Oil Review Middle East 7 2012

ORME 7 2012 Cover_ORMETHREE05COVER.qxd 25/10/2012 16:00 Page 1

Vol 15 Issue Seven 2012

www.oilreview.me

UK ÂŁ10, USA $16.50

Abu Dhabi’s expiring oil concessions Sparking the oil boom in the Kurdistan Region of Iraq Asset management systems Integrating seismic data LNG imports rise as production lags behind demand Ensuring sustainable water usage for fracturing operations Corrosion monitoring and maintenance

ADIPEC to focus on sustainable energy growth

Well integrity management systems

See us at Stand MS21

Khalid al-Falih, chief executive of Saudi Aramco, has announced plans to invest US$35bn in crude oil exploration and development over the next five years.

See page 40

al ion r g re cto e th s se 7 9 ing ga 9 rv l & ce 1 e S oi in s

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S01 ORME 7 2012 Start_Layout 1 25/10/2012 16:53 Page 5

Contents

Vol 15 Issue Seven 2012

www.oilreview.me

UK £10, USA $16.50

Abu Dhabi’s expiring oil concessions

Columns

Sparking the oil boom in the Kurdistan Region of Iraq Asset management systems

6

Industry news and executives’ calendar

Integrating seismic data LNG imports rise as production lags behind demand Ensuring sustainable water usage for fracturing operations

Analysis

Corrosion monitoring and maintenance Well integrity management systems

18

Abu Dhabi Concessions

ADIPEC to focus on sustainable energy growth

Abu Dhabi has started the process of renewing its expiring large oil concessions.

See us at Stand MS21

24

Hydrocarbons

Jose Luis Bustamante, regional senior vice president at Fluor, shares his outlook for the EPC market.

Khalid al-Falih, chief executive of Saudi Aramco, has announced plans to invest US$35bn in crude oil exploration and development over the next five years.

See page 40

ars

ye

28

The Kurdistan Region of Iraq

An extensive preview of ADIPEC 2012 starts on page 75.

Are the difficulties preventing the region’s oil boom any closer to resolution?

30

Asset Management Systems

Patrick Gex of Ventyx explains the vital role played by enterprise asset management.

Exploration & Production 34

Integrating Seismic Data Ghiath Ajlani of CGGVeritas explains how proper integration of seismic data can significantly enhance the quality of datasets.

40

Developments The latest exploration and production contract news from around the region.

Gas 48

LNG Imports

A look at how some countries in the region cannot develop their gas reserves quickly enough to satisfy demand.

54

Developments The latest news from the regional gas sector.

Petrochemicals 56

Outlook An analysis of the International Energy Agency’s Medium-Term Oil Market Report.

59

News Contract and project updates from the regional petrochemical sector.

l na gio re ctor e th s se 7 9 ing ga 19 rv & Se oil nce si

15

Editor’s note THE FORTHCOMING ABU Dhabi International Petroleum Exhibition & Conference (ADIPEC) – the 15th in the series – is now firmly established as the major oil and gas event in the region, and its importance is clearly reflected in our lengthy preview in this issue. ADIPEC 2012 will attract more than 4,000 international delegates and upwards of 45,500 attendees, while 1,600 companies will be exhibiting across 38,000 sqm of exhibition space. To accommodate the event’s expansion this year, a new Outdoor and Offshore exhibition area has been launched, where more than 100 exhibitors will showcase their latest oil and gas equipment. ADIPEC will be supported and sponsored by more NOCs, IOCs and service companies than ever before. Our preview includes input from numerous exhibitors, all hoping to find an outlet for their technologies and services, and some detailed analysis of the regional oil, gas and petrochemicals market, exclusive opinion pieces and much more. Elsewhere in this issue, our usual mix of analysis, technical features and industry commentary means there is something for everyone working in the oil and gas sector. Readers comments are always welcome to oil@alaincharles.com

154

Corrosion Monitoring Mitigating corrosion using a continuous monitoring system.

158

Marine Personnel Transfer Dealing with the key challenge of personnel transfer.

Country Focus 64

Iraq A look at the political and security issues the country needs to overcome to thrive.

160

Fire Safety

An overview of national and international organisations, advisory bodies and trade shows that help enable companies to adhere to fire safety legislation.

162

Well Integrity Management

Exhibition Preview 70

Basra Oil & Gas

The international conference will focus on Iraq as the hub of future global energy supplies.

75

ADIPEC 2012

An extensive preview and selection of news and features to mark this year’s edition of the now annual Abu Dhabi International Petroleum Exhibition and Conference.

How well integrity management systems can give users a 360° view of corporate risk.

166

Innovations Introducing some of the latest available technologies for the oil and gas sector.

Information Technology 184

Wireless Technology A look at vMonitor’s Wireless HART range of instruments.

Technical Focus 140

Oil Spill Prevention

Strict rules apply to the prevention and clear-up of oil spills but the Gulf is particularly well-equipped to respond effectively.

144

Tank and Terminal Management

The vital role of tank inventory management and tank overfill prevention systems.

148

Weld Overlay Cladding The benefits of using weld overlay cladding to protect pipelines from corrosion.

187

Developments The latest IT project, product and contract news from around the region.

192

Project Databank/Rig Count

Arabic Section 4 11

Industry News Gulf Gas Overview

Managing Editor: David Clancy Editorial and Design team: Bob Adams, Lizzie Carroll, Andrew Croft, Ranganath GS, Kasturi Gupta, Prashant AP, Meenakshi Nambiar, Ian Roullier, Genaro Santos, Zsa Tebbit, Nicky Valsamakis, Julian Walker and Ben Watts

Publisher: Nick Fordham

Advertising Sales Director: Pallavi Pandey

Magazine Sales Manager: Camilla Capece Tel: +971 4 448 9260, Fax: +971 4 448 9261, Email: camilla.capece@alaincharles.com Country Representative Telephone Fax China Wang Ying (86) 10 8472 1899 (86) 10 8472 1900 India Tanmay Mishra (91) 80 65684483 (91) 80 40600791 Nigeria Bola Olowo (234) 8034349299 Russia Sergei Salov (7495) 540 7564 (7495) 540 7565 South Africa Annabel Marx (27) 218519017 (27) 46 624 5931 Qatar Saida Hamad (974) 55745780 UK Steve Thomas (44) 20 7834 7676 (44) 20 79730076 USA Michael Tomashefsky (1) 203 226 2882 (1) 203 226 7447

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Production: Donatella Moranelli, Nasima Osman, Devolina Pal, Nick Salt, Jeremy Walters and Sophia White - Email: production@alaincharles.com Subscriptions: Email: circulation@alaincharles.com Chairman: Derek Fordham Printed by: Emirates Printing Press, Dubai © Oil Review Middle East ISSN: 1464-9314

Serving the world of business

Oil Review Middle East Issue Seven 2012 5

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News

MENA oil producers to invest US$740 billion into energy projects over next five years OIL PRODUCERS FROM across the MENA region will contribute US$740bn towards energy projects over the next five years, according to a report from Arab Petroleum Investments Corporation (Apicorp).

Saudi Arabian producers have been slated to lead the way, with the report stating that companies from within the kingdom - primarily Saudi Aramco and Saudi Basic Industries Corporation (SABIC) committing investments totalling US$165 billion for the five-year period from 2013 to 2017.

Meanwhile, UAE-based oil firms and investment

arms have planned to invest US$107bn into energy projects during the same period, the report added.

The research claimed that Algeria, which has been projected to plough US$71bn into energy projects during the next five years, had overtaken Iran and Qatar as the region's third-biggest investor.

The report placed Iran's energy spending programme over the next five years at US$68bn, while Iraqi spending fell well below required investment at US$56bn.

“Tighter international sanctions, and the retreat of

ExxonMobil set to sell southern Iraq stake EXXONMOBIL IS IN talks to sell its stake in a multibillion dollar oil project in southern Iraq. At the time of writing, negotiations were underway between ExxonMobil and international oil companies to decide who will take over its 60 per cent stake in the West Qurna-1 field.

“Exxon has informed the government that it wants to sell its assets at West Qurna-1,” an anonymous spokesperson confirmed.

Meanwhile, the company has shifted its focus towards its plans in the Kurdistan Region of Iraq, where the company's exploratory drilling in the region has been scheduled to start in early 2013, added the spokesperson.

According to a second anonymous source, ExxonMobil has already ordered the purchase of oil well casing heads and is negotiating a contract with an oil services firm to start drilling in the Kurdistan Region of Iraq.

The company will reportedly start operations in the Al-Qosh block near Mosul.

In November 2011, ExxonMobil caused controversy when it became the first major international oil company to sign petroleum contracts with the Kurdistan Regional Government (KRG) despite Baghdad’s threats to expel it from a contract in southern Iraq.

Under the terms of the contract, ExxonMobil was assigned responsibility for six blocks by the KRG, which is in dispute with the central government over land and oil rights.

Chevron, Total SA and the oil-producing arm of OAO Gazprom all followed ExxonMobil’s lead by striking their own deals in Kurdistan in early 2012.

The Iraqi central government responded by excluding all companies that signed deals with the KRG from participating in auctions for future oil exploration rights in southern Iraq.

6 Oil Review Middle East Issue Seven 2012

foreign companies, have ended up taking a toll on Iran’s elusive energy investment programme,” Apicorp said in a statement.

The bank said that countries in the region would be able to finance projects on their own as long as the basket of Opec crudes remains US$10 higher than last year’s review at more than US$100 a barrel.

Apicorp's review covers projects in the oil, gas, petrochemicals and power industries, which have been deemed likely to see final investment decisions being taken.

Shah gas project on track for 2014 completion

THE US$10BN SHAH gas development project is on track and should be completed by late 2014, according to the field’s operators.

Saif al Ghafli, CEO of operator Abu Dhabi Gas Development Company, said that the installation facilities were now 60 per cent complete, while 20 per cent of the drilling has also been completed.

It is hoped that the project, located 180km from Abu Dhabi, will help meet growing domestic demand in the UAE. According to Ghafli, the project is expected to produce 500mmcfd of clean gas as well as condensates, natural gas liquids and sulphur.

Drilling risks along with environmental and technical issues were among the potential hazards associated with the development, he added.

The company’s partner for the project will be US-based Occidental Petroleum.

S02 ORME 7 2012 News_Layout 1 24/10/2012 16:28 Page 7

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S02 ORME 7 2012 News_Layout 1 24/10/2012 16:28 Page 8

BP opts for Frazer-Nash's assistance in Iraq assessment BP IRAQ HAS chosen engineering technology firm Frazer-Nash Consultancy to provide it with technical assurance during a fitness-for-service (FFS) assessment programme on the Rumaila oil field's pressure vessels and associated equipment The decision was made via the Rumaila Operating Organisation (ROO), a joint venture that was formed to modernise and operate the oilfield in the southern part of Iraq.

Frazer-Nash business manager for oil and gas, Simon Rees, said, "This multi-year project is an important part of restoring the Rumaila field to capacity and we are proud to have been selected by BP for this task.

"We hope the techniques and methods we develop on this project will help ROO as they continue their remediation work on other parts of the asset portfolio."

The FFS assessment will look to establish the suitability and condition of the equipment currently installed in the field.

Frazer-Nash has also confirmed that it has been asked to offer assistance in developing a methodology for establishing the "appropriate levels of assessment to apply to each item" in order to help reduce costs during the field's redevelopment.

Image source: Daniel Fogg

8 Oil Review Middle East Issue Seven 2012

PDO to create 20,000 jobs over next five years THE PETROLEUM DEVELOPMENT of Oman (PDO) will aim to create 4,000 jobs per year as part of its new five-year business plan. Raoul Restucci, managing director of PDO, said, "We have to continuously find and invest in the best talent and technology to discover and recover gas and review the entire supply chain to make sure the exploration and development process is more economical.

www.pdo.co.om

"For PDO, this means not only complying with increasingly more stringent health, safety and environment (HSE) rules and regulations but also achieving and retaining a social license from the communities where we operate.

"We need, and want, their consent to operate and this means investing in vital infrastructure, education, vocational training, and job creation in those areas.�

PDO has developed an in-country value strategy, which involves supporting local community companies, increasing the procurement of local goods and services and improving the capacity and capability of the Omani people and businesses. This would, in turn, secure long-term sustainable commercial benefits, the company said. “As part of this strategy, we have also implemented a comprehensive social investment programme with a particular focus on training to help lowincome individuals and families in our concession area to build their own businesses or secure meaningful employment,� Restucci commented.

Restucci claimed that in order to sustain the progression in the gas sector, the government needed to provide a stable political and economic environment and workable labour laws. A modern infrastructure and a sound educational and training system to produce the new generation of technical talent is also required, he added.

S02 ORME 7 2012 News_Layout 1 24/10/2012 16:28 Page 9

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S02 ORME 7 2012 News_Layout 1 24/10/2012 16:28 Page 10

News

QPI to invest US$3.61bn in Egyptian refinery QATAR PETROLEUM INTERNATIONAL (QPI) has announced that it will invest US$3.61bn to build an oil refinery in Egypt in partnership with Orient Company and the Egyptian General Petroleum Corporation (EGPC).

The announcement was made at a joint press conference addressed by the minister of energy and industry, Dr Mohammed bin Saleh Al Sada, and Egyptian minister of petroleum and mineral resources, Osama Kamal.

Dr Al Sada, who is also the board chairman of QPI, said, "This investment would further enhance QPI's strategy to develop and update the three pillars upon which the company is based; namely exploration, developing and producing oil, petrochemicals, refining and gas and energy amid the company's vision."

Kamal said that once the proposed refinery in the outskirts of Cairo (Mastard area) is complete, it will annually produce about 4.2 mt of environment-friendly petrol and other petroleum products, including more than 2.3 mt of environment-friendly diesel, which will reduce Egypt's import of diesel by up to 50 per cent.

The environment-friendly diesel is expected to improve air quality in the Greater Cairo area and help reduce Egypt's annual subsidy bill.

The refinery at Mastard, which is scheduled to start operations in 2016, will contribute about US$300mn in direct benefits to Egypt and create several thousand jobs.

Al Sada said that Qatar was ready to extend further cooperation by investing in other viable projects.

IMF warns of oil importers’ vulnerability THE INTERNATIONAL MONETARY Fund (IMF) has warned that diminishing budgets and external balances are placing oil-importing countries in the Middle East region at increased risk.

The IMF said in a recent report that countries such as fuel import dependent countries, such as Egypt, are still suffering from the European financial crisis, which depleted export markets. Energy price rises and government spending to meet the demands generated during last year's social unrest are also highlighted as conditions that are placing certain countries in the region at increased risk.

The IMF report forecasted 2.1 per cent growth in

the oil-importing group of countries (Afghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Sudan, Syria and Tunisia) this year, rising to 3.3 per cent in 2013. However, the fund also warned that this rate may be in jeopardy if the global economy does not stabilise. According to Bloomberg, the IMF report predicted a two per cent economic expansion in Egypt this year and three per cent next year - still half the average growth rate during the five years before 2011's unrest.

Many countries in the region are particularly vulnerable to the global economic climate as

current-account imbalances are exacerbated by weaker capital inflows and declining official international reserves, the IMF report said. “Large adverse terms-of-trade shocks arising from high and rising food and fuel prices in recent years call for greater exchange rate flexibility to restore and maintain competitiveness,� said the IMF report.

Egypt has requested a US4.8bn loan due to falling reserves and is currently in negotiations with the IMF. The IMF predicted growth of 6.6 per cent this year for the region's oil exporters, adding that this would fall to 3.8 per cent in 2013.

First stage of US$128mn Kirkuk-Beiji gas network 'imminent' THE IRAQI OIL Ministry has announced that the first stage in the transportation of dry and liquid gas from Kirkuk to Beiji will be implemented soon. The project will cost US$128mn.

Oil ministry spokesman, Asim Jihad, told news agency, Aswat alIraq, that South Korean company, Kogas, will implement the first stage of the pipeline network, which will distribute dry gas across the country.

The dry gas pipelines will be connected from Kirkuk to cement

factories and various other institutions and another 110 km pipeline will carry liquid gas. The project will take 22 months to complete.

"These projects were laid down in the past, but the war and economic sanctions prevented their implementation," Aswat al-Iraq quoted economic expert, Abdul Razzaq al-Abayachi, as saying. "Iraq was planning to connect its pipelines network with the Nabucco gas network; but for the time being, this implementation will assist Iraq in exporting its gas through the international network."

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News

Alstom wins US$19mn Sohar refinery contract OMANI TENDER BOARD has awarded a US$19mn contract to France's Alstom for reducing the emissions of Sohar refinery’s breaking units.

The project is set to be implemented within eight months, according to Musab bin Abdullah Al Mahrouqi, CEO of Oman Refineries Petrochemical Industries Company (ORPIC).

Mahrouqi said that the company has allocated US$59.8mn for the environmental improvement plan which will be implemented in a number of stages by 11 local and international companies.

The plans, which were initiated by ORPIC in 2011, are aimed at limiting the emissions of offensive smell resulting from Sohar Refinery’s operations.

Mahrouqi added that ORPIC has sought international expertise to improve the performance of the refinery’s units, especially the water treatment plant, the basins of which emit gases that affect the nearby population.

One of the basic requirements and aims included in the Sohar Refinery expansion project, which will be tendered soon, is to improve the performance of the current refinery units by introducing modern technologies that limit the negative emissions.

US/Dubai talks continue over Iran imports

Lebanese prospects spark interest at London meeting MORE THAN 50 European and US companies have voiced their interest in Lebanon’s oil and gas prospects at a meeting with Lebanese officials in London. Having listened to an update from the Lebanese government regarding its survey of an area off the Lebanese coast, the vast majority of the companies made it clear that they were keen to explore the area for oil and gas as soon as possible.

According to Lebanon's Daily Star, companies were curious to know the actual size of the gas blocks off the coast; indicating that the larger blocks would tempt firms to take part in the bidding.

One attendee of the meeting said that Cesar Bou Khalil, an adviser to Lebanon's Energy and Water Ministry, told the company representatives that the size of the blocks would be revealed by the Petroleum Administration once it was formed.

UK firm, Spectrum, which has been conducting a 3D seismic survey off the southern coast of Lebanon, assured the companies that the prospects of large amounts of gas in this country are quite substantial.

Spectrum revealed to the Daily Star that preliminary results covering 3,000 sqm showed close to 25 tcf of reserves with a potential market value of more than US$40bn.

An estimated 60 oil companies from the US, France, the UK, Austria and other countries attended the event and were briefed by government officials about the geo-political situation in Lebanon and efforts that the government is making to hasten oil and gas exploration.

It is rumoured that the Petroleum Administration, which will be responsible for issuing tenders, will be formed before the end of this year.

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12 Oil Review Middle East Issue Seven 2012

The Sohar refinery

THE US AND Dubai are reportedly negotiating an end to the emirate’s Iranian oil imports, according to industry sources. Despite the US government tightening control of Iranian condensate imports in recent months, Dubai continues to purchase it. US officials are said to be continuing to encourage Emirates National Oil Company (ENOC), which is owned by the Dubai government, to switch its supplier.

“The Americans did ask ENOC to stop importing but this is still going on,” a UAE oil industry source was quoted as saying by Lebanon's Daily Star.

Meanwhile, a US official was quoted by the same source as saying, “We are working with UAE to ensure imports wind down."

Iran’s condensate sales are its biggest source of income after crude and refined products. Dubai is the biggest buyer of Iranian condensate, ahead even of Asian countries such as China.

The condensate is refined by ENOC at Dubai’s Jebel Ali refinery and provides the city's residents with cheap subsidised fuel, costing around US$0.47 a litre.

While US and European sanctions, designed to starve Iran of the funds that they say are being channelled into developing nuclear weapons, have halved Iranian crude exports this year, analysts say that Dubai’s condensate imports from Iran are up nearly 20 per cent compared to last year.

“The Saudis aren’t happy that another GCC (Gulf Cooperation Council) member is effectively supporting Iran and undermining sanctions and they’ve made their feelings known,” a diplomat was quoted as saying.

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Executives Calendar 2012/13 NOVEMBER 2012

5-7

SPE Deep Well Challenges Workshop

CAIRO

www.spe.org/events

11-14

ADIPEC

ABU DHABI

www.adipec.com

20-22

Petex

LONDON

www.petex.info

25-28

Integrated Reservoir Modelling

DUBAI

www.eage.org

27-28

Artificial Lift Conference

MANAMA

www.spe.org/events

27-30

Offshore Southeast Asia

SINGAPORE

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DECEMBER 2012

4-6

SPE Digital Oilfield Implementation Challenges

MANAMA

www.spe.org/events

6-9

Basra Oil and Gas Exhibition

BASRA

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9-12

Fourth Arabian Plate Geology Workshop

ABU DHABI

www.eage.org

10-12

Kuwait International Petroleum Conference

KUWAIT CITY

www.spe.org/events

JANUARY 2013

13-15

Petrochem Arabia

DHAHRAN

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15-17

World Future Energy Summit

ABU DHABI

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21-23

Offshore Middle East

DOHA

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28-30

SPE Unconventional Gas Expo

MUSCAT

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Middle East Technology Forum

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Production Optimisation Challenges

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24-27

Corrosion UAE

ABU DHABI

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Saudi Safety and Security

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10-13

Middle East Oil Show (MEOS)

MANAMA

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Offshore Mediterranean (OMC)

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Middle East Downstream Week

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14 Oil Review Middle East Issue Seven 2012

S03 ORME 7 2012 Analysis 01_Layout 1 24/10/2012 16:31 Page 15

S03 ORME 7 2012 Analysis 01_Layout 1 24/10/2012 16:31 Page 16

S03 ORME 7 2012 Analysis 01_Layout 1 24/10/2012 16:31 Page 17

Analysis

S03 ORME 7 2012 Analysis 01_Layout 1 24/10/2012 16:31 Page 18

Abu Dhabi has this year started the process to renew its expiring large oil concessions, inviting IOCs to submit bids and to some extent confirming that that it is not just prolonging contracts with existing players, but moving to a new set-up. Samuel Ciszuk, Global Oil Supply Consultant at KBC Energy Economics, examines the evidence.

Abu Dhabi

concessions S

PECULATION OVER WHAT was going to happen with Abu Dhabi’s two large expiring concessions – the onshore Adco concession, where production stands at around 1.4-1.5mn bpd, and the offshore Adma-Opco concession, with a 550,000 bpd production capacity - has been building slowly but steadily, coming to a head in the past summer.

With the large Adco concession expiring in 2014 (Adma-Opco’s concession does not expire until 2018), the process of renegotiation was widely expected to open earlier, however it was not until this past summer when news broke that Abu Dhabi National Oil Company (ADNOC) had sent out

18 Oil Review Middle East Issue Seven 2012

invitations for pre-qualification to a number of supermajors, as well as a number of mid-sized players who diligently have tried to gain a foothold in the emirate for some time.

Organisational stability would further enhance Abu Dhabi’s reputation as perhaps the most stable Middle Eastern crude producer

News immediately centred on BP not being among the companies invited for the prequalification, despite having been a part of the Adco consortium (ADNOC 60 per cent, BP 9.5 per cent, Shell 9.5 per cent, Total 9.5 per cent, ExxonMobil 9.5 per cent and Partex two per cent), initially formed in 1939. While seen as yet another potential blow to the company which has been trouble stricken in the last two years, both sides soon clarified that the process was only in its beginning and that until a definitive shortlist of qualified bidders had been drawn up, other companies than the ones approached could still be included.

S03 ORME 7 2012 Analysis 01_Layout 1 24/10/2012 16:31 Page 19

Analysis

S03 ORME 7 2012 Analysis 01_Layout 1 24/10/2012 16:31 Page 20

The main news in the talk about the Adco renewal in June-August was, however, the underlying signs of change to the concession layout which ADNOC communicated. Change to the framework was inevitable, for instance no one would have expected the renewed contract to run for another 75-year period. Yet beyond the accepted wisdom that 20-year terms are the new norm, little else has been known. ADNOC’s intentions, not to say the intentions of Abu Dhabi’s Supreme Petroleum Council – which lays down and oversees oil and gas policies in the emirate - have mostly remained unknown. The lack of leaks unveiling the future direction has by many been interpreted as a sign that internal opinions for a long time remained divided.

further enhance Abu Dhabi’s position and reputation as perhaps the most stable Middle Eastern crude producer, both vis-a-vis investors and the emirate’s clients. The weight of core political and security relationships for the UAE with the US, France and the UK should not be underestimated here, with all the supermajors receiving significant diplomatic backing from home. That this view had prominent backing at the highest industry and political levels in the emirate is confirmed by the 2009 renewal of the Gasco concession (ADNOC 68 per cent, Shell 15 per cent, Total 15 per cent and Partex two per cent) for a 20-year period (backdated to the 2008 expiry of the previous term), without any change to its constituent parties.

Shake-up Least possible change One school of thought about the concession renewals has for several years proposed the least possible change to the composition of the consortia, drawing on the existing members’ longterm relationships and their knowledge of the Abu Dhabi geology. As some of the world’s largest supermajors have been part of both the Adco concession and the Adma-Opco consortium (ADNOC 60 per cent, BP 14.66 per cent, Total 13.33 per cent and JODCO 12 per cent), the argument could be made that all technology needs for Abu Dhabi’s mature reserves and the development of hitherto untapped geological horizons, would already exist within this group of market leaders.

Furthermore, the organisational stability would

20 Oil Review Middle East Issue Seven 2012

The other diametrically opposed viewpoint was essentially that the old concessions need a shakeup, in order to inject some more momentum and efficiency into the operations. How this would be done has not been clear however, with several different approaches – or a combination of them at times looking likely.

The breaking up of the concessions into smaller field or field cluster-focussed units, could for instance bring in the most experienced technologyleaders for each particular challenge. It would also make it easier to play IOCs against each other in a bidding process and pressure them on terms, as well as ostensibly making it easier to evaluate the different groups’ performance against each other during the length of the concession agreement. All

in all, this would put ADNOC in a stronger power position towards the IOCs, despite depending so much on their technological and project management skills.

Administrative changes to the concessions through the implementation of an asset-based organisation, structuring management more around geographical field units in recent years, were seen as evidence of this view gaining at least partial ground among the emirate’s oil leadership.

Interestingly, this view had some support also from the concessions’ existing partners, as the increasing call on some of the latest technologies, particularly in the enhanced oil recovery (EOR) field, raised questions over how comfortable the partners would feel to share proprietary technologies with each other within the concession, when outside of the emirate they were in cut-throat competition over access to other reserves around the globe.

No more easy oil As a firm direction for the future remained unclear and the date of expiry was coming closer, it was hardly surprising that IOC investment was drying up, maintaining Abu Dhabi production capacity, but failing to grow it. The emirate has repeatedly pushed a 3.5mn bpd production capacity target forward for over a decade, more recently having fixed it to 2017, although the target is by now feared to have slipped at least a further year or two, by industry circles. The reason behind the failure of Abu Dhabi to materially raise its crude production capacity since the late 1990s despite its healthy

S03 ORME 7 2012 Analysis 01_Layout 1 24/10/2012 16:31 Page 21

Analysis

S03 ORME 7 2012 Analysis 01_Layout 1 24/10/2012 16:31 Page 22

financial situation has not surprisingly been the ever nearer expiry date of the concessions. The scale and long-term nature of the needed investments –as well as the relatively low remunerations of around US$1/b IOCs receive in Abu Dhabi - have increasingly discouraged any large developments to take place in the emirate’s upstream sector the closer the expiry date of the contracts have crept. There has simply been no time left to recoup the funds needed to achieve the planned capacity growth.

A renewed license would however unleash investment, as the stability of the emirate and its oil and gas policies otherwise remains highly trusted. As soon as IOCs could start calculating with a rate of return on their investments there should be little in the way. Naturally IOCs will try to improve on the terms. These arguments have already started to become visible, with oil executives from within the concession-holding consortia arguing over the past months that higher margins were required to support the large investments in expensive technologies needed.

While IOCs inevitably will try to argue for the highest possible margins and talk up their costs ahead of negotiations, there is a fundamental truth at the base of that message. Like other increasingly mature plays, Abu Dhabi’s growth, and to a rising degree even the continued defence of its current production capacity level of around 2.8mn bpd, will come from reservoirs which no longer can be qualified as easy oil and gas. The application of more advanced reservoir management technologies and EOR techniques will fundamentally alter the production cost per barrel in the emirate, along the lines seen in other mature plays.

That the growth potential exists should not be doubted, however. Neither should the fact that the renewal of a long-term concession should itself go a long way to attract investment. Consider the example of ExxonMobil (28 per cent), JODCO (12 per cent) and ADNOC (60 per cent) in the Zadco

22 Oil Review Middle East Issue Seven 2012

consortium, which in 2006 committed to a 20-year concession for the Upper Zakum field offshore Abu Dhabi. Its target to lift production from 500,000 bpd at the time to 750,000 bpd in 2015 has recently been increased to 900,000 bpd. The potential for greenfield exploration, in a few recent examples awarded under new concessions to mainly Asian NOCs, is not seen as very high, (or at least not of a game-changing nature). However, the Upper Zakum example shows the remaining opportunities in the emirate should there be a step change in recovery technologies used at its existing fields.

The application of more advanced reservoir management technologies and EOR techniques will fundamentally alter the production cost per barrel in the emirate, along the lines seen in other mature plays Finding the right synthesis So where is Abu Dhabi likely to go in the future with regards to the concession renewals? After this summer’s pre-qualification invitations and the following flurry of media comments, a few things seem to have clarified. The concession will run for 20 years, as has been the case with Gasco and Zadco. The Adco (and in the future also likely the Adma-Opco) concession will likely be broken up along the main producing assets, allowing the entry of some new specialised IOCs who for a long time have courted Abu Dhabi. Size and experience will however still be major factors securing a place at the Abu Dhabi’s largest fields, meaning

that ultimately the composition might not change too much. BP, which a few years ago was the only IOC complaining openly over the emirate’s tight terms might be in a precarious position, particularly given more general reputational problems of late, while long-established minnow Partex looks likely to be excluded, on its inability to compete with the larger companies in the realms of technology, finance and international asset-swaps and politico-strategic clout.

Hence the ultimate outcome might be neither radical shake-up, nor status quo, but a synthesis of the two options, suitable to the general, consultative, Emirati way of politics. Also, pointing to the advantage of – mainly - Western IOCs, is the recent award of a number of exploration concessions and smaller development projects to Chinese and South Korean oil companies. As almost all of Abu Dhabi’s crude exports goes to Asia, the emirate has looked for ways to cement those strategic relationships by involving Asian NOCs in its upstream sector. Their relative lack of advanced proprietary technologies, particularly in the main areas of interest to Abu Dhabi, like for instance CO2 injection techniques and the management of tighter reservoirs, means that they were never seen a contenders for the largest projects coming up for grabs in the Adco and Adma-Opco concessions.

With the new set-up, IOCs should be able to feel safer applying their most advanced solutions, however they will also face a very different competitive situation, already spurring some IOC sources to warn of a similar outcome to the Iraqi bidding rounds of 2009-2010, when IOCs agreed to terms later deemed unattractive just to get access to the large crude streams. If Abu Dhabi however can manage to balance its pressure in the negotiations and bidding right, such a change of the concessions should give it a golden opportunity to secure the technology and investments needed without compromising too much on its government take goals. ■

S04 ORME 7 2012 Analysis 02_Layout 1 24/10/2012 16:40 Page 23

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S04 ORME 7 2012 Analysis 02_Layout 1 24/10/2012 16:41 Page 24

Analysis

Jose Luis Bustamante, senior vice president EAME region at Fluor spoke to Oil Review about the company’s plans in the region and his outlook for the EPC market.

Hydrocarbon sector

heating up

B

USTAMANTE WAS ABLE to provide his insight into the changes that the hydrocarbon industry has gone through and where the key markets in the region stood in terms of project cycles.

“We have been engaged in many of the mega projects around the region. By being there since the beginning of the oil industry in these countries we have managed to build up some very solid relationships with all the NOCs in the area,” he underlined.

Fluor has a long history in the Middle East and has been operating in the region since 1947.

During its 65 years of operations, the company has worked in all key areas including in upstream, downstream, petrochemicals and chemicals, and offshore oil and gas.

“This provides us with a comprehensive understanding of the full cycle of energy in the region,” stated Bustamante.

Fluor’s know-how can be important when it comes to bidding and working on the various major projects around the region which require depth of resources to complete.

The size of the projects in the Middle East and the complexities involved mean that a contractor should have the strength in not just one particular discipline or area.

Fluor has the depth of resources to meet these challenges and can call on its over 45,000 people in the global company, which is why Bustamante believes that the kind of projects in the region are a perfect fit for Fluor.

24 Oil Review Middle East Issue Seven 2012

“In the Middle East we have around 2,000 people in project execution and we also have a large maintenance operation team. We have around 1,000 people in operations and maintenance in Qatar alone working on projects for Shell/QP GTL and RasGas.” In fact, Fluor wants to expand its operations in the Middle East and expects to double the size of the company in the region over the next few years, according Bustamante.

Fluor has a long history in the Middle East and has been operating in the region since 1947 New project cycle Every Gulf country seems to be in a different part of the project cycle which means there are varying opportunities to be found around the region In Abu Dhabi, Bustamante emphasized that he has seen a significant change on the investment front in recent years.

“What we are seeing is a continuous demand for gas in the Emirates driven by Dubai and the Northern Emirates which Abu Dhabi has commitments to. So we are going to see greater investments in the gas sector as Abu Dhabi looks to ramp up local production to manage the growing demand.”

Jose Bustamante

Alongside its push for gas, Abu Dhabi is also putting a major emphasis on upstream developments. Both ADMA-OPCO and Zadco are pushing forward with a number of mega projects.

“We have worked on FEED phases for the ADMA-OPCO new fields that they are developing: the SARB, Umm LuLu and Nasr fields,” he remarked. The first two fields are now out for bids for the engineering, procurement and construction (EPC) phase.

S04 ORME 7 2012 Analysis 02_Layout 1 24/10/2012 16:41 Page 25

Analysis

S04 ORME 7 2012 Analysis 02_Layout 1 24/10/2012 16:41 Page 26

“Sour gas is also a key area for us and in addition to performing EPC work, we offer technologies for acid gas treatment that will help us to penetrate new markets by selling licenses,” he said.

Once all these projects are implemented Abu Dhabi will have more gas and oil to pour into their downstream facilities which will lead to additional opportunities in the downstream sector.

Bustamante noted that sour gas development was on the rise worldwide, and in the longer term, Fluor sees significant opportunity in this area.

ADNOC, for instance, is looking more seriously at its reservoirs that are high on sulphur content and Fluor sees a lot of potential for development projects for large H2s and CO2 content. This is true not only in the UAE, but also in Saudi Arabia and Oman.

Bustamante also touched on the petrochemical boom sweeping the region. He said he believes that Qatar, having already created a LNG hub, is now looking at getting more value from its gas by building petrochemical plants, while, Saudi Arabia is the biggest market and is currently focusing heavily on petrochemicals.

There are lots of opportunities in the Kingdom in both industrial cities.

Bustamante said he’s excited about Iraq and that Fluor is looking at a number of opportunities in the country. However, he believes that the country needs to gain some momentum and that once there is a bit more economic activity and the engagement of more locals, then the security

situation will likely improve, he said.

Fluor also has an office in Basra and has been working on West Qurna 1 for ExxonMobil for two years now.

“We are continuing to grow in Iraq and we have a nice backlog with the West Qurna 1 work with ExxonMobil but our priority is to secure more work in Iraq,” explained Bustamante.

Sour gas development is on the rise worldwide, and in the longer term, Fluor sees significant opportunity in this area Investment climate “The Middle East oil and gas market is very busy without considering Libya and Iraq, once you add these two markets to the equation, then the EPC market will really heat up.”

Bustamante said there is a lot of tough competition in the regional EPC market and one noticeable characteristic of the Middle East region during the global downturn was how the regional players continued to invest on a very steady basis.

Bustamante provided an example of this balance in the region’s investment cycle with Kuwait, which put tenders on hold for greenfields

A legacy image from Fluor's work on a petrochemical complex project for Saudi Kayan Petrochemical Company

26 Oil Review Middle East Issue Seven 2012

and refineries during the recession, but now the Gulf state is going back for bid qualifications.

But in Kuwait’s place you had companies like Abu Dhabi’s ADNOC investing heavily from a new refinery in Ruwais by Takreer to Gasco’s IGD and Al Hosn’s SGD projects.

This means the region’s oil and gas investment market has kept a steady path during the more difficult economic times of the last few years.

A real issue in the future will be one of resources, whether it be technical resources, manpower or skilled labour, according to Bustamante.

The region has invested heavily in human resources on increasing the local workforce and training people but if the market continues to grow there will be shortage.

“Our interest is always to develop local nationals as it makes sense from an ethical, relationship and even a cost point of view. Also, I think it is a moral obligation to develop the local communities. We have a great track record in this regard,” he added.

With Fluor celebrating its Centennial this year, Bustamante reflected in Fluor’s long history in the region and Fluor’s contribution to the development of the Gulf Countries over the past 65 years in which Fluor has been part of the business community of the Gulf.

“The Middle East has been a good market for us and we are and have always been committed to the region,” he remarked. n

S05 ORME 7 2012 Analysis 03_Layout 1 24/10/2012 16:44 Page 27

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Analysis

S05 ORME 7 2012 Analysis 03_Layout 1 24/10/2012 16:44 Page 28

Compared to most of the 2005-2010 period, much progress has been made in the dispute over natural resources between the Iraqi government and the autonomous Kurdistan Region of Iraq in 2011-2012, but have we actually come any closer to a solution? Samuel Ciszuk Global Oil Supply Consultant at KBC Energy Economics investigates.

The Kurdistan Region of Iraq:

oil boom on standby T

HE DISPUTE OVER who is to control the oil resources of the Kurdistan Region of Iraq has been dragging on for years and one could be forgiven for expecting international oil companies (IOCs) to have begun giving up on the lack of monetisation opportunities, starting to leave the autonomous region. Instead the opposite has happened, with the first wave of minnows having proven up oil and gas reserves – at an impressively high rate – of a scale large enough to whet the appetite of a growing number of midsize companies and even supermajors. This scaling up of investor size in the Kurdistan Region has put considerable pressure on the Iraqi government in Baghdad, contrasting the rather tepid investor interest in the exploration contracts it has offered recently with the attractiveness of the Kurdistan Regional Government (KRG). Moreover, the investor inflow to the Kurdistan Region of Iraq points to the risk of a future investor exodus, from Iraq proper to the north.

So far, the latter has not happened. Crude volumes at the main projects in southern Iraq are so large, that many of the IOCs involved in the development of megafields there simply feel they have to tap into the large flows, hoping to be able to squeeze additional value out of the crude further up their integrated value chains. Consequentially they are remaining for now, and are also hopeful that they might negotiate improved terms when the overambitious 12.5mn bpd 2017 production target is renegotiated. The move of large IOCs into the Kurdistan Region of Iraq has however exposed a weakness in the Iraqi government’s approach to dissuade investment in the region. While Iraq is maintaining a policy of black listing IOCs entering into upstream contracts with the KRG from doing business in Iraq, it has failed to convincingly punish ExxonMobil, who already develops one of Iraq’s main megafield projects, West Qurna-1, after it swooped up a number of exploration tracts in the autonomous region.

ExxonMobil was according to some Iraqi sources at the time stripped of its operator role in a IOC consortium developing a desalination plant meant to supply several megafields with water for injection. It was, however, an open secret that the US supermajor was uncomfortable with the project scope, price and government bureaucracy and consequentially appeared almost relieved no longer having responsibility for the project.

While Baghdad’s policy to isolate the KRG oil industry from investments is proving increasingly toothless, it has continued to demonstrate that its

28 Oil Review Middle East Issue Seven 2012

control over the only existing oil export route from northern Iraq – the Kirkuk-Ceyhan pipeline to the Turkish Mediterranean coast – is firm. With that comes the fact that Baghdad’s State Oil Marketing Organisation (SOMO) receives all crude revenues sold at Ceyhan, making the KRG dependent on Baghdad for receiving revenue from the exports it has been allowed to make and to pay the IOCs producing the crude from its share.

This grip on the oil revenues has meant that Baghdad actually has been successful in slowing down the oil boom in the Kurdistan Region of Iraq.

While a growing number of oil companies are positioning themselves in the region, investments over the minimum work commitments are at risk going forward and development investment into proven discoveries have been slower to materialise compared to the speed which should have been expected had monetisation been a straight forward issue.

To the KRG it has of course been obvious from the start that being able to diversify its export routes and not be dependent on Iraq would be key to a completely autonomous control over its resources. Geopolitically this has however not been possible, until perhaps now. After years of fostering low-level commercial relations across the Turkish border and proving welcoming to Turkish investments in everything from oil to construction, bilateral relations started to reach the very high political levels openly in the past two years or so, culminating in open political discussions and an inImage source: KRG

principle decision about building a crude export pipeline straight from Iraqi Kurdistan to the Turkish coast.

For Turkey to openly mull such discussions had seemed almost unthinkable only five years ago and a breakdown in Turkish-Iraqi relations was probably necessary in order for the last impetus to be provided. Whether Turkey will go ahead with the plan is still uncertain. By Baghdad, such a move would inadvertently be portrayed as a stab in the back, undermining its government authority and Iraq’s fragile recovery in general. Since fears still linger in the international community over Iraq’s renewed fragmentation, considerable international opposition to a Turkey- Kurdistan Region of Iraq pipeline is likely, potentially delaying the project.

Moreover, the Iraqi crude production capacity increase seen in 2012 has been instrumental in balancing Iran’s falling output amid tougher international sanctions. Hence, stability in Iraq has become even more important to the international community, as with half of Iran’s exports removed from world markets, there is no room for new shortfalls in Iraqi exports.

Despite the Kurdistan Region of Iraq improving its position vis-à-vis Baghdad through its realignment with Turkey and the possibility of an export pipeline, as well as through attracting larger upstream investors, Baghdad too has improved its odds in the tug-of-war. Having remained firm on its control of oil exports and revenues and only agreeing to some limited concessions in nonpermanent agreements (leaving out key issues such as the legality of the Kurdistan Region of Iraq’s production sharing agreements, or making sure not to pay IOCs directly from the state coffers, for instance) Iraq has bought itself time. This respite has by now allowed Baghdad to reach a stage where its own oil export revenues are rising sharply, making it less dependent on the near-time increment which would have come from the Kurdistan Region of Iraq.

This is not to say that Iraq, with all its reconstruction needs, would not benefit from every additional exported barrel of crude, but just that in a position of rapidly rising state income, the effect of 200,000-250,000 bpd of crude from the Kurdistan Region of Iraq is somewhat diluted compared with the situation back in 2009-2010.

This is essentially the production which rapidly would be available onstream from DNO’s Tawke field, Sinopec’s and Genel’s Taq Taq and from some limited test production at Gulf Keystone’s prolific Shaykan structure. Some additional volumes could

S05 ORME 7 2012 Analysis 03_Layout 1 24/10/2012 16:44 Page 29

Analysis

come from one or two other test production efforts, as well as from the KRGcontrolled Khurmala dome.

Seen from this perspective, the so-called goodwill gesture of the KRG to restart exports through the Kirkuk-Ceyhan pipeline, without waiting for Baghdad to settle debts from pervious periods of exports this summer, was an effort not only to overtly offer an extended hand to Baghdad, but to reinsert the Kurdistan Region of Iraq exports into the Iraqi budget in a real way and recreate a budgetary hole, should the region again need to withdraw.

Where does this put the outlook for a more permanent agreement which would put upstream investment in the Kurdistan Image source: KRG Region of Iraq on a sure legal footing? With all recent activity, the two sides’ red lines in the negotiations do not appear to have moved. For both sides a compromise on the political and legal control over oil policy and ownership risks being very politically costly.

Nevertheless, the Kurdistan Region of Iraq’s geopolitical realignment with Turkey stands out as the single largest recent change, forcing Baghdad on the back foot, to reopen talks and facilitate the export of the autonomous region’s crude through its export pipeline. With Turkey on its side, the Kurdistan Region of Iraq can suddenly credibly threaten to gain full control of its crude exports and their marketing, building itself a completely autonomous revenue stream, disconnected from Iraq proper.

A Syrian spanner in the works?

