oil&gas-mar-2011

INTERVIEW

Professor Reginald Victor Dean of Research, SQU

SPECIAL REPORT Unconventional Natural Gas

MAR-APR 2011

Steady and Sustaining

Raoul Restucci, Managing Director, Petroleum Development Oman in an exclusive interview

HUMAN RESOURCES

The Talent Crunch

MAR-APR 2011

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FROM THE EDITOR’S DESK No 15

March-April, 2011

WE ARE TWO! The Oil & Gas Review (OGR) has completed two years. We feel extremely proud that over this period, we have met the aspiration of our readers by filling the information void in the oil and gas sector.

We would like to thank our valued readers, who have over the last two years provided valuable feedback and guidance. Your thoughts and suggestions continue to play a pivotal role in disseminating valuable information to other discerning readers.

CONCEPT & CONTENT Akshay Bhatnagar Sunil Fernandes DESIGN Senior Art Director Sandesh S. Rangnekar Art Director Minaal G Pednekar Senior Designer Shameer Moideen Senior Photographer Rajesh Burman Photographer Sathya Das Motasim Abdulla Al Balushi

The 2nd anniversary edition is a mega issue, which is packed with interviews, news, analysis and opinions. We have featured an exclusive interview with Raoul Restucci, the new Managing Director of Petroleum Development Oman (PDO).

Restucci spoke to OGR on a range of issues including the company’s enhanced oil recovery projects, gas exploration programme and more.

Production Manager Govindaraj Ramesh

In fact, PDO also had its annual media briefing, in which it shared its production figures achieved for 2010, as well as its plans for the future. We have featured a detailed analysis on PDO.

MARKETING Business Head - Strategic Media Unit Kush Gupta Marketing Team Sanjeev Rana

The world has a large amount of unconventional gas resources waiting to be tapped. OGR features a story on unconventional gas and what experts say about this valuable resource.

CORPORATE Chief Executive Sandeep Sehgal Executive Vice President Alpana Roy Vice President Ravi Raman

Also featured in the current edition are views, analysis, news briefs, statistics and a lot more. Do enjoy reading the edition and do not forget to send in your valuable comments.

Senior Business Support Executive Radha Kumar Business Support Executive Zuwaina Said Al-Rashdi

As we go to press, oil prices have spiked dramatically with Brent Crude trading at $115, thanks to unrest in certain countries, particularly Libya. We do hope that prices stabilise in the best interest of producers and consumers.

Distribution United Media Services LLC Published by United Press & Publishing LLC PO Box 3305, Ruwi, Postal Code - 112 Muscat, Sultanate of Oman Tel: (968) 24700896, Fax: (968) 24707939 Email: publish@umsoman.com All rights reserved. No part of this publication may be reproduced without the written permission of the publisher. The publisher does not accept responsibility for any loss occasioned to any person or organisation acting or refraining as a result of material in this publication. OER accepts no responsibility for advertising content.

Copyright © 2011 United Press & Publishing LLC Printed by Oriental Printing Press Correspondence should be sent to: Oil & Gas Review United Media Services LLC PO Box 3305, Ruwi 112, Sultanate of Oman Fax: (968)24707939 Email: akshay@umsoman.com

Sunil Fernandes sunilf@umsoman.com

Read the E-Mag: Follow us on www.oeronline.com twitter.com/oilandgasreview An

Presentation

CONTENT Steady and sustaining

18

An exclusive interview with Raoul Restucci, Managing Director, Petroleum Development Oman

12

A new record!

DME Oman has emerged as the world’s largest physically delivered crude oil futures contract, demonstrating a continued confidence in the contract

14

Talent crunch

The Global oil and gas industry is bracing for a labour crunch that has already stepped in

62 MARKET ROUND-UP

A review of the oil and gas markets in January

06 2

March-April 2011

NEWS BRIEFS

A complete news round-up on the latest in Oman’s oil and gas industry

30

Creating a positive impact

PDO’s EcOman Centre is an eye-opening journey through the evolution and future of energy

CONTENT Riding the next big wave

36

Unconventional gas is fast changing the energy mix around the globe, as the insatiable demand for gas continues

44

Stay committed and conscious

Interview with Professor Reginald Victor, Dean of Research at Sultan Qaboos University

52

Who in the US wants this much oil?

The insatiable demand for oil in the US continues, despite often labelled as an “oil guzzling” nation

RISE OF EMERGING 58 THE ECONOMIES

Emerging economies will lead energy growth to 2030 and renewables will out-grow oil, BP’s latest projection of energy trends, the BP Energy Outlook 2030 reveals

86 EVENTS CALENDAR

A calendar of events in the local oil and gas industry

80

Global round-up

A round-up of the latest global news

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March-April 2011

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MB Holding is a multinational company with operations in more than 20 countries across the globe. The group stands as one of the fastest growing and largest services companies in its field within the Middle East. MB Holding LLC reliably meets its commitments and sets benchmarks in the process, with emphasis on maintaining the highest standards of business ethics and integrity.

NEWS BRIEFS

Petroleum Development Oman supports Al Noor Association for the Blind Barwani and Mohammed bin Ismail Al Blushi, Chairperson of Al Noor Association for the Blind (Al Batinah & Al Dhahira branch) in the presence of HE Sheikh Hilal bin Said Al Hajri, Wali of Ibri.

“This grant from PDO’s Social Investment budget is aimed at helping people in the community,” Mundhir Al Barwani said.

“PDO believes that the best way to support communities is to work hand-in-hand with local organisations like the Al Noor Association.”

As part of its continued support to the community, Petroleum Development Oman (PDO) will sponsor the acquisition of a bus in support of the Al Noor Association for the Blind. The bus will be used by the Al Batinah & Al Dhahira branch to cover the transportation

needs in the two regions. The Company’s commitment was made recently at a special ceremony held at PDO’s Oil and Gas Exhibition Centre in Mina al Fahal where a Memorandum of Understanding was signed by Human Resources Director Mundhir bin Salim Al

HE the Wali of Ibri commented, “This reflects the continuous efforts PDO exerts to support the community. We appreciate the Company’s contributions which benefit the local people and hope this continues for the benefit of the society.”

Hi-Tech Services & Supplies to represent Böhler Welding in Oman Hi-Tech Services & Supplies (Hi-Tech), part of the Trading SBU of Al Hassan Group, has been appointed by the Böhler Welding Group, one of the world’s leading welding consumables manufacturer, as its distributor in Oman.

Böhler Welding Group is a member of the Voestalpine Group, Austria, a leading international customised high-quality and hightech steel products and solutions company. A contract was signed recently by Maqbool Ali Salman, Managing Director, Al Hassan Group of Companies and Anders Andersson, Managing Director, Böhler Welding Group Middle East.

Hi-Tech Services & Supplies is the “rising star” supplier of mechanical equipment in the Sultanate of Oman for the projects sector. HiTech has two specialist teams dedicated to oil & gas, petrochemicals and water & wastewater and welding sectors. Hi-Tech’s welding team has a list of prestigious project references such as PDO’s Burhan Gas Pipeline project, Amal Power Station, Kawther Gas Depletion Compression project and Sohar Deepwater Bulk Jetty project.

Commenting on the tie-up, Salman said, “Al Hassan is always on the quest to bring in new

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products with the latest technology to its valued customers in Oman. We are extremely happy to be able to bring such a world-class brand to the Oman market. We are honoured that the Böhler Welding Group has chosen to associate with us.”

He added, “We shall, in the near future, conduct technical seminars for quality and welding managers to update them on the latest offerings in technology and products from the Böhler group.”

Andersson remarked, “The Böhler Welding Group has, by way of various mergers and acquisitions, evolved into a welding power house with six strong brands, viz: Böhler, UTP, T-Put, Avesta,

Soudokay and Fontargen under its umbrella. This provides its customers with a broad range of products and service-based solutions.”

“We are very happy to be in Oman, a country which is developing rapidly. We feel we have found the right partners in Oman with our association with Hi-Tech Services & Supplies.

The tremendous goodwill they have generated in the market with their existing operations, and, a sound technical team looking after the welding business augurs well for us and our customers,” remarked Andersson.

NEWS BRIEFS

Aptus Infotech and Cadmatic ink partnership for Middle East region

Omanoil’s network of filling stations total 122 by 2010 Augmenting its outreach to all regions of the Sultanate, Oman Oil Marketing Company (omanoil) announced that it has inaugurated 10 new filling stations in a number of prime locations across the nation during 2010, bringing the total number of its network to 122 and making it the fastest growing in the local retail industry.

Aptus Infotech and Cadmatic held a seminar recently, at the Crowne Plaza in which they inked a partnership. Cadmatic is a leading developer and supplier of 3D software for plant and ship building industries. The company is headquartered in Turku, Finland from where the company provides design solutions to its large customer base worldwide. Cadmatic is part of Elomatic Group, one of the biggest engineering companies in Scandinavia. Senior officials of Cadmatic gave presentation explaining how their software solutions help engineers design through 3D visualisations in user-friendly interfaces. The seminar also witnessed a classic exchange of knowledge, ideas and visions that clearly showed the importance of 3D plant design software within the Sultanate and the rest of the world. Presentations discussed

the latest technology being used worldwide in the oil & gas, paper, pulp, marine and other industries. The software is useful for contractors and consultants to help them move from 2D to 3D technology which helps to enhance design, visualisation capabilities and error free drawings. “The industry is looking for solutions to increase cost efficiency and productivity. It is our goal to provide the best solution for these requirements,” a release stated.

Distinguished guests from plant consultants and contractors such as Worley Parsons, Occidental Oman, ORPC, BEC, L&T Electromech, RAY International and others attended the seminar.

Jukka Rantala, President and CEO of Cadmatic was accompanied by Matti Siltanen and Timo Nurminen at the launch

PDO supports NACA’s “Dar Al Hanan” Mission The National Association for Cancer Awareness in Oman has set out on a mission to provide accommodation for families accompanying children for cancer treatment at the Royal Hospital in Muscat. As part of its community oriented initiatives Petroleum Development Oman (PDO) contributed a donation to the National Association for Cancer Awareness (NACA) to help them pursue their noble mission. “We are very happy to extend a helping hand to NACA in recognition of the valuable service they render to the community,” said Mundhir Al Barwani, PDO’s Human Resources Director who handed over a cheque to Yuther Al Rawahi, Founder and Hon. Life President of NACA. “Apart from the formal contributions the Company makes in favour of voluntary organisations like NACA we encourage our staff to donate for such noble causes. Over the past few years the Company’s Ras Al Hamra Fitness Committee made great health awareness and money raising efforts which included raising RO70,000 for a mobile cancer treatment unit, RO17,500 for Diabetes Association, RO7,500 for the Genetics Association and RO22,000 for the Down’s Syndrome Association in Oman collected from PDO, PDO staff and contractors,” he said. “Dar Al Hanan Mission is geared towards providing suitable accommodation to parents accompanying their children suffering from cancer. We greatly appreciate PDO’s support which translates into practicing good corporate citizen’s policy,” said NACA’s President.

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With the establishment of six Ahlain convenience stores to date, the 10 new strategically located multi-facility filling stations will serve an extensive number of motorists throughout Oman.

The filling stations include Al Waqybah and Falaj Al Qabael in Sohar, Al Bureek in Al Khaburah, Al Reham in Bedyah, Al Suwaih in Janal, Al Aqar Twin and Al Hummaira in Shinas, Al Serh in Al Rustaq, Thamrit in Al Thamrit and Dhofar in Salalah.

Hussain Al Ishaqi, General Manager of Retail at omanoil said, “The opening of 10 filling stations in 2010 underscores our meticulously-planned growth strategy and commitment to serving all local communities of the Sultanate, reaching even the most remote regions and providing them with holistic and fullfledged products and services. As we expand the omanoil total convenience experience to all Wilayats and Governorates, we will continue to pioneer the local retail business and earmark additional strategic locations for 2011.”

“Today, omanoil has expanded its presence in key areas of the Sultanate to proactively meet the market’s increase in fuel demand and other professional retail services in-line with the robust growth in developmental and commercial projects in both public and private sectors,” he added.

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NEWS BRIEFS

Renaissance announces record preliminary results pay tribute to our customers, suppliers and every one of the 11,457 people who work in this group of ours. They have managed to deliver growth in a year that has felt the toughest impact of the global recession in some key industries and markets in which we operate. This underlines the resilience of the Renaissance business model. The 2010 performance sets the stage for the exciting plans we have in store for 2011 and beyond as the world economy recovers and strengthens.”

Renaissance Services has announced the preliminary results for the year ended December 31, 2010. The results are subject to audit by the external auditors and approval of the company’s Audit Committee, Board of Directors and Shareholders. Renaissance is expected to post revenues of RO253 million, up from RO248 million in 2009. Net profit is

predicted at RO32.3 million up from RO28.5 million in the preceding year. The net profit of 2010 includes a capital gain of RO 0.65 million from the disposal of assets compared with a capital gain of RO5.97 million in 2009.

Stephen Thomas, CEO of Renaissance, said in an announcement, “We would like to

Oil production up 6.4 per cent Oman’s total oil production rose remarkably by 6.4 per cent in 2010. Statistics released by the Ministry of National Economy revealed that the Sultanate’s total crude oil production amounted to 315.6 million barrels in 2010, compared to 296.6 million barrels in 2009.

The statistics also pointed out that the Sultanate’s total oil exports recorded a remarkable increase in 2010 by 10.6 per cent to hit 268.7 million barrels as compared to 242.9 million barrels in 2009.

The Sultanate’s oil exports to Singapore and China rose by 151.6 per cent and 43.4 per cent respectively. The oil exports to Korea, Taiwan, Thailand and Japan declined by 40.3 per cent, 30 per cent, 11.9 per cent and 6.7 per cent respectively.

During 2010, China maintained its leading position as the Sultanate’s trade partner with respect to the destination for the Sultanate’s oil exports. The Chinese

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March-April 2011

markets received 41 per cent of the Sultanate’s oil exports — 111.3 million barrels. Japan and India came in the second place by 14 per cent each, followed

by Thailand 11 per cent, Korea 6 per cent, Taiwan and Singapore 4 per cent each.

Meanwhile, Sultanate’s natural gas production rose by 7.2 per cent in 2010 to reach 1,176.8 billion cubic feet compared to 1,097 billion and 660 million cubic feet in 2009. The associated and non-associated gas production rose by 5 per cent and 7.7 per cent in 2010 respectively.

The company highlighted the 20.2 per cent increase in operating profit and stated that “operating margins have also improved from 16.4 per cent in 2009 to 19.2 per cent in the current year.” Operating costs are expected to post at RO204.6 million, declining from RO207 million in 2009.

Curtis awarded legal services contract by Oman Gas Company Curtis, Mallet-Prevost, Colt & Mosle’s Muscat office has been awarded a threeyear legal services contract by Oman Gas Company (OGC), after winning a competitive tender. OGC is the major gas transportation company in Oman delivering natural gas to consumers comprising of domestic, power and desalination plants, fertilizer, methanol, petrochemical, refinery, steel and cement plants. “We are extremely pleased to have won this tender and to be able to advise OGC with all aspects of its daily management of the major natural gas network in Oman,” said Bruce Palmer, Managing Partner of Curtis’ Muscat office. “This prestigious assignment will add to Curtis’ international activities and expertise advising state-owned oil and gas companies worldwide.” OGC is involved in the transmission and distribution of natural gas, through a large network of gas pipelines, compressor stations and gas supply stations.

PDO’s EcOman Centre dedicated to nation Petroleum Development Oman (PDO) has recently opened an EcOman Centre, a facility dedicated to educating and inspiring the public to adopt an eco-friendly lifestyle, at Mina Al Fahal. The EcOman Centre aims at introducing people to the different forms of energy like heat, light, mechanical, electrical and chemical energy and educating them on how to gradually shift from non-renewable fossil fuels to renewable sources like solar energy, wind, geothermal, hydropower and biomass.

