. Our bases are located in Dubai, Fujairah and Oman and we employ around 900 people. Albwardy is 49% owned by Damman Shipyards group in Holland, a company for which we build ships. We build tugs, workboats and dredgers for Damman but we also repair vessels of any size from VLCC tankers to small boats.

We came last year and we didn’t exhibit, but it was a great event. So this year we decided to link up with Damman on a joint stand. I hope to generate new business here too. It’s a good opportunity to showcase our abilities not just with newbuilds but also with regard to the repair work that we carry out.

How much of your business is in the Middle East?

The majority of our business is in the Middle East but our customers are not all from this region. We deal with a lot of ship owners from the United Kingdom, from Singapore and also from mainland Europe. Because Fujairah is such a busy bunker port, a lot of our repair work is done at the anchorage in that location. But we also send people around the world, sailing them to various companies to carry out voyage repairs.

What are the toughest challenges in today’s market?

We have had to diversify. Last year we were very busy as everyone was but more with repairs. This year, we have had to change our balance a little bit. Our bottom line hasn’t changed - we are still talking about the same numbers, but the balance of repairs has changed. Now we are doing more newbuild work and more float repairs; we are still doing dry-docking but not as much as before. One of the main areas of our business was dry-docking dredgers but right now there’s a lot less dredging going on. But there is an awful lot of float repairs at the anchorage because there are more ships out there right now.

In terms of bottom line we are doing as well as last year but we have re-addressed our balance. As a company we are fortunate because we are not in one specific area. Because our company is spread over three different markets you can generally weather problems, so if one market is affected, the other two can usually keep you going. What are your projections for the next six months?

In the next six months, we will be looking to relocate. We are currently based in Al Jadaf, and we’re looking at the new developments at Dubai Maritime City, as well as a number of other options. So that is one of our focus points. The other main issue is keeping the business up; we are very fortunate that we haven’t been affected too much, but you can never take your eye off the ball. Mark Pearson, Albwardy Marine Engineering.

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Oil&Gas Middle East November 2009

www.arabianoilandgas.com

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SEISMIC VESSELS

SEISMIC SHIFT Oil & Gas Middle East meets Polarcus CEO Rolf Ronningen to find out what makes the UAE-built Nadia a real offshore game changer

olarcus is currently building four ultra-modern new build seismic vessels, in Drydocks World’s flagship yard in Dubai. Three of these new builds are high end 12 streamer 3D vessels, and the remaining one is a multipurpose vessel for either 6 streamer 3D operations or source operations for wide azimuth projects. Guiding the good ship Polarcus is CEO Rolf Ronningen,

bringing 28 years of seismic experience to the helm. From his office at the top of Dubai’s skyline, the waters into which the first vessel, Nadia, will be launched this month, are just visible. Polarcus, a brand new start-up has obviously joined the industry in a tough year, but Ronningen’s enthusiasm hasn’t been dampened by events outside the company’s office. “Today we are a four vessel company. We started with six

vessels, but because of the financial crisis we did not see that we would be able to fully fund all six vessels. We were faced with a choice and we decided to sell the vessels to the founding shareholders, essentially transferring the risk whilst holding a purchase option to buy the vessels back.” Ronningen hopes the company will be in a position to reacquire the remaining two vessels in 2010.

The first two vessels are due to be delivered in November and December this year, and the company has already secured a contract for the launch vessel Nadia. “We have signed a Letter of Intent with TGS-NOPEC Geophysical Company ASA (TGS) for the charter of the 12 streamer 3D seismic vessel Polarcus Nadia for around three months commencing in December 2009. The Letter of Intent further includes a right of first

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SEISMIC VESSELS

refusal for TGS to extend the charter in two six month increments under pre-agreed terms” The Polarcus Nadia is the company’s first newbuild and incorporates leading design features that will position her as one of the most advanced seismic vessels in the industry. With the first contract under its belt, business for Polarcus could really take off next year. “We have 17 bids outstanding with the oil industry, and we

CUTTING EDGE The X-Bow is an exciting development. In bad weather, rather than smashing into waves, which retards the flow of the vessel, these bows will slice through the water, reducing pitch. As well as a more comfortable ride, it actually uses half the fuel at the same speed as a conventional vessel, or twice as fast for the same fuel consumption.