The question now is to what extent the Syrian uprising and the de facto creation of a Kurdish-controlled zone in Syria’s northeast might make Turkey reconsider strengthening the autonomy of the Kurdistan Region of Iraq. Already, Turkey appears to have slowed down the process of detente seen during the spring and summer this year, in order to take stock of the situation and see whether it needs to re-evaluate its KRG relationship. Syria’s Kurdish areas have largely come under the sway of groups close to PKK, which for decades has been fighting Turkey to establish a Kurdish homeland in its east. In the last decade the group has been increasingly doing so in opposition to the KRG’s policies, as the Kurdistan Region of Iraq’s leadership largely has renounced panKurdish independence aspirations. The recent increased PKK violence in Turkey and the uncertainty over which Kurdish group will dominate in north eastern Syria however puts the onus on the KRG to reassure Turkey and potentially support its efforts to calm Kurdish unrest in Syria by trying to influence events there in a direction beneficial to both the KRG and Syria. At a time when Kurds in Syria appear close to self-rule, such an anti-nationalist policy might be rather unpopular in the Kurdistan Region of Iraq however.

For Baghdad there is not that much to do apart from perhaps trying to mend fences with Turkey, although for other reasons this will not come easy to a government under Nuri al-Maliki. This leaves us with a situation in which the Syrian uprising, with all its potential ripple effects on the Middle East, could also derail the recent Baghdad-Kurdistan Region of Iraq understanding, unless the Kurdistan Region of Iraq manages to reassure Turkey that it will not dabble in pan-Kurdish policies. If they do so, Baghdad will be hard pressed to give significant concessions soon to the KRG in order to keep exports going through the government-controlled line, although for the Kurdistan Region of Iraq, if the opportunity to build a pipeline opens, it will be taken.

Watching the evolution of KRG-Turkey relations amid the Syrian uprising is for now key to understanding when a more permanent solution for the region’s IOCs can be found. ■

Oil Review Middle East Issue Seven 2012 29

S05 ORME 7 2012 Analysis 03_Layout 1 24/10/2012 16:44 Page 30

Analysis

Enterprise asset management (EAM) is regarded as a major component of an efficient oil and gas industry. The importance for companies to have a reliable system is outlined by Patrick Gex of Ventyx who explained what the company brought to the table.

Building a reliable asset

management system

The oil and gas sector is one of the most asset-intensive industries

P

ATRICK GEX, VICE President Product Management - plant operation at Ventyx, an ABB company, told Oil Review that more and more oil and gas companies are now looking to invest in best-ofbreed asset management and reliability solutions, providing valuable opportunities for companies like Ventyx.

Enterprise asset management monitors the condition of key assets of oil and gas companies.

Gex explained that as the oil and gas sector is one of the most asset-intensive industries, it therefore faced unique challenges in maximising the safety, productivity, and compliance of its operations.

“Asset management solutions play a key role in solving these challenges,” he added.

Gex foresees a greater integration of asset management and enterprise operations management (EOM) systems in the future. This will arise as the oil and gas sector looks at ways to rationalise the routine duties of operators and managers to better meet the challenges of productivity, efficiency, safety and compliance.

“To do this in a complex environment requires a comprehensive operations management system that is integrated to other systems like asset

30 Oil Review Middle East Issue Seven 2012

management to ensure alignment of asset strategies with their safe and efficient operation,” Gex noted.

“Safety is always a top priority for the oil and gas sector and should not be compromised for efficiency.”

Patrick Gex Challenges He listed the main challenges facing operators in terms of asset management as divided into three: productivity/efficiency, safety and compliance.

As the price of oil fluctuates with economic prosperity, it is important for oil and gas companies to operate as efficiently as possible. Productivity should be optimised as the price opportunity increases, he stressed.

“Safety is always a top priority for the oil and gas sector and should not be compromised for efficiency.”

Gex said, “Asset and work management solutions can enable a proactive approach to safety best practices by systematizing knowledge of the workforce and better managing their qualifications, clearances and tagouts, This will ensure the right worker has the right certifications and safety instructions to perform work safely.”

Financial advantages EAM systems can help decision makers achieve a higher return on capital assets, including equipment, vehicles, and linear assets. In the past, Gex explained, many oil and gas organisations had focused their time, money and effort toward ERP standardisation.

“As we speak to them on the success of such endeavours, we are finding that trying to configure these solutions to address the needs of the operations and maintenance departments has been difficult and costly. Most are now looking to invest in best-of-breed asset management and reliability solutions as a way to complement their existing ERP,” he noted.

Gex argued that the financial business case for efficient operations management was strong, and the tolerance for asset disaster low.

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eSOMS Offering

Analysis

Ventyx, with 25 years of experience developing solutions for asset-intensive industries became part of ABB in 2010, a move which Gex said has been of great importance as far as Ventyx was concerned. “Being part of ABB increased our reach into to new international markets, a world-class corporate research team, and new technologies,� he said.

The merger with ABB was followed by the acquisition of Mincom in 2011, which Gex said has allowed innovation to be driven through IT/OT convergence and, bringing the best practices to their customers from the newly integrated company.

Ventyx introduced facility control and operations for better real-time visibility into the status of operations, and asset and work management solutions to improve efficiency across the asset’s lifecycle.

The company’s own EOM system, eSOMS offers a number of benefits to oil and gas companies. “eSOMS has a significant impact on the bottom line profitability of a facility. It is designed to improve efficiency of operator rounds and minimise turnaround time, which results in significant savings – in some cases up to US$5 million per year,� Gex observed.

He predicted that the Middle East region would be

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32 Oil Review Middle East Issue Seven 2012

looking to invest in more integrated solutions as the oil-rich area continues to utilise technology to support its productivity, safety, and compliance initiatives. “Organisations operating in the region are continuing to invest in new, more complex operations,� he added.

The Ventyx system is already used at worldclass projects in Saudi Arabia and Qatar where clients have been working with eSOMS for several years now.

Gex asserted, “We have several major upgrades planned for the next two years. Key investment areas include integration of real-time operational technology and IT solutions, improved workforce efficiency through our mobile technology platforms, and ongoing investment to further enhance functionality across our software portfolio.�

Outlook Gex predicted growth opportunities in Russia, China and the Middle East as new investments in asset infrastructure require better systems to manage it.

He concluded, “I am very excited about the opportunities that lie ahead for Ventyx.

We believe the time is just right for oil and gas companies looking for improved returns and competitive advantage to evaluate their solutions.â€? â–

S06 ORME 7 2012 E&P 01_Layout 1 24/10/2012 16:47 Page 33

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Proper integration of the acquisition, processing and interpretation of high-resolution and high-density borehole and surface seismic data can significantly enhance the quality of both datasets for optimised reservoir characterisation, writes Ghiath Ajlani of CGGVeritas.

Integrating borehole and surface

seismic data F

OR MANY DECADES, and until the turn of the new century, borehole seismic in the Middle East was mainly restricted to sonic logging and calibrated checkshot surveys, zero- and variable-offset vertical seismic profiling (VSP), and other conventional seismic velocity measurements taken at 20-30 depth levels with about 50 m spacing. The basic concept behind borehole and surface seismic is a simple one, where seismic energy from a surface or near-surface source propagates to be reflected, refracted and diffracted at various acoustic impedance geological boundaries to then be recorded at receiver stations called detectors or geophones (Figure 1a). Borehole VSP are recorded conventionally with a source placed near the borehole and receivers positioned at regular intervals within the borehole (Figure 1b).

These measurements were primarily used to generate time-depth tables for subsequent time-todepth conversion of two-way traveltime structural maps interpreted from surface seismic data. Similarly, surface seismic data during that period was restricted to conventional 25-50 m receiver and source station intervals, 300-400 m source and receiver lines intervals, 12-70 Hz temporal bandwidth, and 100200 fold of coverage (multiplicity of common depth points, CDP). Furthermore, these modest-quality borehole and surface seismic datasets were not integrated for reservoir characterisation purposes but were used for merely qualitative matching of seismic data with synthetic seismograms (Figure 2), albeit an important and successful step but this stopped short of delivering accurate and detailed reservoir characterisation results.

Figure 1. a) A diagram showing how borehole and surface seismic data is recorded with a source at the surface or near surface while receivers (detectors, geophones) are distributed along the surface and in the borehole. b) Basic VSP acquisition geometry and seismic raypath propagation. (Courtesy of Baker Hughes International).

Advanced borehole seismic technologies have been developed, such as cross-well tomography, simultaneous high-density surface and 3D VSP borehole acquisition Driven by the need for detailed high-resolution seismic information around the borehole for reservoir characterisation, the geophysical industry has had to come up with new technologies and methodologies.

This is because exploration and field development teams are increasingly expecting high-quality borehole and surface seismic to provide usable data for the following; porosity, anisotropy and fine stratigraphic and structural details for optimised

34 Oil Review Middle East Issue Seven 2012

Figure 2. Example of conventional usage of borehole seismic VSP data for matching with surface seismic data (Baker Hughes International).

static and dynamic reservoir model building, accurate drilling plans and prognoses and Enhanced Oil Recovery (EOR) monitoring.

Accordingly, innovative and advanced borehole seismic technologies have been developed, such as

cross-well tomography, simultaneous high-density surface and 3D VSP borehole acquisition, with very large arrays (100) of three-component receiver levels, and other technologies. In parallel, surface seismic methodologies have evolved rapidly and

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exponentially, reaching new heights of channel count, source and receiver densities, seismic fold, long offset and wide-azimuth coverage and higher spatial and temporal resolutions (Table 1).

Superb data quality On recent projects this has led to the delivery of superb data quality that is suitable for highly detailed reservoir characterisation through the use of highdensity high-resolution 3D surface seismic and 3D VSP datasets (Figure 3). It is expected that more accurate and reliable integration of borehole high-density high-resolution 3D VSP and other measurements with surface seismic data acquisition, processing and reservoir characterisation interpretation is possible.

This will be based on the ability to acquire higher spatial sampling and wider bandwidth source signal along with the processing of both datasets in 'truer' amplitude flows while fully compensating for the multipathing skewed geometries of borehole 3D seismic raypaths.

Proper integration of the acquisition, processing and interpretation of highresolution and high-density borehole and surface seismic data can significantly enhance the quality of both datasets for optimised reservoir characterisation.

CGGVeritas and Baker Hughes International, through their joint collaboration and partnership in borehole and surface seismic integration, have therefore ventured into new and promising horizons for enhanced and accurate reservoir characterisation. As a result, and by drawing on their extensive expertise in surface and borehole VSP acquisition, processing and interpretation services, both companies have jointly developed highly advanced technologies and solutions for successful and comprehensive integration of these superb datasets. An example of this collaboration is simultaneous acquisition of high-density high-resolution 3D surface and 3D borehole VSP data. This is achieved by using ongoing surface seismic acquisition with live source-receiver spreads to simultaneously record borehole seismic data via three-component (3C) receivers positioned in the borehole (Figure 4).

Acquisition and processing stages Surface and borehole seismic integration initially requires accurate modelling of the desired outcome starting from a geological model to build the right data expectations from the two datasets (Figure 5). Typically, advanced borehole 3D VSP receiver design is based on a closely spaced large number of levels with three fixed component system to record the vertical compressional wavefield and the two horizontal shear components (example: Sercel’s MaxiWave®). This data is delivered as a high-resolution 3D P (compressional) and S (shear) wave migrated image in the time domain and provides significantly improved fault, porosity, anisotropy and stratigraphic detection. The acquisition design geometry can utilise a very high surface source density aiming to illuminate two to three metre small fault throws, discriminate two to three per cent porosity unit variations and fracture related anisotropy.

To achieve these impressive goals, processing of the surface seismic and 3D VSP high-density data should be closely integrated at critical processing stages (Figure 6). This is where issues such as short and long wavelength multiple attenuation of surface seismic, compensation of absorbed seismic energy, optimisation of wavelet processing and imaging are tackled. Surface seismic raypath geometry is quite different from 3D VSP raypath geometry as the latter is much more asymmetrical and complex. This fact must be taken into consideration at all processing stages to assure “true” amplitude 3D VSP processing and imaging and accurate optimisation of surface seismic processing and to generate reliable reservoir characterisation results.

Table-1. The exponential change in surface seismic acquisition. The table shows the main acquisition parameters recently achieved and the likely future trend towards higher density and resolution specifications.

Figure 3. Conventional vs. high-density (CGGVeritas UltraSeisTM) land seismic for finer spatial sampling, wider bandwidth and superior resolution. Courtesy of Qatar Petroleum, Seeni et al, EAGE 2011.

Figure 4. a) 3D VSP acquisition with sources laid out on the surface as part of a surface seismic acquisition geometry, while receivers record data simultaneously in the borehole. b) An example of 3D VSP orthogonal inline and cross line extracted from the full 3D VSP volume with a time slice at the base of the figure. (Courtesy of Baker Hughes International).

Interpretation and characterisation One of the main goals of integrating high-density and high-resolution wideazimuth 3D surface and 3D VSP data is to assure zero-phasing of both data sets in order to perform joint seismic amplitude-versus-offset, or angle or azimuth (AVO, AVA, AVAz) inversion and analysis. This is where gradient and intercept volumes are derived from both datasets and used by the interpreter to provide quantitative answers regarding reservoir size and extent, and fluid saturation levels and fracture density and distribution using azimuthal variations with offset (Figure 7).

While surface seismic provides wider spatial coverage than borehole seismic, the seismic amplitudes recorded on the surface have travelled twice through the sediments overlaying and away from the reservoir. Borehole 3D VSP seismic amplitudes, on the other hand, are closer to the reservoir. Accordingly, these

36 Oil Review Middle East Issue Seven 2012

Figure 5. An example of the 3D geological and seismic modeling required prior to finalising the simultaneous surface and borehole seismic 3D acquisition parameters.

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datasets are affected differently by scattering and attenuation and are also subject to variations due to the heterogeneity of the overburden causing many uncertainties.

Proper and accurate integration of surface and borehole 3D seismic can reduce these uncertainties where borehole 3D seismic AVO data can be used to calibrate the surface seismic AVO data. Because 3D VSP receivers are positioned very close to the reservoir, many of the uncertainties associated with surface seismic AVO are eliminated. Consequently, reflection amplitudes recorded in a 3D VSP AVO survey are much less affected by transmission loss and scattering. In addition, with a properly designed 3D VSP or cross-well survey, wider reflection angle apertures can be acquired than with surface seismic geometry and accurate azimuthal fracture analysis can be performed (Figure 8).

Figure 6. Integration of surface and borehole seismic data starts from the early stages of processing to optimise steps in the flow such as inverse-Q, deconvolution, velocity analysis and migration.

Integration Challenges The main challenges of comprehensive integration of high-density high-resolution surface and borehole 3D seismic data can be summarised in four main categories: 6 Amplitudes, attenuation and propagation mechanisms variations for VSP vs. surface.

6 Borehole point measurement vs. Fresnel zone sampling at a completely different scale.

6 Shear waves from the VSP. 6 Surface and interbed multiples.

Recent advances in this integration process span the full width of acquisition, processing and interpretation and have the potential for providing more detailed and accurate integrated reservoir characterisation. The integration process must be comprehensive and can be as basic as well-to-seismic calibration, zero-phasing and seismic wavelet extraction and as complex as the transformation of the 3D VSP horizontal component by squeezing the borehole seismic PS time into the surface seismic PP time.

Another challenge in this integration is the inversion of the 3D VSP shear impedance volume via the correlation between log data, synthetic seismograms, VSP and surface seismic data along with log data time calibration. Other complicating factors can be the different imaging and amplitudes of lateral velocity contrasts, such as faults, rugged erosion surfaces, near-surface diffractors and heterogeneities. These can impact the match between VSP corridor stacks and synthetic seismograms and cause discrepancies in the well tie with surface seismic due to overburden faulting and the multipathing phenomenon observed in seismic transmission.

Vertical Transverse Isotropy VTI azimuthal anisotropy amplitude de-absorption compensates for loss of high frequencies when two-way-time increases and helps improve resolution. Q factor (seismic absorption and attenuation) is a key parameter in the integration between surface and borehole seismic and can be derived from the direct (downgoing) VSP arrivals. Phase de-absorption compensates for wavelet distortion due to dispersion. Surface seismic multiple attenuation can be optimised by utilising borehole seismic to enhance the modelling and subtraction techniques via multiple generator analysis. Additionally, space-variant VTI information from various VSP datasets is valuable as it can be used for second order velocity picking with a large mute to provide more accurate velocity. Subsequently, accurate porosity, fracture-based anisotropy and detailed stratigraphic and structural reservoir information can be calibrated and validated between the high-density and high-resolution 3D surface and 3D VSP integrated seismic data.

Figure 7. An example of AVAz results that can be generated by joint high-density and high-resolution 3D surface and 3D VSP seismic data integration. The indicated horizon shows both amplitude and two-way time variation with azimuth, indicative of HTI anisotropy which is characteristic of a fractured media. (courtesy of Hampson-Russell, a CGGVeritas company).

Figure 8. An example of anisotropy fracture analysis that can be generated by joint high-density and high-resolution 3D surface and 3DVSP seismic data integration (courtesy of Hampson-Russell, a CGGVeritas company).

Comprehensive understanding

Author’s acknowledgement: Ghiath Ajlani would like to thank the management of CGGVeritas for permission to publish this article.

The growing need for highly detailed reservoir characterisation analysis in the vicinity of wells with detailed integration with surface seismic has led to the recent development of advanced surface and borehole high-density highresolution, acquisition, processing and interpretation technologies. These advances, despite formidable challenges, have resulted in a more comprehensive understanding of the physics (both differences and similarities) of borehole and surface 3D seismic measurements. Accordingly, accurate and integrated handling of amplitudes and imaging of these datasets has become possible providing highresolution data that can be used reliably for reservoir characterisation. Future enhancements are still possible via even higher surface and borehole source and receiver densities, wider bandwidth source signal and more accurate ‘true’ amplitude and 3D migration processing. ■

References Horne, S., Slater, C., Malek, S., Hill, A., and Wijnands, F., 2000. Walkaround VSPs for fractured reservoir characterisation, 70th Ann. Internat. Mtg., Soc. Expl. Geophs., Expanded Abstracts, 1401-1404.

Lou, M., Zhang, Y., and Pham, D., 2001. Shear-wave splitting and fracture orientation analysis from PS waves, 71st Ann. Internat. Mtg., Soc. Expl. Geophs., Expanded Abstracts, 94-97.

Seeni, S. et. al. Ultra High-density Full Wide-azimuth Processing Using Digital Array Forming - Dukhan Field, Qatar. EAGE Vienna, 2011.

Thomsen, L., 2002. Understanding seismic anisotropy in exploration and exploitation, SEG/EAGE Dist. Instr. Series No.5, Soc. Expl. Geoph.

38 Oil Review Middle East Issue Seven 2012

S06 ORME 7 2012 E&P 01_Layout 1 24/10/2012 16:49 Page 39

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S06 ORME 7 2012 E&P 01_Layout 1 24/10/2012 16:49 Page 40

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Saudi Aramco to invest US$35 billion SAUDI ARAMCO HAS announced its intention to pump US$35bn into its oil exploration and development programme over the next five years.

The state-owned firm said it hoped to diversify its energy portfolio and boost earnings from downstream activities by growing and integrating chemicals with its refining operations.

Khalid al-Falih, chief executive of Aramco, said, “We are continuing to strengthen our oil business to meet the rising call on our oil production; in fact, we plan to invest US$35bn over the next five years in crude oil exploration and development alone to keep our oil production portfolio robust.

“We are also planning to increase our conventional and unconventional gas supplies by almost 250 per cent over the coming couple of decades,” he added.

Saudi Arabia has claimed that it plans to increase gas production to meet domestic energy demand and free up crude oil for export. The country, however, has yet to discover non-associated natural gas in sufficient quantities to replace oil as the fuel for planned electricity plants.

Non-associated natural gas would also act to guarantee cheap feedstock for new petrochemical factories Khalid al-Falih across the country.

40 Oil Review Middle East Issue Seven 2012

Chariot acquires exploration blocks offshore Morocco CHARIOT OIL & GAS has announced its acquisition of equity interests in two exploration blocks offshore Morocco. The company has been granted 75 per cent ownership and operatorship of the Loukos and Casablanca/Safi blocks from Maghreb Petroleum Exploration. As part of the agreement, Chariot will take responsibility for the initial exploration phase of each license.

The Moroccan Office National des Hydrocarbures et des Mines will hold the remaining 25 per cent of both licenses. The Loukos block is approximately 1,900 sq km in size, with water depth ranging between five and 110 m. Meanwhile, the Casablanca/Safi block is around 3,500 sq km, with both located some 50 km offshore.

Following approval of the deal, Chariot will be required to reprocess 2D seismic data for both blocks within a six-month exploration period. Once complete, the company will have the option to move forward into further exploration phases.

"In line with our strategy, Chariot has continued to seek out underexplored highly prospective opportunities with the intention of maturing them into drillable oil prospects,” Paul Welch, CEO of Chariot, said. “The Loukos and Casablanca areas have been of interest to Chariot for some time and we are pleased to have these additional assets, which we consider to hold significant potential, as part of our broader West African portfolio."

The move marks a shift in direction by the company, which recently suffered a disappointing result exploring in pre-salt layers offshore Namibia.

In September 2012, the firm reported that no commercial hydrocarbons were found at its Kabeljou exploration well in the Orange Basin.

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Frontier Resources Oman signs EPSA for Oman block FRONTIER RESOURCES OMAN Limited has gained 100 per cent working interest of Block 38 in the Mudayy Block, Oman.

The company, a wholly-owned subsidiary of Frontier Resources International Plc, signed the six-year exploration and production sharing agreement (EPSA) with the government of Oman. The Block encompasses an area of 17,425 sq km and is located in the Dhofar region of southwest Oman and the southern part of the Rub Al Khali Basin.

Despite only three wells being drilled so far, the block is considered prospective for oil and gas due to its proximity to the producing Block 6, operated by Petroleum Development Oman (PDO). Following its evaluation of vintage seismic, well data and regional geologic studies, Frontier has also predicted that the Block contains an untested salt basin with exploration potential analogous to the other proven salt basins of Oman.

Primary targets include the carbonate stringers embedded in Ara Group salts, which lie at depths of between 3,000 and 5,000 m. Meanwhile, secondary targets include the shallower Haima Play which had minor oil shows during drilling and the deeper Buah Formation which proved to be gas productive elsewhere in Oman.

Frontier will conduct geophysical and geological studies during the first phase of the agreement to determine the range of drilling opportunities that may be available. This information will then be used to design a 3D seismic survey of the results, leading to the drilling of a well if a suitable structure is identified.

In early 2013, the company plans to start the reprocessing of older seismic data and the acquisition of aerogravity and magnetic surveys of the block as preparation for the 3D seismic survey. Frontier Resources Oman signs EPSA for Oman block.

Genel Energy spuds Chia Surkh well in Iraq GENEL ENERGY HAS spudded its first exploration well in the Chia Surkh exploration block in the Kurdistan Region of Iraq.

The Anglo-Turkish oil firm confirmed that the Chia Surkh 10 exploration well, which has been designed to test the Lower Miocene to Palaeocene section, was spudded on 7 October 2012.

Chia Surkh 10, located in the southern part of the autonomous region, has become the first exploration well to be Chia Surkh 10 is located in the southern part drilled on the 984 sq km of the Kurdistan region or Iraq Chia Surkh exploration block, which Genel has estimated to have prospective resources of more than 300mn boe.

The company will continue to drill the well to a total depth of approximately 2,500 m, with results from the site expected to be revealed in Q1 2013.

Genel Energy holds a 60 per cent operated interest in the Chia Surkh exploration block, with the remaining 40 per cent split equally between Petoil and the Kurdistan Regional Government.

42 Oil Review Middle East Issue Seven 2012

Refinery to increase Iranian production by 8mn litres per day A SENIOR OIL official from Iran has said that the country's premium gasoline production will increase by eight million litres per day (lpd) following the impending completion of a development project at a refinery near Shazand.

Imam Khomeini Refinery director of capacity enhancement project, Rashid Seyedian, told Iranian TV network Press TV that the treatment facility’s output would double to 16mn lpd when the development has been completed in four weeks' time.

The daily treatment capacity at the refinery would rise from 170,000 to 250,000 barrels following the project's completion, while fuel oil production at the facility would decline.

"At present, the Shazand Imam Khomeini Refinery receives 250,000 bpd of feedstock," revealed Seyedian.

"The operation of the new gasoline units would slash the production of low-value materials."

Farhad Ahmadi, managing director of the National Iranian Oil Engineering and Construction Company who has funded the US$3.3bn project, said that the upgraded refinery would help turn Iran into "the Middle East’s gasoline production hub".

Euronav announces Maersk FSO services deal for Qatar EURONAV HAS ANNOUNCED that Maersk Oil Qatar AS (MOQ) has signed an agreement for the provision of floating storage and offloading (FSO) services on the Al Shaheen field offshore Qatar.

The fixed five-year contract, which started on October 1, contains an option for MOQ to extend the contract period for either one or two years.

FSO Africa and its sister vessel, FSO Asia, have been operating on the Al Shaheen field for two-and-a-half years and two years respectively.

They are the two largest and most sophisticated double-hulled FSOs in the world and are owned by joint venture companies in which Overseas Shipholding Group, Inc. and Euronav each have a 50 per cent interest.

HLG awarded Iraq oil and gas contract HABTOOR LEIGHTON GROUP (HLG) has been awarded a US$200mn subcontract for engineering and construction work on an oil and gas production facility in southern Iraq.

HLG CEO and managing director, Laurie Voyer, said in a statement that the project was in line with the group’s strategy to diversify its work by type and geography and will be the first contract HLG has been awarded in Iraq.

HLG’s initial scope of works comprises the partial engineering, and construction of civil, utility, and infrastructure works, including site offices, earthworks, roads and buildings equipment installation, electrical and instrumentation, oil and water storage tanks.

Works will commence immediately and have been scheduled for completion in early 2014.

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Saipem awarded drilling contracts worth US$200mn ITALIAN OILFIELD SERVICE group Saipem has been awarded offshore and onshore drilling contracts worth approximately US$200mn. In offshore drilling, Saipem has been awarded by the National Drilling Company (NDC) a contract for the charter of Perro Negro 3 for drilling activities offshore Abu Dhabi, for a period of 36 months starting from 2013. Perro Negro 3 jack-up rig is capable of operating in water depths of up to 91 m.

Saipem also signed a contract with GDF SUEZ for the charter of Scarabeo 4 to be engaged in drilling activities offshore Egypt, for a period of three months during Q3 and Q4 of 2012. Scarabeo 4, which is currently under contract with IEOC, will

be chartered by GDF SUEZ under a contract assignment.

Scarabeo 4 is a second generation semisubmersible drilling rig capable of operating in water depths of up to 457 m.

Outside of the region, Saipem has been awarded an offshore drilling contract in Ecuador, with EP Petroecuador awarding the company a contract for the charter of the jackup Ocean Spur, as well as onshore contracts for six rigs in South America and Italy. The contracts range in length from five to nine months, starting in different periods of the second half of 2012.

Kuwait Energy makes new Egypt discovery KUWAIT ENERGY HAS announced a new oil discovery at its Ahmad-2 well in Egypt. The well is located in the Area A license in the Gulf of Suez, Egypt, adjacent to the Shukheir North West field.

Kuwait Energy is the operator of the Area A license under a service agreement with Egypt's General Petroleum Company (GPC). Kuwait Energy holds a 70 per cent working interest in the license, and the remaining 30 per cent interest is held by Petrogas E&P, of Oman.

The Ahmad-2 well encountered oil in the Rudeis formation for the first time in the Shukheir North West field and Ahmad area, and initial tests showed a production flow rate of 1,300 bpd. This is the fifth exploration success in the Area A concession, and the 19th discovery in Egypt for Kuwait Energy since 2008.

"We are delighted to announce yet another exploration success at the Area A concession, which follows the discovery of the West Ahmad-1X well earlier this year,” said Kuwait Energy's chief executive officer, Sara Akbar.

“Area A is now our largest producing oil asset in Egypt and we look forward to more successes."

Kuwait Energy started operating in Egypt in 2008 and its operations there contribute the largest share to the Company's current total working interest production. In Egypt, the company operates three oil blocks, Area A, Burg El Arab development lease and the Abu Sennan concession, and has interests in two other non-company-operated blocks, namely the Mesaha concession and the East Ras Qattara development lease

Khor Mor production reaches 80,000 bpd DANA GAS AND Crescent Petroleum have announced that the Khor Mor field now produces 80,000 barrels of oil equivalent per day (boepd).

The jointly operated field, which recently reached its fourth year of production, is located in the Kurdistan Region of Iraq.

Majid Jafar, CEO of Crescent Petroleum and member of the Dana Gas board of directors, said, “We are proud to be the largest investors in the [Kurdistan Region of Iraq's] oil and gas sector, and the highest petroleum

producers since our first production four years ago, which enables electricity supply for millions of Iraqis and billions of dollars of ongoing fuel savings for the government.

“We are working with the Kurdistan Regional Government (KRG) Ministry of Natural Resources on the next phase of development and expansion, to grow our operations and enable further progress and prosperity for the local community,” he added.

Total investment in Khor Mor to date is close to US$1bn and total cumulative petroleum Total investment in Khor Mor to date is close to US$1bn

44 Oil Review Middle East Issue Seven 2012

production has exceeded 67mn boe, according to the joint operators.

Daily production on the field includes 340mn cubic feet of gas per day (cfd) and 15,000 bpd of condensate liquids, and both companies have revealed that there were plans for further expansion on the field.

In total, more than 279 bcf of gas and 13mn barrels of condensate liquids have reportedly been produced by Khor Mor since the start of production in October 2008.

The companies have claimed that the gas supply to local power stations has provided an additional electricity supply of 1,750MW locally, ensuring almost continuous power supply to four million people in the Kurdistan Region of Iraq. They added that the region's government had benefitted from US$5.4bn worth of fuel cost savings, with further annual savings of US$2.5bn predicted.

Rashid Al-Jarwan, executive director and acting CEO of Dana Gas, said, “This important milestone has been achieved with the cooperation and support of the KRG, as well as our partners, contractors and local staff.

“In addition, we are working with the KRG to improve and resolve the outstanding receivables, and are very encouraged by the recent announcement on the resumption of payments from the federal government.”

S07 ORME 7 2012 E&P 02_Layout 1 24/10/2012 16:52 Page 45

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WesternZagros confirms initial oil flow at Kurdamir-2 WESTERNZAGROS RESOURCES LTD. has reported an initial low rate flow of 42 to 45 degrees API oil to surface has been achieved at the Kurdamir-2 exploration well in the Kurdistan Region of Iraq. The rate was detected during the post-perforation clean up period of the Eocene testing programme. The company advised that flow rates and the potential for commerciality cannot be confirmed until the test is completed.

Acidisation of the Eocene interval is currently under way in order to improve the flow rates and a further update of results will be issued when post-stimulation testing is complete. The operator, Talisman, is currently conducting a cased hole test between the depths of 2,830 and 3,040 m in the Eocene-age formation. The Eocene is a secondary target in Kurdamir-2.

Kurdamir-2 is the second deep exploration well to be drilled on the Kurdamir structure. WesternZagros and Talisman each have a 40 per cent working interest in the Kurdamir Block, with the Kurdistan Regional Government holding the remaining 20 per cent.

Dana Gas begins output at NGL plant in Egypt DANA GAS SAID that its Egyptian affiliate, the Egyptian Bahrain Gas Derivatives Company (EBGDCo), has started commercial output at a natural gas liquids (NGL) plant at Ras Shukheir in Egypt, with the first propane cargo loaded on October 1.

The Ras Shukheir plant will have a production capacity of 120,000 tonnes a year of propane and butane using gas feedstock supplied

by Egyptian General Petroleum Corp at a rate of The NGL plant at Ras Shukheir 55 million standard cubic feet per day (MMscfd) to 80 MMscfd. The butane will be sold in Egypt whilst the propane is destined for international markets. The residual gas will be supplied to Egypt's National Gas grid.

Dana Gas stated that the project cost US$125.24 million to build.

Rashid Al Jawan, executive director and acting chief executive officer of Dana Gas said, “The Ras Shukheir plant is now our third gas processing plant to be commissioned in Egypt and we expect first revenue and cash flows in this quarter.”

EBGDCo is a joint venture between Dana's subsidiary Danagaz Bahrain, the government-owned Egyptian Natural Gas Holding Co and Arab Petroleum Investments Corp.

Kuwait Energy finds oil in Egypt's Area A concession KUWAIT ENERGY HAS made a new oil discovery at the Ahmad-2 well, located in the Area A license in the Gulf of Suez, Egypt, adjacent to the Shukheir North West field.

The Ahmad-2 well encountered oil in the Rudeis formation for the first time in the Shukheir North West field and Ahmad area, and initial tests showed a production flow rate of 1,300 bpd.

Kuwait Energy’s chief executive officer, Sara Akbar said, “We are delighted to announce yet

another exploration success at the Area A concession, which follows the discovery of the West Ahmad-1X well earlier this year. Area A is now our largest producing oil asset in Egypt and we look forward to more successes.”

The oil find is the company’s fifth exploration success in the Area A concession, and the 19th discovery in Egypt for Kuwait Energy since it started operating in the North African country in 2008.

In Egypt, Kuwait Energy operates three oil

blocks, Area A, Burg El Arab development lease and the Abu Sennan concession, and has interests in two other non-Company-operated blocks, namely the Mesaha concession and the East Ras Qattara development lease.

Kuwait Energy is the operator of the Area A license under a service agreement with Egypt’s General Petroleum Company (GPC). Kuwait Energy holds a 70 per cent working interest in the license, and the remaining 30 per cent interest is held by Oman’s Petrogas E&P.

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46 Oil Review Middle East Issue Seven 2012

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S08 ORME 7 2012 Gas_Layout 1 24/10/2012 16:55 Page 48

The Golar Freeze FSRU

LNG

A number of the Middle East’s countries have fallen into a paradoxical position where their gas reserves cannot be developed quickly enough to satisfy rising demand from utility providers and industry, writes Lynda Davies.

LNG imports

taking root K

UWAIT WAS THE first country in the region to turn to the import of liquefied natural gas (LNG), taking delivery of its first cargo in August 2009. Dubai followed a year later. Kuwait imports LNG on a seasonal basis though a floating storage and regasification (FSRU) unit, but is now considering long term imports and the construction of a permanent import terminal.

Bahrain, Jordan and Lebanon all have LNG import projects at the planning stage, and earlier this year, two UAE government-backed investment firms unveiled their plans to build an FSRU in Fujairah.

“The region remains a relatively small LNG market for the time being, but the volume of LNG imports is set to grow significantly with Kuwait’s expansion, growth in Dubai and the planned new terminal in Fujairah and potentially Bahrain,” said Robin Mills, head of consulting at Dubai-based Manaar Energy Consulting & Project Management.

“However, LNG is a high-cost solution,” he said, “which may not be as necessary if Middle East countries are able to expand domestic production, regional gas trade or alternative energy.”

While LNG imports will remain the only reasonable solution in the next few years, Kuwait – at least until now – and those planning to start imports mostly see buying-in the fuel as an interim solution. To this end, Kuwait and Dubai have opted for FSRUs to receive imports rather than establish onshore facilities. The FSRU concept also seems to be the favoured option for those countries looking to start imports.

“Floating storage and regasification import terminals are a perfect solution in this region, providing an interim solution to bridge the gap between a country’s current gas needs and the future development of domestic gas reserves to meet industrial and commercial demand,” said an energy market analyst. “Offshore facilities can be

48 Oil Review Middle East Issue Seven 2012

Kuwait is now evaluating longer term imports of LNG and is considering the construction of a land-based import terminal moved once they are no longer needed, and they cost less to build than onshore sites and have significantly shorter project timelines than their onshore facilities.”

Kuwait turned to LNG imports to help meet surging gas demand for power generation during the country’s summer months. Kuwait has four-year LNG supply agreements in place for what is believed to be the equivalent to an average of about 500 MMcf/d to cover the peak summer demand with Royal Dutch Shell and Vitol, Since extending the import season, Kuwait National Petroleum Company (KNPC), has also purchased some LNG spot cargoes.

The LNG is received and regasified at the Mina Al-Ahmadi GasPort, an FSRU operated as a joint venture between US firm Excelerate Energy and KNPC, and commissioned in 2009. The dockside FSRU comprises an Excelerate Energy Bridge® brand regasification vessel which is moored at Mina Al-Ahmadi’s South Jetty for the duration of the import season.

Excelerate Energy’s FSRUs are based on a conventional LNG carrier design but have the added capability of onboard regasification. The FSRUs utilise the same vaporisation technology as is used on land-based facilities and delivers regasified LNG at a base load rate of up to 500 MMcf/d with a peak capacity of in excess of 600 MMcf/d.

The gas port also incorporates a shuttle tanker

berth that provides for ship-to-ship LNG transfer and boil off gas management capabilities between a conventional LNG vessel and the energy bridge regasification vessel (EBRV). This allows the EBRV to be kept on station while receiving LNG deliveries from conventional carriers dockside.

Kuwait considers longer term imports Having initially considered LNG an interim solution until it could develop more of its own gas reserves, Kuwait is now evaluating longer term imports of LNG and is considering the construction of a land-based import terminal.

Kuwait could have the permanent LNG import facility in operation by 2017, according to KNPC. Mina Al-Ahmadi as well as Al-Zour near the Kuwait-Saudi border are said to be possible locations, but this could not be confirmed.

Mills believes Kuwait’s 2017 target to be somewhat optimistic.

“2017 would normally be feasible but given the slow pace of most other energy projects in Kuwait, it sounds optimistic,” he said.

Dubai became an importer of LNG for the first time in December 2010 when the first commissioning cargo was delivered to a newly established FSRU at Jebel Ali port. Following this commissioning cargo, regular imports of LNG into the emirate began the following May to help meet growing demand from the power sector during the summer months, and supplement its gas imports via pipeline from Abu Dhabi and Qatar.

LNG imports are handled by the Golar Freeze FSRU, which was converted from a conventional LNG vessel and is now permanently moored alongside a purpose built jetty at Jebel Ali. Owned

by Golar LNG Limited, the FSRU is on a 10-year time charter to the Dubai Supply Authority (DUSUP) which is responsible for procuring, transmitting and delivering natural gas to consumers in the emirate and owns Dubai’s gas pipeline network.

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LNG ships berth alongside the Golar Freeze to discharge their cargoes into the FSRU, which has the capacity to store 126,000 cu/m of LNG. The LNG is regasified using seawater. Regasification capacity is three million tonnes per annum, equivalent to 400 MMcf/d of natural gas or 5.1bn cu/m per year.

LNG imported via the Golar Freeze is supplied to DUSUP under a 15-year supply agreement with Shell Western LNG, reached in 2008 and started in 2010. The deal provides for shipments of up to 1.5mn tonnes per annum, with a large proportion each year delivered during Dubai’s summer months. The contractual LNG is supplied primarily from Qatargas 4. DUSUP also purchases LNG spot cargoes both to support short term changes in gas demand and when favourable market opportunities present themselves.

DUSUP stores some of the gas delivered during the winter months at the Margham gas storage facility. This gas is redelivered from the Margham plant in the summer months, and, as a result, according to DUSUP, Dubai has managed to reduce to zero the amount of oil products burnt for electricity generation in the emirate other than for the occasional operational reasons.

UAE plans Fujairah import facility Abu Dhabi has announced plans to build an LNG import terminal at Fujairah, the UAE’s only emirate with an Arabian Gulf coast. The planned terminal would give Abu Dhabi, access to LNG supplies outside the Gulf without the vessels having to pass through the Strait of Hormuz.

Mubadala Development Company and International Petroleum Investment Company (IPIC), investment firms run by the Abu Dhabi government, are working to develop a FSRU to handle the LNG imports. Imports of gas to the UAE currently come principally through the Dolphin Gas pipeline from Qatar, a project in which Mubadala has a 51 per cent stake, and seasonal imports by Dubai.

Neither Mubadala nor IPIC has revealed much in the way of details about the project. However, according to industry sources, a feasibility study was completed in 2011, and the two firms have secured bids for the proposed terminal’s front-end engineering design (FEED) contract. The FEED contract is expected to be awarded shortly. Mubadala and IPIC are also seeking a financial advisor for the project.

The FSRU is planned to be constructed in two phases, each providing capacity for 600 MMcf/d of gas, providing a final capacity of 1.2 MMcf/d. The import facility currently is targeted to be in place by the end of 2014.

Bahrain currently can produce more natural gas than it consumes. But rapidly growing demand for gas from the power generation and desalination sectors in particular, and the desire to boost its downstream sector, has led the country to evaluate the import of LNG to meet supplement existing domestic gas production until it can develop further domestic gas resources, after plans to import gas from Qatar and Iran failed to materialise.

Accordingly, Bahrain has been advancing plans to establish an LNG import and re-gasification terminal, which will be built, near the Khalifa bin Salman port in Hidd. According to trade media citing Bahrain’s Oil Minister, Abdul Hussain bin Ali Mirza, the country aims to import some 400 MMcf/d of gas – equivalent to around three million tonnes per year of LNG, with the volume slowly to be ramped up as demand increases.

The national oil company Bahrain Petroleum Company (BAPCO), working with the country’s National Oil and Gas Authority (NOGA), is assessing nine shortlisted companies to become the strategic partner or partners for the terminal. The award of the tender had been anticipated early this year, but is now expected to be made by the end of 2012. The short-listed companies are

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S08 ORME 7 2012 Gas_Layout 1 24/10/2012 16:55 Page 53

LNG

Minal Al-Ahmadi Gasport, Kuwait

believed to include Royal Dutch Shell, Vitol Bahrain and Excelerate Energy.

According to BAPCO, the tender includes options to build and operate the import facility as well as to supply the LNG, but not all bids included provision for both construction of the terminal and the supply of the LNG. Both an FSRU concept as well as a conventional onshore terminal option are under consideration.

Bahrain is currently aiming to have the import terminal in service by the end of 2014 or early 2015.

Jordan fast-tracks LNG imports Jordan’s long-running plans for an LNG import terminal at its Red Sea port of Aqaba recently have been fast-tracked following repeated disruptions to gas supplies delivered to the country from Egypt by pipeline. Jordan typically receives around 80 per cent of its natural gas requirements from Egypt, but in 2011 it is reported to have received just 31 per cent of its contracted quantities for between 250 Mcf/d and 255 Mcf/d. Attacks on the pipeline in Egypt’s Sinai Peninsula by militants have continued this year. Jordan has been forced to plug the gap by turning to imported crude.

The country wants to begin importing LNG by 2014 in a bid to alleviate its ongoing energy woes, and the Ministry of Energy and Mineral Resources hopes to float an RFP this autumn from prospective partners to help implement an FSRU for the LNG imports. In addition to installing a new FSRU, other options under consideration include leasing an existing FSRU. The latter option has gained increasing favour as it would mean the 2014 target to start imports would be achievable, ministry officials were quoted as saying by the Jordan News Agency, Petra.

Although Jordan has yet to enter into a deal with any LNG supplier, Qatar has been seen as the preferred choice, MENAFN News has reported. In January, the two countries formed a committee to estimate Jordan’s LNG import needs. The imported gas initially would be earmarked for local power generation plants and at a later stage would also go the country’s industrial sector as well as consumers, according to the Energy and Mineral Resources Ministry. The LNG imports are intended to supplement, not replace, Egyptian supplies, according to the ministry.

Lebanon is looking to LNG as an alternative fuel source to gas oil until it can start extracting its own natural gas offshore. The country’s Ministry of Energy and Water has said once the necessary infrastructure is in place, the use of imported LNG to produce electricity among other usages should be possible by mid-2015.

To this end, the setting up of an FSRU is planned at Beddawi in the north of the country to handle the LNG imports. The Ministry of Energy and Water issued a tender for the construction and operation of the FSRU earlier this year. Based on the tender documentation, the unit should have up to 3.5mn tonnes per year capacity, and the ministry has said it will consider proposals for project implementation that include existing FSRUs, along with the refitting of existing vessels alongside proposals aimed at building a new FSRU. The ministry already has concluded a technical and feasibility study for the construction of a coastal pipeline stretching 173 km from Beddawi to Tyre to transport the gas, and aims for construction to start in 2013.

Mills, however, believes Lebanon’s mid-2015 target to have the import and handling infrastructure in place as “highly optimistic”.