The centre will help visitors of every age to understand energy consumption habits at home and work locations and to understand the efficient alternatives to save energy by changing lifestyle. The centre is designed to create awareness among the public about the possibilities of harnessing sustainable energy resources for brighter future. Sayyid Said bin Ibrahim Al Busaidi, Deputy Governor of Muscat, presided over the opening of the centre. “The choice we made in building the

centre was guided by the importance PDO gives to being a responsible company. And being a responsible company begins by spreading awareness on how best to preserve the planet where we all live. The EcOman

Centre just does that,” says Raoul Restucci, PDO Managing Director.The centre consists of three themes: the ‘Power Tower’, ‘Better World’, and connecting these two, the ‘Energy Journey’.

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SPECIAL REPORT

A NEW RECORD!

DME Oman has emerged as the world’s largest physically delivered crude oil futures contract, demonstrating a continued confidence in the contract.

OGR reports

It was a new record for average daily volumes for the DME Oman Crude Oil Futures Contract (DME Oman) in January, which stood at 3,570 contracts (equivalent to 3.5 million barrels of oil per day), with a record total of 71,396 contracts traded throughout the month.

This steady performance builds on the 35 per cent year-on-year increase in trading levels reported for 2010.

January’s performance indicators demonstrate continuing confidence in the DME Oman contract as the most efficient price discovery and risk management tool for the East of Suez crude oil markets.

Today, more than 50 companies trade regularly on the exchange while in excess of 140 million barrels of crude oil were delivered through the DME during 2010, confirming the status of DME Oman as the world’s largest physically delivered crude oil futures contract.

Commenting on January’s performance, Thomas Leaver, Chief Executive of the Dubai Mercantile Exchange (DME) said, “This is a positive start to the year, particularly following such strong and continued growth from 2010. Thanks to DME’s growing customer base, stakeholder support and employee dedication, we continue to build on our growing target market providing a freely traded, open, transparent and regulated market space. We will continue to work diligently over the coming months to further consolidate our position as the accepted benchmark for crude oil in the Middle East and Asia.”

The DME was launched in June 2007 12

March-April 2011

Thomas Leaver, Chief Executive, Dubai Mercantile Exchange

with the goal of bringing fair and transparent price discovery and efficient risk management to East of Suez, the world’s fastest growing commodities market and the largest crude oil supply/ demand corridor in the world. Today, DME Oman is the explicit and sole benchmark for Oman and Dubai crude oil Official Selling Prices (OSP), the

historically established markers for Middle East crude oil exports to Asia Pacific.

The Dubai Mercantile Exchange Limited has set new trading records during the month of January 2011 with average daily volumes being the highest since the launch of the exchange.

HUMAN RESOURCES

TALENT CRUNCH AND CHANGING HR STRATEGIES

The Global oil and gas industry is bracing for a labour crunch that has already stepped in – thanks to an ageing workforce, impending employee retirements, and increasing expansion activities. Saji P. Moolan reports on the precarious position the industry is passing through

A

fter volatile oil prices and environmental concerns, this is, perhaps, the third major issue the sector has to cut through. “Retiring workers and expansion demand clearly shows that a larger labour pool is needed to meet the current and future needs of the petroleum industry,” warns Petroleum Human Resources Council of Canada (PHRCC). A huge chunk of workforce, both upstream and downstream, are ageing and retiring. In a couple of years, nearly half of the workforce that mans all E&P

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March-April 2011

(exploration and production) facilities world over will retire or age out leaving a huge room for replacement.

Three-fourths of the retirements would happen in the technical/core functions such as geo-sciences, reservoir, production, maintenance, technical services and R&D. On the other, oil companies are under tremendous pressure to meet the increasing demand in supply especially in the newly emerging economies like China and India. This has resulted in immense expansion activities and

emergence of new projects, creating lots of opportunities in the energy sector. Strong oil prices will sustain this growth. But, it lacks talents that can accelerate the process.

Invariably, this dearth of skilled labour is felt equally by international oil companies (IOCs) and national oil companies (NOCs). In the current year, some areas in the industry will face labour shortages. Unless necessary steps are taken, by 2020 the situation will snowball into a full-blown crisis that will affect almost all sectors within

the oil industry. Early signs of a remote crisis are already visible in several oil producing nations.

For instance, in the context of soaring demand and strong crude prices, billions of dollars are being poured into northeastern Alberta for the next wave of oil sand development.

Several oil companies in this Canadian province, including Athabasca Oil Sands Corp. and Imperial Oil Ltd., are either expanding or are considering an expansion. This is expected to nearly triple its 1.5 million barrel per day output in the next 20 to 25 years.

Human resource hunters will have hard time fishing in labour pool.

“Calgary Herald”, a daily news paper published from Alberta, quoting a PricewaterhouseCoopers business confidence index report, predicts a possible labour shortage in 2012.

“Contrary to perceptions that the oil sands workforce is younger, census data indicates this is not so. Therefore, the sector will need to do significant hiring to replace workers retiring between 2010 and 2020,” says PHRCC. Oil companies here are already looking to the neighbouring US, where the economy still remains depressed, for skilled workers. Some are exporting engineering works to India to avoid the pinch of talent crunch, and even considering hiring people under the country’s temporary foreign worker programmes.

Michael Lynch, President, Strategic Energy & Economic Research Inc.

A report released in October 2010 by Ernst and Young (EY) gave a graver picture about India’s talent pool.

According to EY, the nation’s oil industry will face a severe talent crunch in the next five years as 11 per cent of its white-collar workforce is scheduled to retire. “Indian oil and gas sector will see a major dearth in availability of skilled workforce due to an ageing workforce and subsequent retirements,” cautions the report.

The report, ‘HR Challenges in the Indian Oil and Gas Sector’, that covered eleven oil and gas majors in India further said seven per cent of workforce will leave the sector in the next five years.

India’s oil and gas sector is likely

to require around 25,000 additional professionals in the next five years due to business growth and retirement or attrition. This is equivalent to around 48 per cent of the current employee strength.

With a GDP of $1.25 trillion, India is currently the world’s fourth-largest economy and the fifth-largest energy consumer, with oil and gas accounting for 45 per cent of the country’s energy needs. Driven by a mix of soaring global oil demand and geopolitical uncertainties about supplies, the Middle East oil sector is also witnessing a wave of new investments aiming to boost oil production.

But, for the skilled workforce, the region has to look to overseas labour

In keeping with the times www.progressoman.com

HUMAN RESOURCES

practices rather than relying on legacy systems built for a different generation,” says Ezat Zarasvand, General Manager, The Information Store, a provider of digital oilfield solutions.

The oil industry is now tapping into technology like instant messaging, remote data access, and even social networking sites. Some big oil giants like Chevron and BP are encouraging employees to use handheld computers, interactive Web pages, blogs, social networks and other media to store information on how they make crucial decisions or resolve problems at the office and in the field.

Ezat Zarasvand, General Manager, The Information Store

markets like Europe, North America and Asia, regions that are already undergoing a talent crunch. The roots of the present crisis can be traced back to 1980s and 1990s, when oil prices plunged and companies laid off hundreds of thousands of engineers.

Recruitments were slowed down, scaring away an upcoming generation of workers who looked for other disciplines or options.

“Many people left and went into other areas during periods of oil price weakness and poor labour demand, and are reluctant to return,” observes Michael Lynch, President of Strategic Energy & Economic Research Inc. (SEER), a US-based think-tank that provides energy information and consulting services to decision makers.

Of the latest causes, the emergence of new oil producers including the former Soviet states, China, Africa, and India, and the labour demand in these unexpected regions and the recruitment blitz launched by IOCs all sucked up the labour supply pool. Also, new age sectors, Information Technology and outsourcing, boomed big time, and 16

March-April 2011

continue to attract youths. Several colleges and universities in the West had to close down engineering departments due to lack of students.

In the 2000s, number of students studying petroleum engineering dropped drastically compared to the 1990s.

Once these institutions ceased to supply human resources, it removed the bridge between a graying workforce and the new generation in the oil sector.

In the wake of this labour crunch, managing them became a lot more central to oil and gas companies. Companies in the sector are now realigning their HR strategies to match their core business objectives. More emphasis has been put on employee development and retention.

As a result, they are now changing their top-down, rigid management styles to attract younger workers. Several companies have now recognised and implemented e-learning to take them to a digital era in E&P. “Equipping the younger workforce with the tools that yield optimal results from both people and assets means embracing new technology and current best

Emphasising the idea of digital oil fields, Zarasvand says, “The future of oil and gas production will depend on finding new ways of efficiently meeting worldwide energy consumption, doing more with fewer resources, and using technology and information more effectively across the upstream business. And further digitalisation of the oilfield and workplace will be the primary enabler of more efficient energy production.”

A big part of this human resources problem has been the boom and bust nature of the industry. The massive layoffs in 1980s and 1990s have left indelible scars. Many people who left and went into other areas during periods of oil price weakness and poor labour demand are reluctant to return.

Everybody knows price determines everything in the oil industry. If price collapses again, those pink slips will return. Workers are certainly wary of such a scenario. However, it is also true there has never been a better time in history to enter the oil and gas industry.

(Saji P. Moolan is a freelance writer.

The views expressed in this article are his own.)

COVER STORY

STEADY AND SUSTAINING

Just a few months in the job and Raoul Restucci, Managing Director of Petroleum Development Oman (PDO), has “hit the ground running”.

Restucci spent time talking to Sunil Fernandes on PDO’s performance and future plans. Excerpts from an exclusive interview The word “sustainable” has been used for the second year running in the theme for the “Annual Media Briefing.” Does it mean that the focus would remain on not substantially growing oil production?

It’s always going to be a case of maximising ultimate recovery and replacing barrels you produce with new barrels. So it’s about using best economics, efficient technologies and an optimum scheduling of projects.

Maybe I could produce more in 2011, and 2012, but what about produce from the other fields in the subsequent months and years. In our business plan we have a replacement ratio, and if we exceed that we would be proposing more production. If we undermine that or if our production becomes unsuccessful, we would have less production. So a combination of all this would simply mean that we should ensure sustainable production over a longer period of time. The important thing is to strike the right balance, given the complexity of our projects.

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March-April, 2011

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COVER STORY

raw materials and other product prices.

People have become difficult to secure, while contractors are seeking a higher price regime. In 2008, we witnessed an escalation in natural gas prices and it resulted in challenges in securing materials at appropriate prices.

What’s your reserve-replacement ratio like?

At the moment we delivered in excess of one and we continue to work on that.

Natural gas would remain crucial to power industrial growth in the Sultanate.

What’s your take on natural gas production at PDO in the next few years?

We continue with an intensive gas exploration programme, including development and seismic. But in addition to that we have gone significantly into tight and unconventional gas. These are new plays that have transformed the natural gas landscape in countries like the United States.

These are capillary pressure dominated reservoirs, which require different technologies, and where the resource size is rather large. In the early phase the question was is that domain available in Oman?

Our exploration efforts in 2010 and our plans for 2011 aim at exploiting the potential of our natural gas reserves.

In 2010, we drilled what maybe the deepest well in the Middle East, which 20

March-April 2011

was 7000 metres below, in the search for deep gas in the Fahud Salt Basin. We have identified a number of formation and opportunities. And now we are working on how to test those, frac them and produce them, while simultaneously reducing costs. PDO is certainly committed to putting emphasis not only on oil, but increasing efforts in natural gas management. This is not something that will add-up to in the next year, but is more of a long term proposition. We are encouraged by the response that we see, but it will take time to have a robust programme in place. A lot of testing, fracking, learning and adopting new technologies will be involved.

Would it be commercially viable to exploit all of the gas, considering that it is tight and maybe expensive?

I think we will be able to explore the large amounts of gas available, such that it would be a reliable long term supply for power generation, desalination etc.

What are the challenges for PDO going forward?

We have to see where oil prices are headed. We have got increased prices of

How would you rate your performance in 2010?

We have done very well in 2010. We had delays in the Harweel project, but it was more than offset by better well reservoir management, a reduction in non-productive time and a reduction in shutdowns. We have delivered on our promise of production and have exceeded the same. At the beginning of the year, we placed a lot of emphasis on safety, making sure that the Harweel project which has a number of hydrogen sulphide operations, had assurances for an extremely safe operations there.

Qarm Alam was also expected to start in the first quarter of this year?

We had delays in Harweel and Qarn Alam. We have outstanding performance in the depletion compression projects and the gas projects that I referred to in my annual media presentation. Interestingly, the Amal steam project is ahead of schedule. Next year, I might tell you that it will be completed much sooner than 2013. As we increase complexity, the important thing would be to take forward our learning. One of the areas that we could do going forward is strengthening the central engineering organisation. We could centralise many projects and learn from efficiencies and best practices.

Your comments on the need for ensuring safe driving practices?

Across the region many people succumb to injuries in road accidents. We are working with the Royal Omani Police, which is essentially a combination of technology, improved systems, awareness programmes and enforcement. We are committed to saving lives at all costs.

GEARED TO MEET CHALLENGES

Petroleum Development Oman is facing complexities like never before, with ageing oilfields, complex projects, burgeoning demand for gas and spiralling prices of commodities. Despite challenges, it seems certain that the company will sustain and gradually increase production in the years to come. Sunil Fernandes reports on the reasons for optimism

T

aking challenges head-on has never been a problem at Petroleum Development Oman (PDO). When faced with criticism for declining production a few years ago, the company not only reversed declining production, but managed to sustain and increase production.

2010, like 2009 has been a year of steady performance in terms of production at PDO. The company has for the fifth successive year, reported a combined production of oil, gas, liquid petroleum gases and condensates at more than one million barrels of oil equivalent per day.

If we individually consider the production of oil, there has been a marginal increase in production. Daily average oil production in 2010 stood at 553,000 barrels per day, slightly above the 2009 level of 552,000 barrels per day.

Pertinently, if the Harweel project had to go on stream as anticipated by mid-2010, the company would perhaps have shown a reasonable jump in production.

THE BIG LEAP The last few years has seen a steady oil and gas production trend at PDO. Going forward, the company is faced with

The Harweel miscible gas project is expected to go on stream later this year

COVER STORY

A view of the Qarn Alam steam-injection project

ageing oilfields which pose a challenge in replenishing its oil production. However, Enhanced Oil Recovery (EOR) projects that are slated to go on stream will add almost a third to production in the coming years, making it the next big leg in the production story. EOR projects at Harweel, Marmul, Qarn Alam and Amal will between them add staggering levels to oil produced, when all of the projects go on stream at full production.

However, EOR projects come at a cost, and at a cost that is significantly higher when compared to conventional means of oil production. “We would be satisfied even if oil would be around $30. The EOR projects at Harweel, Marmul, Qarn Alam and Amal, would not have any problems with lower oil prices.

Having said that, if we consider today’s oil prices, these projects are extremely attractive,” says Raoul Restucci, Managing Director of PDO. 22

Interestingly, PDO would be the first company to simultaneously use all the three EOR techniques of polymer flooding, miscible gas and steam injection, when some of its projects are commissioned.

The first of the EOR projects at Marmul has already kicked-off with the plant’s inauguration done in October 2010.

The lowest in terms of oil production contribution, the Marmul polymer project will add 10,000 barrels a day of incremental production to PDO over the coming years. Marmul is a long-term project in which increased production can take many months to take effect.

However, early operations have been promising with increased production.

Haweel is yet another complex EOR project, but this time using miscible gas to draw-out oil. Technological challenges have led to some delays, but commissioning activities at this

project are now underway, and first oil is expected in the second quarter 2011.

Once Harweel reaches full production, it will contribute with an additional 40,000 barrels per day of high quality crude oil to PDO’s expanding portfolio.

The Qarn Alam steam-injection project has also experienced some delays, but the project team is working hard to recover lost time. First production and first steam stages are expected in August and October 2011, respectively, after which it will also contribute another 40,000 barrels per day.

PDO’s newest EOR project at Amal is progressing on schedule. This is a twin field development at Amal East and Amal West where steam will be used in different ways to increase production. At Amal East, steam will heat the reservoir (known as steam soak) making the oil less viscous and easier to pump to the

March-April 2011

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COVER STORY

surface. At Amal West, a variant known as steam drive will be used where steam sweeps the oil to producing wells. Steam will be provided using waste heat from the new Amal power station via a cogeneration unit. Amal is expected to take several years to reach its full effect with peak production at the two Amal fields not expected until 2018 when output is projected to reach 23,000 barrels per day.

Oil, Condensate and Gas production

Discoveries remain crucial Discoveries remain crucial to ensure that depleting reserves are replenished and a reserve-replacement ratio in excess of one is achieved. “At the moment we delivered in excess of one and we continue to work on that,” says Restucci.

