NEWS, DATA AND ANALYSIS FOR THE MIDDLE EAS EAST’S STT’’S EN E ENERGY NER ERG GY YP PROFESSIONALS ROFFE RO ES SS SIO IO IONALS
November 2011 • Vol. 7 Issue 11
CAPTURING CARBON
DATA DILEMMA
The Middle East is the ultimate proving ground for carbon capture
How to manage the flood of data from modern upstream operations
POWER OF TWO Bijan Mossavar-Rahmani on how he’s transforming RAK Petroleum and DNO into a unified regional leader
20TH WORLD PETROLEUM CONGRESS PREVIEW: GET CONNECTED LEADING EXHIBITORS AND DELEGATES TALK UP THE EXCITING PROSPECT OF A GLOBAL GATHERING IN DOHA
CONTENTS
19
Liner Hanger Systems
34
Our completions offering just became more complete.
*Mark *Mar M k off Schlumberger. Mark S hlumb Sch l berge lumberge ergerr. © 2011 Sch S Schlumberger. hlumb l berge lumberge ergerr. 11-CO-0276 11-COCO 0276
NOVEMBER 2011
40 06 LEAD NEWS
25 DEMAND OUTLOOK
40 LAMPRELL LAUNCH
Leighton Offshore wins $600m in further contracts for upgrades to Basra’s oil export terminal, while Saipem wins $1.5 billion for phase 2 of the expansion project.
The good news is that for once, producers and consumers agree. The bad news that they agree oil demand growth is undershooting previous estimates.
The UAE’s dominant offshore rig engineering services firm inaugerated it’ new $75 million state-ofthe-art facility: at Hamriyah, UAE. We have the pictures.
19 LIBYA LIBERATED
34 OMANI GAS
44 COVER STORY
Patrick Osgood assess the progress of Libya’s upstream rehabilitation after the end of the civil war with his monthly review of ongoing developments.
Oman is grappling with a gas squeeze as increasing domestic demand, LNG export commitments and unpalatable external sources put the brakes on development.
Daniel Canty interviews Bijan Mossavar-Rahmani, RAK Petroleum and DNO chairman and RAK CEO, on the firms’ imminent merger and Kurdistan.
22 SYRIA SANCTIONS
38 JACKUP SURVEY
Gulfsands Petroleum and KOV have seen severe disruptions to their Syrian operations as international oil sanctions aimed at ending the Assad regime begin to bite.
Dr Rina Samsudin, senior analyst at IHS Petrodata, says the region’s jackup market, will get a shot in the arm after a rash of projects in Saudi Arabia.
www.arabianoilandgas.com
Our suite of field-proven liner hanger systems is fully integrated within Schlumberger completion technologies, allowing you to complete your wells using one trusted source. Confidence in Completions www.slb.com/hangers
REGULARS 4 COMMENT 8 REGIONAL NEWS 19 NEWS ANALYSIS
November 2011 Oil&Gas Middle East
1
CONTENTS
NOVEMBER 2011
53
58
64
81 72
2
Oil&Gas Middle East November 2011
53 BRAVING BIG DATA
64 CCS IN THE MIDDLE EAST
81 UPSTREAM PARTNERS
Top US data management firm Teradata is looking to shake up the way the region’s upstream sector manage its data. We meet them to find out how.
Robin Mills, an independent energy strategist and economist, examines the state of carbon capture and storage (CCS) in the region, and it’s vital place in the Middle East’s future.
As part of a new series on firms supporting operators and service companies, Ion Andronache, CEO of Syscom 18 explains what it takes to enter the MENA market.
58 ANGLO EASTERN
72 WPC LOOKAHEAD
We profile Anglo Eastern, a Dubaibased fabricator, which has been leveraging regional advantages to outcompete European rivals in supplying the North Sea market.
With just a month before the world’s premier upstream industry event kicks off in Doha, Oil & Gas Middle East hears from the leading companies exhibing at the 20th WPC.
REGULARS 101 PROJECTS 108 RIG STATS 112 BIG PICTURE
www.arabianoilandgas.com
Working today to power tomorrow Countries all over the Middle East and North Africa (MENA) are endowed with natural resources, such as oil and natural gas. Harnessed through advanced technology, these resources have the power to enrich life and foster the economic growth of nations. ExxonMobil is working with national oil companies in the region to maximize the value of petroleum resources, as well as finding new sources and innovative ways to meet future energy demand. This includes a steadfast commitment to protecting the environment. Backed by the industry-leading expertise of over 16,000 scientists and engineers globally and more than 100 years of experience in the region, we are working today‌to power tomorrow. exxonmobilmena.com
COMMENT
2011 accolades await Upstream year rounded off with Doha WPC and awards
Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: 00 971 4 444 3000, Fax: 00 971 4 444 3030 Web: www.itp.com Offices in Dubai & London ITP Business Publishing Ltd CEO Walid Akawi Managing Director Neil Davies Managing Director ITP Business Karam Awad Deputy Managing Director Matthew Southwell Editorial Director David Ingham Editorial Energy Group Editor Daniel Canty Tel: +971 4 444 3255 email: daniel.canty@itp.com Assistant Editor Patrick Osgood Tel: +971 4 444 3662 email: patrick.osgood@itp.com Contributors Ventures, Contax Partners, Advertising Commercial Director Jude Slann Tel: +971 4 444 3693 email: judith.slann@itp.com Sales Manager Robert Arundell Tel: +971 4 444 3677 email: robert.arundell@itp.com Studio Group Art Editor Daniel Prescott Designer Wasim Akande Photography
The brand new QNCC is built in homage to Qatar’s Sidra tree and will feature 3,500m2 of solar panels. he upstream year draws to close not with a whimper but with a series of confident bangs in 2011. Next month will see the world’s energy leaders converge in Doha for the World Petroleum Congress, creating a real industry buzz in the absence of an ADIPEC conference and exhibition this year. This installment will mark the first time the event has ever been hosted in the Middle East, signaling a long overdue congress in the energy capital of the world. Leadership figures from the largest IOCs and the region’s biggest hitters will have the opportunity to interact in, what everyone hopes will be, the best event in the World Petroleum Council’s history. Qatar has pulled out all the stops and designed and built a brand new conference and exhibition centre, which from an early sneak peak, gives any such facility anywhere on the planet a run for its money. The 60 member countries of the World Petroleum Council represent 95% of the world’s oil and gas production and consumption, and the event is a unique opportunity to witness the technical achievements and best players in the industry in such concen-
T
tration, not to mention the fact it will be a landmark occasison for Doha itself. Following on from the WPC, the Middle East’s best energy performers will gather in Dubai, on 12 December, to celebrate outstanding achievements in all fields which touch the upstream business at the second annual Oil & Gas Middle East Awards. Due to a flurry of late nominations the deadline for entering you firm or your colleagues for one of the prestigious gongs has been extended to November 17th, so there is still time to get in on the act. We’ve received a record number of nominations in every category this year, and the event promises to be just the ticket to round off an impressive regional energy year. You can find out more information on how to enter and how to book a table amongst NOC and IOC regional leaders alike by following the link at our online home ArabianOilandGas.com From all at Oil & Gas Middle East, we wish you luck on the night and look forward to seeing you there! Daniel Canty, Editor E-mail: daniel.canty@itp.com
To subscribe to the magazine, please visit: www.ArabianOilandGas.com 4
Oil&Gas Middle East November 2011
Chief Photographer Jovana Obradovic Senior Photographers Isidora Bojovic, Efraim Evidor Staff Photographers Lester Ali, George Dipin, Juliet Dunne, Murrindie Frew, Lyubov Galushko, Verko Ignjatovic, Shruti Jagdesh, Stanislav Kuzmin, Mosh Lafuente, Ruel Pableo, Rajesh Raghav Production & Distribution Group Production & Distribution Director Kyle Smith Deputy Production Manager Matthew Grant Production Coordinator Devaprakash Managing Picture Editor Patrick Littlejohn Image Editor Emmalyn Robles Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami Circulation Head of Circulation & Database Gaurav Gulati Marketing Head of Marketing Daniel Fewtrell Marketing Manager Annie Chinoy ITP Digital Director Peter Conmy ITP Group Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin Circulation Customer Service Tel: +971 4 444 3000 Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages.com Printed by Color Lines Press Subscribe online at www.itp.com/subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.
Audited by: BPA Worldwide. Average Qualified Circulation: 7,167 (Jan - June 2011)
Published by and © 2011 ITP Business Publishing, a member of the ITP Publishing Group Ltd. Registered in the B.V.I. under Company Registration number 1402846.
www.arabianoilandgas.com
GE Oil & Gas
Fueling the future together After more than 80 years of working in this great region, we are just as excited as we were on day one. Our relationships within the Middle East have led to some of the world’s most innovative technologies and industry milestones. Through investing in local partnerships we have maximised process, skill and technology transfer across the region and together we’ve made breakthroughs, headlines and friends. We look forward to another 80 years of successful partnerships. geoilandgas.com
To learn more, visit us at booth 8201 at the 20th World Petroleum Congress, 4-8 December 2011
GE imagination at work
LEAD NEWS
Iraq plows $2.1bn into oil export development plan On 17 October Iraq’s South Oil Company (SOC) awarded a $518 million contract for part of Iraq’s Crude Oil Export Facility Reconstruction Project, also known as the Sea Line Project, to Leighton Offshore, a subsidiary of Leighton Holdings. The project includes two offshore platforms, a 75km, 48-in oil pipeline and a singlepoint mooring system. The project will connect oil storage facilities to the Basra Oil Terminal in Fao, Basra, in southern Iraq. The contract is financed and supported through a Japanese official development assistance loan by the Japan International Cooperation Agency. SOC also let an additional SPM contract worth $79.85 million to Leighton Offshore, the scope of which includes an additional SPM, 3.5 km of 48-in. OD pipeline, pig launcher installation, conversion of spare SPM buoy to operational status, and replacement of spare buoy. Both contracts are in addition to the $799 million Phase 1 Iraq Crude Oil Export Expansion Project (ICOEEP) work Leighton is currently completing. ICOEEP includes installation of 120 km of pipeline (two parallel 48-inch 50 km lines – 10km onshore and 40km offshore—and 20km of infield lines) as well as three SPMs.
6
Getty Images
South Oil Company aims for 4.5 million bpd capacity at Basra Oil Terminal
Hamish Tyrwitt, CEO, Leighton Holdings.
Leighton Offshore has scooped a further $600 million of work from Iraq’s SOC.
“Leighton Offshore has demonstrated its ability to deliver complex projects in difficult and remote locations and we are extremely proud to be a part of the rebuilding of Iraq’s oil export infrastructure which is critical to Iraq’s economy,” Hamish Tyrwhitt, CEO of Leighton Holdings said. Leighton Offshore chief executive officer, Peter Cox, said the offshore oil and gas sector represented a key area of growth for the company. The new SPM project will parallel Phase 1 work and is slated for completion by early
Oil&Gas Middle East November 2011
2012. ICOEEP aims to expand Iraq’s offshore loading facilities to enable export capability of 4.5 million b/d by 2015. Iraq is investing heavily in export infrastructure over the next few years to prevent bottlenecks as oil production increases and the pipeline to Ceyhan struggles to keep up. The country’s crude oil exports averaged 2.1 million barrels a day in September, shipping 53 million barrels from Basra and 10.1 from Kirkuk, according to data on the country’s Oil Ministry website. Saipem has announced that it
Peter Cox, CEO, Leighton Offshore.
has scooped the $1.5 billion EPIC contract for phase 2 of the Iraq Crude Oil Export Expansion Project, within the framework of the expansion of the Basra Oil Terminal. The contract includes the engineering, procurement, fabrication and installation of a Central Metering and Manifold Platform, to be installed in 28 metres of water, along with associated facilities. Oil exports account for over 95% of Iraq’s revenue and provide the funding for muchneeded nationwide infrastructure programs.
www.arabianoilandgas.com
REGIONAL NEWS
Massive African gas pay for Eni Italian energy firm Eni has found an estimated 22.5 trillion cubic feet of natural gas off the coast of Mozambique. The discovery is the result of Eni’s first ever deepwater play and is the largest hydrocarbons discovery in the company’s history. According to a Wall Street Journal report citing people briefed on the discovery, the gas reservoir is of very high quality and Eni should be able to get an unusually large percentage of the gas out of the ground. A percentage estimate for recoverability has not yet been given. “The outstanding volume of natural gas discovered will lead to a large scale gas development with a combination of both
GettyGetty Images Images
22.5 trillion cu ft find in Mozambique will bring new LNG exporter to Asian markets
Paolo Scaroni: gas find is the largest hydrocarbons discovery in Eni’s history.
export to regional and international markets through LNG and supply to the domestic market. This will support the industrial and economic growth of the Country,” Eni said in a company
statement. Asia is the most likely export market for the gas. The find could chip away at the market share of Middle East exporters, which currently enjoy a dominant share of LNG makets
to Japan, China and South Korea. The discovery will also more than double Eni’s proven and booked gas reserves. The firm owns 70% of the Mamba South block, and reported global proven gas reserves of 17.7 trillion cubic feet in its 2010 annual report. Co-owners in the area are Galp Energia (10%), KOGAS (10%) and ENH (10%). Eni was awarded the exploration license in March 2006. The previously unexplored block, known as Area 4, is located in deep water up to a depth of 2,6000 metres in the Rovuma Basin and covers an area of 17,646 square kilometres. The firm is now undertaking further drilling to a depth of 5,000 metres.
Petrofac reveals mammoth $12bn backlog ADMA eyes CEO confirms overall predicted net profit of “at least 15%” for 2011 Ayman Asfari, group chief executive of Petrofac, has praised the London-listed company’s performance and confirmed a company backlog of $10.8 billion at the end of September, and $12 billion as of today. “We have delivered good operational performance across our portfolio of assets in the year to date and we expect to deliver like-for-like net
$2.7 BN Petrofac’s H1 2011 revenue
Source: Petrofac interim report 2011
8
profit growth for the full year of at least 15% and in line with current market expectations. “We have made good early progress with our Integrated Energy Services strategy, including the recent award of two Production Enhancement Contracts in Mexico and deployment of the FPF1 floating production facility. We are encouraged by the number of Integrated Energy Services opportunities that we have identified and are pursuing, which combined with our existing backlog and a continued positive outlook for our Engineering & Construc-
Oil&Gas Middle East November 2011
tion and Offshore Engineering & Operations businesses, gives us confidence in achieving our target of more than doubling our recurring 2010 group earnings by 2015.”
Petrofac CEO Ayman Asfari.
100k hike The CEO of Abu Dhabi Marine Operating Company (ADMAOPCO) has confirmed that the Lower Zakum field will up production capacity by 100,000 barrels per day (bpd) by the end of 2014 under its CO2 EOR project. “We will see the beginning of the ramp up by the end of 2012 and it will reach full production by end of 2014,” Ali Rashid Al Jarwan told Reuters at an oil & gas conference on 20 October. Current production has recently dropped off by between 200,000-300,000 bpd due to bottlenecks in storage, with the drop-off likely to remain for two months as capacity is added.
www.arabianoilandgas.com
REGIONAL NEWS
$900m UAE Rail contracts signed Etihad Rail – the master developer and operator of the UAE’s national railway network – has awarded the Civil & Track Works contract for the first stage of the network, that will link the Western Region cities of Habshan and Ruwais by 2013 and then Shah and Habshan by 2014. The contract was awarded to a consortium comprising Italy’s Saipem, Tecnimont and UAE-based Dodsal Engineering and Construction. The $898.4 billion Civil & Track Works contract comprises the design, procurement and construction of the railway infrastructure, in addition to the testing and commissioning (on
Getty Images
Saipem, Tecnimont & Dodsal win $898m UAE rail deal in bid to handle Shah field’s sulphur
Progress at the offshore Abu Dhabi Shah sour gas project is spurring progress.
a design and build basis) of all assets relating to the completion of the first phase of the project The rail project has seen an accelerated pace of delivery
since the Shah sour gas project, which will generate millions of tonnes of sulphur bi-product, was signed with Occidental Petroleum in January this year after
fellow American firm ConocoPhillips bailed out of the project. 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 is anticipated to produce approximately 500 million cubic feet per day of network gas and a significant amount of condensate and natural gas liquids. Transporting the sulphur away from the gas field will be the rail company’s primary task ahead of transporting passengers around the UAE.
GO FROM SEISMIC TO WELLHEAD, ANYWHERE IN THE WORLD Tell us where. We’ll drop in the equipment, engineer a drilling solution and leave you with a fully operational facility. Or, we can simply assess the situation and offer advice. Whatever works. UNITED ARAB EMIRATES N 23˚26’ E 52˚46’
www.arabianoilandgas.com
Precise underground navigation is our specialty; we’re experts at vertical, directional and horizontal drilling. We have the tools and know-how to consistently deliver exceptional value in terms of reduced operating costs and risk exposure.
November 2011 Oil&Gas Middle East
9
REGIONAL NEWS
Bit spun at Ber Bahr
HIGHLIGHTS
Iraq: getting there on gas flaring project.
Iraq Is set to finally sign off on the $17 billion Shell/Mitsubishi gas capture deal in south Iraq “within weeks” Oil Minister Abdul Kareem Al-Luaibi told a conference on 11 October. The deal is set to net the Iraqi government $100 billion over its 25-year lifespan and solve the country’s long-standing and dire electricity shortage. Dragon Oil has announced the completion and initial testing of the Dzheitune (Lam) 13/160 development well in Turkmenistan. The well was drilled with a single string to a depth of 2,900 metres by Rig 40 and tested for initial production at 1,257 barrels of oil per day. Rumaila saw further disruption this month as two bombs struck export pipelines, reducing flow rates for several days. Production dropped to 530,000 barrels per day (bpd) from 1.24 million bpd. The attack – seemingly timed to coincide with a visit to the field by the Oil Ministry – cause no reported injuries and main production infrastructure was not damaged.
10
Getty Images
Genel Energy, the Turkish oil company recently acquired by the Tony Hayward fronted private equity vehicle Vallares, has successfully spudded at its Ber Bahr-1 exploration well in Iraqi Kurdistan. The announcement was made by Gulf Keystone, Genel’s partner in the block. Ber Bahr covers 208 km² in north-west Kurdistan and is similar in profile to the Shaikan and Sheikh Adi blocks operated by Gulf Keystone. Ber Bahr-1 will target prospective intervals in the Cretaceous, Jurassic and Triassic with a planned total depth of around 2100 metres. Genel’s resource estimate for Ber Bahr is 1.5 billion barrels of oil equivalent-initially-inplace. The adjacent Shaikan is a major discovery with independently audited gross oil-in-place volumes of 4.9 (P90) to 10.8
(P10) billion barrels, while it is estimated that Sheikh Adi holds between 1 (P90) and 3 (P10) billion barrels of oil-in-place. Gulf Keystone is preparing a development plan for Shaikan, which is expected to be submitted to the Kurdistan Regional Government in 2013. While still in early planning
stages, a 200-well program with a 400,000-450,000 barrel-a-day peak production could require capital spending of $6-8 billion, which has led to the firm to plan for a promotion from London’s junior AIM market to a premium FTSE listing and reports (which the company has denied) that the firm has put itself up for sale.
Tethys Oil cranks up Oman oil production Swedish exploration and production firm Tethys Oil has announced - as part of its official figures for September - that its Oman asset production has continued to rise. Test production from the Early Production System (EPS) on Blocks 3 and 4, an area spanning 33,125 sq km onshore continues to increase and amounted in September to 190,938 barrels of oil, corresponding to 6,365 barrels of oil per day (bpd).
Oil&Gas Middle East November 2011
Tethys’ share of gross Long-term production tests production, before government have been carried out on wells take, amounts to 30% of the total, from both the Saiwan East or around 57,281 barrels. oil field on Block 4 and the Farha South oil field on Block 3. Production rates continue to vary depending on test programme design and available capacity. Tethys has a 30% interest in Blocks 3 and 4. Japanese firm Mitsui E&P Middle East holds 20% and the operator CC Energy Development (Oman), which holds the remaining 50%. Tethys: 6,365bpd from Omanlast month. Getty Images
Getty Images
Genel Energy and Gulf Keystone drill 1.5 billion barrel block
www.arabianoilandgas.com
®
Touch N Tuff
®
® ®
The reference for single-use gloves Ansell’s Touch N Tuff® nitrile glove is combining excellent puncture and abrasion resistance, high-level chemical protection and exceptional comfort. This glove is ideal for many applications. Specifically designed for workers at risk from hazardous chemical splashes, the new long cuff provides increased protection and better fit. Testing by a certified body confirmed that Touch N Tuff® resists a greater variety of industrial chemicals for longer periods than any other nitrile disposable gloves. Touch N Tuff®: the toughest in chemical resistance.
Ansell UK Ltd 30-32 Mariner Lichfield Road Industrial Estate Tamworth B79 7UL United Kingdom Phone: +44 (0) 1564 711 802 Fax: +44 (0) 1564 711 344 http://www.ansell.eu E-mail: infouk@eu.ansell.com
REGIONAL NEWS
Lamprell nets $333m UAE rig deal Abu Dhabi’s National Drilling Company signs up for two new 116E jack-ups UAE oil, gas and renewables engineering services firm Lamprell has announced that Abu Dhabi’s National Drilling Company (“NDC”) has exercised its options for Lamprell to proceed with the construction of two jackup rigs in addition to the rigs currently under construction by Lamprell for NDC. The new agreement with NDC is for the construction and delivery of two jackup rigs valued at $166.65 million each. As with the existing rigs under construction, these additional rigs will be completely outfitted and equipped, LeTourneau designed, self-elevating Mobile Offshore Drilling Platforms of a Super 116E (Enhanced) Class design. The announcement was a
fillip to the company’s performance of the London Stock Exchange, after the company took a 15% hit to its share price on news of $14.3 million hit to its books arising from cost overruns on windfarm ship contracts. The firm’s shares traded up 9 pence per share (2.4%) on the news in early trading on 18 October. The rigs consist of triangular hulls and three 310 foot trusstype legs per rig, each leg with an electro-mechanical rack and pinion elevating system, which will allow drilling in depths of up to 200 feet of water with a rated drilling depth of 30,000 feet. Deliveries are scheduled to be in Q1 2014 and Q2 2014 respectively. The work will be performed at Lamprell’s newly
Nigel McCue, Lamprell CEO: “delighted” to strenthen relationship with the NDC.
inaugerated Hamriyah facility. Nigel McCue, Lamprell’s Chief Executive Officer, commented in a company statement: “We are delighted to
announce today the exercise by NDC of its options, and for the opportunity to continue to strengthen our relationship with this prestigious customer.”
Lukoil all set to award further Eni restarts Chevron JV plows in $6bn contracts at West Qurna II field Libyan gas Chevron Phillips, the giant US chemical firm formed by ConocoPhillips and Chevron, has been cleared by the Basra Investment Commission (BIC) to invest $6 billion in a new chemicals facility in which will use the associated gas from south oil fields as feedstock. A BIC statement, received by Aswat al-Iraq, said that the project is to build petrochemical plants in the first phase of the project. Chevron Phillips is aiming to have a 75% Iraqi workforce at the plant, according to the statement.
12
Lukoil, Russia’s largest private sector company, is on the cusp of awarding several new contracts as part of its multi-billion dollar development of the supergiant West Qurna 2 oil field. Dow Jones Newswires, citing a senior Lukoil executive, reports that the company is in the final stages of evaluating commercial and technical bids for contracts competing to build the central processing facility, export pipelines, tank farms, and a 126MW power station. The firm has already awarded the 23-well drilling and
Oil&Gas Middle East November 2011
completion package to Baker Hughes, which is under way. Five companies had been shortlisted: Saipem, SNC Lavalin, Punj Lloy, Globalstroy and South Korea’s Samsung Engineering. Two other bidders, Petrofac and Technimont, are reported to have been dropped, according to Reuters. The biggest package will be the construction of the CPF which will enable the consortium to produce 400,000 barrels of oil a day from West Qurna-2 by 2014 as part of the first-stage development of the field.