Leaders in Fluid Engineering www.arabianoilandgas.com

November 2009 Oil&Gas Middle East

SEISMIC VESSELS

have been told we are the frontrunner in some of those tender bids,” beams Ronningen. The company is targeting key strategic areas of business, initially East Africa – stretching from Madagascar to Somalia and the Mediterranean, and is hoping to tap into the hotspots of activity from Oceania and the Arctic.” Polarcus will own and operate the vessels itself - a strong offering to oil and gas companies. “The fewer management systems you have on board the better as far as exploration is concerned,” says the CEO. When the oil price is below a certain level, exploration tends to drop off, and drop off fast. However, high-level seismic is

the most resilient marine market to this volatility. In the late 90s when the crisis hit, most high-end towed seismic operators remained cash-positive. That said, it’s not as though the market has escaped the lull completely. “Compared to where it was a year ago, there has been a very significant reduction in vessel prices. But I am confident we have seen the bottom of the cycle. There were very few

leads coming up back in March, but now there is a heck of a lot of activity. From the second half of next year I am very, very confident that utilisation and rates will have bounced back.” Given the shallow waters lapping at Arabian Gulf’s edge, most seismic activity in the Middle East tends to be carried out by bottom laid

cables, with the depth and infrastructure ‘clutter’ making accurate readings more challenging for towed seismic operations. However, Ronningen says the lack of competition in the region is

“I am conﬁdent we have seen the bottom of the downturn. There was very little business going on back in March, but now there is a lot of activity” Rolf Ronningen, chief executive ofﬁcer, Polarcus. Rolf Ronningen.

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SEISMIC VESSELS

a real advantage. “There are no seismic companies based here, yet when you look at the concentration of resources here, we see a big opportunity. It also has additional benefits. It’s very easy to attract people to come to Dubai. I have experience in Norway, Singapore and the US, but this is by far the easiest place to attract people.” The Polarcus asset Ronningen is most enthusiastic about is the company’s ultra-green ethos. “Our unique offering is the Explore Green technology. This is not just repackaging something and calling it environmentally friendly. It is real and we are taking way beyond CSR.

We are massively reducing particle exhaust emissions. All of the vessels are double hulled which is an extra expense, but one that in the event of a grounding, could prevent any pollutants escaping.” Ronningen reveals that the extra build-costs are paying off already. The company has had pre-qualification meetings with Shell in The Hague, which he is excited about. “The head of that department is determined to make the seismic industry more environmentally sound. Typically, Shell does not accept a seismic company until they have a certain track record, but with what we are bringing to the table, Shell will be happy to fasttrack the approval. And this is a fairly typical example of the reactions we’ve had from oil companies. There is a lot of enthusiasm for this,” he concludes.

SHIP AHOY! The Polarcus vessel Nadia splashes into service in November, launching from the local fabrication yard, Drydocks World - Dubai.

BOW WOW FACTOR: ULSTEIN GROUP Ulstein, ship designer of the XBow vessel type also has a stake in the Polarcus project, says Gunnar Haug, regional director of Ulstein Middle East.“We occasionally enter into projects as stakeholders, partly to show interest in the project, but also to make it easier for a customer to realise his project. We inject some capital and then sell out after a couple of years. Essentially this acts as a facilitator,” says Haug. “There are many ways to help the client with financing, and I think this sort of stakeholder and financing collaboration is likely to increase in the future.” Ulstein is also building seismic vessels for Western Geco, a subsidiary of oilfield service giant Schlumberger. The first two seismic vessels with the Ulstein X-Bow, WG Columbus and WG Magellan, have been working together in the Gulf of Mexico throughout the summer. WG Columbus, hull number 1657, was delivered in March, while WG Magellan, hull number 1658, was delivered at the end of July. Both vessels were built at Barreras in Vigo, Spain.

Western Geco currently have four ULSTEIN SX124 vessels under production, two at Barreras and two at Drydocks World in Dubai. The Dubai vessels are planned for deliveries in 2009 and 2010. Aside from the seismic vessels, Ulstein is a designer of offshore construction vessels, field support and well intervention vessels. “The Arabian Gulf waters often demand vessels with a draught of less than six metres, so we are working to adapt our workboat and support vessel designs to fit the needs of the local market,” reveals Haug.