Media Book.indd 4 And the reasons for maintaining a healthy ratio is PDO’s heavy investment in its exploration programme which has resulted in significant successes. In 2010, the company made a discovery of four new oil fields, one of them with material volume of oil in place. The company also found a potentially large gas field.

Combined potential in-place volumes of oil and gas could be in excess of 800 million barrels of oil equivalent. One of the material oil discoveries in 2010 was at Amal Southeast, close to the existing Amal and Amal East oil fields which are currently part of an important Enhanced Oil Recovery development project.

Natih reservoir. Two wells were drilled and hooked-up and produced at a combined rate in excess of 350 b/d.

demonstrating the significant potential that continues to be available in the PDO concession. As a result, PDO will continue its aggressive efforts to find both new oil and new gas fields. PDO’s ambitious oil exploration plans for 2011-2015 call for extensive 3D seismic data acquisition, continued search for completely new geological opportunities as well as the drilling and testing of approximately 140 exploration and appraisal wells.

The Al Ghubar East discovery was an immediate follow-up to the important 2009 Al Ghubar South discovery.

The exploration well proved oil in the same Shuaiba reservoir and the well subsequently flowed at high rates when tested. Production plans for this field call for early production from the exploration well followed by subsequent development in tandem with the Al Ghubar Main field. PDO has also made another significant gas discovery at Khulud West in the north of PDO’s concession area, 5 km west of the Khulud South discovery announced last year.

An intensive gas programme

Overall, these discoveries come from a variety of reservoirs and depths,

The Sultanate is witnessing a rising demand for natural gas to drive industrial growth and the demand-supply scenario

“Now there is lot of work, like appraisal, testing and determining the full commerciality of these projects. But we are very excited about these projects,” says Restucci.

Overall (PDO & Contractors) Lost-time Incident Frequency 1986-2010

In addition to this, PDO has made three other oil discoveries at Sayyah in the north of PDO’s concession, Al Ghubar East and Aqeeq in the central region of the Sultanate. The Aqeeq discovery, close to the existing Sadad field, followed the same innovative drilling campaign approach adopted in 2009 with the successful discovery at another nearby field at Anbar involving drilling 12 wells in a grid pattern. The discovery will be hookedup for production in 2011 to nearby infrastructure. The Sayyah discovery is an oil accumulation in the excellent quality 24

March-April 2011

PDO safety statistics

2/19/11 9:59 AM

COVER STORY

The Amal field

continues to remains tight. “We continue with an intensive gas exploration programme, including development and seismic. But in addition to that we have gone significantly into tight and unconventional gas,” says Restucci.

The search for new gas is focused on deep tight gas exploration in all of Oman.

In northern Oman, up to 30 tight gas wells will be drilled and tested over the next four years and extensive 3D seismic data will be acquired.

In southern and central Oman, PDO plans to drill new wells to test new gas play concepts, will acquire additional 3D seismic data, and will carry out in-depth geological studies.

Already in 2010, three new gas fields at Burhaan West, Mabrouk and Harmal were brought onstream on schedule, 26

March-April 2011

giving an important boost to PDO’s ability to sustain gas production over the coming years.

And new natural gas discoveries continue. In 2009 it was Khulud South and in 2010 it is Khulud West.

The exploration well at Khulud West encountered a gas column of more than 150 metres in the Amin reservoir at a depth close to 5,000 metres.

Although indications are that the reservoir is better quality than Khulud South, it remains challenging being tight, with low permeability and at high pressure and high temperature. The exploration well is planned to be tested in 2011 and the field will require additional operations and studies to demonstrate commerciality.

Clearly, the gas story at PDO remains huge, and the company is intensifying efforts to ensure that production is

increased and then sustained.

Reasons for optimism There is little doubt that PDO is facing challenges from ageing fields, cost increases, growing demand for gas and increased complexity of its projects. But each of these challenges seemed to be well mitigated by new discoveries, EOR projects slated to go on stream, sustaining natural gas supplies and improving operating efficiencies.

“Clearly, the response will be by sustaining production on the exploration front, building development activity, commissioning EOR expertise, strengthening efforts in managing costs, driving efforts in energy consumption for EOR projects, strengthening of project engineering service. It’s about operational excellence, technology and our people,” says Restucci.

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PROJECT REPORT

CREATING A

POSITIVE IMPACT Petroleum Development Oman’s (PDO) EcOman Centre is an eye-opening journey through the evolution and future of energy. Jelle van der Toorn Vrijthoff, Quinx and Jan Burgmans, Bruns who were design/ consultants for EcOman Centre talk to Sunil Fernandes on the novel attributes of the project, its challenges and more COULD YOU TELL US MORE ABOUT THE ECOMAN CENTRE AND YOUR OWN INVOLVEMENT? We have been working along with Petroleum Development Oman for the last several years. In fact, we have been earlier associated with the Oil and Gas Exhibition Center. Over the years we have had regular interactions with PDO and in one of these interactions we suggested an ecology theme as the next “Gift to the Nation”.

Deliberations were had with PDO and collectively it was decided to present the EcOman Centre that you see. We were appointed as contractors and formed a consortium of our own to take care of the different aspects of the project.

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Jan Burgmans (left) and Jelle van der Toorn Vrijthoff

The different exhibits that take you through the energy journey

By the time we got formal approvals it was rather late. We simultaneously worked on the building construction along with the exhibit construction. We thus had two lines of activity running parallel. And the process I am talking of is a very difficult process.

THE THEME OF THE ECOMAN CENTRE IS MORE RELEVANT TO THE OIL AND GAS SECTOR. The reason we decided on this concept is of course the fact that in the foreseeable future we would run out of oil. Therefore, everybody has to become more efficient in the development as well as conservation of this vital resource.

THE ECOMAN CENTRE HAS MANY THEMES. HOW DID YOU GO ABOUT PREPARING THE DIFFERENT THEMES? There have been a whole lot of people involved with this project. For example, there was a need for architects, game designers, video designers, copy writers etc. Therefore, we put together a

consortium that would work together to do the centre. And of course when we are managing a consortium there was a lot of logistics involved, which we were able to overcome.

WHAT WERE THE CHALLENGES YOU FACED? The biggest challenge we faced was time.

It is our duty to educate the younger generation and when school children and adults see and watch the exhibits, I am sure they would remain wellinformed and aware of the need for conservation. So to that extent I believe our theme was the most appropriate for the present times.

March-April, 2011

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PROJECT REPORT

THE ECOMAN CENTRE Petroleum Development Oman’s (PDO) brand new EcOman Centre at Mina al Fahal is an engaging and eyeopening journey through the evolution and future of energy. It is a thoughtful investment to help visitors, young and old alike, learn the possibilities of harnessing sustainable energy resources in their march towards an ever brighter future under the enlightened leadership of His Majesty Sultan Qaboos bin Said.

The centre consists of three themes: the ‘Power Tower’, ‘Better World’, and connecting these two, the ‘Energy Journey’.

THE POWER TOWER Visitors will start their tour from the Power Tower which will educate them on the sources and impact of energy through technical illustrations, animations and interactive demonstration models.

THE ENERGY JOURNEY One can then discover how humans developed technologies to harness nature’s energy. Visitors’ trip will start at the beginning of time with the discovery of fire to present day burning of fossil fuels and the production of electricity.

BETTER WORLD Visitors continue their journey through to ‘Better World’ where HOW LONG DID YOU TAKE TO IMPLEMENT THIS PROJECT? We completed the project in 18-months time. We had to do the project from scratch in the sense that it was more of a greenfield project.

Completing the project in 18-months, I would say is a huge accomplishment.

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The Power Tower

they will learn how you can make a positive impact to the world. One can have the chance to see models of eco-friendly houses which will demonstrate how ‘Eco-friendly’ resources, recycling programmes and WERE YOU INVOLVED WITH ANY OTHER PROJECT FOR PDO? We did the Oil and Gas Exhibition Centre, but in that case the building was given to us. So it was not a grassroots project.

THE ECOMAN CENTRE WOULD ENTAIL MAINTENANCE FROM TIME TO TIME. WHAT KIND

energy storage are put into practice.

The EcOman Centre is the latest of the endowments unveiled to the nation every five years; reflecting PDO’s strong commitment to society and sustainable development.

OF MAINTENANCE WOULD BE REQUIRED? We really do not see a major issue on maintenance. What we believe is that the project would have maintenance that is almost negligible for a prolonged period of time. However, if there is a need for maintenance we are able to provide adequate support.

A cut above the rest The 7th edition of OER CEO Golf, the day-long leisure sports and networking event, was held on February 3, 2011 at the prestigious Muscat Hills Golf and Country Club under the auspices of HE Ali bin Masoud Al Sunaidi, Minister of Sports Affairs. Over 350 of the country’s most respected CEOs and A-list guests went head to head in friendly competitions, backed by some of the nation’s most popular and competent brands. Nawras Business Solutions was the pre presenter of OER CEO Golf 201 2011, while INFINITI was the ass associate presenter. Rolex wa was the official timekeeper w while Times of Oman and Al Shabiba were the publicity partners.

Samsung was the prize partner

MUSCAT HILLS

UNCONVENTIONAL GAS

RIDING THE NEXT BIG WAVE Unconventional gas is fast changing the energy mix around the globe, as the insatiable demand for gas continues. Sunil Fernandes reports on why this energy resource is becoming an important part of the energy portfolio

I

n a report last month, Anne-Sophie Corbeau, a gas analyst at the International Energy Agency (IEA), said global gas reserves could have a lifespan of more than 250 years through unconventional gas reserves, including shale, roughly doubling previous estimates. “The gas story is huge,” she said.

She went on to add that there was “probably” more than “300 times” more unconventional gas on hand than the current annual demand for gas.

The Middle East has some of the largest natural gas reserves in the world, but has failed to exploit the same. Estimates reveal that the Middle East has close to 40 per cent of natural gas reserves, but barely produces 15 per cent. Apart from Qatar, most of the countries in the region are either importing natural gas, or are just able to meet their need for natural gas. Over the last few decades, exploitation of oil resources has been considered more lucrative than natural gas. In fact, natural gas was considered undesirable and was generally flared.

Suddenly, with the burgeoning demand for desalination and to generate power for both domestic and industrial March-April, 2011

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UNCONVENTIONAL GAS

consumption, it was realised that there is a dire need to exploit natural gas.

Enhancing the production of natural gas, both conventional and unconventional therefore assumes paramount importance, since most of the countries in the Middle East are either importing natural gas or are witnessing a tight demand-supply scenario.

“Quite interesting here is that countries like Bahrain, Saudi Arabia, Kuwait and the United Arab Emirates have production capacities that are overtaken by consumption and there is a need to explore more gas to fulfill economic reforms and more infrastructure projects,” said Khaled Nouh, President, Baker Hughes, Middle East Region while speaking at the recent SPE Middle East Unconventional Gas Conference (SPEUGC) and Exhibition held in Muscat recently. This clearly brings to light the significance of tapping unconventional

gas reserves in the region.

DIFFERENCE BETWEEN CONVENTIONAL AND UNCONVENTIONAL NATURAL GAS There is often a saying in industry circles that “what is conventional today might well be unconventional tomorrow.” Unconventional gas reservoirs include tight gas, coal bed methane, gas hydrates, and shale gas. Unconventional gas reserves are often difficult to exploit and the level and expertise needed are very high.

These are therefore low margin and resource intensive assets. Because profit opportunities are limited, getting the most out of an unconventional programme requires close scrutiny of operational efficiency and cost levels.

WHAT PROFESSIONALS SAY The Society of Petroleum Engineers (SPE) recently organised the SPE

Middle East Unconventional Gas Conference and Exhibition in Muscat.

Noted speakers highlighted the significance of unconventional gas development to meet future needs.

Speaking at the panel session on “Hunt for Unconventional Gas: Where and How?” Nouh highlighted the huge quantum of unconventional gas.

“The world’s unconventional gas reserves equates to five times that of conventional gas reserves. In the Middle East unconventional gas reserves is at 3300 tcfs, while conventional gas reserves is at 2281 tcfs.” While clearly there are vast reserves in the Middle East a lot of unconventional natural gas remains to be exploited. “The US has been able to increase production from unconventional gas from 30.4 per cent of total production to about 44.2 per cent, the major benefit coming from both tight and shale gas

Creating a world of opportunities www.progressoman.com 38 38

March-April M Mar Ma arcchh-Ap hApr p ill 2011 201 20 011

production. As for shale gas outside North America, I am aware of only nine wells that have been drilled in the Eastern Hemisphere, including one in Tunisia and two in Saudi Arabia.

Some of these wells have been drilled and fractured, while others have not been drilled and fractured. The simple fact is that there is still a lot of easy to reach gas in countries like Russia, Qatar, Norway, Indonesia, Algeria and Nigeria,” he stated. The Middle East has an insatiable demand for natural gas thanks to the burgenoning demand from industry and domestic consumption. The future demand is hence expected to be quite robust. “The future demand is forecasted to be flat for OECD, while for the Middle East region the consumption of gas is expected to see an annual growth rate of 3.2 per cent. The consumption of gas will grow by 100 per cent in the next few decades,” Nouh revealed.

Khaled Nouh, President, Baker Hughes, Middle East Region

According to him there was thus a need to look at integration of technologies from seismic to stimulation as a key approach to tap unconventional gas in the Middle East. “Project economics is going to remain a big challenge for us.

Unconventional gas exploration has not been a major success in the Middle East and therefore the appetite for further investment is very scattered. Conventional gas will always be a threat as far as the economics are concerned,” he stated.

However, the Middle East could well take the example from North America which has made rapid strides in tapping unconventional gas.

Speaking at the same SPE Middle East Unconventional Gas Conference and Exhibition Melvyn Giles, Theme Leader, Exploration Excellence Unconventional Gas, Shell said that the story of tapping unconventional gas in North America was one of persistence and something that we could learn.

Jonathan Evans, Vice President, BP Oman

“Unconventional Gas is now forming half of North American gas production and its proportion is expected to increase further. The EIA estimates that there is 250 years of supply. But do not

let the estimates fool you. There is large amount of natural gas, but that does not mean that all of this is economical. You have to think also of how much of that gas is accessible to you,” he said.

March-April, 2011

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UNCONVENTIONAL GAS

but there could be issues like water management. If you are going to frac a well, and it’s going to take large quantities of water then you got to make the water available for recycling. As we go forward we need to show the public that we can develop unconventional gas not only in an economic way, but also in a way that is environmentally and socially friendly.”

Ali Al Gheithy, Petroleum Engineering Functional Director, Petroleum Development Oman

DRILLING OPTIMISATION REMAINS CRUCIAL Drilling optimisation will remain one of the key factors to save costs and ensure productivity. A well-planned drilling optimisation can lead to tremendous benefits in the long term. Robbie Kellas, Director, Baker Hughes spoke on “The value of unconventional gas play”, which was moderated by Ali Al Gheithy from Petroleum Development Oman.

“We need to construct a well that meets all objectives (for both reservoir access and data gathering for the life cycle of the well) at the lowest possible time and cost,” he said.

Presenting a drilling optimisation focus Kellas’ presentation noted that the application of technology and drilling methodology differed between segments, while the drilling optimisation process was equally applicable across all areas.

“The drilling optimisation process would involve establishing objectives, planning, drilling, post-well analysis and the use of best practices,” he said.

Melvyn Giles, Theme Leader, Exploration Excellence Unconventional Gas, Shell

Unconventional gas has known to cause environmental challenges and concerns have often been expressed by environmental bodies. Giles pointed out that there was a need to reduce costs here 40

March-April 2011

and also address environmental issues.

“As we go forward we have to address the footprint issues and gain public confidence. Not only footprint issues,

According to Kellas it was important to define the target well and acquire reservoir data and steer the well to the optimal location. “It is necessary to optimise completion based on gathering information and optimise each stage based on log/cuttings data. We also need to monitor each stage and use the data to optimise future well construction. ”

UNCONVENTIONAL GAS

He summed up his speech by concluding the key drivers of a drilling optimisation process which according to him included the necessity to: • Set performance improvement goals and measure them against these goals.

• Accelerate the learning curve.

• Control and retain knowledge that can be transferred to new projects.