Eni has confirmed that Mellitah Oil & Gas, the Joint Venture operating company (NOC 50%, Eni 50%) in Libya, has restarted today gas production from the offshore platform of Sabratha. Production will start at 4-5 Million cubic metres per day and will gradually increase to reach 11-13 Mcmd during the month of November, during which time all 15 wells on the platform will be progressively reopened. Additional production will also be added when the subsea wells are put on stream in 2012.
www.arabianoilandgas.com
REGIONAL NEWS
TAQA pumps $46m into Kurdish E&P Abu Dhabi’s oil and utilities giant takes 20% stake in Canada’s Western Zagros The Abu Dhabi National Energy Company (TAQA), confirmed on 17 October that it has taken a strategic investment in WesternZagros Resources, an exploration firm that holds two production sharing agreements with the Kurdish Regional Government. Under the agreement, TAQA will purchase, through a private placement, 74 million common shares for gross proceeds of around $46 million. When this placement is completed, TAQA will own approximately 19.9% of the WesternZagros shares. Carl Sheldon, General Manager of TAQA, said “This investment in WesternZagros reflects our focus on developing TAQA’s footprint in the MENA (Middle East-North Africa) region. TAQA brings technical and operational expertise and a proven track record in developing challenging oil and gas projects, while WesternZagros has already built successful
operations in the Kurdistan region of Iraq.� WesternZagros’s Chief Executive Officer, Simon Hatfield added, “This landmark agreement represents a significant leap forward for us. TAQA is an excellent strategic investor for WesternZagros given their proven track record, their support for our direction and their deep knowledge of our operating region. We are excited about the opportunities we are pursuing in the next twelve months, including further appraisal of the Sarqala and Kurdamir discoveries, and exploration drilling at Mil Qasim.� TAQA’s executive officer and head of upstream, David Cook (interviewed in O&GME at bit.ly/TAQAtransition) will join the board of WesternZagros, which will use the proceeds of the investment towards its 2011-12 capital and operating program.
*OREDO ([SHULHQFH Ĺ&#x; /RFDO 3UHVHQFH 2XU DGYDQFHG FRDWLQJV SURYLGH SURWHFWLRQ IRU 2LO *DV ,QGXVWU\ SURMHFWV ZRUOGZLGH
-RWXQ FRPSDQLHV UHSUHVHQWHG LQ PRUH WKDQ FRXQWULHV SURGXFWLRQ IDFLOLWLHV JOREDOO\ 8QLIRUP VWDQGDUG RI JOREDO VHUYLFH ,Q WKH 0LGGOH (DVW DQG 1RUWK $IULFD RXU 7HFKQLFDO 6DOHV WHDPV LQ WKH 8$( 4DWDU %DKUDLQ .XZDLW 2PDQ 6DXGL $UDELD (J\SW <HPHQ $OJHULD 6\ULD ,UDQ DQG ,UDT ZLOO EH SOHDVHG WR DVVLVW \RX ZLWK DQ\ FRDWLQJ VROXWLRQV 3OHDVH YLVLW RXU ZHE VLWH IRU FRQWDFW LQIRUPDWLRQ
MRWXQ FRP TAQAâ&#x20AC;&#x2122;s investment is in keeping with its new MENA-focused upstream strategy.
www.arabianoilandgas.com
November 2011 Oil&Gas Middle East
13
REGIONAL NEWS
Supergiant fields soak up $100 bn Senior Iraq official confirms water injection agreement and massive IOC spending International oil companies are primed to spend $100 billion on the further development of Iraq’s supergiant Rumaila, Zubair and West Qurna 1 oil fields, according to a senior government official. Thamir Ghadhban, chairman of Prime Minister Nuri Al-Maliki’s advisors committee, said “we have $100 billion for the three fields,” on 19 October. Ghadhban says ExxonMobil together with its partners will spend $50 billion upgrading the supergiant West Qurna 1 field. The remaining $50 billion would be spent by BP and Eni to upgrade the Rumaila and Zubair oil fields respectively, Ghadhban told reporters on the sidelines of an Iraqi energy conference in Istanbul organized by the London-based CWC Group.
Basra oil terminal, also undergoing expansion, is due to receive a lot more Iraqi oil.
Rumaila and Zubair currently produce 1.24 millionbarrels per day (bpd) and 210,000 bpd respectively, and are slated to reach production of 2.85 million bpd and respectively 1.2 million
bpd by 2017. West Qurna 1 is dues to produce 2.25 million bpd in the same timescale, and is slated to create 100,000 jobs for Iraqis. The whole field is believed to contain 43 billion
parrels, the secondmost in the world after Saudi Arabia’s Garwar field. “The bulk (of the finance) is for West Qurna 1 because the Rumaila and Zubair fields were well advanced in terms of development, such as number of wells, oil field facilities, other infrastructure, while West Qurna phase 1 needs more.” A significant chunk of this investment – some $12 billion plus – will be invested in the common seawater injection project, essential to maintain pressure in the south’s giant reservoirs. Cumulative output from the fields is mandated to reach 6.8 million bpd by 2017. A reduction of the target appears inevitable as government figures admit the targets are unrealistic.
Shah Deniz to pick gas export pipeline by end of November The Shah Deniz consortium aims to reach a decision on the destination of gas from the Shah Deniz field by the end of November, according to Azerbaijan’s state-backed oil and gas company SOCAR. “Shah Deniz will take a decision on a route of the pipeline project for gas exports to Europe in October-November,” SOCAR chief Rovnag Abdullayev, said on 18 October. The consortium is set to choose between three pipeline projects which will re-shape the European gas landscape, reducing the continent’s
14
reliance on Russian gas and introducing an element of competition from the Caspian in wholesale supply markets. The Shah Deniz field is estimated to contain 1.2 trillion cubic metres of natural gas, enough to power Europe until the middle of the century. The first phase began production in 2006, with Phase II due to some on stream in 2017. SOCAR has previously missed self-announced deadlines on picking a pipeline, having announced that a decision in October. The Nabucco pipeline is
Oil&Gas Middle East November 2011
A new Caspian pipeline will re-shape the European gas wholesale market.
competing with the Interconnector Turkey-Greece-Italy (ITGI) and the Trans Adriatic Pipeline (TAP) projects to win
feedstock commitments. BP, which operates Shah Deniz II, has expressed a preference for a smaller pipeline.
www.arabianoilandgas.com
REGIONAL NEWS
Extra $1.1bn for Oman tight gas Sultanate targets 90 mn cu ft of gas per day from Block 60 development program
www.arabianoilandgas.com
bearing formation, Ordovician Barik, located at depths of around 4,500 metres, which was discovered in 1998 by Petroleum Development Oman and appraised by BG International from April 2006 to June 2010. On 11 October OOCEP signed a Gas Sales Agreement covering initial output from the Abu Tubul field, which received $1.1 billion of investment through a tight gas drilling contract in March, with a view to commercial gas production in Q1 2013 through the use of horizontal drilling and hydraulic fracturing techniques. Output is targeted at a peak produc-
independendence, with BP’s pending commitment to a $15 billion tight gas project being the country’s best prospect (see page 34). After producing from Block 60, OOCEP will drill at least two exploration wells at Block 42. Covering around 25,600 sq km, Block 42 includes the northeast coastal range of the Oman Mountains and the basin immediately to the south under Ramlat Sharqiyah. Hydrocarbon indications have already been Oil Minister Mohammed Hamad Al-Ramahi. proven by previous exploration tion rate of 90 million standard wells, and OOCEP will acquire cubic feet per day. Longer new data to appraise known term, Oman is seeking energy structures in the block. Getty Images
Oman’s national oil company is committing to a gas development program inked in March at two major gas exploration blocs, and a sales agreement for one of its tight gas concessions. According to a report in the Oman Daily Observer, Oman’s Oil Company for Exploration and Production (OOCEP) is set to commit to the further development of the Abu Tubul gas field in Block 60 in central Oman and Block 42 in the Sharqiyah region. Block 60 is the larger of the two fields, covering about 1,500 square kilometres. It includes the Abu Tubul field with gas and condensate
November 2011 Oil&Gas Middle East
15
REGIONAL NEWS
Fluor bags FEED from ADMA-OPCO US firm wins contract for full field development project at offshore Nasr concession Texas-based engineering, procurement and construction giant Fluor Corporation has confirmed its Fluor Offshore Solutions (FOS) unit was awarded a front-end engineering and design (FEED) contract by Abu Dhabi Marine Operating Company (ADMA-OPCO) for new offshore facilities located at the Nasr Field approximately 30 kilometers northeast of Umm Shaif Super Complex in Abu Dhabi. Fluor booked the undisclosed contract value in the third quarter of 2011. “We are encouraged that ADMA-OPCO has once again put its trust in Fluor for this new major project,” said Peter Oosterveer, president of Fluor’s Energy & Chemicals Group. “This demonstrates the excellent relationship our team has worked so hard to develop
The FEED, struck for an undisclosed sum includes sub-sea and export pipelines.
with Abu Dhabi National Oil Company (ADNOC) and its operating companies.” “This is our third major Arabian Gulf offshore project within the last 18 months and underscores Fluor’s strength in the offshore oil and gas sector in the Middle East and the UAE in particular,” said
Lee Richardson, vice president of FOS. “Fluor is focused on continuing our long history with ADMA-OPCO, and we are pleased to have been selected for this major offshore development project.” The Nasr Full Field Development Project includes seven wellhead towers, super
complex facilities including gas processing and oil separation production facilities, a utilities platform, living quarters, infield subsea pipelines and an export pipeline to Das Island. The FEED portion of the project is currently under way in Fluor’s Houston and Abu Dhabi offices. Fluor also recently won a utilities and offsites package at Saudi Arabia’s $19 billion Sadara downstream JV with Dow Chemical. The group boasts a backlog of $40 billion. In early August, ADMAOPCO awarded an EPCI contract on the early production project phase-1 of the Nasr & Umm Lulu field development projects to Larsen & Toubro. ADMO-OPCO plans to increase its crude production capacity to 700,000 bpd by 2015.
Weatherford scoops $200 million package at Iraq’s Garraf field US services giant beats Petrofac, JGC, Saipem and Punj Lloyd to early works deal US oilfield services firm Weatherford has been awarded a works package at the Garraf field, according to a recently retired government source quoted by Dow Jones Newswires. Weatherford, which beat Petrofac with JGC, and Saipem with Punj Lloyd to the deal, was reportedly awarded the contract by Malaysia’s Petronas (45%) and its partners, Japan Petroleum Exploration (Japex) (30%) and Iraq’s state South Oil Company (25%).
16
Adnan Galay, who retired as chairman of the field’s joint management committee in October, declined to provide the value of the deal. However, contracting sources attending an Iraqi energy meeting in Istanbul said the contract is worth about $200 million. Lakeshore TolTest has reportedly been retained by Weatherford as a subcontractor Garraf holds an estimated 1 billion bbls. under the contract. The Garraf field, which has barrels, is expected to produce reserves of around 1 billion 50,000 barrels a day next year,
Oil&Gas Middle East November 2011
60,000 barrels a day in 2013, and 100,000 barrels a day in 2014, with an eventual output target of 23,000 bpd. The contract will cover early production work, including the construction of two-train degasing facility, storage tanks, and associated infrastructure. The firm had already carried out the front end engineering and design study at the field. The Garraf field contains proven estimated crude reserves of 1 billion barrels.
www.arabianoilandgas.com
REGIONAL NEWS
Iran pins fiscal hopes on jet fuel Iranâ&#x20AC;&#x2122;s Oil Minister is focusing on refined and petrochemical products in the face of international sanctions and reduced national subsidies which have reduced local demand for oil and gas. The Iranian Oil Ministryâ&#x20AC;&#x2122;s Shana newswire quoted Rostam Qasemi as saying one of the ministryâ&#x20AC;&#x2122;s â&#x20AC;&#x153;prioritiesâ&#x20AC;? is to convert Iranâ&#x20AC;&#x2122;s crude to refined products. The US claims that Iranâ&#x20AC;&#x2122;s hopes for downstream exports are hampered by the countryâ&#x20AC;&#x2122;s inability to import refined and petrochemical products, forcing it to up downstream production for its domestic market.
â&#x20AC;&#x153;Iran has had to redirect production facilities from valuable petrochemical export production in order to manufacture refined petroleum for domestic sale,â&#x20AC;? Wendy Sherman, undersecretary of State for political affairs told the US Senate this month. Meanwhile, the Fars news agency, citing an oil ministry official, claims the Bandar Abbas refinery is on the cusp of producing jet fuel for export. Iranâ&#x20AC;&#x2122;s upstream woes continue, as foreign investment stays away. â&#x20AC;&#x153;Iran has been increasingly unable to attract foreign investment, especially
Getty Images
Hobbled by sanctions, Tehran redirects oil for domestic downstream use
Tehran hopes to export jetfuel to Asia in a bid to minimise a drop in downstream revenues.
in its oil fields, leading to a projected loss of $14 billion a year in oil revenues through 2016,â&#x20AC;? David Cohen, the US Treasuryâ&#x20AC;&#x2122;s undersecretary for terrorism and financial intelligence, told the U.S. Senate.
The lack of investment is exacerbated by Qasemiâ&#x20AC;&#x2122;s truculence with foreign investors. Tehran has recently booted out Gazprom and suspended CNPC for failing to meet Tehranâ&#x20AC;&#x2122;s field development timescales.
6XO]HU 3XPSV <RXU 3DUWQHU LQ WKH 0LGGOH (DVW
7KH +HDUW RI <RXU 3URFHVV
2TKYDQ /TLOR HR @ VNQKC KD@CDQ HM SGD RTOOKX NE OTLOHMF RXRSDLR ENQ SGD .HK @MC &@R HMCTRSQX @MC QDBNFMHYDC FKNA@KKX ENQ SGD PT@KHSX @MC GHFG RS@MC@QC NE NTQ OQNCTBSR 6HSG NTQ DWSDMRHUD "TRSNLDQ 2TOONQS 2DQUHBDR MDSVNQJ VD @QD BKNRD SN NTQ BTRSNLDQR "TRSNLDQR VHKK jMC QDKH@AKD @MC RTOONQS HM NTQ 2DQUHBD "DM
SDQR HM 2@TCH Q@AH@ @MC HM SGD 4MHSDC Q@A $LHQ@SDR
www.arabianoilandgas.com
.TQ KNB@K RODBH@KHRSR G@UD @ OQNENTMC JMNVK
DCFD NE OTLOR TRDC HM NHK OQNCTBSHNM QDjMHMF @MC ONVDQ FDMDQ@SHNM @OOKHB@SHNMR 2JHKKDC jDKC ODQRNMMDK RTOONQSR XNT ENQ NM RHSD RDQUHBD NUDQ
G@TKR HMRS@KK@SHNM @MC BNLLHRRHNMHMF L@BGHMDQX CH@FMNRSHBR @MC SQNTAKDRGNNSHMF
$EX 'KDEL 6HUYLFH &HQWHU 8$( KH 2NMR !TRHMDRR "DMSQD K HM 1N@C 4LL + -@Q AT #G@AH 4 $ $O NKREDU 6DOHV 2IĂ°FH .6$ / . !NW K JGNA@Q 2@TCH Q@AH@H *2 RDQUHBD LD RTKYDQ BNL VVV RTKYDQOTLOR BNL
November 2011 Oil&Gas Middle East
17
NEWS ANALYSIS 1 Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxx
NEWS REVIEW Libya liberated: back to the fields After Gaddafi’s demise, Libyan oil workers are rushing to protect oil fields and put oil at the heart of a new Libyan economy Words:Patrick Osgood
addafi is gone, and with him the significant threat of a sustained insurgent campaign against Libya’s oil infrastructure. Libyan oil production is creeping upwards, thanks to the work of Libyan oil workers and a handful of foreign oil companies making exploratory returns to the country. The National Transitional Council’s Finance Minister responsible for oil Ali Tarhouni, says nationwide production is already at 500,000 barrels per
G
www.arabianoilandgas.com
day (bpd) and could reach 1 million bpd before 2012. Wintershall sent a small group of Libyan workers to a cluster of oil fields in October, where sites jointly operated by Occidental and Canada’s Suncor Energy are also restarting. “We have reached a production level of about 20,000 barrels per day (bpd) shortly after beginning operations. Now we have to technically stabilise this production,” Wintershall CEO Rainer Seele said in a company statement.
Repsol also got started at the Sharara field recently, with production now up at 70,000 bpd. The field produced 360,000 bpd before the war, and further production will be limited as pipelines are tested for fractures and other other potential damage.
HOLDUP IN WAHA Libya will not get back on track without Waha Oil, a joint venture between the national oil company, ConocoPhillips, Marathon and Hess, which at 400,000 bpd accounted for
a quarter of national pre-war output. Around 80 key Waha Oil workers are refusing to return to the Waha fields until chairman Bashir Alashhab and directors whom the the workers accuse of cooperating with Gaddafi are removed. At the time of going to press, strikes have continued for nine weeks. Workers’ representatives say that Waha fields are undamaged and can return to 180,000 bpd production in weeks, but no progress will be made until the impasse is resolved.
November 2011 Oil&Gas Middle East
19
NEWS ANALYSIS 1
While Libya’s oil fields are bouncing back, restoring exports will take time.
BACK TO THE FIELDS Small initial teams are being deployed to evaluate damage and make a start on production, with a return to pre-war production so far dependant on the willingness of oil workers to return as war damage or logistical bottlenecks. In some cases, Libyans guarding foreignoperated oil fields are giving thei lives to defend fields from saboteurs. Wintershall currently has a tenth of their pre-war workforce in place, with more to join in the coming weeks. Domestic demand will take a sizeable chunk out of exports for now. Crude is currently pumping to the 120,000 bpd Zawiya terminal to increase domestic supplies of petrol and downstream products. Dow Jones quoted National Oil Company chairman Nuri Berruien in an interview saying Zueitina Oil had restarted production in early October and
20
is currently averaging about 30,000 bpd. Prior to the war Zueitina was pumping an average of 60,000 bpd. Berruien also told the news agency Agoco was in the process of restarting production from its Hamada and Beida oilfields where pre-war output averaged a combined 20,000 bpd. The Agoco-controlled fields of Sarir and Misla are together producing around 220,000 bpd, with another 130,000 bpd to go to reach pre-war capacity. 70,000 bpd of production has come back online at the Nafoora field that Occidental part owns with OMV and others under the operation of NOC subsidiary Agoco. Occidental has not as yet put a team on the ground or commented on its intentions, while an OMV employee, speaking to Dow Jones Newswires, says the company may send staff back to the country next month.
Oil&Gas Middle East November 2011
The Mabrouk field, which before the war pumped 50,000 bpd, may be the next to come on line, as no damage is reported and workers are keen to return to evaluate capacity. Heritage Oil, a British independent, recently bagged a 51% stake in Libya’s Sahara Oil Services Holdings, which holds long term permits and licenses to provide oil field services in Libya, for $19.5 million in cash. The firm has also acquired promising 2D seismic for further exploration. The British firm suffered a rebuff from the NTC after lobbying hard to bring in private security personnel, according to a report in Petroleum Economist. Burrien is reported to have slammed the proposals as “not acceptable”. The NTC does not want to see a flood of private security firms in the country, preferring a domestic oil security force that will give anti-Gaddafi fighters jobs and regularise Libya’s massive cache of small arms.
security fears keep many away. Analysts at IHS Global Insight say that, in addition to addressing security concerns that former rebels may be too inexperienced to address, the logistical challenge of rebuilding looted facilities must be overcome before the large foreign labour contingents on which Libya’s oil industry relied can return. Eni has denied a Reuters report that its (33% owned) 700 million-barrel ‘Elephant’ field in the south-west Fezzan region lay “in ruins”, saying that while there have been “thefts of communications and transportation equipment” by pro-Gaddafi militias, sustained delays are unlikely. Hoever, production at Elephant has still not yet begun. The security situation in Fezzan remains short of what IOCs will need to see before committing staff in numbers, as the risk of hit-and-run attacks remains high. With Sirte and Bani Walid taken by NTC forces, Fezzan could be the last hold-out for pro-Gaddafi forces.
SECURITY While many fields have sprung back into life at a pace that belied the predictions of many analysts, resuming production at pre-war levels is set to take at least until Q3 2012, as lingering
EXPORTS Bottlenecks at the export end are also looking to ease shortly. Berruien says the Es Sider terminal, which shipped around a third of Libya’s pre-war crude
350,000 bbls Libya’s exports of crude slated for November. Source: Libyan National Transitional Council
www.arabianoilandgas.com
NEWS ANALYSIS 1
500,000bpd Current Libyan oil production.
Source: Libyan National Transitional Council
Libyaâ&#x20AC;&#x2122;s oil workers are determined to get oil production back on track.
www.arabianoilandgas.com
exports, will take need a year before it handles crude again. Ras Lanuf - the countryâ&#x20AC;&#x2122;s largest refining facility - could restart within a few days, with 300,000 barrels of crude currently stored at site. On exports, Reuters reports that the National Oil Company
shipped its fourth cargo on Friday. 600,000 barrels of Libyan light crude landed at Trieste, Italy, after a joint purchase by OMV and Swiss refiner Petroplus. Libyaâ&#x20AC;&#x2122;s oil exports will jump to almost 350,000 barrels per day in November, doubling Octoberâ&#x20AC;&#x2122;s volumes.
November 2011 Oil&Gas Middle East
21
NEWS ANALYSIS II
NEWS REVIEW Bit stop: Syria oil sanctions start to bite EU and US sanctions are hitting Syrian oil firms hard as the government orders reduced production and suspends oil payments. Words: Patrick Osgood
GETTY IMAGES
wo of Syria’s oil exploration firms have announced major disruptions to their businesses in the wake of international sanctions aimed at Prime Minister Bashar Assad’s Ba’athist regime. Gulfsands Petroleum disclosed on 17 October that it “has been instructed by the Syrian authorities for the time being to continue to confine Block 26 gross daily production to approximately 6,000 barrels of oil per day (“bopd”).” The company expects that production will remain reduced until the end of October at the earliest and therefore average Block 26 gross production for the month is anticipated to be approximately 6,000 bopd.
T
22
Gulfsands operates the Block 26 Production Sharing Contract (PSC) with a 50% working interest: the other 50% interest is held by Chinese firm Sinochem, which contains two producing oil fields: Khurbet East and Yousefieh. At the end of August 2011 Khurbet was producing over 21,500 bopd and Yousefieh was averaging over 2,600 bopd. The 18,100 bpd reduction in production from Gulfsands’s announcement to the end of October, on the basis of an average OPEC Reference basket price of $107, will lead to a gross revenue loss of $36.1 million, half of which is born by Gulfsands. Gulfsands says its “strong cash position means that it is
Oil&Gas Middle East November 2011
well-placed to manage the consequential short term diminution in revenue.” The firm reported in its 2010 accounts that it sits on just over $80 million in cash and cash equivalents. On the same day Kulczyk Oil Ventures announced that it has suspended current operations in Syria “with immediate effect”. The company has halted the bit at a depth of 2,072 metres in the Itheria-1 well, the first exploration well being drilled by KOV Gulfsands says it can ride things out.