Gunnar Haug, regional director of Ulstein Middle East.

Leaders in Fluid Engineering www.arabianoilandgas.com

November 2009 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

Ptitle

Client

Consultant

EPC Contractor

Budget ($M)

Status

Project Kuwait Scheme

KPC / KOC

Sproule Associates Limited (Canada)

Not Appointed

7000

FEED

Gas Pipeline From BS-131 to Mina Al Ahmadi

KOC

AMEC

Crude Oil Manifold at GC 27

KOC

Gathering Center 16 in West Kuwait

KOC

Fluor Corporation

Gathering Centre 24 at Sabriya

KOC

AMEC

SK Engineering & Construction

621

Execution

Repair and Replacement of Pipelines in Southeast Kuwait

KOC

Arabi Enertech

Execution

Replacement of Oily & Efﬂuent Water Lines at GC 23 and GC 25

KOC

Instruments Installation and Maintenance Co. (ImCo)

Execution

Efﬂuent Water Injection Phase I & Sea Water Injection Phase II

KOC

Not Appointed

750

FEED

Transit Line from Abdali Main Point to Abdali Mid-Point Manifold

KOC

Not Appointed

EPC Bid

Crude Oil Flow Pipelines in North Kuwait

KOC

Not Appointed

110

EPC Bid

Gas Compressor at GC 16 & Gas Reinjection at Minagish

KOC

Safwan Petroleum Technologies

Execution

Gas Pipeline between Booster Station 140 & GCMB Manifold

KOC

United Gulf Construction Company (UGCC)

Execution

KUWAIT

LPG Filling Plant at Umm Alaish

KOTC

Mina Al Ahmadi Reﬁnery Upgrade - Phase 1

KPC

Upgrade of South Ghudair Gathering Centre

KOC / SAT

AMEC, Kuwait

Fluor Corporation

Petrofac International

544

Execution

Not Appointed

EPC Bid

Not Appointed

750

EPC Bid

Not Appointed

100

FEED

Almeer Techical Services Company/ Flour Corporation

140

Execution

Arabi Enertech

Execution

Flowlines Upgradation & General Support Services

Saudi Arabian Texaco/ KGOC

Mushrif Trading

Execution

Maintenance Services for KOC

KOC

Petrofac, Kuwait

125

Execution

Mina al Ahmadi - Doha West Pipeline

Ministry of Energy (Electricity & Water)

Penspen International (UK)

Heavy Engineering Industries & Shipbuilding Company (Heisco)

128

Execution

Gas Booster Station 160

KOC

AMEC, Kuwait

Snamprogetti Kuwait

649

Execution

Maintenance of Mina Abdullah Reﬁnery in the South

Kuwait National Petroleum Company (KNPC)

Kharaﬁ National, Kuwait

111

Execution

Jurassic Early Production Facility (EPF)

KOC

Not Appointed

400

EPC Bid

Booster Station 132

KOC

Not Appointed

800

EPC Bid

Drilling Service in Kuwait - Contract 4

KOC

Weatherford Oil Tools Middle East

Execution

Al Zour North Project - Pipeline Packages

Ministry of Energy

Not Appointed

136

EPC Bid

New Base Oil Plant at Shuaiba

KNLOC

Not Appointed

400

Study

Dry Crude Storage Tank at Gathering Centre 1

KOC

Bridge and Roof Company

Execution

Gathering Center 14 in the South East

KOC

Almeer Technical Services

Execution

EPC Contractor

Budget ($M)

Status

Mashael Group of Companies

200

Execution

NJS Consulting/Al Dowailah

OMAN Project Title

Client

Sohar Bitumen Reﬁnery

Sohar Industrial Port Company (SIPC)

Nimr C Full Field Water Injection Project

PDO

Harweel Cluster Phase - 2

Petroleum Development Oman (PDO)

www.arabianoilandgas.com

Consultant

AMEC, Abu Dhabi

Al Hassan Engineering

Execution

Petrofac International, Oman; Galfar Engineering & Contracting, Oman;

960

Execution

November 2009 Oil&Gas Middle East

PROJECTS Project Title

Client

EPC Contractor

Budget ($M)

Status

Crude Oil Stabilisation Unit at Mukhaizna

Occidental Mukhaizna

Consultant

Not Appointed

EPC Bid

Mabrouk Field Project

PDO

Galfar/Integrated Engg. & Construction Co;

1500

Execution

Asphalt Plant at the Sohar ReďŹ nery Complex

Sohar ReďŹ nery Company

Not Appointed

FEED

Engineers India Ltd.