• Develop solutions to reduce NPT and ILT. HUGE POTENTIAL Salim Sibani, Chief Executive Officer, Oman Oil Company Exploration and Production observed that Oman had been producing conventional gas for more than 30 years now, while speaking at the SPEUGC. He stated that the supply demand remained tight in the country and it would take some time before unconventional gas gets a decent market share.

“Unconventional gas is a major leap and a change that requires a complete shift from major stakeholders. There is also a need to align between resource holders and operators even while there is a need for expansion of the niche service sector to support unconventional gas implementation,” he said while speaking at a session moderated by Jonathan Evans from BP Oman. Speaking on “How to get cost down and production up,” Sibani noted that one needs to segment the challenge into smaller chunks with realisable targets. “It is important to accelerate the learning curve and expand the service base for unconventional resource base. There is also a need to grow the project scope to maximise service sector capacity utilisation,” he said.

While clearly the potential for 42

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Robbie Kellas, Director, Baker Hughes

Salim Sibani, Chief Executive Officer, Oman Oil Company Exploration and Production

unconventional remains huge, the industry needs to drive itself forward.

The best way forwards was summed up by Sibani at the conference when he rightly said, “We need to challenge

ourselves out of the comfort zone.

We have to start the long journey with a clear vision. We have a lot of unconventional gas and it’s time to ride the next big wave.”

ENVIRONMENT

Professor Reginald Victor, Dean of Research, Sultan Qaboos University

STAY COMMITTED AND CONSCIOUS Environmental initiatives have remained at the forefront for the oil and gas industry which has recently been plagued with disasters like the Gulf of Mexico oil spill. Professor Reginald Victor, Dean of Research at Sultan Qaboos University (SQU) talks to Sunil Fernandes on the need to mitigate risks, and his own research in myriad areas

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IT’S BEEN MORE THAN TWO DECADES FOR YOU AT SQU. COULD YOU TELL US A LITTLE ABOUT YOUR STINT HERE? I joined SQU in 1989, as an Associate Professor in the Biology Department, and became a full Professor and Head of Department in 1993 - a position that I held until 2000. In 2000, the new Centre for Environmental Studies and Research was created and I became its first Director. In 2009, the new Deanship for Research was created and I was appointed as the first Dean. I have now completed a year in this position.

WHAT KIND OF RESEARCH HAVE YOU BEEN FOCUSING ON, PARTICULARLY WITH REGARDS TO OMAN? In Oman, I have undertaken and guided research in several areas relating to the environment and it would be impossible for you to pen all of these. However, I must make a special mention of His Majesty funded strategic research project called Al Jabal al Akhtar Initiative, which was a mountain research initiative.

It basically involved conservation, ecology and sustainable development of the mountain region. We had as many as 20 scientists working on this multidisciplinary project. Our aim was to study biodiversity, climate, waterrelated issues, range land ecology, animal husbandry, eco-tourism and socio-economic impacts of development on these mountains and integrate our findings to come up with management solutions for the protection of Al Jabal al Akhdar under the guiding principles of National Biodiversity Strategy and Action Plan (NBSAP) for Oman.

In 2008, we concluded the project with a major conference in Muscat, which was a great success. It was for the first time that a comprehensive work on Oman mountains had been done. It gave us a

lot of international exposure and now I am pleased to be invited as the lead coordinator for mountain development issues in the MENA (Middle East and North Africa) region by the Switzerland Development Corporation (SDC). This is a project that will develop proposals for Rio + 20 (earth summit to be held in 2012). It just goes to show how the research initiatives undertaken by us, has gained tremendous credibility.

YOU ARE ALSO DEVELOPING RESEARCH INITIATIVES IN COLLABORATION WITH THE EARTHWATCH INSTITUTE, UK. COULD YOU ELABORATE? We are developing a proposal on Woodland Conservation in the Mountains of Northern Oman with the Earthwatch Institute. It is basically a project for conservation and restoration of the Juniper/Olive woodlands. Juniper woodlands are found 2000 meters above sea level in Oman while Olive woodlands range from about 1200 meters and mix with juniper in higher elevations.

These woodlands are important in terms of the ecosystem services they provide, but unfortunately are being degraded due to natural and man-mediated reasons.

Our study will conduct a thorough ecological evaluation of these woodlands and come up with management plans for their conservation and restoration in appropriate mountain sites.

YOU HAVE ALSO DONE SOME RESEARCH ON DIESEL CONTAMINATION OF ALFLAJ. COULD YOU SHARE SOME INFORMATION WITH US ON THAT PROJECT? This was done several years ago and it was more of an opportunistic effort.

There is an important falaj that supplies a large area of orchards in a mountain village. People started noticing gasoline smell from the water in that falaj and the government being extremely conscious sent out people to undertake research and the findings revealed that the falaj was being contaminated with diesel. The pertinent question was the source of the contamination and the same was finally narrowed down to one source – a diesel storage area for vehicles.

Loading and unloading diesel had caused slippages, the result of which saw diesel percolating with rainwater into the groundwater aquifers and brought back to the surface by the falaj.

An oil separator was installed to cleanup the falaj. We stepped-in to study the contamination of this natural ecosystem and how it altered the nature of the water quality. It gave us some insight into the resilience of natural ecosystems to recover from contaminations such as these. The dynamics of the biological self purification process was interesting and we even identified a group of fungi that was degrading the diesel into nontoxic byproducts.

We are developing a proposal on Woodland Conservation in the Mountains of Northern Oman with the Earthwatch Institute. It is basically a project for conservation and restoration of the Juniper/Olive woodlands

March-April, 2011

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ENVIRONMENT

Over a period of time the diesel content in the falaj has reduced to non-detectable levels and the separator was no longer needed. For us it was an interesting academic exercise to

discover the natural recovery process of a stream in the hot arid climate and our findings will be of use to practitioners who strive to mitigate the effects of such contaminations.

I think significant progress has been made since the last Earth Summit held in 1992. A lot of effort is needed and you must remember that the whole issue of environment is very complex

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HOW DO YOU PREVENT CONTAMINATION SUCH AS THIS? By using the best management practices (BMP) in general. In this case, BMPs for the storage and disposal of toxic material like diesel would have prevented the contamination, but accidents can happen even in best laid plans.

YOU HAVE SPENT DECADES DOING RESEARCH WORK. DO YOU FEEL THAT THE COMMON MAN IS NOT DOING ENOUGH FOR THE ENVIRONMENT? I think significant progress has been

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ENVIRONMENT

made since the last Earth Summit held in 1992. A lot of effort is needed and you must remember that the whole issue of environment is very complex.

For example, environmental issues are linked to poverty, gender bias, culture, education and a host of parameters other than scientific and technical concerns.

These issues are inter-connected, often with synergetic and/ or antagonistic responses. In the last 20 years the consciousness towards environment protection has remained high.

Twenty years ago when I spoke of environmental and related issues to University students, many of them were not in tune.

Today, they are much more aware and are keen to participate in discussions and organise activities that promote environmental consciousness.

Biodiversity, climate change and pollution issues are discussed by laypeople these days. Even children are talking about global warming. I am extremely optimistic about the progress in the near future.

HAVING SAID THAT ENVIRONMENTAL ISSUES ARE COMPLEX. WHAT IS THE BEST POSSIBLE WAY FORWARD? Look at the Narmada Dam issue in India. The benefits of the project like power and water resources would have to be weighed against the environmental hazards and associated socio-economic impacts. There are several cases like these where authorities face issues of conflict between environment and development. There are no easy answers.

I was not a great believer of sustainable development (SD) a decade ago. Even now I ask if sustainable development was such a great mechanism why so many conservation and environmental protection projects are failing all over the place. Success stories are few and 48

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I still believe that development should be prepared to make compromises and sacrifices in favour of the environment. I am aware that this view does not go down well with the sustainable developers far between.

I still believe that development should be prepared to make compromises and sacrifices in favour of the environment.

I am aware that this view does not go down well with the sustainable developers. However, I do believe that environment is a people’s issue and you cannot take people out of the environmental equation.

So out of necessity and for want of better mechanisms sustainable development has to be accepted.

Sustainable development of course has many definitions and as many interpretations, but the wise use of natural resources in such a way so that future generations can also enjoy the same benefits as you have, is acceptable.

Canada, Norway, Denmark and some other western European countries have experienced notable success with SD. But it is pertinent to note that these are countries with low population density, less poverty, better health care and education and clean technologies and in general are considered as developed.

Whether their models will fit the impoverished developing countries is something to think about.

HOW IMPORTANT IS THE ENVIRONMENTAL IMPACT ASSESSMENT (EIA) AND DO YOU LECTURE ON THIS SUBJECT? Today, environmental impact assessment is extremely important

and even the poorest of governments undertake them. In fact, I give a training course on this subject with two of my colleagues, Drs Hemasiri Kotagama and Ghazi Al Rawas for people from outside SQU like consultants, company executives, and employees of Ministries.

This is a very comprehensive short term course and we offer it every year through the Centre for Environmental Studies and Research (CESAR) and Centre for Community service and Continuing Education (CCSCE) at Sultan Qaboos University. There is a lot of demand for this course from private and public sectors, but unfortunately we can accommodate only 20 candidates per year.

WHAT IS YOUR UNDERLYING MESSAGE TO THE LAYMAN? I think everybody should be environmentally conscious and should do his/her own little bit to protect the environment. Can you change from plastic bag to paper bag today? Can you stop the shower running while you are soaping or shampooing? Can you walk to the shop in the next street instead of taking your car?

If yes, then you have done your bit for the day. You are a guardian as much as any NGO or environmental group is.

Stay conscious and committed so that your children, grandchildren and great grandchildren can enjoy the same beautiful planet called earth as you did.

COMPANY REPORT

The OPES Team (from left to right): Divisional Managers, Khawar Nabi, S. Venkatesan, S. Bala (Technical Manager) and R.Siva Kumar

A RELIABLE PARTNER OHI Petroleum & Energy Services (OPES) has a track record of serving Oman’s oil and gas sector for over two decades. A part of the reputed OHI Group, OPES provides a wide array of products and services, particularly related to production of both crude oil and natural gas.

OPES’ range includes various kinds of equipment and services: pumps and compressors, motors and transformers, pipes and valves, chemicals, pressure vessels, turbo-couplings, mechanical 50

March-April 2011

Oil and Gas. With most of its principals, OPES has a long history of successful cooperation which has resulted in mutual benefits, while also being of great value to its customers.

Apart from this OPES also supplies products related to the aviation sector, which include polymer-modified bitumen, cable trays and special purpose pits.

The success of OPES in its chosen fields stems from the stress on fulfilling the clients’ need with the right products of the best quality and dependability, which are delivered at competitive prices. In fact, OPES considers itself not just as a dependable supplier, it works virtually in partnership with its clients, responsive to their needs and attentive to the services and advice that they may require.

In each area of its activity, OPES has partnered some of the top companies in their respective specialisations, and works closely with them in order to provide the best and ideally suited products for the needs of its clients, who comprise all the companies in Oman in

In this regard it seeks to tie up with vendors in disciplines adjacent or supportive to its core activities so that it could offer to its clients the gamut of products which integrate together to provide coherent solutions from a single focal point.

seals, instrumentation and controls.

“We are a company that is growing steadily and adjusting to the prevailing business environment,” says one of its managers. “We have continued to explore new business areas and work with newer technologies, and therefore are constantly adding new principals. While doing so, what remains constant is our commitment to excellence and to accomplish our tasks in the best possible way. We have re-organised our business plan over the years and re-engineered our organisation structure internally. For instance we have formed divisions each of which contains related products from our portfolio, each being controlled by a dedicated manager.

This enables us to decentralise our functioning, and thereby achieve better efficiency, as well as responsiveness to customers’ needs,” he states.

OPES sources some of the best possible products and services, through arrangement with its principals, who are all globally reputed manufacturers, most of whom are leaders or major players in their individual disciplines. A divisional manager adds, “Our company’s experience and expertise ensures that it is able to provide the best possible solutions to match clients’ requirements, while obtaining these from client-approved vendors who are also able to offer competitive prices.

We ourselves provide technical assistance to our clients along with experts from our principals. Our level of competence, our familiarity with the expected codes and standards, our inputs and assistance even from the conceptual stage enables us to bring to bear the advantages of our experience and expertise, to execute the projects or contracts right from the earliest stages, through bidding, order execution and then to after-sales support.”

OPES has been working closely with most of its principals for the last two decades. The strength of these

partnerships can be inferred from the fact that many principals who have come to it more recently have been referred to and recommended by existing ones of long standing.

Another divisional head emphasises the inherent strength that OPES has from its ability to provide integrated services.

“For example a compressor project would need turbo-couplings, mechanical seals, motors, transformers, scrubbers, coolers, vessels etc. We have principals in all these areas which enables us to support almost all elements of the compression package. Our strength to provide integrated services illustrates the benefits of our attitude to partner our principals and then to act as virtual partners to our customers.”

OPES is able to offer alternatives by virtue of its range: The pumps that it represents include centrifugal, progressive cavity, twin-screw, plunger, reciprocating and so on covering the widest range of pressures, volumes and viscosities. Similarly for pumping oil from oil wells, OPES offers both the surface beam pumps and the best types of down-hole pumps. OPES is also the only company. In Oman to have also supplied acid gas compressors which deal with extra-high percentages of the

lethal Hydrogen Sulphide.

OPES has also been participating in enhanced oil recovery projects in the country, both for supply of equipment such as pumps, compressors, control and monitoring systems and also for supply and injection of polymer. “As the EOR projects in the country continue to increase so does our scope of work.

We are already supplying pumps to almost all of the enhanced oil recovery projects in the country, and are proud to be associated with such technology intensive projects,” says a manager.

Coming to Health, Safety and Environment (HSE) norms the company has a good track record. It has ensured zero lost time incidents, and all employees whose functions include field visits meet PDO’s HSE norms and remain fully compliant. OPES believes that safety and quality are primary goals, and there can be no compromises. Neither can it fail to care for the environment or its responsibilities to the community.

Perhaps, as the MD, Mr. Behram Divecha states, the core of OPES’s success and progress lies in its attitudes and core values: partnership, cooperation, team work, responsiveness and a relentless pursuit of excellence.

March-April, 2011

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SPECIAL REPORT

WHO IN THE US WANTS THIS MUCH OIL?

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he United States consumes more gasoline than South America, Europe, Africa and Asia combined. On an average, an American consumes as much energy as 31 Indians or 13 Chinese. About 40 per cent of this energy comes from oil.

“The prime reason for this is that the United States created a unique civilisation organised around 52

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automobiles, suburbs, and malls – all made possible by an abundance of cheap domestic oil,” says Michael Klare, Professor of Peace and World Security Studies at Hampshire College, Massachusetts.

Yes, they could afford to create such a “unique civilisation” in the years after the World War II when the country was the world’s leading oil producer. In the US of 1950s, gas was only 20 cents a gallon.

Now it is $3.14 per gallon depending

The insatiable demand for oil in the US continues, despite often labelled as an “oil guzzling” nation. Saji P. Moolan reports on the reasons for this “gasholism”

on which state the gas station is located in. This obviously means things not just changed, but changed a lot.

However, the country’s national transportation policy has barely changed since 1950 except the interstate highway system launched by President Eisenhower in 1956. But, price and consumption of oil has always been subject to change. As oil prices soared, so did America’s dependence on imported oil. In 1973, US oil imports

were 35 per cent of the total oil consumed. It has ballooned every since, and is nearly 65 per cent now – grown from mere appetite to gluttony – costing the nation annually 500 to 700 billion dollars for foreign oil.

According to US Energy Information Administration (EIA) most of these imports come from Canada (23.3 per cent), Venezuela (10.7 per cent), Saudi Arabia (10.4 per cent), Mexico (9.2 per cent), and Nigeria (8.3 per cent).

Despite voluminous imports and supply, oil is no longer cheap as it used to be.

But, for the US old habits never die.

The US has approximately 3 per cent of the world’s proven oil reserves.

However, many of its domestic reserves have been exhausted. Some of its deposits are left untapped either for environmental reasons or as long-term reserves; or for both. Over the years, the US administrations perfected a climate for the people - relatively wealthy nation, low fuel taxes, low fuel efficiency requirements and a poor public transportation system - to develop a fixation with the amber liquid. It is, however, surprising to know that American people in general overwhelmingly support broader access to public transportation, safe walking and biking.