47,500 bpd Gulfsands’s production capacity in Syria Source: Gulfsands Petroleum
www.arabianoilandgas.com
NEWS ANALYSIS II
Cutting edge technology for LNG systems GETTY IMAGES
Kulczyk Oil Ventures has suspended operations and is monitoring developments.
from STAHL CraneSystems, the world’s leading manufacturer of explosionprotected hoist and crane technology. All products are certified in compliance with IECEx regulations and are convincing in their high quality and cost-effectiveness. Come and see us in Qatar. STAHL CraneSystems FZE, Ware House No: RA08 / SC08, P. O. Box 261271, Jebel Ali Free Zone, Dubai, e-mail: infouae@stahlcranes.com
6,000 bpd Gulfsands’s current production in Syria Source: Gulfsand Petroleum
and its joint venture partners on Syria Block 9. KOV holds a 50% stake in the block under a production sharing contract which provides the right to explore for and produce oil and gas for export to European markets. KOV cited the need to assess reservoirs and “an increasingly difficult operating environment” as reasons for the suspension in exploration activity. The firm “will continue to monitor operating conditions in Syria to assess when, and if, a recommencement of Syrian operations is possible.” “The sanctions against oil will hit the Syrian economy hard,” Hussein Amach, a Damascusbased economist who previously
www.arabianoilandgas.com
worked at the International Monetary Fund in Washington, said on 10 October. “Oil is more important now than is typically the case. Because tax receipts are down, oil now finances 30 to 40% of government spending. Anything that affects that will have a serious impact on the budget.” International sanctions were introduced as a result of what senior UN officials have called a “campaign of ruthless repression and killing” against civilian antigovernment protesters in Syria. The UN says more than 3,000 Syrian protestors have been killed by security forces controlled by the Assad regime since protests escalated to an uprising on 15 March this year.
ss Congre m u e l d Petro ecember 2011 l r o W 8D 2 0 th atar 4 – Q – a h Do
November 2011 Oil&Gas Middle East
23
MIDDLE EAST NEWS REVIEW Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxx
NEWS REVIEW
Oil demand down on Euro doom OPEC and the IEA finally agree on one thing – poor global growth prospects signal faltering oil demand growth Words: Patrick Osgood PEC and the IEA both revised down their predictions for global oil demand growth in October, in light of the ongoing Eurozone crisis, tepid US outlook and weaker than forecast growth in India and China. “OECD growth expectations for 2011 currently stand at 1.6%, significantly lower than the initial forecast of 2%,” OPEC said in its in its oil market report for October. The producer’s group also revised 2012 economic growth forecast for 2012 sharply downward, from 4.1% to 3.7%.
O
www.arabianoilandgas.com
OPEC said that the economic downturn was “taking its toll” on oil consumption, and cut its forecast for demand growth this year by 180,000 bpd to 0.88 million bpd, and by 70,000 bpd in 2012 to 1.2 million bpd. The International Energy Agency (IEA) also cut its growth forecasts, with oil demand growth down 50,000 bpd for 2011 and down 210,000 bpd for 2012. The USA’s Energy Information Administration released a more optimistic picture of oil demand growth, with a predicted
increase of 1.32 million bpd to 88.4 million bpd this year, and a further 1.44 million bpd in 2012. However, the EIA shared the view of the producer and consumer bodies that the downside risks to oil demand growth have increased significantly since September.
The differing outlooks emphasise difficult trading conditions on oil markets, which have had a turbulent month in light of mixed US data and the ongoing Eurozone soap opera. Volatile oil prices could influence commercial decisions if the demand outlook does not settle in 2012.
9.3 million
Saudi Arabia’s current oil production, a reduction of 500,000 barrels per day in one month. Source: OPEC October Report
November 2011 Oil&Gas Middle East
25
MAKING THE MOST
OF GLOBAL RESOURCES
Together with Qatar Petroleum, Maersk Oil has developed the Al Shaheen field, the most complex offshore field development project in the Middle East. The USD 6 billion project includes installations of 15 platforms, drilling of 160 new wells and 140,000 tonnes of new facilities. Maersk Oil has a proven track record of making the impossible possible in tight and difficult reservoirs. We are a technically focused company and through our integrated solutions we create safe, costeffective and efficient solutions while accelerating and enhancing our oil and gas recovery.
We aim at becoming the preferred choice of host by governments, business partners and employees through our excellent operational and technical capabilities. Explore more at www.maerskoil.com
Visit it us at the World Petroleum Congress, Qatar National Convention Centre, 5-8 December.
Oil production: Maersk Oil operates of some 700,000 barrels of oil equivalent per day. People: Some 3,500 people â&#x20AC;&#x201C; 1/3 offshore, 2/3 onshore. Production countries: Denmark, Qatar, UK, Algeria and Kazakhstan. Exploration countries: Angola, Brazil, Oman, Greenland and the US Gulf of Mexico
MIDDLE EAST NEWS REVIEW
Saudi Aramco CEO Khalid Al-Falih.
While OPEC’s Reference Basket fell below $100 for the first time since February in early October, the cartel says that “signs of weakening demand have had only a limited impact on overall oil market fundamentals.” Despite volatility in oil markets provoked by poor US jobs data and the development of an incipient debt crisis in the Eurozone, the underlying demand for oil is holding up and is set to grow, albeit modestly. At the time of writing, Brent stands at $110 a barrel and WTI at $85.
SUPPLY On the supply side, OPEC producers pumped 30.13 million barrels according to the October Platts monthly survey, only 20,00 bpd off August’s totals for the peak driving season. Mohammad-Ali Khatibi, the current OPEC President, told Iran’s state-backed Mehr news agency on 10 October that OPEC Secretary General Abdullah Salem El-Badri has asked Arab OPEC members to cut their oil output, because the gradual return of Libyan oil production was bol-
stering oil supplies and growth prospects were now weaker than previously anticipated. Nouri Bourrien, the head of Libya’s National Oil Company, expects the country to hit 1 million bpd within five months and a return to pre-war production 1.6 million bpd in fifteen. Saudi is now retreating as Libya advances, reducing production by 500,000 bpd in to 9.3 million bpd in September. In addition, the global growth for the second half of 2011 predicted by GCC producers when
Hydroflow, your professional water blast partner. HYDROFLOW have a full range of pumps with operating pressures 6,000 to 40,000 PSI for those tough Applications. We also have full range of accessories to utilize the pressure and flows available from our JETSTREAM fleet. No matter what your waterblasting application is, we can supply a complete package with the expertise and advise to ensure your project is carried out on time and within budget. We pride ourselves in offering the best solutions for each and every problem.
Bundle Puller 45 t
Tel: +971 4 340 32 28 Fax: +971 4 340 32 29
26
Hydro Demolition
Boiler Exchanger Cleaning
Offices also present in SOHAR, OMAN & AL KHOBAR, SAUDI ARABIA HYDROFLOW PUMP RENTAL HYDROWFLOW EQUIPMENT L.L.C. P.O.Box: 37928, Dubai, UAE P.O.Box: 32427, Abu Dhabi, UAE Email: hydroflo@emirates.net.ae Website: www.hydroflow-me.com
Oil&Gas Middle East November 2011
Tube Bundle Cleaning
Tel: +971 2 622 32 40 Fax: +971 2 622 32 49
www.arabianoilandgas.com
NEWS ANALYSIS
deciding in June to raise production has failed to materialise.
LOOKING AHEAD The next OPEC meeting on 14 December promises some of the theatrics witnessed in June. Rostam Qasemi, Iran’s Oil Minister, will try to seek agreement that Arab producers cut their production in reaction to faltering world growth prospects. Iran’s call for a production cut was slammed by the IEA as “premature”, and is likely to be rebuffed in the OPEC meeting. El-Badri, speaking at the Oil & Money conference in London on 10 October, said “the market looks very comfortable” within OPEC Secretary-General Abdullah el-Badri: market “very comfortable.”
880,000 bpd OPEC predicts global oil demand growth will only be 0.88 million bpd in 2011. Source: OPEC October Report
28
Oil&Gas Middle East November 2011
the current price ranges. Both El Badri and UAE’s oil minister Mohammed Al Hamli have labeled Brent prices of around $100 a barrel “reasonable.” The IEA continues to lobby Saudi Arabia to increase its
production capacity, with IEA Chief Economist Fatih Birol reacting to a recent statement from Saudi Aramco CEO Khalid Al-Falih making it clear the Kingdom is comfortable with the status quo. “In the next 10 years, more than 90% of the growth in global oil production needs to come from MENA countries,” said Birol. “There are major risks if this investment doesn’t come in a timely manner,” he said. “Oil demand is set to increase.” “There is no reason for Saudi Aramco to pursue 15 million b/d [of output capacity],” Al-Falih told the Wall Street Journal. “Our objective is not to grow our production for the sake of growing our production but to be there for the market if the market needs it, and we are waiting to see what happens on the supply side as well as how demand stabilizes,” Khalid AlFalih explained.
www.arabianoilandgas.com
HANDLE THE COMPLEXITY OF RISK Swift and dramatic changes in business conditions, stricter regulations, intense public scrutiny: managing risk has never been more critical â&#x20AC;&#x201C; and more complex. Through our extensive, worldwide experience in risk management within the offshore energy and maritime industries, we understand risk at all levels from the detailed technical through to long-term business strategy, helping you to handle the complexity of risk. $MBTTJGJDBUJPO t 7FSJGJDBUJPO t 5FDIOPMPHZ RVBMJGJDBUJPO t 4BGFUZ IFBMUI BOE FOWJSPONFOUBM SJTL NBOBHFNFOU t &OUFSQSJTF SJTL NBOBHFNFOU t "TTFU SJTL NBOBHFNFOU
www.dnv.com
2011 OIL & GAS MIDDLE EAST AWARDS
Last chance for 2011 glory The countdown is on to the 2011 Oil & Gas Middle East Awards. Get your nominations in now
T
he Middle East’s upstream oil and gas community will once again round the year off in style with the second Oil & Gas Middle East Awards in December. Hosted by ITP Business, publisher of ArabianOilandGas.com and Oil & Gas Middle East, on 12th December 2011 the ceremony will be held in Dubai. The Oil & Gas Middle East Awards will celebrate excellence amongst the region’s outstanding upstream industry. The awards will to seek out best in class organisations, projects, and the people who have proven that going that extra mile, even when part of a multinational company or multibillion dollar project, can make a real difference. From young engineers climbing the first rungs on the upstream career ladder, to the project manager who has overcome seemingly insurmountable odds to bring projects in on time and on budget, right through to exemplary leadership at the top – the Oil & Gas Middle East Awards will identify those performers responsible for positioning the Middle East at the heart of the world’s energy sector. The Awards website has been live since March and entries have been arriving from May. Judging by traffic to date and your enquiries the event promises to be just the ticket to round off the year that the regional upstream business really bounced back! The awards have been separated into four distinct categories to honour the best in class projects, companies, individuals and initiatives throughout the upstream energy world in the Middle East. Participation guidelines, and formal instructions and explanations of category eligibility can all be found at bit.ly/og_awards
ENTRY INFORMATION: Participation guidelines, and formal instructions and explanations of category eligibility can all be found at bit.ly/og_awards
3
www.arabianoilandgas.com
November 2011 Oil&Gas Middle East
31
OMAN COUNTRY PROFILE
OMAN’S GREAT GAS
CONUNDRUM Oman is oil-rich, but it’s a shortage of gas that is making the headlines. Words: Patrick Osgood
34
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
Getty Images
OMAN COUNTRY PROFILE
Oman’s big bet on LNG exports to Asia has left it exposed to a domestic gas squeeze.
one are the days when Oman could view gas as a sideshow to getting at lucrative oil. The US Energy Information Administration states that Oman has 849.5 billion cubic metres (bcm) of natural gas reserves as of 1 January 2011. The current CIA World factbook states that the Sultanate produced 24.76 bcm of gas in 2009, 14.72 bcm of which was consumed domestically. Business Monitor International predicts that
G
www.arabianoilandgas.com
Oman’s annual gas demand will rise by 22.1% by 2014 over 2009 demand. The EIA says Oman’s natural gas consumption rose rapidly over the past decade, seeing a 135% increase from 1999 to 2009. The trend is continuing, and a shortfall in feedstock for power generation is already hampering Oman’s economic development, especially its industrial policy. $3.46 billion of petrochemicals projects have been cancelled or forestalled as
a result of a lack of guaranteed gas feedstock. A rapid rise in domestic demand for power generation and downstream projects, together with the need for gas for reinjection into Oman’s mature oil fields and lockedin liquefied natural gas (LNG) export obligations have left the sultanate with a gas supply gap that it quickly needs to close. The problem is common in the gulf, but has been made especially acute in Oman after
its LNG export program is coming back to bite it. When oil prices fell below $10 per barrel in 1998, the Omani authorities launched a diversification programme known as Vision 2020, which involved gas sales to finance infrastructure projects. These took the form of long-term LNG supply deals, chiefly to Japan’s Osaka Gas and South Korea’s Korea Gas, both signed in 2000. The Sultanate has worked to close the gap, reducing LNG
November 2011 Oil&Gas Middle East
35
Getty Images
OMAN COUNTRY PROFILE
Oman has large LNG export commitments that remove needed domestic gas. exports to around 80% of capacity in 2010, according to Robin Mills, a Dubai-based independent energy economist. Brent is currently trading at $110 a barrel and the gas landscape has been changed enormously, with the US now looking to export LNG. Oman’s Asian LNG deals have locked away a share of the country’s gas resources that it might now prefer to apply to its value-added petroleum product ambitions, if it had the choice. Muscat cannot solve its gas problems simply by transferring LNG from the export market to domestic customers. Lower prices paid for domestic gas would adversely affect revenues of both companies, hampering state budgets that form the basis of economic growth.
FEW OPTIONS
mize revenues. The gas giant has been supplying 200 million cu ft per day of gas to Oman through the trans GCC Dolphin pipeline, under a deal struck in 2007. Mills says gas above this commitment will be expensive. Iran is pitching to export gas to Oman, and says it is in active negotiations with a view to striking a deal by the end of March 2012, Javad Owji, managing director of National Iranian Gas Co told local news sources. “We’ve been discussing with Iran to import gas and we will continue to discuss that, for Oman requirements,” Nasser bin Khamis Jashmi, undersecretary at Oman’s ministry of oil and gas, said on 11 October, according to Tehran Times. The countries signed a prvisional agreement for the construction of a 200km underwater pipeline to transport 1 billion cubic feet of gas a day from the Iranian island of Kish to Oman in 2009. Iranian gas would be a great deal cheaper than Dolphin gas or imported LNG, but may have serious political drawbacks.
Mohammed Hamed Al Rumhy, Minister of Oil and Gas of the Sultanate of Oman. hard rock formations, and surrounded by packed sand and stone, making it difficult and expensive to recover. The Sultanate has only recently been approaching its upstream gas sector development with the same urgency and ingenuity with which it has taken to cutting-edge enhanced and improved recovery scheme on the oil side. Last year, BG Group pulled out of a tight gas project at the Abu Butabul gas and condensate field, after determining that the $800 million up-front investment was not commercial. Muscat is now hopeful that BP will decide to pour $15 billion into a long-awaited 10 year tight gas production project at the 2,800 sq km 100 trillion cu ft Khazzan field, known as
Block 61. BP signed an exploration and production sharing deal with Oman in January 2007 and a commercial price for the gas must be struck quickly to ensure BP can plug Oman’s gas leak in time. Oman has other tight gas fields that could make contributions to supplies, but none has the potential of the BP project. BP appointed Worley Parsons to carry out the the select stage engineering of the Khazzan Project, which involved the engineering definition of options for the extended well testing of tight gas reservoirs contained within the field. Extended well testing was completed in 2010, after the completion of 3D seismic – the largest ever commissioned by BP onshore - by
A nuclear solution to Oman’s energy needs is unlikely to arrive on time to head off the gas squeeze, as Abu Dhabi is unlikely to see any progress on the construction of its nuclear plants and a related GCC power grid before 2017. Qatar has no shortage of gas, TIGHT SPOT but has to date prioritised LNG Oman is not short of gas exports to extra regional mar- reserves. However, these are kets in Asia and Europe to maxi- buried deep into the country’s BP has invested $600 million in Oman’s tight gas, but is not yet committed.
36
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
OMAN COUNTRY PROFILE
Global Geophysical Services. If the project gets the green light it will trigger a contracting boom in Oman. The project is slated to include a 30 mcmd gas processing plant, export pipelines, 300-400 wells â&#x20AC;&#x201C; most drilled horizontally in difficult conditions â&#x20AC;&#x201C; and 600 km of flowlines and gathering systems. The company is currently taking applications from vendors interested in becoming approved suppliers. BP, which declared the g&g results â&#x20AC;&#x153;very encouraging,â&#x20AC;? is now working on the full field development plan - expected to be submitted to the government in early 2012 â&#x20AC;&#x201C; after which it will attempt to strike commercial terms for investment. The firm has already plowed around $600
million into the project.
PICKING A PRICE In a recent Reuters report, the company has said that it will not make a decision on whether to proceed with full field development until 2013, a blow for Oman. Each well will have to penetrate five km of low-porosity rock before going horizontal, a process which will take several months, with production not slated to begin by BP until 2016 or 2017 on the basis of a Bob Dudley, BPâ&#x20AC;&#x2122;s CEO: set on Oman? 2013 start. Mills says the price must be right. â&#x20AC;&#x153;Clearly gas prices will have to rise substantially to make such difficult gas projects commercial, to $4-5 per million British thermal units or more,â&#x20AC;? Mills says. â&#x20AC;&#x153;The government will
then either have to raise prices to end-consumers or subsidise prices from other sources. With current high LNG prices, additional gas availability would be valuable even at higher costs.â&#x20AC;? Reuters has reported BP CEO Bob Dudley saying the high cost of the project could lead BP to withdraw if a sufficient aggregate price for the gas cannot be agreed. Given the alternatives, Oman will have to work hard to ensure BP commits.
â&#x20AC;&#x153;Importing gas from Iran is politically problematic for any gulf state, not least because of sanctions.â&#x20AC;?
Eurotechnology Saudi Co Ltd.â&#x20AC;&#x2122;s oilfield centre is situated in Dammam, Kingdom of Saudi Arabia on the main Dhahran to Jubail Highway. Our facility is situated in a 35,000m2 location which offers a full range of services for our customers including Inspection, Repair, Manufacture and Re-Certification. SERVICES PROVIDED Manufacture & Re-certification of Wellhead and Christmas Tree equipment PSL1 through 3(API 6A) Â&#x2021; Cross-over connectors Â&#x2021; 7RS FRQQHFWRUV Â&#x2021; 7HHV DQG &URVVHV Â&#x2021; $GDSWHU DQG 6SDFHU VSRROV Â&#x2021; )ODQJHG &RQQHFWRUV Â&#x2021; 7KUHDG &RQQHFWRUV Â&#x2021; 2WKHU (QG FRQQHFWRUV Manufacture & Re-certification of Drill-through Equipment (API 16A) Â&#x2021; 'ULOOLQJ VSRROV Â&#x2021; $GDSWHUV Â&#x2021; /RRVH FRQQHFWLRQV Manufacture of Casing & Tubing Pup joints, Accessories, Threading & end finishing (API 5CT) Manufacture of Drill stem subs, Threading for Rotary Shouldered connections (API 7-1) Threading and Repair of Grant Prideco Extreme Torque (XT) Connections XT39 and XT54 Threading of Voest Alpine Premium Connections 4 1/2â&#x20AC;? and 7â&#x20AC;? VAGT Approved Repair Facility for T3 Valves Â&#x2021; 5HSDLU 5H FHUWLILFDWLRQ RI FKRNH PDQLIROG /RRVH YDOYHV
www.arabianoilandgas.com
ADDITIONAL SERVICES
5 NDT Services â&#x20AC;&#x201C; MT, PT & UT 5 Hardness Testing (Sour Service in accordance with NACE MR 01-75) 5 Hydrostatic testing 0 to 30,000 PSI 5 Coupled end Hydrostatic testing for 18 5/8â&#x20AC;? Casing 5 Heat Treatment services 5 Make Up / Buck-Off Services up to 20â&#x20AC;? diameter 60,000 ft/lbs 5 Shot blasting 5 Painting
.LQJGRP RI 6DXGL $UDELD 'DPPDP -XEDLO +LJKZD\ 2SSRVLWH 79 6WDWLRQ 3 2 %R[ 'DPPDP 7HO )D[ ( PDLO LQIR#HXURWHFKQRORJ\ FRP VD
November 2011 Oil&Gas Middle East
37
MIDDLE EAST
JACKUP MARKET REVIEW Dr Rina Samsudin, Senior Analyst, IHS Petrodata, says a raft of contract letting from Saudi Arabia is paving the way for a region-wide increase in demand for 2012
38
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
JACKUP REPORT
lthough jackup utilisation and day rates in the Middle East have remained relatively stagnant over the last couple of years, there is a sense that drilling interest is picking up again and that market conditions for the drilling industry will improve next year. One major contributing factor has been Saudi Aramco’s massive hiring spree, which is still ongoing. In the years following 2008, the operator scaled down its rig programmes – from 25.5 rig years in 2008 to 20.6 rig years in 2010 – mainly through the early termination of drilling contracts. However, so far in 2011 Saudi Aramco has dished out a staggering 23 new drilling contracts – at three to four years apiece – and is understood to have outstanding tenders for six additional requirements. Because the national oil company has mostly hired jackups based in the Middle East, utilisation levels in the region are expected to rise as idle units start new commitments. Another encouraging sign for rig owners is the number of jackups being pulled out of stack for new charters. Rigs to have been reactivated this year include Noble Charles Copeland (to provide accommodation services for Maersk Oil Qatar) and Noble David Tinsley (which is now working for Dubai Petroleum). The ENSCO 96 and ENSCO 97, having been stacked in Bahrain, are among those going back to work for Saudi Aramco. The Nabors 240 is mobilising offshore in November to undertake a workover campaign for Qatar Petroleum Development. The Noble Dick
A
www.arabianoilandgas.com
Favor is coming out of cold stack for an upcoming campaign offshore Bahrain for Oxy. There are currently more than 20 jackups idle in the Middle East, of which 10 are cold or warm-stacked. With total utilisation in the region at approximately 70% (based on rigs under contract and total regional supply of around 120 jackups), day rates remain competitive – particularly for older, lower-specification units – but are slowly rising. For example, IHS Petrodata’s latest day rate benchmark for 250ft independent-leg, cantilever jackups in the Middle East Gulf is US$75,000-84,000 whereas in January 2011, the benchmark was notably lower at $63,000/day. Three years prior, before the height of the global financial crisis, market levels were at around $120,000/day. Overall, the accumulated contract
backlog, outstanding options and potential drilling programmes in the region point to an increase in jackup demand next year, from around 85 rig years in 2011 to approximately 106 rig years in 2012. If operators resort to using only locally based rigs, the regional marketed surplus could shrink to below 10 units compared to today’s 30-odd surplus. The busiest jackup sectors next year are expected to be Saudi Arabia, Iran, followed by the UAE. Some notable developments on the radar include potential exploration drilling by the likes of GDF SUEZ, CNOOC and Shell on offshore Qatar concessions; Oxy returning to Bahrain for more exploratory drilling following a campaign there in 2009/2010; and Saudi Arabia potentially starting to drill off its shores in the Red Sea after years of conducting seismic studies.
Day rates are slowly rising, but have still not caught up to pre-crisis highs.
ANALYST INFO Now IHS Petrodata, ODS-Petrodata was acquired in April 2011 by IHS, a business information company with comprehensive content, insight and expertise in key areas shaping the global landscape. Businesses and governments around the world use our products and solutions to make faster and more confident decisions.