“Given the country’s general statement, problems in progressing energy and infrastructure projects, and the security issues such a terminal would raise; even more so given recent events and stability, it’s a highly optimistic target, “ he said. ■ Excelerate Energy’s Express

Oil Review Middle East Issue Seven 2012 53

Gas

S08 ORME 7 2012 Gas_Layout 1 24/10/2012 16:55 Page 54

Aramco makes Red Sea gas field discovery

KOGAS awarded Iraq gas pipeline project

SAUDI ARAMCO HAS discovered a new gas field near the port of Daba in the Red Sea, according to the Saudi Arabian oil minister Ali alNaimi. Al-Naimi revealed that tests at the site conducted at a depth of 17,700 feet revealed that gas flowed at a rate of 10mn cfd.

Saudi Aramco has said that it planned to c o n t i n u e evaluating the gas Ali al-Naimi in the well and would drill more wells in order to help it attain the size of the field.

The state-owned oil company's gas reserves rose to 282.6 trillion standard cf in 2011 from 279 trillion standard cf in 2010, with its production of gas rising to an average of 9.9bn cfd in 2011 from 9.4bn cfd a year earlier.

SOUTH KOREA-BASED STATE natural gas company, Korea Gas Corp (KOGAS), has won a contract from the Oil Pipelines Company (OPC) to construct a 110km long gas pipeline in Iraq.

The pipeline will link the Iraqi cities of Kirkuk and Baiji and construction work on the pipeline is expected to be completed by September 2014.

The contract is worth US$127 million.

KOGAS was selected as the preferred bidder for the project out of eight other competitors.

"We believe the latest contract will give KOGAS the upper hand in winning other large-scale projects in Iraq," a KOGAS company official was quoted by Korea Times as saying.

The Korea Gas Corporation (KOGAS) said it will sign the contract with Oil Pipelines Company (OPC) soon. OPC is a state-run company controlled by Iraq’s Ministry of Oil. The Iraq project is the company's second overseas contract after it secured first foreign contract in Mozambique to build a 65km gas pipeline.

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S09 ORME 7 2012 Petrochemicals_Layout 1 24/10/2012 16:59 Page 55

Petrochemicals

S09 ORME 7 2012 Petrochemicals_Layout 1 24/10/2012 16:59 Page 56

World oil trade will be transformed over the next five years, according to the respected International Energy Agency (IEA) in its annual Medium-Term Oil Market Report (MTOMR)*. It predicted the change in the hydrocarbon industry would result from a major shift in the regional distribution of oil demand and supply growth.

A shakeup of the global

refining industry T

HE IEA NOTED that the market would see a continued rebalancing of refining capacity, with expansions in Asia and the Middle East more than offsetting continued falls in the OECD. The IEA said that it expected the global oil market to become “less tight over the medium term” than through most of the last decade as elevated supply and lessening demand challenged earlier assumptions and significantly changed the oil market outlook for the next five years.

IEA executive director Maria van der Hoeven commented on the report, "The oil market is at a crossroads.”

It projected a return to higher OPEC spare production capacity as a result of a combination of demand and supply factors, which van der Hoeven said, “will be welcome news amid rising supply and demand risks.”

OPEC capacity is set to rise to as much as seven million barrels a day in 2017 from 2.8 million last year, the report said.

On the demand front, the IEA stated that “the economic recovery has lost momentum and the weak economic environment has reduced expectations of oil demand growth for the medium term, yet the reallocation of

demand by region and key product, which has been underway for the last 15 to 20 years, is expected to continue.”

Global fuel demand is projected to gain 1.2 per cent annually to 95.7mn barrels a day in 2017, from 89mn last year. Output is forecast to advance about 1.5mn barrels a day each year to 102mn barrels a day during in the same period.

The report highlighted that demand from non-OECD economies is forecast to overtake that in the OECD as early as 2014, which can be seen in the second graph.

“Market share continues to shift from mature to newly industrialised economies, but amid persistent concerns about the health of the former,” the IEA underlined.

OPEC capacity is set to rise to as much as seven million barrels a day in 2017 from 2.8 million last year

Supply increase Its report showed that despite some supply shortfalls in 2012, the growth in supply will rise by a strong 9.3mn barrels a day over the next five years.

The IEA predicts that North America’s oil sands and light-tight crude will account for 40 per cent of the increase, while Iraq will account for 20 per cent of global supply growth in that period.

Most of the medium term growth is set to come from the America, which has had its industry rejuvenated by new advanced extractive technologies applied to light, tight oil deposits in the US and the Canadian oil sands that had “exceeded earlier expectations.”

“North American non-conventional supply has reached game-changing levels,” the IEA noted..

Amongst OPEC producers, Iraq stands out and Iraqi production has reached new heights.

Its production capacity is expected to enter a new growth phase, which could continue even beyond the forecast period, while Libyan production recovery in 2012 defied expectations and Saudi output surged to 30 year highs.

The oil market has been hit by supply shortfalls in the last few years which arose from the Libyan civil war in 2011, international sanctions on Iran in 2012 to a number of unplanned, non-OPEC output stoppages.

Refining shifts

OECD vs Non-OECD oil demand

56 Oil Review Middle East Issue Seven 2012

The shifts in demand from the OECD to nonOECD economies will have an affect on the refining industry with internationally traded crude volumes due to decline sharply.

“Distillate demand is expected to grow much faster than that for other products, so that gasoil and diesel by the end of the forecast period will account for the largest share by far of the demand barrel, a challenge for refiners and end-users alike,” the IEA stated.

Refiners are predicted to add seven million barrels a day of crude distillation capacity in the next five years, outpacing demand growth.

The expansions will cause utilisation rates to fall to 79 per cent in 2017 from an average of 83 per cent in the years from 2006 to 2008.

“The main loser in the expansion of global

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Petrochemicals

S09 ORME 7 2012 Petrochemicals_Layout 1 24/10/2012 16:59 Page 58

refining capacity will be the OECD, especially Europe,” where more plants will probably close before 2017, the IEA said.

The fall in trading of crude will primarily be the result of rising domestic production in North America, which will lessen its import

Refiners are seen adding seven million barrels a day of crude distillation capacity in the next five years, outpacing demand growth needs. More Middle East oil is going to be kept within the region to satisfy growing regional demand, rather than in the past when it was exported. ■

* “the Medium-Term Oil Market report”, 12 October 2012, downloadable at www.iea.org/publications/mediumtermreports/

Global oil product demand

58 Oil Review Middle East Issue Seven 2012

+ The MTOMR is the last in a series of medium-term forecasts that the IEA devotes to each of the four main primary energy sources: oil, gas, coal and renewable energy. A companion to the IEA's authoritative monthly Oil Market Report, the MTOMR offers a bridge between that monthly snapshot of market conditions and the oil section of the annual World Energy Outlook, which has a longerterm focus.

S09 ORME 7 2012 Petrochemicals_Layout 1 24/10/2012 16:59 Page 59

Chiyoda subsidiary awarded contracts in Qatar A SUBSIDIARY OF Japan's Chiyoda Corporation has been awarded a long-term services contract for three petrochemical facilities in Qatar.

Chiyoda Almana Engineering LLC (CAEL) will provide the services as part of a three-year contract, which features an optional one-year extension, to the Qatar Chemical Company Limited (Q-Chem) and QChem II Facilities in Mesaieed Industrial City and RLOC facilities in Ras Laffan Industrial City.

Chiyoda has been involved in numerous LNG projects in Qatar having executed EPC work for 12 of the country's 14 LNG trains.

CAEL, which has a workforce totalling 450 in the country, has provided its services to more than 100 local Q-Chem II facility projects including a number of oil and petrochemical projects.

The company has yet to reveal the value of the contract.

Through these contracts, Chiyoda and CAEL are aiming to contribute further to Qatari sustainable development.

Preliminary design work on Duqm Refinery project starts

Port of Duqm

OMAN'S DUQM REFINERY and Petrochemical Industries Co (DRPIC) has announced commencement of preliminary engineering design work on a major refinery complex at Duqm, Oman.

The preliminary design will provide the groundwork for the Front End Engineering Design (FEED) due to be tendered by the end of this year, or early in 2013, reported the Oman Daily Observer.

The refinery itself will be built at a 900-hectare site located just north of the Port of Duqm and connected to a proposed Liquid Jetty by a pipeline system.

It is reported that the preliminary engineering design is being primarily undertaken in-house by DRPICâ&#x20AC;&#x2122;s newly appointed Project Management Consultant, Shaw Energy and Chemicals Limited (acquired by Technip).

It is believed that around eight firms have been prequalified to participate in the FEED tender, documents for which are currently under preparation. A tender for the Engineering-Procurement-Construction (EPC) contract is likely to be floated in the third quarter of 2013.

DRPIC is a 50-50 joint venture of Oman Oil Co (OOC) and IPIC, a commercial entity owned by the government of Abu Dhabi.

The joint venture is overseeing the development of 11.5 million tonnes per annum (230,000 barrels per day) grassroots refinery at the Duqm Special Economic Zone, to be followed by investments in downstream petrochemical projects in the second phase.

Oil Review Middle East Issue Seven 2012 59

Petrochemicals

S09 ORME 7 2012 Petrochemicals_Layout 1 24/10/2012 16:59 Page 60

Dow signs marketing agreement with Sadara THE DOW CHEMICAL Company (Dow) will market and sell the majority of products produced by Sadara Chemical Company (Sadara), Dow’s joint venture with Saudi Arabian Oil Company (Saudi Aramco).

Dow said that it will leverage its global marketing experience and operations to bring Sadara's plastics and specialty chemical products to market in growing regions.

The company believes the combination of its marketing leadership with Sadara's strategic well positioned location will strengthen existing customer relationships and forge new ones in these fast growing regions.

“This marketing agreement—like the Sadara joint venture as a whole— represents another significant step towards Dow’s ever-expanding global reach, advancing our transformation as we grow with customers locally and globally,” said Andrew Liveris, Dow’s chairman and chief executive officer.

Nearly half the products Sadara offers will be available in expanding Asia Pacific markets, while the majority of the remainder will be sold in other key countries in Central and Eastern Europe, Africa and India. Sadara itself will take the lead in bringing its products to market in certain Middle Eastern nations including Saudi Arabia.

Products covered under the agreement include polyethylene, propylene oxide, polyether polyols, methylene diphenyl diisocyanate and toluene diisocyanate aromatic isocyanates, propylene glycol, butyl glycol ethers, amines and polyolefin elastomers.

Sadara is constructing the complex, which will be comprised of 26 manufacturing units, and will possess flexible cracking capabilities and produce more than 3mn metric tonnes of high-value performance plastics and specialty chemical products.

60 Oil Review Middle East Issue Seven 2012

Saudi Polymers starts production at Jubail facility SAUDI POLYMERS COMPANY (SPCo) and its joint-venture partner, National Petrochemical Company (Petrochem), have started commercial production at their polymers manufacturing facility in Jubail, Saudi Arabia.

The integrated SPCo petrochemicals complex includes operating units that are capable of producing ethylene, propylene, polyethylene, polypropylene, polystyrene and 1-hexene.

"We will now be working to fill the critical inventory targets needed to ensure our long-term reliability as a supplier of quality products," said Mike Zeglin, executive president of Saudi Polymers Company.

In addition to direct sales to serve local Saudi Arabian demand, SPCo will manufacture products to serve growing global demand outside the Kingdom through its exclusive distributor, Gulf Polymers Distribution Company, SPCo said in a statement.

SPCo is a limited liability company incorporated in Saudi Arabia that is owned 65 per cent by Petrochem, a joint-stock company incorporated in Saudi Arabia and 35 per cent by Arabian Chevron Phillips Petrochemical Company, a wholly-owned subsidiary of SPCo's manufacturing facility Chevron Phillips Chemical.

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Petrochemicals

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Borouge delivers first shipment to Khalifa Port ABU DHABI TERMINALS (ADT) has announced that Khalifa Port has received the first shipment of polyethylene for export from Borouge, provider of innovative plastics solutions.

Borouge's sent 700 containers of polyethylene from its petrochemicals plant in Ruwais via the vessel 'Al Bazm II'. Previously, Borouge was using Abu Dhabi's Mina Zayed to export its products to customers globally.

The containers will be put into storage at the Khalifa Port Container Terminal and later exported to Borouge's customers around the globe.

"The new terminal at Khalifa Port provides Borouge with an efficient and cost-effective distribution point for its broad range of innovative plastics solutions manufactured at Ruwais," said Wim Roels chief executive officer of Borouge's Marketing & Sales Company.

"Routing our polyethylene and polypropylene products through the new Khalifa Port enables us to better serve our customers throughout Asia and beyond, and we look forward to Khalifa Port's contribution to the successful growth of Borouge in the international plastics industry," he added.

Borouge manufactures two million tonnes of Polyolefins at its plant in Ruwais and is currently expanding the plant's capacity to 4.5 million tonnes by mid-2014.

"ADT is very excited receiving the first Borouge cargo on the Khalifa Port Container Terminal only one month after starting operation. This demonstrates our ability to offer world class container terminal services as well as integrated logistics solutions for our key accounts such as Borouge," said Martijn van de Linde, chief executive officer of ADT. Abu Dhabi Terminals announced that 30 per cent of Mina Zayed's container traffic movements have already been moved to the new port - two months ahead of schedule.

Foster Wheeler awarded further contract

by Sadara FOSTER WHEELER HAS said that subsidiaries of its Global Engineering and Construction Group have been awarded an engineering and procurement contract by Sadara Chemical Company (Sadara) for a packaging centre at Jubail Industrial City in the Eastern Province of Saudi Arabia.

The packaging centre will be part of the fully integrated chemicals complex that is being built by Sadara, a joint venture between Saudi Arabian Oil Company (Saudi Aramco) and The Dow Chemical Company (Dow).

The packaging centre contract has been awarded as an extension to the front-end engineering design (FEED) contract awarded to Foster Wheeler in 2008.

The contract value for the project was not disclosed.

"This award follows our successful completion of the FEED stage for the packaging centre and reflects our client’s continued confidence in Foster Wheeler’s ability to execute large and technically complex projects,"said Umberto della Sala, chief operating officer of Foster Wheeler.

The packaging centre will be completed in the second half of 2014 and will serve as a logistics handling hub for Sadara’s chemical complex. The facility will handle packaging, storage and loading of high value-added chemical products and performance plastics for road and rail transport within Saudi Arabia and for export to overseas markets.

"This is the second major unit awarded to Foster Wheeler under its FEED contract with Sadara, the first being the propylene oxide unit which was awarded in December 2011 and is currently being executed by our Thailand office," della Sala added.

Sadara’s first production units will come on-line in 2015, and all units are expected to be up and running in 2016.

62 Oil Review Middle East Issue Seven 2012

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Petrochemicals

Sahara Petrochemical agrees credit facility Saudi Arabia's Sahara Petrochemical Co has signed a three-year medium-term revolving credit facility with Saudi Investment Bank for US$107 million.

The company said the purpose of the facility was to provide standby support both to the company's working capital and

to aid future investments.

The company added in a statement, “This important agreement with a Saudi bank reflects the distinguished role of Saudi Investment Bank in supporting the petrochemicals industry.”

The Jubail-based producer makes basic petrochemicals including

propylene, acrylic acid, ethylene, low and high density polyethylene, caustic chlorine and ethylene dichloride.

Sahara's main projects are the Al Waha Petrochemical Company its first majority owned subsidiary and on its affiliated participation in Saudi Olefins and Polyolefins Company (SEPC).

Sahara’s Al Waha petrochemical complex

Oman Oil to build petrochemicals plant in Sohar OMAN OIL COMPANY, the energy investment arm of the Oman government, has announced that it will invest around US$800 million to build a petrochemicals plant in Sohar Industrial Port.

The world-scale capacity of the plant will be around one million tonnes per annum (mtpa) and the plant will manufacture Purified Terephthalic Acid (PTA) and Polyethylene Terephthalate (PET), the Muscat Daily reported.

Nasser bin Khamis al Jashmi, chairman of Oman Oil and the Undersecretary of the Ministry of Oil and Gas said, “We are establishing a company to set up this petrochemical project in Sohar which will produce PTA-PET. The investment in this project will be about US$800mn."

Jashmi did not say whether the new plant will be a wholly owned subsidiary of Oman Oil or a joint venture project. He added that Oman Oil is also planning a project to set up one of the largest crude storage facility in the world at Ras Markaz in Duqm.

Jashmi stated, “We are planning a storage capacity of 200mn barrels crude plus other products. We are now in the study phase of the project.”

The planned PTA/PET project is likely to source its feedstock requirements from the aromatics scheme at Sohar. The latter has a production capacity of 818,000 metric tonnes per annum of paraxylene and 198,000 metric tonnes of benzene.

Paraxylene is the primary feedstock used in the manufacture of

Oil Review Middle East Issue Seven 2012 63

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Iraq

Politics now the main barrier to Iraq

oil and gas investment I

N IRAQ, THE historical importance of security for oil and gas investment cannot be overemphasised. This fact is apparent when one simply compares historical violent activity to foreign commercial activity. It is no coincidence that the “hockeystick” spike in Foreign Commercial Activity in Iraq begins in 2008, coinciding with the dramatic drop off of violence in the same year. Further, Foreign Commercial activity is now well established and has grown quite healthily since 2008.

Further, Iraq’s hydrocarbon wealth is expected to drive the Iraqi economy for the foreseeable future with oil revenues contributing enormously to the economy, cycling through government expenditures into broader economic development.

However, the fundamental barrier to oil and gas investment in Iraq, and thus to the country’s development overall, has moved from security to politics, as issues over the legal status of oil and gas has created an uncertain investment environment. Iraq has no comprehensive oil and gas law, as the regulation has foundered on a dispute between the Kurdistan Regional Government (KRG) and the Government of Iraq (GoI) over ultimate authority over oil and gas extraction.

In the absence of a explicit law, the KRG has asserted that they have the right to sign contracts for development of all new oil and gas exploration on their territory, while the GoI asserts it has the sole right to sign any contracts, whether for redevelopment or for new exploration. As a result, the sides have signed very different contracts creating a bifurcated oil industry. The Kurds have signed more lucrative Production Sharing Contracts (PSCs) while the GoI has signed Technical Services Contracts (TSCs).

company plans, we believe oil refinery production could lag demand until the 2016-17 time frame in Iraq, whereas the Kurdistan Region of Iraq refined product supply could exceed local demand as soon as next year.

Further, should the KRG secure export markets, (a big if) they would only need to sell 288,000 bpd at US$100/bbl, or 360,000 bpd at US$80/bbl to compensate for the 17 per cent of the annual Iraqi budget they receive from Baghdad today (which nets to US$10.5 billion). Now, there are a lot of things that could turn out differently in this scenario, but the trend is clear to us; The Kurdistan Region of Iraq is accelerating away from the rest of Iraq in development, starting with oil and gas, feeding into the downstream industries of refining and electricity, and into the broader economy. Thus a scenario emerges where an increasingly prosperous KRG, supplying Baghdad with essential resources, could begin to gradually to gain more leverage to move out from under the Baghdad’s thumb.

Iraqi supply and demand of refined product

Given these conditions, the strategy of the oil majors Exxon, Chevron, Gazprom and Total becomes apparent. Having locked in contracts in the south (except in the case of Chevron), where most of the oil is located, but frustrated by the low profitability and bureaucratic difficulties of those contracts, they have decided to balance that with higher risk, higher reward investments in the north: classic portfolio strategy.

Source: Dunia Frontier Consultants.

Now, the GoI and the KRG have cut a deal, for the third time since the original oil and gas law failed in 2007, where the GoI will pay the Kurdistan Region of Iraq oil companies 50 per cent of the revenue from their exports to cover production costs. However, we take a dim view of the long-term viability of the deal; instead, we expect the general environment of mistrust and bureaucratic incompetence is likely to eventually lead to a breakdown, as it did in the first two deals. The GoI has already taken three weeks to forward the initial payment, which was supposed to be delivered within a week. Further, the hard part is yet to come; a detailed audit of Kurdish costs, which caused the last deal to break down. Lastly, the current deal does not even begin to address the real root problem, the oil and gas law, with its attendant constitutional issues of territory and ethnic tensions. So the KRG and GoI would seem to be doomed to a cycle of periodic, short-lived deals, with longer periods of tension and belligerent rhetoric between them.

A way out?

However, two charts illustrate an overall power shift that might gradually change this dynamic. Based on our best information on government and

64 Oil Review Middle East Issue Seven 2012

Kurdish supply and demand of refined product

Now the success of the strategy depends on monitoring Iraqi politics for evidence of an emerging shift. Will the KRG move towards de facto autonomy and secure space for its oil economy to grow? Or is the GoI reasserting control?

Meantime, the chance of open conflict, highly unlikely in our opinion, though not impossible, must also be monitored, as the two sides continue to circle each other seeking advantage. As the outcome becomes clearer over time, one or the other side (or both sides) of the Iraqi oil and gas industry will likely prove out, with large potential upsides. But given the long time frames and potential negative outcomes on both sides – of being stranded in low return investments in the south, or losing out on risky investments in the north, the best solution may be to split the difference, playing both options. n

S10 ORME 7 2012 Petrochemicals 02_Layout 1 24/10/2012 17:06 Page 65

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Iraq

GardaWorld* provides security and risk management services in Iraq and the directors of its Basra and Kurdistan region missions outlined how the company is helping make the country more secure and the challenges that still remain there.

Providing a secure

Iraq

GardaWorld has been providing security services to the oil and gas industry in the Kurdistan Region of Iraq since 2003

T

HE INTERNATIONAL DIVISION of the Canada-based GardaWorld Security Corporation has been operating in the Kurdistan region of Iraq since 2003 and established operations in the southern port city of Basra more recently. It is one of the most experienced providers of security services to the oil and gas sector in both regions and always strives to develop strong engagement and relationships in the local community.

GardaWorld offers concession-based security for five major oil and gas exploration and production projects spanning 3,400 sq km in the Kurdistan Region of Iraq

Kurdistan experience Julian Allen, regional director, Kurdistan region of Iraq opened by stating that GardaWorld was part of the new breed of security companies which have embraced the localisation of the Kurdistan region of Iraq, providing employment and career paths for local citizens.

“We have over 500 staff, of which 95 per cent are Kurds. We are predominately a local national company,” he emphasised.

Allen explained that GardaWorld provides risk management advice on site with an expatriate manager and a medic. It also provides community relations management

66 Oil Review Middle East Issue Seven 2012

support and journey management.

“We find that community relations programmes are a key demand from our clients and we send our medics out to clinics in the various villages. This provides huge dividends for those taking our services,” noted Allen. “It has also been my aim to move the business away from the old school security set up, and because of this the government has been very supportive. We are now part of the oil and gas supply chain in the region.”

GardaWorld operates across the whole Kurdistan region and has offices in Erbil, the regional capital and Sulaymaniyah.

The company is fully licensed with the Kurdistan Regional Government (KRG) and the projects cover concession-based security services for six major oil and gas exploration and production projects as well as five oil and gas service companies.

A key component of the service that GardaWorld offers is training and Allen underlined its importance when he talked about the setting up of a programme called ‘Training the Trainer’ with City & Guilds (a UK Training Provider).

“This has provided great dividends to us. We now have a dedicated core of Kurdish employees who have been trained as Trainers and we are now moving to the next stage to become a fully accredited centre within the Kurdistan region of Iraq. That would make us the first security services company to do this in the area.”

With his experience being embedded on the ground, Allen finds that the Kurdistan region is moving in the right direction and is a permissive working environment. But he cautioned that operating in the region still involves risks. There also remain huge logistical challenges. Of these, the hardest is still moving large numbers of people safely and securely around the area.

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Iraq

S10 ORME 7 2012 Petrochemicals 02_Layout 1 24/10/2012 17:06 Page 68

“Driving long distances out to the sites means that HSE (Health, Safety and Environment) considerations such as driving hours are vital. We work hard to make sure these are adhered to properly,” said Allen.

He believes that the oil and gas industry in the Kurdistan region is maturing and the move of the super majors into the Kurdistan region of Iraq has clearly been a significant catalyst for development.

The entry of the super majors, which started with ExxonMobil, has had an unbelievable impact in terms of experience and financial backing pouring into the region. This really means that the Kurdistan region of Iraq can take the oil and gas

industry to the next level, Allen argued.

He stressed, “The existing oil and gas companies have done a lot for the sector, for example Genel Energy, one of our Clients, has really led the charge from the start.”

Allen went on, “One thing that has changed with the entry of the super majors is that their requirement in terms of paperwork, accountability and demonstrable transparency is increasing. In terms of the security industry, firms like ours are positioned very well in that regard” Allen pointed out.

He maintained that GardaWorld was working hard to expand the business and predicted that demand for its services would continue to increase.

Basra growth

GardaWorld was the first private security company in Iraq to achieve a 100 per cent compliance from the Iraqi Ministry of Interior Julian Allen

James Grimshaw, managing director, Southern Iraq provided a valuable insight into GardaWorld’s Basra operations, which have grown from nothing two years ago to becoming a strong component of the firm’s overall Iraq portfolio.

“We took a strategic view that we needed to have a proper capacity in Basra in order to be able to capture what was a growing security market for

GardaWorld provides journey management and secure transportation in Basra

68 Oil Review Middle East Issue Seven 2012

S10 ORME 7 2012 Petrochemicals 02_Layout 1 24/10/2012 17:06 Page 69

the oil and gas community. We have invested heavily on the back of a very strong view that there is a market that can consume these assets. This has proven to be the case,” Grimshaw asserted.

“The real differentiator between us and most of the other private security providers is that we are investing in advance of contract signature, rather than waiting to procure assets at the point of signature. We are making a bold move. We can only do this because of the size and entrepreneurial culture of the business and our access to capital.”

Garda’s Basra operation is now around 400 strong with around 75 per cent of the staff being Iraqi.

“We have huge expectations for the Basra market and we want to be here well into the future” Grimshaw said.

GardaWorld won a major contract in August with a global oil and gas service company which as a result will become a key client for the Canadianbased firm.

“We are very excited about this opportunity with a

James Grimshaw

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Iraq

new strategic client,” explained Grimshaw. ”It is very good for us. So our focus now is to get it up to speed and running. Such is the nature of this client that it is important not just for our operation in Basra, but also for our entire business." n

Garda’s Basra operation is now around 400 strong with around 75 per cent of the staff being Iraqi

Basra Oil and Gas

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An international conference on Iraq as the ‘hub’ of future global energy supplies will be the centrepiece of this year’s Basra Oil & Gas event. The full scale of future potential is rapidly becoming clear under the IEA’s latest analysis.

Basra draws oil and gas

experts again A

RRANGED BY PYRAMIDS International (Iraq) and Expotim International (Turkey) Fair Organisations* the Third Basra Oil & Gas conference and exhibition runs from 6-9 December in Iraq’s key oil exporting and processing city.

Last year 17,000 mainly local visitors came along to see the products and services of more than 200 exhibiting companies and institutions from 40 countries. Businesses involved in the supply of equipment and services for all aspects of oil and gasfield development along with drilling and well servicing predominated at the last edition in 2011, a situation which is likely to be replicated this year.

This year the exhibition will host over 400 companies, showcasing the very latest products and technologies from the market.

Falah Al-Kahawaja, conference director, said, “This conference provides an unrivalled opportunity for the oil and gas industry to understand more about Iraq and the expectations for the future. It is a complex market to navigate, and we want to provide a platform that gives local, regional and international companies interested in doing business in Iraq somewhere to share knowledge, experience and insight.”

An excellent concise summary of Iraq’s current all-forms energy status is available on the combined events’ website at www.basraoilgas.com (search under ‘Sector’). Oil Review’s own independent view of this potentially contentious situation (essentially, in terms of detail about what is possible, no-one really knows because of the decades of neglect) is as follows. A special report on what is undoubtedly a fast-evolving situation was launched by the International Energy Agency as part of its annual ‘World Energy Outlook’ series; see the special update account within this issue.

Most analysts agree that Iraq comes at least fifth in the global league table of proven oil reserves, with just a fraction of known fields being currently under active development. At least 30 giant or super-giant fields of at least a billion barrels production potential (at least half including the Rumaila complex very much more than this) are known to exist, mostly in the southeast with well-equipped Basra right at the centre of most of the most promising areas. Already oil literally fuels the whole national economy, although downstream processing is woefully inadequate, and a new hydrocarbons law is urgently needed to remedy and regulate this by drawing in the necessary foreign direct investment.

70 Oil Review Middle East Issue Seven 2012

The conference was well attended last year

The immediate target is to produce at least 10mbd; in 2011 according to BP’s latest ‘Statistical Review of World Energy’ actual output was a mere 2.8mbd. The pre-war peak was 2.5mbd, so production is seen to be rising fast already.

Vague this is certainly, but all the figures relating to natural gas are even vaguer still.

Essentially this sector of the industry is almost entirely undeveloped, with domestic customers relying on imports for some of the LPG which is still widely used for cooking and heating. However potential reserves are known to be well in excess of 100tcf, which if correct would put them in the world’s top ten; again at least two-thirds lie within the southeast’s Basra Governorate. For ‘probable’ reserves the total is of the order of at least twothree times more.

Comprehensive plans have been laid to develop the Basra oil terminal as well as refining capacity in this core city, and the best place to update yourself on these proposals is undoubtedly the December conference and exhibition in Iraq’s key energy city.

A key feature of the annual Basra show is always the incorporated conference, the organisation and running of which is once again in the hands of Mr Falah Al-Khawaja. An independent consultant who was trained overseas as an electrical engineer, Mr Al-Khawaja spent more than

40 years working within various energy departments of the Government of Iraq.

Summarised, this year’s sessions will be focusing on: 6 Oil and gas production 6 Exploration and drilling 6 Gas production and prospects 6 Storage and transport issues 6 Health, safety and environment issues 6 Linked and dependent heavy industries, including refining and petrochemicals 6 Logistics, security and regulatory issues 6 Lessons learned from all the above The whole catalogue of events – conference and trade exhibition - is being officially supported by the Ministry of Oil and ‘Oil Review’ is pleased to have been appointed as Official Media Partner for what is certain to be the largest ever oil and gas event in this exciting but grossly underdeveloped energy-producing and –potential country. ■

“Unique access to Iraq’s oil and gas sector” is promised by the experienced team of joint organisers. * Call the Event Directors on +90 212 356 0056 (1166 or 1162) or e-mail info@basraoilgas.com

S11 ORME 7 2012 Basra_Layout 1 24/10/2012 17:09 Page 71

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Basra Oil and Gas has strong backing THE THIRD BASRA Oil and Gas show has strong support and both Mott MacDonald and Invensys Operations Management explained why they are supporting the show.

Mott MacDonald has been involved with the Basra Oil and Gas event since its inception in 2010 and the company will be Platinum Sponsor for the third year running at this year’s event.

“The event offers a good balance between networking opportunities, industry insights and expert discussions at the conference,” said Charles Ellinas, managing director Oil, Gas and Petrochemicals Mott MacDonald.

“We would like to showcase how our firm has been continually present in Iraq for the past 60 years and how over 1,000 projects delivered in the last eight years won us an important recognition from British Expertise” added Ellinas.

Mott MacDonald will be holding an expert-led session on current EIA practice in the oil and gas sector in Southern Iraq which Del Vecchio expects will be well attended. The reason why this event is so key is that “Basra is the focal point of the energy industry in Iraq and we are confident it will become soon one of the oil capitals in the world,” said Del Vecchio.

The company has recently been expanding their presence in the country with the addition of new offices in Basra city and Erbil. As Ellinas explained, “Being close to our business partners means that we can better support their needs.”

Invensys “Invensys has been present in Iraq primarily through our leading brand Foxboro for a few decades now. Customer contact forums like the Basra Oil and Gas Show form a key part of our Go to Market Strategy in Iraq and this is the second trade show we are attending this year in Iraq,” said Wael Konsowa, country manager – Iraq, Invensys Operations Management Invensys will be exhibiting the EYESIM Immersive Training system that uses next-generation of virtual reality gaming technology to apply to reallife challenges. Eyesim is used extensively for operator initiation training; update health & safety procedures with standardised documented processes and gain consistency across operations. The company will also use this opportunity to showcase the latest updates from the Triconex and Foxboro range of products and solutions.

Iraq’s communications sector maturing AS THE DUST of conflict continues to settle, the communications sector in Iraq is improving and Kevin Thorley, chief executive officer Middle East at UK-based Hermes Datacomms is optimistic about the future and the advantages it can bring to the oil and gas industry in Iraq.

Hermes Datacomms, an expanding communications company, supplies VSAT communication needs both onshore and offshore and in remote locations for oil and gas exploration.

Thorley spoke to Oil Review about the maturing of Iraq’s communications sector over the last few years and highlighted how the country’s improving IT infrastructure is helping making VSAT services a reality.

He noted, “Iraq is now starting to catch up and things have developed quite quickly.

We are starting to be able to deliver fibre and last mile access, in addition to VSAT services” Over the last three to four years there were only limited abilities to make international calls, obtain broadband internet access and operate through corporate networks.

But this has started to change and for providers like Hermes Datacomms, which offer satellite communications there is now the opportunity to provide fibre.

“The fibre option is developing quite quickly inside the country and we have been able to put in a few fibre connections for corporate companies,” said Thorley.

Hermes Datacomms deals with a lot of the big corporate oil and gas companies in Iraq, including American and UK clients.

Thorley explained that the main demand

72 Oil Review Middle East Issue Seven 2012

from corporate clients there is the ability to be able to provide connections to their corporate networks throughout the world, enabling them to drop into Europe or the US with voice.

This demand was “creating opportunities for companies like Hermes to provide fibre and VSAT services.”

Iraq through and through To support this much-needed internal and external communications growth in Iraq Hermes Datacomms was awarded a trading licence in the strategic southern port city of Basra in late 2011.

Thorley emphasised the importance of having a registered office in Iraq. “It has proved to be very valuable and has allowed us to employ local Iraqis and has given us the ability to get vital equipment into the country.”

The importance of being able to get assets into Iraq is a significant advantage that the UK company has some of its competitors and Thorley noted that the firm has been able to get equipment shipped from the UK in country within ten days.

The majority of Hermes Datacomms work takes place in Southern Iraq where most of the major oil companies are operating.

“We have our main office in Basra city and we also have an office on the Rumaila oil field working with one of our biggest customers,” Thorley added.

Hermes Datacomms is in the process of upgrading and expanding its staff in Iraq and is looking to bring on new people. The UK-based firm has employed their our own Iraqi engineers and has recently appointed

two expats, now working back-to-back training these local engineers to work within the oil and gas industry.

“The Iraqi authorities have been very supportive and we also have taken on an Iraqi country manager as our task here is all about investment in the Iraqi market.”

Hermes Datacomms also works in Northern Iraq where they have some international customers. It has already applied for a licence in the Kurdistan region of Iraq and the registered company is due to be opened there by the end of the year.

Global support Hermes Datacomms has been operating in the region for over ten years and is headquartered in the UK. There are around 20 people working in Dubai mainly as a support role for the company’s expanding Iraq operation.

Customers have access to a 24/7 service centre which provides support and ensures a reliable and highly efficient service at all times.

Thorley explained that oil and gas companies operating in post war Iraq are looking for integrated solutions, adding “we can offer that as we provide full service with an established office, 24/7 local engineering support and in country stock.”

Thorley is very positive about the next five years in Iraq, where he predicts that in a few years they will be able to replace wireless services. The task of doing this will be tough and complicated, but he is willing to name a five year deadline for it to be complete.

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S12 ORME 7 2012 Adipec 01_Layout 1 24/10/2012 17:14 Page 74

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S12 ORME 7 2012 Adipec 01_Layout 1 24/10/2012 17:14 Page 75

The 15th Abu Dhabi International Petroleum Exhibition & Conference opens on 11 November. Having now become an annual event, this year’s edition has a number of new features, including an extended range of outdoor exhibits.

ADIPEC focuses on sustainable

energy growth T

HIS YEAR’S EDITION of the region’s largest oil/gas trade exhibition and technical conference runs in Abu Dhabi from 11-14 November. In an exclusive interview (on the following pages), dmg :: events’ Commercial Director – Energy, Kimon Alexandrou, pointed out that a number of groundbreaking events are being introduced this year. These include individual GCC country briefings for companies new to doing business in the region, and a fascinating look at the UAE’s oil industry from its distant beginning in the last century.

He also stressed the international nature of all ADIPEC get-togethers and the excellent links that have built up with the administrators of the splendid new ADNEC centre.

Outdoor area This year, ADIPEC will include a much extended outdoor area in which offshore and other marine products will be featured for the first time. Core company activities on show at the exhibition this year will include: 6 Drilling, exploration, production, refining 6 Well completion and logging 6 Offshore and marine activities 6 Well equipment services 6 HSE issues 6 Pumps and compressors 6 Safety and security 6 Storage and transport 6 Pipeline products, technology and services 6 Valves and actuators 6 Ships, workboats and other vessels 6 Process plant and machinery 6 Engineering, maintenance and repair 6 EOR systems 6 Lifting equipment of all types More than 1,500 individual trade exhibitors are expected this record 15th year, coming from 90 countries other than the host nation itself. There will be 14 national pavilions. A total of more than 50,000 visitors are expected to come through the gates during the four day exhibition.

“ADIPEC is the destination where oil and gas industry professionals get together to experience, discover, network, discuss and debate core industry issues,” said dmg. “It also features the biggest attendance of NOCs and IOCs of any event in the region.”

On the theme of ‘Sustainable energy growth: People, responsibility and innovation’ the SPEorganised technical conference organised

“ADIPEC is the destination where oil and gas industry professionals get together to experience, discover, network, discuss and debate core industry issues” alongside at ADIPEC is always a landmark event in the international oil and gas industry’s busy calendar. It is also the largest anywhere in the entire Middle East region.

Key speakers Under the chairmanship of ADMA-OPCO’s Ali Al Jarwan, key speakers this year will include Bob Dudley of BP, Christophe de Margerie of Total and Hirobumi Kawano of Japan’s JOGMEC. 50 technical sessions in seven simultaneous streams are being administered in 2012, alongside the usual extensive selection of poster and other offerings.

Five different core disciplines – geosciences, field development, drilling and completion, projects, and

combined maintenance/integrity/HSE/operations – are being covered on the core days when the conference runs until 17.30. A full list of over 100 individual categories of topics, carefully scrutinised in advance by the Society of Petroleum Engineers in association with a special ADIPEC Technical Committee, can be found on the exhibition website under ‘Conference’.

More than 4,000 mostly international delegates are expected to attend the conference this year, and once again this will be an ideal opportunity to mingle with leading industry figures as well as to identify up and coming companies and technologies.

A separate PCIC (Petroleum & Chemical Industry Committee) conference is being held on 12 November within the ADNEC halls (www.pcicmiddle-east.com).

Having been a very successful biennial series organised in conjunction with the SPE, ADIPEC has now become an annual event, with a special gas-oriented edition running in the ADNEC Centre from 10-13 November 2013. The chairman on that occasion will be Mohammed Sahoo Al Suwardi of GASCO. n

For more information visit www.adipec.com Oil Review Middle East Issue Seven 2012 75

S12 ORME 7 2012 Adipec 01_Layout 1 24/10/2012 17:14 Page 76

Oil Review Middle East spoke to ADIPEC organiser, dmg :: events’ Commercial Director – Energy, Kimon Alexandrou

ADIPEC continues to experience

rapid growth How important is ADIPEC to the regional and global oil and gas industry?

ADIPEC is the leading oil and gas event for the Middle East and the world’s largest event outside of North America. With more than 58 per cent of the world’s oil reserves based in the Middle East, ADIPEC is a vital meeting place for the international oil and gas industry.

In additional to the large percentage of oil reserves within the region, the GCC alone has more than US$150bn worth of oil projects and US$74bn worth of gas projects in progress which makes ADIPEC the essential meeting place to network and source suppliers from an global market.

How international has ADIPEC become?

With 14 national pavilions, 60 countries represented across 1,600 exhibitors and 45,500 attendees coming from 90 different countries, this makes ADIPEC a truly international event. All the major IOC’s, NOC’s and service suppliers will also be in attendance at ADIPEC and I think it is safe to say that ADIPEC has the largest gathering of NOC’s, IOC’s and service suppliers for an event of it’s kind.

How will the major theme of the show be conveyed?

ADIPEC traditionally run’s under a theme that meets the pressing needs of the industry at that time. Currently an important issue affecting the global oil and gas industry evolves around the sustainability of the growth in energy consumption. Therefore, the theme of the ADIPEC 2012 conference is ‘Sustainable Energy Growth: People, Responsibility and Innovation’.

Organised in conjunction with the Society of Petroleum Engineers (SPE), this year’s programme has been designed to examine a range of best practices as well as cutting-edge technology solutions aimed at meeting

“An important issue affecting the global oil and gas industry evolves around the sustainability of the growth in energy consumption”

76 Oil Review Middle East Issue Seven 2012

Kimon Alexandrou

present and future challenges in the oil and gas industry. With all the challenges we now face right from the extraction of oil to new environmental challenges, we feel that now is the time to debate and discuss such issues. The topic and content has led to the largest ever conference programme being put together which includes: more than 400 papers selected from the 1,500 submissions, 235 speakers presenting in 50 technical sessions.

The two executive plenary sessions on the first day form an opportunity to hear senior oil company executives discussing the vital elements of sustainable industry growth and sharing insights on new strategies. Following the executive plenary sessions, five panel sessions will take place, debating key topics such as ‘Meeting the world’s needs for energy’, ‘Human capital preparations key to future industry success’, ‘Unconventional oil and gas development’, ‘Can gas resources alone respond to growth aspirations?,’ and ‘Sustainability, environmental improvements and CSR’.

S12 ORME 7 2012 Adipec 01_Layout 1 24/10/2012 17:14 Page 77

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How much has the show expanded from two years ago?

In 2010, ADIPEC covered 35,000 sqm of exhibition, had 1,500 exhibitors and 45,500 attendees. For 2012, ADIPEC has grown to 38,000 sqm (a 15 per cent increase), 1,600 exhibitors and we expect to welcome more than 50,000 attendees through the doors. I think it is fair to say that these figures are quite an achievement and a testament to the importance ADIPEC has for the worldwide oil and gas industry.

Since 2010, we have been working hard to get the message out to the market that, outside of North America, ADIPEC is the largest event for the industry and with the introduction of the new outdoor exhibits and offshore halls, plus the fact that we still have more than 100 exhibitors on the waiting list, exhibitors have recognised the importance of ADIPEC. To this extent, we have reached a milestone in ADIPEC’s history. As from 2013, ADIPEC will become an annual event meaning that our exhibitors can benefit from the business opportunities ADIPEC brings on a yearly basis rather than waiting every other year.

What were the biggest challenges you faced in preparing for this year’s show?

ADIPEC’s biggest challenge has been to try and accommodate so many exhibitors. With 38,000 sqm, which includes a new outdoor sector, ADIPEC now takes up all of the space at ADNEC and has no more space to grow into. This is why we have more than 100 exhibitors on a waiting list and why we are becoming an annual event. Even being in a state of the art venue like ADNEC, who are constantly improving their facilities and expanding, they cannot keep pace with the growth of ADIPEC! In addition to this, we had to ensure we created the largest and best conference programme line-up for our 4,000 delegates. We received more than 1,500 paper submissions from 58 countries, representing 117 companies – the highest number ever! Trying to whittle this number down to a manageable level and select the best papers submitted was an extremely difficult task and a task that was undertaken by our event committee which was led under the chairmanship of Mr Ali Al Jarwan, CEO of ADMA-OPCO. There are even a further 200 ‘poster sessions’ for papers that couldn’t get included but were still worthy of some kind of representation during the conference.

What are the main new additions to ADIPEC in 2012?

As the industry evolves, so does ADIPEC. You will see several new features at this year’s ADIPEC from a new outdoor exhibits area to the country’s first public display of historical oil and gas artefacts.

With the new outdoor exhibits and offshore tents we have been able to expand to our current size and cater for the increase in demand. Within these new areas, you can see over 100 companies showcasing the latest equipment and machinery for the oil and gas industry.

A feature that we are very proud to have put together, and a first for the UAE, will be the ADIPEC Museum. Archiving the achievements of the UAE oil and gas industry from the 1930’s through to the modern day, the ADIPEC

“The ADIPEC Museum will include artefacts, such as the very first signed oil concession agreement, which have never been on public display before” Museum will include artefacts, such as the very first signed oil concession agreement, which have never been on public display before.