In 2010, a national poll was conducted for Transportation for America (T4A), a policy organisation that supports progressive transportation and land use

Michael Klare, Professor of Peace and World Security Studies, Hampshire College

policy, which revealed that over 82 per cent voters believed “the United States would benefit from an expanded and improved transportation system such as rail and buses.”

Along these lines, 73 per cent voters felt they “have no choice but to drive as much as” they did, and 57 per cent liked to spend less time in the car. Nevertheless, there are over 260 million vehicles plying on US roads that

translate into 755 cars for every 1,000 Americans. And, these vehicles drive an awful 7 billion miles a day.

America’s gasoholism cannot be attributed to people’s choice or gas-guzzling SUVs and Humvees, but are tendencies spurred on by government policies. It is a simple market principle - lower prices encourage consumption. And, less efficiency standards encourage

Oman’s Progress now goes online www.progressoman.com

SPECIAL REPORT

automobile companies to make anything the people can afford to buy.

“Whether this is excessive or not is a matter of judgement; it could be argued that consumers make a logical choice, given relative prices and income,” observes Michael Lynch, President of Strategic Energy & Economic Research Inc. (SEER), a US-based think-tank that provides energy information and consulting services to decision makers.

But, the real addiction is that of the US Department of Defense (DoD), which is the largest oil consuming government body in the US and in the world. This gas-guzzling machine has military deployment in 150 countries, has over 700 military bases globally, and is now fighting a few wars.

According to Prof. Klare, the DoD consumes as much as 340,000 barrels (14 million gallons) every day, which is greater than the total national consumption of Sweden or Switzerland.

There are only 35 countries in the world that consume more oil per day than the Pentagon. And, the figure becomes all the more significant in the context of the nation’s daily oil consumption – nearly 20 million barrels per day.

The Air Force is the Lamborghini Murcielago of Pentagon with its planes burning more than half the fuel supply for the entire military.

In his book, ‘Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum’, Prof. Klare points out that an average American soldier in Iraq or Afghanistan consumes sixteen gallons of oil on a daily basis – either directly (through the use of Humvees, tanks, trucks, and helicopters) or indirectly (by calling in air strikes).

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For the US administration, they can turn to Europe to emulate some of their models/measures to optimise oil consumption. One solution is to give more importance to public transportation as in many European countries. In the French capital of Paris, people complete over half of their trips without cars compared to 20 per cent in the US In his opinion, these foreign wars only account for a small fraction of the Pentagon’s total petroleum consumption. Possessing the world’s largest fleet of modern aircraft, helicopters, ships, tanks, armoured vehicles, and support systems – all powered by oil – DoD lives on oil. This makes us wonder why and what for they burn so much oil?

Besides Pentagon, there are other gluttons too. The United States Postal Service (USPS) has 142,000 vehicles and operates the world’s largest civilian vehicle fleet. While, FedEx Express operates the world’s largest cargo airfleet with 694 aircrafts, and hundreds of trucks.

The USPS, FedEx and UPS have already initiated moderate measures to reduce consumption through electrification, conversion to hybrids and energising fleets with alternative fuels.

While for the US administration, they can turn to Europe to emulate some of their models/measures to optimise oil consumption. One solution is to give more importance to public transportation as in many European countries. In the French capital of Paris,

people complete over half of their trips without cars compared to 20 per cent in the US. Gasoline is taxed heavily in Europe, with taxes making up as much as 75 percent of the cost of a gallon of gasoline compared to a maximum of 17 per cent in the US, to contain excessive use of oil. They also encourage more efficient diesel vehicles and more efficiency standards for car manufacturers.

“High prices in recent years appear to be causing people to move from the largest vehicles to smaller sizes, which, combined with government regulations on vehicle efficiency, should see US gasoline consumption decline over the next decade,” says an optimistic Michael.

Or they can go the Danish way and increase purchase taxes on cars to deter excessive driving. Instead of funding more highway construction, Americans can fund more public transportation projects. These decisions are hard to make, but are easier to be effective.

(Saji P. Moolan is a freelance writer.

The views expressed in this article are his own.)

SPECIAL REPORT

THE RISE OF EMERGING ECONOMIES World energy growth over the next twenty years is expected to be dominated by emerging economies such as China, India, Russia and Brazil while improvements in energy efficiency measures are set to accelerate, according to BP’s latest projection of energy trends, the BP Energy Outlook 2030.

BP’s ‘base case’ - or most likely projection - points to primary energy use growing by nearly 40 per cent over 58

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the next twenty years, with 93 per cent of the growth coming from non-OECD (Organisation of Economic Co-operation and Development) countries. Non-OECD countries are seen to rapidly increase their share of overall energy demand from just over half currently to two-thirds. Over the same period, energy intensity, a key measure of energy use per unit of economic output, is set to improve globally led by rapid efficiency gains in

Emerging economies will lead energy growth to 2030 and renewables will out-grow oil, BP’s latest projection of energy trends, the BP Energy Outlook 2030 reveals the same non-OECD economies, under these projections According to the BP Energy Outlook, diversification of energy sources increases and non-fossil fuels (nuclear, hydro and renewables) are together expected to be the biggest source of growth for the first time. Between 2010 to 2030 the contribution to energy growth of renewables (solar, wind, geothermal and biofuels) is seen to increase from 5 per cent to 18 per cent.

know, BP has a 15-year record of calling for more action from governments, including the wide application of a carbon price. Our base case assumes that countries continue to make some progress on addressing climate change, based on the current and expected level of political commitment. But overall, for me personally, it is a wake-up call.”

HIGHLIGHTS BP’s ‘base case’ projections are that world primary energy demand growth averages 1.7 per cent per year from 2010 to 2030 although growth decelerates slightly beyond 2020. Non-OECD energy consumption will be 68 per cent higher by 2030 averaging 2.6 per cent per year growth, and accounts for 93 per cent of global energy growth. In contrast, OECD growth averages 0.3 per cent per year to 2030; and from 2020 OECD energy consumption per capita is on a declining trend of -0.2 per cent per year.

Biofuels will see an increased contribution to the energy mix

Natural gas is projected to be the fastest growing fossil fuel, and coal and oil are likely to lose market share as all fossil fuels experience lower growth rates.

Fossil fuels’ contribution to primary energy growth is projected to fall from 83 per cent to 64 per cent OECD oil demand peaked in 2005 and in 2030 is projected to be roughly back at its level in 1990. Biofuels will account for 9 per cent of global transport fuels.

The BP Energy Outlook 2030 is the first of BP’s forward-looking analyses to be published, after 60 years of producing definitive historical data in the BP Statistical Review of World Energy. In launching the BP Energy Outlook 2030, Group Chief Executive Bob Dudley said, “The issues covered in this document are huge ones – the effort to provide energy to fuel the global economy, sustainably, in an era of unprecedented growth. I believe one of our responsibilities is to share the information we have, to inform

the debate on energy, and now on climate change.”

“What producers, governments and consumers all want is secure, affordable and sustainable energy. But on a global scale, this remains an aspiration. And to meet that aspiration over the next two decades, we need smart, market-oriented policies to deliver the energy we need in a manageable way – without inhibiting economic development or jeopardising the improvements in living standards now being experienced by billions of people worldwide.”

“I need to emphasise that the BP Energy Outlook 2030 base case is a projection, not a proposition. It is our dispassionate view of what we believe is most likely to happen on the basis of the evidence.

For example, we are not as optimistic as others about progress in reducing carbon emissions. But that doesn’t mean we oppose such progress. As you probably

Transport growth is seen to slow because of a decline in the OECD. The region’s total demand for oil and other liquids peaked in 2005 and will be back at roughly the level of 1990 by 2030. Toward the end of the period, coal demand in China will no longer be rising and China is projected to become the world’s largest oil consumer.

OPEC’s share of global oil production is set to increase to 46 per cent, a position not seen since 1977. At the same time, oil - and gas - import dependency in the US is likely to fall to levels not seen since the 1990s, because of improved fuel efficiency and the increased share of biofuels. Global consumption growth is also impacted by higher oil prices in recent years and a gradual reduction of subsidies in oil-importing countries.

The fuel mix changes over time, reflecting long asset lifetimes. Oil, excluding bio-fuels, will grow relatively slowly at 0.6 per cent per year; natural gas is the fastest growing fossil fuel March-April, 2011

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OECD Asia will account for nearly two-thirds of non-OECD consumption growth over the next 20 years and more than three-quarters of the net global increase, rising by nearly 13 million barrels a day,” said Rühl. “The largest increments of new supply will come from OPEC – conventional crude in Saudi Arabia and Iraq, as well as OPEC natural gas liquids (NGLs) which are not subject to OPEC quotas.”

Non-OPEC liquids are likely to rise modestly, driven by a large increase in biofuels, along with smaller increments from Canadian oil sands, deepwater Brazil, and the FSU which offset continued declines in mature provinces.

Natural gas is projected to be the fastest growing fossil fuel

with more than three times the projected growth rate of oil at 2.1 per cent per year. Coal will increase by 1.2 per cent per year and by 2030 it is likely to provide virtually as much energy as oil excluding biofuels. The strong carbon policy drive in OECD countries risks being more than offset by growth in emerging economies.

Wind, solar, bio-fuels and other renewables continue to grow strongly, increasing their share in primary energy from less than 2 per cent now to more than 6 per cent projected by 2030. Biofuels will provide 9 per cent of transport fuels and nuclear and hydropower will grow steadily and gain market share in total energy consumption.

“The slowing of growth in total energy in transport is related to higher oil prices and improving fuel economy, vehicle saturation in mature economies, and expected increases in taxation and subsidy reduction in developing economies,” said Christof Rühl, BP’s Chief Economist. “In percentage terms, oil demand is reduced the most in the power sector (-30 per cent) because this is the easiest oil to displace with gas or 60

March-April 2011

renewables and is the sector most likely to employ carbon pricing.”

ENERGY INTENSITY Since 1900 the world’s population has more than quadrupled, real income (as measured by Gross Domestic Product) has grown by a factor of 25, and primary energy consumption by a factor of 23.

“The modern energy economy has been shaped by the trends of industrialisation, urbanisation, motorisation and rising income levels,” said Rühl.

Energy per unit of income as measured

by GDP continues to fall, and at an accelerating rate. “This is true in our outlook to 2030 not only for the global average, but for almost all of the key countries and regions. The combination of energy efficiency gains and a longterm structural shift towards less energy intensive activities as economies develop underpins this trend,” said Rühl.

NON-OECD GROWTH Global liquids demand is forecast to reach 102.4 million barrels per day (mmbpd) in 2030. The net growth of 16.5 mmbpd over the next 20 years comes exclusively from the emerging economies of the non-OECD. “Non-

FUEL SUBSTITUTION According to the Energy Outlook’s projections, oil continues to suffer a long run decline in market share, while gas steadily gains share. Coal’s recent gains in market share, on the back of rapid industrialisation in China and India in particular, are reversed by 2030, with all three fossil fuels converging on market shares around 27 per cent.

The diversifying fuel mix can be seen most clearly in terms of shares of growth.

Over the period 1990-2010 fossil fuels contributed 83 per cent of the growth in energy; over the next twenty years fossil fuels are likely to contribute 64 per cent of the growth. Renewables (excluding hydro) and biofuels together account for 18 per cent of the growth in energy to 2030.

“The diversifying fuel mix is being driven largely by developments in the power sector. Energy used to generate power remains the fastest growing sector, accounting for 53 per cent of the growth in primary energy consumption 1990-2010 and projected to account for 57 per cent of the growth to 2030.

In terms of end use, industry drives the growth of final energy consumption.

The role of transport is weakening; over the past 20 years transport sector energy

demand grew at about the same rate as total energy demand, but over the next 20 years it grows much less rapidly than total energy,” said Rühl.

“OECD oil demand declines are concentrated primarily outside the transport sector, where it is relatively easier to displace oil by gas and renewables; post-2015, OECD transport demand is also expected to fall as technology and policy drive improved engine efficiency.”

GROWTH IN BIOFUELS Biofuels production is expected to reach 6.7 mmbpd by 2030 from 1.8 mmbpd in 2010 and will contribute 125 per cent of net non-OPEC supply growth over the next 20 years. Continued policy support, high oil prices, and continued technological innovations all contribute to the rapid expansion. The US and

Brazil will continue to dominate biofuel production with 76 per cent of total output in 2010 but falling to 68 per cent in 2030 as output from Asia-Pacific begins to rise. “The global fuel mix continues to diversify – but for the first time, non-fossil fuels will be major sources of supply growth,” said Rühl.

ENVIRONMENTAL POLICY The Energy Outlook 2030 assumes continued policy action to address concerns about both climate change and energy security, based on the current trend of political commitment. BP has developed an alternative ‘policy case’ to explore the implications of a significant increase in the level of political commitment which translates into a tightening of policy.

“The key focus of the policy case is to reduce dependence on carbon intensive

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fuels. This can be achieved through a wide range of policy instruments, including various ways of putting a price on carbon,” said Rühl.

In BP’s policy case “global emissions peak just after 2020, but will still be 20 per cent above 2005 levels. The emissions path is still expected to be well above the International Energy Agency’s 450 Scenario1, indicating how much more effort will be required after 2030 to put the world onto a ‘safe’ path,” said Rühl.

The cut in emissions in the policy case would be achieved through a combination of more rapid efficiency gains, fuel switching – from coal to gas and from fossil fuels to nuclear, hydro and renewables – and the introduction of carbon capture and storage (CCS) for both coal and gas power plants.

MARKET REPORT

TRADING VOLUMES SURGE

Positive momentum in crude prices continued, fuelled by the economic recovery in the West

T

he OPEC Reference Basket maintained its momentum in January, moving within a $90-95/b range, which resulted in a monthly average of $92.83/b, up $4.27 or 4.8 per cent from the previous month.

This upward trend was attributed to bullish sentiment in the futures markets, 62

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which pushed both Nymex WTI and ICE Brent front months to 28-month highs.

Improving macroeconomic sentiment, cold weather pushing demand higher, as well as growing investment in the paper market and recent geo-political concerns, were the main contributors to the strong market. Traded volumes of ICE Brent hit a record high in January and resulted in a

large premium of Brent over WTI, as WTI futures remained affected by ample stocks in Cushing, Oklahoma. The OPEC Basket stood at $96.93/b on February 9.

World economic growth remains unchanged at 4.5 per cent for 2010 and 3.9 per cent for 2011. OECD growth for 2011, now forecast at 2.3 per cent,

has improved due to the additional US stimulus which was introduced at the end of last year. The US is now expected to expand by 2.9 per cent and the Euro-zone was raised to 1.4 per cent. Growth for Developing Countries remained almost unchanged, with China growing at 9.7 per cent and 8.8 per cent and India at 8.0 per cent and 8.5 per cent in 2010 and 2011, respectively. Despite increased activity in the manufacturing sector, which has led to a broad-based improvement in global sentiment, significant challenges remain. The extraordinary sovereign debt levels and the high unemployment in the OECD, rising inflation rates, combined with the possibility of overheating in Developing Countries, constitute concerns that might influence the 2011 growth trend.

Winter petroleum product consumption increased, leading to an adjustment in the total world oil demand forecast for 2010 and 2011. Furthermore, a sudden increase in natural gas prices has discouraged power plants from fuel switching, not only in the OECD, but also in some parts of Asia.

Furthermore, sturdier industrial activity within the US and China, ignited by stimulus plans and government incentives, boosted demand. As a result, total world oil demand growth was revised up by around 0.2 mb/d for 2010 and 2011 to stand at 1.8 mb/d and 1.4 mb/d respectively.

Non-OPEC supply is expected to have increased by 1.1 mb/d in 2010, following a marginal upward revision, mainly due to adjustments to actual fourth quarter production data. In 2011, non-OPEC oil supply is forecast to increase by 0.4 mb/d following a minor upward revision. In January, total OPEC crude oil production averaged 29.72 mb/d, according to secondary sources, representing an increase of about 400 tb/d from the previous month.