November 2011 Oil&Gas Middle East
39
EVENT REPORT
XXXXXXXXXXXXXXXXXXXXXXXxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxXXXXXX
$75 million Lamprell facility launch celebrated with Royal visit
ROYAL VISIT amprell, a diversified engineering and contracting service provider to the onshore and offshore oil & gas and renewables industry, held the official inauguration ceremony for its main facility in Hamriyah Free Zone, Sharjah, UAE on 27 October. The event, under the patronage of His Highness Sheikh Dr. Sultan bin Mohammed Al Qas-
L 40
simi, Supreme Council Member and Ruler of Sharjah, was attended by UAE dignitaries and Lamprell’s customers and partners. The event marked the official launch of Lamprell’s main facility following over three years of construction and investment totalling $75 million. With an area covering 335,000 m² and a quayside of
Oil&Gas Middle East November 2011
over 1.4 kilometres, the Hamriyah yard is one of the region’s foremost facilities for the manufacture of oil & gas assets. The yard has capacity to accommodate up to 13 jackup rigs simultaneously and an additional five rigs in various stages of construction throughout. The full Api-accredited facility will focus on the construction of new build jackup rigs,
liftboats and rig refurbishment projects. In addition to construction, the yard hosts Lamprell’s main administration building which house over 600 administration staff, a client office, several workshops and ample warehouse space. Speaking at the inaugeration ceremony, Nigel McCue, Chief Executive Officer of Lamprell, said:
www.arabianoilandgas.com
EVENT REPORT
His Highness Sheikh Dr. Sultan bin Mohammed Al Qassimi and UAE dignitaries take a tour of the facility.
“We are delighted to be celebrating this event in the presence of His Highness. This facility increases the Group’s capacity significantly both in terms of area and quality and technology, helping position Lamprell as one of the leading yards in the world and cementing its position as the premier global provider of rig refurbishment services.” His Highness Sheikh Dr. Sultan bin Mohammed Al Qassimi, Supreme Council Member & Ruler of Sharjah, cutting the ribbon.
www.arabianoilandgas.com
November 2011 Oil&Gas Middle East
41
EVENT REPORT
LAMPRELL’S HAMRIYAH AT A GLANCE: • Located in the Hamriyah Free Zone, Sharjah, UAE • Area of 335,000 m² • 1.4 km of deepwater quayside • Construction base for new build jackup rigs, liftboats and rig refurbishment projects • Accommodates up to 13 jackup rigs simultaneously at the quayside and an additional 6 rigs in various stages of construction within the yard • Investment of $75 million
Nigel McCue, Lamprell CEO.
$503.8 M
Lamprell’s full year 2010 revenue amounted to US$ 503.8 million, delivering a net profit of $66.6 millionn
42
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
2011 ǍƃƵƉƁȢȶ ǍƃƵƄƃŴ & ǞƸſǞƁ ǓŴȶLjȚ ȰǍƪŽȚ ȥƾŹ NjſȖ ǚƁȶȖ ƞƸŽƾƑȚ ǙƶǣƾŮǎŽ ǙůǞǧ ȲƾƫƁȘ ǙƶƳƚ ǓƲź ȤǽȶȢ ǗŽȖ ȔƾƲŽ ǀƸŮǍƯŽȚ ȴǞŰNjƇƄƁ ǜƛ ƞƴƵƄƤȚ ǜǣƾŮǎŽȚȶ ȳƾŻȤLjƾŮ ȲƾƫůǽȚ ǚűƻů ǽ
44
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
COVER STORY
POWER OF TWO
Bijan Mossavar-Rahmani is spearheading one of the most talked about merger propositions of 2011. By bringing together the assets and local skills of RAK Petroleum with Norway’s DNO, he is targeting a MENA powerhouse centred around the prolific hydrocarbon resources of Kurdistan and beyond. Oil & Gas Middle East uncovers the magic behind the deal he United Arab Emirates has long been synonymous with oil, its production and more recently all the trappings of petrofuelled economic success. Whilst on a national level the supermajors, which have minority stakeholdings in the behemoth Abu Dhabi national oil companies, and the Emirate-owned energy producers dominate the industry consciousness, it has fallen to private companies to take UAE oil and gas entrepreneurship and accomplishment to replicate that reputation abroad. Sharjah’s Crescent Petroleum and its subsidiary Dana Gas have delivered tremendous results for the local population in Iraq’s Kurdistan and have struck upon success after expectation beating success in its exploration efforts in Egypt. Dubai’s Dragon Oil has shown local businesses are up to the challenge and can overcome the hurdles of prospecting, producing and profitably selling oil from Turkmenistan. Now you can confidently
T
www.arabianoilandgas.com
add to that portfolio Ras Al Khaimah’s homegrown RAK Petroleum. A relative newcomer in the Middle Eastern oil and gas business, the company, only founded in 2005, today holds an interest in and is operator of, four concessions in the Sultanate of Oman and three on home turf in the Emirate of Ras Al Khaimah. The company has an extensive and active work programme covering exploration, appraisal, development and producing operations. RAK Petroleum also holds a non-operated interest in the Hammamet Offshore licence, Tunisia. In Oman, its production from the offshore West Bukha oil and gas field currently averages 9,000 barrels per day of oil and associated liquids and 27 million cubic feet per day of dry gas. The nearby gas and condensate field, Bukha, produces another 10 million cubic feet per day of gas and 800 barrels per day of associated liquids. Both fields are located in Oman Block 8 and are operated by
November 2011 Oil&Gas Middle East
45
COVER STORY
RAK Petroleum with a 50 percent participating interest. In its consolidated results for last year, the company recorded a net profit from operations of US$26.4 million (year ended 31 December 2010), its first back-to-back profitable year since its founding in 2005. Good results undoubtedly, but what has propelled the company to international fame in 2011 is its growing stake in, and soon-to-be-completed merger with Norwegian upstream operator DNO. As of the second quarter 2010 RAK Petroleum’s shareholding in DNO International ASA reached 30 percent, and the UAE company now has two management members on the DNO Board after the Chairman of the Board and Chief Executive Officer Bijan MossavarRahmani was elected by DNO shareholders in March 2011. The merger proposition has raised eyebrows in both companies’ home turf, as well as garnering attention from some of the biggest names in the oil business in London. Pitched as an opportunity for DNO to broaden its footprint in a prolific hydrocarbon area, and for RAK Petroleum to bring its local knowledge, assets and skills to DNO’s exciting prospects in the Kurdistan Region of Iraq, the deal has been met with almost unanimous enthusiasm by directors, shareholders and analysts across the board. Oil & Gas Middle East met with CEO Mossavar-Rahmani in Dubai to discuss the upcoming merger, and uncover why, in his word’s, the deal really is a win-win proposition. He says that for DNO, the local knowledge and under-
46
standing of regional risk, in addition to RAK’s assets, brings tremendous value, and for RAK stakeholders, the tantalizing prospect of the Kurdistan concessions under DNO’s belt provides an opportunity too irresistible to miss. “As a joint entity the merger works on a number of levels. There is a familiarity and comfort that comes with having a substantial element of local content and local contact on the ground in these regions,” he says. “I happen to have some Kurdish ancestry and I’m very comfortable in Kurdistan, I have a knowledge of their history, of the mindset, and they understand how I think and work. In a sense that familiarity, shared culture, language and ethnicity can all be very helpful in understanding how one conducts oneself in business in these regions – that’s part of it.” Mossavar-Rahmani explains that the way in which someone from the UAE views political and contract risk within the Middle East is different to what an investor in Scandinavia might think. “Familiarity breeds a level of comfort and understanding of risk, and knowing how to mitigate it perhaps more than a western investor. Western investors are most comfortable investing in western companies, whereas for people from this region investing in the US comes with a set of risks, such as visas, and access.” It follows that local advantages can be reaped beyond the business and socio-political spheres. “Even from a geology and geophysics point of view, working in a particular region means a better understanding
Oil&Gas Middle East November 2011
DNO’s Kurdistan Sindy Rig in action during well testing.
“We would absolutely look at Libya as an opportunity in the future. As it opens up I think it will definitely be a market that’s going to be exciting” of what you are dealing with, which equates to a competitive and comparative advantage, and local content is the first step to ultimately achieving more with less,” enthuses Mossavar-Rahmani. Enthusiasm for all things Kurdistan has dominated the regional upstream news agenda throughout 2011. Longstanding
concerns surrounding the contractual legality of operating in the semi-autonomous northern region, in a country still wanting a decisive Oil Law kept potential investors at bay, but the tide appears to have turned. Indeed, spotting an opportunity and being willing to take the risks associated with being a prime-mover, DNO was actu-
www.arabianoilandgas.com
COVER STORY
RAK Petroleum - Bukha platform with 1 staff - Block 8, Oman ally the first international oil and gas upstream player to sign a production sharing contract signed with the regional government in 2004. That boldness has set the company apart from its peers who are now perceived to have
Dubai, UAE
largely missed the boat with regards to getting in on an unprecedented slice of oil and gas real estate. “We understand that there are issues surrounding the sanctity of contracts in the Kurdistan Region of Iraq with
+971 (0) 4 299 7029
www.chapman-freeborn.com
ACQUISITION FEVER The banner development for DNO this year has been its acquisition of RAK Petroleum’s oil and gas assets in the Middle East and North Africa for $250 million in shares. The transaction values DNO at $1.64 billion, or 9.50 kroner a share, and RAK’s operating subsidiaries at $250 million, with the enlarged DNO group having interests in the Kurdistan region of Iraq, Yemen, the United Arab Emirates, Tunisia and Oman. The company has firmly nailed its colors to the mast, setting out a plan to expand through mergers and acquisitions. However, other major players in the region have designs of their own. Tony Hayward, who will shortly become CEO of Genel Energy after Vallares agreed the purchase of the company through a reverse takeover earlier this year, told the Norwegian newspaper Finansavisen “DNO International could be interesting to us eventually.” Vallares acquired Genel in a deal valued at $2.1 billion, and having declared an acquisition range of up to $8 billion in June, has a mandate to either leverage investors’ capital for a further purchase to tap up equity markets if it achieves the premium London Stock Exchange listing it expects in early 2012. Genel’s current operations leave the company with net cashflow of 8% of revenues, which Hayward says gives Genel room to “to participate aggressively in the significant consolidation we expect to see in the region.”
cargodxb@chapman-freeborn.com 31 offices in 23 countries
Air Cargo Charter Broker of the Year 2007 / 08 / 09 / 10 / 11
www.arabianoilandgas.com
November 2011 Oil&Gas Middle East
47
Lamprell is a leading provider of diversified engineering and contracting products and services to the onshore and offshore oil & gas and renewables industry. Principal businesses and services are: Principal businesses:
Services:
New build marine (jackup rigs, liftboats, wind farm installation vessels, tender drilling barges, FPSO topside modules)
INSPEC: Non Destructive Testing (â&#x20AC;&#x153;NDTâ&#x20AC;?), pre-heat, post weld heat treatment testing, specialised inspection services, marine NDT services.
Upgrade and refurbishment of jackup rigs
Sunbelt H2S: Specialising in H2S detection and related services,H2S training, consultancy, equipment sales and rental.
Engineering & Construction projects for onshore and offshore sectors (oil & gas structures, EPC services, pressure vessels, process modules) Oilfield engineering services, including the upgrade, refurbishment and new building of land rigs
Tech Services: Operations & Maintenance support services for regional onshore & offshore operators.
P.O. Box 42149 Sharjah, United Arab Emirates. www.lamprell.com
T +9716 5282323 F +9716 5284325
info: IAN ANDERSON : ianderson@lamprell.com
COVER STORY
Bijan Mossavar-Rahmani, chairman and CEO of RAK Petroleum.
“Familiarity breeds a level of comfort and understanding of risk, and knowing how to mitigate it perhaps more than a western investor” DNO has a Kurdish operating capacity of 65,000 – 75,000 barrels per day (bpd), and is currently producing 32,334 bpd while reservoir monitoring work is underway in production. The company is producing at those rates today. “That production capacity can be increased with some modest investment to around 100,000 barrels per day, and potentially even further.” The issue for DNO is how to manage its investments to aximise revenue from a difficult market mix (‘Revenue Wrangling’ opposite).
MENA LEADER Kurdistan aside, one of the primary reasons Mossavar-Rahmani is excited by the merger is the opportunity it creates to emerge as a unified Middle East and North Africa focused
50
company, with a portfolio spanning reliable and exciting hydrocarbon markets. “The RAK Petroleum assets would help DNO corporately become a stronger company, not just because of the value of bringing our experience to the Iraq operations. By contributing our blocks in the UAE, Oman and Tunisia we will transform DNO from a two MENA-country company into a five country MENA presence,” he says. The Middle East and North African opportunity landscape is, he says, ripe for an ambitious company. “Clearly some of the best oil and gas real estate on earth is concentrated in this region. We are pursuing a couple of redevelopments in the Northern Emirates, offshore Ras Al Khamiah, and DNO is active in
Oil&Gas Middle East November 2011
REVENUE WRANGLING DNO, like Genel, is owed between$200-350 million dollars by the Kurdish Regional Government, a situation which stems from the lack of a settled oil law to regulate the relationship between the KRG and Iraqi government on contract management and oil revenues. Currently, the region’s oil for export is pumped via Kirkuk to Turkey through the ageing Ceyhan pipeline, and revenues are paid to Baghdad. The capital has been withholding the contractually-mandated profit oil revenues from DNO’s exports because it says that the PSCs under which DNO operates are unconstitutional, a position the KRG firmly opposes. DNO pumped the region’s first export oil to great fanfare in 2009, but exports ceased after just four months when Baghdad refused to pay the KRG out as the oil came via the PSC it had signed with DNO in 2004. As a result of the legal limbo, DNO has been paid only $163.7 million for exports to date, ostensibly on account of exploration and production costs, for the period of when it has been able to export Kurdish oil. Payments were made by the KRG in June and September this year after it received cash from Baghdad. From the export halt in October 2009 until February 2011, the Norwegian firm sold its oil domestically at knock-down rates of around $25 per barrel, against prevailing average rates for Iraqi combined export crude of $104. After a temporary deal struck between Erbil and Baghdad in January 2011, DNO began exporting oil again, which led to pumper profit and operating revenues of NOK 355 million ($63 million) and NOK 732 million ($130 million) respectively in the second quarter this year. However, continuing payment problems, a higher domestic market price and technical issues with export infrastructure has pushed DNO back to the regional market. On 17 October the company announced the diversion of a third of its production back to the domestic market to improve “the stability of its revenue stream.” 10,000 bpd are reaching the local market at prices of $50-55 for which DNO gets paid immediately, with a total of 675,000 barrels slated for domestic sale. In other words, DNO would rather sell cheaply-produced oil within the region for sub-optimal rates than have to rely on both the creaking export infrastructure and fractious political relations between Erbil and Baghdad that are running up a huge amount of oil that has been ‘bought’ from DNO by the Iraqi government but has not been paid for. Meanwhile, the firm’s exports – which are essentially delivered on credit – currently average 25,000 bpd from the company’s total production capacity in-country of 70,000 bpd.
www.arabianoilandgas.com
COVER STORY
respect to Baghdad and their sensitivities. The issues are complex and complicated and need to be addressed. However, we felt comfortable that we understood the larger context and that we could also be helpful in the discussions that could lead up to the resolutions,” explains MossavarRahmani. “The approach of ‘wait and see’ quickly transitions to ‘wait and lose out’. Those who have sat on the sidelines waiting have seen opportunities grabbed by others prepared to take risk. Whereas those that have gone in have been tremendously successful,” he says. What has set the Kurdistan Region apart from the southern Iraq experience is its openness to doing business with companies large and small. Whilst the supermajors have concentrated on chasing the giant technical services contracts in the South, the production sharing action in the North has gone to more agile players such as DNO.
“I see Kurdistan as a launch pad for growth, and it is on a rapid trajectory. The speed and success Kurdistan has had in opening up and attracting companies is really unprecedented in the modern period. “They have been tremendously successful in attracting small companies first, which has been followed by larger companies coming in to drill, find, produce and bring their oil to market. It’s actually something of a phenomenon.” This is not untypical – very large companies to tend to be more lumbering and slower to act when it comes to frontier areas. Smaller companies tend to go in, prove it can be done, and then sell to larger players. “In Kurdistan, companies with quite limited presence in the rest of the world have been successful. Smaller companies eventually get swallowed by larger ones until you reach a supermajor who can manage the lot,” he says. “I think the trend towards
DNO’s Erbil-2 Sindi Rig. The Norwegian firm was a first-mover into Kurdistan.
www.arabianoilandgas.com
“The approach of ‘wait and see’ quickly transitions to ‘wait and lose out’. Those who have sat on the sidelines waiting have seen opportunities grabbed by others prepared to take risk” larger players coming in with deeper pockets is somewhat inevitable in Kurdistan. There have been many discoveries which will require larger players with the wherewithal to develop them. Taking the region to the next level will require companies with the necessary financial backing.”
CONTRACTUAL ISSUES There is a huge degree of contractual variation in Iraq, and companies which signed deals amidst much hype and fanfare in the last two years are now returning to the table looking
to renegotiate those terms. Kurdistan was more of a clean sheet and the contracts are quite transparent, says Mossavar-Rahmani. “There was perhaps a perception that one of the challenges to the Kurdistan business model was a lack of transparency, which has been addressed by the Kurdistan Regional Government by taking the unprecedented step of making the contracts publically available by publishing them online. That is an unheard of not just in Iraq or Kurdistan but pretty much region-wide,” he says.
RAK Petroleum’s Bukha platform, offshore Block 8 in Oman.
November 2011 Oil&Gas Middle East
49
COVER STORY
ANALYST INSIGHT Since the RAK/DNO merger prospectus was made available, investment analysts following DNO have reviewed the proposal. Each has endorsed the transaction and produced a Buy recommendation for DNO shares. Here’s what the analysts say: First Securities, October 26, 2011: “There are two main reasons why we think investors should support the merger: Firstly, a merger will create a wider portfolio with lower political risk and better geographical diversification. Secondly, a merged asset base will most likely provide a more stable operational cash flow as the company’s operational cash flows have been volatile in periods with exports from Kurdistan.” ABG Sundal Collier, October 11, 2011: “On the back of the release of the DNO/RAK Petroleum merger prospectus we raise our recommendation to BUY (from SELL). We believe the merger will offer substantial downside protection and view the enlarged regional footprint following the merger as adding value.” Arctic Securities ASA, October 21, 2011: “DNO/RAK merger creates significant MENA E&P Player. The merger is in line with DNO’s strategy to grow assets and production in the Middle East and North Africa, while providing diversification regarding political and technical risk. DNO staff monitoring operations at the Yemen Tasour central processing facility. Yemen, and I’d like to build on that opportunity. Yemen is not the easiest place to operate right now due to civil strife, but where that poses one set of challenges, we also feel there are opportunities.” Mossavar-Rahmani says that the share prices of companies exposed to countries at the centre of the Arab Spring have been hit, and where others may fear to tread, he sees lands of opportunity. “Yemen and Egypt may also be viewed as distressed states by the investment community and companies with a lower risk appetite may be looking to exit, whereas I think they may pose important opportunities in the future.” “If we have a greater appetite for regional risk, because we see it differently, then investing in assets across the region would be appealing to us, in the same way that some opera-
www.arabianoilandgas.com
tors may prefer to cash in their value and move into territories or environments closer to their own comfort level.” “DNO has stated it wants to do more in Tunisia and Yemen. Now, obviously, they are not Iraq and Libya - the size of the fields is different - but a cluster of smaller operations can combine to a significant business opportunity. It’s not always about the size of the reserve under the ground, rather what you do with what you’ve got and how well you can manage those assets,” he adds. Looking further ahead, future footprint expansions in North Africa could also be on the cards. “We would absolutely look at Libya as an opportunity in the future. As it opens up I think it will definitely be a market that’s going to be exciting. It’s a little bit early for us now, and we are
in the middle of a merger, but I would be very excited in 2012 to look at the opportunities which are there,” he says. “South Sudan is another area where companies will look and we hope to look in there in time. In a political sense, both Libya and South Sudan are clean slates and the potential to build exciting developments in their upstream industries is certainly appealing.”
MONEY TALKS Once the merger goes ahead, which looks ever more likely now that minority shareholders initially reticent are now on board, the company will look to international investors to finance its growth ambitions. “Once the merger is complete we will look to a London listing, because there will be stronger investment appetite and larger investment pools
chasing the sort of opportunity we represent. Having access to that means we could place more shares in London and raise capital that way, and the capital value of existing shares will increase,” he outlines. “London will give us access to higher multiples, more shareholders, and shareholders with deeper pockets. Also importantly, what London does is give us shares in a currency we can use to do other mergers with.” Initial meetings with potential investors have been positive, he says, but local investment would be advantageous too. “One of the largest investor pools really should be local. RAK Petroleum is a locally formed and locally funded company with key investors from the UAE and Saudi Arabia. There is a large investor pool here we can tap into here too, which I hope we can tap into,” he concludes.
November 2011 Oil&Gas Middle East
51
TERADATA
Massive swathes of data can now be generated by oilfield operations, and up to 70% of an engineer’s time can be spent searching for and managing that data.
DATA FOCUS:
TERADATA LOOKS EAST Oil & Gas Middle East meets firm hoping to shake up the region’s attitude to data ou could be forgiven for not recognizing the name Teradata in the upstream oil and gas business, but not for long. The firm, founded in 1979, is a specialist vendor of data management, analytics and business intelligence services, and has got to grip with ‘big data’
Y
www.arabianoilandgas.com
across a number of commercial sectors, counting retailers WalMart, eBay, Tesco, and major financial firms among its enterprise-wide clients. In the Middle East, Teradata already acts for mobile companies and is active in other commercial sectors. “We are relatively new to the industry glob-
ally,” Niall O’Doherty, Teradata’s business development manager for the Emerging Industries Team, with a remit covering Europe, the Middle East and Africa, admits to Oil & Gas Middle East. “What we’ve been trying to do is take the stories that you hear around eBay and apply those insights to oil and gas.”
THE DATA DELUGE By 2020, the digital world will be 44 times as big by volume in 2009, according to a study by global market intelligence firm IDC. The upstream oil and gas industry is no different. After all, it was the oil industry that first spurred the bulk purchase of early forms of data storage,
November 2011 Oil&Gas Middle East
53
TERADATA
and was at one point the largest purchaser of magnetic tape. Other industries have caught up, with eBay announcing at the Partners Conference that they load 15,000 transactions a second through their accounting and analytics systems. These volumes are common in oil and gas: National Oilwell Varco recently reported that rigs using new intelligent bit strings are each likely to generate data at a rate of four terabytes a day. Across the life and breadth of an average 300-400 well development project, the data volume is intimidating. “Sensors have become very inexpensive, and so explorers are sensor-equipping everything,” Glenn Sartain, senior industry consultant - Oil & Gas at Teradata, tells Oil & Gas Middle East. “That will lead to what I call a data tsunami coming at these companies. The majority of it has been regarded as data noise, or what Chevron calls ‘data exhaust.’” On average, 70% of an engineer or geologist’s time is spent searching for and managing data, and there are fewer experienced professionals able to make the kind of businesscritical judgment calls on which successful upstream projects rely. In light of this, oil and gas companies are recognizing that there is a lot of value in that ‘exhaust,’ but they lack in the the age of the multi-petabyte (1,000 terabytes) project, a way to navigate it. Sartain says the digital oil field future of the industry has so far seen “a lot of hype and not a lot of substance.” Why?
Data management allows oil companies to learn from engineers’ prior decisions.