In addition, this year’s exhibition brings the region to Abu Dhabi with the introduction of ADIPEC briefings featuring key industry figures and companies.

The country briefings will serve as a key platform to assist international businesses in entering regional markets, while promoting awareness of local regulations, trends and best practices. Countries in focus include the UAE, Saudi Arabia, Qatar, Kuwait and Iraq.

Finally ADIPEC is introducing a new, business class facility exclusively for invited senior oil and gas professionals. The Middle East Petroleum Club will be a dedicated building where invited guests can network and relax outside of the busy exhibition area.

How important has ADNEC being to the growing success of ADIPEC over the years?

ADNEC has been vital to the recent growth of ADIPEC. The new venue opened in 2008 which offered ADIPEC the opportunity to grow from 16,000 sqm in 2006 to 30,000 sqm in 2008. Since then, as the venue expanded and opened up more space, ADIPEC has been able to continually grow to the 38,000 sqm it now stands at. Without these state of the art facilities, ADIPEC would not have been able to reach its current status as the largest event in the Middle East for the oil and gas industry..

ADNOC and its group of companies have supported ADIPEC from the start, how important has this relationship being to the growth of ADIPEC? ADNOC and its group of companies have been important supporters from ADIPEC’s early days. As one of the region’s most important NOCs, the support of ADNOC has demonstrated the seriousness in which they regard ADIPEC as the region’s leading oil and gas event. The continued support of the group’s CEO’s – with Mr Ali Al Jarwan, CEO of ADMA-OPCO, Chairman for 2012, and Mr Mohammed Sahoo Al Suwaidi, CEO of GASCO, Chairman for 2013 – the ADIPEC and ADNOC relationship continues to grow along with the event.

What do you think will be this year’s biggest achievement?

Our biggest achievement this year will be surviving the event! If we can cater for more exhibitors, more visitors and more features than ever before then that will be a monumental achievement. We are a new team, working with new clients and new supporters and new features and I am looking forward to it all coming together and being the success we all hope and expect it to be. n

Dow’s advanced oil and gas chemistry solutions to be showcased WITH A PRESENCE in the oilfield since the 1920s, Dow prides itself on providing advanced, chemistry-based solutions to the global oil and gas industry. Today, Dow Oil & Gas utilises its market knowledge, chemistry expertise and advanced innovation capabilities to meet customers’ needs across the oil and gas value chain – from exploration, production, enhanced oil recovery (EOR) and oil and gas transmission, to refining and gas processing. With more than 40 years in production chemistry and more than 1,000 global references in gas treating, Dow Oil & Gas is committed to using chemistry and

78 Oil Review Middle East Issue Seven 2012

innovation to help solve the biggest challenges facing the oil and gas industry – focusing on maximising supply, optimising efficiencies, and minimising emissions.

This year, Dow will be bringing its entire range of world-class solutions to the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC).

Dow’s delegation to ADIPEC this year will be led by Larry Ryan, General Manager for Dow Oil & Gas. Larry joined Dow in September 2011 and is responsible for leading Dow’s global participation in this growing market. Prior to joining Dow, Larry served as Global Manager for Water

Treatment at Halliburton Energy Services, as well as the Chief Executive Officer of SulphCo Inc. from 2007 until joining Halliburton.

Dow’s advanced chemistry solutions for the oil and gas industry – from exploration and production to refining and gas processing – will be on display at ADIPEC 2012, with featured offerings including: NEPTUNE™ Advanced Subsea Flow Assurance Insulation; AQUCAR™ Microbiocides; Amine Programme and UCARSOL™ Specialty Solvents, among others. Dow will be located in Hall 5, Stand 5000 at ADNEC.

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By making use of flow back and produced water, Halliburton has devised innovative new treatment technologies to deliver high-quality water for use in fracking.

Ensuring sustainable water usage for

fracturing operations I

N 2002 THE expected gas recovery from shale drilling ventures was about two per cent. Now that stands at just under 50 per cent. Every new technology impacts the estimated production numbers in a positive way.

The original two per cent recovery estimate was anchored to the technology available at the time horizontal drilling was comparatively rare and hydraulic fracturing was limited to enhancing production from conventional wells and familiar formation types.

Since then, these two complementary operations have been put to work in what was originally a very difficult hydrocarbon extraction job â&#x20AC;&#x201C; production from shale. Horizontal wells now extend for hundreds of metres through the payzone.

Specialised hydraulic fracturing techniques and fluids have been designed for shale oil and gas recovery. The basic physics of hydraulic fracturing, however, continue to work in much the same way: fracturing fluid is pumped into a wellbore at a rate, calculated to increase the downhole pressure enough to fracture rock in the formation. When the formation cracks, fracturing fluid enters and extends the crack further into the formation. Some type of proppant is carried by the fracturing fluid so that the fractures remain open and serve as channels for oil and gas production.

The concept is simple, but the successful execution requires a good understanding of the reservoir, the mechanical systems needed to open the formation to accept the fluids/proppants and then deliver high rates of hydrocarbons for a long sustained period making the operations highly profitable. One thread that links all three concerns is water.

By some estimates, oil and gas drilling and production in the US alone requires the management of over 20bn barrels of water each year. This includes water used purposefully in drilling and completions operations as well as

80 Oil Review Middle East Issue Seven 2012

A poorly designed fracturing fluid can result in impact to the production of the reservoir and impair or halt production management of water produced in conjunction with oil and gas. Much of the produced water is used in reservoir pressure maintenance operations, but up to 40 per cent of all produced water requires disposal and is either injected into a disposal well, or treated sufficiently to be considered for reuse or discharge. In any case, oilfield operators understand that the fate of that water is their responsibility, and it cannot be neglected.

On average, the drilling and hydraulic fracturing of a horizontal shale well requires between 45,000 and 120,000 bbl of water. Securing the thousands of barrels of water needed for a single fracturing operation is increasingly difficult, especially in water-scarce regions and on remote wellsites where water must be trucked or piped in. The water supply for fracturing operations comes from pits, ponds, tanks, pipelines, vessels, municipalities, groundwater wells, streams, and increasingly, from the thousands of barrels of produced water that flows back throughout the lifecycle of a well in addition to the fracturing fluid flow back.

In addition, the water used to make up the volume needed for a typical fracturing operation may come from multiple sources, each of varying quality. The water from these sources may be added at variable rates and volumes as the fracturing fluid is blended. One of the most preferred water sources for hydraulic fracturing operations if fresh water is not available is produced water from existing wells, as the water chemistry of produced water is fairly consistent. Also, seawater and brackish

groundwaters can be used as source water for hydraulic fracturing fluids.

Efficient water use and re-use is critical to sustained oil and gas operations. Trucking water to a treatment facility, where it may require extensive remediation before it can be discharged or reused, is costly and complicated. Water is often stored in rough-and-ready places, like earthen pits or rental frac tanks. The conditions are right for stagnation and contamination, both at the surface and downhole.

During the fracturing operation, the fluid that arrives in the blender moments before it is pumped downhole must be treated to meet three important requirements: 6 Bacteria control. Bacteria can flourish downhole, produce H2S and form slimy biofilms that promote corrosion.

6 Friction reduction. Addition of friction reducer so that high rate pumping can be achieved without excessive pump pressures.

6 Fracture effectiveness. Complex fracture fluid formulation chemistry requirements are attained.

Scale and corrosion inhibitors may also be part of the mix, along with oxygen scavengers and clay stabilisers.

A poorly designed fracturing fluid can result in impact to the production of the reservoir and impair or halt production. However, not all problems are caused by insufficient fracturing treatment design or execution. Even the most widely used treatments can be flawed by interactions between chemical additives, or between incompatibilities between the water source and the chemical additives. Some failures may be the result of bacterial proliferation and may not be detected until flowback testing reveals unexpectedly high bacterial counts.

These concerns have motivated operators to evaluate disinfection options carefully, with a view to reducing or eliminating reliance on

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chemicals. Halliburton, the industry leader in fracturing operations, has recently introduced two water treatment options that can help prevent the types of problems described above while providing excellent water quality for use in a range of oilfield operations: CleanStream® Service and CleanWave® water treatment system.

CleanStream Service CleanStream service uses ultraviolet (UV) light to control bacteria in fracturing fluids, reducing the amount of biocides required. The process is applied at fracturing rates up to 100 bbl/min, and the on-the-fly treatment takes place inside a mobile unit located between the source water tanks and the blender.

In some cases, UV light can be a direct substitute for chemical biocide.

Testing and quality control for treated water have the same protocols as chemical biocides, so direct comparisons are possible. Field testing to date has shown a 99.9 per cent effective bacteria reduction when using CleanStream service. The ability to reduce or eliminate the use of chemical biocides leads to fewer chemicals on location, and may also minimise compatibility issues that can arise when multiple fracturing fluid additives are in use.

The use of UV light for disinfection and bacteria control is commonplace in hospitals, food processing and water treatment industries. The cellular DNA of microorganisms like bacteria absorbs the energy from the UV light, causing damage to their DNA structure. This damage interferes with many cellular processes including protein synthesis. The replication of the chromosome prior to reproduction is impaired, leaving the bacteria unable to produce proteins or replicate. This is important as a means to minimise any bacterial recovery or growth downhole.

Quality control testing is performed continuously during the treatment process to ensure effective disinfection is taking place.

Typically, for every barrel of oil produced, up to three barrels of water may be produced. Between 10 per cent and 40 per cent of the fluid volume used in fracturing flows back during the subsequent clean-up and sometimes it can be more in the 30 per cent range if you are dealing with shale hydraulic fracturing.

CleanWave service treats flowback and produced water for use as fracturing fluid. The water treatment results in a clear brine that, when combined with Halliburton’s extensive fluid chemistry expertise, minimises dependency on fresh water. Trucking and disposal costs can be reduced producing net economic and environmental benefits to the operator and the community at large.

The CleanWave service features a mobile electrocoagulation system that uses electricity to treat flowback and produced water at rates up 20 bbl/min and 26,000 bbl/day, with minimal power usage, assuming a 20 hour per day operation,. The system destabilises and coagulates the suspended colloidal matter in water, including solids, hydrocarbons and some heavy metals found in produced water. When water passes through the electrocoagulation cells, the anodic process releases positively charged ions, which bind onto the negatively charged colloidal particles suspended in water resulting in coagulation. At the same time gas bubbles produced at the cathode attach to the coagulated matter causing it to float to the surface where it is removed by a surface skimmer. Heavier coagulants sink to the bottom, leaving access to clear water that is suitable for use in drilling and completion operations.

The CleanWave system performs to the standards commonly applied in industrial water treatment. It can reduce Total Suspended Solids (TSS), hydrocarbons, heavy metals and iron by 95-99 per cent.

It is well-suited for oilfield applications because it breaks emulsions, removes some heavy metals, and reduces sludge accumulation. Operation is automated and the system is scalable to match the scope of the operation. The mobile unit features a patented process to minimise fouling on the anodes by the reversing of polarity at the anodes as well as managing flow distribution of water across the anode cells. Manpower requirements are low, requiring only a single operator per shift. Halliburton has successfully deployed this in the field and has treated produced water of 280,000 mg/L TDS, used that treated water in subsequent hydraulic fracturing operations.

As water becomes increasingly scarce and environmental regulations become tighter, the CleanStream® and CleanWave® service offerings provide the functionality operators need to reduce their dependence on fresh water. n

82 Oil Review Middle East Issue Seven 2012

S13 ORME 7 2012 Adipec 02_Layout 1 24/10/2012 17:17 Page 83

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HB Rentals to display innovative accommodation units at ADIPEC HB RENTALS, a global leader in offshore A60 accommodation, is marking its continuing commitment to the Middle East by exhibiting a selection of its latest innovative units at this year’s ADIPEC. With an 18-month-old base in Dubai, HB Rentals has been a regular participant at ADIPEC and in 2012 the company has once again taken a significant display area at the show.

HB Rentals will be showcasing its A60 accommodation units and ATEX zone 1 cabins – giving visitors the chance to step inside the containers and see first hand how they are used.

Visitors to the HB Rentals stand can also talk to a representative about their needs and the solutions offered by the company.

HB Rentals uses A60 pressurised safe area classified accommodation units for offshore accommodation, including zone 1 and zone 2 pressurised cabins. All units go through rigorous international safety regulations meaning that they can be used almost anywhere in the world.

The company specialises in the supply of offshore living quarters, permanent additional accommodation as well as galley, mess rooms,

laundries, offices, laboratories, recreation rooms, locker rooms, toilets, washrooms, laboratories offices, logging and control rooms. Customisations can include stairways, walkways, sewage systems, fresh water systems, power generators and water pumps – offering clients exactly what they need without a ‘one solution fits all’ approach. HB Rentals will also, for example, liaise with temporary power suppliers to make the process even easier for the client.

2012 has proved a fruitful year in the Middle East for HB Rentals, with a flurry of significant account wins including McDermott International, Abu Dhabi-based National Petroleum Construction Company (NPCC), liftboat provider, Hercules Offshore, Al Jaber, GMS and Earth.

“ADIPEC gives us the perfect chance to show potential customers why we differ from our competitors. As a turnkey service provider we have international bases and manufacturing capabilities, said Michael Bradley, director of sales and business development at HB Rentals.

“We also offer for rental water making plants, sewage systems, pumps, tanks, stairways and

walkways, lighting towers, power distribution panels, power generators.

We offer our clients the option to hand over the complete project to HB Rentals from survey and design through Mike Bradley at HB Rentals to manufacture / rental installation hook-up and commissioning.

“We’re not looking for quick-win contracts and that’s so important in this region. We know that business is about developing long-term relationships and showing that we’re flexible, innovative, proactive and customer-orientated.

“2012 is proving to be a great year for us.

Since the expansion into the Middle East we have quadrupled the size of our fleet and we expect further growth by the end of the year.

This year we are looking for a new operations base – one we can call our own – and we plan to move in by Q1 2013.”

HB Rentals will appear at ADIPEC on stand G520 in the Offshore & Marine hall.

Oil Review Middle East Issue Seven 2012 85

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In an interview with Gary Sykes, ConocoPhillips Qatar President, Oil Review discussed the recent developments in both the company and its venture in Qatar.

ConocoPhillips continues its

Qatari E&P C

ONOCOPHILLIPS IS one of the world’s largest independent energy companies in the field of exploration and production (E&P), as based on proved reserves and production of liquids and natural gas.

It explores for, produces, transports and markets crude oil, natural gas, natural gas liquids, liquefied natural gas and bitumen on a worldwide basis, with operations in 30 countries. In Qatar, ConocoPhillips, holds a 30 per cent interest in the world-class Qatargas3 LNG project in Ras Laffan Industrial City.

It also operates its Global Water Sustainability Centre in the Qatar Science and Technology Park, which focuses on innovative solutions to treat byproduct water from the oil and gas industry as well as desalination, recycling, awareness and conservation. Gary Sykes, ConocoPhillips Qatar President, discussed with Oil Review the company’s operations both globally and in Qatar.

ConocoPhillips has witnessed some interesting structural changes in the last year. Can you please tell us more about those changes and what are their implications for the company and its operations worldwide and in Qatar?

Sykes: On May 1, 2012, ConocoPhillips completed its repositioning into two independent companies through the spinoff of its downstream businesses to a new company, Phillips 66. Our vision is to be the Exploration and Production (E&P) company of choice for all stakeholders, by pioneering a new standard of excellence.

Key focus areas for our present activities include safely operating producing assets in North America, Europe, Asia and Australia; growing North American shale and oil sands businesses; executing a number of major international development projects; and building a global exploration programme. In this context, our operations are quite extensive as we conduct exploration activities in 19 countries and produce hydrocarbons in 13 countries, with proved reserves located in 15 countries as of Dec. 31, 2011.

We truly believe that we are absolutely unique and our position is uncharted. We represent a new class of investment – one that will strive to achieve the growth of an “independent” with the returns and yield of a “major.” We want to show the marketplace that this can be done. As the world’s largest independent E&P company, in terms of production and reserves, we are positioned to compete in a truly unique way. We have laid out a long-term plan for growth, financial returns and a

86 Oil Review Middle East Issue Seven 2012

“As the world’s largest independent E&P company, in terms of production and reserves, we are positioned to compete in a truly unique way” sector-leading yield. Our focus is to execute and deliver on this formula through the inevitable price cycles. When we do, we will be unlike any other E&P company, and the market will reward us.

What about ConocoPhillips’ employees spread all over the world? To what extent have the changes in the company impacted them?

Sykes: We strongly believe that it’s important that we are all pulling in the same direction and that every employee knows what to focus on and how to contribute to the company’s success. As such, ConocoPhillips uses its pioneering SPIRIT to responsibly deliver energy to the world. The company conducts its business to return maximum value to shareholders while utilising a wealth of knowledge and resources from its employees and acting responsibly in all communities in which it operates. Our highly skilled and dedicated workforce of more than 16,500 employees embraces this opportunity.

We have a chance to do something very impactful – change our culture. As we seek to do this, our goal is not necessarily to create the culture of an independent, but rather the culture of an independent ConocoPhillips. This is a subtle, but important, distinction. We want the best of our legacy – like SPIRIT Values – but we also want to be able to move faster and unlock the potential of our people. We strongly believe that our culture will be values-based, performance- and results-driven, focused and aligned, efficient and non-bureaucratic as well as empowered and collaborative, inspired and fun. At ConocoPhillips, we attribute our success primarily to the dedication and capabilities of our people around the world. Our SPIRIT values, coupled with the talent and drive of our employees, offer ConocoPhillips a distinct competitive advantage. We strive to provide our employees with a compelling place to work and the opportunity to develop their careers. ConocoPhillips’ SPIRIT Values – which stand for Safety, People, Integrity, Responsibility, Innovation and Team work set the tone for how we behave with all our stakeholders, internally and externally. They are

Gary Sykes, ConocoPhillips Qatar President

shared by everyone in our organisation and recognised throughout the industry. They distinguish us from our competitors. They are a source of pride.

Moreover, ConocoPhillips is committed to contributing to social, economic and environmental improvements in all the communities in which it operates. The company is currently funding numerous environmental, social, health and education programs around the world including Qatar, where we recently partnered with Hamad Medical Corporate for a major public health and safety campaign.

What about your investments and operations in Qatar?

Sykes: Historically, we have been one of the first international oil and gas companies to support Qatar’s drive to develop its LNG industry as envisioned by HH the Emir of the State of Qatar, Sheikh Hamad bin Khalifa Al-Thani. In 2003, ConocoPhillips and Qatar Petroleum signed a Heads of Agreement to develop Qatargas 3, a large-scale LNG project in Ras Lafan Industrial City, Qatar. At present, ConocoPhillips holds a 30 per cent interest in this integrated project which comprises upstream natural gas production facilities to produce approximately 1.4 gross billion cubic feet per day (BCFD) of natural gas over the 25-year life of the project. The project also includes an LNG facility that produces 7.8mn gross tons per year. The first LNG cargoes were loaded in November of 2010. The

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AVEVA design, engineering and enterprise software Building Reputations Owner Operators, engineering contractors and shipbuilders the world over trust AVEVA to create and operate the most complex engineering assets.

We empower our customers to make thousands of accurate design, engineering and business decisions every day, across the entire project and asset lifecycle. You too can benefit from improved productivity, minimised risk and reduced costs, resulting in maximised ROI. The leader in design, engineering and information management software for the process plant, power and marine industries, AVEVA invests in our customers’ success through a global sales and support network in more than 40 countries.

AVEVA – building solid reputations for 45 years

www.aveva.com | middle.east@aveva.com

Visit us at

in Hall 7, Stand 7127

S14 ORME 7 2012 Adipec 03_Layout 1 24/10/2012 17:48 Page 88

ConocoPhillips’ Global Water Sustainability Centre

LNG carriers are owned by Qatargas Transport Co. (Nakilat) and time chartered to Qatargas 3. In order

“Historically, we have been one of the first international oil and gas companies to support Qatar’s drive to develop its LNG industry” to capture cost savings, Qatargas 3 executed the development of the onshore and offshore assets as a single integrated project with Qatargas 4. This

88 Oil Review Middle East Issue Seven 2012

included the joint development of offshore facilities situated in a common offshore block in the North field. The joint venture mega train (Train 6), one of ConocoPhillips’ key assets, is part of the world’s largest LNG complex.

Did the company adopt any research and development ventures in support of its operations in Qatar?

Sykes: We did do that, but with an eye not only on Qatar but on benefiting our operations worldwide as well the industry as a whole. In 2010, we established the ConocoPhillips Global Water Sustainability Centre at the Qatar Science and

Technology Park. The centre examines ways of treating and recycling by-product water from oil and gas production operations, as well as other projects related to industrial and municipal water sustainability. It has been designated as ConocoPhillips’ worldwide centre of excellence for water-related technologies, disseminating findings to the company’s global operations, as well as to local government and industry partners. The interactive visitor centre promotes water conservation awareness. GWSC has achieved remarkable success in the only two years, with registered patents in its name as well as recognition awards from the Qatar foundation for Education, Science and Community Development. It is also in extensive cooperation with leading educational institutions in Qatar including Qatar University, Qatar Foundation and Texas A&M University. We have every faith that GWSC will further foster its very important role in the field to the benefit of the State of Qatar and our industry. n

Gary Sykes is president for ConocoPhillips Qatar. A petroleum engineer, Sykes was appointed president, ConocoPhillips Qatar in May 2012. Previously, he served as vice president for Canadian Arctic, ConocoPhillips Canada, where he was responsible for the company’s northern Canadian assets. Sykes began his career with Conoco in 1990.

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ADIPEC

MERLIN Mark 4 Tube Inspection is a new development from Cokebusters, which the company says combines the latest advances in miniaturised acoustic technology.

Furnace process

tube inspection D

The Mark 4 Merlin inspection PIG

EVELOPED FROM A series of International Patent applications from May 2000, the Mark 4 entered commercial service in September 2011.

Currently, the priority focus is the detection of anomalies and surface degradation in oil refinery fired heater tubes whose diameters range between 2.9 and 10 inches. MERLIN Inspection compliments the service of Cokebustersâ&#x20AC;&#x2122; mechanical decoking.

MERLIN technology uses an untethered pipeline PIG propelled in a controlled manner through the process tubes of a fired heater by a continuous flow of water supplied by the same Cokebusters pumping machinery as used for mechanical decoking.

The PIG itself is of carbon fibre construction, fitted with highly sensitive ultrasonic probes fixed around its body.

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Revolutionary Driven at low velocity, the PIG is capable of navigating short radius u-bends and various tube diameters with ease.

Through acoustic scanning, accurate wall thickness and internal radius dimensions are captured and stored at rates in excess of 5,000 measurements per second.

According to Cokebusters, MERLIN technology offers a revolutionary step change from traditional hand-held NDT inspection methods, giving refiners several days of time saved whilst simultaneously massively increasing valuable data on tube degradation trends.

Once decoked and cleaned, a typical fired heater process coil can be scanned in just 15 minutes. From recovery of the device, on-board data is uploaded onto a PC to be automatically organised and mapped.

Within minutes, a tube general arrangement drawing is available on-screen, providing information on location and nature of tube wall condition anomalies.

This time efficient process promptly presents irregularities in process tubes to be identified and flagged to refinery engineers.

Cokebusters mechanical decoking of process tubes in a typical fired heater can be carried out within a period of 48 hours - oil to oil.

Using MERLIN Inspection in combined service adds only two hours per process pass/coil. All technicians are colleagues so a seamless exchange from decoking to inspection can be readily managed without delays.

90 Oil Review Middle East Issue Seven 2012

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Clearly, if refiners can be encouraged to invest in increasing awareness of process tube degradation, there are benefits all around MERLIN software is apparently capable of automatically mapping the obtained data to an accurately scaled drawing of the tube coil, presenting visual displays of familiar tube cross sections with 2D and 3D imagery.

From a single mobilisation of personnel and specialist equipment, time and cost savings are clear.

Asset value Cokebusters technicians present the client with a detailed inspection report before leaving the site, analysing any impact on tube life.

As a consequence, the refinery client maximises asset value, with the opportunity to adjust feedstock and extend service life.

With equipment costs and refinery productivity even more critical in todayâ&#x20AC;&#x2122;s economic climate, the timing of heater re-tubing is a key decision.

To avoid wasted expenditure, optimisation of re-

tubing schedules is vital, being only achieved by implementing decisions based upon reliable scientific analysis. This new approach in heater management can accurately assess tube condition so that replacement is planned well in advance, with productivity interruptions kept to a minimum.

The favoured deterministic technique to assess remaining life for fired heater tubes is the API 579 Omega approach, based on stress-rupture (Larson-Miller).

By utilising data obtained from a MERLIN inspection, the remaining life of heater tubes can be determined. If an oil refinery invests in more accurate knowledge of its fired equipment, it follows that risk can be quantified and reduced. In turn, this can present considerable benefits for insurances as well as refining productivity.

Consultation with the London Insurance Industry has opened further this issue of risk management in terms of its potential benefit to Insurers.

Clearly, if refiners can be encouraged to invest in increasing awareness of process tube degradation, there are benefits all around. It is an easy logic to see that the insurance industry has a vested interest in promoting regular assessment of process equipment.

Accordingly, the refinery which takes this modern route to apply the latest scientific procedures is the refinery which presents less risk, and in return sees significant cost benefits. â&#x2013;

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in i n t teg eg g grity ty y saffety saf f tyy fe k mw work wo rk nsi sib ib bilit illitittyyteam ConocoPhillips, onocoPhillips, oour ur sspirit pirit hhas as ffueled ueled oour ur ssuccess. uccess. N Now ow w we’re e’re bbuilding uilding oon n oour ur Same Same name. nam me. S Same ame values. values. Ne New ew D Day! ay! At C core core values values of of safety, safety, people, people, integrity, integrity, responsibility, responsibility, innovation innovation and and teamwork teamwork to to create creatte a company company like like no no other. other. ConocoPhillips ConocoPhillips is is now now focused focused exclusively exclusively oon n exploration exploration aand nd pproduction. roduction. A Ass aan n iindustry ndustry lleader, eader, we we are are pioneering pioneering a new new standard standard ooff eexcellence. xcellence. With With a world-class world-class w workforce orkforce ooff more more than than 16,000 16,000 employees employees and and a legacy legacy of of strength, strength, we’re we’re excited excited about about our our future. future. But But even even as as we we embark embark on on this this new new journey, journey, the the way way we we do do bbusiness, usiness, tthe he w way ay w wee ssupport upport the the communities communities where where we we live live and and work work ... ... our our spirit spirit ... ... that’s that’s staying staying the the same. same. It’s It’s just just part part of of who who we we aare. re.

S14 ORME 7 2012 Adipec 03_Layout 1 24/10/2012 17:23 Page 92

A new era for gas measurement?

WITH THE OFFSHORE Division (OSD) setting a tough challenge in proposing a target of a 50 per cent reduction on the 2009/10 total of hydrocarbon releases (HCRs) and 94 per cent for year-end 2012/2013, there has never been a stronger focus on minimising future HCRs and other hazardous gas releases.

To help offshore companies achieve this, Dräger has developed a new product, the Dräger X-act 5000, which uses a unique new ‘pump concept’, which when used in conjunction with Dräger-Tubes, allows ‘spot-check’ measuring and sampling of gases – the first ever dual function of its kind.

This brand new technological advance will make life easier for those who operate in the oil and gas industry and routinely use gas detector tubes to test for potentially hazardous atmospheres. As well as speeding up the entire testing process of sampling and measuring potentially dangerous gases and air by up to 20 per cent, the state-of-the-art pump also eliminates operator error by automatically transferring and storing all measurement data, improving personal safety levels and efficiency.

Measurements and continuous detection of substances including hydrocarbons, hydrogen sulphide, benzene and oxygen depletion help to ensure personal and plant safety – and are continually under the spot light. Gas detection equipment is the first line of defence for measuring and detecting gas hazards in a range of offshore scenarios, including confined spaces (such as leg-working), tank testing and potentially explosive gas atmospheres.

Portable gas detection specialist, Kevin Honner from Draeger said: “Early feedback suggests that the new Dräger X-act 5000 is proving popular with our customers in the oil and gas industries, helping to transform the landscape of both short and long-term gas/air measurement and testing.”

Pentagon Freight Services at ADIPEC PENTAGON FREIGHT SERVICES LLC is part of the Pentagon Group operating on six continents, in 39 countries and 49 offices around the world.

Exhibiting at ADIPEC this year, Pentagon is a specialist logistics provider dedicated to the oil and gas industry. These locations are strategically chosen for their close proximity to our core business, servicing the oil, gas, mining and marine industries.

Pentagon offers freight and logistics expertise in the Middle East with its regional HQ at Jebel Ali and offices in Abu Dhabi, Ras Al Khaimah, Dubai Airport, DWC, Muscat, Doha, Basra, Erbil, Egypt as well as representative offices in Kuwait, Saudi and Bahrain.

Depsite the difficulties of doing business in Iraq, Pentagon's newly set up offices and warehousing storage facility both in Basra and Erbil show the company's logistic commitment to overcome challenges in support of major oil and gas projects throughout the GCC region. Pentagon offers expertise in the shipping, storage, inventory control and handling of land rigs, OCTG, Line Pipes and all associated oilfield and marine products. As oilfield specialists, Pentagon's staff has extensive product knowledge and experience thus providing accurate and quick responses which are vital to the industry. Pentagon's technical expertise and total transport services ensures the best possible operational plan for its clients' cargo throughout the duration of their projects. Pentagon Freight Services operates its own vessel, the M/V Thor Pioneer - a project cargo type vessel that is capable of heavy lifts up to 100mt - between UAE and Iraqi ports as well as other ports within the Gulf region.

Pentagon also offers a wide range of freight forwarding services such as supply chain solutions for projects, general forwarding, pipelines etc into ports across the region via air, sea and road.

Pentagon works closely with its clients to fully understand their business, their objectives and their expectations in order to provide optimum value and support. Pentagon is committed to surpassing expectations and continuously improving standards.

92 Oil Review Middle East Issue Seven 2012

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Baker Hughes continues to provide technologies designed specifically for unconventional applications and will be showcasing the latest additions to its advanced range at this year’s ADIPEC

Technology for unconventional

environments T

HE BAKER HUGHES AutoTrak™ Curve rotary steerable system drills vertical, curve, and horizontal sections in one fast run to maximise available pay zones and reduce the number of trips. Several new drilling records have been set with the system across most of the important unconventional basins in the US. The AutoTrak Curve rotary steerable closedloop drilling system takes commands from the surface to place the wellbore in the desired direction and inclination. The system has completed more than 610,000 m of rigorous testing in some of the toughest unconventional environments in North America.

Specifically engineered to meet the needs of those drilling in unconventional oil and gas plays, the AutoTrak Curve system drills more precisely and at a much higher build-rate than other services. The tight angle is particularly critical as it allows customers to intersect a much larger area of the reservoir than was previously possible with rotary steerable systems, resulting in valuable additional pay zone.

Combining an optimised bottomhole assembly and drill bit to maximise drilling efficiency and reservoir exposure, the AutoTrak Curve system achieves high build rates of more than 15 degrees/30 m. Tolerant to the presence of lost circulation material in the mud system, the AutoTrak Curve system does not require special pressure drop between the pipe inside diameter and the annulus to operate. Additionally, a gamma ray detector is integrated into the tool, close to the bit, to allow precise geosteering.

The advanced technology saves time, given there is no need to change the bend angle of a motor, resulting in faster well construction. Given the improved hole quality, completion time also is enhanced and casing can be run to total depth faster and easier.

Operators can pair the AutoTrak Curve system with the Hughes Christensen Talon™ highefficiency PDC bit for consistent performance, enhanced durability, and drilling efficiency.

Working together, the AutoTrak Curve system and Talon bit meet the challenges of drilling with accuracy, reliability and speed.

Well-suited for first-bit-under-the-surface applications, intermediate, vertical, and near-vertical drilling, as well as hard-to-drill and abrasive formations, the Talon bit can also handle challenging environments, delivering superior

94 Oil Review Middle East Issue Seven 2012

The Hughes Christensen Talon™ high-efficiency PDC bit is well-suited for first-bit-under- the-surface applications, intermediate, vertical, and near-vertical drilling, as well as hard-to-drill and abrasive formations.

directional control and high build-up and rates of penetration (ROP). All Talon bits begin with the Baker Hughes DART™ process. Baker Hughes drilling experts analyse customer objectives and reservoir challenges to maximise drilling efficiency by combining new and existing technology, extensive knowledge, and innovative designs to find exactly the right drill bit for a specific application.

In Oman, an operator was looking to significantly reduce drilling costs and achieve more aggressive performance without sacrificing vertical control Talon technology includes advanced mechanical and hydraulic designs, such as uniquely shaped and positioned blades and nozzles, customised bit profiles, low-torque gauge designs, and diverging junk slots. These improved designs mean more energy for rock and large-volume cuttings removal, less vibration, and increased

durability to help boost ROP and run life.

The Talon bit highlights a shaped gauge pad that is made up of tungsten carbide and thermally stable polycrystalline diamond materials that protect the gauge pads and keep the bit gauge longer. Another feature is the short shank that decreases the make-up length for higher levels of control in conventional directional drilling and increases bit side force on rotary steerable systems.

The Baker Hughes StaySharp™ applicationspecific premium polished cutter technology is featured on every Talon bit, which reduces drilling costs by dramatically improving ROP, drilling efficiency and overall performance. Diamond mixes used in the manufacturing process enable the diamond structure in each StaySharp cutter to be accurately tailored a unique application. The result is a base cutter with an exceptionally wear-resistant working surface, a sharper cutting edge and a durable, impact-resistant supporting structure.

In Oman, an operator was looking to significantly reduce drilling costs and achieve more aggressive performance without sacrificing vertical control in deep exploration gas wells with long, interbedded carbonate intervals and sticky shales.

Baker Hughes recommended the 31-cm (12¼-inch)

S15 ORME 7 2012 Adipec 04_Layout 1 24/10/2012 19:17 Page 95

HOT WORK

Instrumentation Products

Needs a SafeHouse Habitat

Visit us at

ADIPEC 2012 11. – 14.11.2012 Abu Dhabi | German Pavilion Hall 8.0 / 9.0 | Booth 8120A

The Only Internationally ATEX accredited ‘Hot Work’ Habitat

With decades of engineering experience and the necessary passion for the diverse world of industrial valves AS-Schneider once more demonstrates its technical competency with innovative valve technology.

Armaturenfabrik Franz Schneider GmbH + Co. KG Bahnhofplatz 12 74226 Nordheim Deutschland / Germany

Telefon Telefax

+49 7 13 3 101-0 +49 7 13 3 101-148

www.as-schneider.com

Oil Review Middle East Issue Seven 2012 95

S15 ORME 7 2012 Adipec 04_Layout 1 24/10/2012 19:17 Page 96

Talon high-efficiency PDC bit combined with its AutoTrak V vertical rotary steerable system and the Navi-Drill™ X-treme™ LS low-speed motor.

On the initial run, the Talon bit drilled from 1,180 to 2,822 m, covering a total distance of 1,642 m. The average ROP was 30.5 m/hr, which was 28 per cent faster than the previous record for a deep

gas well in the field and 64 per cent higher than the average ROP. The operator used another Talon 31-cm (12¼inch) bit in a gas development well setting a record for the longest, deepest, and fastest shoe-to-shoe run for a comparable interval. Total distance covered was 2,192 m from 945 to 3,137 m with an average

ROP of 22.95 m/hr. These results represented a 7.6 per cent improvement over the previous best performance.

Based on these successes, the Talon bit was run in two additional wells. The total saving for the four wells was approximately 21.5 days with a cost reduction of US$749,000. n

Siemens to display broad portfolio of oil and gas products and solutions SIEMENS WILL BE exhibiting at this year’s ADIPEC, which the company sees as a key international platform for companies operating in the oil and gas industry to meet and present advancements in technology, knowhow, best practices and to discuss sector challenges and future needs. It is also an opportunity for customers to become better acquainted with Siemens’ broad portfolio of oil and gas products and solutions, and for the company to assess their needs and receive feedback on how to further tailor its offerings.

Sustainability, reliability, safety and efficiency are at the heart of everything Siemens does in the oil and gas sector, and its technologies are the result of extensive research and development over many years. They are designed to add value to the company’s customers’ projects by optimising their investments, keeping downtime to a minimum and ensuring that production remains safe and reliable.

Siemens is one of very few companies in a position to supply solutions to almost all areas of the oil and gas industry, and has been a provider of innovative technologies to the regional hydrocarbon sector for many years.

Regional and worldwide growth in the oil and gas sector requires that technology providers like Siemens are in a position to deliver the most advanced products and solutions that not only meet, but exceed customer and industry expectations. It also requires being close to the customer, which is why Siemens’ global oil and gas headquarters is located in Abu Dhabi, at the heart of the world’s leading oil and gas region.

At ADIPEC this year Siemens will be showcasing some of its key technologies and demonstrating why emphasis on sustainability, efficiency, reliability and Ali Vezvaei, Executive VP and GM, safety is essential to the continued growth Siemens Oil and Gas division of the oil and gas industry.

The First Stainless Steel Welded Pipe Mill in the Middle East Outokumpu Armetal Stainless Pipe Company (OASP) is the leading manufacturer of high quality EFW (Electric Fusion Welding) stainless pipe with diameters range from ½” to 8”, Sch10s & Sch40s; Grade 304L, 316L& Duplex. OASP pipes are suitable for a wide range of industries, such as, Oil & Gas, Petrochemical, Desalination, water treatment and general construction.

Outokumpu Armetal Stainless Pipe Company. mpany ny y.

Second Industrial City, Riyadh, Saudi Arabia Tel: +966-1-265-2030, Fax: +966-1-265-0350 E-mail: info@outokumpu-armetal.com www.outokumpu-armetal.com

96 Oil Review Middle East Issue Seven 2012

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Participating in ADIPEC 2012 at Stand 4070, Stall No. 4

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‘Unique’ temperature control solutions AS AN EXPERT in heating and temperature control solutions for industry, Vulcanic will be presenting its innovative product ranges for the oil, gas and petrochemical sectors at ADIPEC. The company’s experience, acquired in a wide range of industries and severe environments, both on-shore and offshore, enables Vulcanic to propose ideal solutions tailored to the demands and specifications of its customers, in accordance with international standards.

Vulcanic’s presence at ADIPEC will provide an ideal opportunity to discover its Vulcanic will be custom solutions and innovations, exhibiting its temperature such as Compatherm, a unique control solutions heating system.

Vulcanic says its project engineering division is a world leader in the design and manufacture of electric heating systems and temperature control solutions.

Typical applications include the heating of heavy fuel oil, crude oil, suction heating for oil storage tanks, and the heating of natural gas. Other applications include the heating of hydrocarbons, hydrogen and nitrogen or the heating of TEG/MEG, in dehydration packages.

98 Oil Review Middle East Issue Seven 2012

Speedy moves quickly to establish a regional presence SPEEDY INTERNATIONAL IS expanding its services to the regional oil and gas industry, following the award of a US$50mn services contract with ADNOC’s support services arm ESNAAD. As a group, Speedy has gained many years of experience globally using its technical expertise in major oil and gas infrastructure projects combined with its asset management services.

Operating in the region since 2010, the company is now investing heavily in its fleet and services to the petrochemicals industry.

“As a leading provider of specialist equipment, expertise and support services to the oil and gas sector, we offer the youngest fleet in the region, having invested AED 115mn (US$31.3mn|) since launching our Middle East operations in 2010,” said Andy Carter, managing director of Speedy International.

Speedy offers modern, specialised equipment for pipeline process works, industrial shutdowns and turnarounds, temporary power solutions, and offshore and onshore process works, all from its new 30,000 sq-ft regional headquarters in Mussafah, Abu Dhabi.

“We offer flexible services ranging from equipment rental to on site temporary depot set up specific to project requirements. Our extensive product range includes generators, nitrogen production units, boosters, compressors, lighting towers, lifting and hand tools, while our services include test, repair, inspect and maintenance (TRIM) to ensure our clients enjoy smooth operations in what is a high-risk environment,” said Carter.

Speedy International will be showcasing its services to the oil and gas sector at this year’s ADIPEC, the company will be exhibiting at the show in Hall 7, Stand 7123.

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We create

the solution

Thermal imaging surveillance cameras GLOBAL SURVEILLANCE TECHNOLOGY company, Synectics, is to showcase its new range of thermal imaging camera stations at ADIPEC. Designed to be lightweight and durable, the compact COEX™ C2000-FT and C2000-VT camera stations unite the very latest thermal imaging technology with high grade, corrosion resistant, 316L stainless steel construction.

The cameras, which have already been ordered for use on Phase 2 of the Abu Dhabi Inter Refineries Pipeline (IRP), are specifically designed to offer constant visual monitoring in no or low light scenarios, on land or at sea. They can be used for anything from monitoring flare status, confirming leaks of specific gases, and checking tank fill levels, through to standard surveillance applications.

world-class Where safety knows no compromises _ R. STAHL sets new standards. As one of the leading suppliers of systems and components for hazardous areas, we offer the complete spectrum for the following fields: > Automation > Distribution and Control > Operating and Monitoring > Installation Equipment > Lighting > Alarm and Signalling. R. STAHL stands for modern explosion protection worldwide. With their great commitment, competent teams attend to the safety of people and facilities.

We will gladly assist you.

R. STAHL Middle East FZE, Dubai, U.A.E., Tel. + 971 4 8835855 or info@stahl.ae

100 Oil Review Middle East Issue Seven 2012

www.synx.com

The COEX™ C2000-VT camera stations, with continuous rotation pan and tilt capabilities and continuous zoom, feature a virtually indestructible gearbox with backlash eliminating technology to ensure smooth speed controls, while the super lightweight (5kg) C2000-FT camera stations offer the benefit of high definition fixed thermal imaging.

Graham Ashley, Middle East business development manager for Synectics, said: “ADIPEC is an important show for Synectics - our Middle Eastern order book stands at approximately 50 per cent of the division's global turnover and we are the leading supplier of security solutions in the region. That’s why it’s so important that we continue to use the exhibition as a chance to highlight new innovations - in this case the COEX™ C2000-FT and C2000-VT thermal imaging camera stations.”

Both COEX™ C2000-FT and C2000-VT camera stations benefit from low voltage operation, and their thermal imaging capabilities can be set to colourisation mode to identify different temperatures, and can operate under extreme conditions from ice and smoke to total darkness.

They are designed to function at temperatures ranging from -45°C to +60°C, and are fully compatible with a range of control systems and transmission methods, including IP and Fibre Optics.

To find out more about Synectics’ COEX™ new thermal imaging camera stations visit stand 8090H at ADIPEC or email graham.ashley@synx.com.

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Advanced actuated valve safety systems AS THE FOCUS for valve system safety related matters in the oil and gas industries increasingly moves from the valve itself to the actuator and associated controls, UK manufacturer, Imtex Controls Limited has developed innovative solutions to some commonly experienced issues.

The Camtorc Series of pneumatic and hydraulic actuators for part-turn valves has proven an excellent solution for overcoming maximum The VSD Controller provides conventional position monitoring integrated with PST capability

allowable stem torque (MAST) problems for valves which is a common issue experienced when trying to size a valve actuator to satisfy increasing operator-specified safety factors.

The Camtorc series design, combining a simple and highly efficient cam mechanism with other innovative features, significantly reduces the maximum possible output torque of the actuator whilst still ensuring that specified safety factors are observed.

The Imtex type VSD Controller provides conventional position monitoring integrated with partial stroke testing (PST) capability in a single device easily installed or retrofitted to The Camtorc series design significantly reduces the maximum possible output torque of the actuator

102 Oil Review Middle East Issue Seven 2012

any valve actuator. The PST option meets the functional safety requirements for final elements conforming to IEC.61508. The type VSD SIL3 rated controller utilises the standard actuator solenoid valves to initiate a PST and records detailed functional information on the assembly for later interrogation, either locally or remotely. Imtex will be exhibiting at this yearâ&#x20AC;&#x2122;s ADIPEC.