Gas Compressor Station at the Nimr ďŹ eld

Oman Gas Company

Tecnicas Reunidas / Worley Parsons

Galfar Engineering & Contracting, Oman

Execution

Octal Petrochemical Project at Salalah Free Zone

Octal Holding

Uhde

National Construction & Trading Co. LLC (NCTC)

700

Execution

Kauther Gas Compression Project

PDO

Aromatics Complex in Sohar

AOL

Two New Gas Pipelines in the South of the Sultante

PDO

Depletion-Compression Project at Saih Nihayda

Petroleum Development Oman (PDO)

Not Appointed

350

EPC Bid

Pipeline Between the Nimr Field and the Port City of Salalah

Oman Gas Company

Not Appointed

EPC Bid

Marmul Central Development - Phase 3

Petroleum Development Oman (PDO)

Gulf Petrochemicals Services, Oman

Execution

Qarn Alam EOR Project - Off-plot Package

PDO

Galfar Engg. & Cont.

139

Execution

Qarn Alam EOR Project - On-plot Package

PDO

MEG WorleyParsons

Dodsal

450

Execution

Methanol Plant in Salalah

Oman Oil Company (OCC) / UK GTL Resources / Mubadala Development Company, Oman / Vitol

Jacobs Engineering

GS Engineering & Construction

910

Execution

Oil & Gas Pipeline in Musandum

Oman Oil Company (OCC)

Not Appointed

500

EPC Bid

Saih Rawl Gas Depletion Project

PDO

Tecnicas Reunidas, Oman

Bahwan Engineering Company (BEC)

545

Execution

Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Petrochemical Complex at Ras Laffan

QP/Total

Not Appointed

3000

Concept

Low-Sulphur Condensate Storage Facility at Ras Laffan

Dolphin Energy Limited, Qatar

Qatar Engineering & Construction Company

212

Execution

Jacobs Engineering

Petrofac International, Oman

350

Execution

LG International / GS Engineering & Construction

1200

Execution

Not Appointed

101 - 250

EPC Bid

QATAR

Al-Shaheen Oil ReďŹ nery

Qatar Petroleum

Axens France

Not Appointed

5000

EPC Bid

Block 4 North

Qatar Petroleum/Anadarko

Not Appointed

Wintershall, Germany

150

Execution

Acid Gas Removal Pant in Dukhan

Qatar Petroleum (QP)

Technip, Qatar

Not Appointed

350

EPC Bid

Melamine Project at Mesaieed

Qatar Melamine Co.

Eurotecnica/Urea Casale

QECC

250

Execution

Petrochemical Complex at Ras Laffan

QP /ExxonMobil Corporation

Not Appointed

3000

FEED Bid

Subsea Pipelines Pkg. for Qatar Gas 3 & Qatar Gas 4

Qatar Petroleum (QP)

J Ray McDermott, Dubai

100

Execution

Oryx GTL - Phase 2

QP/Sasol/Chevron

Not Appointed

1400

Study

Gas Pipeline Network within Ras Laffan Industrial City

Qatar Petroleum

Mott MacDonald Qatar

Larsen & Toubro, Qatar

123

Execution

OleďŹ ns Complex

QP/ Shell

Not Appointed

2500

Study

"$ #

! " "

Oil&Gas Middle East November 2009

www.arabianoilandgas.com

PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Condensate Reﬁnery at Ras Laffan

Laffan Reﬁnery Company

Technip, Qatar

Daewoo Engineering & Construction, Qatar; GS Engineering & Construction, Qatar;

602

Execution

Pearl GTL Project - Pipelines Package

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

J Ray McDermott

150

Execution

Q-Chem 2

Q-Chem

Aker Kvaerner

Daewoo Engineering & Construction, Qatar

700

Execution

Pearl GTL Project - Package C8

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

Veolia/Saipem/Al Jaber

101 - 250

Execution

Pearl GTL Project - Storage Tanks Package

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

CB&I

400

Execution

QVC Expansion Project

QVC

Not Appointed

31 -100

Study

Ras Laffan-Mesaieed Ethylene Pipeline

Q Chem ll / Ras Laffan Oleﬁns Co.