“Data is actually as much of an asset as an oil well, or a pipeline, or a tanker. It needs to be mined in the same way as a reservoir” Glenn Sartain, Teradata
fixation of the frequency which data is collected under the guise of ‘real-time’ digital oil field aspirations. “The idea of what is ‘real-time’ really needs to be addressed,” says O’Doherty. “There is a cost with going down to seconds or minutes, but is there value there? If you are talking about decisions of whether to send a boat out with a spare part, do you need to know in a nanosecond?” Teradata, taking account of the long life scales of any upstream project, aims to build business intelligence into this, so oil companies don’t install the latest expensive fiber optic everywhere just because they can. Oilfield services giants have retained the data acquired during exploration and field develSTUCK IN SILOS Part of the problem has been opment, and each has provided that there has been undue their own solution to specific
54
Oil&Gas Middle East November 2011
problems in upstream projects, from G&G to wireline logging and maintenance analytics. One result of this approach is that data accrual has been viewed by management as a cost of doing business. “The thinking has been that it has to be maintained, so you build a cost structure for it, you’re not very happy about it, but you’ll store it because you have to,” explains Sartain, a 20-year industry veteran. “Data is actually as much of an asset as an oil well, or a pipeline, or a tanker. It needs to be mined in the same way as the reservoir that I am drilling to get at.” The level of specialization by engineers has also exacerbated the ‘siloing’ of data stores: IOCs and NOCs didn’t call for integrated data management, so it was not developed by service companies. Scalability – a vital
attribute in any business system, especially one facing a data-rich future – was ignored. Part of the problem has been the way that operators have driven competition for service business. “We’ve driven this by having service companies that compete with each other for pieces of business,” says Sartain. “If you said to a service company that ‘we’re giving you the front-end opportunity to drill these wells but we need to have all of the information collected together in a single repository,’ they would say, ‘we can’t do that’”. “We need to separate out the data management layer from the application and visualization layers,” says O’Doherty. “Until this is done it’s going to be a challenge to overcome some of the scalability issues the industry has.” Additionally, just as the technological possibilities for the industry opened up in the 2000’s, rising oil prices provided operators with a disincentive to change the way they worked. “Industries make changes whenever they feel pain,” says Sartain. who says that upstream operators have also been anaesthatised to the pain of the shortcomings in how they manage their data by ‘baked in’ contingency funding in standard business models. Increased business risk, regulation and higher operational risk from pursuing deeper and tighter hydrocarbons in difficult environments is now allowing some of that pain to get through.
LOSING TIME There is also the vexed issue of non-productive time, which industry analysts believe costs the upstream sector around $8
www.arabianoilandgas.com
TERADATA
“Our focus now is on how you can build a sub-surface data structure within a database which is scalable up to multi-petabyte levels” Niall O’Doherty, Teradata
Niall O’Doherty, Teradata. billion a year. The incentives to manage data better are real: knocking a day off a well-drilling timetable can save millions of dollars, and making best use of G&G data can be the difference between 20 years of oil pay or a plugged and abandoned well. Preventing another Macondo – which official reports partly described as a failure of data communication and analysis – is an obvious and paramount priority. “If I’m a cement vendor or a mud-logging company, I’ve got all my optimised solutions for my individual role, but the challenge is in how they are all brought together: and that’s what we’re doing,” says Sartain. “It’s in the correlation of events that you can find the real cause. “In an environment where you were collecting data at or near real-time and were applying modeling to it, none of this would have ever occurred.”
SCALABLE SOLUTION This is where Teradata comes in. Unlike other players in the market, or oilfield services firms that are turning new tricks, the company has always been about data management. To evaluate what Teradata’s
www.arabianoilandgas.com
expertise in data management for other industries – particularly manufacturing – for upstream exporation and G&G, O’Doherty teamed up with Duncan Irving, a sub-surface geo-modelling and data structures specialist at Manchester University, to see if Teradata’s solutions for other industries could be applied to upstream oil and gas, from seismic to financial tracking and production stats. Together with Irving, O’Doherty has an ambitious vision for data management and analytics for the upstream industry: the ‘Spatially-Registered Data Structure’. The SRDS is a kind of ‘Google Earth’ for seismic and g&g data, which is fully scalable, tracks historical data, and is accessible anywhere. “Our focus now is on how you can build a sub-surface data structure within a database which is scalable up to multipetabytes,” says O’Doherty, “one that will allow real-time analytics, that will support the digital oil field and the workflow through the upstream process, and then extend that flow of information through midstream to downstream.” On the seismic side, Teradata recently acquired Aster Data, an analytic database management systems firm, which will allow Teradata customers
to run pattern recognition algorithms that can perform partautomation of the time-consuming seismic analysis process, allowing fewer engineers to make better decisions more quickly.
PARTNERS CONFERENCE The company takes the position that its current customers can sell the business much better than Teradata can itself, and organises an annual Partners User Group Conference to bring current and potential customers together to share insights and see the value of adjusting the way Teradata helps with ‘big data’. The firm announced its fifth-generation Teradata Data Warehouse Appliance platform at the conference, which doubles the performance and
triples the data capacity of its predecessor, putting Teradata at the forefront of firms capable of managing the data volumes and complexity in oil & gas. But it’s not all about data volumes and algorithms: there’s also the human equation. In upstream, that means overcoming the knowledge squeeze as experienced engineers begin to exit the profession without sufficient mid-ranking replacement bridging the gap between them and the next generation. O’Doherty emphasises that a change in expectations should accompany a new data management system. Ensuring the right environment for sharing data is “never to be underestimated, especially in environments where people may be coming from state-run or formerly state-run companies where there might have been differing expectations of openness, sharing, transparency, and may be reluctant to be monitored.”
CONOCOPHILLIPS For ConocoPhillips, Teradata has been looking at knowledge management, and capturing the decision-making expertise of senior engineers in production models before they retire. This whittles down the amount of information an engineer sees so they have what they need at the right time, instead of trawling for data that an intelligent algortythmn can find.
70%
amount of an engineer or geologist’s time spent finding and manipulating data
Another well, another data set.
November 2011 Oil&Gas Middle East
55
TERADATA
“What [ConocoPhillips] engineers are now seeing is not what a ‘greybeard’ engineer would see; they’re seeing what a greybeard would have already pulled out from the data,” says Sartain. “So when the time comes to make a decision, you have given someone who has less experience the ability to decide based on the information that’s already been combed through.” “If someone a year after the fact says ‘why did we decide Good data management helps junior engineers make better decisions. to drill that hole there,’ today, people can’t find the Powerpoint slides, which were based on some excel spreadsheets, which were based on something else,” says O’Doherty. “What you really want is a for all those decisions to be made in an integrated environment Niall O’Doherty, Teradata so that all the data that backed up that decisions is available.” all their hydrocarbons are PITCHING FOR NOCS across the business. We ena- Teradata is thinking as big as it bled them to make real-time gets in the Middle East, pitchDOWNSTREAM The downstream sector has future decisions about what is ing to national oil companies. never enjoyed profit oil, and going to be there from the sup- “We’re targeting the main players, such as Saudi Aramco and is ripe for greater efficiency ply-side.” Western’s CIO Blake Larsen Kuwait Oil Company,” says savings. Western Refining, a 200,000 bpd Texas independ- told delegates that Teradata O’Doherty. “We’re also working ent, reported gains in profit- allows the whole company to on approaches towards national ability and strategic planning get “one version of the truth” data repositories, something we after implementing Teradata. across the business, instead think has been neglected by the The company now has a single- of different groups – whether industry of the last few years. source inventory system that accounting, traders or engi- There is a huge amount of data neers – getting different data that is being generated and updates every 15 minutes. “Margins have always been snapshots from different times. stored for governmental and squeezed downstream, and the Tellingly, this temporarily led to regulatory purposes in differfact that different operations frictions within the business, as ent kinds of national data reposhave been traditionally run in some group had to change the itories: are they getting the full silos adds to the complexity of way they worked around the value out of that?” “The challenge for National how businesses run,” says Sar- new system, but now Larsen tain. “They can now see where says “no-one wants to go back.” Oil Companies is slightly different,” says Sartain. “Their G&G side is totally siloed from their drilling and completions side, and their producing side is siloed again from drilling and completion.” SarLost revenue the upstream undustry suffer through non-productive time tain is confident that putting a
“We’re targeting the main players, such as Saudi Aramco and Kuwait Oil Company”
$8 BILLION
56
Oil&Gas Middle East November 2011
unified data structure under these parts of upstream draws them closer together, leading to fewer drilling days, eventually saving “hundreds of millions of dollars.” Aramco, says Sartain, is building real-time operational centres, has the sensors, and now needs to ask what can be achieved with the huge amounts of data they are collecting. O’Doherty is not put off by Aramco’s famously thorough – and often time-consuming – approvals process. “Aramco has already tried to build an integrated sub-surface data store, and I think there is absolutely a requirement and a demand from Aramco. In a way NOCs can be in a position to decide things quicker, if the right person is convinced.” Aramco are likely to trial Teradata with “something small, something innovative, something new,” in order to prove it works, says O’Doherty. “It’s an enabler, but it’s also a competitive advantage.” The oil and gas business is where manufacturing was ten or twelve years ago, says Sartain. “It’s following exactly the same path as industrial manufacturing, we’re just behind.” As a result, Teradata prizes its ability to take oil and gas companies to customers in other industries: there is no reason why an airline uses in-flight data analysis of engines for predictive maintenance purposes, but a gas company that uses a similar turbine cannot. Sartain says Teradata has been “poking and prodding” around the oil and gas industry for some time. “You get to know when an industry is ready for the capabilities that you bring to the table.”
www.arabianoilandgas.com
OTHERS ONLY FOLLOW SUIT. Now open – Courtyard by Marriott Doha City Center Unlock a new way of doing business at the Courtyard by Marriott Doha City Center, located at the hub of the city’s vibrant financial and business district. Whatever you want from your business stay – you’ll find it here. From meeting to eating; work space to work-outs; motivation to relaxation. Check into a hotel designed with you in mind. For more information or to make reservations, call 00974 4419 5555 or visit courtyarddoha.com.
Courtyard by Marriott® Doha City Center West Bay, City Center Al Wahda Street, Doha, Qatar T 00974 4419 5555 F 00974 4419 5100 courtyarddoha.com
IT’S A NEW STAY.®
ANGLO EASTERN
MAKING THEIR MARK
S Success iin th the ffabrication b i ti game ttakes k more th than jjustt steel. t Oil & Gas Middle East takes a tour around Anglo Eastern Engineering, a burgeoning Dubai success story
stablished in Jebel Ali Free Zone in 2000, Anglo Eastern is a Dubai-based fabricator to the oil and gas industry that has been growing steadily on the back of a growing order book. Even
E 58
the financial crisis failed to stop the company’s development. “In 2008, we were rocking,” says Bill Bhogal, CEO. “We went from 90 staff to around 180, and we still employ them to the point where we are at ca-
Oil&Gas Middle East November 2011
pacity for our yard.” The company now boasts a facility spanning 26,000 sq metres in Jebel Ali Free Zone, Dubai, which includes 12,000 sq metres of workshop and yard facilities, 1,200 metres of 9 metre deep
waterfront, 950 metres of reinforced jetty and its own machining and painting facility. Last year the company completed a landmark floating production, storage and offloading project, and is hoping to land
www.arabianoilandgas.com
ANGLO EASTERN
gle largest components we have built at Anglo-Eastern since we started”. The 150-ton skid took eight months to build and was delivered on time and on budget in July.
NORTH SEA
more of this higher complexity, process of doubling the foothigher margin work. print of the firm’s Jebel Ali facility to a total 56,000 sq metres, DOUBLING DOWN which Bhogal expects will bring The company’s expansion has with it a visa allocation for a furreached the edges of its current ther 300 workers. yard, and Bhogal is now in the Having started in plate,
www.arabianoilandgas.com
pipes, tanks and structures, the firm has developed its capabilities in manufacturing packaged skids and pressure vessels. A significant recent project was for a skid for Petrobras, which Bhogal says is “one of the sin-
The company’s key market is the North Sea, where it is making a play for regular work from major players such as FMCTechnologies in Norway. After working for around a year to persuade FMC that Anglo could deliver to stringent standards required on the Norwegian shelf, Anglo started off with smaller fabrication packages for FMC, with its latest FPSO being the fourth or fifth metering package done for them, commissioned by FMC’s Fred Canton. Bhogal says Anglo want to “tackle the Krone’s and Emersons of the metering world”. Despite the maturing of some blocs and uncertainty created by the UK government’s spring shock tax hike on North Sea oil profits, Bhogal sees the area as one ripe for continued investment, reporting a strong response to approaches he has been making to prospective clients. “I personally believe that there is a lot of work out there in the Norwegian shelf,” he says, “and not enough capacity there to meet demand.” Norwegians can be demanding. “It took us around a year to get FMC on board, to really convince them that we could build equipment the way we are now,” Bhogal says. However, customers outside the region will not ask whether a company is ARAMCO or ADNOC-approved, something Bhogal believes may be stymieing the regional fabrication market, as only third
November 2011 Oil&Gas Middle East
59
ANGLO EASTERN
“The main core business for us is oil and gas – that’s what we are going to be concentrating on over the next five years.” Bill Bhogal, CEO, Anglo Eastern or fourth-string packages are then available from EPC contractors, instead of a shot at the bulk of the work on offer under regional EPC contracts. Anglo has built a solid reputation in oil and gas, but their work includes other industrial sectors. “It doesn’t all have to be oil and gas,” he says. “We’re the sort of company where, if a customer says they need a thousand tonnes of structural steel for aluminium silos for a smelter project, we do it. But the main core business for us is
oil and gas – that’s what we are going to be easy, Bhogal admits. going to be concentrating on “It could be tough. A lot of firms over the next five years.” out there have been working hard to reduce their costs, just PROSPECTS AND PROFIT to make ends meet.” Bhogal says Anglo is differThe firm has the certifications needed to back up Bhogal’s entiating itself with the capabiliambition, having been awarded ties it has developed to meet the the ISO 9001 standard, ‘U’ and requirements of clients beyond ‘PP’ Code Stamps from the the region. Referring to local American Society of Mechani- competitors such as Fabtech, cal Engineers, and accreditation Perfect Engineering, Dannam by the National Board of Boiler Engineering, Bhogal says “the and Pressure Vessel Inspectors. skid packages we have been But getting to where Anglo doing for FMC, I don’t think Lower labour costs gives Anglo the edge over European rivals. wants to be in five years is not these guys can do them.”
Anglo Eastern has been making strides in the floating production, storage and offloading skid market, with this package completed in eight months.
60
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
STRUCTURES THAT
PRODUCE
COLLABORAT E Exchange model data with other designers and tools like PDS/PDMS
DESIGN - Link to any structural analysis and design tool to bring your ideas into practice.
DELIVER - Extract and update 2D design drawings and reports automatically from the 3D model:
Award 2009
- Ramesh Chandran, Saipem - UAE
â&#x20AC;&#x153;By using Tekla Structures, we are able to perform interference checks and extract all our 2D design drawings, material take off, and fabrication drawings. Thanks to Tekla, we are able to maintain consistency of information and a high quality of output.â&#x20AC;? Tekla Structures BIM (Building Information Modeling) software provides a data-rich 3D environment that can be shared by contractors, structural engineers, steel detailers, fabricators, concrete detailers and manufacturers. Choose Tekla for the highest level of constructability and integration in project management and delivery.
General Arrangement Drawings Steel Fabrication Drawings Concrete Detail Detailed Drawings Drawings Bill of Materials (BOM)
ANGLO EASTERN
Anglo Eastern is doubling its production facility in Jebel Ali Free Zone on the back of a strong order book and ambitions to win new North Sea business.
“The major thing about manufacturing, especially in high-volume manufacturing, is man-hours.” Bill Bhogal, CEO, Anglo Eastern The margins are also sufficiently attractive to compete with European rivals without sacrificing quality. “The major thing about manufacturing,” Bhogal says, “especially in high-volume manufacturing, is man-hours.” Bhogal says operating in the region allows Anglo Eastern to apply its UK business model and work standards in a much lower-cost environment. Bhogal emphasises that
62
COMPANY HISTORY Anglo Eastern is a family company with a long pedigree in steel. The company started with Bill Bhogal’s grandfather in 1942, who left the Punjab to manufacture steel for the Ugandan Railway under the British Protectorate. The company traded out of Uganda until the rise of Idi Amin made business difficult in 1972. The company then returned to the Midlands, a traditional manufacturing hub in the UK, where Bhogal’s father ran the business. In 2000, Bill took over the running of the company and “on the advice of a wise old Englishman” moved to Dubai, after surveying the market for a month and working at future rivals Fabtech for four months. The company started in Jebel Ali Free Zone with three staff, 30 containers and a port-a-cabin, and has grown to 220 staff in a modern 26,000 sq m facility. Much of their early work came from UAE-based rig builder and refurbisher Lamprell.
the firm can get UK and Norwegian specification jobs done “50-60% cheaper” than European competitors, due to reduced overheads – especially labour – of operating in the UAE. “We have a fully-expensed expert Lloyds-certified welder that we are paying 10 Dirhams More generally, Bhogal is ($2.72),” Bhogal says, “compare that to the UK where a effusive about the business similarly qualified welder com- environment in Dubai, saying mands £26 (c.$41).” it is a great place to start up a
Oil&Gas Middle East November 2011
business. “If you can pay your rent and start-up costs, you can get going and make your own fortune,” he says.
www.arabianoilandgas.com
CCS IN MENA
64
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
CCS IN MENA
CAPTURING CARBON
Robin Mills, Dubai-based economist and author of Capturing Carbon, on how Carbon Capture and Storage could work in the Middle East, and why it matters. single technology can help solve three of the most intractable problems of the Middle East energy industry: high carbon footprint, maturing oil-fields, and shortages of gas. Carbon capture and storage (CCS) can also ensure the long-term sustainability of the region’s hydrocarbons. But MENA countries are still not doing enough to make it a reality. Carbon dioxide (CO2) is the main gas responsible for human-caused climate change (global warming). Preventing it from entering the atmosphere is therefore an essential part of tackling climate change, along with improved energy efficiency and increased use of nuclear and renewable energy. CCS takes emissions of carbon dioxide from large, stationary sources – power sta-
A
www.arabianoilandgas.com www.ar www .ar .arabi a abi abiano anooila ilandg ndg dgas. as. s.com s. c co com
tions burning gas, oil or coal; petrochemicals; gas processing; oil-refining; cement manufacture – and transports it by pipeline to places where it can be injected deep underground, where it is disposed of safely, essentially forever. The capture step is the most expensive part of CCS for power plants, and it also requires energy, around 35% of a plant’s output. But some industrial processes, such as ammonia, ethylene oxide, and synthetic fuels (such as those produced at Shell’s Pearl gasto-liquids plant in Qatar), produce concentrated streams of carbon dioxide which can be captured at low cost. CO2 can be injected into ‘deep saline formations’ – reservoirs containing undrinkable, salty water, usually thousands of metres below potable aquifers. Due to a century of oil exploration, the geological structure of the Middle East is
well-known, and suitable storage formations are abundant – more than 200 years of space for emissions from all sources. In Europe, CO2 storage has aroused some environmental and safety concerns, centering on possible leakage. Geological studies suggest that leakage from well-chosen sites should be minimal – many hydrocarbon fields have held oil and gas for hundreds of millions of years. CO2 is not flammable, and is toxic only in high concentrations. In MENA, public opposition should be less of a problem than elsewhere – most storage will be away from population centres, in the desert or offshore, and the population is more familiar with, and accepting of, oil industry activities.
EOR CO2 can also be injected into oil reservoirs, where, under the right conditions, it is an
November 2011 Oil&Gas Middle East
65
CCS IN MENA
USA, almost 90 billion barrels, comparable to the UAE’s total reserves, are considered technically recoverable with CO2. EOR potential across MENA could conceivably be on the order of 500 billion barrels, about half current global reserves. Initial target countries would be those with more mature fields – Oman, Bahrain, Tunisia, and perhaps Dubai, Qatar and Egypt. Over time, a network of CO2 pipelines could develop, as they have in the US, to link sources to injection points in the southern Gulf or between Algeria and Tunisia. The third component of MENA CCS is its ability to substitute for natural gas used for pressure maintenance in oilfields. Abu Dhabi re-injects 2 billion cubic feet per day, more than a quarter of total UAE demand; replacing this with CO2 would ease the tight gas supply situation. Iran has great technical potential for using CO2 instead of natural gas injection in supergiant fields such as Agha Jari, but this seems unlikely under current conditions. CCS has already been used for EOR projects in the US for economic reasons.
PART OF THE SOLUTION
“A single technology can help solve three of the most intractable problems of the Middle East energy industry” Robin Mills excellent enhanced oil recovery (EOR) agent. Typically 3-6 tonnes of carbon dioxide can liberate an additional 10 barrels of oil, the extra revenues helping to pay for the cost of capturing CO2. The Permian Basin in Texas and New Mexico, with
66
carbonate reservoirs comparable to those in the Middle East, has produced more than 1 billion barrels of oil via CO2EOR since its introduction in the early 1970s. This was done purely for economic, not environmental reasons. In the whole
Oil&Gas Middle East November 2011
Globally, CCS is one of the core technologies for tackling climate change. Even by 2050, fossil fuels are expected to supply 50% of electricity generation, and gas- and coal-fuelled plants provide the reliable, dispatchable power needed to complement intermittent
20%
Amount of global emissions reductions that CCS can provide by 2050. Source: IEA
sources such as wind and solar power. The International Energy Agency estimates that CCS could account for one-fifth of the total required mitigation efforts to avoid catastrophic climate change. Although it is often stated that “CCS is an unproven technology”, in fact all its components are well-known. So far, about 115 megawatts of pilot CCS projects are in operation, enough to show that the technology works at close to commercial scales. CO2 injection has been going on since 1996 at Statoil’s Sleipner field in the Norwegian North Sea, and since 2000 at EnCana’s Weyburn EOR project in Canada. Newer projects include the Snøhvit LNG facility in Norway’s Arctic, and Chevron’s massive Gorgon LNG project in Australia, due to start in 2014. We are on the threshold of a long-delayed breakthrough, with significant power-plant CCS projects in the US, Canada, UK, Australia and China. In June, a Chinese group announced a 1 gigawatt (GW) coal gasification project with carbon capture in Inner Mongolia. In June and July, Shell received approval to fit CCS to two plants in Canada: its Scotford heavy oil upgrader, and a Canadian power plant, the CO2 to be used for EOR. By 2017, Bloomberg New Energy Finance estimates that 3.2 GW of CCS-equipped systems will be running, close to half today’s solar power output. What is needed now are more commercial-sized, repeatable projects. Various technology approaches have to be tested at scale, and costs have to come down via experience.
www.arabianoilandgas.com
CCS IN MENA In the long term, CCS is an essential part of preserving MENA’s role as the world’s energy supplier.
WHEREFORE MENA? Given its potential, it might be surprising that CCS is not more widespread in MENA. The only major operating CCS project in the region today is the In Salah project in Algeria, where since 2004 BP has re-injected CO2 from natural gas into a saline aquifer. The Abu Dhabi Company for Onshore Oil Operations (ADCO) has successfully trialled CO2 injection for EOR in the Rumaitha field in Abu Dhabi.Saudi Aramco plans to start CO2 injection in its largest field, Ghawar, next year, and Qatar has studied CO2-EOR in its offshore Al Shaheen field. Abu Dhabi’s clean energy vehicle, Masdar, is planning to approve capture of CO2 for EOR from the Emirates Steel plant. However, as revealed in Mubadala’s bond prospectus, Masdar’s flagship CCS project, a $2.5 billion hydrogen power plant joint venture with BP, has been held up by lack of agreement over the pricing of the
68
CO2 to be delivered to ADCO. There are several reasons why CCS has not yet taken off in MENA. The main one is simply that there is no penalty on CO2 emissions in the region today – nor indeed, anywhere in the world outside the EU and, recently, Australia. Without a price for emitting carbon dioxide, all forms of clean energy will struggle against polluting alternatives. Other reasons are institutional. Environmental awareness is rather low, although improving. The large, low-cost oil resources of the big MENA producers mean that EOR has not been a priority, and the region’s national oil companies tend to be technically conservative and risk-averse. CCS needs to be part of a comprehensive overhaul of climate and energy policies in the region. The GCC in particular needs to make dramatic improvements to its high carbon and energy intensity. If it does not,
Oil&Gas Middle East November 2011
“Although it is often stated that “CCS is an unproven technology”, in fact all its components are wellknown.” Robin Mills it faces the threat of damage to its reputation, an issue for tourism hotspots such as Dubai, and to carbon-based tariffs on its exports of industrial and downstream products such as aluminium and plastics. Dubai, Ajman and Oman have all proposed coal-fired power plants, which would massively increase emission if not fitted with carbon capture. More immediately, the region’s runaway energy consumption, fuelled by strong economic growth but also by low, subsidised prices, is wasting resources at home that could be exported profitably, and putting an increasing strain on gas and electricity supplies.