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A new approach to managing asset integrity AMÉTHYSTE, A FRENCH software publisher, has recently launched a new software solution orKsoft® - which provides a global and collaborative vision of Asset Integrity and Risk Based Management through a dedicated integrated network platform. At ADIPEC there will be an opportunity for oil and gas operating companies as well as for companies specialised in certification, inspection and maintenance to discover a new approach to Asset Integrity Management.

The main objective of orKsoft® is to provide

decision support to maximise the economic value of industrial plants in compliance with environmental regulations.

Due to its transversal features, orKsoft® enables management to ensure that all stages of the life cycle of equipment, from design to decommissioning, are managed to best in class and consistent standards, increase the reliability, availability, maintainability, safety and sustainability of facilities, as well as identify risks early on. The software can also help reduce the cost of

inspection and maintenance while extending the life of the facility.

www.amethyste.fr

Turnkey projects completed GASSÓ-SYSCOM GROUP HAS recently completed the engineering, execution, testing and delivery of 40 metering systems in Iraq and four fiscal metering skids for loading diesel in tank trucks in Bahrain.

As an EPC contractor, the group has also completed in recent years a loading terminal for petrochemical products for the ABCCo Company in Aqaba, Jordan, where it supplied the equipment for all the 19 storage tanks, radars for continuous measurement of product level in the tank, temperature transmitters, the high and low level switches, the pressure vacuum relief valves and the flame arrestors.

The group says the delivered equipment meets high quality international standards and the it has signed exclusive distribution contracts with over 40 companies from Europe, the US, Africa, Middle East, southwest Asia and Japan.

The group which is primarily specialised in manufacturing and distribution of loading arms and accessories, hoses and automation equipment, transmitters, panel equipment, valves, pumps, firefighting systems and complex installations for loading terminals and refineries, says it has delivered high quality equipment to customers worldwide Important projects have been undertaken in Romania, Syria, Jordan, Bulgaria, Kazakhstan, Algeria, Libya, Nigeria, Angola, Morocco, Spain, Portugal and most recently Iraq and Bahrain.

Most applications are in oil and gas industry but also in cement, ceramics, pharmaceuticals, metallurgy, and the power plant sector. The group is also a system integrator for hardware and software solutions for loading terminals.

104 Oil Review Middle East Issue Seven 2012

S17 ORME 7 2012 Adipec 06_Layout 1 24/10/2012 18:21 Page 105

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S17 ORME 7 2012 Adipec 06_Layout 1 24/10/2012 18:52 Page 106

Maintaining a jacket can be a demanding job. However, when it is positioned on a badly corroded skidway there is the added challenge of a vast lifting project - as a leading manufacturer of high-pressure hydraulic tools, Hi-Force, explains.

Skidway maintenance and the challenges of

the big lift I

T IS NOT normal practice to carry out maintenance to a skidway after a jacket has been fabricated. A skidway would usually be newly constructed prior to the fabrication of the jacket or, if it already exists, refurbished before the fabrication began.

However, the maintenance requirements that brought about the largest lift project that Hi-Force Limited has so far undertaken were far from normal.

Hi-Force, a leading manufacturer of highpressure hydraulic tools, undertook the project as part of a supply contract to the State Oil Company of Azerbaijan Republic (SOCAR).

SOCAR needed a deepwater jacket lifted in order to carry out vital maintenance to the skidding system on which the jacket was positioned, prior to it being mobilised offshore in the Caspian Sea. The jacket was 151 metres long and 80 metres wide.

To lift it involved the supply of 20 pieces of custom-manufactured 1,012-tonne lifting capacity cylinders, four customised, 700 bar pressure-rated split flow pump units, a PLC control system and over 1.2km of high pressure hydraulic hose. All of these were combined to create a precise jacking system capable of lifting 16,192 metric tonnes (using 16 cylinders, with four pieces spare) to a maximum height of 900mm.

So why was maintenance necessary? In fact the fabrication of the jacket, and therefore the skidway upon which it sat, had begun over 20 years ago when Azerbaijan was part of the former Soviet Union. When Azerbaijan gaining independence in 1991, work on the jacket stopped. The partly completed unit was then left in a fabrication yard on the coast of Azerbaijan.

One of the huge cylinders is positioned under its jacking point

106 Oil Review Middle East Issue Seven 2012

The jacket in all its glory

And that is how the unit remained until mid 2011, when SOCAR decided to complete the remaining fabrication, refurbish the originally fabricated structure and put the jacket into service in the Caspian Sea. However, the skidway on which the jacket was positioned had become badly corroded after more than two decades of exposure to the elements. The only way the project could now work, therefore, was if the jacket could be lifted, allowing

A technician winds down the â&#x20AC;&#x2DC;failsafeâ&#x20AC;&#x2122; locking ring on a cylinder piston to secure the load mechanically

the skidway to be refurbished and replacement hardwood and anti-friction Teflon to be installed. The jacket could then be skidded out to sea.

Initial discussions between Hi-Force and Socar were aimed at working out both the best configuration for the jacking system and its likely needs: the number of lift points, the required capacity and the required lift height, as well as the criticality of an even synchronised lift.

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The lift, it was decided, would be carried out using 16 1,012-tonne capacity cylinders strategically placed in 16 lifting positions spread across the footprint of the jacket as it lay on its side.

These 16 cylinders would be operated in banks of four from four split flow hydraulic pump units. These would be controlled by a centralised PLC control system with the capability to ensure that the cylinders would lift simultaneously in a synchronised fashion, regardless of the loading on each cylinder, and would remain within a maximum of 1mm of stroke variation to each other throughout the duration of the 605mm total height of lift.

As soon as the contract for this huge lift had been signed the race was on to complete the manufacture of the 20 ‘monster’ cylinders (which included the four spares) as quickly as possible. The manufacture of the pump units, PLC and accessory items was also going ahead but it was the cylinders that offered the biggest challenge and longest lead time, not least because of the sheer size and volume of high-grade steel required and the amount of machining and heat treatment (to protect against

One of the HFG100036 Cylinders upon completion of the lift

Clear daylight can be seen between the jacket and the skidway with the lift complete and load mechanically secured

108 Oil Review Middle East Issue Seven 2012

Middle East Director, Craig Brown (3rd from left), Hi-Force UK Production Manager, Chris Dickinson (5th from left) and Hi-Force Caspian Sales Engineer, Govhar Aliyeva (right) along with Socar Engineers during commissioning of the PLC

corrosion) involved in their manufacture. Even assembly and testing of the cylinders presented significant challenges.

Admittedly the 1,012 tonne capacity was not the highest capacity Hi-Force had ever manufactured; it had produced bespoke cylinders of 1,500 tonnes and 2,000 tonnes in the past. However, the closed height of 1,620 mm and the stroke length of 900mm made them the largest cylinders the company had ever produced in terms of physical size and weight. In fact each cylinder weighed in at 2,800kg. Not only that but for each cylinder piston to fully extend to its maximum 900mm stroke required 127.71 litres of oil!

After manufacturing and extensive testing, the complete system was shipped to Baku, the Azerbaijan capital. Three articulated trucks delivered the cargo. The goods arrived on site at SOCAR in mid-June well in time for the proposed lift date of 25 June.

After four days of installation, commissioning and testing, all sixteen cylinders required for the lift were in position, connected to the pump units and the PLC unit and everything was ready.

There was a further consideration, however. From the outset safety had always been the top priority.

With this in mind the decision had been taken to manufacture and supply Hi-Force ‘failsafe’ hydraulic cylinders to carry out this lift. ‘Failsafe’ cylinders lift the load via hydraulic power, but they also incorporate a mechanical load holding facility. This enables the load to be secured mechanically both during the lift (in case of hydraulic failure) and after the lift has been completed. This would then allow critical maintenance of the skidway — under the jacket — to be carried out without the need to place any additional mechanical load-holding blocks beneath the jacket.

Considering the huge load to be lifted and the relatively high piston extension required it was decided that the lift would be carried out in 100mm intervals. The cylinder piston mechanical loadholding rings would be secured at each 100mm interval, thereby minimising the risk in the (very unlikely) event of any system hydraulic failure.

Each cylinder piston was raised to a point where all sixteen were in contact with their respective lift point on the jacket. The system was then operated and the jacket lifted to a height of 100mm, ensuring that all cylinder pistons were within a threshold of 1mm across all sixteen units. Once this initial 100mm lift had been achieved, each cylinder was inspected and the piston mechanical load-holding rings were wound down to secure the load mechanically. The lift height was then increased by

a further 100mm to 200mm. This procedure was repeated at each 100mm interval of the lift until the required lift height of 605mm had been achieved and each cylinder piston load-holding lock ring had been secured mechanically.

Throughout the lift the hydraulic pressure in each cylinder was continually monitored to ensure that there was no danger of any cylinder being overloaded beyond its individual capacity of 1,012 tonnes at 700bar maximum working pressure. In fact readings were taken from the display unit of the PLC control at each 100mm interval. Upon completion of the lift at the 605mm required height, final readings from all 16 cylinders were taken so that the total weight of the jacket could be calculated. It was a colossal 10,455.40 metric tonnes.

Once the load had been secured mechanically, the hydraulic hose lines and Ethernet cables that provided communication between the cylinders and the PLC were disconnected and removed. SOCAR was now able to start their work on re-furbishing the skidway. Once this was done the system was reconnected and the jacket was lowered back onto the skidway under the supervision and system operation of SOCAR engineers, who had been trained to operate the jacking system by Hi-Force both before and during the raising of the enormous jacket.

The big lift was complete. ■

Hi-Force, a leading UK manufacturer of highpressure hydraulic tools, operates globally from nine regional offices, supported by a professional network of distributor companies across the globe. For further information please visit www.hi-force.com

One of the huge HSP44E6154 Split Flow Pump Units.

Four pumps operated four cylinders each

S17 ORME 7 2012 Adipec 06_Layout 1 24/10/2012 18:22 Page 109

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S17 ORME 7 2012 Adipec 06_Layout 1 24/10/2012 18:22 Page 110

As emerging markets continue to gain in strength, the Middle East oil and gas industry needs to embrace and utilise any technological advantage it can. Ossama Tawfick, AspenTech’s Regional Senior Director for the MENA region, explains the role process manufacturing software can play in adding a competitive advantage.

Using software modelling to

optimise resources T

HE MIDDLE EAST and North Africa (MENA) region’s exporters account for approximately 40 per cent of oil and 20 per cent of natural gas traded internationally. According to the International Energy Agency in 2025, world energy demand will have increased by 50 per cent in relation to 2005 and will reach 15bn tons oil equivalent. The increasing demand for energy, along with a greater focus on environmentally-friendly technologies, is driving a strong requirement for innovation.

The Middle East’s dependence on oil and natural gas revenues highlights the need for the region to diversify. Rising oil prices and the demand for the region’s export commodities mean that the outlook for economic growth remains positive. However, higher oil prices can negatively impact the economies of oil importing countries, such as those in Western Europe.

With the cost of oil determining the price gasoline prices and other petroleum products, these mounting costs can be a huge drain on consumer households and also commercial businesses. Rising import costs for oil, natural gas and petroleum-based products can slow trade growth, although the reliance on these natural resources mean that importing

Ossama Tawfick, Regional Senior Director for the Middle East and North Africa, AspenTech

110 Oil Review Middle East Issue Seven 2012

countries still need to manage their economies more effectively.

Oil exporters with spare production capacity, particularly those in Saudi Arabia, have a controlling influence on prices. The government is also actively promoting the downstream petrochemical industry in the region by manufacturing more high value added petrochemical products.

Software modelling helps process engineers to develop optimal process designs, identify optimal operating conditions and analyse designs alternatives Due to their natural advantage in holding cheap feedstock, petrochemical producers in Saudi Arabia can maximise their return on investments by expanding in the downstream sector. This could be in the area of plastics or value added speciality chemicals and engineering thermoplastics that are used for automotive appliances and consumer products. The Saudi government, which currently dominates the petrochemical sector through SABIC, is aiming for growth in the downstream petrochemical sector and is keen to explore technological partnerships with foreign players to help with this initiative towards greater diversification across the petrochemical value chain.

High oil prices are no longer effective alone and the Middle East needs alternative industrial strategies to maintain development during the coming years. This challenge becomes ever more important in light of the emergence the BRIC countries (Brazil, Russia, India, and China) and many other emerging economies.

There is much debate across the region and among industry leaders as to how this may be achieved. However, one factor remains – modernisation and technological innovation are essential to drive growth. Innovation will dramatically enhance products and business processes and help to meet international standards. The Middle East itself has enormous potential, particularly in light of its growing population and young labour force. Technology

has increasingly become a crucial ingredient for Arabic companies to achieve competitiveness and long-term growth.

Maximising potential Software innovation is helping the Middle East’s process industry today to overcome these challenges by increasing productivity and installing best-practice across the enterprise and enabling operators to be more energy efficient, agile and optimal with their assets.

So, how does software modelling help operators in the designing of systems? In the initial design phase of any project, software modelling helps process engineers to develop optimal process designs, identify optimal operating conditions and analyse trade-offs between design alternatives. It also enables them to capture, share and transfer process knowledge via computer software models.

Software modelling can also allow contractors and consultants to evaluate the capital and operating economics of each design scenario and proactively identify potential problems as the design moves into the operational or construction phase.

The benefits to clients from using software modelling are significant. Across the process industries, companies are faced with global economic challenges, dynamic market conditions and pressure to reduce time to market. In tackling these challenges, they need to creatively reduce capital and operating costs and increase engineering efficiency.

Fundamental to improving the performance of the plant or enterprise, or even the extended supply chain, is an accurate representation of the basic processes. Software modelling enables engineers to rapidly evaluate the safest and most profitable designs through quick creation of interactive models for ‘what-if’ studies and sensitivity analysis. These models can be leveraged throughout the operational lifecycle from conceptual to detailed designs, performance rating and optimisation – significantly reducing engineering costs and enabling better operating decisions.

Market receptiveness In general terms, business pressures at the earliest conceptual design stages are increasing. Now more than ever, process engineers are expected to deliver optimised designs that factor in capital costs,

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operating costs, energy usage and capacity.

Software modelling offers a cost-effective and efficient means of achieving these goals.

A number of factors and trends are making the Middle East market ever-more receptive towards software modelling. These include increasing environmental concerns, increasing cost pressures and the need to make installations flexible and scalable, as well as the move towards district cooling plants and the growing size of such plants. These present opportunities for huge cost savings if software modelling is employed in the planning and

At management level there is a substantial return on investment from using such software tools as well as concrete benefits to organisations

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112 Oil Review Middle East Issue Seven 2012

design stages. For example, the latest version of AspenTech’s aspenONE suite includes Integrated Energy Analysis and Greenhouse Gas Evaluation to save energy and achieve environmental compliance.

Innovation is at the heart of AspenTech and the company has pioneered process industry software. The company’s roots are from the ASPEN (Advanced System for Process Engineering) project at Massachusetts Institute of Technology (MIT) during the oil crisis of the late 1970s, where its process modelling technology was used for prototype coal gasification projects. AspenTech’s software incorporates proprietary empirical models of manufacturing and planning processes and reflects the deep domain expertise amassed from focusing on solutions for the process industries for nearly 30 years.

AspenTech’s aspenONE® solution is a suite of applications that integrate and optimise engineering, manufacturing and supply chain operations and is used for energy, chemicals, engineering and construction. AspenTech works closely with many high profile customers including Bapco, RasGas, Saudi Aramco, SABIC and many others who use its software solutions to drive operational and process efficiencies.

With advances in computing power, as well as increasing accuracy of simulation software, more companies are relying on software modelling. The engineers who have studied using software modelling tools, as well as people who have been in companies that have standardised them, have adopted the advances in technology with great enthusiasm. Chemical process engineers value the technical advances and overall efficiency provided by software.

However, at management level there is a substantial return on investment from using such software tools as well as concrete benefits to the organisation from the adoption of innovative technology.

Optimising existing plants In the Middle East, there is a significant trend towards optimising existing plants. We are also seeing a clear move towards energy management initiatives in the oil-rich GCC states. For many Middle East companies, operating in the process industries, the need to increase capacity, improve margins, reduce costs and become more energy efficient is essential if they are to compete successfully on a regional and global scale. With the right software tools, they can implement integrated solutions to achieve best practices and optimise their engineering, manufacturing and supply chain operations Process industry software is fuelled by a unique combination of innovation, expertise and breadth and depth of products. These solutions represent best practices in process optimisation. They were developed by the best minds in process optimisation technology, drawing on the process industry's largest accumulated domain expertise in process optimisation software. The tools themselves are

S17 ORME 7 2012 Adipec 06_Layout 1 24/10/2012 18:22 Page 113

specifically designed to make it easier for process manufacturers to use process optimisation to achieve their operational excellence goals.

The Middle East oil and gas industry is investing in new innovative technological capabilities to increase exploration, production and transportation to maintain production and access new markets. As the oil and gas sector is the backbone of the Middle East economy and delivering affordable and reliable oil and gas is vital, process industry software can play a significant role in maximising profits and safeguarding future assets.

With globalisation and market volatility, oil and gas margins are diminishing. The current business environment offers few opportunities for product differentiation and, therefore, commercial success relies on a greater need for better process efficiency at a lower cost. Owner operators need to make sound judgments on design options for their asset investment decisions. As industry leaders seek to successfully make the most of their existing assets and maximise the potential of their resources, process industry software will give companies in the Middle East an advantage in a highly competitive market. â&#x2013;

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Oil Review Middle East Issue Seven 2012 113

S18 ORME 7 2012 Adipec 07_Layout 1 24/10/2012 18:26 Page 114

With the Middle East region’s abundant shale fields now maturing, Joe Rainey, President of Halliburton’s Eastern Hemisphere operations, examines the shifts in thought, methodology, technlogy and technique relating to this often hard-to-access gas source.

A new mindset for

shale development T

HE SHALE PLAY boom in North America is delivering on its promise of substantial new reserves. In several countries throughout the world, operators are now taking steps to evaluate shale fields, which are viewed as a boost to existing production and a way to stave off the predictions that fossil fuels will be depleted in our lifetime.

Gas production from shale – a miniscule percentage of total production just 10 years ago – has reached significant levels today. It seems to be the answer for energy-starved nations and those countries whose mature fields are near exhaustion.

But is there a need for shale gas production in the Middle East, where rich and easily exploited reservoirs continue to supply much of the world’s oil and gas? Can these energy supply giants relax while the rest of the world takes on the costs and complications of shale drilling operations? The strategic answer is no.

The Middle East region is blanketed with shale layers that have high potential. These are the 'source rock' layers that drillers passed through on their way to the prolific carbonate reservoirs typical of the region. Now, after years of production, these fields are maturing. The wells are being re-entered, sidetracked, recompleted, stimulated – the effort needed to sustain current production levels is increasing. Now is the time to consider the possibilities that those bypassed shales offer.

Perfect circumstances Gas production from Middle East shale resource plays can fulfil residential and manufacturing energy requirements and reduce carbon emissions.

In general, the Middle East represents a perfect set of circumstances for shale development, but this effort will take a new mindset toward drilling, completion and infrastructure. For example, planning conventional wells begins with determining target reserves, followed by a drilling program designed to reach those payzones.

Shale must be treated differently from the start.

The geology, mineralogy and physical structure become critical factors, as each well will be fractured to gain access to the hydrocarbons.

Seismic data takes on a new significance.

Beyond the differences in geological and geophysical approaches, launching a successful shale development depends on a broad multidiscipline team. The objectives may be similar to conventional operations: well optimisation and minimal non-productive time. However, achieving these goals and preserving the economic margins

114 Oil Review Middle East Issue Seven 2012

Now the goal is to treat shale as a hydrocarbon resource, paying particular attention to fluid loss control and minimising formation damage needed to sustain development requires a different mindset.

Every well, including those drilled within the same play and within close proximity, must be treated individually. The 'cookie cutter' type well cannot be assumed to have optimal production.

Beginning with the geology – where all oil and gas extraction begins – shale development requires a true paradigm shift, much more so than deep water, extended reach or HPHT wells. Each shale possesses distinct characteristics that can vary in degree within a single field. The complex mineralogy and 'brittleness' (tendency to fracture) are critical factors. Porosity is dependent on the formation constituents as well as the individual minerals, and permeability can be so that low it is difficult to accurately measure.

Shale is a 'self-sourcing' type of reservoir that both generates and stores hydrocarbons. But to be of interest, the shale has to be thermally mature – i.e., it must have been subjected to enough heat and pressure so that the organic matter it contains will crack and form hydrocarbons.

The total organic content is another important value – it must be higher than two per cent to generate economic levels of gas, according to studies made on US shale plays. Hydrocarbon storage capacity must also be identified. Further, to avoid the risk of breaching a water-bearing zone, the hydraulic fracturing energy cannot exceed certain limits.

Evaluation tools As with any exploration effort, reaching the right conclusions about a shale involves seismic activities, cores, and well log data. However, these traditional information sources are interpreted differently for shales, and the industry is continuing to develop workflows that have shale-specialised evaluation tools and offer robust continuous improvement loops as experience is gained.

Unlike the old days, when we blew through shale sections as fast as possible and were largely concerned with preventing their prolonged exposure to water-based muds, now the goal is to treat shale as a hydrocarbon resource, paying particular attention to fluid loss control and minimising formation damage. Whether drilling vertically through a thick shale layer – and in the Middle East there are organic rich shales up to 365 m (1,200 ft) thick – with the intention of kicking off laterals, or drilling a long horizontal section through a thinner shale bed, the drilling practices must be adapted to the shale environment.

Drilling fluids can now be specifically designed for the clay mineralogy of a particular shale. These inhibitive fluids minimise shale reactivity and also help protect the reservoir from invasion by drill solids and filtrate.

Recently an inhibitive water-based mud that was engineered for long open-hole sections in deepwater wells has been used successfully to drill highly reactive clays in Egypt. This fluid can be adapted to shale drilling, as have many others now in use other parts of the world. Many geologists prefer the log quality obtained when water-based fluids are used, especially when they are required to interpret new types of log data in a very different type of reservoir.

Optimal direction Downhole tools and bottomhole assemblies used in shales will encounter vibration, abrasiveness,

S18 ORME 7 2012 Adipec 07_Layout 1 24/10/2012 18:26 Page 115

Schoeller-Bleckmann UK (SBUK) is a major stockholder in Duplex, Super Duplex, 6 Moly, Nickel Alloys and Stainless Tube, Pipe and other components. Via our parent company Bohler-Uddeholm (UK) Limited we have access to Wire, Rod, Round Bars, Plates and Forgings in the full range of corrosion resistant alloys.

Our particular strengths lie in the supply of STAINLESS STEELS and EXOTIC GRADES Duplex (UNS S31803), Super Duplex (UNS S32760 / UNS S32750) and 6 Moly (UNS S31254).

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S18 ORME 7 2012 Adipec 07_Layout 1 24/10/2012 18:26 Page 116

extreme hardness, steerability issues and the ever-present threat of borehole instability.

Directional orientation is more complex – it is not always possible to drill in the optimal direction due to the horizontal stresses, and the effectiveness of frac operations and well producibility can be compromised if the well trajectory is not carefully planned.

When the well reaches the fracturing stage, the objective is to create a dense network of branched fractures, quite different from the simple bi-wing fractures induced in conventional wells. Most shale wells go through multi-zone completions where the job sequence considers isolation, second perforation and third the actual fracture job using fluid and proppants.

Stimulation designs are tailored to each shale’s reservoir characteristics, specifically with regard to fluid viscosity, pump rate, proppant concentration and strength. Because fracture operations require a tremendous volume of water – most of which is not recovered in flowback – conservation of water sources is essential. This will be no surprise to operators in the Middle East, where dealing with water scarcity is its own advanced industry.

Effective methods for treating produced water and seawater for use as fracturing fluids can convert a waste stream and non-usable water sources into a fracture fluid supply.

The Middle East shale resources, many of which are high in carbonate content, have been compared geologically to the Eagle Ford shale play located in South Texas. That is good news for potential shale drillers in the Middle East as

116 Oil Review Middle East Issue Seven 2012

there is a well-established supply of knowledge they can tap.

Shale drilling and production technologies have reached state-of-the-art levels in the US, so the learning curve has been flattened along with the costs of launching a shale development programme. Exploration plans are designed to allow operators to gain essential insights of the resource plays before they break ground on actual projects. Engineering capacity is already high in the Middle East region, and national oil companies have no problem attracting highly skilled petroleum professionals.

The very history of the oil and gas industry in this part of the world is a powerful motivator for shale development. The mature fields – still a major force in the energy market – reflect the establishment of effective energy policies that have served Middle Eastern producers well. The administrative side of oil delivery, the rules of commerce and taxation, the visible role of government in protecting the environment by enforcing effective regulations, the infrastructure that supports development and export – all these internal factors put the Middle East in a prime position to make the next step to shale exploitation.

Proving ground The Middle East has been the proving ground for many sophisticated technologies, and it is also a place where much is invested in prolonging the life of mature fields. This depth of experience makes it the right location for the new paradigm that is

shale development. Many of the concepts are the same: dealing with decline rates, opening new reservoirs from old wells, stimulating, and exercising efficient practices that maximise the return on investment. Wells drilled through thick shale layers may offer multiple payzones where laterals can be installed and production can be comingled in the main wellbore.

Above all, there is ample time to plan and optimise during the typical stages of shale exploration and early development. Essential considerations include the following:

6 Accurate core and log analyses 6 Creating processes and technologies to reduce non-productive time

6 Developing an accurate shale resource model 6 Precision drilling and fracture placements 6 Optimisation of hydraulic fracturing performance through fracture mapping

6 Improving actual production performance, and 6 Possible restimulation to maximise production By balancing the activities above, accurate data collection, analyses and pilot testing will pay off in the long term production of the basin.

The additional hydrocarbon recovery will comfortably support local populations and industries and decrease environment impact, while preserving traditional production for the export market. n

Joe Rainey is President of Halliburton’s Eastern Hemisphere operations.

S19 ORME 7 2012 Adipec 08_Layout 1 24/10/2012 18:28 Page 117

Serving the world of business

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S19 ORME 7 2012 Adipec 08_Layout 1 24/10/2012 18:28 Page 118

Weatherford’s suite of highly advanced production optimisation services – including artificial lift, flow measurement, reservoir monitoring and software – ensure that every field maintains a wide production window.

Optimisation advances:

extending well-life H

ISTORICALLY, THE EXPLORATION and production (E&P) sector has prioritised investments in exploring for and drilling new oil assets. However, once a new asset reached the production phase, the objective became achieving production goals with minimal operating expenditures.

The past two decades have seen a shift in this mind-set as companies have increasingly realised that they can recoup a substantial return on production infrastructure investments – particularly those related to optimising and extending a field’s productive life.

Recognising this trend, Weatherford invested heavily in building the necessary optimisation technology and expertise. Today, the company has built a comprehensive suite of optimisation services, which work together seamlessly to boost a field’s production and profitability.

Most wells have insufficient pressure to bring produced liquids to the surface. Artificial-lift systems help make up that pressure deficit, adding energy to the fluid column in the wellbore so that it can be economically produced.

“There is a vast array of artificial-lift systems in the industry today; and we have strategically positioned ourselves to be an expert provider in all forms of lift,” said Dharmesh Mehta, Weatherford’s Senior Vice President of Completion and Production Systems. “Our initial forays into artificial lift began in 1987, with the acquisition of Highland Pump, a provider of rod-pumping systems.”

This investment was soon followed by the acquisition and in-house development of gas-lift, plunger-lift, progressing-cavity-pumping, hydrauliclift and capillary- injection systems. Additionally, a sizable investment was made in a major electrical submersible pump provider.

118 Oil Review Middle East Issue Seven 2012

“By the late 1990s, we had built a comprehensive portfolio of lift services, suitable for nearly any well requirement,” said Mehta.

“And, we were pioneers in developing integrated artificial-lift systems – for example, we were the first and only company to provide rod pumps, rod strings, surface-pumping units, controllers and optimisation software.”

“I see us making our smart technologies even smarter, as well as more robust to unload longer, horizontal wells that are becoming quite common in shale-oil plays” By 2005, Weatherford had 30,000 wells running on its lift systems, with many installed in Latin America and early adopters in the Middle East and Asia Pacific region.

“Another major development was the advent of so-called intelligent artificial lift – the software and systems that monitor and control artificial-lift tools to provide even greater optimisation gains,” said Mehta.

But what does the future hold for Weatherford’s lift offerings? “I see us making our smart technologies even smarter, as well as more robust to unload longer, horizontal wells that are becoming quite common in shale-oil plays,” said Mehta. For example, the Rotaflex® long-stroke, 8.5m (28-foot), reciprocating rod-lift unit is helping operators unload unconventional wells.

As the E&P industry keeps moving toward deeper, hotter and more technically challenging production plays, I see Weatherford continuing to

advance all forms of lift to help operators achieve their production goals.”

Measuring flow Recognising that you cannot optimise a process without first accurately measuring it, Weatherford has spent the past decade developing and refining its comprehensive range of flowmeasurement technologies.

“The core of our flow-management offerings came from two strategic acquisitions,” said John Lievois, Global Flow Program Manager for Weatherford. “The first brought us a metering technology that was the precursor to our Red Eye® 2G and multiphase water-cut meters.”

The Red Eye meter’s capability is based on nearinfrared spectroscopy, enabling it to easily differentiate between water and oil at even very high water cuts, a challenge for previous metering technologies. Changes to salinity or the presence of emulsions, sand or gas bubbles do not impact the measurement.

“We’ve made significant improvements to the Red Eye technology to enable it to measure water cuts on any well stream, even those with gas present,” said Lievois.

This benefit is particularly attractive to operators of subsea assets, as it enables them to avoid the expense of multiphase meters or separation equipment offshore. “Installing a multiphase meter subsea might cost you upwards of US$1mn; and it does not provide a direct, standalone measurement of water cut,” said Lievois.

The flow-measurement portfolio was bolstered with the acquisition of a fibre-optic, Bragg-gratingbased technology used as a direct-sensing element for strain. “While this technology is deployed as part of our reservoir-monitoring offering, we also

S19 ORME 7 2012 Adipec 08_Layout 1 24/10/2012 18:28 Page 119

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moved the technology to the surface, using lowercost components for less demanding environments to measure flow rates,” said Lievois. The system uses an array of electronic strain sensors to measure the propagation of turbulent vortices in the flowing production stream, and then translates this data to the total flow rate. It achieves this with a high degree of accuracy over a wide range of flow rates and fluid types.

Today, Weatherford offers one of the broadest product ranges in the industry. And in the future, the company will continue to drive integration with other production optimisation technologies. “For example, we are now taking the data on pressure, temperature, flow rates and water cuts and feeding it into our reservoir and facilities monitoring and optimisation software,” said Lievois.

The outputs from the i-DO® and LOWIS™ software optimisation packages are presented in a usable format and in real time to engineers, who can quickly make control decisions regarding tools controlling the artificial-lift system or chokes and valves. (More information about these software packages is provided later in this article.)

Weatherford has recently embarked on a firstof-its-kind pilot project in Kuwait, where it has installed a full suite of artificial-lift equipment, chokes, flow-measurement services and software controls on 85 wells.

“We have installed remote terminal units to pull in flow, pressure and temperature data from each well and then transmit it via radio signal to our optimisation software,” said Lievois. “We will use the output to control production on a well-by-well basis for the entire field. Although it is in its early days, we are excited by the potential that it promises for this field and many others around the world.”

Better decision-making The past two decades have seen exciting growth in downhole-monitoring technologies that provide a wealth of information about the reservoir. These technologies can be used to preserve the long-term viability of the well.

WellScan™ monitoring – Weatherford’s broad range of advanced reservoir-monitoring solutions – delivers reliable and timely formation data in operating environments, both routine and extreme.

The company started moving quickly into reservoir monitoring, when it acquired a provider of piezoresistive strain gauges.

“Our electronic silicon-on-insulator or SOI gauges are primarily used for general reservoir and production monitoring and to provide information on how the reservoir responds to artificial-lift operations,” said Tad Bostick, Weatherford’s Vice President of Reservoir Monitoring. “And, we keep making advances to these systems as industry needs demand and expand.”

These gauges are available as a single-point, digital pressure/temperature (P/T) sPOD™ gauge and as a multipoint, digital mPOD™ gauge. The sPOD gauge is ideal for completions where a single P/T reading is required, such as rod-pumping, coalbed methane or coal-seam gas applications.

The mPOD gauge enables multiple gauges to be deployed, powered and communicate with the

120 Oil Review Middle East Issue Seven 2012

The outputs from the i-DO® and LOWIS™ software optimisation packages are presented in a usable format and in real time to engineers

Quartz gauges, incorporating a quartz transducer into a high-temperature electronic design, have been added to the reservoirmonitoring portfolio surface on a single cable. The mPOD gauge is typically used to measure both intake and discharge pressure and temperature off a pump, as well as the vibration of a pump for more comprehensive optimisation of pump operations.

Weatherford has installed nearly 3,000 of these gauges worldwide.

In addition, quartz gauges have been incorporated into the reservoir-monitoring portfolio.

These are high-performance gauges that incorporate a quartz transducer into a hightemperature electronic design.

“The electronics are fully contained in a robust, hermetic package for operations up to 150°C (302°F) and in high-pressure environments,” said Bostick. “While we were initially using third-party quartz gauges, we decided to develop and deliver our own design in 2007. The result is the Weatherford quartz gauge (WQG™) line, which has successfully been deployed in more than 100 reservoir-monitoring projects the world over.”

The next step forward in reservoir monitoring came in the manner of permanent in-well opticalbased sensors, including P/T gauges, downhole single and multiphase flowmeters, multipoint temperature arrays, and distributed-temperaturesensing (DTS) sensors.

“In 10 years’ time, we brought optical permanent-monitoring systems from the prototype stage to worldwide distribution, installing some 4,500 gauges in more than 400 projects,” said Bostick. “During that time, deployment has advanced from a single gauge in a well to multiple sensors that record a comprehensive set of reservoir data.”

These systems have been deployed to monitor reservoir production from multiple commingled zones, high-rate gas wells, high-pressure/high-

temperature wells, and to assess hydraulic fracturing and sand-control operations.

“We successfully deployed a five-zone, 10gauge, permanent in-well optical-sensing system offshore Brunei, an industry first,” added Bostick.

“Our operational experience enabled us to overcome significant installation challenges that would have normally taken 40 hours of rig time.

We accomplished the installation, which included 10 P/T gauges and DTS sensors in one cable, in 20 hours. This project represents the most complex, permanent, downhole-optical-monitoring system deployed to date.”

Using 10 years of experience worldwide with optical P/T gauges, Weatherford has just introduced its new extreme-environment optical gauge, based on an improved glass Optical Cane™ sensor and sealing technology.

The new gauge can withstand continuous temperatures to 200°C (392°F) and pressures to 1,380 bar (20,000 pounds per square inch) with short-duration pressures to 2,068 bar (30,000 pounds per square inch. A successful field trial in a multistage fractured shale well in Australia tested the limits of the gauge with downhole temperatures reaching 191°C (376°F) and pressures to 1,248 bar (18,100 pounds per square inch) during seven stages.

“We are extremely excited about this new gauge, which capitalises on years of lessons learned in the most hostile downhole wells,” said Bostick.

Multipoint optical-sensing technology for ultrahigh temperature – approaching 300°C (572°F) reservoirs, such as those for thermal, heavy-oil recovery using steam – further strengthened the offering.

“Today, we have the broadest range of reservoir sensors, which we offer under our WellScan permanent-downhole-monitoring system,” said Bostick. This system enables the operator to monitor each stage of the completion and production, from when they first install the gauges to when they activate the artificial-lift system to when they begin to ramp down production to decommission the well. The system provides true zonal monitoring, using the downhole flowmeters to obtain real-time flow allocation from each well.

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“One client has used our permanentdownhole monitoring to instrument 30 wells from one platform,” said Bostick. The operator uses the real-time pressure, temperature, flow and DTS measurements to know exactly what is being produced from each well, without the need for a separator.

In the future, the industry trend to do more downhole monitoring is expected to continue, particularly as the reliability and robustness of the gauges keeps improving.

“Our WellScan electronic gauges and optical sensors have proven themselves in conventional and unconventional reservoirs around the globe,” said Bostick. “And we will continue to increase their application range to higher temperature and pressure regimes to better manage the real-time production information, as well as to tie into reservoir simulators to enhance the management of reservoir exploitation.”

Enhanced view In recent years, the concept of the ‘digital oilfield’ has taken hold in the E&P industry, in which an integrated collection of sensing and control hardware and software are used to optimise production from fields. It aims to reduce operating costs and provide the operator with the most accurate picture of how the asset is performing.

“Our Field Office™ suite of software tools takes the real-time data gathered from our range of production solutions and provides insight into how a multidisciplinary asset team can best manage their entire asset,” said Ashok Dixit, Software Program Director for Weatherford.

Field Office software is not designed to simply help sell hardware but rather to complement and enhance other optimisation products. “We offer a comprehensive software portfolio that optimises overall field operation,” said Dixit. “Our solutions provide support until the very last drop of oil is produced.”

WellFlo® well-analysis software is a sophisticated well-modelling tool with broad applications for producing or injection oil wells.

“One of its greatest strengths is its capability to support multiple artificial-lift systems, which

includes helping the operator select and design the best artificial-lift option for their well—not simply for today, but for performance expected in the future,” said Dixit.

The sophisticated engineering calculations within the WellFlo software integrate with the LOWIS life-of-well information software. This webbased, enterprise-wide, well-measurement suite combines the engineering calculations from the WellFlo software with real-time data collected by the SCADA system to improve the efficiency of operations related to production, artificial-lift and well services.

“The industry’s move from conventional to unconventional reservoirs such as shale gas, shale oil and heavy oil is an unavoidable fact” “We have developed multiple real-time analysis workbenches to support gas well deliquification rod pump, gas lift, electrical submersible pumping, progressing cavity pumping and plunger lift,” said Dixit. “Soon these artificial-lift analysis workbenches will be available on the recently acquired CygNet® enterprise operations platform as well.”

What WellFlo and LOWIS software do for the reservoir and artificial lift, ReO® software and its accompanying intelligent daily operations (i-DO) software do for surface facilities. ReO software performs simulation and optimisation on equipment, such as flowlines, chokes, separators, compressors and pumps. i-DO software links the real-time information from wells and surface facilities, including other corporate data sources, with WellFlo and ReO software to ensure that reservoir, well and facility models are constantly updated for proactive integrated asset management.

“The industry’s move from conventional to unconventional reservoirs such as shale gas, shale oil and heavy oil is an unavoidable and present

Weatherford’s WellFlo® well-analysis software is a sophisticated well-modelling tool with broad applications for producing or injection oil wells

fact,” Dixit said. “For example, we have very little information about the capabilities of hydraulic fracturing for shale oil. We are moving to provide smarter solutions for shale oil such that we take much of the guesswork out of what is going on.

Eventually, we will have so much data that we think these unconventional assets will be considered conventional assets in their own right.”

With a production optimisation portfolio that boasts some of the E&P industry’s leading production solutions, Weatherford continues to enhance and expand its production offerings.

Already a leading provider in all forms of artificiallift systems, the company also offers some of industry’s leading flow-measurement and downhole-monitoring technologies; and it continues to save operators time and costs with innovative sensing, monitoring and control hardware and software. n

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S19 ORME 7 2012 Adipec 08_Layout 1 24/10/2012 18:29 Page 124

Mott MacDonald at ADIPEC 2012 GLOBAL MANAGEMENT, ENGINEERING and development consultancy Mott MacDonald is working on a number of key projects in Abu Dhabi and the wider region aimed at maintaining operational efficiency and increasing production across various oil and gas fields.

“Abu Dhabi is aiming to boost crude oil production capacity from 2.7mn bpd to 3.5mn bpd by 2017,” said Hisham Alami, Mott MacDonald’s general manager for oil, gas and petrochemicals in Abu Dhabi.

Mott MacDonald is currently working as project management consultant (PMC) for oil network modifications at Umm Shaif and at the Lower Zakum Field on a series of brown field and green field works to increase the oil production by 100,000 bpd. The consultancy is also involved in modifications to the Upper Zakum field where a gas lifting system is being replaced with an electric hydraulic system that will eliminate the use of H2S (hydrogen sulphide) gas.

In Abu Dhabi fast-growing demand for gas from petrochemicals and aluminium industries has led to shortages. The Emirate reinjects a large amount of natural gas back into wells to repressurise them and to increase oil recovery.

However, companies are now considering

124 Oil Review Middle East Issue Seven 2012

replacing natural gas with nitrogen and carbon dioxide. Mott MacDonald is currently conducting a conceptual study on behalf of Abu Dhabi Company for Onshore Oil Operations (ADCO) for the Bu Hasa field. ADCO intends to replace 600mn standard cubic feet per day of gas currently being injected for recovery in South Bu Hasa with nitrogen supplied from Mirfa. Using carbon dioxide in this way will play a part in mitigating greenhouse gas emissions and a pilot project for injection of carbon dioxide we are conducting for ADCO is giving promising results.

Working with GASCO in the Habshan field, Mott MacDonald is providing engineering and procurement services for a new system that will recover gas that would be normally flared during routine shutdown operations.

Mott MacDonald has a well-established presence in the Middle East dating back to the 1960s and will celebrate its 50th anniversary in the UAE next year. The consultancy employs over 14,000 staff worldwide working across a network of 170 offices in 50 countries. It has an oil, gas and petrochemicals team of more than 1,400 staff. Among its flagship oil and gas projects in the UAE are the Upper Zakum field development, the Jebel Ali chemical storage facilities and the

Mott MacDonald’s activities in the region also include providing detailed engineering, procurement support and construction planning and supervision for the retrofitting of LNG facilities in Oman.

Inter Refineries Pipelines. Mott MacDonald is the project management consultant for Takreer’s Ruwais refinery expansion, with responsibility for managing three EPC packages: offsite and utilities, tankage and associated pipe work and marine facilities.

In March 2012 the company received official recognition for its safety record as project management consultant on the Bab Gas Compressor Project. The project achieved 25mn man-hours without lost time injuries, with 5,000 staff working on site at peak.

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Certification double for gas and flame detector range DRÄGER IS ONE of the leading global manufacturers of gas and flame detectors in the world. The company has recently launched its first ever range of SIL 2 devices to have TUV certification on both the hardware and the software.

Dräger, like many other manufacturers has attained SIL 2 certification on the hardware of their earlier gas detectors, but the Polytron 8000 series is the first to have its software certified as well. This is important for users requiring a ‘true’ SIL 2 F&G system.

The stainless steel or aluminium Polytron 8000 transmitter and display can be fitted with the following sensors, all of which are manufactured by Dräger themselves: 6 Electrochemical sensors for toxic gasses 6 Catalytic bead sensors for hydrocarbon gasses and hydrogen 6 Infrared sensors for hydrocarbon gasses and CO2 The 8000 series can be fitted with optional dongles, offering sensor life indication with a

Dräger's Polytron 8000

JESCO to exhibit latest pipeline technology MARKET-LEADING PIPE MANUFACTURING company, Jubail Energy Services Company (JESCO), will be exhibiting at this year’s ADIPEC. JESCO, which was established with a state-of-the-art manufacturing facility to produce carbon steel seamless pipe products, produces casing and seamless pipes from 5.5” to 16”, including intermediate sizes. The pipes are produced to meet API Standards and the company’s proprietary steel grades cover critical features such as sour service, high collapse and high compression. JESCO’s annual production target is 400,000 metric tons of seamless line pipes and OCTG products.

The manufacturing and control process is based on equipment designed and produced by Danieli & C Officine Meccaniche SpA of Italy. FQM technology allows JESCO to produce high quality pipes with a high degree of production flexibility, versatility and efficiency.

The FQM 3-roll retained Mandrel Mill has pronounced advantages over other seamless pipe manufacturing technologies like improving wall thickness tolerances, pipe surface quality and pipe outer diameter accuracy.

Through the latest heat treatment technology JESCO is able to achieve API grades and tailored steel grades. The company’s proprietary steel grades cover critical features such as sour service, high collapse, high compression or a combination of them all with a capacity of 200,000 metric tons.

In 2009 the plant was granted API certification and in 2010 the company was listed in the Saudi ARAMCO vendor list as one of its approved local suppliers.

126 Oil Review Middle East Issue Seven 2012

permanent, battery-style indicator on the display, as well as data logging. The data logger records every time gas is detected, even when it is below the alarm level.