Punj Lloyd

Execution

Methanol Capacity Expansion at Mesaieed

Qafac

Mustang Tampa

Not Appointed

501 - 750

FEED

Gas to Liquids Project-3 (Pearl GTL)

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

Consolidated Contractors International Company (CCC)

16000

Execution

Low Density Polyethylene Unit at Mesaieed

Qapco

Uhde

Uhde/Tefken

549

Execution

Al Shaheen Project - Packages 17 & 18

Maersk Oil Qatar

NPCC

600

Execution

HFO Bunkering Project

Qatar Petroleum

Maritime Industrial Services

Execution

Condensate Reﬁnery at Ras Laffan - Phase 2

Laffan Reﬁnery Company

Not Appointed

800

Study

Al Khaleej Gas Development Phase 2 - Onshore Package

Exxon Mobil/ Ras Gas

Chiyoda

Chiyoda/Technip

1600

Execution

Plateau Maintenance Project

Qatargas

Technip, Qatar

Not Appointed

1200

EPC Bid

J Ray McDermott

185

Execution

Worley Parsons

Qatar Kentz

101 - 250

Execution

Al Shaheen Project - Package 13

Maersk Oil Qatar

Two New Glycol Regeneration Trains in Dukhan

Qatar Petroleum

Ras Gas 3 - Trains 6 & 7

Rasgas 3

Chiyoda Foster Wheeler

Chiyoda/Technip

13000

Execution

Qafco V

Qafco

Not Appointed

Saipem/ Hyundai Engineering & Construction Co

3200

Execution

Al Shaheen Project - Package 12

Maersk Oil Qatar

Qatar Engineering & Construction Company

100

Execution

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

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dry gas mechanical seals & repair engineered mechanical seal support systems advanced air coolers bearing protection mechanical seals

• • • • •

solutions extending equipment life

November 2009 Oil&Gas Middle East

PROJECTS Project Title

Client

Headworks for Muaither RPS and Associated Pipelines

Qatar General Electricity & Water Corporation (Kahramaa)

Consultant

EPC Contractor

Budget ($M)

Status

Al Waha Contracting

109

Execution

Ethane Cracker cum Aromatics Complex at Mesaieed

QP/Honam

Foster Wheeler

Not Appointed

3500

EPC Bid

Common Sulphur Project

DEL

Washington Group International

Not Appointed

101 - 250

FEED

Pearl GTL Project - Wellhead Platforms Package

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

J Ray McDermott

300

Execution

Al Khaleej Gas Development Phase 2 - Offshore Package

ExxonMobil Corporation/ RasGas Company limited (Ras Laffan Liqueﬁed Natural Gas Company );

Chiyoda Corporation, Qatar

J Ray McDermott, Qatar

300

Execution

Gas Sweetening Facilities Integrated Project at Mesaieed

Qatar Petroleum

Worley Parsons

Not Appointed

350

EPC Bid

Doha Urban Pipeline Relocation Project

Qatar Petroleum

Tebodin

Punj Lloyd

181

Execution

Pearl GTL Project - Package C2

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

Linde

900

Execution

Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Marjan, Zuluf and Safaniya Oil Fields Upgrade

Saudi Aramco

WorleyParsons

J Ray McDermott

250

Execution Execution

SAUDI ARABIA

South Rub Al Khali Gas Development

SRAK

KCA Deutag Drilling

2000

5 Sulfur Recovery Units in Uthmaniyah & Shedgum

Saudi Aramco

Imad Company for Trading & Contracting

150

Execution

Stroytransgaz

200

Execution

Shbab-1 Oil Pipeline Project

Saudi Aramco

Sasref Reﬁnery - Ultra-low Sulphur Diesel Complex

Sasref

ABB Lummus Global

350

Execution

Jubail-2 Export Reﬁnery - Pipeline and Offsite Package

Saudi Aramco/Total

Technip

Gulf Consolidated Contractors (GCC)

300

Execution

Onshore Maintenance Potential Project

Saudi Aramco

RHM/CAT/Suedrohrbau

300

Execution Execution

Sasref Reﬁnery - Control Systems Upgrade

Sasref

Petrocon Arabia / Yokogawa Middle East

100

Biaxially Oriented Polypropylene Plant (BOPP) in Dammam

Rowad National Plastics Co.