Stronger heating oil demand due to colder-than-expected weather along with higher diesel demand has kept product market sentiment bullish. The sustained momentum in the middle distillate market has kept refining margins healthy, however expectations of lower demand for light distillates and fuel oil could start to exert pressure on refinery margins.

to $85-90/b in December, resulting in a monthly average of $92.83/b, up $4.27 or 4.8 per cent from the previous month and $16.82 or 22 per cent from January 2010.

OPEC sailings were steady in January at 23.6 mb/d. Dirty Spot freight rates declined in January due to plentiful tonnage supply, improved weather conditions, new Worldscale flat rates and lower tonnage demand. VLCC rates decreased 21 per cent, Suezmax dropped 41 per cent and Aframax declined 32 per cent in January.

Again, the continuous upward movement in the OPEC Basket was driven by a rally in crude oil futures prices, particularly those of Brent.

US commercial inventories rose around 11 mb in January after four consecutive months of decline. The build was divided between crude and products which increased by 7.9 mb and 3.3 mb respectively. At 1074.9 mb, US commercial oil stocks in January remained well above the historical norm.

The most recent data for December shows that commercial oil inventories in Japan declined by 3.1 mb, with products showing a drop of 7.1 mb, while crude continued to build, increasing by 4.0 mb. Preliminary indications show that commercial oil stocks dropped further by 4.2 mb in January.

The demand for OPEC crude in 2010 is estimated at 29.3 mb/d, around 0.2 mb/d higher than the previous report. With this adjustment, the demand for OPEC crude stood at about 0.2 mb/d higher than 2009.

In 2011, the demand for OPEC crude is expected to average 29.8 mb/d, up about 0.5 mb/d from 2010 and 0.4 mb/d above the previous assessment.

THE OPEC REFERENCE BASKET The OPEC Reference Basket maintained its momentum in January to move within a higher range of $90-95/b compared

Following this increase – the sixth month in a row – the OPEC Reference Basket stood at its highest level since the $96.85/b of September 2008.

All Basket components increased, particularly Brent-related crudes, which showed higher gains than the Basket and other components. African crudes – Saharan Blend, Es Sider, Bonny Light and Girassol – rose by between 5.3 per cent and 5.5 per cent. Bonny Light and Saharan Blend stood at the top of list with $98.10/b and $97.50/b respectively, after having gained more than $5/b each.

African crudes were supported by strong demand from European and Asian buyers as well as tight supply, particularly following disruptions in the North Sea in early January. Most March cargoes of Girassol were sold up to Dated Brent plus 30-50¢/b.

Middle Eastern crudes increased further as the market remained bullish after Oman traded at high premiums of around 55¢/b to Dubai quotes, supported by expectations that refiners from the US West Coast would look for alternative grades around the Pacific following the shutdown of the Trans-Alaska-Pipeline.

In addition to strong demand from Asian buyers, the naphtha crack reaching a 3-year record high and gasoil crack spreads standing at their strongest levels in two years also contributed to the bullishness of the Middle East crude oil market. However, Middle Eastern crudes came under pressure at the end of the month on the back of higher availability of prompt cargoes and weaker naphtha March-April, 2011

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MARKET REPORT

cracks, which fell to a four-month low. Middle Eastern grades were also pressured by lower premiums of rival ESPO, which fell from December record highs. At the end of the month, Oman cargoes were valued as low as minus 20¢/b to Dubai quotes, compared to plus 40-55¢/b previously. The widening Brent/ Dubai spread also continued supporting Middle East market sentiment by limiting the opportunities of arbitrage for African and Russian crudes to Asia.

Apart from Qatar Marine and Murban, which rose 4.0 per cent and 4.4 per cent respectively, the remaining Middle Eastern grades showed increases higher than the average of the Reference Basket, with Iran Heavy leading gains with 5 per cent, followed by Arab Light with 4.9 per cent and Basrah Light and Kuwait Export with 4.8 per cent each. Latin American crudes Merey and Oriente followed the same trend and increased further by 4.4 per cent and 2.2 per cent, supported by stronger demand from US West Coast 64

March-April 2011

refiners as the shipment of the Alaskan crude was interrupted in the second week of January following the shutdown of the Trans-Alaska-Pipeline. Latin American crudes weakened once Alaskan crude started flowing again through the pipeline, after repairs at the North Slope pumping station were made.

The OPEC Reference Basket moved beyond $95/b on the last day of January before standing at $97.71/b in the first week of February, following an upward trend of seven consecutive gains as market sentiment strengthened further.

OIL PRICES, US DOLLAR AND INFLATION The US Dollar weakened on average in January against all major currencies, compared to December levels. It fell by 1.1 per cent against the euro, by 1per cent versus the yen, 1 per cent compared to the pound sterling and 1.5 per cent compared to the Swiss franc.

With regard to the euro, the trading

range of the previous months of $1.30/€ to $1.40/€ was re-established and even touched the upper-level of the band at the beginning of February, when concerns about the situation in Egypt reached their peak. The average for January was $1.3357/€ compared to $1.3219/€ a month earlier. The most recent successful debt auctions of peripheral Euro-zone member countries managed to calm fears and supported the euro. Consensus forecast for the end of February now stands at $1.308/€compared to the current level of $1.367/€. While the US-dollar may strengthen in the mid-term, the fluctuation of the Euro versus the USdollar is expected to remain high.

Furthermore, higher inflation in the Eurozone might lead to an earlier rate hike than in the US, which some ECB members have already argued for, while such a move does not seem to be imminent.

(Courtesy: OPEC Monthly Oil Market Report)

COMPANY REPORT

A MULTIPLE RANGE OF SERVICES Advanced Oilfield Technology Co LLC (AOTC), Muscat, is a member of the Al Sulaimi Group which has a wide spectrum of operations spread across Oman and also has operations in UAE, Qatar, Saudi Arabia and other parts of the globe

T Sukumar, Asst General Manager, Fabrication, AOTC

AOTC has the expertise to provide multiple engineering services starting from design, supply, fabrication, painting, site delivery and erection of process equipment, tanks, pressure vessels, skids, flare stacks, overhead cranes and other lifting equipments. The company also possesses certifications of quality management system ISO 9001-2008 and 66

March-April 2011

a number of ASME certifications for design, fabrication and supply of pressure vessels (‘U’ stamp), power boiler (‘S’ stamp), pressure piping (‘PP” stamp) and National Board awarded ‘R’ Stamp for repair of all the above equipment.

“My association with this company has shown me that it has a vibrant

work culture combined with a high level of expertise. This potent mixture combined with the opportunities and challenges that are ever present on a day-to-day functioning like facing and meeting commitments at all stages of a project cycle, from design through to construction make it a truly enriching experience. Each construction project is

AOTC’s facilities at Rusayl

different due to the client’s brief, design choices, specifications, site and weather conditions and changes in the availability and quality of market resources,” says T Sukumar, Asst General Manager, Fabrication, AOTC. “With the recent delay and cancellation of numerous projects in other parts of GCC, contractor and manpower availability are likely to increase. Based on our recent experience, this could result in a significant increase in contractor interest in projects and consequently more bids, resulting in a very competitive environment. In such an environment, turnkey EPC contracting will be the viable option for us in the Middle East in the near future. We would prefer becoming an EPC contractor of repute in Oman to start with and then we would like to grow from there,” he adds.

in Oman. AOTC also has a 15,000 sq m facility in Ghala industrial estate which is purely for machine shop related activities.

At Rusayl the company is equipped with infrastructure facilities to fabricate any kind of pressure vessels, structures, piping and storage tanks. We also have the expertise and required qualifications for fabricating various metallurgies like CS, SS, DSS, Hastelloy and Inconel.

AOTC also provides services related to supply, installation and commissioning of standard and explosion-proof EOT cranes, hoists and gantries. A few of its valuable clientele who have contributed to its growth in no particular order are:

(F) Doosan Heavy Industries & Construction Co LTD (G) Occidental of Oman (H) J.Ray Mc Dermott Middle East INC (I) Frames Separation Technologies B.V (J) Galfar Engineering & Contracting SAOG (K) Dodsal Engineering & Construction LLC

(A) Petroleum Development Oman (B) Oman Refineries and Petrochemicals Co LLC. (C) Oman LNG

The company’s facilities include a stateof-the art 15,000 sq m fabrication shop at Rusayl Industrial Estate near Muscat

(E) Petrofac Engineering & Construction International LTD

(D) Oman India Fertilizers Company SAOG (OMIFCO)

(L) Gulf Petrochemical Services & Trading LLC “Our explosive growth and expansion into associated and ancillary services has been due to the unstinted and unflinching support provided by our management at the Al Sulaimi Group,” says Sukumar.

March-April, 2011

67

ADVERTORIAL

“AHLAN WA SAHLAN”

AWAKEN TO ADVENTURE Enter a world of discovery, luxury and comfort at the Desert Nights Camp, Wahiba Sands…

Nestled amidst the dunes of Wahiba Sands, Desert Nights Camp is the ideal place to enjoy the beauty of Oman in style. Escape the chaos of city life into the tranquillity of the desert. Be it a Corporate conference, team building workshop, romantic getaway or a family holiday, Desert Nights Camp is the perfect destination.

Desert Nights Camp comprises of 26 luxurious Bedouin styled tents giving you the ultimate desert experience.

Guests are provided with air-conditioned comfort in luxury tents comprising of a living room, bedroom and an en-suite bathroom. An open air lounge provides beautiful panoramic views of the desert and is great for cosy sit-outs.

Take a camel safari, brave the sand dunes on a quad bike or simply sit back and gaze at the stars. Once the sun goes down, there’s a traditional majlis where you can unwind with friends and family, enjoy some dates and khawa while listening to some enchanting music.

Later sit around the campfire and have a relaxed, traditional meal and play some board games until you’re ready to call it a night. Whatever you chose to do, we promise, you won’t be disappointed.

The camp provides guests with the finest traditional fare. You can opt to dine under the stars and make the most of your desert experience or dine in luxury in air conditioned comfort. From the 70

March-April 2011

traditional “Shuwa”, a traditional Omani lamb dish, to delectable kebabs, the food is sure to tingle your taste buds.

The Two Dunes Restaurant is where the main meals are served. With a cosy ambience and unparalleled service, this restaurant can seat around 64 people and is tastefully furnished with traditional Omani wooden furniture. The restaurant offers a wide range of cuisines including Indian and Arabic. Special meals are also available on request. A local Bedouin band provides entertainment for the evening, thus setting the ambience for a truly Arabian evening.

The Oasis bar offers a wide range of aperitifs to help you unwind. Whether you want to watch your favourite sporting action on satellite TV or simply relax, the Oasis Bar is the place to be.

Brave enough for the sand dunes? You’ll have to find out for yourself. So strap yourself in and get set to enjoy the ride of a lifetime as experienced drivers take you whizzing across the dunes of the

Wahiba Sands. It’s dune bashing at it’s best! Use this opportunity to venture several kilometres into the pristine desert and take a moment to gaze at the endless vistas of red gold dunes. If you’re feeling more adventurous, then hire a quad bike and quench your thirst for adventure. Even if you’ve never driven a bike before, you can learn the ropes in a matter of minutes. Experience the sheer exhilaration of riding up and down the ever shifting sands of the dunes and enjoy a crazy adrenaline rush.

During the morning hours, guests can also enjoy fun a camel ride around the camp site.

A mere two hour drive from Muscat, the camp is situated just about 11 km from the small town of Al Wasil. Once you leave Muscat, follow the Sultan Qaboos road past the airport and take the Nizwa Highway. Follow the road towards Sur for 150 km until you pass Ibra and reach Al Wasil. A dirt road just 500 m from Al Wasil will lead you to the camp. Follow the special sign posts to ensure that you are on the right track.

APR

3 10

MEOW WEEK 9-14 April 2011 Kingdom of Bahrain

17 24

4 11 18

25

5 12 19

26

IL 2 01

1

6 13 20

27

1

7 14 21

28

2

8

9

15 22

29

16 23

30

REGIONAL ROUND-UP

Occidental to join Adnoc in developing Shah Gas Field Occidental Petroleum Corporation has been selected by the Government of Abu Dhabi to participate in the development of Abu Dhabi’s Shah Gas Field, one of the largest gas fields in the Middle East.

Under the terms of the new agreement in principle, Oxy will hold a 40 per cent participating interest in a 30-year contract.

The Abu Dhabi National Oil Company (Adnoc) holds the remaining 60 per cent interest. “We are honoured that the Abu Dhabi Government has chosen Oxy to participate in this major gas project,” said Dr. Ray R. Irani, Occidental’s Chairman and Chief Executive Officer. “Production at the Shah Field will be an important future resource to fill the rapidly expanding regional demand for gas.”

“This is another important step in the implementation of our growth strategy and in our relationship with the Emirate of Abu Dhabi. The development of this field under the agreement provides an exciting opportunity to create value for the people of Abu Dhabi and for our stockholders,” said Dr. Irani.

The Shah gas project involves development of high-sulfur content reservoirs within the Shah field, located onshore approximately 180 km (110 miles) southwest of the city of Abu Dhabi. The project will involve development of several gas gathering systems, construction of new gas and liquid pipelines and processing trains to process 1 billion cubic feet of high-sulfur content gas. This is anticipated to produce approximately 500 million cubic feet per day of network gas and a significant amount of condensate and natural gas liquids. Adnoc is already in the process of developing the field with the majority of project engineering procurement and construction contracts already awarded. Production from the field is scheduled to begin in 2014.

72

March-April 2011

Emarat honours distinguished employees for their dedication Emirates General Petroleum Corporation (Emarat) recently held its “Star of the Month” programme, in which it felicitated outstanding employees. Abdulraoof Abdul Aziz, Manager, Dealer Sales Operations at Emarat, praised the corporation’s employees at various stations in Dubai and the Northern Emirates, for their honesty, behaviour and dedication to their assigned duties. Abdulla Hassan Al Noman, Manager, Retail Sales Operations was present at the honouring ceremony.

Abdulraoof said, “We are committed to move ahead with our development and product and service improvement strategy. For that, we will continue to monitor our performance and analyse any changes in the levels of operations according to our set standards and specifications. This endeavour is in line with our goals and objectives to maintain a reputable, highly regarded and upright image of the Corporation in the eyes of our customers and partners.”

He called on other employees at the Corporation’s service stations to exert similar efforts to obtain recognition. He asserted that the key to success is the establishment of harmony between employees at the workplace.

RasGas sets new safety record RasGas Company celebrated the remarkable safety achievement of its Drilling Shorebase operations, which has now clocked up 14 years without a lost time incident (LTI), and 10 years without a recordable incident. Speaking at a special ceremony to mark the occasion in Ras Laffan, Hamad Rashid Al Mohannadi, RasGas Managing Director, said, “This is a truly amazing achievement by our Drilling Shorebase operations, which has not recorded a lost time incident since operations began in 1997. The Shorebase operations has also gone 10 years without a single recordable incident. This impressive record shows the strength and depth of the team’s commitment to achieving a safe working environment. On behalf of RasGas I would like to express my appreciation to everyone who contributed to this outstanding safety record.”

Ron Gilliland, RasGas Subsurface Group Manager, also attended the company celebrations.

Gilliland said, “Safety is a top priority at RasGas. We expect all our employees and contractors to make safety a primary focus in their daily work activities. At RasGas we believe that a job’s not well done unless it’s done safely.”

Baker Hughes opens Saudi Arabia drill bit manufacturing plant Baker Hughes’ new drill bit manufacturing plant in Saudi Arabia is fully operational and delivering industry-leading polycrystalline diamond compact (PDC) bits to the Saudi Arabian and Middle East markets. This modern drill bit plant consolidates all the manufacturing processes for PDC bits in Saudi Arabia.

At full capacity, the facility, an integral part of the Baker Hughes super base in Dhahran, will employ approximately 80 people.

“Proximity to markets and customers is critical to ensuring client alignment and fitfor-purpose products,” said Art Soucy, Vice President of Supply Chain for Baker Hughes.

“Saudi Arabia and the Middle East are key markets for Baker Hughes and, after several

to diversify our manufacturing footprint to better serve our global client base.”