To accompany the SIL 2 gas detectors, Dräger offers the Flame5000, an imaging based flame detector. This advanced technology is more reliable than UV and IR based flame detectors, which give frequent false alarms. Most importantly it gives fast and reliable detection of a fire, without any loss of sensitivity when sunlight is in the detector’s field of view. The image from the CCTV camera gives instant confirmation of a fire and can also be integrated into the security system.

Dräger also manufactures portable gas detectors, self contained breathing apparatus sets, escape sets, respirators, various other PPE, rescue shelters, fixed breathing air systems and training simulators.

Dräger will be at ADIPEC at stands 1040A and 10023 and the Flame5000 and new 8000 series detectors will be on display.

Pipe coating solutions PIPE COATING SOLUTIONS provider, Bredero Shaw, will be exhibiting at this year's ADIPEC show. The company provides tailored services to the oil, gas, and water industries and its Middle East pipe coating operations are located in Ras Al Khaimah, UAE. Bredero Shaw offers a wide range of onshore and offshore pipe coatings including: anti-corrosion coatings; thermal flow assurance coatings; protective and weight coatings; and internal coatings.

Bredero Shaw’s facilities around the world apply these coatings on line pipe, field joints and other fabricated production structures, such as bends, spools, jumpers, etc. Over 400,000 km of pipelines around the world have been protected using Bredero Shaw technology and services.

Bredero Shaw also maintains a fleet of advanced mobile coating facilities and equipment that can be quickly mobilised and stationed anywhere.

www.brederoshaw.com

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Flame-resistant apparel company outlines regional plans BULWARK® PROTECTIVE APPAREL is the world’s largest manufacturer of flameresistant (FR) apparel. The company, which will be exhibiting at ADIPEC, is part of VF Corporation, which has been in business for over a century and is the world’s largest apparel manufacturer with a value of US$16bn on the New York Stock Exchange. Bulwark has an extremely broad range of premium flameresistant apparel. Priding itself on its innovation and quality, Bulwark provides advanced protection, comfort and durability to hundreds of thousands of workers in oil and gas and energy industries across the world. Bulwark is headquartered in Nashville, US, with distribution throughout the world.

Innovative lightweight garments, specifically designed for hot climates, are stocked to meet local requirements in the company's new regional distribution centre in Jebel Ali Free Zone, UAE, aided by dedicated local sales support from the Middle East office. Bulwark has pioneered many of the technological advancements in the FR market, and continues to do so with one of the industry’s most comprehensive collections of technical personnel. Bulwark has played a key role in the ongoing development and continuing improvement of FR garment technology. Bulwark’s 40 year history in this business provides a proven track record of garments tested in the most extreme working conditions. Oil Review spoke to Nick Graham, General Manager of VF Imagewear for EMEA.

Do you feel you have gained traction in the Middle East market this year?

In fact we have gained a lot of traction this year. We are proud to be providing protective apparel in the Middle East for the likes of Saudi Aramco, BP, Exxon, Baker Hughes, Petronas, EMAL, ABB, Gazprom, OMV and many more. We are committed to the region for the long term, stocking lightweight breathable products here with local expert support from our team in the Dubai office.

What have been the main demands from potential oil and gas clients in the region?

Obviously with the hot climate everyone wants the most lightweight, breathable, comfortable protective apparel possible. New innovations in fabric technology have been able to deliver better solutions with many choosing to switch over to our Cooltouch®2 and Comfortouch® collections because they genuinely offer the best combination of comfort, protection and value on the market. But when it comes to safety you really can't stress enough the importance of good quality - you need to trust the garment to do the job in that critical moment when you need it the most. That's why we make the garments ourselves and have them tested and certified by independent third parties UL and Centexbel. In addition, clients always want their product delivered yesterday! That's why we invested in stock to service this demand and we have one million FR garments in stock. Bulwark® is about peace of mind - that the garment will protect you and you can get it delivered quickly.

Are you looking at bringing any new products into the region next year?

Absolutely. Innovation is part of the DNA of both Bulwark and parent company

www.bulwark.com

VF. It's an ongoing commitment from our global product team, in partnership with our customers who give us great feedback from wear trials in the field.

We constantly refine the collection, adding more colours and choice where our customers need it.

What has been the reception been to your other brands, like Red Kap and Timberland Pro been?

Our sister brand, Red Kap, has been in the Middle East for decades already and is showing strong growth now in the general workwear market. Timberland is now part of the VF family and we could not be any happier! The Timberland Pro footwear collection is a perfect match for the Bulwark brand in the safety market as it is based on the same principles of quality, innovation, protection and comfort. Often people tell me after wearing a pair for a day that they are the most comfortable shoes they have ever worn. We always encourage people to try for themselves.

What are your main target markets for fame resistant clothing?

It's really all about providing peace of mind to those folks out there in those tough and often dangerous working environments. It's why we do what we do.

Our 451 video at bulwark.com sums this up much better than I can. I can also share that Bulwark is already the largest FR manufacturer in the world and of course we aim to be number one in the Middle East.

Statoil making progress on increasing flow from ageing oilfields NORWAY’S STATOIL, OPERATOR of the huge offshore Snohvit gas field off northern Europe which supplies an island-based LNG plant, has reported progress on increasing the flow and lifespan from its ageing Mikkel and Midgard fields nearby.

The fields feed the huge Asgard B floating platform.

The company, which is exhibiting at ADIPEC will be installing special extra-reliable compressors on the seabed itself, increasing the

The Snohvit gas field supplies an island-based LNG plant

128 Oil Review Middle East Issue Seven 2012

operating pressure to 60 bar whilst at the same time reducing it below and thereby creating a vacuum effect.

The expected outcome is to extend the life of these fields significantly, adding 29bn boe starting Q1 2015. Component technology from the aerospace industry is being utilised to build compressors that can work reliably for the required period in these exceptional conditions with minimum intervention. The ongoing project will presumably act as a testbed for other challenging developments in hostile Arctic waters, such as the Barents Sea and Alaska’s North Slope, too.

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ISISAN targets Gulf region growth LPG STORAGE AND transportation tank specialist, ISISAN, now has branches in Istanbul, Dubai, Algiers, Frankfurt and Mumbai. The company, which is exhibiting at this year’s ADIPEC, offers its products and services worldwide, through one production base in Turkey, three service centres and two sales offices.

ISISAN, which has its headquarters and production base in Turkish industrial city, Kayseri, has a considerable share of the market for refrigerated and vacuum insulated tanks for low temperature and cryogenic services. Their uses include transportation of CO2, LNG and other gases.

Founded in 1967, ISISAN started doing business in the Gulf region in 1985 and ISISAN Gulf FZC was founded in 2008. ISISAN Gulf now includes the company’s engineering and sales office in Dubai and an after sales service centre and a workshop capable of assembling bobtail tanker trucks in Oman.

“Our engineers are professionally qualified and experienced in gas industry,” said Augusthy Mchalil, executive of ISISAN Gulf. “Some of them have designed and managed systems for companies in the Gulf region before. This enables ISISAN to understand and analyse the needs of its customers.”

ISISAN is targeting the continued growth of its business in the Gulf region. “We already have a strong position and an increasing share of the Gulf market,” said Adnan Husrevoglu, ISISAN exports manager.

“Recent market developments show that there is great growth potential in the LPG sector, particularly for semi-trailers.”

www.saudileather.com

SLIC’s specialist industrial footwear at ADIPEC Saudi Arabian footwear company, SLIC, has expanded to become one of the leading suppliers of industrial safety and work footwear in the Middle East and Africa. SLIC offers industrial footwear that is both tough and comfortable. By utilising the latest technologies, SLIC produces work footwear that is high in quality, flexibility and performance. As a manufacturer, the company also ensures that it meets the world’s highest safety standards. SLIC is dedicated to the production of highly comfortable work footwear that also offers the added safety of reinforced, composite toes. SLIC guarantees all of its products against manufacturing defects for a six month period and will be exhibiting its range at ADIPEC 2012.

High precision tubes for critical environments AS A LEADING manufacturer of stainless steel, super-austenitic, Duplex, nickel and titanium alloy tubes, Fine Tubes Ltd. are supplying the oil and gas and petrochemical industries with high specification tubes for various applications in the most hostile sour well, subsea or downhole marine environments.

The high quality tubes, manufactured in the UK, are supplied in a broad range of stainless steel, nickel alloys and titanium with a strong demand for stainless steels 904L (UNS N08904) and 254SMo/6Mo (UNS S31254), along with nickel alloys 825 (UNS N08825) and 625 (UNS N06625) for global offshore and onshore projects. Control and instrumentation tubes, downhole control lines, subsea control lines for umbilicals, and high pressure tubes are a

130 Oil Review Middle East Issue Seven 2012

selection of the product types Fine Tubes will be presenting at the 2012 ADIPEC in Abu Dhabi.

Fine Tubes’ specialist expertise in special grade stainless steels such as 904L and 254SMO make the tube manufacturers the ideal partner for the supply of instrumentation packages used in the construction of Offshore FPSO, FPSS’s, Spars and TLP’s. Specialist drawing techniques have been developed by Fine Tubes’ engineers for alloys such as MP35N, Nitronic 50, super alloy C276 and alloy 718 used for pressure housings on ‘downhole-measurement-while-drilling’ (MWD) as well as ‘logging-while-drilling’ (LWD) tools.

Extensive raw material stocks are maintained at their production site in Plymouth, UK, to ensure production and delivery profiles are in accordance with their global customers’ demands. All tubing products are manufactured on a ‘make-to-order’ basis in order to accommodate customer specific requirements.

Fine Tubes will be at the ADIPEC exhibition from 11–14 November 2012 on the stand of Petro Middle East, an ADNOC approved company who has representing Fine Tubes for over 10 years in the UAE. In addition, due to growing business in the oil and gas sector and as part of Fine Tubes’ global expansion strategy, a further network of agents in the Middle East has recently been appointed in Qatar, Oman and Saudi Arabia.

Nick Head, Fine Tubes’ business development executive for the oil and gas industry, will be available at the show to answer questions and to discuss tubing requirements and Fine Tubes latest product developments. During ADIPEC in Abu Dhabi Fine Tubes will be represented on the stand of Petro Middle East, stand no. 5060, at booth B2.

For an appointment during the ADIPEC expo or a product presentation, contact nhead@fine-tubes.co.uk. Visit www.finetubes.com for further information.

C

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Iraqi oil is poised to become a game-changer for world markets says the IEA.

Iraq’s impact

examined I

RAQ’S OIL AND gas resources hold the key to the country’s future prosperity and can make a major contribution to the stability and security of global energy markets. So says the International Energy Agency in a special report*, issued ahead of their annual World Energy Outlook.

Key findings of this landmark survey – the first the OECD’s energy watchdog has produced covering a major Middle Eastern producer – are as follows.

6 Oil and gas resources are “immense” and the costs of production are amongst the lowest in the world.

6 Iraq is already the world’s third largest oil exporter, with plans to expand output of both crude and natural gas rapidly.

6 Gas is a much under-utilised resource, with more than one-half of what is produced being wastefully flared.

6 Catching up and keeping pace with the rising demand for electrical power is “critical” to national development.

6 The overall level of energy infrastructure and institutions is certainly improving, but continues to be a serious constraint.

On this last key point, there is the legacy of physical damage and years of poor maintenance to cope with, plus a lack of consensus on overall governance of the entire hydrocarbons-based sector.

“Oil is the cornerstone of Iraq’s economy”, the report concludes. Last year export revenues attributed to this single commodity accounted for 72 per cent of total GDP, compared with just 52 per cent in the country with which Iraq is so often compared, Saudi Arabia. Iraq’s population is significantly larger than Saudi Arabia’s. “[The] twin challenges for Iraq are to increase its oil revenues and then use them to support greater diversification of its economy,” the report says.

On the more positive side output of oil [and associated gas too, of course] is already on the way up and is expected to be of the order of three million barrels per day this calendar year. By 2020 it should be more than six, and by 2035 – the standard long-distance reference point used by not just the IEA but also other analytical agencies – it could be somewhere between eight and nine million bpd. By far the most significant increases will come from exploitation of the giant fields of the south.

“Our High Case+ of nine million bpd by 2020 would equal the highest sustained growth in the history of the oil industry,” the agency points out. This will of course depend on the development strategy adopted, and on the speed (and co-ordination) of “investment along the supply chain”.

This in turn means avoiding bottlenecks in storage and transportation, making available sufficient water to support this level of production, and the availability of both drilling equipment and expertise.

Most of this oil – both today’s production and the expected increases – will be exported, and in turn most of these exports will be heading towards Asia – to China in particular. Other reports indicate clearly that this is where consumption

Source: International Energy Agency

132 Oil Review Middle East Issue Seven 2012

Source: International Energy Agency

“The twin challenges for Iraq are to increase its oil revenues and then use them to support greater diversification of its economy” is growing fastest right now, and expected to do so more or less right through the long-term review period.

In terms of oil on its own, the commodity about which there is most discussion right now, the bottom line is that, “Iraq accounts for 45 per cent of the growth in global production to 2035. By the 2030s it becomes the second largest global oil exporter, overtaking Russia.”

Many of the same potential prospects seem to exist down the line for the eventual development of gas.

The less welcome news is that meeting the anticipated levels of oil, gas and electricity output over the period to 2035 will require over US$530bn in investment. But, “Iraq stands to gain much more – almost US$5 trillion in revenues from oil export over the same period, an average of US$200bn per year. Revenues of this magnitude can transform Iraq’s future prospects, with the potential to stimulate much-needed economic growth and diversification.”

Funds apart, all that is lacking, according to the report, is, “strengthened institutions and human capacity, a stable regulatory framework and sound longterm strategies for the energy sector – and efficient, transparent management of revenues and spending.” n

Much difficult ground covered IRAQ IS ALREADY the world’s third-largest oil exporter, and has both the resources and intention to increase its output vastly. Contracts are already in place, the International Energy Agency points out.

But the key question the Paris-based experts ask is, will Iraq’s ambitions be realised? And what would be the implications for the nation’s economy, and for world markets of this number-one traded commodity?

“The obstacles are formidable,” the agency says, listing political, logistical, legal, regulatory, financial, and security-related issues, and insufficient skilled labour, too. “One example: in 2011, grid electricity could meet only 55 per cent of demand.”

The writers of this special report, published just ahead of the latest edition of the “World Energy Outlook”, have examined these vital issues with the support and close co-operation of the national government and many other leading officials, commentators, industry representatives and international experts. They have looked into the prospects for natural gas and power supply too.

* “Iraq Energy Outlook”, 9 October 2012, downloadable at www.worldenergyoutlook.org + Most IEA reports present a series of possible scenarios, see any edition of “WEO” for details (next edition to be published on 12 November)

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The supply/demand debate moved to Germany at the end of September. OPEC’s Secretary General, Abdalla Salem El-Badri, was there to put forward the organisations’ point of view.

Berlin conference sees OPEC outline

energy future O

PEC’S LATEST VIEWS on the current energy scene were summed up by Organisation Secretary, General Abdalla Salem El-Badri, at a conference organised by the German Council on Foreign Relations in Berlin on 28 September. The topic was the subject of a debate between OPEC and Wintershall Holding GmbH, the company being Germany’s largest single oil and gas producer. (The full text with annexures can be viewed at www.opec.org) El-Badri pointed out that energy issues are going to be at least as important in the future as they have in the recent past. “The world will add more than a combined India and the US to its population in just over 20 years,” he said, adding that all of those new citizens will need a combination of food, water, work and comfort.

He went on to say that the global economy is certain to rebound in time but, nevertheless, “billions of people continue to suffer from energy poverty.”

So, in short, world demand for energy is certain to grow. OPEC believes that by 2035 it will be more than 50 per cent higher than it was in 2010.

“To meet this challenge we need a stable and predictable market," said El-Badri. "We need to focus on the efficient and sustainable development of all energies. We need to appreciate just what each energy source can offer to this future. And we need to allow producers and investors to make sure future energy demand can be met.”

In Vienna, the current view is that fossil fuels will still be contributing 82 per cent by that distant date, although the critical share of oil will fall from 34 per cent to 28 per cent. Oil will still remain central to growth in many sectors, especially transportation. Gas is expected to increase from 23 per cent to 25 per cent.

Renewables will only be supplying three per cent by 2035, and nuclear six per cent.

“Some may ask, can we meet this demand? I have no doubt that we can,” said El-Badri.

In more detail, and referring to the Organization’s latest World Oil Outlook, El-Badri repeated that global demand is likely to increase by nearly 23mn bpd between 2010 and 2035, to close on 110mn bpd. This will be driven by demand from the fastest growing energy consuming region, Asia. To meet this sustainably will only be possible due to improved technologies such as EOR, and a combination of

134 Oil Review Middle East Issue Seven 2012

Source: Organisation of the Petroleum Exporting Countries

"When some people talk about peak oil, let me say, it will not be any time soon” new resources and mainstream supplies.

To support this he pointed out that the US Geological Survey recently estimated total global recoverable resources to be around 3,500bn barrels.

“To put this into some context, cumulative oil production has been less than a third of this," said El-Badri. "When some people talk about peak oil, let me say, it will not be any time soon.”

But to put off that inevitable day, huge investment is needed in people and resources.

“Above all, you need management who has the guts to take risks, because this is the name of the game in the oil industry,” said El-Badri.

At this point he stressed the role of Germany’s single largest energy producer in Libya, where over 150 wells have been drilled by this operator which is now one of the largest in the country. But to take risks like that, stability is an essential prerequisite, said El-Badri, and at the heart of this he contends is security of both

demand and supply: “Energy security should be viewed as a full circle."

As a result OPEC members are currently investing in 116 individual projects around the world, worth close to US$280bn if all proceed as planned – major investments, every one, that noone wants to see as money down the drain if demand does not keep pace with supply for whatever reason. This is the key challenge to the oil industry’s development, El-Badri effectively said.

But there are others. One is of course differing rates of economic growth around the world, especially the current lagging-behind of the industrialised countries, especially Europe.

Another is the necessity to protect the global environment. In this regard El-Badri cited the potential of carbon capture and storage (CCS) in particular.

Finally, El-Badri turned his attention to the current supply/demand situation. No shortages are foreseen, he said, but the operations of speculators are continuing to bring about international price volatility.

And for the future? “A committed, cooperative and coordinated approach aimed at fostering market stability in both the short- and long-term is something OPEC places much value on,” ElBadri concluded. n

S19b ORME 7 2012 Adipec 10_Layout 1 24/10/2012 18:36 Page 135

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S19b ORME 7 2012 Adipec 10_Layout 1 24/10/2012 18:36 Page 136

Active across Abu Dhabi’s booming energy sector, these are busy times for Abu Dhabi National Oil Company and its many subsidiaries.

Upstream, downstream: ADNOC leads

Abu Dhabi investment T

HESE ARE EXCITING times for Abu Dhabi’s oil and gas industry, as key longterm contracts with foreign investors come up for renewal, and as major upstream oil and gas expansions near completion.

None more so than for state-owned energy giant Abu Dhabi National Oil Company (ADNOC), in the thick of things on nearly all major industry initiatives across the high-spending emirate.

Established in 1971, ADNOC has 15 subsidiary companies working across all parts of the various fields of the oil, gas, and petrochemicals chain, as well as in crude oil and gas transportation and services. And this, of course, means coordinating massive spending efforts upstream, with Abu Dhabi targeting to increase its total crude oil production from around three million bpd to 3.5mn by 2017, just five years away. These plans are already well advanced, not only on such key upstream oil and gas projects, but in other important areas too.

It includes the launch of the flagship Abu Dhabi Crude Oil Pipeline (ADCOP), which opened earlier this year, bypassing the congested Strait of Hormuz, through which a large slice of the world’s traded oil passes. This strategic oil pipeline is evidence of Abu Dhabi’s forward thinking leadership in the energy world. The pipeline is seen as a vital way of safeguarding oil exports from the emirate in case of any disruption to tanker traffic through the Gulf by an increasingly isolated Iran.

Zadco’s Barakah rig

Upper Zakum The biggest single initiative underway right now is the development of the offshore Upper Zakum field, a key part of the emirate’s oil expansion strategy. In September, ADNOC unit, Zakum Development Company, (Zadco), awarded one of the key engineering and construction contracts for the development of the field to a consortium of Technip of France, and the local National Petroleum Construction Company (NPCC).

Since 2009, Zadco has implemented a production programme to increase capacity at the Upper Zakum field, from 550,000 bpd to 750,000 bpd, and to tap any undeveloped reservoirs.

The US$10bn project forms a central part of ADNOC's long term strategy to increase and sustain Abu Dhabi’s oil production capacity by 2017. Zadco is a joint venture between ADNOC, the US super-major ExxonMobil, and Japan Oil Development Co Limited.

The so-called Upper Zakum 750K scheme is huge in ambition and undertaking - as well as cost - and involves more than 240 km of subsea

136 Oil Review Middle East Issue Seven 2012

The onshore Shah sour gas project is on track for completion by late 2014 pipelines, ranging from 6” to 42”, and a further 128 km of subsea composite and fibre-optic cables. And it will entail lots of heavy metal too: almost 30,000 tons of offshore structures (jackets, riser platforms, flare towers and bridges), including approximately 3,000 tons of islands, modules and bridges.

The field is located in the Middle East Gulf, roughly 84 km offshore Abu Dhabi, and divided into four production artificial islands (Central, North, South, and West), with processing facilities at the Central Complex.

Shah maturity Another flagship US$10bn upstream project is also coming into focus, this time on the gas side. As

well as raising oil production capacity, the emirate is equally keen to bolster local production of gas in order to meet growing internal demand, both from industry and the residential sector. The onshore Shah sour gas project, which groups ADNOC with the Occidental Petroleum of the US, is on track for completion by late 2014, Al-Hosn Gas' chief executive officer, Saif Al-Ghafli, said recently.

Al Hosn Gas (Abu Dhabi Gas Development Company) is the name of the joint venture between ADNOC and the US’ Occidental Petroleum that is leading the project. Al-Ghafli said that four of the 20 wells needed to process one billion cubic feet a day of high-sulphur, or sour, gas have been drilled - the project is utilising three upstream drilling rigs - while the facilities and pipelines required on the enormous project are more than 60 per cent complete.

The Shah field is located 210 km southwest of the city of Abu Dhabi. When ready, the scheme will deliver 500mn cubic feet per day of clean gas as well as significant volumes of condensates, natural gas liquids and sulphur.

It’s development poses great technical challenges though because of the nature of the gas content involved, mostly sour, or high in hazardous hydrogen sulphide, which must be removed before the fuel can be used.

"As the first ever unconventional development of sour gas resources in the Gulf, Shah represents a new era in regional gas development, and is watched with great interest by the industry,” said Al Ghafli recently in a keynote address at the second KPMG GCC Energy Conference in Abu Dhabi. "This landmark project, using cutting-edge technology will not only fuel growth, industrial development and employment opportunities, but will also create sustainable wealth for our citizens far into the future."

ADNOC holds 60 per cent of the project, while Occidental holds the remaining equity.

Contract renewal Other upstream plans are taking shape too, both on the oil side and on the gas side. The Shah project is the largest and most advanced, but other sour gas projects being put together in Abu Dhabi include the development of the Bab and Hail fields.

And while the emirate has been busy raising gas production to meet local needs, it continues to be a reliable gas exporter too. Another ADNOC unit, Abu Dhabi Gas Liquefaction Company Limited (ADGAS) was the first liquefied natural gas (LNG) export company to be established in the Middle

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crude oil in the UAE, one of the few Middle Eastern states that allow foreign companies to explore for and produce oil within its borders.

Downstream growth The Zakum gas processing facility

The greatest test facing investors in Abu Dhabi right now is the shake-up of the onshore concession agreements with ADNOC East and North Africa region.

On the oil side, the greatest test facing investors in Abu Dhabi right now is the shake-up of the onshore concession agreements with ADNOC that have been in place for many years.

International heavyweights such as ExxonMobil, BP, Shell, Total and Portugal’s Partex are key shareholders in the industry, enjoying output from Abu Dhabi’s main onshore fields, under concession agreements that the companies or their forebears have held since 1939.

ADNOC became a partner in the 1970s, forming ADCO, which holds the rights on six main deposits through to 2014, when new deals will be put in place. ADNOC holds 60 per cent, with the foreign partners collectively holding the balance.

There is intense competition for a share of these blocks. The existing foreign partners as well as other producers may participate in bidding for Abu Dhabi’s 1.4mn bpd onshore oil rights as the current contracts expire. But the shake up is expected to result in applications from new investors including large oil and gas companies from China and India, among others, and change looks to be coming. Rex Tillerson, the head of ExxonMobil, the world’s biggest company by market value, has acknowledged that he expected Abu Dhabi to alter the terms for the Gulf emirate’s main oil producing concessions when the current agreements expire in under two years.

Abu Dhabi holds more than 90 per cent of the

Downstream, ADNOC also continues to pour investment into new facilities and in raising the bar in terms of technology and product sophistication.

This will put it in a better position to provide more advanced fuels for demanding markets such as western Europe.

The company is looking to offer cleaner diesel for export through its 2013 term contract, making it the first Middle Eastern producer to export ultra-low sulphur diesel outside the region on a term basis, with most of the shipments expected to go to Europe. While ADNOC has been able to meet summer diesel specifications in Europe, it aims to meet winter specifications by the middle of 2013 too. ADNOC’s plan for regular shipments comes as Europe faces a growing shortfall of diesel and jet fuel, because of lower refinery use rates.

The Abu Dhabi company plans to offer diesel cargoes with 10 parts-per-million (ppm) sulphur to

export customers for term contracts for next year. It has been offering the cleaner diesel fuel for exports in the spot market since late June. ADNOC had term contracts to export about 600,000 tonnes of gasoil a year with a higher sulphur content of 5,000 ppm until the end of last year.

Separately, it has also taken a more proactive role in the retail market, with ADNOC’s distribution arm taking over fuel stations that were run by fuel retailer Emarat in every emirate in the UAE except for Dubai, according to state news agency WAM. The move, by ADNOC Distribution, comes as three of the country’s four retailers - Dubai governmentowned Emirates National Oil Co (ENOC), Emirates Petroleum Products Co. and federally owned Emarat - grapple with losses due to fuel price caps and higher gas prices.

ADNOC’s large crude oil fields allow it to keep petrol stations going even with fuel prices set at less than US$0.50 a litre.

But it is not just about sitting on top of the resources. ADNOC has shown itself adept at managing change, and growing with the times. In uncertain oil markets, those are great skills to have. n

Fujairah pipeline triumph Arguably, Abu Dhabi’s greatest triumph in 2012 was the launch of the flagship Abu Dhabi Crude Oil Pipeline (ADCOP). Many years in the planning, the pipeline is designed to transport 1.5mn bpd, rising later to 1.8mn bpd; it filled its first tanker at Fujairah in July. The pipeline, which runs 404 km from Habshan in Abu Dhabi to the neighbouring emirate of Fujairah, is owned by the International Petroleum Investment Company (IPIC), an investment arm of Abu Dhabi’s government, but will be leased to ADNOC, and operated by ADNOC’s Abu Dhabi Company for Onshore Operations (ADCO).

The pipeline is significant in two key ways. One is that it can offset the reliance on crude oil terminals in the Gulf, hence, reducing shipping congestion through the Straits of Hormuz. The second is to offer an export capacity on the eastern seaboard of the UAE to accommodate larger vessels, due to the relatively deepwater at the location.

According to credit ratings agency Fitch, the inauguration of ADCOP has helped mitigate geopolitical risk for the emirate, and for ADNOC. It will allow up to 70 per cent of oil exports to bypass the Straits of Hormuz, giving Abu Dhabi a strategic advantage compared to some of its oil exporting neighbours in the event that regional hostilities led to the straits’ closure.

It has also opened up a new energy investment growth pole in Fujairah. The main oil terminal there consists of eight storage tanks each with one million barrels capacity.

There are also 12 ship loading pumps, each with a capacity of 27,000 barrels per hour, to supply the three Single Point Moorings (SPM), each of these having a capacity of 80,000 barrels per hour and other support facilities. There is also talk of further related investments in the future too including a possible export refinery.

Seamless steel pipes VOESTALPINE TUBULARS, AN Austrian seamless steel pipe manufacturer that will be exhibiting at this year’s ADIPEC, produces seamless steel pipes up to an outside diameter of seven inches (177.8 mm). The pipes are available in API or proprietary grades (VA Series), with API or proprietary/premium thread connections, such as VAGT® - a gas tight thread connection, VAsuperior® - another gas tight thread connection designed to meet ISO 13679, CAL IV and VAroughneck® - a connection suitable for rotated strings.

In addition to the seamless tubular products used in the drilling and completion of oil and gas wells, Voestalpine Tubulars produces mechanical tubes, boiler and heat exchanger tubes, pressure tubes and line pipe. These pipes are delivered to the automotive, petrochemical, construction, mining, tunnelling and fluid transportation industries.

138 Oil Review Middle East Issue Seven 2012

The company’s international sales network, with offices in Kindberg (Austria), Houston, Dubai and Moscow, provides an essential proximity to the customers and allows for comprehensive customer support. In addition, an alliance with NOV Grant Prideco provides customers with an expanded range of products and services.

The company’s commitment to quality and efficient utilisation of environmental resources is proven by its application of several management systems. The company is certified according to ISO 9001, 14001 (EMAS location), 15001 (Energy Management System), OHSAS 18001, TÜV and API respectively.

The company’s sales team is looking forward to meeting people at the ADIPEC exhibition, hall 12, stand AD166.

Contact sales@vatubulars.com for inquiries or requests.

S20 ORME 7 2012 Oil Spill_Layout 1 24/10/2012 18:39 Page 139

Oil Spill Prevention

S20 ORME 7 2012 Oil Spill_Layout 1 24/10/2012 18:39 Page 140

Spills can occur at any time at sea, and strict rules apply about preventing and dealing with them. Fortunately the Gulf is well equipped with the means for contingency planning and timely response.

Effective action against

oil pollution

Prompt and appropriate action can minimise the harmful impact of an oil spill

T

HE MOST DAMAGING oil spills always take place in a marine environment, either in the case of offshore production and loading/unloading operations, or incidents in transit, including those involving bunker oil.

Pollution is invariably the consequence, and the severity of this depends on a combination of the amount and nature of crude or product involved, the ambient temperature of the water, the underwater landform conditions and the weather conditions at the time. As well as the promptness, effectiveness and scale of the response reaction, of course.

Apart from during the conflict conditions that prevailed during 1991 the Gulf, Red Sea and North African regions have been mercifully free of really major events in recent years, but the industry is constantly monitoring the situation for the first signs of such an incident.

Normally the biggest fear is of a subsea blowout on the scale seen in the Gulf of Mexico in 2010. If such an event occurred in the shallow waters of the coral-rich Gulf this would have devastating consequences for wildlife, tourism and all smallscale maritime activity.

Strong case Prevention is invariably better than cure, and the industry puts top priority on this by insisting on such countermeasures as blowout preventer installation during the drilling and well development process, inspection and upgrading of

140 Oil Review Middle East Issue Seven 2012

all well casing materials, as well as eliminating the ‘human factor’ whenever this is possible, by automation, triple checking and so on.

In addition there is a strong case to be made out for the double hulling of ocean-going tankers, though this is of course a long-term solution to an ever-present problem.

In addition, there is a strong case to be made out for the double hulling of ocean-going tankers The major incident response methods are used by today’s recovery teams operated by specialised organisations such as Oil Spill Response Ltd (OSRL, locally headquartered in Bahrain), Marine Spill Response Corp (MSRC) and the various Swire emergency response teams, as well as by local contractors.

These techniques include as appropriate bioremediation using living agents that cause relatively harmless globules to sink to the ocean floor, controlled burning at the surface, use of floating booms to rein-in the area of water affected by surface skimming, construction of a physical bund to contain any spill that takes place on the

land margin, use of chemical dispersants, physical removal by means of dredging, vacuum treatment and/or centrifuging, and – in a few fortunate cases – simply ‘watch and wait’.

Many national and international organisations including various UN bodies themselves - have an interest in both preventing and ensuring adequate response to spills. Of these the leading by far is the London-headquartered International Petroleum Industry Environmental Conservation Association, which is quite properly funded by the global oil industry itself.

Principal forum All were represented at the Rio Plus 20 conference on sustainable development issues in June this year.

IPIECA is a multiple-interest institution which lists ‘Oil spill preparedness’ as just one of its Working Group activities; it describes itself in its annual report (2011 edition available on the website) as dealing with a range of environmental and social issues.

Set up in 1987, the IPIECA Oil Spill Working Group (OSWG) constitutes the global industry’s principal channel of communication with other international bodies – and the majority of governments that belong to them, such as the UN Environmental Programme and the International Maritime Organisation. It also provides the industry with its principal international forum for dealing with contingency planning and effectiveresponse issues.

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The OSWG’s multiple documents stress that oil spills of any type and source remain a serious environmental risk in whatever waters - warm or cold, deep or shallow – they unfortunately occur, including as a result of deliberate malicious activity.

Both the oil (including products processors and handlers) and shipping industries are susceptible, and accidents are likely to happen even in the most heavily monitored conditions.

Like the industry the members of the OSWG believe that prevention is normally the top priority, but simultaneously the oil and gas producers need to develop their own capability to respond adequately and promptly when such an incident does occur. Normally this means calling in the experts.

Incident after incident around the world, including many tanker break-ups such as the ‘Torrey Canyon’ incident of 1967 (in northern waters, long before the Group was formed), have shown that prompt and appropriate action can minimise the harmful impact on both the natural marine environment and those whose commercial activities depend on it, whether they be fishermen, small boat operators, pearl fishers or tourism businesses.

Put the two concepts together and you have what the group refers to as ‘Preparedness’, a state

IPIECA is engaged in a global initiative to produce effective action against oil pollution at sea of play in which the industry co-operates with itself and, most importantly, with affected governments to plan and rehearse co-ordinated response.

IPIECA aims to improve this preparedness continually by exchanging information about response procedures and general best practice, promoting co-operation between interested parties

www.imo.org

(both producing and responding industry and governments), encouraging the all-important ratification and implementation of relevant international conventions, and promoting what it calls “Net Environmental Benefit Analysis” (selfexplanatory) and “Tiered Response”.

In association with the IMO, IPIECA is engaged in a global initiative to produce effective action against oil pollution at sea and in all tidal waters, in the form of both contingency planning and implementation of internationally-agreed rules about what should be done in the event of an incident – ranked in terms of severity and scale, a subject that needs international agreement itself – occurring anywhere and at any time.

In addition it co-ordinates the planning, equipping and locating of a number of top-grade “Tier 3 Centres” (i.e. most comprehensively equipped) around the oil-producing and -receiving regions of the world, including right here in the Gulf and in the fast-growing Caspian too.

At these key venues are stored all the items of equipment and consumables needed including specialised ships and rotary-wing aircraft that can be rapidly mobilised in the event of an incident, in association with the initiatives offered by private organisations and certified local contractors, who take part in the many incident-modelling and training exercises that take place.

Oil Review Middle East Issue Seven 2012 141

Oil Spill Prevention

Harmful impact

Oil Spill Prevention

S20 ORME 7 2012 Oil Spill_Layout 1 24/10/2012 18:39 Page 142

The major incident response methods are used by today’s recovery teams operated by specialised organisations

The industry’s ability to respond is growing and improving all the time and in 2008 IPIECA brought together all its key recommendations into a single handy “Oil Spill Preparedness & Response Report Series Summary”, which can be read on the website.

This provides a complete overview of all the issues involved in dealing with spills from whatever cause at sea; we understand a version in Arabic is currently being prepared.

Many national and international organisations including various UN bodies themselves - have an interest in both preventing and ensuring adequate response A total of 17 different individual topics are covered in this Series Summary, seven of these on the various Biological Impacts (which differ widely by location), and the remainder on Contingency Planning itself.

The CP topics listed on this page include (somewhat abbreviated): Sensitivity mapping for response; Choice of options to minimise damage; Waste minimisation and management guidelines; Dispersants; Exercise planning; Safety guidelines; Guide to Tiered Preparedness/Response; and the various issues surrounding Compensation.

Not surprisingly an industry as important as this meets regularly to discuss and exchange experience about operating conditions and practical solutions that might apply all over the marine world. Most recent was iTen Media’s three-day Oil

142 Oil Review Middle East Issue Seven 2012

Spill India event, with exhibition, held in Goa midSeptember in association with the UK-based Interspill conference organisers and the Oil & Natural Gas Corp. This year’s theme was ‘Plan – Prevent – Protect’.

Summarised, the coverage of this recent nearby event neatly sums up the whole industry’s activities in addition to contingency planning and response overall: 6 Off- and onshore spills – prevention and response 6 Government issues and new regulations (national and international including IMO Protocols). “Companies’ response and operators’ expectations” 6 Case studies and lessons learned 6 Crisis assets identification 6 Public information, managing public opinions 6 Training, equipment and salvage 6 Use of volunteer and temporary workers 6 Managing data 6 Oil spill history 6 Response exercise planning 6 Compensation issues, current and forthcoming

6 6 6 6

Equipment transportation in emergency conditions Human resources and training ‘The fate of spilled oil’ Legal issues

At almost the same time the Society of Petroleum Engineers co-operated with the Australian equivalent to put on a conference on preparedness, contingency planning and response in Perth. A similar event had taken place in Portland, Oregon, in May. Interspill itself was held in March 2012, put on by the UK Spill Association. And shortly forthcoming is Spillcon 2013 (8-12 April), also to be held in Australia, at Cairns in the north.

Finally the big one coming up is of course the three-yearly International Oil Spill Conference 2014 in Savannah, Georgia, which runs from 5-8 May. Another Interspill-associated event, this is sponsored by all the big institutions such as IPIECA, the IMO, NOAA and the US Environmental Protection Agency. ■

www.ipieca.org

IMO at the helm FOUNDED IN 1948 to, amongst other tasks, ‘prevent pollution of the sea caused by ships and other craft operating in the marine environment’, the International Maritime Organization provides machinery for effective co-operation amongst governments. It is a specialised agency of the United Nations*.

The various agreements whose drafting and implementation it has overseen include MARPOL (Prevention of Pollution from Ships, 1973 with latest revision 1997), Pollution Preparedness, Response and Co-operation (1990), Civil Liability for Oil Pollution Damage (1969,amended in 1992 to set up a new International Fund for Compensation), as well as a special convention covering Civil Liability for Bunker Oil Pollution Damage (2001).

The IMO is responsible for convening many international maritime conferences and drafting international Conventions and Protocols – both on safety and pollution issues.

* www.imo.org

S21 ORME 7 2012 Tech Focus_Layout 1 24/10/2012 18:45 Page 143

Tank Management

S21 ORME 7 2012 Tech Focus_Layout 1 24/10/2012 18:46 Page 144

With the ever-increasing focus on productivity and increasing yields, not to mention safety, tank inventory management systems and tank overfill prevention systems are vital for tools for all terminal managers.

Tank and terminal

management solutions T

ODAY, PRODUCTIVITY AND increasing yields are fundamental demands from every business. Therefore, every single site needs to provide maximum storage space at the lowest costs with the highest safety standards. In addition, an increase of the worldwide consumption of oil products is recognised and leads to a higher turnover of media on the one hand, but also to a higher need of buffering peaks and establishing reserves on the other.

Solutions that will assist terminal managers successfully address challenges include tank inventory management systems and tank overfill prevention systems. This article provides information for those key solutions that most modern terminals have already installed and use on a daily basis.

Tank overfill prevention systems The primary task of an overfill prevention system is to prevent any major tank incident. The fully automated overfill prevention system must, according to the latest HSE report comply with Safety Integrity Level One (SIL 1) at the very least, based on IEC 61511. A fully automated overfill prevention system consists of a SIL classified level limit instrument, a SIL certified logic solver and an alarm annunciation panel, all of which are part of the shutdown system following IEC 61511 recommendations. The overfill prevention system must include independent layers of protection taking the following considerations into account: 6 Engineering, installation, operation, maintenance and proof testing of the system is part of the design scope.

6 Ensure full separation of inventory (tank gauging) and overfill prevention system. Preferably based on a diverse measurement principle (other physical phenomenon than inventory or tank gauging measurement).

6 A fail-to-safe loop design with the appropriate proof test intervals.

6 Ensure a safe process flow e.g. the receiving site should have control of the tank filling.

6 A safe mechanical design to fully hold the tank capacity in the secondary and tertiary containments.

6 Ensure appropriate organisational quality including the management of change, well maintained emergency response procedures and a culture and leadership following local and international standards.

For overfill prevention on storage tanks holding volatile, petroleum fluids, the industry best practice

144 Oil Review Middle East Issue Seven 2012

Figure 1: Safety Instrumented System components.

has been documented by the American Petroleum Institute (API) in the API RP 2350 standard. A number of tank overfill, fire and multiple tank explosion incidents, most noticeably the explosion at Buncefield, UK, in 2005 and the investigations after those events, have reinforced the interest in safety issues around petroleum storage facilities.

The explosion was the largest detonation since the end of World War II and rocked the Buncefield Petrol Depot north of London. 72mn gallons of fuel ignited, causing a shock that registered 2.4 on the Richter scale.

Owners, operators and users of tank terminals should ask themselves: 6 Could this happen to us?

6 Could we actively improve the safety at the terminal and how?

6 Are we really prepared for such events?

6 Could we keep the status quo of the current design?

6 Does the current system comply with latest applied safety standards to e.g. IEC 61508/ 61511?

The API 2350 standard highlights the importance of ensuring different layers of prevention; using diverse technologies and independent overfill prevention and tank gauging systems.

Industrial safety Industrial safety was focused mainly around safe work practices, hazardous materials control and the protective 'armouring' of personnel and equipment. Today, safety penetrates far deeper into more complex manufacturing infrastructures, extending its protective influence all the way to a companyâ&#x20AC;&#x2122;s bottom line. Contemporary safety systems reduce risk with operational

A number of tank overfill, fire and multiple tank explosion incidents have reinforced the interest in safety issues around petroleum storage facilities advancements that frequently improve reliability, productivity and profitability as well.

SIL (Safety Integrity Level) is one of the key indicators that customers can use as an objective comparison of instrument reliability from various suppliers. SIL data is an indicator for reliability, i.e., the better the numbers, the more reliable the instrument.

Safety instrumented systems (SIS) The safety instrumented system (SIS) plays a vital role in providing a protective layer around industrial process systems. Whether called an SIS, emergency or safety shutdown system, or a safety interlock, its purpose is to take process to a 'safe state' when pre-determined set points have been exceeded or when safe operating conditions have been transgressed. An SIS is comprised of safety functions with sensors, logic solvers and final elements. Figure 1 shows its basic components: 6 Sensors for signal input.

6 Logic solver with communications including signal processing and interfacing.

6 Final elements (valves, switching devices, drives) for final control function.

S21 ORME 7 2012 Tech Focus_Layout 1 24/10/2012 18:46 Page 145

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Tank Management

S21 ORME 7 2012 Tech Focus_Layout 1 24/10/2012 18:46 Page 146

Figure 2: Overfill Prevention Sensors in comparison to Tank Inventory Gauges.

6 Easy installation, simple commissioning and start up.

Tank Gauging Systems consist of field instruments, tank scanning units and inventory management software Sensors and transmitters As already mentioned, independent (from the tank gauging) overfill system should be installed in all storage tanks. In addition the measuring principle of sensors used for the overfill prevention it is recommended to be different form the principle used in the tank gauging system. For example if a radar gauge is used for the tank gauging system it is not recommended to use another radar for the overfill prevention system. A comparison table is indicated in figure 2.

Several type of sensors can be used for the overfill prevention systems such as servo gauges, displacers, capacitance probes, guided wave radars etc, however sensors based on active vibration technology with tuning forks have several advantages over other technologies such as: 6 Determination of the aggregation phase by measurement of the fluid density, gas versus liquid.

6 Tuning forks concept is as simple as it is robust.

Its active drive mechanism is operating continuously and always responds to power failures. The signal evaluation, a continuous monitoring of resonance frequency using a detection window, signals abnormalities immediately, thus providing maximum diagnostic coverage.

6 SIL2/3 compliant to IEC61508/61511.

6 Suitable for all cone roof tanks using existing tank fittings and floating roof tanks using existing still pipes.

146 Oil Review Middle East Issue Seven 2012

6 Very simple and cost effective proof testing by push buttons.

6 Can be used with any type of tank gauging system.

Automatic Tank Gauging Tank gauging is the generic term used for the quantity assessment of liquid products in bulk storage tanks. Usually the quantity assessment is expressed in net standard volume. High reliability and accuracy of the overall system are important as calculated data are often used for accounting, financial custody transfer and loss control applications.