DMT Technology Holding

Execution

Yanbu Gas Plant Expansion

Saudi Aramco

Enppi

180

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

Ras Tanura Reﬁnery

Saudi Aramco

WorleyParsons

Not Appointed

8000

Feed

Jacobs Engineering Inc.

Ras Abu Ali Upgrade

Saudi Aramco

Zuhair Fayez Partnership Consultants

Bonatti S.p.A

160

Execution

Hawiyah Plant Expansion

Saudi Aramco

Jacobs Engineering Inc.

Tecnicas Reunidas

400

Execution

Shedgum - Yanbu NGL Line Expansion - Phase 2

Saudi Aramco

Suedrohrbau

200

Execution

Ras Tanura Reﬁnery - DHT Unit

Saudi Aramco

Samsung Saudi Arabia Ltd.

500

Execution

Reﬁning & Integrated Petrochemicals Complex

Nama

Foster Wheeler

Not Appointed

1500

Study

Ebgaig - Al Khobar Natural Gas Pipeline

SWCC

Not Appointed

100

FEED

Ethylene Amines Project At Jubail

Arabian Amines Company

Hyundai E&CC / Hanwha E & C

300

Execution

Jacobs Engineering / Burns & McDonnell Engineering

Jubail - 2 Export Reﬁnery - Aromatics Plant

Saudi Aramco / Total

Axens

Samsung Saudi Arabia Ltd.

650

Execution

Jubail-2 Export Reﬁnery - Coker Unit Package

Saudi Aramco / Total

Foster Wheeler

Samsung Saudi Arabia Ltd / Chiyoda Corporation

850

Execution

Karan Field Exploration - Platforms Package

Saudi Aramco

J Ray McDermott

500

Execution

New Domestic Reﬁnery in Jubail

Saudi Aramco

Not Appointed

5000

EPC Bid

Jubail Petrochemical Complex - Phase 3

Sipchem

Not Appointed

8000

EPC Bid

Petrochemicals Complex in Yanbu

Saudi Aramco / Sabic

Not Appointed

3000

Study

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

Rabigh Reﬁnery Expansion - Phase 2

Petro-Rabigh / Saudi Aramco / Sumitomo Corporation

JGC Corporation

Not Appointed

4000

FEED

Ammonia Plant In Jubail

Sipchem

Haldor Topsoe

Not Appointed

FEED

Khurais Field Development - Gas-Oil Separation Plants (GOSPs) Package

Saudi Aramco

Jacobs Engineering Group Inc.

Snamprogetti / Imad Company for Trading & Contracting

1300

Execution

Yanbu Export Reﬁnery - Hydrocracker Package

Saudi Aramco/ConocoPhilips

Kellogg Brown & Root (KBR)

Not Appointed

1200

EPC Bid

Jubail-2 Export Reﬁnery - Storage Tank Package

Saudi Aramco / Total

Technip, Saudi Arabia

Punj LIoyd Ltd / Petro Steel

1000

Execution

Karan Field Exploration - Offshore Elements Package

Saudi Aramco

Petrocon Arabia, Saudi Arabia

J Ray McDermott

1000

Execution

Fertiliser Complex Expansion at Jubail - Urea & Ammonia Plant

Saudi Arabian Fertilizer Company (Safco)

Not Appointed

150

EPC Bid

Oil&Gas Middle East November 2009

www.arabianoilandgas.com

PROJECTS Project Title

Client

Wafra Steam Injection - Phase 2

Chevron / Saudi Aramco

Consultant

EPC Contractor

Budget ($M)

Status

Saudi Arabian Texaco INC

500

Execution

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

2500

Execution

J Ray McDermott, Saudi Arabia

800

Execution

Kellogg Brown & Root

Not Appointed

17000

FEED

Samsung Saudi Arabia Ltd.