Khaled Nouh, President of Middle East Operations for Baker Hughes, said, “Baker Hughes has provided solutions to clients in the Middle East, and specifically Saudi Arabia, for over 70 years – dating back to the drilling of the famous first discovery well, Dammam #7.

years of successfully assembling drill bits in Saudi Arabia, we took the next logical step of manufacturing bits from raw materials. The investment underscores our commitment

Topaz commences planned expansion into Brazil Topaz Energy and Marine (Topaz), a leading international oilfield services group, has agreed to acquire two offshore supply vessels in Brazil based on a total delivered price of $40.4 million. The vessels, Sea Otter and Sea Marten, were built in 2007 and 2010 and are both Anchor Handling Tug Supply vessels (AHTSV). AHTSV are specialised vessels used in support of offshore oil and gas activity. The vessels are employed on three year time charter contracts with Petrobras, the semipublic Brazilian oil company and the largest in Latin America. Fazel Fazelbhoy, Chief Executive Officer of Topaz Energy and Marine, said, “Brazil offers significant growth opportunity for Topaz, and these vessel acquisitions provide us with an excellent first entry point into the buoyant offshore market. We will continue to pursue growth through partnerships, vessel acquisitions and new build orders. This acquisition is in line with the next steps of our declared business strategy and builds upon extensive preparations to enter the Brazilian market.” Topaz Energy and Marine is a provider of offshore support vessel and engineering services. It has a modern and diversified fleet of 100 vessels operating primarily in the MENA and Caspian regions.

Tasweeq signs milestone LPG contract with Thailand Qatar International Petroleum Marketing Company (Tasweeq) has signed an agreement with Petroleum Authority of Thailand (PTT), to supply a significant quantity of Liquefied Petroleum Gas (LPG). The contract was signed between Saad Al Kuwari, CEO, Tasweeq and Sarakorn Kulatham, Head of Delegation, PTT with senior representatives from both companies. In line with its mission, Tasweeq is committed to diversify Qatar's petroleum products into new markets along with improving close ties with existing clientele. Liquefied Petroleum Gas (LPG) is a versatile global commodity that is produced from natural gas and crude oil. LPG is used for heating and as feedstock for petrochemicals among other uses. Qatar is now considered as one of the largest producers of LPG in the world and Thailand is a growing market for LPG. Speaking at the signing ceremony Al Kuwari said, "This contract is a testament of Tasweeq's attempt to increase its market share for Qatar's LPG and other petroleum products. I am confident that Tasweeq has added a valuable market to its portfolio, such as the Thai market, in line with Tasweeq's vision of delivering Qatar's energy to the globe reliably, efficiently and responsibly."

We have demonstrated our commitment to the Saudi market, opening our new integrated base last year and now the new drill bit manufacturing plant, which offers further employment opportunities for the Saudi workforce. We welcome this opportunity to be part of Saudi Aramco’s continued leadership in developing the oil and gas reserves of Saudi Arabia.”

Jacobs receives contract from Luberef Jacobs Engineering Group has been awarded a contract from Saudi Aramco Lubricating Oil Refining Co. (Luberef) to provide front-end engineering design (FEED) services to support an expansion project at its lube oil refinery in Yanbu, Saudi Arabia.

Officials did not disclose the contract value.

However, they noted that based on the outcome of the feasibility study the overall expansion project cost was estimated at approximately $1 billion.

Under the agreement, Jacobs is providing FEED services for both inside battery limits (ISBL) and outside battery limits (OSBL).

The ISBL services involve a new lube oil unit (hydrocracking, iso-dewaxing/ hydrofinishing), a new sulfur complex, and an expansion of the propane de-asphalting unit; the OSBL services involve all utilities and infrastructure. Jacobs’ Leiden, The Netherlands office is managing the overall project, while the infrastructure and buildings services are being executed by Jacobs’ Al Khobar, Saudi Arabia office.

Additionally, Jacobs’ office in Mumbai, India is executing selected design elements.

March-April, 2011

73

REGIONAL ROUND-UP

Picture courtesy: Dana Gas

Dana Gas posts 80 per cent rise in profits for 2010

Dana Gas, the Middle East’s largest regional private sector natural gas company, has announced its preliminary financial results for the year ended 31st December 2010. Revenue from the sale of hydrocarbons increased to AED1785 million, with gross profit reaching AED781 million. These figures represent increases of 40 per cent and 79 per cent respectively, compared to 2009 and reflect the Company’s continued production growth in Egypt and from the Khor Mor field in the Kurdistan Region of Iraq. Earnings before interest, tax, depreciation, amortisation and exploration was AED1034 million.

In 2009, EBITDAX was AED1440 million due to a one-off gain reported in 2009 from the sale of a 10 per cent interest in the Kurdistan Region of Iraq assets. The resulting full year net profit for Dana Gas in 2010 was AED158 million compared to AED 88 million in 2009, an 80 per cent increase which reflects growing production and higher oil prices especially in the fourth quarter of 2010.

74

March-April 2011

Latest double-hull supertanker unveiled

Vela International Marine’s Homam Star, the fourth double-hull very large crude carrier (VLCC) ordered from Daewoo Shipbuilding and Marine Engineering, has begun service, after a naming ceremony at the South Korean shipyard. Mazen Snobar, Saudi Aramco’s Executive Director of Industrial Services and Vela board member, presided over the naming ceremony The ceremony was attended by more than 55 guests, including Daewoo Shipbuilding Senior Executive Vice President W.K. Ki, Vela Technical and Support Department Manager Saud Bukhari and Project Site Manager Khalid Alhammad.

Mohammed S. Al-Gusaier, Vela President and CEO, said the Homam Star is the last VLCC to be built by Vela under the single-hull replacement programme, which started in 2000. It is built to the latest shipbuilding rules and regulations and to Vela’s standards of safety, reliability and the environment, he said.

Similar to its sister vessels, the Homam Star is built with many fuel-saving and emissionsreduction features, including the main engine power plant shaft generator, clean notation and the sludge-conditioning system.

Export production tests at Tawke initiated DNO International (DNO) has confirmed that export production tests at the Tawke oil field in the Kurdistan Region of Iraq has commenced. At present, the tested volumes are around 10,000 bopd. The technical tests are being conducted in close coordination with the Kurdistan Regional Government and the Northern Oil Company to ensure a responsible and secure start up of exports and to further ramp up to Tawke’s current capacity of 50,000 bopd in the near future. DNO

is a fast track, full-scale E&P Company. DNO serves as operator and active license partner in several production and exploration assets.

The company explores for oil and natural gas and acquires license interests in UK, Yemen, Kurdistan Region of Iraq, Equatorial Guinea and Mozambique, both frontier areas and regions with established oil and natural gas production and infrastructure.

Honeywell’s UOP to collaborate with King Fahd University of Petroleum and Mining

Picture courtesy: Honeywell

UOP LLC, a Honeywell company, will collaborate with the King Fahd University of Petroleum and Minerals (KFUPM) in Dhahran, Saudi Arabia, for the development of catalytic processes for petrochemicals production. Honeywell’s UOP and the KFUPM have signed a five-year agreement that will allow university professors and researchers to collaborate with company scientists on catalyst development and processes for aromatics production. Aromatics are a critical raw material used in the production of petrochemicals such as plastics and detergents. Honeywell’s UOP is the world’s leading licensor of process technology for the production of aromatics and has licensed more than 725 individual process units for the production of aromatics to date.

ABB wins $53 million substation order to power Saudi Arabia’s largest university distributing power at 132 kV and 13.8 kV. The turnkey order includes civil works and auxiliary systems as well as gas-insulated switchgear (GIS), transformers, protection equipment and substation automation.

Picture courtesy: ABB

“This substation will help meet the growing demand for electricity and support the expansion of Najran University,” said Peter Leupp, Head of ABB’s Power Systems division. ”ABB’s compact GIS technology will ensure reliability and at the same time minimise the substation footprint.”

ABB, the leading power and automation technology group, has won an order worth $53 million from Najran University, Saudi Arabia’s biggest educational institution, for a substation to help ensure reliable power supplies for the campus. The order was booked in the fourth quarter of 2010. ABB will be responsible for the design, supply, installation and commissioning of a 380 kV (kilovolt) substation capable of

Sabic ships first load of acetone

The university is located in Najran, a city in the south of Saudi Arabia. It was founded in 2006 and covers an area of 18 million square meters. The university complex will house two campuses including 25 colleges with an overall capacity of 45,000 students. It will also host administrative buildings, a medical city, a research center, sports facilities and housing accommodation for faculty, staff and students.

Saudi Basic Industries Corporation’s (Sabic) affiliate, Saudi Kayan Petrochemical Company (Saudi Kayan), has shipped its first export production of acetone, a part of the phenolic chain used to make methyl methacrylate (MMA), Polycarbonate (PC), solvents, adhesives and paints. The initial shipment of some 1,600 metric tonnes from the Port of Jubail, on Saudi Arabia’s Gulf Coast, sets a record also as the first shipment of acetone from the Middle East. The company has said that the shipment is bound for manufacturing customers in the Indian market, and that some of the acetone produced at the plant will be also used by other units at Saudi Kayan to produce high-value PC. Sabic’s Performance Chemicals Strategic Business Unit (SBU) reports the rated capacity of the acetone plant at Saudi Kayan at 140,000 metric tonnes per year. The giant new petrochemical complex at Jubail, will, when completed, have a combined capacity of more than 5.5 million metric tonnes per year of petrochemical products, some of which will feed further downstream business growth in Saudi Arabia.

Sabic Vice Chairman and CEO Mohamed Al Mady noted that the company is diversifying its product portfolio in pursuit of long-term profitable and sustainable growth. Al Mady also said, “The way we are introducing products will not only help Sabic, but also our customers sell products that are sustainable.” He also noted that the Performance Chemicals SBU would be one of the main drivers of Sabic’s diversification strategy as the company implements its 2020 vision of being the world’s preferred leader in chemicals. Sabic owns 35 per cent of Saudi Kayan, with 20 percent owned by Al-Kayan Petrochemical Company, and 45 per cent by public shareholders.

GLOBAL OIL PRODUCTION

Oil: Production* Thousand barrels daily

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

US

7733

7669

7626

7400

7228

6895

6841

6847

6734

7196

Canada

2721

2677

2858

3004

3085

3041

3208

3320

3268

3212

Mexico

3450

3560

3585

3789

3824

3760

3683

3471

3167

2979

13904

13906

14069

14193

14137

13696

13732

13638

13169

13388

819

830

818

806

754

725

716

699

682

676

1268

1337

1499

1555

1542

1716

1809

1833

1899

2029

Colombia

711

627

601

564

551

554

559

561

616

685

Ecuador

409

416

401

427

535

541

545

520

514

495

Total North America Argentina Brazil

Peru

100

98

98

92

94

111

116

114

120

145

Trinidad & Tobago

138

135

155

164

152

171

174

154

149

151

3239

3142

2895

2554

2907

2937

2808

2613

2558

2437

130

137

152

153

144

143

141

143

140

141

6813

6722

6619

6314

6680

6899

6866

6636

6678

6760

Azerbaijan

282

301

311

313

315

452

654

869

915

1033

Denmark

363

348

371

368

390

377

342

311

287

265

Venezuela Other S. & Cent. America Total S. & Cent. America

Italy

95

86

115

116

113

127

120

122

108

95

744

836

1018

1111

1297

1356

1426

1484

1554

1682

Norway

3346

3418

3333

3264

3189

2969

2779

2550

2451

2342

Romania

131

130

127

123

119

114

105

99

98

93

6536

7056

7698

8544

9287

9552

9769

9978

9888

10032

144

162

182

202

193

192

186

198

205

206

2667

2476

2463

2257

2028

1809

1636

1638

1526

1448

177

171

171

166

152

126

125

114

114

107

Kazakhstan

Russian Federation Turkmenistan United Kingdom Uzbekistan Other Europe & Eurasia

465

465

501

509

496

468

455

448

425

400

14950

15450

16289

16973

17579

17541

17595

17810

17572

17702

Iran

3855

3892

3709

4183

4248

4234

4286

4322

4327

4216

Iraq

2614

2523

2116

1344

2030

1833

1999

2143

2423

2482

Kuwait

2206

2148

1995

2329

2475

2618

2690

2636

2782

2481

Oman

959

960

904

824

786

778

742

715

754

810

Qatar

757

754

764

879

992

1028

1110

1197

1378

1345

9491

9209

8928

10164

10638

11114

10853

10449

10846

9713

548

581

548

527

495

450

435

415

398

376

2547

2455

2260

2553

2664

2753

2971

2900

2936

2599

450

455

457

448

420

416

380

345

304

298

48

47

48

48

48

34

32

35

33

37

23475

23025

21729

23299

24797

25258

25497

25156

26182

24357

Algeria

1578

1562

1680

1852

1946

2015

2003

2016

1993

1811

Angola

746

742

905

870

1103

1405

1421

1684

1875

1784

88

81

72

67

89

82

87

82

84

73

Total Europe & Eurasia

Saudi Arabia Syria United Arab Emirates Yemen Other Middle East Total Middle East

Cameroon 76

March-April 2011

Thousand barrels daily Chad

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

-

-

-

24

168

173

153

144

127

118

Rep. of Congo (Brazzaville)

254

234

231

215

216

246

262

222

249

274

Egypt

781

758

751

749

721

696

697

710

722

742

91

177

200

244

346

376

364

376

350

307

Gabon

327

301

295

240

235

234

235

230

235

229

Libya

1475

1427

1375

1485

1623

1745

1815

1820

1820

1652

Nigeria

2155

2274

2103

2238

2431

2499

2420

2305

2116

2061

Sudan

174

217

241

265

301

305

331

468

480

490

Tunisia

78

71

74

68

71

73

70

97

89

86

Other Africa

56

53

63

71

75

72

66

84

79

79

7804

7897

7990

8386

9324

9921

9925

10238

10219

9705

Australia

809

733

730

624

582

580

554

567

556

559

Brunei

193

203

210

214

210

206

221

194

175

168

China

3252

3306

3346

3401

3481

3627

3684

3743

3901

3790

India

726

727

753

756

773

738

762

769

768

754

Indonesia

1456

1389

1289

1183

1129

1087

1017

969

1031

1021

Malaysia

735

719

757

776

793

759

747

763

768

740

Thailand

176

191

204

236

223

265

286

305

321

330

Vietnam

328

350

354

364

427

398

367

337

317

345

Other Asia Pacific

200

195

193

195

235

286

305

320

340

328

7874

7813

7836

7750

7853

7946

7942

7968

8175

8036

74820

74813

74533

76916

80371

81261

81557

81446

81995

79948

of which: European Union #

3493

3285

3339

3128

2902

2659

2422

2388

2222

2082

OECD

21521

21303

21430

21165

20766

19861

19458

19140

18414

18390

OPEC

31072

30544

29132

30877

33592

34721

34920

34604

35568

33076

Non-OPEC £

35734

35608

35869

35540

35371

34700

34321

34046

33602

33671

8014

8660

9533

10499

11407

11839

12316

12795

12825

13202

Equatorial Guinea

Total Africa

Total Asia Pacific Total World

Former Soviet Union

Courtesy: BP Statistical Review of World Energy 2010

Oil: Production*

* Includes crude oil, shale oil, oil sands and NGLs (the liquid content of natural gas where this is recovered separately).

Excludes liquid fuels from other sources such as biomass and coal derivatives. ^ Less than 0.05.

Less than 0.05%. # Excludes Estonia, Latvia and Lithuania prior to 1985 and Slovenia prior to 1991. £ Excludes Former Soviet Union.

Notes: Annual changes and shares of total are calculated using million tonnes per annum figures.

Growth rates are adjusted for leap years.

March-April, 2011

77

GLOBAL NEWS

Picture courtesy: Shell

Qatar Petroleum and Shell sign MoU

Picture courtesy: BP

BP joins Marine Well Containment Company

BP has joined Chevron, ConocoPhillips ExxonMobil and Shell as a member of the Marine Well Containment Company (MWCC). BP brings its marine response experience and equipment to the MWCC. “Last autumn we made an ongoing commitment to share what we’ve learned and the experience we gained during the Deepwater Horizon incident response with the world,” said James Dupree, Regional President for BP’s U.S. Gulf of Mexico business.

“We have shared our insights with regulators, participated in public forums, worked directly with industry bodies and published our lessons learned. Joining the MWCC and bringing our capabilities and equipment to an interim response system is another important part of that commitment.”

Among the equipment BP will bring to the MWCC are riser, manifold and containment systems deployed for use during the Deepwater Horizon response.