Tank Gauging Systems consist of field instruments, tank scanning units and inventory management software. Field instruments are used to measure level, average temperature, water interface and where applicable observed density.

Tank Scanning units are used as acquisition units and in many applications also perform the inventory calculation as per API standards. The system layout of a typical tank gauging system is indicated in figure 3.

The level measurement accuracy is among the most important and has been stipulated by the American Petroleum Institute (API MPMS Ch 3.1B) and OIML (R85) which are recognised world-wide. Both recommendations require gauge accuracy of less than 1mm prior installation on the entire range. Prior installation means to a certified calibration ring either in vendors premises or in some cases to national metrology institutes e.g NMi or PTB. Suppliers of such automatic tank gauging systems are required to supply certificates proving a measurement accuracy of better than ±1mm (±1/16”) as compared to the reference system. The accuracy of the reference system

should be at least ±0,5mm (±1/32”).After installation the recommendation specifies accuracy of at least ±4mm (±1/8”) over the entire measurement range. The reference measurement after installation is always the reading form the manual hand dip. API has also released recommendation on the manual hand dip tapes and procedures on how manual hand dip should be done.

Based on the requirements of each application, specific solutions for the best fit level device and proven tank management systems is used. These solutions fit the application needs and can provide the required functions for level, average temperature, water bottom and where required density profiling based on the tank characteristics.

Tank gauging solutions for inventory control and custody transfer applications covers instruments for all parameters and different technologies like float and tape, servo, radar, guided-radar, hydrostatic and hybrid gauging technology.

Although several technologies exist only two types of gauges are commonly used. Those are the Servo Gauges and the Radar Gauges. Both technologies have advantages and disadvantages over each other and the selection on which one is the most suitable depends on the application, the type of the tank, the stored product and existing supports, nozzles or still pipes on the tanks. Servos Gauges for example is the recommended gauge for custody transfer applications in pressurised tanks like LPG as they are not affected by vapour pressure, vapour composition and low dielectric constant of the liquid. In addition, proof testing procedure is much safer as it can be done remotely form the control room with out having to access the top of the tank. On the other hand Radar Gauges are more and more often used in unpressurised storage tanks.

Conclusion Every company that wishes to improve its operation, be more competitive and provide high quality, innovating products and services should be able to follow and integrate into its daily operations new technological developments. Efficient, safe and environmental friendly operation of tank farms and terminals are among the most important daily challenges every terminal manager has to deal with. Developments of technology have provided managers with necessary tools to achieve high efficiency, operate the facilities safely and serve their clients better.

Endress+Hauser is a major supplier of measurement instrumentation and inventory control systems for monitoring and controlling liquids during processing, transportation and storage. At your terminal or tank farm, Endress+Hauser can provide turn key solutions to include instrumentation, system components, design, production, documentation, certification, factory acceptance tests, installation, site acceptance tests, business process integration, maintenance, service contracts and after sales support.

With more than 50 years of experience in Tank Gauging and Automation Solutions

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Tank Management

Figure 3 : Typical Tank Gauging System Layout.

Endress+Hauser has the largest installed base of instrumentation throughout terminals and tank farms worldwide. Endress+Hauser assumes the responsibility of guaranteeing the productivity, safety and accuracy of your tank farm or terminal. n

References

6 Overfill Protection for Storage Tanks in Petroleum Facilities, API RECOMMENDED PRACTICE 2350 THIRD EDITION

6 OIML R 85 Automatic level gauges for measuring the level of liquid in stationary storage tanks

6 API Manual of Petroleum Measurement Standards Chapter 3—Tank Gauging Section 1B—Standard Practice for Level Measurement of Liquid Hydrocarbons in Stationary Tanks by Automatic Tank Gauging

Senergy and Apache join forces TWO PIONEERING ENERGY industry companies have announced a partnership to provide the oil and gas industry with previously proprietary geosteering and other software that can improve the evaluation and productivity of unconventional resource developments.

Senergy, which provides fully-integrated project and asset development services across the energy industry, will receive patented and unique geosteering software designed by Apache as part of a cooperative software development agreement, and the technology will be used within Senergy’s Interactive Petrophysics (IP™) and Oilfield Data Manager (ODM™) software suites.

The new technology package consists of PetroSleek™, a patented and innovative tool for geosteering, together with several other unique modules which perform a variety of calculations to enhance the evaluation of subsurface formation data. Additional tools in the package include a complete unconventional resources workflow, a fluid properties tool and a salinity calculation tool.

“With the large number of high angle and horizontal wells now being drilled globally it has become essential to be able to position a well correctly in a target subsurface formation to maximise the productivity and therefore the value of the well,” said John Fraser, Senergy’s vice president of software. “PetroSleek™ enables geologists and drillers to visualise the well position in real time so they can make the necessary adjustments to steer the well to the correct target.”

Mike Bahorich, chief technology officer of Apache, said, “PetroSleek™ geosteering software, developed by Apache, will now be available to the industry through Senergy. PetroSleek™ is an innovative geosteering visualisation tool, and has been proven to be highly beneficial on Apache projects worldwide.”

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Technical Focus

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Honeywell to acquire majority stake in Thomas Russell Co. HONEYWELL HAS ANNOUNCED that its UOP business has signed a definitive agreement to purchase a 70 per cent stake in Thomas Russell Co., a leading provider of technology and equipment for natural gas processing and treating. UOP, part of Honeywell Performance Materials and Technologies, is a leader in process technology, materials and equipment to petroleum refining, petrochemical, and gas processing industries.

With the acquisition, Honeywell’s UOP will offer a broad range of key technologies and products that allow shale and conventional natural gas producers to remove contaminants from natural gas and recover high-value natural gas liquids used for petrochemicals and fuel. Under the terms of the agreement, Honeywell’s UOP will acquire a 70 per cent stake in Thomas Russell for US$525mn in cash. Honeywell’s UOP has a right to acquire the remaining 30 per cent stake and Thomas Russell has a right to sell the remaining 30 per cent stake in the company to UOP at a price based on operating income performance.

“Thomas Russell Co. is a terrific complement to our current business and is particularly well positioned to serve the growing market for processing shale gas, as well as gas from oil fields,” said Andreas Kramvis, president and CEO of

Honeywell Performance Materials and Technologies. “With this acquisition, UOP will provide a comprehensive range of key technologies to natural gas producers globally, as well as a broad range of technologies to convert natural gas feedstocks into high-value petrochemicals.”

The deal is subject to customary regulatory approvals and is expected to close in the fourth quarter. The company does not anticipate the closing of the deal to impact its earnings per share guidance range for 2012, and it expects the acquisition to be accretive to 2013 earnings.

Founded in 2002, Thomas Russell specialises in the design, engineering, fabrication and start-up of skid-mounted modular packaged plants systems for the recovery and upgrading of natural gas liquids (NGLs). NGLs, including ethane, propane, and butane are in high demand as feedstocks for petrochemical production.

“Thomas Russell will be joining a recognised leader in technology for refining, petrochemicals and gas processing, allowing the business to continue to grow to meet customer needs globally,” said Tom Russell, founder and CEO of Thomas Russell Co. “Our product and technology offerings complement those of UOP’s Gas Processing and Hydrogen business, and we share the same

commitment to the natural gas market.”

Honeywell UOP’s Gas Processing and Hydrogen business has technology, equipment and materials to treat and process natural gas as well as to purify hydrogen used in refineries. Its gas technologies extract contaminants such as water, mercury, sulphur and carbon dioxide from raw natural gas as well as technology to recover NGLs. The business has supplied technology to more than 3,600 individual process units for gas processing in a broad range of applications through the world, including new applications such as Floating, Processing, Storage and Offloading (FPSO) vessels that recover natural gas from offshore wells.

Honeywell’s UOP has increased its offerings in natural gas in recent years, acquiring the gas membranes product line from W.R. Grace in 2009 and forming an exclusive marketing alliance with Netherlands-based Twister B.V., a maker of advanced natural gas separation technology.

Honeywell’s UOP opened a gas processing design centre in Kuala Lumpur, Malaysia, in June 2008 and a manufacturing and operations centre to produce natural gas membrane elements in Penang, Malaysia, in July 2012 to better serve growing natural gas markets in Southeast Asia and around the world.

LNG mooring lines ‘stronger than steel’ THE INTRODUCTION OF new and larger vessels, Q-Flex and Q-Max, and new, often more exposed terminals becoming operational have changed mooring dynamics. The need to maintain workers’ safety at all times, whilst delivering maximum operational efficiency through lower costs and faster turnaround times remains unchanged.

DSM Dyneema, a close partner to the LNG industry, has done a study which concludes that these industry trends are changing the performance demands for LNG mooring lines. In parallel to DSM Dyneema’s investigation, in 2011 members of the LNG community created a users group to further investigate HMPE mooring line failures which TTI (UK) was asked to facilitate. DSM Dyneema is part of the users group, while at the same time continuing its own investigation programme.

DSM Dyneema has drawn up a number of recommendations to address these changing market demands and the three per cent failrate of HMPE-based LNG mooring lines. Key among these is the call for industry-wide standard guidelines for specifying and testing of LNG mooring lines – ensuring the right mooring line is commissioned for any particular working task and environment.

HMPE based mooring lines have been used in the LNG industry for over a decade and have proven their benefits over time in many different maritime applications such as oil tankers, containers, carriers, bulk cargo vessels, as well as Cruise liners, RoRo and Navy ships. Ropes with Dyneema®, used in 50 per cent of LNG mooring lines, are as strong as steel wire ropes of the same diameter but at only one-seventh of the weight allowing for easier handling. Ropes with Dyneema® are about 60 per cent of the diameter and 30 per cent of the weight of equally strong polyester or polyamide ropes.

BW Shipping, one of the world’s leading maritime groups in the oil tanker, gas and offshore segments operating a fleet of 96 owned, part-owned or controlled vessels and FPSOs, has equipped a fleet of

148 Oil Review Middle East Issue Seven 2012

www.dyneema.com

11 tankers with mooring lines made with Dyneema® made by Samson Rope Technologies and is seeing significant benefits.

A search for mooring lines that would be safer than conventional steel wire resulted in the selection of AmSteel® Blue mooring lines with Dyneema®. The lower weight of Dyneema® based ropes means reduced deckhand injuries. Moreover, in the unlikely event of a rope failure, ropes with Dyneema® show no snap-back like that shown by steel wire rope or polyester and nylon based ropes. Due to the nature of the fibre, effects like fish hooks or broken wire are not present thus preventing hand injuries.

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Weld Overlay Cladding

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Alan Robinson, Managing Director of Arc Energy Resources, discusses the benefits of weld overlay cladding to protect pipelines and associated components from corrosion; and reviews the options available using corrosion resistant alloys.

Using weld overlay cladding to increase

pipeline longevity I

N ORDER TO maintain the efficient and reliable operation of pipelines and other equipment in the oil and gas industry, engineers need to know what techniques are available to extend the life of new components or refurbish worn or corroded ones. Just as importantly, they need to know what the cost benefits are of such techniques compared to the use of expensive base materials or replacing the part.

There are a number of options available to protect flanges and the internal surfaces of equipment but the final choice will normally be based on an evaluation of factors such as the application, required service life, operational priorities, installation deadlines and, of course, budget restraints.

So, how can engineers ensure the long-term integrity of internal surfaces of pipelines, flanges and other equipment against aggressive corrosion caused by hazardous and corrosive oil and gas environments?

Where budget is not a constraint, engineers can simply specify components in corrosion or wear resistant alloys known to withstand the conditions. However, this is rarely the case and other, more cost-effective options are usually sought.

Where pipe, flanges or fittings and other components such as valves and pumps, require protection, weld overlay cladding is certainly a versatile option, providing the assurance of a heavy-duty metallurgically-bonded protective layer that will not be degraded in hostile environments. The use of carbon and low alloy steels clad with a corrosion resistant alloy has been common practice for some years and is a well proven, economical and technical alternative to solid alloys.

For use in aggressive applications, weld overlay cladding should be considered the default option because it will provide excellent protection and extend service life for new equipment; as well as refurbishing worn or older components that are already badly corroded or eroded.

Even pipeline equipment in enclosed areas would benefit from weld overlay cladding. While internal surfaces may need to be fully protected, a conventional and inexpensive stainless steel deposit may be adequate for the flange seal faces of pipes, valves and pumps that may suffer corrosion during their normal service life.

For the most corrosive applications, the use of a higher grade stainless steel, complex nickel chromium or hardfacing alloys is normally

An example of Arc Energy's weld overlay clad product

150 Oil Review Middle East Issue Seven 2012

recommended. Whilst these tend to be expensive if used in solid form, a three millimetre thick layer applied to the affected surface will offer the same operational performance and could lead to significant savings from the extended life expectancy of the equipment.

Protective materials These include austenitic (300 series) stainless steels, ferritic/martensitic (400 series) stainless steels, duplex stainless steels or the more complex high nickel chromium alloys. With apologies to the manufacturers of austenitic stainless steels, it is unlikely they would have the resistance required for the very worst conditions.

Inconel alloysâ&#x20AC;&#x2122; oxidation and corrosion-resistant properties make them the material of choice for many severe service applications. They are invaluable in natural gas applications likely to involve sour, corrosive gases such as hydrogen sulphide. However, whilst smaller valves can be cast in Inconel, the cost is frequently prohibitive for larger valves, which is where weld overlay cladding proves its cost effectiveness.

When repairing equipment, the affected areas can in many cases be premachined and, using automated weld overlay cladding or specialised manual welding, rebuilt with a corrosion resistant alloy (CRA) such as complex nickel aluminium bronze. Typically, the repair will even be superior to the original metal!

After first identifying the surfaces that need to be protected, engineers can choose from a number of welding processes and a wide range of cladding alloys Welding processes After first identifying the surfaces that need to be protected, engineers can choose from a number of welding processes and a wide range of cladding alloys. Weld overlay cladding technology presents the materials engineer with a wide choice of welding processes that offer immense flexibility. An almost infinite range of component shapes and sizes can be protected, with an equally wide range of base material/cladding alloy alternatives.

The GTAW (TIG) process can be used in bores as small as 20mm, and is ideally suited for components of varied geometry, where the position of the welding head requires frequent adjustment. These could range from a simple flange that needs to be clad through the bore and across the sealing face, to a complex valve body with several interconnecting bores. This flexibility also lends itself to the cladding of irregular shaped components, such as pump and valve internals.

GMAW (MIG), submerged arc and electroslag welding processes are used where large areas and thicker deposits are required. Fast deposition rates mean these methods also offer cost savings. A wider selection of consumable materials, which may not be produced in the standard solid wire form, is also available.

Selection of the most appropriate welding process is largely dependent on factors such as the size of the clad area; access to the area to be clad; alloy type, specified clad thickness; chemical composition limits; welding position; and NDT acceptance standards.

S22 ORME 7 2012 Tech Focus 02_Layout 1 24/10/2012 18:47 Page 151

When weld overlay cladding was first employed, re-machining after cladding was the norm, but as techniques and equipment have improved the â&#x20AC;&#x2DC;as weldedâ&#x20AC;&#x2122; finish has become much smoother, to the extent that many areas of clad equipment are now left as clad. This would not apply to the sealing/gasket areas, which have to be produced to the very finest of tolerances.

Arc Energy Resources are capable of restricted access weld overlay cladding to a minimum of 20mm diameter

Weld overlay clad parts are now widely used in the oil and gas, power generation, chemical and marine industries because the process has proved to be fast, flexible and cost effective Submerged arc welding is used where larger surfaces are clad and access is easy. Traditionally larger diameter (2.4mm +) consumables have been used for this process, again resulting in the need for fairly thick substrates to accept the high heat inputs and large weld deposits.

Recently, procedures have been developed using 1.2mm wires, allowing use on thinner section components and giving more controlled thickness of deposit, while maintaining deposition rates in the region of five kilograms per hour. There are consumable/flux combinations available that make single layer deposits viable. This is particularly true with duplex and ferritic/martensitic stainless steels.

Oil Review Middle East Issue Seven 2012 151

Weld Overlay Cladding

Automated or mechanised processes generally offer the best deposition rates and provide the most consistent quality of deposit, which enables adherence to the results provided during procedure qualification testing.

Mechanised equipment can be designed to access areas that simply cannot be reached by manual methods.

Using this process, the chemical composition of the welding consumable can be achieved at 2.5mm from the base material/cladding interface (this can be reduced to 1.5mm in the case of 300 series stainless steels, where over alloyed wires are available).

Weld Overlay Cladding

S22 ORME 7 2012 Tech Focus 02_Layout 1 24/10/2012 18:47 Page 152

The fact is that weld overlay clad parts are now widely used in the oil and gas, power generation, chemical and marine industries because the process has proved to be a fast, flexible and cost effective remedy to the effects of corrosion and wear.

The choice of coating chemistry is legion; and the processes available extend from the lowly manual metal arc to multi-head hot wire TIG to laser and beyond. Many previously ‘difficult to weld’ materials are now commonly welded with consistent success. And the development of the cladding process is such that the market acceptance standards for the cladding material (a cast structure) are now identical to the acceptance levels for the base material.

In many environments weld overlay cladding offers clear advantages because protection can be applied specifically to the areas under attack The acceptance and viability of weld overlay cladding in oil and gas environments has been proven extensively by Arc Energy. Managing Director, Alan Robinson, has been at the forefront of weld overlay cladding development for over 25 years, and the company is experienced in cladding bores ranging from 20mm up to four metres in diameter and up to six metres in length.

Arc Energy has developed a wide range of base material/cladding combinations, qualified to standards including ASME, NACE, DNV and ISO. The weld overlay cladding techniques have been tried and tested, and are widely implemented by a wide variety of market sectors.

To summarise, in many environments weld overlay cladding offers clear advantages because protection can be applied specifically to the areas under attack, eliminating the need to produce a whole component or item of plant from an expensive corrosion resistant material.

However, the overwhelming advantage is its versatility. Whatever the shape or size of the equipment or component there is a process that can be applied and an alloy to counteract the different levels of corrosive attack. Weld overlay cladding is a proven and recognised cost saving technology that is already well established and engineers in extreme environments are sharing the significant

Arc Energy has developed a wide range of base material/cladding combinations

benefits, both practical and financial, of increased life expectancy.

And finally a caveat: the development of today’s cladding technology is so tightly defined that it is important to use a cladding provider that maintains the best quality structure and technical support. At the very least, the provider should hold ISO 3834-2 (Comprehensive Quality Requirements for Fusion Welding of Metallic Materials) and employ the services of a European Welding Engineer. n

Statoil awards LWI vessel contracts STATOIL HAS AWARDED several contracts for new light well intervention (LWI) vessels.

These 'category A' units will contribute to increased recovery from Statoil’s approximately 500 operated subsea wells on the Norwegian continental shelf (NCS).

Statoil has, on behalf of relevant licensees, awarded a contract to Island Offshore Management and Eide Marine Services for the charter of a total of three LWI vessels.

These purpose-built vessels are used for performing light well interventions, well operations and well maintenance without a riserbased system. Statoil can reduce well intervention costs by about 60 per cent by utilising a LWI vessel instead of a conventional rig.

“Performing these types of conventional jobs on subsea wells with low volumes of oil in place is expensive. The LWI vessels ensure both costefficient and safe operations,” said Statoil’s head of drilling and well, Øystein Arvid Håland.

“Having more and new vessels of this category also helps increase recovery from fields on stream by opening new zones in the well, and stopping water production downhole.”

The contracts are worth a total of US$1.7bn.

Island Offshore vessels Island Frontier and Island Wellserver, which already have

152 Oil Review Middle East Issue Seven 2012

contracts with Statoil, have been awarded new five-year contracts. Eide Well Intervention, a new supplier in this sector for Statoil, has been awarded an eight-year contract for their newbuild, which employs completely new technology. The contracts with both companies come into effect in the spring of 2015, and include two options to extend for another two years.

A growing number of discoveries are developed via subsea wells, and it is important both to have equipment capable of maintaining these and to avoid using conventional drilling rigs for this type of work.

The rig market on the NCS is characterised by an ageing rig fleet, and it is necessary to ensure sufficient and adequate rig capacity at sustainable rates. To address this, Statoil has put light LWI vessels – category A units – into service on a large scale.

“We have great ambitions and a long-term perspective on the NCS. Using purpose-built rigs and vessels in our operations is an important part of Statoil’s rig strategy. The high number of subsea wells in the future will require maintenance, and we are securing capacity in order to meet this need,” said Statoil’s chief procurement officer, Jon Arnt Jacobsen.

Photo: Harald Pettersen / Statoil

“Island Offshore has delivered solid services and we expect the same going forward. At the same time we are pleased to have increased the number of suppliers in this market, and through the Eide Well Intervention new-build we are also employing the latest available technology. Together these three vessels will provide us with an efficient service fleet for light well intervention services.”

Statoil has been pursuing riserless well intervention in subsea wells since 2000, and the technology has steadily improved. The category A units will perform services for Statoil and the partners on the Åsgard, Norne, Gullfaks, Oseberg, Heidrun, Snøhvit, Tyrihans, Tordis/Vigdis, Snorre, Statfjord and Sleipner fields.

The contract awards are dependent on partner approval.

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Technical Focus

Yokogawa updates differential-pressure transmitters YOKOGAWA HAS ANNOUNCED the launch of its new EJA series of pressure/differential-pressure transmitters. Incorporating the company’s unique DPharp digital resonant sensing technology, this latest product range includes a version that is particularly suited to the oil and gas industry. The low copper housing DPharp EJA transmitter features multi-sensing capability, fast response time and its new compact design makes it significantly lighter than the stainless steel versions currently on the market, ideal for use on offshore platforms.

Typically used to measure liquid, gas, and steam flow rates as well as liquid levels in tanks, pressure transmitters are vital in maintaining safety on an oil platform, as they are essential to trigger safety shutdowns when hazardous conditions are detected. This new range from Yokogawa is the latest generation of digital pressure transmitters, adding new levels of functionality, performance and safety compared to the original EJA series, of which five million units have been shipped to customers around the world.

The new EJA series offers users within the oil and industry many new features and benefits.

Firstly, the response time, the time from the detection of a pressure change to the change in the

output of an electric signal, has been brought down to 90 ms, which equals the capability of Yokogawa’s premium EJX series. This faster response time will now allow the new EJA transmitters to be used in high-speed applications such as turbine surge control.

Secondly, the multi-sensing capability means that a new EJA differential pressure transmitter will be able to simultaneously measure both differential and static pressure. This means that a single new EJA differential pressure transmitter will be able to measure both the liquid level and the pressure in a tank, a function that traditionally could only be carried out using two pressure transmitters. Not only does this mean it can fit in installations where space is limited, but it is also a more cost-effective solution.

Thirdly, the flexible, rugged housing means that the transmitters can be mounted either vertically or horizontally and new, larger indicators on the display make it easier for oil land gas engineers to read the process variables and alarms and the intuitive display also aids in faster commissioning and maintenance.

All transmitter versions in the new EJA range comply with the International Electrotechnical Commission’s (IEC) IEC61508 standard on the

functional safety of electrical/electronic devices and are suitable for use in safety integrity level (SIL) 2 applications in single mode and SIL 3 applications in dual mode. Independent certificates and reports, from both TUV and exida.com, come as standard to support this statement: a feature that is unique to Yokogawa’s DPharp sensing technology.

r r r

Oil Review Middle East Issue Seven 2012 153

Corrosion Monitoring

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A combination of ageing plants, greater fluid corrosiveness and tightening of HSSE requirements has made corrosion management a key consideration for oil and gas companies. One way to mitigate such corrosion is to use an innovative continuous monitoring system, writes Peter Collins, CEO of UK company, Permasense Ltd

A breakthrough in

corrosion monitoring C

ONTINUOUS MONITORING PROVIDES asset and integrity managers with an up-to-date picture of how their infrastructure is coping with the demands placed upon it. This information informs decision making about maintenance and replacement, optimisation of prevention/mitigation strategies and feedstocks. Continuous measurement presents a step change in the levels of corrosion rates that can be determined and the accuracy of that determination.

Steel pipework and vessels are always at risk of corrosion or erosion. Unless monitored there is a risk of failure which may impact the safety of workers and the environment, quite apart from the financial costs of operational interruption, of repairs and of reputational damage.

As oil and gas operators produce and process ever more corrosive or erosive hydrocarbon streams the demands on plant metallurgy steadily increase.

Permanently installed sensor systems deliver a continuous picture of asset condition over time, at a comparable cost to that of a single manual inspection. This picture can be correlated with process conditions that may be causing corrosion or erosion, and with strategies to minimise corrosion such as inhibitor use, enabling the asset manager to move beyond merely knowing whether corrosion or erosion is occurring to understanding why and at what rate. This understanding enables operators to make better-informed decisions.

The need for continuous monitoring There are various established techniques for the periodic assessment of pipe and vessel integrity.

However periodic inspections do not deliver continuous pipework condition data that can be correlated with either corrosion and erosion drivers - process conditions, crude constituents and abrasive solids - or inhibitor use to enable an understanding of the impact of process decisions and inhibitor strategy on plant integrity. Manual acquisition of ultrasonic wall thickness data is also frequently associated with repeatability limitations and data logging errors.

Periodic inspections do not deliver continuous pipework condition data that can be correlated with either corrosion and erosion drivers 154 Oil Review Middle East Issue Seven 2012

Permanently installed sensor systems on the other hand deliver continuous high quality data.

Permasense has developed an ultrasonic sensor that can be installed on pipes/vessels operating at up to 600째C (1100째F). This sensor has been certified as intrinsically safe for use in the most hazardous of environments and is proven in operation over a number of years in refinery environments and, more recently, in upstream facilities.

Permanent installations show that where corrosion is taking place it is often intermittent rather than continuous. In such cases it is particularly valuable to be able to correlate thickness data over time with process and/or inhibitor parameters. Moreover, the data highlights which prevention or mitigation strategies are most effective.

System design At the core of the Permasense system is an ultrasonic sensor mounted on stainless steel waveguides (figure 1). The waveguides isolate the sensor electronics from extreme temperatures and guide the ultrasonic signals to the pipe wall and back without excessive signal degradation and distortion. The system can monitor pipe wall thicknesses of over three millimetres (1/8 in) in a wide range of steels and other alloys. The frequent measurement of corrosion allows for metal loss detection at the level of 10s of microns.

Each sensor is equipped with a radio and communicates with other sensors and a gateway (base station) within a 50m (55yd) range. The sensors form an independent mesh or wireless network (figure 2) and each sensor radio can act as a relay, or repeater, enabling the network to span hundreds of metres from the gateway.

Data is channelled via the gateway to a database on a connected computer. If, as is usual, this computer is networked, browserbased visualisation software enables the corrosion/inspection engineer to view the data at their desk. The data can also be exported in any of the file formats required by the various process monitoring applications, enabling seamless transfer and read-in to those packages and thus correlation with the process data at the sensor location.

Large scale deployment All Permasense sensors are battery powered meaning no cabling is required. This minimises

Figure 1: The Permasense Sensor

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The system allows facility operators to monitor locations continuously without the repeated cost of access, and for little more than the cost of a single manual inspection

Corrosion Monitoring

installation costs and enables use in remote areas and on a large scale.

The sensor is secured on the pipe/vessel by means of two studs which are welded onto the pipe. For pipe wall temperatures below 100째C the studs can also be welded onto girth clamps, themselves mounted on the pipe.

Stud mounting allows for dry coupling - no couplant is required between the waveguide tip and the pipe wall. This, together with multi-year battery life, eliminates the need for expensive maintenance access between turnarounds. Studbased mounting also enables geometric flexibility and reduces installation time to just minutes; a two-man installation team can typically install 50 sensors per day.

Figure 2: The Permasense System

The sensor has been designed using highgrade materials to allow for many years of continuous operation, and a number of systems have been in uninterrupted operation for four years. To ensure the system performs in the event of a blockage of an individual pathway, or the loss of a sensor, there are multiple pathways for data transmission through the mesh back to the gateway (figure 2) to ensure data retrieval.

The gateway channels data transmitted from all the sensors located in the network. Typically

wall thickness measurements are sent every 12 hours; but this interval can be changed at any time for any sensor, to as little as every few minutes if necessary, depending on the monitoring or metal loss determination requirement at that location.

Data is stored in the computer database to guarantee security and this allows the user to view a full history of data readings helping to build up a clearer picture of corrosion and erosion rates.

Honghua Golden Coast Equipment FZE introduction Honghua Golden Coast Equipment FZE (Honghua Dubai), registered in Jebel Ali Free Zone in Nov of 2006, is one of the sole corporations of Honghua Group in China(listed in Hongkong stock market in 2008). The total area of the workshop for Honghua Dubai is about 21,000m2, including 2800m2 workshop (owning lathe, boring machine, milling machine, plate shearing machine, welding machine and other equipments), 500m2 warehouse and a 17,000m2 commissioning yard.

Honghua Dubai will be the assembly, maintenance, refurbishment, spare parts supply, equipment leasing, after sales service and marketing center of Honghua Group in Middle East and Africa. In addition, new technology and new products of Honghua Group will be displayed here.

Honghua Golden Coast Equipment FZE. (Branch Company of Sichuan Honghua Petroleum Equipment Co., Ltd) P.O.Box. 261868 Jebel Ali Dubai-U.A.E. Tel: +009714 8807066 Fax:+009714 8807061 Website : www.hhcp.com.cn www.hh-gltd.com

Oil Review Middle East Issue Seven 2012 155

Corrosion Monitoring

S23 ORME 7 2012 Tech Focus 03_Layout 1 24/10/2012 18:50 Page 156

Figure 3: Measured wall thickness for sensors installed on one carbon cast steel U-bend

Applications The system has a wide range of applications in oil and gas and petrochemical facilities. To date in refineries, for example, these include virtually all crude unit lines, air coolers, furnaces, heat exchangers, pumps, amine units, cokers and cracking units. Upstream, systems are in service in central processing facilities and feeder lines in onshore production, on offshore gas production platforms and in LNG plant. Pipe materials include carbon, chrome and stainless steel. Typical

Figure 4: Carbon steel U-bend with Permasense Sensor

156 Oil Review Middle East Issue Seven 2012

Permanently installed systems reduce the safety risks associated with collection of plant condition data locations for sensor installation are on elbows, known thin spots, and areas of particular turbulence. Older units, particularly those operating

outside of design specification, are particularly worthy of attention.

The system allows facility operators to monitor locations continuously without the repeated cost of access, and for little more than the cost of a single manual inspection. Continuous measurement presents a step change in the levels of corrosion rates that can be determined and the accuracy of that determination. By correlating metal loss data with process data (composition, hold-up, temperature for example) a true understanding can

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Inspector safety In plants with aggressive rates of corrosion, particularly where the corrosion is intermittent and the remaining life is uncertain, frequent manual inspection is common. If a shutdown is necessary to enable manual inspection (because of high operating temperatures or for safety reasons for example) the loss of throughput can come at a high cost.

Some locations in a facility can be hard to reach, meaning technicians incur safety risks in gaining access. Where high pipework/vessel temperatures are involved ensuring technician safety during manual inspection becomes even more challenging.

Permanently installed systems reduce the safety risks associated with collection of plant condition data. In several facilities Permasense system users have also been able to eliminate the periodic shutdowns previously required to enable operator access at high pipework temperature.

The installed systems are also now delivering data where inspector availability is limited or access is difficult for environmental reasons.

Gelsenkirchen experience Corrosion monitoring was conducted on cast carbon steel u-bends with a wall thickness of approx. 25mm (1in.), operating at 380°C (720°F) in the Gelsenkirchen refinery operated by BP to ensure continued safe operation (figure 3).

Because the high temperature prevented accurate manual ultrasonic wall thickness measurement, and would have exposed inspectors to significant hazard, the Permasense continuous monitoring system was installed (figure 4): this secured operation with confidence until turnaround. The system has been delivering reliable measurement data for over 3 years now.

Conclusion Operators using the Permasense solution for continuous corrosion monitoring have a more accurate and timely understanding of the corrosion

and erosion rates occurring in their facility. Where inhibitors are in use the system is giving a greater understanding of their effectiveness. The continuous provision of data allows potential corrosion hotspots to be remotely monitored in real time and at time intervals of the operator’s choosing, as frequently as every few minutes if necessary. This insight allows asset managers to make more informed decisions to the benefit of plant integrity, safety and operating costs.

The system has been tried and tested in some of the most inhospitable environments and operates at pipework temperatures running at up to +600°C (+1100°F). It allows operators the freedom to choose monitoring locations irrespective of how inaccessible they are thanks to the use of ultrasonic sensors and wireless networks for data retrieval.

The system has been deployed in refineries and upstream facilities, including offshore platforms, worldwide. The experience of 11 oil companies operating the system has proved that the data it generates enables significantly better informed decision making in managing their assets. n

Dr Peter Collins joined the Permasense board in 2010 and is responsible for the overall development of the company as the CEO. www.permasense.com

Oil Review Middle East Issue Seven 2012 157

Corrosion Monitoring

be gained of what changes in specific parameters are driving corrosion and erosion.

The system enables operators to make betterinformed decisions about changes according to these parameters to minimise impact on their plant.

Furthermore, users are now optimising their inhibitor strategies through the insights gained from the data.

Continuous monitoring on near-end-of-life lines enables turnarounds to be scheduled with much greater confidence. In a recent example, a system installed on a line with an expected remaining life of 12 months enabled line replacement to be postponed by a very valuable six months.

Marine Personnel Transfer

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Personnel transfer is one of the key challenges in the offshore environment, particularly in regions affected by extreme weather conditions, such as the Middle East.

Improving efficiency through marine

personnel transfer F

OG, HIGH WINDS, rough sea states and other such adverse conditions can cause significant delays in the transportation of personnel to offshore installations, with a resultant impact upon costs and efficiency.

With more than 10mn crew transfers taking place annually across the world in the offshore oil and gas sector alone, either by helicopter, vessel or crane and basket, this is one of the highest risk and most expensive activities in the industry. As such, transfer methods must be proven, reliable and capable of handling the changeable conditions that occur in the offshore environment. This means that suppliers must be able to provide solutions that are both safe and technically and economically feasible.

Recognising that optimising the workforce is a key consideration in the production and supply of energy worldwide, Offshore Solutions BV (OSBV) is transforming the oil and gas industry’s perception of the marine transfer process.

OSBV’s Offshore Access System (OAS) provides operators with a cost effective, practical personnel transfer solution that facilitates safe and efficient access from a vessel to offshore facilities.

The OAS is a 21 m, hydraulically operated, telescopic gangway, fitted with an active heave compensation system. With unique continuous 24hour connection and operating capability, it incorporates a motion reference unit in its active hydraulic system, which when engaged, maintains the walkway tip at a constant height relative to the horizon. This allows the gangway to be connected safely to a fixed offshore installation in sea states up to three metre significant wave height when installed on a suitable vessel.

Once connected, the heave compensation is disengaged and the gangway is allowed to ‘float’ between the vessel and the installation. The walkway is robustly connected and automatically compensates for the six movement planes of the vessel motion.

During transfer, the OAS operates a semiautomatic traffic light system allowing personnel to cross from the vessel to the installation safely. From system checks through to the deployment of the OAS, the process takes around five minutes, whilst recovery is approximately one minute.

With its own independent power source the OAS can remain operational, even in the event of power failure on the vessel and should an emergency disconnection be required, the OAS has a fail-safe mechanism that allows automatic release from the platform.

It is the only heave compensated gangway

158 Oil Review Middle East Issue Seven 2012

OSBV has been providing 24-hour personnel access for Qatar Shell GTL Limited since December 2010

The OAS provides a permanent connection, enabling operators to use the OAS vessel as the primary means of escape system that can maintain a permanent connection and has an outstanding safety record. Since operations began in 2006, the OAS has achieved more than 142,000 personnel transfers without any recorded incidents and maintains an average 96 per cent availability.

Multiple benefits An OAS-equipped vessel with accommodation in the field means that personnel can be transferred to the installation/FPSO at the start of their 12hour shift. Several installations can be serviced by one vessel and with available man-hours on each installation increasing by up to 70 per cent using an OAS as opposed to helicopters, this equates to very significant cost savings for the operator.

An OAS vessel can also prove more cost effective than a jack-up accommodation unit and with multi-function capability, it can be used as a standby vessel to facilitate ROV or dive spread, dive support, workshops, materials storage and platform supply.

Committed to continuous development and in response to market demand, the company recently adapted the OAS and designed a free standing skid

mounted unit to reduce installation time to less than 24 hours. This system, which last year completed the world’s first vessel-to-FPSO personnel transfer using a heave compensated gangway, retains all the safety and operational features of the original OAS. The 80 sqm Lloyd’s Register approved unit is fully self-contained and once installed on an appropriate vessel, it is ready for immediate operation, making it extremely suitable and more cost-effective for short-term hire. This is an exciting advance in the capability for safe and efficient access to offshore facilities, with a service solution that can benefit the operator, at a time where increased productivity and cost reduction is of key importance in the continued success of the industry.

The OAS in action OSBV has been providing 24-hour personnel access in the Middle East for Qatar Shell GTL Limited, operator of the world’s largest gas to liquids (GTL) plant, since the completion of sea trials in December 2010. It is the first heave-compensated access system to work in the region and has been used to transfer crews to the Pearl 1 and 2 platforms, positioned in the Gulf.

Mounted onboard the Bourbon Gulf Star, the 21 m OAS provides a permanent connection, enabling the operator to optimise 12-hour shift patterns and to use the OAS vessel as the primary means of escape. The OAS’ continuous connection and operating capability was a key element of this marine access success story. As well as the robust

S24 ORME 7 2012 Tech Focus 04_Layout 1 24/10/2012 18:54 Page 159

transfer people, but have a gangway between platform and ship to make crossings as easy and safe as going from one floor of a building to another.

“In order to operate the systems, we often require connecting the OAS for 24 hours, to utilise the vessel as our refuge. With this capability, we have a great solution to moving people around fast, safely and comfortably.’’

A demonstration of demand from the region, the company expects to have four units operational in the Gulf by the end of the year.

The future Lindsay Young

"The concept of transferring people from vessel to platform via an OAS was a life-changing decision” Marcel Goedhart, engineering services manager at Qatar Shell GTL, said, "The concept of transferring people from vessel to platform via an OAS was a life-changing decision. Qatar Shell GTL Ltd. will no longer use helicopter transport to

OSBV is convinced that marine access systems will be increasingly used in the transfer of personnel to offshore structures in the future and is noticing that operators worldwide are beginning to challenge their existing operating models.

Moving towards marine access as an alternative way of liquidating man-hours offshore will increase personnel availability on location and improve productivity. The use of a multi-purpose support vessel with integrated OAS on board offers a great deal of flexibility and opportunity to call off services as required, with a system suited to facilitating multiple platform support. n

www.offshore-solutions.nl

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Oil Review Middle East Issue Seven 2012 159

Marine Personnel Transfer

physical connection, this OAS was specifically adapted to perform for extended periods in demanding climatic conditions.

Despite a challenging environment, the unique continuous 24-hour connection capability allowed staff to leave the platform for the vessel during periods of high temperature and humidity; returning to work during cooler periods of the day – a demonstration of the flexibility and efficiency of the OAS. The OAS mounted on board the Bourbon Gulf Star has been connected for more than 4,500 hours since operations began, with 100 per cent availability for the past 12 months. More than 58,000 personnel transfers have taken place without any safety incidents (25,000 this year alone). The three-year contract was awarded based on the OAS’ proven technology, safety record and the potential to increase operational efficiency.

“The OAS is ideally suited to conditions in The Gulf due to its ability to ensure continued operations in a challenging environment,” said Lindsay Young, managing director of OSBV. “It delivers considerable time reductions and, as a consequence, operators can manage projects far more efficiently. Our work with Qatar Shell GTL Limited has shown the true value of the OAS, in bringing the Pearl 1 gas production platform online ahead of schedule.”

Fire Safety

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Fire safety legislation relating to the oil and gas industry naturally varies from country to country but there are a number of national and international organisations and advisory bodies that can assist companies within the sector to understand and adhere to the law, and therefore help minimise the risk of fire and explosions.

Mitigating risk to drive

fire safety I

N THE OIL and gas industry, all fire safety precautions rely on making a comprehensive risk assessment before a facility is constructed, and pre-empting all conceivable hazards. This includes the planning of safe and practicable escape routes and equipment provision for all conceivable circumstances.

Local fire prevention officers work in association with the managers of all industrial and utility facilities, who are experts in the provisions and requirements of the local fire and explosion code(s). They are frequently involved in the training of new personnel, including incoming senior managers and engineers.

All fire safety policies rely on constructing facilities in accordance with the local building, electrical installation and fire codes, and both maintaining and using them in accordance with recommended best practice.

Common fire hazards associated with an oil/gas facility include electrical systems that are overloaded or out of date, storing combustible materials with insufficient protection and/or ventilation, naked lights of any form, flues that are not regularly and properly cleaned, food preparation operations, battery charging, and designed working pressures and/or temperatures being exceeded.

Requirements of national fire codes relating to oil and gas and processing activities naturally vary by location but typically include local certification needs for installation, servicing and inspection of all equipment. Many general industrial facilities require an individually tailored fire safety plan to be in place, the drafting and updating of which usually requires input from the local authorityâ&#x20AC;&#x2122;s independent fire department.

Keeping plans updated with expansion and development of facilities and evolving local legislation requires maintenance in digital form, in line with current practice in both China and North America. This arrangement ensures that handheld device-equipped fire and explosion

National fire codes relating to oil and gas and processing activities typically include local certification needs for installation, servicing and equipment inspection 160 Oil Review Middle East Issue Seven 2012

Image source: Paul Mata

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Trade fairs There are various technical trade fairs which showcase fire safety solutions, including the Middle East Fire, Safety & Security Exhibition being held in Cairo from December 1-4. In New Orleans, the Industrial Fire, Safety and Security Exposition takes places from November 14-15.

The ISAF 2012 exhibition was held recently in Istanbul. The IFSEC International show is held annually in Birmingham, UK, the next occurring on May 13-15 2013.

Non-profit organisations Alternatively, there are various non-profit associations that deal with fire safety. In Quincy, Massachusetts, there is the US National Fire Protection Association, which describes itself as an international institution “providing consensus codes and standards, research, training and education” for all applications. It produces more than 300 agreed codes and standards designed to cut the possibility and risk of fire, explosion and similar incidents under all circumstances.

From within the energy industries themselves there is the Society of Petroleum Engineers, which has a local office within Dubai’s Jumeirah

Lake Towers. They recently held a three-day conference on 'Protecting people and the environment – evolving challenges' in Perth, Australia, which specifically focussed on energy and petroleum issues.

Advisory bodies A large amount of research and risk-mitigating work has been done on this subject in the North Sea province, and one of the most active has been the UK’s Offshore Operators Association/Oil & Gas UK, which has built a consulting role and reputation for itself in many other energy provinces.

Specifically, these experts produce a series of regularly updated guidelines on fire and explosion guidance, available online, covering such issues as hazard management, avoidance and mitigation measures and design practice for fire and explosion engineering.

The UK’s official HSE department is also an excellent source of detailed advice.

India’s Oil Industry Safety Directorate is run by the Petroleum & Natural Gas Industry, which issues its own local standards and guidelines on the formulation of disaster management plans.

Officials provide analysis of incidents, evaluation of safety performance, LPG handling and storage, terminal and pipeline operation.

Saudi members of the international SFPE are holding a five-day conference and exhibition in Dammam in November Finally, there is the general-purpose US Society of Fire Protection Engineering (SFPE) which produces the quarterly Fire Protection Engineering. This group has an active chapter in Saudi Arabia, which is presided over by Ali Mokhtar.

Saudi members of the international SFPE are currently finalising plans for a five-day conference and exhibition in Dammam, which opens on November 10 and is the fourth in a wellsupported series. A list of upcoming events is available at www.sfpe.org Fire safety solutions are becoming increasingly important in the oil and gas industry.

As the fast-growing LNG industry has shown, the safety record can be excellent, building as it did on earlier experience with hazardous frozen gases. The key is anticipating and mitigating all conceivable hazards before they are experienced on the ground. n

Oil Review Middle East Issue Seven 2012 161

Fire Safety

response personnel can access the necessary data while attending an incident onsite.