300

Execution

Manifa Oil Field Redevelopment - Platforms Package

Saudi Aramco

Ras Tanura Petrochemicals Complex

Saudi Aramco / Dow

ASU at Jubail

National Industrial Gas Company (GAS)

Petrokemya - 4 in Jubail

Petrokemya

Technip / Aker Kvaerner

Not Appointed

FEED

Upgrade of the Oil Reﬁnery at Yanbu

Saudi Aramco Mobil Reﬁnery Company Ltd. (Samref)

Worley Parsons, Saudi Arabia

2000

Execution

Sasref Reﬁnery Expansion

Sasref

ABB Lummus Global

Not Appointed

275

FEED

UNITED ARAB EMIRATES Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Replacement of Oil & Water Pipelines

Adma - Opco

Technip / Worley Parsons, Abu Dhabi

Costain

900

Execution

Adnoc Storage Facility in Hamriyah Free Zone

Takreer

Not Appointed

150

EPC Bid

Borouge Complex Expansion - Phase 2: Offsites and Utililies

AUH Polymers Company

Foster Wheeler

Technicas Reunidas

1230

Execution

Hail Field Development

ADCO / Gasco

Not Appointed

749

Study

Crude Oil Pipeline Replacement

Zadco

Not Appointed

300

EPC Bid

OGD-3/ AGD-2 - Pack 2

GASCO

Bechtel

1460

Execution

OGD-3/ AGD-2 - Pack 4

GASCO

Bechtel

Snamprogetti

1420

Execution

Green Diesel Project in Ruwais

Takreer

Wood Group Mustang

GS Engineering & Construction

350

Execution

Umm Shaif Gas Injection Facilities

Adma - Opco

WorleyParsons

Hyundai Heavy Industries

1597

Execution

Modiﬁcations to 41 Well Head Towers

Adma - Opco

WorleyParsons

Not Appointed

150

EPC Bid

www.arabianoilandgas.com

November 2009 Oil&Gas Middle East

PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

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

Gas Processing Facility in UAQ

Gulf Energy Company

Technip/Kvaerner

Not Appointed

120

EPC Bid

Umm al Dalkh Full Field Development

Zadco

Not Appointed

650

Study

Sahil Phase-2 Development

ADCO

Foster Wheeler

Tecnicas Reunidas / CCC

250

Execution

Onshore and offshore Sour Gas Development

ADNOC / ConocoPhilips

Fluor Corporation

Not Appointed

10000

EPC Bid

IGD - Gas Processing Platform - Pack 6

Adnoc / Adma-Opco

Fluor Corporation Abu Dhabi

NPCC

405

Execution

Borouge Complex Expansion - Phase 2: Oleﬁns Conversion Unit

AUH Polymers Company

ABB Lummus Global, Abu Dhabi

Samsung Corporation, Dubai

300

Execution

Fertil Plant Expansion

Fertil

Jacobs Engineering

Not Appointed

450

EPC Bid

OAG Network-Das Island Compression Facilities

Adgas

Fluor Corporation

Technip

610

Execution

OAG Network-Pack 2 - Das Island to Ras Al Qila Pipeline

Gasco

Fluor Corporation

NPCC

241

Execution

OAG Network-Pack 3 - Ras Al Qila to Habshan Pipeline

Gasco

Fluor Corporation

CCC

400

Execution

OGD-3/ AGD-2 Pack 3

GASCO

Bechtel

1241

Execution

Borouge Complex Expansion - Phase 2: Ethane Cracker

AUH Polymers Company

Linde

1100

Execution

Development of Qusahwira & Bida Al-Qemzan Fields

ADCO

Washington Group International / Veco Engineering

Not Appointed

1800

EPC Bid

Taweelah-Qidfa Gas Pipeline

DEL

Stroytransgaz, Abu Dhabi

418

Execution

Asab Gas Development (AGD) Modiﬁcations - Package 1

GASCO

Veco Engineering

Not Appointed

500

EPC Bid

Jebel Dhanna Crude Oil Storage Tanks

Adco

ILF Consulting

Not Appointed

100

EPC Bid

LNG Storage Hub in Techno Park, Dubai

DMCC / Techno Park / LNG Impel

Not Appointed

2000

FEED

Umm Al Lulu Oil Field Development

Zadco

Tebodin Middle East, Abu Dhabi

Not Appointed

1500

EPC Bid

New Reﬁnery in Fujairah

AGOL

Mott MacDonald

Not Appointed

1000

Study

Borouge Complex Expansion - Phase 3: PDH & Phenolics Complex

AUH Polymers Company

Not Appointed

1000

Study

Abu Dhabi Gas Grid

ADNOC Distribution

Not Appointed

1000

Pre FEED Bid

Zirku Production Facilities Debottlenecking

Zadco

Technip, Abu Dhabi

Not Appointed

450

EPC Bid

Upper Zakum - Fujairah Oil Pipeline

IPIC/Conoco Phillips

WorleyParsons

China Petroleum Construction Corporation

3290