NEXT STEPS Reforming energy pricing so that consumers pay market prices is an essential first step. Only then can carbon pricing be introduced so that polluters pay the full environmental cost of their activities. This would allow low-carbon energy – CCS, nuclear and renewables – to compete on a level playing field with conventional fossil fuels.
70%
The cost penalty of meeting climate change targets by 2050 without CCS. Source: IEA
www.arabianoilandgas.com
NLINE O R E T S I REG ! AND WIN se ямБll n iPad plea a in w d n a online ISAD333 To register otion Code: m ro P r o it is in the V
The largest and most comprehensive exhibition and conference for security and safety in the Middle East t $PNNFSDJBM 4FDVSJUZ *OGPSNBUJPO 4FDVSJUZ t 'JSF 3FTDVF t )PNFMBOE 4FDVSJUZ 1PMJDJOH t 4BGFUZ )FBMUI
+BOVBSZ o %VCBJ *OUFSOBUJPOBM $POWFOUJPO BOE &YIJCJUJPO $FOUSF %VCBJ 6"& Intersec 2012 t FYIJCJUPST FYQFDUFE t WJTJUPST FYQFDUFE t )BMMT t SE 6"& *OUFSOBUJPOBM 'JSF'JU $IBNQJPOTIJQT t &YDJUJOH 0VUEPPS %FNPOTUSBUJPOT $POGFSFODFT
www.intersecexpo.com
CCS IN MENA
Robin Mills estimates that with the requisite separation unit to extract CO2 from the produced oil and the stainless steel infrastructure needed to transport and contain CO2, cap-ex costs are likely to be higher than for an equivalent natural gas project with nearby feedstock.
BOOK REVIEW: CAPTURING CARBON: THE NEW WEAPON IN THE WAR AGAINST CLIMATE CHANGE
However, if accounted for as operational expenditure, the lost opportunity cost of sinking natural gas – which is better used elsewhere – is likely to make a CO2 EOR project more profitable over a project’s life span. CCS project build - up to 20309 Number of projects implemented
800 Cement Pulp paper Iron steel Ammonia Biomass plants Gas plants Coal power plants
700 600 500 400 300 200 100 0 2010
2015
2020
2025
2030
Indivative cashflow for a CO2-EOR project 500
Annual cashflow (US$ million)
400 300 200 100 0 -100 -200 -300
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
Decommissioning
Revenues
Opex
CO2 Purchase
Capex
Net cashflow
The UN’s Clean Development Mechanism (CDM) recently approved CCS to receive carbon credits. But EU carbon prices around $15 / tonne of CO2 are too low to pay for the first generation of plants, likely to cost $60 / tonne or more. Hence government support is required until the technology improves and carbon prices rise as climate policy
70
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
-400
becomes more stringent. MENA countries should forge alliances with international CCS organisations, for instance Australia’s Global CCS Institute, academia, think tanks and consultancies. Building on the region’s skills in hydrocarbon production is one of the easier ways towards the ‘knowledge economy’ much-trumpeted in the Gulf.
Oil&Gas Middle East November 2011
Capturing Carbon is one of the first books to summarise the state and potential of Carbon Capture and Storage (CCS) technology and to advocate its adoption. Mills begins the book with one of the best summaries of the climate change problem available, before evaluating each aspect of CCS in turn, from capture, transportation and storage to policy and economics. His claim is simple: “Carbon capture and storage is a realistic contender for a leading role in fighting climate change,” and it is supported by a readable, clear and impeccably referenced argument. Many books about climate change solutions evangelise for one or a few solutions as ‘silver bullets’, whether renewables, efficiency, or nuclear, while ignoring or being actively hostile to other options. Mills rejects this. Referring to the ‘Socolow wedges’ that show avoiding harmful climate change can only be avoided through a portfolio approach, he offers a frank appraisal of the limited but vital role CCS has to play, and is sensitive to how it can add value to oil projects. Refreshingly, Mills – an energy economist with particular expertise on the Middle East – makes good on his claim that he is solely interested in “what works” by removing the political, social and philosophical baggage from the issue of climate change. He makes a persuasive case for CCS as one of several technical solutions to what is ultimately a technical problem: how to achieve what he dubs climate “resilience” in light of an unprecedented and damaging increase in global carbon emissions resulting from the (justified) demands of industrializing and post-industrial societies. Along the way Mills scorns the ideologues of the climate “skepticism” movement of what he calls “vested interests, certain big businesses, right-wing ideologues, self-appointed ‘experts’ in the media, ignorant or self-interested politicians, and scientists willing to prostitute themselves to the highest bidder,” and the jeremiahs within the green movement who call for the dedition of the benefits of our globalised capital economy on quasi-moral grounds. There are some parts of the book that lack the detail of others – the early chapter on carbon capture technology contains many ‘mays’ and ‘possiblys’ – but Mills makes it clear that this is due to the state of the art, and he is keen to show where development and investment is needed to build on the obvious promise of CCS. Appropriately, Milsl declines the temptation to fill in the blanks with hot air. It is clear from Capturing Carbon that the commitment required to implement CCS on the required scale will be large, even daunting. Yet it is also clear that there is no option but to address global carbon emissions urgently, and that in a world where around 40% of total CO2 emissions come from large stationary sources such as power stations and industrial plants, CCS is - while costly - invaluable.
www.arabianoilandgas.com
CCS IN MENA
CCS AND EOR Using CCS in enhanced oil recovery (EOR) has immense potential in the Middle East. EOR and reinjection processes using natural gas are literally energyintensive endeavours, wasting feedstock needed for power generation or export, though reinjected gas is typically eventually recovered. CO2 is often – reservoir conditions depending – a superior injection gas to natural gas. In order to be adopted at commercial scale, in the absence of any carbon tax or cap and trade regime, the costs of CCS must not outweigh the benefits yielded by EOR. How do the numbers stack up? In Capturing Carbon, reviewed on page 108, Robin Mills give a cashflow estimate that could apply to Middle East projects, based on recovery of 90 million barrels of incremental oil at a conservative price of $50 per barrel and 1 mega-tonne per year of carbon capture.
www.arabianoilandgas.com
The Zero-Emissions Platform, an EU industry alliance, has laid out a plan for systematically testing different CCS options, but funding difficulties in the midst of the economic crisis have shrunk the original programme. Some of the wealthier GCC countries should band together to build one of the demonstration plants here in collaboration with the EU – ideally capture from a gas-fired power plant with CO2 used for EOR, the most likely and valuable option for the region. In the long term, CCS is an essential part of preserving MENA’s role as the world’s energy supplier. Without carbon capture, the use of fossil fuels will become increasingly unac-
ceptable. With it, gas in particular can maintain its role, not just as a bridge fuel, but as a mainstay of the world energy system out to the end of this century and beyond. For Qatar, with 200 years of gas production at current rates, and the UAE, Saudi Arabia, Kuwait, Iran and Iraq with more than 70 years of oil production, carbon capture is part of securing the wellbeing of future generations.
40% 40% of total CO2 emissions come from large stationary CCS-ready sources such as power stations.
November 2011 Oil&Gas Middle East
71
WORLD PETROLEUM CONGRESS
DESTINATION
DOHA Qatar capital is putting the finishing touches to its hosting preparations for the 20th World Petroleum Congress
72
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
WORLD PETROLEUM CONGRESS
very three years, the World Petroleum Council organizes the World Petroleum Congress as the principal meeting place for global discussion of oil and gas issues. The triennial Congress is also known as the “Olympics” of the industry because it attracts the largest number of attendees from the largest number of countries from all over the world. The 20th World Petroleum Congress will be held in Doha, Qatar, from 4-8 December 2011. Led by plenary sessions that will bring together the most prestigious and influential industry leaders from
E
www.arabianoilandgas.com
around the world, the 2011 Congress is already being described as one of the most high-profile congresses in the Council’s history. Following the Opening plenary with six oil and gas ministers from the Middle East, ExxonMobil’s CEO Rex Tillerson and Shell’s CEO Peter Voser will be joining Qatar’s Minister of Energy and Industry, His Excellency Dr. Mohammed bin Saleh Al-Sada, in a high-level presentation of Qatar’s role in the future energy landscape. Other names participating in the Congress include BP CEO Robert Dudley, Russia’s Energy Minister
November 2011 Oil&Gas Middle East
73
WORLD PETROLEUM CONGRESS
optimize operations,eliminate losses,improve the quality and flow of information, and meet safety and environmental regulations,” explains Asheim. “Events like WPC are primarily designed to let entrepreneurs meet many potential customers face-to-face in a brief period of time. ABB looks forward to introducing customers and visitors world’s leading power and automation technology, leading-edge application knowledge and local expertise.” Pekka Paasivaara, a member of the GL Executive Board, said: “we are pleased to be exhibiting at World Petroleum Congress (WPC) for the first time this year. Senior representatives will be available at stand 9216 to talk to delegates about the innovative technical solutions and software we use to help our clients plan, design and develop, operate and optimise and assure their on- and offshore assets worldwide.” Paasivaara adds that he is delighted to see WPC come to the Middle East for the first time, and especially to Qatar.
www.arabianoilandgas.com www w ww ww.ar ww ..aaarrab abi abi biano ano an anoila n ila landg andg d as. dgas. dg ass com oom m
Pekka Paasivaara, GL Noble Denton. “GL Noble Denton has experienced a significant uptake in demand for our services from the region in recent years, and we continue to place a strategic focus on developing business in the region,” he says. GL Noble Denton will use the pulling power of the event to publicise an exclusive prepre view of some of the findings in a new report the company has commissioned the Economist Intelligence Unit to produce on the future of the oil and gas industry in 2012 and beyond. “Due to be released in Janu-
EMERSON AT THE WPC Emerson Industrial Automation exhibits at World Petroleum Congress 2011 Emerson Industrial Automation Middle East will be using the World Petroleum Congress in Doha to showcase its latest technologies and innovations for the Petroleum and Industrial marketplaces. Emerson Industrial Automation, part of Emerson Electric Co., will be demonstrating its diverse range of innovative solutions to improve efficiency and reliability in production processes including specialized products for hazardous and extreme environments within the Oil and Gas industry. The brands on display from Emerson Industrial Automation will include EGS, whos Appleton and ATX brands are leaders in the field of electrical products for hazardous areas including lighting, enclosures and control switches. Asco Numatics whose range of pilot valves is used in the control of both production and distribution processes in the oil and gas industry. Leroy-Somer, who offer a specialized range of ATEX-certified hazardous area motors and alternators, demonstrating new IE2 high efficiency electric motors, as well as the other leading brands Control Techniques, demonstrating variable speed motor drives, and Kop-Flex, SealMaster, and Browning couplings for power transmission. The Emerson Industrial Automation team looks forward to meeting industry professionals at all levels to demonstrate the total range of products and discuss our solutions for the evolving needs and demanding requirements of the oil and gas industry.
November Nov N oovemb eem mber m er 201 2011 011 Oi 01 O Oil Oil&Gas i &G Gas Ga ass M a Middle Mi idd ddl d dlle E d East ast as a sstt
75 75
WORLD PETROLEUM CONGRESS
Sergei Schmatko, Total CEO Christophe de Margerie, Petrobras CEO José Sergio Gabrielli, and Nobel Peace Prize recipient FW de Klerk from South Africa. The sold-out exhibition accompanying the 20th WPC is expected to cover 35,000 square metres, surpassing the previous WPC event in Madrid in 2008 by 20%, and making it the largest exhibition in the WPC’s history. In June 2008, over 4,000 delegates were registered at the 19th WPC in Madrid, where initiatives such as Ministerial Sessions, the electronic Poster Plaza and Special Sessions on youth in the industry, were all successfully implemented. These will also be incorporated into the Doha Congress, with even more delegates expected to attend. Doha has already registered over 3,300 delegates and with eight weeks to go until the event the organisers are expecting total numbers to be in the region of 5,000 attendees. A wide-ranging Technical Programme for the 5-day congress will recognize the scientific, technological and professional achievements of the oil and gas sector. Topics for the sessions will reflect the 20th WPC’s official theme: ”Energy Solutions for All: Promoting Cooperation, Innovation and Investment”. Almost 2,000 high-quality papers have been submitted for the 24 technical forum sessions, which are distributed into five blocks: Natural Gas, New Exploration and Production Frontiers and Technologies, Innovations in the Downstream, Complementary Energy Sources, and Industry
74
Commitment to Sustainability. This is an unprecedented level of submissions, both in terms of quality and quantity, and about 300 papers and posters will be presented. The technical programme also includes a broad variety of posters, roundtable discussions, special sessions, best practice keynotes, and plenary sessions with the confirmed participation of high-ranking industry and government authorities. The Youth Programme is an integral feature of the 20th WPC and is inspired by the World Petroleum Council’s ongoing youth programmes and forums. The core message the organising committee wants to convey is that the youth of today can contribute in shaping a sustainable future. Dialogue between young participants from around the world has already commenced on www.WPCyouthconnect.com which is a dedicated forum to discuss topics of significance to the industry. There will also be a dedicated youth session at the Congress. The 20th WPC is being held at The Qatar National Convention Centre (QNCC) which is the first venue of its kind in the region that has been built to the gold certification of the U.S. Green Building Council’s Leadership in Energy and Environment Design (LEED). The WPC will require the full hosting capacity of the QNCC. Over five days during the 20th WPC, the organisers expect to welcome around 5,000 attendees, including 500 speakers, over 50 top chief executives and hundreds of global media representatives, in addition to staff and contractors.
Oil&Gas Middle East November 2011
Bjarne-Andre Asheim, Region Business Unit Manager ABB Middle East.
“WPC will be a great way to connect with the best oil & gas players in the industry” Bjarne-Andre Asheim, ABB
EXHIBITOR EXCITEMENT The parallel exhibition features more than 500 companies including most major international oil companies and national companies from around the globe. For trade visitors, this is expected to be one of the biggest events of its kind in the region, with visitor numbers expected to meet the full capacity of the QNCC’s exhibition space. Bjarne-Andre Asheim, Region Business Unit Manager for Oil, Gas and Petrochemicals, ABB in the Middle East says that thw WPC poses a unique opportunity to exhibitors. “The World Petroleum Congress has over the past been one of the largest oil and
gas shows globally. Now that it has come to the Middle East, it will be a great way to connect and interact with some of the best oil and gas players in the industry and moreover witness the presence of international and national oil producers, major EPC contractors, consortium leaders, technology providers trading companies and consulatants under one roof.” ABB provides a full range of Products, Automation and Electrical solutions, and EPC deliveries for onshore production; from well-heads to transportation and treatment facilities. “Products and demos displayed at our stand will offer our oil and gas audience innovative solutions that will help
www.arabianoilandgas.com
A global presence in the oil, gas and petrochemical industries? The environments in which the oil, gas and petrochemical industries create are as extreme as they are challenging. From the complex sensitivity of a petrochemical plant to the cold, dark depths of the ocean, to the hot, high pressure but oil-rich geological formations deep in the earth, here you will find ABB technology working to recover and process the hydrocarbons that bring light, power and mobility to the world above. To learn more of our oil, gas and petrochemical solutions and technologies, visit us at www.abb.com/oilandgas
www.abb.com
Absolutely.
WORLD PETROLEUM CONGRESS
ary 2012, the comprehensive report will gather opinions from a wide selection of senior industry professionals from around the world on the future opportunities and challenges that the sector is likely to face in the future,” Paasivaara says. “We will also be also offering WPC delegates the chance to come to our stand and vote on a range of hotly debated issues in today’s oil and gas industry. Delegates will be invited to give their opinions on a thought-provoking question during each day of the event, and the results of each day’s Industry Snapshot poll will be announced the following morning. The poll will include questions on the whether the oil and gas industry can sustain growth in the world’s energy demands, and whether unconventional gas has a long-term role to play in the sector.”
says growing the profile of the Qatar based oilfield engineering, design and manufacturing company, which specialises in the production of wellheads, christmas trees, valves and related productions will be key. “Since we are the only existing wellhead manufacturing company in the Middle East and we have more than 30 years of experience in the field, we are confident that the show will be an opportunity for us to meet with many of the exhibiting companies that we would prosper to build strong ties with, through interaction with our employees and information about our products and ser-
vices,” explains Swelem. “In particular we would like to communicate the capability of our engineering and R&D department for their innovation and competency in creating DDC’s product line,” says Swelem. “An example is our newly-launched Hydraulic Actuator and Self Contained Surface Safety Valve that is conventionally maintained and suitable for both offshore and onshore operations and ideal for use in H2S and CO2 applications.” Swelem says the timing of an international audience couldn’t be better, as the company is currently going through an expan-
sion plan through the opening our new Delta U.S. branch that will target the South and North American markets.
OFFSHORE OPPORTUNITY John Cunningham, business development manager at Offshore Solutions BV, said: “We intend to build our Gulf business upon the considerable experience gained in successfully operating our first OAS in the region for the Qatar Shell GTL Limited project. “The 20th WPC exhibition provides OSBV with a platform for raising awareness of the benefits of marine access and meeting existing and potential
DELTA DOHA The Middle East’s only local wellhead manufacturing company, Delta Doha, will also be using the WPC exhibition to build brand awareness. Managing director Wesam Swelem Wesam Swelem, MD, Delta Doha.
John Cunningham, business development manager at Offshore Solutions.
GASKET INSULATION KITS- Manufactured to ANSI, DIN, JIS specifications, customary sizes and designs possible. GASKET SHEETS available with Germanischer Lloyd, WRAS, BAM (oxygen) & BS7135 grade X. Ring joint type gasket available with API-6A, test certificates can be provided for all products.
NON-METALLIC GASKETS
SEMI-METALLIC GASKETS
Jointings Graphites Virgin & Expanded PTFE Rubber (NR/SBR, Neoprene, Silicon, Nitrile, EPDM & Viton)
Spiral Wound Gaskets Double Jacketed Gaskets Camprofile METALLIC GASKETS Ring Joint Gaskets
exclusive distributor
www.arabianoilandgas.com
November 2011 Oil&Gas Middle East
77
WORLD PETROLEUM CONGRESS
STAHL CRANES AT WPC Chris Wilson, Sales Manager at Stahl Cranes, is looks forward to showing oil and gas companies WPC what his company can do. Why exhibit at WPC?
CW: Being the first time that the WPC will be held in this region and with so many of our core customers from the Petroleum companies and majors EPC companies attending, we believe this to be an excellent opportunity to showcase the products and services that we offer. With the biggest Chris Wilson, Sales Manager product range and being the world leader in explosion-protected crane technology, we are delivering care-free service packages to global epc companies, which makes us the first choice for complex international projects. In addition to this, we see this show as a great opportunity to demonstrate our local partnership with Petrotec in Qatar, where we combine safe high quality products of lasting value with an unequalled service. Jens Fuglsang Pedersen, global industry manager at Endress+Hauser. What new equipment and services do you have to offer?
clients based in the region. “As market leader in heavecompensated marine access systems, Offshore Solutions BV is committed to developing a long-term sustainable business in the Middle East. “OSBV is committed to maintaining our incident free HSE performance, which has been achieved in a range of challenging sea states and from a variety of vessels. “We will be showcasing video footage at the exhibition of the OAS operating in 3 metre wave height in the demanding conditions of the North Sea as filmed by our own operator technicians.” Cunningham says the capability to operate in these challenging sea states, combined with a 24-hour connection capability (and engineered by OSBV to perform for extended periods in demanding climatic conditions), a vessel with an OAS installed onboard is capa-
www.arabianoilandgas.com
ble of delivering major benefits to operators in the Gulf. “We have also developed a Free Standing Offshore Access System (FSOAS), primarily for shorter term contracts. This is an important step in the strategic development of our company and is a key part of our global strategy.”
TECH TALK Jens Fuglsang Pedersen, global industry manager oil and gas at Endress + Hauser, a major supplier of measuring instruments and automation solutions for the industrial process engineering industry, says the face to face opportunities the WPC exhibition provides will be an excellent platform to build on dialogue with local and international clients. “It is important for Endress+Hauser to meet our customers face to face. Only in talking to them we can learn about their needs and answer
Explosion-protected equipment is pertinent to the safe operation of the oil and gas industry to which we have contributed extensively, having pioneered the design of the very first explosion protected hoist. We shall continue to showcase our products which continue to this day to be the leading design in performance and safety in this field. Our LNG hoists have been designed especially for maintenance work in natural gas liquefaction plants, they are equipped with two rope drums, two ropes, two gears and two motors and rocking suspension which currently is regarded as the safest hoist presently available on the market. What do you hope to gain from exhibiting?
To continue to expand the presence of our company and awareness of what we deliver to the industry amongst the many petrochemical companies attending.
November 2011 Oil&Gas Middle East
79
WORLD PETROLEUM CONGRESS
“It is important for Endress+Hauser to meet our customers face to face” Jens Fuglsang Pedersen, Endress + Hauser their specific requests,” explains Fuglsang. “At this year’s World Petroleum Congress we will be displaying the world’s largest Coriolis massflow meter.” Earlier this year Endress+Hauser signed a major agreement with Shell to supply process measurement instruments, engineering and associated services. Both companies have signed an Enterprise Framework Agreement (EFA) with an initial term of five years. “Shell selected Endress +Hauser for the global provi-
80
sioning of instruments and technologies for flow, level, pressure and temperature measurements and for liquid analysis. We will also provide to Shell project management, engineering, maintenance, repairs and site services in Shell facilities around the globe.”
5,000 Predicted attendees for WPC 2011.
Oil&Gas Middle East November 2011
DNV AT WPC DNV is Exhibiting at WPC as part of a wider presence at the conference. WPC is the most important meeting place for international oil and gas executives. DNV is a global provider of knowledge for managing risk. “Today, safe and responsible business conduct is both a license to operate and a competitive advantage. Our core competence is to identify, assess, and DNV CEO Henrik Madsen. advise on risk management, and so turn risks into rewards for our customers,” explains Tore Høifødt, senior vice president, communication director, Asia Pacific & Middle East for DNV. DNV’s CEO Henrik Madsen, is giving a best practice keynote speech and the company is presenting papers at various sessions. “From our leading position in certification, classification, verification, and training, we develop and apply standards and best practices,” says Høifødt. “This helps our customers to safely and responsibly improve their business performance. Our technology expertise, industry knowledge, and risk management approach, has been used to successfully manage numerous high-profile projects around the world.”
www.arabianoilandgas.com
Monday
12th December 2011 Westin, Dubai
Join us as we recognize industry excellence at the 2nd annual Oil & Gas Middle East Awards
Silver Sponsor
Category Sponsors
Shell is proud to be associated with the Oil & Gas Middle East Awards 2010. The Awards Ceremony “ evening proved to be a useful event for us to meet up with many industry players. The various awards introduction gave us a great opportunity to appreciate the various outstanding energy projects in the MENA region and we look forward to attending the next Oil & Gas ME Awards in December 2011.