In addition to the transfer of equipment, BP also will bring to MWCC the company’s information and supporting records, drawings, permits, licenses and other technical information it developed throughout the spill response.

80

March-April 2011

Qatar Petroleum and Shell have signed a Memorandum of Understanding to jointly study the development of a major petrochemicals complex in Ras Laffan Industrial City, Qatar.

The agreement was signed in Doha by His Excellency Abdulla bin Hamad Al Attiyah, Deputy Prime Minister and Minister of Energy and Industry of the State of Qatar, and Peter Voser, Chief Executive Officer of Shell. The scope under consideration would include a mono-ethylene glycol plant of up to 1.5 million tonnes per annum using Shell’s proprietary OMEGA (Only MEG Advantaged) technology and other olefin derivatives to yield over 2 million tonnes of finished products.

HE Minister Al-Attiyah said, “This agreement represents an important step towards implementing the vision of His Highness the Emir, Sheikh Hamad bin Khalifa Al Thani, regarding the optimal utilisation of the country’s natural gas resources and to expand the downstream industries in Qatar. Together with Shell we aim to study and develop a major petrochemical complex which aligns with our plans of increased petrochemical production and diversification of our product portfolio.”

Peter Voser said, “I am delighted that we have the opportunity to further expand our partnership with Qatar Petroleum in petrochemicals. Shell has over 80 years of experience in the global chemicals industry, playing a major part in its growth worldwide and developing some of its key manufacturing processes. This new project will combine Shell’s experience and technology with the ambition of the State of Qatar to create further value from its natural gas resources.”

In Qatar, Qatar Petroleum and Shell are together building Pearl Gas to Liquids (GTL) and Qatargas 4 LNG, two of the largest projects in the world in Ras Laffan Industrial City.

Chevron reports fourth quarter net income of $5.3 billion Chevron Corporation has reported earnings of $5.3 billion ($2.64 per share – diluted) for the fourth quarter 2010, compared with $3.1 billion ($1.53 per share – diluted) in the 2009 fourth quarter. Results in the 2010 period included

gains of nearly $400 million from downstream asset sales. Foreign currency effects decreased earnings in the 2010 quarter by $99 million, compared with a decrease of $67 million a year earlier.

The 6th Annual Gulf Exhibition for Building and Construction

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GLOBAL NEWS

New discoveries for Total in Congo Total has had new discoveries in Bilondo Marine 2 and 3 wells (BILDM-2 and BILDM-3), drilled in a water depth of 800 metres in the central area of the MohoBilondo license, approximately 70 kilometres offshore the Republic of the Congo. They follow the successful exploration wells Moho Nord Marine 1 and 2 drilled in 2007. Bilondo Marine 2 and 3 were drilled to a total depth of around 1,800 metres in the tertiary series and flowed successfully. The Bilondo Marine 2 and 3 wells encountered a gross reservoir of 77 and 44 metres respectively. Neither well encountered water.

The latest discoveries confirm Total’s confidence that an additional development hub is emerging as a direct extension of phase 1 which is already producing in the southern part of the Moho-Bilondo license. This first phase, brought on stream in 2008, was the first ultradeepwater field to be developed in the Republic of the Congo. The field is currently producing 90,000 barrels per day from 13 subsea wells tied into a floating production unit (FPU).

ConocoPhillips and the NEED project collaborate ConocoPhillips and the National Energy Education Development (NEED) Project will host 26 energy education workshops for K-12 educators during 2011. The workshops provide America’s teachers with classroom materials emphasising all forms of energy, energy efficiency and conservation in order to improve and expand their students’ energy knowledge.

ConocoPhillips’ sponsorship of NEED began in 2008. Over the past three years, ConocoPhillips and NEED have provided training and resources to approximately 3,000 teachers, who in turn have reached more than 290,000 students with the education materials.

This year, more than 1,000 educators are expected to participate in the one-day workshops in order to gain knowledge and resources to teach about energy in their classrooms. Each workshop participant receives state-correlated curriculum guides and hands-on experiments that spark innovative thinking and encourage a creative dialogue about today’s energy challenges.

“The NEED Project is honoured to have ConocoPhillips as a partner in energy education. An understanding of energy is fundamental to making important energy decisions today and in the future,” said Mary Spruill, Executive Director of the NEED Project.

BP resumes dividend payments, targets investment on delivering value through long term growth

Honeywell has announced it received a two-year extension to its contract with CPS Energy, for managing, installation and support services for the utility’s Peak Saver demand response programme. The programme – available to residential, multi-family, and small commercial customers in the San Antonio, Texas, area – helps decrease electricity use when demand on the grid and production costs are at their highest. CPS Energy is able to stabilise fuel costs by reducing the need for additional power plants. In addition, participating homeowners receive a Honeywell UtilityPRO(R) touchscreen programmable thermostat, which can cut day- to-day energy costs up to 10 per cent or more.

82

March-April 2011

Picture courtesy: BP

Honeywell and CPS Energy expand Peak Saver Demand Response Programme

BP plans to resume the payment of quarterly dividends, which were suspended in June 2010 following the oil spill in the Gulf of Mexico.

It also set out its strategic agenda to deliver higher value for shareholders through increased investment in new access and long-term growth opportunities and more active portfolio management, which will underpin a return to a progressive dividend policy. Consistent with this agenda and aligned with changing trends in global demand, the company also announced plans to divest half of its US refining capacity.

Beyond this, the company will set out its agenda to rebuild its reputation and deliver sustainable value growth for its shareholders.

“2010 will rightly be remembered for the tragic accident and oil spill in the Gulf of Mexico and it is clear that as a result BP is a company in transition. I am determined that we will emerge from this episode as a company that is safer, stronger, more sustainable, more trusted and also more valuable,” said BP Group Chief Executive Bob Dudley.

Maersk Oil to buy Devon Energy’s 15 per cent interest in Angola Block 16 Maersk Oil, a fully-owned subsidiary of A.P. Møller – Mærsk A/S, has agreed to acquire a 15 per cent interest in Block 16 in Angola from Devon Energy for an initial payment of $70 million and future contingent considerations.

The agreement is subject to closing conditions including government approval. Maersk Oil already operates Block 16, which includes the Chissonga discovery. Maersk Oil’s interest in the block would increase to 65 per cent, with Sonangol (20 per cent) and Odebrecht (15 per cent) as partners.

“Acquiring Devon Energy’s interest in the block will provide Maersk Oil further materiality in Angola, just as the evaluation work on the Chissonga discovery gathers pace,” said Lars Nydahl Jorgensen, Head of Exploration at Maersk Oil. “It shows our confidence in the prospectivity of Block 16 and Angola as a whole.” Maersk Oil is in the process of analysing the results from wells drilled at the Chissonga discovery to determine whether it is commercial and if further appraisal drilling is needed.

Eni named the best international company for online financial and corporate communications Eni has been named the leading international company for online financial and corporate communications, in the fourteenth edition of Hallvarsson & Halvarsson’s survey of major international companies operating in 28 different industries. This year, Eni has set a double record in the survey which is acknowledged as the widest field of research on online financial and corporate communications (950 companies assessed, 571

professionals interviewed and 127 evaluation criteria adopted). For the third year in a row, Eni ranks first in the H&H Webranking Europe 500, consisting of Europe’s top 500 listed companies for market capitalisation in the FT Europe 500 ranking. Furthermore, Eni also tops the new H&H Webranking Global 100, which is made of the major 100 international listed companies for market capitalisation in the FT Global 100.

Cobalt International Energy awarded block in Angola Cobalt International Energy, has been conditionally awarded a 40 per cent working interest and has been indicated as operator of Block 20 offshore Angola. Eight other companies submitted bids to obtain a working interest in the block as part of Angola’s Pre-salt Licensing Bid Round.

The respective successful companies will begin to work with Sonangol, E.P., Angola’s national oil company, to negotiate definitive agreements that will govern the exploration, development and production operations on the awarded blocks.

Cobalt’s Block 20 award will not be final until the definitive agreements have been executed. Cobalt

understands that such agreements are targeted to be finalised by the end of the second quarter of 2011.

“Cobalt is extremely pleased to have reached this milestone in our efforts to capture a working interest and indicated operatorship of Block 20” said Joseph H. Bryant, Cobalt’s Chairman and Chief Executive Officer. “Given our interests in Blocks 9 and 21, access to Block 20 would create an expanded operated position for Cobalt in the heart of Angola’s highly prospective Presalt play and, if awarded, will offer a tremendous value creation opportunity for our shareholders.”

Statoil had a meeting with Petroleum Safety Authority Norway (PSA), where well and the reservoir conditions, and updated plans for relief wells at the Gullfaks field were discussed.

All North Sea wells are required to have two independent barriers to secure the integrity of the wells. As announced earlier by the company, 20 Gullfaks wells were shut down as a precautionary measure where there was

Picture courtesy: Statoil

Safety measures at Gullfaks fields a suspicion of weakened integrity in the wells. At the meeting, the PSA were given information about the status of these wells and Statoil’s further plans.

“The wells will now be examined in detail to evaluate their integrity,” says Gunnar Nakken, Vice President for Gullfaks operations. “If it turns out that there is a deficiency in the barriers, we will act on this and repair them. The alternative is a permanent shut-down of the wells.”

March-April, 2011

83

GLOBAL NEWS

Kitimat LNG partners Apache Canada Ltd. (Apache Canada) and EOG Resources Canada Inc. (EOG Canada) have agreed to purchase the 50 per cent interest in the Pacific Trail Pipelines Limited Partnership (PTPLP) they do not own from Pacific Northern Gas Ltd. (PNG) for $50 million.

Apache Canada and EOG Canada will pay PNG $30 million on closing - expected by the end of February - and a second payment of $20 million when the purchasers decide to proceed with construction of the Kitimat liquefied natural gas (LNG) export facility.

“Acquiring the PTP is an important step in building a comprehensive system that will enable Apache and EOG to tap Asian markets for our abundant natural gas resources in the Horn River Basin and elsewhere in Western Canada,” said Janine McArdle, president of Kitimat LNG.

Maersk Oil acquires Zero Emission technology rights Maersk Oil, has acquired licences to Clean Energy System’s Oxy-Fuel technology that allows zero-emission power generation in combination with oil and gas projects.The Oxy-Fuel technology uses pure oxygen to combust natural gas or other fuels to produce water, electricity and carbon dioxide (CO2). Water and power can be provided to consumers, while the captured CO2 can be used for Enhanced Oil and Gas Recovery projects, ensuring a zero emission operation.

84

March-April 2011

Chevron to build lubricants plant Chevron Corporation has said that Chevron Lubricants will commence construction of a lubricants manufacturing facility at the company’s Pascagoula refinery. The $1.4 billion Pascagoula Base Oil Project (PBOP) is projected to generate approximately 1,000 jobs over the next two years of construction and about 20 permanent positions once the facility is operating.

The facility will manufacture 25,000 barrels per day of premium base oil, the main ingredient in the production of top-tier motor oil that helps improve fuel economy, lower tail-pipe emissions

and extend the time between oil changes.

“Chevron was the first company to produce premium base oil,” said Mike Wirth, Executive Vice President, Chevron Downstream & Chemicals. “With the addition of the Pascagoula facility, Chevron will become the world’s largest producer of premium base oil. Demand for this product is increasing in the U.S. and around the world, and Chevron is adding capacity to meet that demand.”

Construction is scheduled to be completed by year-end 2013.

Repsol chosen as best European energy company for leadership

Picture courtesy: Repsol

Kitimat LNG partners to purchase Pacific Trail Pipelines interest

Repsol has been chosen as Best European Energy Company for Leadership according to a study carried out by the International consulting firm Hay Group.

This study, titled Europe’s Best Companies for Leadership, evaluates the best companies on the continent in terms of the quality of their executive leadership. Repsol is the only energy company among the top 10 in the ranking drawn up from the analysis.

The study which involved 3,769 people from 1,827 firms across the world, examines how the best companies have shown a more comprehensive and cooperative focus, adapting their leadership practices to an environment of gradual recovery and economic growth.

For Hay Group’s Regional Director of Leadership and Talent for Europe and Middle East, Georg Vielmetter, “The study reveals that the best companies for leaders search for ideas at all levels of the organisation. The 10 Best European Companies for Leadership have acted quickly in response to the change presented by leadership.”

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Chevron

Texas, US

www.chevron.com

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Bangkok, Thailand

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Production Operations HSSE Advisor (Rotational)

BP

Oman

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Night Well Site Leader (Night Drilling Supervisor)

BP

Oman

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Petroleum Development Oman

Oman

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RasGas

Qatar

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Bahrain

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Middle East Oil & Gas Show and

March 21- April 1

April 4-6

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London, UK

Netherlands

March 20-23

3rd China Solar Energy Technology and

Gas Transport and Shipping Course

Kingdom of Bahrain

Investment Congress 2011

April 7-8

March 24-25

Netherlands

(MEOS 2011)

Refinery Technology 2011

Jiangsu Province

March 22-23

China

Conference - Doha, Qatar

Exhibition Oil & Gas Asia 2011

April 10-13

Well Integrity Summit 2011

March 28-30

Houston, US

March 27-30

Karachi Expo Centre, Pakistan

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Naturally & Hydraulically Induced Kazakhstan RefinEx 2011

Fractured Reservoirs

Middle East Petroleum & Gas

March 30-31

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Greece

(MPGC 2011)

Kazakhstan

April 10-12

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Kingdom of Bahrain

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8866

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3rd African Gas 2011

Petroleum and Energy Conference and

March 30-31

Exhibition

London, United Kingdom

April 11-13 Liberia

Deep Water Production Tech 2011

City Gas Asia 2011

March 9-10

30-31 Mar 2011

Well Completion Systems Design and

London

Conference - Kuala Lumpur,

Engineering

United Kingdom

Malaysia

April 11-22, UK

March-April M Ma Mar aarrchch Apr prril 2011 20111

6th China Offshore Summit 2011

5th Annual Global Refining Summit 2011

2nd North Africa Asset Integrity

April 13-15

May 16-18

Management 2011

Beijing

Netherlands/Holland

01 June 2011, Cairo, Egypt

2nd Eastern Africa Energy Week 2011 SPE Digital Energy Conference and

May 16-18

Produced Water Treatment 2011

Exhibition

Nairobi, Kenya

May 31-June

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Malaysia

Texas, US

GVF Oil & Gas Communication Europe 2011

Oil & Gas Review is the

GVF Oil & Gas Communications Brazil

May 17-18 ,

strategic media partner for

2011

Aberdeen, Scotland

the following forthcoming

April 19-20

events:

Rio De Janeiro, Brazil

15th Uzbekistan International Oil & Gas Exhibition and Conference OGU 2011

2011 Global EOR Knowledge

Oil & Gas Siberian 2011

May 17-19 ,

Expansion Round Table

April 23-24

Sheraton Convention Center, Tashkent,

Workshop

Russia

Uzbekistan

March 14 – 17, Oman

5th Maritime Risk Management 2011

9th Pakistan Oil, Gas & Energy

Middle East Oil & Gas Show

April 27-28

Exhibition and Conference POGEE 2011

and Conference 2011

London, United Kingdom

May 17-19

March 20-23

Karachi Expo Centre, Pakistan

Kingdom of Bahrain

and Investment Summit 2011

5th Annual China Nuclear Power

Middle East Petroleum & Gas

May 12-13

Congress

Conference 2011

Xinjiang, China

May 19-20

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Chengdu, Sichuan, China

Kingdom of Bahrain

4th Annual Advanced Wind Technology

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85 mm

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180 mm

TENDER WATCH

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Supply and install smart boards and accessories including commissioning and training.

Qatar Petroleum

www.qp.com.qa

Design, manufacture, delivery to site, installation & commissioning of “Top sleeving tower cranes” for Nakilat Ship repair Yard – Phase 5.

Qatar Petroleum

www.qp.com.qa

Cooling water scale and corrosion inhibitor.

Jordan Petroleum

www.jopetrol.jo

Construction of 102 MW Wind Power Project at Rajasthan.

ONGC

www.tenders.ongc.co.in

Supply, installation and commissioning of remote ignition system (RIS) for pilot gas based burners of 23 bath heaters & 16 heater treaters of Assam Asset and Jorhat area.

ONGC

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