Execution

Flowlines & Wellhead Installations to ADCO

Abu Dhabi Company for Onshore Oil Operations (ADCO)

Mott MacDonald

Al Husam General Contracting

100

Execution

Tank Terminals in Fujairah

Emarat

Penspen International

Not Appointed

EPC Bid

Khubai-Margham Gas Pipeline

Margham Dubai Est.

Parsons Brinkerhoff

Not Appointed

FEED

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

Takreer

Washington Group Int'l

Dodsal

272

Execution

Cathodic Protection on Wellhead Casing in Bab and Ruwais Fields

ADCO

ILF Consulting Engineers, Abu Dhabi

EMDAD LLC, Abu Dhabi/ Alsa Engineering

Execution

Gas Exploration Facilities - Kahaif, Moveyid and Sajaa

BP Exploration Operating Co Ltd(BP Sharjah)

AMEC, Abu Dhabi

Not Appointed

500

FEED

Expansion of Ruwais Reﬁnery - Package 1

Takreer

Bechtel

Not Appointed

400

EPC Bid

Crude Oil Storage Tanks at Umm al-Nar Reﬁnery

Takreer

Engineers India Ltd

Al Hussam General Contracting

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

400

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

12000

Concept

Oil&Gas Middle East November 2009

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November 2009 Oil&Gas Middle East

FACE TO FACE

FACE TOFACE

Veli-Matti Reinikkala, president, ABB Process Automation

Houston mirrors Abu Dhabi in resilience to tough 2009 What trends have you seen in the Middle East upstream business? I would say that for the oil and gas sector the market is pretty stable here. The national oil companies obviously have a role in bringing revenues to the Gulf states, so independent of the oil price, activities continue to be extended. Also, the international companies here are engaged in truly mega-projects. I don’t see a dip in that industry.

Veli-Matti Reinikkala, president, ABB Process Automation during his UAE visit.

“It’s important that we are still in dialogue with our customers even when orders aren’t necessarily coming. It’s polite” 88

Oil&Gas Middle East November 2009

Where can oil and gas companies save money? Having generators and compressors on a platform is not very efficient. We offer a solution which provides a link to the shore – and we are talking with customers in the Gulf area now about this. We have a DC link from the shore to a platform, and then AC distribution to the other platforms. Essentially one cable extends from the shore, and then distributes the energy from a hub platform. That’s much more efficient because you can generate the electricity from a power plant, instead of a generator. Some local firms are looking at this with interest. How are you approaching the Iraq upstream market? We have the strategy in place, and we will be doing some business there this year, but safety is still an issue. We need to be cautious. The

first phase is going to be rebuilding the power infrastructure. When that is in place we expect the industrial plant business to take off. What’s your 2010 forecast? I think that the market for oil and gas in 2010 will be roughly the same. My expectation is that we will grow in oil and gas, because that has been our trajectory for several years. How often are you in the Middle East? I am in the Middle East at least once or twice a year, but I often have the regional and local managers over to Houston for group meetings. I’m primarily here to meet the customers and catch up with the managers. It’s important for me that we are still in dialogue with our customers even when orders aren’t necessarily coming. It’s important to stay in touch and visit them. It’s also polite! How has Houston been affected by the credit crunch? Houston is of course an energy town, but it didn’t go through the same bubble as many American cities. House prices remained steady and didn’t shoot through the roof. Houston was hit of course, but it’s still better than the US average. There are some signs of general recovery in sight now.