”
Albert Wong – Regional Communications Manager, MENA, Shell Upstream International
For sponsorship enquiries, please contact: Jude Slann Commercial Director Tel: +971 4 444 3693 Email: judith.slann@itp.com
Robert Arundell Sales Manager Tel: +971 4 444 3677 Email: robert.arundell@itp.com
For nomination enquiries, please contact: Daniel Canty Group Editor Tel: +971 4 444 3255 Email: daniel.canty@itp.com
For more information, or to submit your entries, please visit: www.arabianoilandgas.com/ogawards
For table bookings and further information, please contact: Annie Chinoy Marketing Manager Tel: +971 4 444 3353 Email: annie.chinoy@itp.com
UPSTREAM PARTNERS
ROMANIAN CONNECTION Syscom 18 has bridged the business divide and has been busy building a significant footprint in the Middle East upstream industry stablished in 1991, SYSCOM 18 is a Romanian company specialising in the field of industrial automation equipment and measuring systems. From its Bucharest headquarters the company has mad inroads throughout the Middle East, with operations and equipment sales in Jordan, Iran, Syria and Libya in recent years. Oil & Gas Middle East speaks to Syscom 18 CEO, Ion Andronache. “We are best described as a key services supplier,” Andronache says. “Syscom 18 has over 500 clients in Romania, the Middle East and Central Asia. Most of our orders have been from the petroleum and natural gases industry as well as for a host of other heavy industries.” In the upstream field, the company has had a breakthrough decade, only looking outside its own borders in 200, and swiftly winning business first in Syria, then Bulgaria, Hungary, and its installed technology now spans from Kazakhstan and across North Africa.
E
82
BUSINESS BRIEFING Andronache says that no region escaped the fallout from the financial crisis, but 2011 has been a bounceback year. “Rig utilization has come back quite strongly, and in particular we see a growing offshore market in the wake of the oil price recovery,” he says. “Our results were negatively impacted in 2009 and 2010, but we are witnessing a healthy recovery this year, and we are confident of achieving contract orders worth over $18 million this year.” Andronache says that the company is renewing its focus on Middle Eastern business thanks to a booming upstream project landscape. “To date we have had a lot of regional success in Kazakhstan, Syria, Jordan and Iran. Into those markets we have delivered automation systems for gas stations and oil utilities. Our abilities as a systems integrator and supplier of turnkey systems is a core strength, as feedback from the region sug-
Oil&Gas Middle East November 2011
Syscom 18 is bouncing back from the 2008 crisis with a strong order book.
The firm has enjoyed success in Syria, Jordan and Iran, and is now diversifying. gests clients want to work with one company to provide design, equipment delivery, software development right through to software integration and commissioning.” To back this up the CEO says one of his top priorities has
been to maintain the company’s specialist team. “Ultimately we don’t want to sacrife the quality of our complete offering so we are constantly investing to meet ever-more challenging operating requirements, as well as evolving our technology to suit
www.arabianoilandgas.com
UPSTREAM PARTNERS
ject for ABCCo in Aqaba port, Jordan. Syscom 18 delivered, installed and commissioned automation and metering equipment for petroleum and chemical products terminal. “For this project we supplied the equipment for all the 19 storage tanks, the radars for continuous measurement of product level in the tank, the temperature transmitters for multipoint temperature measurement, and the high and low level switches and the flame arrestors,” he says. The company also provided 19 pumps for petroleum and petrochemical liquids, and eight volumetric metering skids for the project. “In Syria we installed the temperature monitoring system at the JBISSA Refinery. We provided the SCADA system to monitor 250 sensors all connected to a cental PC in the control room,” he adds.
BELATED BIRTHDAY
Ion Andronache, CEO, Syscom 18.
Andronache says well-trained and experienced staff are “absolutely vital.”
“We are constantly investing to meet evermore challenging operating requirements” Ion Andronache, CEO, Syscom 18 www.arabianoilandgas.com
the industry. It is absolutely vital to have a well-trained and experienced staff, so we are always training our team members and updating our approaches to new technology,” says Andronache. Regional project execution highlights include a 2010 pro-
In September Syscom 18 celebrated 20 years of activity. “Traditionally, the first Friday in September we celebrate another year of activity. This year we reached an important milestone, and decided to celebrate it with a special anniversary event. 20 years ago, a team of 18 specialists in automation, electronic and engineering design established the company specialised in industrial automation, which has become a leading provider of integrated solutions for automation and measurement systems, so to all of our clients or partners in the Middle East: We thank you,” said Andronache.
November 2011 Oil&Gas Middle East
83
Indigo Living LLC. Office 120. Oasis Centre. Sheik Zayed Road. P O Box 282425. Dubai. UAE T: +971 4 339 7705 F: +971 4 339 7704. www.indigo-living.com
Let us show you a rental solution that will make any house an Indigo Living home.
For a free consultation, please call our Corporate Sales team on +971 4 339 7705 or email salesdubai@indigo-living.com
out of moving to the region.
experienced team takes the hassle
term with expert advice from our
solution. Flexible rental, short or long
from Indigo Living offers the perfect
the move, renting all your furniture
For global expatriates constantly on
it’s hassle free relocation
it’s cost effective
it’s easy
PROJECTS OMAN Project Title
Client
Consultant
Exploration in Block 64 Concession
Harvest Oman BV /PDO
ORPC Methanol Pipeline
ORPC
Galfar Engineering & Contracting
2
Execution
Exploration in Block 50
Ministry of Oil & Gas
Rex Oil & Gas Company / Petroci Holding
25
Execution
Zauliyah Gas Compression Project
PDO
Al Hassan Engineering
36
Execution
Duqm Refinery & Petrochemical Complex
OOC / IPIC
Not appointed
Not Appointed
7000
Study
Expansion of Sohar Refinery
Oman Refinery Company
CB&I Lummus
Not Appointed
1500
FEED
Gas Compressor Station at the Nimr Field
Oman Gas Company
Tecnicas Reunidas / Worley Parsons
Galfar Engineering & Contracting
36
Execution
Gas Processing Plant at Lekhwair Gas Field
PDO
Tebodin
Larsen & Toubo Electromech L.LC.
150
Execution
Nimr C Full Field Water Injection Project
PDO
Al Hassan Engineering
65
Execution
Expansion of Sohar Refinery - Hydrocracker Unit
Oman Refinery Company
Not Appointed
300
FEED
Exploration of Block 36
Ministry of Oil & Gas
Allied Petroleum Exploration Inc.,Canada
18
Execution
LPG Extraction from OGC Gas Network
Oman Gas Company
Not Appointed
40
Concept Stage
Redevelopment of Raysut Terminal
Ministry of Oil & Gas
Al Qaem Petro Projects & Services LLC / Rampco International Technical Services
25
Execution
Nimr G Field & Karim West - Water Injection Project
PDO
Galfar Engineering & Contracting
96
Execution
Qarn Alam EOR Project - Off-plot Package
PDO
Galfar Engineering & Contracting
139
Execution
Qarn Alam EOR Project - On-plot Package
PDO
MEG WorleyParsons
Dodsal
450
Execution
Expansion of Sohar Refinery - Sulphur Recovery Unit
Oman Refinery Company
CB&I Lummus
Not Appointed
300
FEED
Indian Oiltanking Ltd. .
15
Execution
AMEC
Petrofac International / Galfar Engineering & Contracting
960
Execution
Chevron Lummus Global (US)
Storage Tanks at Sohar Terminals - Phase 6
Oiltanking Odfjell Terminals & Company
Harweel Cluster Phase - 2
PDO
EPC Contractor
Budget ($M)
Status
Harvest Oman BV
22
Execution
reliability focused engineering dry gas mechanical seals & repair engineered mechanical seal support systems bearing protection mechanical seals
• • • •
www.aesseal.com
AESSEAL Middle East FZE contact: Don Van Rooyen email: donvr@aesseal.ae tel: +971 04 8849301 / +971 04 8849302 cell: +971 (0) 508120142
86
Oil&Gas Middle East November 2011
solutions extending equipment life
www.arabianoilandgas.com
PROJECTS
Ongoing and upcoming projects Information is supplied by Ventures Middle East. Tel: +971 2 622 2455. URL: www.ventures-uk.com BAHRAIN Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Sitra Refinery Expansion
Bapco
Not appointed
Not Appointed
2000
Concept Stage
Redevelopment of Awali Onshore Oil Field
Bapco/NOGA/Occidental Petroleum Corporation
Not appointed
Not Appointed
1000
Study
Upgrade of Banagas LPG Process & Storage Units
Banagas
JGC Gulf International; Bahrain
300
Execution
Offshore Field Development
Bapco
Fugro Robertson Limited (UK)
Occidental Petroleum Corporation / PTT Exploration and Production (PTTEP)
2000
Execution
Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Oil & Gas Pipelines from Mina Al Ahmadi
KOC
Hyundai Engineering & Construction Company / Petrofac International
1792
Execution
Crude Oil Transit Line (TL-4)
KOC
ABB
167
Execution
Booster Station 171
KOC
Saipem
906
Execution
Berri - Khursaniyah Gas Pipeline Network
Saudi Aramco
Al Suwaidi
100
Execution
Natural Gas Pipeline - Al Khafji to Kuwait City
KJO
Not Appointed
110
FEEd
Waste Gas Treatment Unit at Mina Al Ahmadi Refinery
KNPC
Not Appointed
100
EPC Bid
Effluent Water Transfer System at GC 17, 27 & 28
KOC
Not Appointed
10
FEED
Effluent Water Injection - Phase I & Sea Water Injection - Phase II
KOC
Petrofac International / Independent Trading Group
428
Execution
Mechanical Maintenance Works for Shuaiba Refinery
KNPC
Instruments Installation and Maintenance Co. (ImCo)
114
Execution
Clean Fuels Project
KNPC
Jacobs Engineering
Not Appointed
14000
FEED
Sulphur Handling Facilities at Mina al-Ahmadi
KNPC
Thyssenkrupp (Germany)
Not Appointed
132
FEED
Replacement of Crude Oil Pipeline at Wafra Main Gathering Center
KOC
Not Appointed
20
EPC Bid
LPG Filling Plant at Umm Alaish
KOTC
Hanwha Engineering and Construction, Korea
189
Execution
Mina Al Ahmadi Refinery Upgrade - Phase 2
KNPC
Honeywell
45
Execution
Pilot Water Injection Plant at Dharif Marrat Oil Field in West Kuwait
KOC
Not Appointed
14
EPC Bid
Maintenance of Oil Production Facilities in North of Kuwait
KOC
ABJ Engineering & Contracting Company
173
Execution
Fifth Gas and Condensate Train at Mina Al Ahmadi Refinery
KNPC
AMEC
Not Appointed
1000
FEED
Gathering Center 16 in West Kuwait
KOC
Fluor Corporation
Al Khorayef Commercial Co. Ltd
310
Execution
Gas Booster Station 160
KOC
AMEC
Snamprogetti Kuwait
649
Execution
Multilateral Wells at Jurassic Fields
KOC
Not appointed
Not Appointed
50
FEED Bid
Jurassic Early Production Facility (EPF)
KOC
Kharafi National, Kuwait
1500
Execution
Booster Station 132
KOC
SK Engineering & Construction, Kuwait
724
Execution
Gas Transit Pipeline - BS171 to Mina Al Ahmadi Processing Plant
KOC
Consolidated Contractors Company (CCC); Kuwait
70
Execution
Replacement of Crude Oil Pipe Lines
KOC
Not Appointed
35
EPC Bid
Heavy Oil Sand Test Facilities in the Lower Fars Reservoir
KOC
Weatherford Oil Tool Middle East Ltd
95
Execution
LPG Tank Farm in Mina Al Ahmadi Refinery
KNPC
AMEC
GS Engineering and Construction Company
1200
Execution
Wara Pressure Maintenance Project
KOC
Schlumberger Oilfield Services Company
GS Engineering and Construction Company
500
Execution
KUWAIT
www.arabianoilandgas.com
Worley Parsons
AMEC
Fluor Corporation
November 2011 Oil&Gas Middle East
85
PROJECTS QATAR Project Title
Client
Consultant
Block 4 North
Qatar Petroleum (QP) / Anadarko Petroleum
Jetty Boil-Off Gas Recovery Project
Qatargas
Block A Exploration
Qatar Petroleum (QP)
Acid Gas Removal Plant in Dukhan
Qatar Petroleum (QP)
Gas Supply to Mesaieed Consumers
Qatar Petroleum (QP)
Diesel Hydrotreater & Sulphur Recovery Unit
Qatar Petroleum (QP)
Petrochemical Complex in Ras Laffan Industrial City
Qatar Petroleum (QP) / Shell
Upgradation of Turbine Controls at FGLCS & RG Plants
Qatar Petroleum (QP)
Gas Pipeline Network within Ras Laffan Industrial City
Qatar Petroleum
Olefins Complex
Qatar Petroleum (QP) / Shell Chemicals
Condensate Refinery at Ras Laffan - Phase 2
Laffan Refinery Company
Technip
Pearl GTL Project - Package C4
QP / Royal Dutch/ Shell
Barzan North Field Development - Process & Buildings Packages
ExxonMobil Corporation /QP
Produced Water Treatment & Injection
Qatar Petroleum (QP)
Plateau Maintenance Project
Qatargas
Technip
Gas Pipeline Between KM & KS
Qatar Petroleum (QP)
Tebodin
Not Appointed
30
FEED
Expansion of Ethylene Plant at Mesaieed
Qapco
Shaw Group
Not Appointed
100
FEED
Jet A1 Fuel Pipeline from QP Refinery to BSV3
Qatar Petroleum (QP)
Tebodin
Not Appointed
45
EPC Bid
Low Density Polyethylene Unit at Mesaieed - LDPE 3
Qapco
Uhde
Uhde/Tefken
549
Execution
Twin Jack-Up Rigs
Gulf Drilling International
Keppel Offshore & Marine
393
Execution
Qafco VI
Qafco
Saipem / Hyundai Engineering & Construction Company
610
Execution
Jet A1 Fuel Pipeline from QP Refinery to BSV3
Qatar Petroleum (QP)
Not Appointed
45
EPC Bid
Low-Sulphur Condensate Storage Facility at Ras Laffan
Dolphin Energy Limited
Qatar Engineering & Construction Company
212
Execution
Two New Glycol Regeneration Trains in Dukhan
Qatar Petroleum
Qatar Kentz
15
Exectution
Qafco V
Qafco
Saipem/ Hyundai Engineering & Construction Co
3200
Execution
Sweet Fuel Gas Supply to Dukhan
Qatar Petroleum
Black Cat Engineering & Construction
110
Execution
Receiving & Loading Facility at Ras Laffan
Qatargas
Kentz Overseas Limited
100
Execution
Common Sulphur Project
DEL
Washington Group International
Doha Petroleum Construction Co. Ltd. (DPCC) Dopet
60
Execution
Pearl GTL Project - Package C5
QP / Royal Dutch / Shell
JGC Corporation / Halliburton
Toyo Engineering Corp. / Hyundai Engineering & Construction Company
1480
Execution
Gas Sweetening Facilities Integrated Project at Mesaieed
Qatar Petroleum (QP)
Worley Parsons
Petrofac International
350
Execution
Oily Water Effluent Pipeline in Dukhan Field
Qatar Petroleum (QP)
Galfar Al Misnad Engineering & Contracting
11
Execution
Fluor Corporation, Abu Dhabi
Technip
EPC Contractor
Budget ($M)
Status
Wintershall
150
Execution
Fluor Corporation / Qcon
1000
Execution
JX Nippon Oil & Gas Exploration Corporation
100
Execution
Petrofac International
300
Execution
Fernas Construction Company
40
Execution
Tecnicas Reunidas
Samsung Engineering
100
Execution
Not Appointed
Not Appointed
6000
Study
Black Cat Engineering & Construction
16
Execution
Larsen & Toubro
117
Execution
Not Appointed
2500
Study
Not Appointed
800
Feed
Halliburton /JGC Corporation
Chiyoda Corporation / HHI Company
1750
Execution
Chiyoda Corporation
Consolidated Contractors Company (CCC)
330
Execution
Black Cat Engineering & Construction
75
Execution
Chiyoda / Technip
1200
Execution
Mott MacDonald Qatar
Tebodin
Worley Parsons
SAUDI ARABIA Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Dorra Gas Field Development
Al Khafji Joint Operations (KJO)
Worley Parsons
Not Appointed
5000
FEED
Jackup Rigs for Drilling Operations
Saudi Aramco
Hercules Offshore
316
Execution
Yanbu Export Refinery - Coker Unit Package
Saudi Aramco
Tecnicas Reunidas (TR)
1200
Execution
Worley Parsons
Upgradation of Shedgum Gas Pipeline Network
Saudi Aramco
Al Suwaidi
100
Execution
South Rub Al Khali(Srak) Gas Exploration - Second Phase
South Rub al Khali (SRAK)
Saipem
2000
Execution
Epoxy Plant Expansion - Phase 2
Arabian Industrial Development Company (Nama) / Jubail Chemical Industries Comany(Jana)
Technip
150
Execution
www.arabianoilandgas.com
Technip India Limited
November 2011 Oil&Gas Middle East
87
PROJECTS Project Title
Client
Gas Exploration in South Rub Al Khali - 'C' Area
Saudi Aramco
Jubail-2 Export Refinery - Auxiliary Utilities
Saudi Aramco / Total / Jubail Refinery and Petrochemical Company
Sasref Refinery - Jubail Sulphur Treatment Unit
Consultant
EPC Contractor
Budget ($M)
Status
Eni S.p.A. / Repsol (Spain)
200
Execution
Axens, France
M. R. Al-Khathlan for Contracting
1500
Execution
Saudi Aramco Shell Refinery Company (Sasref)
CBI Lummus in Middle East
JGC Corporation
100
Execution
Elastomers Plant at Kemya - Carbon Black Plant
Sabic / ExxonMobil Corporation
Fluor Arabia Ltd.
Not Appointed
100
FEED
Yanbu Export Refinery - Crude Unit Package
Saudi Aramco
Worley Parsons
SK Engineering & Construction
970
Execution
Al Khafji Oilfield - NGL Collection and Distribution Facilities
Al Khafji Joint Operations (KJO)
Not appointed
Techint
50
Execution
Shaybah Gas Development - Juaymah Gas Plant Pipeline
Saudi Aramco
Samsung Saudi Arabia Ltd.
600
Execution
Metal Alkyl's Plant in Jubail
Al Zamil Group /Chemtura Corporation
Uhde GmbH
Hyundai Heavy Industries (HHI)
100
Execution
Arabiyah and Hasbah Oilfield - Wellhead Platforms
Saudi Aramco
SNC Lavalin
Saipem
2400
Execution
Arabiyah and Hasbah Oilfield - Hasbah Pipelines
Saudi Aramco
SNC Lavalin
Saipem
900
Execution
Jubail-2 Sadara Petrochemical Complex - Chlorine Plant
Saudi Aramco / Dow Chemical Company
Jacobs Engineering Group Incorporated
Not Appointed
200
FEED
Rabigh Refinery Expansion & Petrochemical Complex - Phase 2
Rabigh Refining & Petrochemical Company (Petro-Rabigh)/Sumitomo Corporation
JGC Corporation
Not Appointed
4900
FEED
Arabiyah and Hasbah Oilfield - Onshore Facilities
Saudi Aramco
SNC Lavalin / Jacobs Engineering Group Incorporated
SK Engineering & Construction / Samsung Saudi Arabia Ltd.
1500
Execution
Jubail - 2 Export Refinery - Aromatics Plant
Saudi Aramco / Total
Axens
Samsung Saudi Arabia Ltd.
650
Execution
Jubail-2 Export Refinery - Coker Unit Package
Saudi Aramco / Total
Foster Wheeler
Samsung Saudi Arabia Ltd / Chiyoda Corporation
850
Execution
Karan Field Exploration - Platforms Package
Saudi Aramco
Clough-Zuhair Fayez Partnership
J Ray McDermott
500
Execution
Shaybah Gas Development - GOSP Plant
Saudi Aramco
Kellogg Brown & Root (KBR)
Samsung Saudi Arabia Ltd.
900
Execution
Rabigh Refinery Expansion & Petrochemical Complex - Phase 2 - MTBE Plant
Petro-Rabigh / Saudi Aramco / Sumitomo Corporation
JGC Corporation
Not Appointed
700
EPC Bid
88
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
PROJECTS
PROJECTS
Project Title
Client
Manifa Oil Field Redevelopment - Platforms Package
Saudi Aramco
Karan Field Exploration - Onshore Elements Package - Gas Facilities
Saudi Aramco
Jazan Economic City Export Refinery
Consultant
EPC Contractor
Budget ($M)
Status
J Ray McDermott
800
Execution
Foster Wheeler /A. Al Saihati , A. Fattani & Al Othman Consulting Engineering Company (Sofcon)
Hyundai Engineering & Construction Company (HDEC)/ Petrofac
600
Execution
Ministry of Petroleum and Mineral Resources
Kellogg Brown & Root (KBR)
Not Appointed
7000
FEED
Petrochemical Complex - Polymer Package
Saudi Chevron Phillips Petrochemical Company (SCP)/ Saudi Polyolefins Company (SPC)
Parsons Engineering Corp.
Daelim Industrial Company/JGC Corporation
5000
Execution
NPG Plant in Jubail Industrial City
Sahara Petrochemical Company (Al Waha) / Chemanol - Methanol Chemicals Company
Not Appointed
125
Concept Stage
Morpholine and Diglycolamine (DGA) Facility in Jubail
Al Zamil Group / Huntsman Corporation / Arabian Amines Company (AAC)
Jacobs Engineering Group Incorporated
Not Appointed
500
FEED
Jubail-2 Export Refinery - Storage Tank
Saudi Aramco / Total
Technip
Punj LIoyd Ltd / Petro Steel / Rotary Engineering Ltd
1000
Execution
Karan Field Exploration - Offshore Elements Package
Saudi Aramco
Petrocon Arabia
J Ray McDermott
1000
Execution
Calcined Petroleum Coke (CPC) Plant
Petrobras / Modern Mining Holding Company
Petrobras
454
Execution
Kayan Petrochemicals Complex at Jubail - n-Butanol Plant
Saudi Aramco / SAAC / Dow Chemical Company / Saudi Kayan Petrochemical Company
Not Appointed
480
Study
Jubail - 2 Export Refinery - Plant Utilities Package
Saudi Aramco / Total
Technip
SK Engineering & Construction
700
Execution
Manifa Oil Field Redevelopment - Onshore Package
Saudi Aramco
Foster Wheeler
JGC Corporation / TR / Snamprogetti
2360
Execution
Ras Tanura Petrochemical Complex - Phase 2
Saudi Aramco
Jacobs Engineering Group Incorporated
Not Appointed
10000
FEED
Ibn Rushd - Yanbu Petrochemicals Complex Expansion - PTA Plant Expansion
Arabian Industrial Fibers Company (Ibn Rushd)
Uhde
CTCI Arabia Limited
400
Execution
Safaniyah Offshore Infrastructure
Saudi Aramco
J Ray McDermott
1000
Execution
Jubail Petrochemical Complex - Phase 3 - Polymers Compounding Plant
Sipchem / Hanwha Chemical
Worley Parsons
Not Appointed
100
FEED
Yanbu Export Refinery - Battery Limits and Solids Handling - Package 6
Saudi Aramco / ConocoPhilips
Kellogg Brown & Root (KBR)
Techint
450
Execution
Upgrade of the Oil Refinery at Yanbu
Samref
Worley Parsons
Worley Parsons
2000
Execution
Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Integrated Gas Development (IGD) - Habshan 5 Utilities & Offsites Package
Gasco /ADNOC
Fluor Corporation
Hyundai Engineering & Construction Company
1720
Execution
Umm Al Lulu Oil Field Development
Adma -Opco
Fluor Corporation
Not Appointed
1500
EPC Bid
Borouge Complex Expansion - Phase 3 - Offsites & Utilities Package
Abu Dhabi Polymers Co. (Borouge)
Tecnimont SpA
Hyundai Engineering & Construction Company, Abu Dhabi
935
Execution
Integrated Gas Development (IGD) - Habshan 5 Process Plant Package
Gasco/ ADNOC
Fluor Corporation
JGC Corporation / Tecnimont SpA
4700
Execution
Borouge Complex Expansion - Phase 3 - XLPE Plant
Abu Dhabi Polymers Co. (Borouge)
Technimont
Hyundai Engineering and Construction
169
Execution
Replacement of Emergency Shutdown Systems (ESD) at Habshan Plants
Gasco
ABB
Kentz Overseas Limited
30
Execution
Habshan - Ruwais - Shuweihat Gas Pipeline
Gasco
Larsen & Toubro; Abu Dhabi
190
Execution
ENOC Storage & Trading Terminal in Fujairah
Horizon Terminals Limited / ENOC House
Not Appointed
50
EPC Bid
NDC - Two Jackup Drilling Rigs
Abu Dhabi National Drilling Company
Lamprell plc
333
Execution
Base Oil Plant in Abu Dhabi
Takreer / Neste Oil (Finland)
Neste Jacobs / Technip
Hyundai Engineering & Construction Company, Abu Dhabi
463
Execution
Replacement of Liquid Storage Tanks in Das Island
ADGAS
Shaw Group (Stone & Webster)
Not Appointed
40
FEED
Asab Full Field Development
ADCO
Foster Wheeler
Petrofac
1000
Execution
Bab Oil field Development - Phase 2
ADCO
Technip
SK Engineering & Construction Company
805
Execution
LNG Trains Replacement at Das Island
ADGAS
Stone & Webster International Inc
Not Appointed
3000
FEED
Zora Gas Field Development
Dana Gas / Sharjah Petroleum Council / Crescent Petroleum
SPD Drilling Consultant
Not Appointed
122
EPC Bid
Debottlenecking of Das Island Crude Oil Processing Units
Adma-Opco
Penspen International Limited
Consolidated Contractors International Company (CCC)
80
Execution
Carbon Black Plant at Ruwais Refinery Complex
Takreer
Worley Parsons
Not Appointed
150
EPC Bid
UNITED ARAB EMIRATES
www.arabianoilandgas.com
November 2011 Oil&Gas Middle East
89
PROJECTS Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Upper Zakum Water Handling Facilities
Zadco
Technip
Not Appointed
100
FEED
Borouge 4
Abu Dhabi Polymers Co. (Borouge)
Not appointed
Not Appointed
2500
Concept Stage
Nitrogen Gas Injection at Habshan
Gasco
SNC Lavalin
Samsung Engineering
160
Execution
Jarn Yaphour and Ramhan Development
ADNOC / Occidental Middle East Development Company
Not Appointed
500
FEED
Gas Exploration Facilities - Kahaif, Moveyid and Sajaa
BP Exploration Operating Co Ltd(BP Sharjah) / Government of Sharjah
AMEC
Petrofac International
300
Execution
Tacaamol Complex in Chemaweyaat - Ethane Cracker
ADIC /IPIC /ADNOC /ChemaWeyaat
Not appointed
Not Appointed
1200
Study
Flare Gas Recovery System in Ruwais Refinery
Takreer
Saipem S.p.A
Not Appointed
100
Design
Zakum Central Super Complex - Phase 2 - Platform Package
Adma-Opco
Technip
J Ray McDermott
250
Execution
Development of Bab, Qusahwira & Bida Al-Qemzan Fields
ADCO
Washington Group International / Veco Engineering
Larsen & Toubro /NPCC
1800
Execution
Sour Gas Development - NGL Transport Pipeline
ADNOC
Fluor Corporation
Saipem S.p.A
196
Execution
Asab Gas Development (AGD) Modifications - Package 1
GASCO
Veco Engineering
Technip
408
Execution
Inter Refineries Pipeline Project at Ruwais - 2nd Stage - Pipeline
Takreer
Technip
GS Engineering & Construction / Punj Lloyd
700
Execution
Borouge Complex Expansion - Phase 3 - LDPE Plant
Abu Dhabi Polymers Co. (Borouge)
Tecnimont SpA
Technimont / Samsung Engineering
400
Execution
Heat Exchangers for ZWSC GG2 Platform
Adma-Opco
Not Appointed
25
Study
Development of Bida-al Qemzan Field
ADCO
Veco Engineering
Debottlenecking of Al-Dabbiyah and Rumaitha Processing Plants
ADCO
Petrofac International
IPIC Petroleum Refinery in Fujairah
IPIC
Gas/ Liquid Coalescer at Thammama
Gasco
Litwin Pel
Upper Zakum - Fujairah Oil Pipeline
IPIC/Conoco Phillips
WorleyParsons
Expansion of Ruwais Refinery - Package 4
Takreer
Sour Gas Development - Gas Processing Plant
Larsen & Toubro
600
Execution
500
Study
3000
Study
10
EPC Bid
China Petroleum Construction Corporation
3290
Execution
Foster Wheeler
Daewoo Engineering & Construction Ltd.
1200
Execution
ADNOC
Fluor Corporation
Saipem
1900
Execution
Sour Gas Development - Sulphur Recovery Unit
ADNOC
Fluor Corporation
Saipem
1450
Execution
Shah Full Field Development - Spiking Compressor Unit
ADCO
Larsen & Toubro
100
Execution
Integrated Gas Development (IGD) - Das Island Process & Utilities Package
Adnoc / Adgas
Fluor Corporation
Hyundai Heavy Industries(HHI),Abu Dhabi
1000
Execution
Satah Full Field Development - Gas Injection & Gas Lift
Zadco
Tebodin Middle East
Technip /NPCC
300
Execution
Production Facilities at Sarb Oil Field
Zadco
Fluor Corporation
Not Appointed
1500
Feed
Sour Gas Development - Offsites & Utilities
ADNOC
Fluor Corporation
Samsung
1500
Execution
Al Jelilah Oil Field Development
Dubai Petroleum Company
Lamprell plc / Global Industries Ltd.
100
Execution
Expansion of Ruwais Refinery - Package 1
Takreer
Foster Wheeler
SK Engineering & Construction Company
2100
Execution
Expansion of Ruwais Refinery - Package 2
Takreer
Foster Wheeler
GS Engineering & Construction
3100
Execution
Mirfa Nitrogen Production Plant
ADNOC / Linde /Gasco
Linde
1000
Execution
Integrated Gas Development (IGD) - Ruwais Storage Tanks Package
Gasco / Adnoc
Fluor Corporation
Chicago Bridge & Iron (CB&I)
533
Execution
Bab Field Modification Project - Package 3
Gasco
Veco Engineering
Daewoo Engineering & Construction Ltd.
300
Execution
Gas Re-Injection Project at Habshan
Takreer / ADNOC / Gasco
SNC Lavalin
Not Appointed
100
EPC Bid
Shah Full Field Development
Adco
Foster Wheeler
CCC / Tecnicas Reunidas
250
Execution
Integrated Gas Development (IGD) - Ruwais 4th NGL Train Package
ADNOC / Gasco
Fluor Corporation
Petrofac International / GS Engineering & Construction
2100
Execution
Flowlines & Wellhead Installations to ADCO
Abu Dhabi Company for Onshore Oil Operations (ADCO)
Mott MacDonald
Al Husam General Contracting
100
Execution
Not Appointed
Note : The above information is the sole property of Ventures Middle East LLC and cannot be published without the expressed permission of Ventures Middle East LLC, Abu Dhabi, UAE
90
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
The 20th World Petroleum Congress 4-8 December 2011, Doha, Qatar www.20wpc.com
•BIG NAMES•BIG AMBITION •BIG BREAKTHROUGHS
THE FIRST TIME IN THE MIDDLE EAST
•5000 DELEGATES •500 SPEAKERS•50 MINISTERS QATAR HOSTS THE ‘OLYMPICS’ OF OIL AND GAS
Official International Arabic Newspaper
Official Publication
Official Broadcaster
Official International Magazine
Official Law Firm and Carbon Offset Partner
Official Airline
Official Business News Service
Official Science and Technology Partner
Official Bank
Official Business Broadcaster
Official Telecommunications Partner
Official Global News Service
Official Auditor and Business Advisor
Official International Business Newspaper
Official Newswire Service
Official Media Partner
Official Daily Newsletter
M
RIG STATISTICS
Rigzone report on current rig contracts by operator
Information is supplied by RigZone.com
RED SEA Manager
Rig Type
Current Status
Current Region
Rig Name
Diamond Offshore
Jackup
Inspection
MidEast - Red Sea
Ocean Heritage
Egyptian Drilling
Platform Rig
Ready Stacked
MidEast - Red Sea
EDC 34
Egyptian Drilling
Jackup
Drilling
MidEast - Red Sea
Kamose
Egyptian Drilling
Jackup
Ready Stacked
MidEast - Red Sea
Zoser
Egyptian Offshore Drilling Company
Jackup
Drilling
MidEast - Red Sea
El Qaher I
Egyptian Offshore Drilling Company
Jackup
Drilling
MidEast - Red Sea
El Qaher II
KS Energy Services Ltd.
Jackup
Ready Stacked
MidEast - Red Sea
Bennevis
Maersk Drilling
Jackup
Modification
MidEast - Red Sea
Maersk Endurer
Newbury Holdings Two Limited
Jackup
Cold Stacked
MidEast - Red Sea
Transocean Mercury
Saipem
Jackup
Drilling
MidEast - Red Sea
Perro Negro 4
SinoTharwa Drilling Co.
Jackup
Drilling
MidEast - Red Sea
ST-Bahari-1
Transocean Ltd.
Jackup
Cold Stacked
MidEast - Red Sea
GSF Key Singapore
Transocean Ltd.
Jackup
Cold Stacked
MidEast - Red Sea
GSF Rig 103
Transocean Ltd.
Jackup
Drilling
MidEast - Red Sea
GSF Rig 105
Transocean Ltd.
Jackup
Drilling
MidEast - Red Sea
GSF Rig 141
Transocean Ltd.
Jackup
Cold Stacked
MidEast - Red Sea
Interocean III
Transocean Ltd.
Jackup
Drilling
MidEast - Red Sea
Transocean Comet
Transocean Ltd.
Jackup
Drilling
MidEast - Red Sea
Transocean Comet
Rig Type
Current Status
Current Region
Rig Name
PERSIAN GULF Manager
Aban Offshore
Jackup
Drilling
MidEast - Persian Gulf
Aban VI
Aban Offshore
Jackup
Ready Stacked
MidEast - Persian Gulf
Aban VII
Aban Offshore
Jackup
Drilling
MidEast - Persian Gulf
Aban VIII
Aban Offshore
Jackup
Drilling
MidEast - Persian Gulf
Deep Driller 2
Aban Offshore
Jackup
Drilling
MidEast - Persian Gulf
Deep Driller 4
Aban Offshore
Jackup
Drilling
MidEast - Persian Gulf
Deep Driller 5
Aban Offshore
Jackup
Drilling
MidEast - Persian Gulf
Deep Driller 6
Alliance Energy Management Inc.
Jackup
Ready Stacked
MidEast - Persian Gulf
Wave Sierra
Arabian Drilling
Jackup
Ready Stacked
MidEast - Persian Gulf
Arabdrill 17
Arabian Drilling
Jackup
Ready Stacked
MidEast - Persian Gulf
Arabdrill 22
Arabian Drilling
Jackup
Drilling
MidEast - Persian Gulf
Arabdrill 30
Arabian Drilling
Jackup
Drilling
MidEast - Persian Gulf
Arabdrill 8
China Oilfield Services Ltd.
Jackup
Drilling
MidEast - Persian Gulf
COSLCraft
China Oilfield Services Ltd.
Jackup
Drilling
MidEast - Persian Gulf
COSLForce
China Oilfield Services Ltd.
Jackup
Drilling
MidEast - Persian Gulf
COSLPower
China Oilfield Services Ltd.
Jackup
Drilling
MidEast - Persian Gulf
COSLStrike
China Oilfield Services Ltd.
Jackup
Drilling
MidEast - Persian Gulf
COSLSuperior
Egyptian Drilling
Jackup
Drilling
MidEast - Persian Gulf
Sneferu
ENSCO
Jackup
Drilling
MidEast - Persian Gulf
ENSCO 54
ENSCO
Jackup
Drilling
MidEast - Persian Gulf
ENSCO 58
ENSCO
Jackup
Inspection
MidEast - Persian Gulf
ENSCO 76
ENSCO
Jackup
Enroute
MidEast - Persian Gulf
ENSCO 84
ENSCO
Jackup
Drilling
MidEast - Persian Gulf
ENSCO 88
ENSCO
Jackup
Drilling
MidEast - Persian Gulf
ENSCO 91
ENSCO
Jackup
Drilling
MidEast - Persian Gulf
ENSCO 94
ENSCO
Jackup
Drilling
MidEast - Persian Gulf
ENSCO 96
ENSCO
Jackup
Modification
MidEast - Persian Gulf
ENSCO 97
92
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
RIG STATISTICS
Manager
Rig Type
Current Status
Current Region
Rig Name
ENSCO
Jackup
Cold Stacked
MidEast - Persian Gulf
Pride Hawaii
ENSCO
Jackup
Cold Stacked
MidEast - Persian Gulf
Pride Pennsylvania
Eurasia Drilling Company
Jackup
Under Construction
MidEast - Persian Gulf
Eurasia Jackup TBN 1
Foresight Group
Jackup
Drilling
MidEast - Persian Gulf
Foresight Driller 5
Foresight Group
Jackup
Cold Stacked
MidEast - Persian Gulf
Foresight Driller VII
Global Petro Tech
Jackup
Cold Stacked
MidEast - Persian Gulf
Global Pearl
Great Offshore
Jackup
Ready Stacked
MidEast - Persian Gulf
Amarnath
Greatship Global
Jackup
Under Construction
MidEast - Persian Gulf
Greatdrill Chaaya
Gulf Drilling International
Jackup
Drilling
MidEast - Persian Gulf
Al Doha
Gulf Drilling International
Jackup
Drilling
MidEast - Persian Gulf
Al Khor
Gulf Drilling International
Jackup
Drilling
MidEast - Persian Gulf
Al Zubarah
Gulf Drilling International
Jackup
Cold Stacked
MidEast - Persian Gulf
ENSCO 95
Gulf Drilling International
Jackup
Drilling
MidEast - Persian Gulf
GULF-2 (Al-Rayyan)
Gulf Drilling International
Jackup
Drilling
MidEast - Persian Gulf
GULF-3 (Al-Wajbah)
Hercules Offshore
Jackup
Cold Stacked
MidEast - Persian Gulf
Hercules 156
Hercules Offshore
Jackup
Ready Stacked
MidEast - Persian Gulf
Hercules 170
Hercules Offshore
Jackup
Drilling
MidEast - Persian Gulf
Hercules 261
Hercules Offshore
Jackup
Drilling
MidEast - Persian Gulf
Hercules 262
Japan Drilling
Jackup
Drilling
MidEast - Persian Gulf
Sagadril 1
Japan Drilling
Jackup
Drilling
MidEast - Persian Gulf
Sagadril 2
Maritime Industrial Services
Jackup
Ready Stacked
MidEast - Persian Gulf
MIS Jackup (Hull 108)
MENAdrill
Jackup
Ready Stacked
MidEast - Persian Gulf
MENAdrill II
Mosvold Middle East Jackup
Jackup
Ready Stacked
MidEast - Persian Gulf
MEJU Jackup TBN 1
Nabors Offshore
Jackup
Ready Stacked
MidEast - Persian Gulf
Nabors 240
Nabors Offshore
Jackup
Drilling
MidEast - Persian Gulf
Nabors 655
Nabors Offshore
Jackup
Drilling
MidEast - Persian Gulf
Nabors 656
www.arabianoilandgas.com
November 2011 Oil&Gas Middle East
93
RIG STATISTICS
Manager
Rig Type
Current Status
Nabors Offshore
Jackup
Modification
MidEast - Persian Gulf
Nabors 657
Nabors Offshore
Jackup
Drilling
MidEast - Persian Gulf
Nabors 660
Nabors Offshore
Jackup
Ready Stacked
MidEast - Persian Gulf
Nabors 867
National Drilling
Jackup
Modification
MidEast - Persian Gulf
Al Bzoom
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Al Ghallan
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Al Hail
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Al Ittihad
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Al Yasat
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Beynouna
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Brakah
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Delma
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Diyina
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Junana
National Drilling
Jackup
Under Construction
MidEast - Persian Gulf
NDC Jackup TBN 1
National Drilling
Jackup
Under Construction
MidEast - Persian Gulf
NDC Jackup TBN 2
National Drilling
Jackup
Under Construction
MidEast - Persian Gulf
NDC Jackup TBN 3
National Drilling
Jackup
Under Construction
MidEast - Persian Gulf
NDC Jackup TBN 4
National Drilling
Jackup
Drilling
MidEast - Persian Gulf
Yemilah
Navymar Shipping Company
Jackup
Drilling
MidEast - Persian Gulf
Oriental 1
NIDC
Jackup
Drilling
MidEast - Persian Gulf
Alborz
NIDC
Jackup
Drilling
MidEast - Persian Gulf
Alvand
NIDC
Jackup
Modification
MidEast - Persian Gulf
Shahid Modarress
NIDC
Jackup
Drilling
MidEast - Persian Gulf
Shahid Rajaiee
Noble Drilling
Jackup
Drilling
MidEast - Persian Gulf
Noble Alan Hay
Noble Drilling
Jackup
Accommodation
MidEast - Persian Gulf
Noble Charles Copeland
Noble Drilling
Jackup
Accommodation
MidEast - Persian Gulf
Noble Chuck Syring
Noble Drilling
Jackup
Drilling
MidEast - Persian Gulf
Noble David Tinsley
Noble Drilling
Jackup
Drilling
MidEast - Persian Gulf
Noble Dhabi II
Noble Drilling
Jackup
Modification
MidEast - Persian Gulf
Noble Dick Favor
Noble Drilling
Jackup
Modification
MidEast - Persian Gulf
Noble Gene House
Noble Drilling
Jackup
Accommodation
MidEast - Persian Gulf
Noble Gus Androes
Noble Drilling
Jackup
Drilling
MidEast - Persian Gulf
Noble Harvey Duhaney
Noble Drilling
Jackup
Drilling
MidEast - Persian Gulf
Noble Jimmy Puckett
Noble Drilling
Jackup
Modification
MidEast - Persian Gulf
Noble Joe Beall
Noble Drilling
Jackup
Drilling
MidEast - Persian Gulf
Noble Roger Lewis
Noble Drilling
Jackup
Drilling
MidEast - Persian Gulf
Noble Roy Rhodes
Noble Drilling
Jackup
Drilling
MidEast - Persian Gulf
Noble Scott Marks
Rowan
Jackup
Modification
MidEast - Persian Gulf
Arch Rowan
Rowan
Jackup
Drilling
MidEast - Persian Gulf
Bob Keller
Rowan
Jackup
Drilling
MidEast - Persian Gulf
Bob Palmer
Rowan
Jackup
Modification
MidEast - Persian Gulf
Charles Rowan
Rowan
Jackup
Modification
MidEast - Persian Gulf
Gilbert Rowe
Rowan
Jackup
Drilling
MidEast - Persian Gulf
Hank Boswell
Rowan
Jackup
Drilling
MidEast - Persian Gulf
Rowan California
Rowan
Jackup
Modification
MidEast - Persian Gulf
Rowan Middletown
Rowan
Jackup
Enroute
MidEast - Persian Gulf
Rowan Mississippi
Rowan
Jackup
Drilling
MidEast - Persian Gulf
Rowan Paris
Rowan
Jackup
Drilling
MidEast - Persian Gulf
Scooter Yeargain
SAAG Drilling
Jackup
Drilling
MidEast - Persian Gulf
SAAG Jackup TBN 1
Saipem
Jackup
Drilling
MidEast - Persian Gulf
Perro Negro 2
Saipem
Jackup
Drilling
MidEast - Persian Gulf
Perro Negro 3
Saipem
Jackup
Drilling
MidEast - Persian Gulf
Perro Negro 5
Saipem
Jackup
Drilling
MidEast - Persian Gulf
Perro Negro 7
Saudi Aramco (NOC)
Jackup
Drilling
MidEast - Persian Gulf
SAR-201
Seadrill Ltd
Jackup
Drilling
MidEast - Persian Gulf
Offshore Freedom
Seadrill Ltd
Jackup
Drilling
MidEast - Persian Gulf
Offshore Intrepid
Transocean Ltd.
Jackup
Drilling
MidEast - Persian Gulf
GSF High Island II
Transocean Ltd.
Jackup
Drilling
MidEast - Persian Gulf
GSF High Island IV
Transocean Ltd.
Jackup
Drilling
MidEast - Persian Gulf
GSF Main Pass I
Transocean Ltd.
Jackup
Modification
MidEast - Persian Gulf
GSF Main Pass IV
Transocean Ltd.
Jackup
Cold Stacked
MidEast - Persian Gulf
GSF Rig 127
94
Oil&Gas Middle East November 2011
Current Region
Rig Name
www.arabianoilandgas.com
Wednesday 14th December 2O11 Dubai, UAE The Address Dubai Marina The 5th annual MEP Awards is the perfect occasion for the industry to come together for one night to celebrate the efforts and achievements of the Middle Eastâ&#x20AC;&#x2122;s MEP sector.
For sponsorship opportunities, please contact: YAZAN RAHMAN Sales Director, Construction Group Tel: +971 4 4443351 Email: yazan.rahman@itp.com
ZAID HADI Sales Manager Direct: +971 4 4443779 Email: zaid.hadi@itp.com
For table bookings and For nomination enquiries, further information, please contact: please contact: ANNIE CHINOY GAVIN DAVIDS Marketing Manager Deputy Editor, MEP Middle East Tel: +971 4 444 3353 Tel: +971 4 444 3262 Email: annie.chinoy@itp.com Email: gavin.davids@itp.com
For more information, or to submit your nominations, please visit:
www.constructionweekonline.com/mepawards
THE BIG PICTURE
Plenty to pump T
he latest World Oil & Gas Review from Eni suggests there is plenty of recoverable oil to keep the Middle East producing for another 81 years at 2010 levels. The region has only shed two years of production in fifteen years, a net gain in reserves against production of 13 years. The UAE has enough reserves to keep producing at current (2010 data) output for 94 more years, up significantly from the 70 years it was thought to have left back in 1995. Eni compiled that statistics by dividing the reserves in a given year by production for the same year. 2005
2010
MIDDLE EAST
83
81
BAHRAIN
1
2
IRAN
66
89
IRAQ
491
130
KUWAIT
121
114
OMAN
15
17
QATAR
26
40
SAUDI ARABIA
78
72
SYRIA
11
18
UNITED ARAB EMIRATES
70
94
YEMEN
26
31
Juâ&#x20AC;&#x2122;aymah NGL Fractionation Plant.
96
Oil&Gas Middle East November 2011
www.arabianoilandgas.com
Complex Wells
Petrel, ECLIPSE, and Measurable Impact are marks of Schlumberger. © 2011 Schlumberger. 11-IS-0461
Optimize Well Placement and Completions with Petrel and ECLIPSE Software
Whether you are planning wells with complex multilateral trajectories, designing intelligent completions with flow control valves, or rigorously modeling wellbore fluid flow—you have everything you need to optimize your complex wells. With Petrel and ECLIPSE 2011, I’ve got what it takes. www.slb.com/complexwells
Global Expertise Innovative Technology Measurable Impact