Well Integrity Management

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Dr. Liane Smith (FREng), Director and founder of Intetech, examines how well integrity management systems can turn large volumes of operating data into actionable business intelligence to give users a 360° view of corporate risk.

Mitigating risk with real-time well

integrity monitoring W

ELL FAILURES HIT oil and gas operators hard, putting production, people and the environment at risk. Well integrity management systems provide an integrated source of critical data and real-time visibility of well integrity across the enterprise to ensure a robust approach to managing corporate risk and ensuring compliance.

Well integrity management is becoming a vital element in managing corporate risk for operators.

Spills and leaks through loss of integrity can harm people, the environment and a firm’s reputation. In addition to the severe curtailment to production and cost of shut-in, there is also the cost of restitution and remediation.

Given that the operational phase of a well life can last for 30 years or more, one of the biggest problems is managing the huge volume of operating data necessary to ensure an optimum safe condition is maintained for the whole design life. Many oil and gas operators continue to rely on handover documentation and a patchwork of bespoke production management databases and spreadsheets to manage this data, such as annulus pressure readings, valve and seal leak tests, and well logs.

Yet consolidating raw operating data using a well integrity management solution with smart functionality and single dashboard user interface provides a relatively low-cost but extremely powerful means of tracking the integrity of operating wells in real-time. Such systems allow users at every level to analyse and report on key performance indicators (KPIs) enterprise-wide, or instantly access more granular data at a per well per annulus level, apply exception reporting and traffic light warnings to highlight issues immediately and optimise repair and test schedules.

Indeed, taking a proactive approach to well integrity management is proven to reduce the risk of well failure and integrity-related shut-ins by up to 80 per cent. It can also extend safe operation beyond the original design life, a key challenge for those oil and gas operators having to deal with ageing equipment and facilities.

An emerging discipline As a sub-set of asset integrity management, well integrity management systems exist both at a documentation and software level, and combine key well operating and production data within a framework for decision-making, management processes and organisational structure.

Recently, an ISO committee began working on

162 Oil Review Middle East Issue Seven 2012

Without software to manage well integrity data, it can take as much as 70 per cent of total project time just to assemble the necessary data for analysis an international standard (ISO/NP 16530) to provide guidance on well integrity management during the operating phase – i.e. from the handover of construction phase to abandonment. This will assure compliance with a defined safe operating envelope including a wide range of parameters for temperature, pressure and fluid composition and is designed to minimise the risk of an uncontrolled release of hydrocarbons or associated products.

The ISO standard will also set out a test criteria philosophy according to type of well and exposure of risk to people, environment, assets and reputation. Well types will be defined by location (onshore, offshore, subsea) and functionality (producer, injector, water disposal etc.), together with corresponding safe operating envelopes, barrier elements and risk-based monitoring and maintenance plans.

Complying with such guidelines will present a major challenge for oil and gas operators, since the required information falls into a number of distinct categories and must be acquired from a wide range of sources. In most cases, these sources are today scattered across the enterprise. Without software to manage well integrity data, it can take as much as 70 per cent of total project time just to assemble the necessary data for analysis during investigations concerning well integrity problems.

The cost of disparate data Collecting operating well production data, chemical analysis of fluids, well logging data and annulus pressures is time consuming and open to error through manual data transfer. The required

information is often held in databases or file systems located in different departments. The result is silos of potentially critical information, making it difficult to review and identify problem wells, while it can take weeks of intensive effort to collate the necessary information for annual audit and management reporting.

Furthermore, the frequency with which information is collected varies significantly.

Operational and production data might be collected several times a day, whereas leak testing of well barrier components is typically performed every six months. Well logging or other inspections may occur every few years. Regardless of frequency, operators need immediate access to the latest available data in each of these areas.

Sustained annulus pressure for example, poses the greatest threat to well integrity, but if a build up of annulus pressure at a well is identified early on and remedial steps are taken in a timely manner, it is possible to return that well to a completely safe operating condition long before the situation becomes critical. A shut-in or blowout can therefore be avoided by this proactive approach to well integrity management.

Pulling data silos together Advanced well integrity management systems can interface to a wide range of third-party databases to collate the necessary information for analysis and identification of wells shifting outside critical safe operating limits, for the assessment of equipment reliability and well risk, and for real-time estimation of the corrosion in the well tubing. Data can also be acquired directly via tablet PCs in the field, entered manually, or via spreadsheet loader.

With operating well data consolidated within a single user interface, the addition of smart functionality enables operators to analyse the well condition automatically in real time and generate concise reports customised to their individual requirements. This ensures they have the specific ‘tools’ needed to satisfy local regulations, proactively identify potential problems and plan

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Well Integrity Management

S24 ORME 7 2012 Tech Focus 04_Layout 1 24/10/2012 18:54 Page 164

test schedules and repairs. They can perform risk evaluation against complex criteria, for example, assessing tubing condition based on varying production conditions or calculating maximum allowable annulus surface pressure (MAASP) values in real time.

Users can also generate and manage well handover documentation, track scaling issues and determine mean time to failure of equipment to establish risk-based inspection frequencies. But just as important is the ability to manage by exception, given the deluge of data faced by oil and gas operators today. With a system managing by exception and automatically identifying issues using a simple traffic light system, issuing email alerts and automatically risk-ranking wells that fail to meet safe operational limits; it is possible to establish effective control of well integrity.

Cost, risk and real-time visibility Although the risk of a blowout occurring during the operating phase of a well is much lower than that during the drilling phase, the risk to production posed by well shut-ins or abandonment and the fact an oil and gas firm typically operates hundreds or even thousands of wells simultaneously means that the level of corporate risk is no less significant.

Many of the major incidents to have occurred in the oil and gas sector in recent history have been the result of a clash of routine activities Many of the major incidents to have occurred in the oil and gas sector in recent history have been the result of a clash of routine activities. The risk level on one well, for example, may be compounded by the integrity issues on offset wells.

This is easily visualised using a well integrity management system, which prevents the potential escalation of overall installation risk.

Accurate and real-time well integrity data ensures critical systems and equipment perform as expected, that production is optimised and that wells are operated in a way that maintains the optimum safe condition for their whole design life.

The result is higher productivity and major cost savings for operators for a relatively low-cost software implementation that obtains maximum value from well integrity data. At the same time, presenting this information via a management dashboard provides senior executives and other users with a 360° view of well integrity at individual well, field and company level.

With tolerance to environmental and reputational damage at an all time low, oil and gas operators must ensure they have effective oversight of every aspect of their business. A well integrity management system with dashboard and exception-reporting functionality enables operators to prove adherence to corporate governance policies and regulatory demands, ensure high integrity of operating wells and manage risk as part of a robust and auditable process. n

Dr. Liane Smith is the director and founder of asset intergrity specialist, Intetech

InterDam to showcase next generation firewall system at ADIPEC INTERDAM, SPECIALISTS IN blast- and fire-resistant doors and walls, will be showcasing a number its products November’s ADIPEC show in Abu Dhabi, including its latest innovation, the G21 FirePanel.

For decades, architectural fire-resistant doors and walls have relied on thick, heavy-welded A60 wall solutions, but after extensive research and testing, InterDam has developed a far more flexible, cost-effective solution in its new G21 FirePanel. The panel uses standard fire-resistant materials, but combines them in a revolutionary new way, ‘sandwiching’ them within a galvanized- or stainless-steel 316 external skin.

The G21 FirePanel effectively introduces a ‘do-it-yourself’ concept to the firewall market, with users able to tailor the product to their own specifications. Professional welders are needed only for the substructure construction. For the panels - which have a certified free

span of over 13 feet - a drill and a pop riveter is all that’s required.

This radically reduces installation time, enabling a three-man crew to install 185 sqm of external wall in a single day.

The InterDam range of G21 products has been extensively tested and certified by Lloyds, DNV and other leading institutes, and the panels come with a 20-year guarantee. They are also less expensive than the welded solutions that have dominated the market until now according to InterDam. “Over the last decade, we have seen very few changes in the applications of bolted A60 fire-resistant wall systems," said Berend Groeneveld, InterDam's managing director. "The industry’s reluctance to move from old, well-established methodology and embrace the latest concepts in firewall technology is understandable, especially if the benefits are not immediately apparent. But now, with the G21 system, there are clear advantages in terms of cost, flexibility and speed - this truly is a firewall system for the 21st century.”

Interdam is currently in the process of setting up a sales representative network in the Middle East to service its regional clients and projects. The company will be exhibiting at booth 11055 in the IRO Dutch Pavilion at ADIPEC.

www.g21firepanel.com

164 Oil Review Middle East Issue Seven 2012

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Innovations

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Dräger launches new innovative SIL 2 device

A new shale-optimised drill launched

DRÄGER IS ONE of the leading manufacturers of Gas and Flame detectors in the world and has launched its first ever range of SIL 2 devices to have TUV certification on the hardware and the software.

Dräger, like many other manufacturers have had SIL 2 certification on the hardware of their earlier gas detectors, but the Polytron 8000 series is the first to have its software certified.

The Stainless Steel or Aluminium Polytron 8000 transmitter and display can be fitted with the following sensors, all of which are manufactured

by Dräger: 6 Electrochemical sensors for toxic gasses 6 Catalytic Bead sensors for hydrocarbon gasses and Hydrogen 6 Infra Red sensors for hydrocarbon gasses and CO2 The 8000 series can be fitted with optional dongles, offering sensor life indication with a permanent “battery style” indicator on the display, as well as data logging. The data logger records every time gas is detected, even when below the alarm level.

To accompany the SIL 2 gas detectors, Dräger also offers the Flame5000, an imaging based flame detector. This state-of-the-art technology is more reliable than UV and IR based flame detectors, which give frequent false alarms. Most importantly it gives fast and reliable detection of a fire, without any loss of sensitivity when sunlight is in the detector’s field of view. The image from the CCTV camera gives instant confirmation of a fire and can also be integrated into the security system.

Dräger also manufactures Portable Gas Detectors, Self Contained Breathing Apparatus sets, Escape sets, respirators, various other PPE, rescue shelters, fixed breathing air systems and training simulators.

Dräger will be at ADIPEC at stands 1040A and 10023.

SMITH BITS, A Schlumberger company, has launched its nextgeneration Spear shale-optimised steel-body PDC (polycrystalline diamond compact) drill bit tailored for unconventional shale plays.

A range of application-specific features were incorporated into the next-generation Spear bit, including improved body geometry and hydraulic enhancements, engineered to minimise blade packing, improve cutter cleaning and increase ROP. Cutter layouts were fine-tuned with IDEAS integrated drillbit design platform to deliver improved ROP while The new Spear bit has improved body ensuring smooth directional control. geometry and hydraulic enhancements "With experience of more than 6,000 Spear bit runs to date, we incorporated specific design elements into the next-generation bit to deliver even more rate of penetration (ROP), further lowering drilling costs in unconventional wells,” said Guy Arrington, president, Bits & Advanced Technologies, Schlumberger.

In the Eagle Ford shale, the first-generation steel-body PDC bit established the field benchmark for drilling the lateral in one run. The next-generation Spear bit design was introduced into the same application and successfully set a new performance record.

Schlumberger launches wireline formation testing service

BP technology boosts oil recovery adding to potential energy supplies

SCHLUMBERGER INTRODUCED THE Saturn 3D radial probe as the newest module for the MDT modular formation dynamics tester. With the Saturn probe, customers can now obtain pressure measurements and fluid samples where they were not previously possible due to reservoir conditions.

Customers expect Schlumberger to be able to fully characterise reservoir fluids in today’s complex reservoir environments,” said Catherine MacGregor, president, Schlumberger Wireline.

“Whether the reservoir is unconsolidated, has low permeability The Saturn 3D Radial Probe or contains heavy oil, we can now perform pressure measurements and downhole fluid analysis and bring high-quality samples to surface,” she added.

The Saturn probe is comprised of four elliptical suction probes mounted at 90 degree intervals circumferentially around the tool, providing the largest surface flow area of any probe in the industry— more than 500 times that of a standard probe.

Analysing reservoirs from more than 85 tool settings, the Saturn probe has been run in South America, Africa and the Middle East in environments ranging from onshore to deepwater. In the Middle East, the Saturn probe sampled fluid in formations with mobility less than 2 mD/cP, enabling the customer to accurately identify the location of the hydrocarbon-water contact point.

BP AND ITS coventurers are deploying for the first time a new technology that could significantly increase the amount of oil that can be recovered from the UK’s largest hydrocarbon resource. The Clair Ridge development, west of Shetland, UK, is the first sanctioned large-scale offshore enhanced oil recovery (EOR) scheme using reduced salinity water injection (LoSal® EOR). The intention is to extract a higher proportion of oil over the life of the field from the rocks deep below the seabed than has previously been possible.

The Mad Dog Phase 2 project in the Gulf of Mexico is the second offshore project that plans to include a low salinity waterflood to support increased oil recovery from the field. The facility will have a low salinity waterflood injection capacity of more than 250,000 barrels of water per day.

“LoSal EOR and other technologies developed by BP are increasing the world’s energy supplies, improving recovery rates and getting more for every dollar we invest,” said Bob Fryar, BP’s executive vice president for production. “LoSal EOR has immense potential for increasing the amount of oil recovered from the ground. If it can be successfully applied to similar fields around the world it will increase the world’s recoverable oil by billions of barrels.”

Around 60 per cent of BP’s oil is produced using traditional waterflooding to help extract oil from reservoirs. Full implementation of potential low salinity projects across BP's portfolio could increase net recovery by up to 700 million barrels of oil equivalent.In conventional waterflooding, injected water flows through layers of porous reservoir rock displacing oil from the injection well to the production well. The pore spaces often contain clays to which oil is bound. LoSal® EOR, using reduced salinity water, releases a lot more of the bound oil and pushes it to the production wells.

LoSal EOR was developed by BP’s enhanced recovery technology team, known as Pushing Reservoir Limits™.

166 Oil Review Middle East Issue Seven 2012

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Innovations

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Customised solution for oil industry UAE-based Trinity Holdings has signed a co-operation agreement with US-based Integrated Equipment to repair, service and distribute Pressure Control Equipment for the upstream oil and gas sector in the Middle East.

A MoU was signed and the agreement framework will allow Trinity Holdings to combine its engineering capabilities and local knowledge with Integrated Equipment’s API licensed manufacturing (OEM) and global repair service expertise in offering customized solutions for specific requirements of the industry.

The new joint venture, Trinity Integrated Equipment, will pursue repair and re-certification of oil and gas equipment and products including Blowout Preventers (BOPs) (API 16A), Pulsation Dampeners (ASME), Wellhead Equipment (API 6A) and Accumulators (API 16D). Local distribution of Integrated Equipment’s API Monogramed BOPs, BOP spare parts, Gate Valves, Choke & Kill Manifolds (API 16C), various Wellhead and X-mas Tree components and a full range of associated Elastomeric products are also within the scope of the joint operation.

A blowout preventer

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Middle Middle East/North East/North A Africa frica Sales Sales a Office: Office: +962 (79) 660-3333 168 Oil Review Middle East Issue Seven 2012

Yokogawa signs strategic agreement with Aramco YOKOGAWA SAUDI ARABIA and Saudi Aramco signed a Corporate Procurement Agreement (CPA) that encompasses all the services Yokogawa provides to Saudi Aramco. It significantly reinforced Yokogawa’s presence in Saudi Arabia.

The CPA with Saudi Aramco covers equipment supply, project management, engineering, spare parts, and maintenance services. It greatly simplifies the process by which Saudi Aramco purchases process automation equipment from Yokogawa. Yokogawa is the first automation vendor to sign such an agreement with Saudi Aramco.

Yokogawa has doubled the size of its facilities in the Dhahran Techno-Valley. In addition to engineering and project execution capabilities, the expanded facilities allow Yokogawa to manufacture specific components of its control systems and to strengthen its research and development activities.

“With the true and sincere support of the Saudi government, customers, and academia, Yokogawa Saudi Arabia has successfully executed many process automation projects in the region”, said Shuzo Kaihori, president and chief executive officer of Yokogawa Electric Corporation.

Yokogawa currently has 300 people working in Saudi Arabia, which includes a large female engineering team. This team supports not only Saudi projects but also projects in other GCC countries.

Through these projects, Yokogawa has developed the capabilities of many Saudi engineers and technicians by deploying and fully involving them in every facet of project execution, and will remain in the Kingdom with a workforce that has the knowledge and expertise to support its installed base throughout its lifecycle.

Yokogawa also hae been providing, since 2007, a one-year Graduate Engineer Training Program and shorter internship programs that are specially tailored to the needs of the Saudi job market,

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Innovations

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Helium gas metering systems for Qatar

Shell focuses on developing local capacity

ALDERLEY FZE, A subsidiary of Alderley plc, has successfully delivered four helium gas metering skids for the Qatar Gas Helium (II) project.

The helium gas metering skids will be located in the North Field, Qatar, which has a large source of helium and will be the Qatar Gas Helium II project most important facility in the world when completed, providing a third of the six billion cubic feet global annual demand. The engineering contractor is Chiyoda Alamana Engineering LLC in Qatar.

Alderley FZE scope of supply is for 4 x helium gas metering skids. The metering skids are 2 x 100 per cent in configuration with 6” Ultrasonic flow meters with gas chromatograph and analyser and housing.

The systems have been designed, manufactured and tested at Alderley FZE’s facility in Jebel Ali, UAE.

MARK CARNE EXECUTIVE vice president for Shell in the Middle East and North Africa, has said that 85 per cent of employees in Shell jointventure’s within the Middle East are national staff.

Carne focused on various ways the industry can contribute to the region’s sustained economic growth through local content initiatives such as a GCC wide qualification system for local companies, Industry Training Centers for skills accreditation and promoting Small Medium Enterprise (SME). On the SME front, he shared the example of Shell Foundation’s seed funding to develop Nomou, an SME initiative managed by Grofin to support entrepreneurs in MENA. “This is a unique initiative because it offers a combination of three ingredients which are critical to SME success: longer term financing, specialized and continuous business skill support and linkages to large supply chains,” Carne added.

In Oman, Petroleum Development Oman (PDO) in its In-Country Value (ICV) programme focuses on the Omanisation of skilled contractor personnel, as well as increasing in-country expenditure on goods and services. Through this initiative PDO, together with its contractor community, created over 4,300 new jobs for Omanis in 2011. About 80 per cent of PDO's full time staff are now Omani, as are 80 per cent of its well engineering contractors.

Carne stated that the practice of developing local content is new to Iraq and this is where Shell is taking a lead role.

Safer and stronger LNG mooring lines

New infrared CO2 gas detector released

THE INTRODUCTION OF new larger vessels, Q-Flex and Q-Max, and more exposed terminals becoming operational has changed mooring dynamics. The need to maintain workers’ safety at all times, whilst delivering maximum operational efficiency through lower costs and faster turnaround times remains unchanged.

DSM Dyneema, a close partner to the LNG industry, has done a study which concludes that these industry trends are changing the performance demands for LNG mooring lines.

DSM Dyneema has drawn up a number of recommendations to address these changing market demands and the 3 per cent fail-rate of HMPE based LNG mooring lines. Key among these is the call for industry-wide standard guidelines for specifying and testing of LNG mooring lines – ensuring the right mooring line is commissioned for any particular working task and environment.

Easy to handle and safe HMPE based mooring lines have been used in the LNG industry for over a decade and have proven their benefits over time in many different maritime applications such as oil tankers, containers and carriers.

Ropes with Dyneema®, used in 50 per cent of LNG mooring lines, are as strong as steel wire ropes of the same diameter but at only one-seventh of the weight allowing for easier handling. They are also about 60 per cent of the diameter and 30 per cent of the weight of equally strong polyester or polyamide ropes.

DETECTOR ELECTRONICS INTRODUCES the PointWatch Eclipse CO2 detector, an infrared fixed-point carbon dioxide (CO2) gas detector that provides non-intrusive calibration, and multiple communications options via 4-20mA, Modbus, relays and HART. The PointWatch Eclipse CO2 gas detector’s non-intrusive calibration allows a single person to calibrate the detector without declassifying the hazardous area, helping to reduce maintenance costs and improving uptime. Its heated optics feature allows constant operation even in extreme A reliable Carbon Dioxide environments, (CO2) detector making it suitable for petrochemical oil and gas applications.

The PointWatch Eclipse CO2 gas detector has been tested and certified to meet CSA, ATEX, INMETRO and IECEx requirements.

170 Oil Review Middle East Issue Seven 2012

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Innovations

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Tentec shows new products BOLT TIGHTENING SPECIALIST, Tentec Ltd, has released its new Compact-8 series of subsea tensioning tools. The range comprises just eight tensioning tools to cover bolt sizes from žâ&#x20AC;? to 4â&#x20AC;? and are suitable for use on the majority of standard pipe flanges. The tools can be used on many specifications of pipeline flanges, including the newer SPO/Vector Compact Flanges, in addition to the conventional ANSI B16.5, ANSI B16.47-Series A, API-6A and API-17D flanges. The Compact-8 series also incorporates many of the features and benefits of Tentecâ&#x20AC;&#x2122;s previous subsea tensioners that have been used safely and reliably by divers around the world since 1991. The new Compact-8 tensioners have also been integrated into Tentecâ&#x20AC;&#x2122;s Bolt Tightening Software.

The software allows engineers to create documentation for multiple bolted joint projects quickly and efficiently and helps them to avoid the errors that often occur with manual torque and tension calculations.

The Compact-8 has only eight tensioning tools

GRP Industries to expand its regional operations SHARJAH-BASED GRP INDUSTRIES is the largest manufacturer of glassreinforced polyester enclosures and kiosks in the Middle East.

The company, which was founded in 1989, is growing rapidly and evolving both its manufacturing capabilities and professional outlook.

Its product range has expanded since its inception and now includes battery boxes along with polyester sunshades and instrument enclosures for the oil and gas industry, as well as roofing products such as skylight sheets, soaker panels, flashings and downspouts for the construction industry.

The firm has two manufacturing facilities located in the Sharjah Airport International Free (SAIF) Zone and one in the Sharjah industrial area. The companyâ&#x20AC;&#x2122;s fourth manufacturing facility is currently in the development phase and will be launched in 2013 in the SAIF Zone.

It is an approved vendor to all GCC Water and Electricity authoritative bodies such as Federal Electricity and Water Authority (FEWA) and Abu Dhabi Water and Electricity Authority (ADWEA).

The company also has offices in Abu Dhabi, Qatar, Kuwait and Oman, and is expanding across the MENA region, supplying products utilised by the water and electricity governing bodies in Egypt, Jordan, Iraq and Iran.

GRP Industries is now turning its focus on the Saudi Arabian market and is looking to establish a manufacturing facility in Jeddah that would give the company a foothold in the Kingdom.

GRP Industriesâ&#x20AC;&#x2122; products are certified by independent testing labs for IP ratings, UV stabilisation and fire safety. Following the companyâ&#x20AC;&#x2122;s strategy to follow best practices, GRP Industries has implemented the Integrated Management System certification that encompasses the ISO Quality Management System, OSHAS Occupational Health & Safety, and Environment Preservation.

LEADING IN OIL & GAS TECHNOLOGY

GAS DEHYDRATION & CHEMICAL INJECTION FOR ZADCO SATAH FFD PROJECT

FRAMES has been active in the Middle East for more than 15 years. In this time we have gained supply references and approvals from every major end-user within this region.

Our regional clients include ADCO, ADMAOPCO, ZADCO, GASCO PDO, Occidental, Saudi Aramco, KOC, MOQ, BP Iraq, and Shell. )URP RXU RIÂż FHV LQ $O .KREDU DQG $EX 'KDEL we are able to serve our clients with local presence, extensive market knowledge, and local fabrication capabilities.

Please visit us at ADIPEC 2012 stand 11040, more information on www.frames-group.com

172 Oil Review Middle East Issue Seven 2012

For the Satah Full Field Development project, our client Technip-NPCC JV has awarded FRAMES with orders for the supply of both the gas dehydration unit (GDU) and the chemical injection packages.

The GDU is a compact design gas dehydration package and TEG has been chosen as agent, while the regeneration is carried out via a hot oil bundle.

The chemical injection packages also have a compact design, are high pressure and designed for harsh offshore environments.

1 x Gas dehydration unit Ĺ&#x201A; 1 TEG Contactor operating at 275 psig Ĺ&#x201A; 1 Complete, compact TEG regeneration unit 3 x Chemical injection packages Ĺ&#x201A; 1 HP Corrosion inhibitor multi-injection package (max 3500 psig) Ĺ&#x201A; 1 HP Hydrate inhibitor injection package Ĺ&#x201A; 1 LP Hydrate inhibitor injection package

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Innovations

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Endress+Hauser launches Coriolis flowmeter ENDRESS+HAUSER HAS LAUNCHED the Proline Promass 83O/84O Coriolis flowmeter for use in corrosive, high pressure and high temperature environments in the oil and gas industry.

All materials that can come in contact with gasses and fluids are manufactured from super duplex stainless steel with 25 per cent Cr (25 Cr duplex), which offers high protection against saline seawater, hydrogen sulfide, chloride, carbon dioxide and other corrosive materials found in crude oil and natural gas. The T316L stainless steel external design also resists corrosion from salt and sea water exposure.

The the 83O/84O is also suitable for use on offshore drilling platforms, floating production storage and offloading (FPSO) facilities, on-shore well fields, custody transfer systems and refineries.

The 83O and 84O were also designed to handle the increasing pressure and temperature requirements of today’s oil and gas exploration environments. As easily-accessible resources are depleted, drilling is moving into deeper and more unfavorable environments. Oil and gas from such holdings often contain poisonous and chemically corrosive substances under very high pressures.

Both models handle pressures up to 3,742 psi (258 Bar) and process temperatures from -40 to 200C. Both are available in lines sizes of three, four and six inch diameters.

Promass 83O output configuration options include digital communications, supporting Foundation Fieldbus, Profibus PA or DP, EtherNet/IP or Modbus RS485 installations. Promass 84O analog outputs for 0-10 kHz phase shifted pulse/frequency are also available when custody transfer proving requirements are mandated.

New motor for liquid and gas diaphragm pumps KNF HAS INTRODUCED a new small brushless DC motor (Type BL30) for integration into a wide range of liquid and gas diaphragm pumps for OEM applications.

This motor (with outside diameter of only 32mm) is designed to fit within standard compressor housings and delivers all the critical Brushless DC Motor powers liquid and gas OEM performance benefits diaphragm pumps associated with brushless DC motor technology. These engineered power solutions offer long service life, quiet and cool operation with minimal pneumatic or electric noise, high torque characteristics, and speed and closed-loop control, among other advantages.

The BL30 motor can be supplied in 12V or 24V versions configured either as 2-wire (for power input) or 4-wire solutions (for power input, tachometer output, and speed control signal input). All provide protection against reverse polarity, over-voltage, and overtemperature, and motors additionally are IP54 rated to protect reliably against dirt, dust, oil, and/or splashing water arising from harsh application conditions.

Standard KNF pump products easily accommodating the BL30 motor include Types NF30 (300 ml/m) and NF60 (600 ml/m) for liquidhandling applications and Types NMP830 (3 l/m) and NMP850 (4.2 l/m) for handling gases.

174 Oil Review Middle East Issue Seven 2012

M-I SWACO introduces new drilling fluid system M-I SWACO, A Schlumberger Drilling Fluid System company, has released the Rhadiant ultra-high temperature non-aqueous drilling fluid system, which eliminates drilling fluid product degradation, prevents wellbore control issues such as barite sag and provides a thin filter cake for enhanced logging conditions.

“With wellbores approaching the 260 degrees threshold, there is a need for a drilling fluid that can remain stable and deliver consistent performance throughout the processes of well construction and openhole logging,” said Joe Bacho, president, M-I SWACO. The Rhadiant drilling fluid system is specially formulated to maintain a stable rheological profile with little maintenance required. Unlike conventional nonaqueous drilling fluids, the Rhadiant drilling fluid system maintains extremetemperature stability even during prolonged static conditions.

Stable rheologies in tandem with ultra-thin and slick filter cake deposits clear the path for logging, casing and cementing operations. These characteristics of the fluid system enable accurate perforation placement, optimised completions and quality reservoir characterisation.

Pyroban expands its explosion protection range PYROBAN GROUP IS growing its range of NEC, ATEX and IECEx certified explosion proof components, kits, packages and systems used to protect the global oil and gas industry from the dangers of an explosion and will demonstrate them at ADIPEC. Pyroban offers a range of solutions and systems to protect generator sets or pumps, forklift trucks and other equipment used in hazardous or discretionary safety areas upstream and downstream.

“Pyroban serves a large number of companies in the Middle East as businesses look to effectively manage the risk of explosion and minimise the risk to people, the environment, their brand reputation and oil and gas production,” said Gary Smith, business development manager for Pyroban’s Oil and Gas Division.

A number of new explosion proof components, many of which have tricertification to ATEX, IECEx and NEC 505, will also be displayed on the Pyroban stand at ADIPEC, manufactured by Pyroban Group companies.

The new Pyroban safety shut-off valve (SVH) will be shown, which is designed to enforce the shut-down of a diesel engine if it ingests a flammable gas, preventing engine ‘over-speed’.

Pyroban will display an explosion proof diesel engine package featuring a Broadland Radiator. The package is protected to ensure it cannot be a potential source of ignition (from hot surfaces, engine over-speed or sparks), which could otherwise lead to a potential explosion. Well service equipment such as cementing units and air compressors are usually powered by similar units.

The typical Pyroban diesel engine solution includes an exhaust gas cooler and a shut-off valve to prevent engine overspeed and flame from the inlet, flame and spark arrestors, safety solutions for all electrics, a safe turbocharger and other safety critical components. An alternator, battery and radiator can also be added to the kit along with advanced control systems such as PCS 2™ or 3GP™.

“Our support service is unrivalled in the Middle East,” remarked Smith.

“We support the 24/7 nature of the oilfield with fast response engineers who can be in place quickly with all the necessary medical certificates and survival training.”

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Innovations

Experts in transport of project cargo BLUE WATER SHIPPING is an international and all-round transport and freight forwarding company with more than 50 offices worldwide. The company offers a variety of unique and highly specialised transport and logistics solutions - handling large project cargo is one of these services.

"We have developed excellent relations in the industry. Through our involvement in various projects, we have gained both the experience and knowledge to handle even the largest projects with a high reliability of delivery. In addition, our incorporated IT systems ensure a unique service to the benefit of our clients, and we have a strong worldwide set-up,”said Claus Laursen, general manager of Blue Water Dubai.

www.bws.dk

The Dubai office is a vital hub for Blue Water’s project cargo, and the company works in close cooperation with both clients and other Blue Water offices to optimise the entire logistics chain and overall service level.

Blue Water’s global project divisions offer transport of all types of project cargo – not only large, out-of-gauge units, but all types of cargo demanding special solutions compared to ordinary groupage and standard transport solutions.

The company has extensive experience with projects for the oil and gas industry – being involved in the transport of entire oil rigs from one part of the world to another. In recent years, the level of activity has increased within this industry but also to other industries.

“The demand for strong professionals is increasing, and we are very serious about the quality in what we do. In Blue Water, we have a strong focus on the health and safety of our employees and of those who come into contact with our services. We encourage a ‘zero incident mindset’ in all employees, contractors and partners,” explained Claus Laursen.

The company added that service and quality in transport and logistics required much more than trucks, vessels and aircrafts – it required the right team.

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Innovations

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SBM Offshore and CompactGTL in GTL floating solutions deal FPSO LEASING COMPANY, SBM Offshore has signed a commercial development agreement with modular gas to liquid solutions provide, CompactGTL, to work exclusively together on offshore projects. The use of GTL technology for floating production systems has the potential to significantly reduce gas flaring, by transforming associated gas into synthetic crude oil which can be blended in to the produced crude oil.

The two companies have been working together since 2008 and this agreement opens the door for the world’s first, fully integrated, offshore modular GTL solution for the upstream industry. The companies will combine their strengths for the marketing and execution of projects involving associated gas

challenges for oil fields offshore.

“SBM Offshore and CompactGTL provide complimentary expertise, and by combining this we have been able to develop an exciting new FPSO product which will be a very attractive solution for associated gas disposal in ultra deepwater fields,” said Mike Wyllie, Chief Technology Officer of SBM Offshore.

Nicholas Gay, Chief Executive, CompactGTL said, “CompactGTL is delighted that we have been able to cement our longstanding relationship with SBM Offshore. Combined with our expertise in delivering the world’s first commercial scale modular gas to liquids solution for associated gas, [the deal] will have significant impact on the offshore oilfield appraisal and development sector.”

Yokogawa launches new pressure transmitters YOKOGAWA HAS LAUNCHED a new EJ series of pressure/differentialpressure transmitters. Incorporating the company’s DPharp digital resonant sensing technology, this latest product range includes a version that is suited to the oil and gas industry. The low copper housing DPharp EJA transmitter features multi-sensing capability, fast response time and its new compact design makes it significantly lighter than the stainless steel versions and makes it ideal for use on offshore platforms.

This new range adds new levels of functionality, performance and safety compared to the original EJA series. Firstly, the response time, the time from the detection of a pressure change to the change in the output of an electric signal, has been brought down to 90 ms, which equals the capability of Yokogawa’s premium EJX series. Secondly, the

multi-sensing capability means that a new EJA differential pressure transmitter will be able to simultaneously measure both differential and static pressure. Thirdly, the flexible, rugged housing means that the transmitters can be mounted either vertically or horizontally and new, larger indicators on the display make it easier for oil land gas engineers to read the process variables and alarms and the intuitive display also aids in faster commissioning and maintenance

The EJA series pressure transmitters

WWCI launches new emergency response solution

Creating real tangible value through integrated solutions

WELL CONTROL AND subsea containment specialist, Wild Well Control Inc (WWCI), has launched WellCONTAINED - the first fully comprehensive solution within the oil and gas industry to navigate through preparedness, www.wildwell.com/ prevention, response and recovery in the event of a deep water well control incident.

“We are excited to be introducing WellCONTAINED […] the industry’s leading, subsea containment emergency response solution,” said Wild Well Control’s president, Freddy Gebhardt. “Wild Well Control is the only company with the depth of experience, capability and equipment to offer complete prevention and response to subsea well incidents. As oil and gas companies intensify their exploration and production into ever more challenging environments, WellCONTAINED provides them with the critical support and capability they need.”

Wild Well Control is a key partner for many of the world’s oil and gas businesses who operate in challenging and harsh environments, including Shell’s Arctic exploration team.

"The experienced professionals at Wild Well Control provided immediate support to Shell during a mandatory exercise that required a demonstration of Shell's ability to safely manage the placement of the capping stack,” said Shell’s Arctic emergency response specialist. “Much of the success of the exercise was achieved due to the industry leading innovations and individual contributions made by the Wild Well Control specialists who have set the bar for future offshore contingency response."

OIL AND GAS account for more than half of all primary energy consumed globally. Presently at 142 MBPD combined oil and gas production is almost double of what it was in 1973, and is likely to rise further reaching 180 MBPD by 2030. Maintaining the dependability and reliability of supply is thus a fundamental objective. This translates into a technological challenge, that of enabling the exploration, extraction, processing and transportation of oil and gas in manners that are safe, clean, energy efficient and affordable.

At ADIPEC 2012, ABB will showcase technology and solutions to increase productivity and profitability of the plant and to add value to the oil, gas and petrochemical business by focusing on real issues the industry is grappling with today. Each of ABB’s displays will demonstrate how ABB solutions can help extend asset life and reduce operational expenditure. ABB’s technologies will not only empower the oil and gas companies with predictive maintenance but will also ensures that you do all of this remotely to avoid cost of travel, time and human resource.

ABB can also reduce emissions and energy consumption and can make optimum use of assets and take quick decisions.

It is observed that half of the unscheduled downtime is due to the human error, ABB solutions will enable operators to comprehend process traffic pattern, improve user interface and office ergonomics thereby facilitating operators to take better decisions quickly.

ABB can help achieve safety first. The safety of a plant and its employees depends on the ability of the plant to shut down or shift to a safe state should an abnormality occur. ABB solutions can be designed to client requirements; Alarm management systems, sensors and their expertise from various projects across the globe can help maintain a higher health and safety level and will keep projects and equipment running smoothly.

176 Oil Review Middle East Issue Seven 2012

S27 ORME 7 2012 Innovations 03_Layout 1 24/10/2012 18:52 Page 177

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Innovations

S27 ORME 7 2012 Innovations 03_Layout 1 24/10/2012 18:52 Page 178

Wireline Engineering celebrates Iraq supply contract WIRELINE ENGINEERING, THE UK-based wireline and well intervention technology specialist, has won a contract worth more than US$330,000 to supply specialist Roller Bogie conveyance technology in Southern Iraq.

The company, which is exhibiting at ADIPEC, stand 1120A in Hall 1, and will be represented by technical staff from its Abu Dhabi and Aberdeen bases, said that the project involved the supply of a new hybrid version of the company's Roller Bogie conveyance tools. These are specifically designed to prevent damage to protective coatings on completion tubulars from the passage of intervention toolstrings, thus extending the life of the completion itself.

“Acquiring such a sizeable order further demonstrates the opportunities available in the Middle East for small companies with great products," said Wireline Engineering Managing Director, Bill Petrie. “Roller Bogie tools are renowned for providing easy access for wireline assemblies in deviated wells but these new hybrid tools also protect completion tubing that is otherwise susceptible to damage from the passage of wireline tools.

“This is our first significant order from Iraq and we are confident that more will follow as the Roller Bogie technology becomes established and

The Roller Bogie contract is worth more than US$330,000

the value of using these tools is realised."

Wireline Engineering, which was established in 1998, develops original well intervention

technologies for the oil and gas industry worldwide and currently works with more than 300 customers in over 60 countries.

Artificial Lift Company’s Advantage System™ enjoys continued success ARTIFICIAL LIFT COMPANY has heralded the continued success of its Rigless Advantage System after the equipment was pulled and reinstalled at ConocoPhillips’ West Texas test well in the US. The relationship between Artificial Lift Company and ConocoPhillips was forged with the Rigless Electric Submersible Pump (ESP) technology in early 2009, when Artificial Lift Company installed the first Advantage System, its Rigless ESP, in ConocoPhillips’ test well. After five years of testing and product development, the Rigless Advantage System was deployed in the West Texas test well. The system ran for 18 continuous months despite harsh

downhole conditions and numerous stops and starts due to electricity variables.

“ConocoPhillips was pivotal in the early commercialisation of our Advantage System, enabling us to bring our rigless technology to the marketplace and serving as a reliable partner to show the cost savings and productivity optimisation that operators enjoy with this product,” said Alex Kosmala, President and CEO of Artificial Lift Company. “Regardless of the difficult well conditions presented in West Texas, Advantage System continues to operate for ConocoPhillips from this test well. We look forward to future success with the West Texas test well installation.”

John Patterson, Global Production Engineering Chief for ConocoPhillips, said, “I was pleased that we accomplished our goal of pulling and rerunning the Advantage System. We discovered that the harsh downhole environment caused a hole in the bottom of the lower seal section shorting the motor, which halted the operation.

Notwithstanding the amount of scale recovered with the equipment, we were able to plug back into the downhole wet connector, and it worked on the first try. There are now six plug-ins to the same downhole wet connector which have demonstrated system repeatability in a vertical well.”

Artificial Lift Company’s Advantage System ESP is slick-line deployable, compatible with industry standard surface and downhole hardware and contains a lightweight, compact Permanent Magnet Motor. The lack of needing a rig for intervention reduces downtime for operators and creates significant cost savings.

Artificial Lift Company installed the first Advantage System, its Rigless ESP, in ConocoPhillips’ test well in 2009

For more information, see http://alcesp.com/advantage.php

178 Oil Review Middle East Issue Seven 2012

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Innovations

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Expanded Pyroban explosion protection range to be shown at ADIPEC EXPLOSION PROTECTION SPECIALIST for the oil and gas industry, Pyroban Group, will demonstrate its growing range of NEC, ATEX and IECEx certified explosion proof components, kits, packages and systems at this year’s ADIPEC on stand 9061.

“We will show new components and products at ADIPEC that help prevent an ignition in the event of a hydrocarbon release in the oil and gas industry upstream and downstream,” said Gary Smith, Business Development Manager for Pyroban’s Oil and Gas Division.

Pyroban has provided safety and explosion prevention solutions for companies globally for more than 40 years.

“Pyroban serves a large number of companies in the Middle East as businesses look to effectively manage the risk of explosion and minimise the risk to people, the environment, their brand reputation and oil and gas production,” said Smith. “At the exhibition we will discuss our refurbishment and remanufacturing services, which bring existing equipment up to current explosion proof standards. This is becoming increasingly popular in the Middle East.”

Pyroban offers a range of solutions and systems to protect generator sets or pumps, forklift trucks and other equipment used in hazardous or discretionary safety areas upstream and downstream. A number of new explosion proof components, many of which have tri-certification to ATEX, IECEx and NEC 505, will also be displayed on the Pyroban stand at ADIPEC, manufactured by Pyroban Group companies.

The new Pyroban safety shut-off valve (SVH) will be shown, which is designed to enforce the shut-down of a diesel engine if it ingests a flammable gas, preventing engine ‘over-speed’. Pyroban will also be showing a range of explosion proof components from Pyropress, a Pyroban Group company.

“We will show the Perseus pressure switch that has tri-certification and the Hermes II pressure switch, which is Exd and Exia approved," said Paul Maddern, Sales Manager for Pyropress. "The Titan differential pressure switch, an Exd differential pressure transmitter and Exia pressure transmitter will also be shown alongside the Guardian Exia temperature and reed level switches designed for use in hazardous areas.”

Visitors to ADIPEC can also see the Pyropress M66 marine certified explosion relief valve (ERV) which vents excess pressure in the event of a crankcase explosion and an ATEX compliant centrifugal and auxiliary spark arrestor for engines up to 1,500 bhp will also be shown, representing a full range offering.

The main feature of Pyroban's stand will be an explosion proof diesel engine package featuring a Broadland Radiator. The package is protected to ensure it cannot be a potential source of ignition (from hot surfaces, engine over-speed or sparks), which could otherwise lead to a potential explosion. Well service equipment such as cementing units and air compressors are usually powered by similar units.

“This engine display not only shows the explosion proof engine kits we are renowned for, it also demonstrates our capability to supply full

Pyroban will also be showing a range of explosion proof components from Pyropress, a Pyroban Group company.

Zone 2 Powerpacks certified in accordance with international requirements such as ATEX, IECEx or Class 1 Div 2,” said Smith.

At ADIPEC, the Pyroban team will be providing information about the different engine packages available for use in Zone 2 (or equivalent) hazardous areas. For packagers, Pyroban has developed comprehensive kits for all types of electronic and mechanical engines spanning 15–3500 bhp.

The typical Pyroban diesel engine solution includes an exhaust gas cooler and a shut-off valve to prevent engine overspeed and flame from the inlet, flame and spark arrestors, safety solutions for all electrics, a safe turbocharger and other safety critical components. An alternator, battery and radiator can also be added to the kit along with advanced control systems such as PCS 2™ or 3GP™.

“Our support service is unrivalled in the Middle East,” said Smith. “We support the 24/7/365 nature of the oilfield with fast response engineers who can be in place quickly with all the necessary medical certificates and survival training.”

Pyroban will also be promoting its consulting and training services that help oil and gas businesses effectively manage their explosion risks and help put processes in place to ensure legal compliance and continued safety.

For further information, visit www.pyroban.com

Conductor Installation Services awarded Weatherford Kazakhstan contract CONDUCTOR INSTALLATION SERVICES Ltd (CIS), an Acteon company, has been awarded a multimillion US$ contract by Weatherford Kazakhstan to provide conductor-driving services in Kazakhstan. The contract requires CIS to carry out up to eight conductor-driving operations annually on wells offshore in the Caspian Sea for a number of major operators.

CIS will employ powerful 90 kJ hydraulic hammers to drive the conductors. Two hydraulic hammer spreads, together with drive chasers and drive

180 Oil Review Middle East Issue Seven 2012

shoes were delivered to Kazakhstan where they will be based throughout the programme. The first installation operation is scheduled to commence during the next few weeks.

The conductor-driving specialist is supporting the contract from its UK headquarters. CIS will carry out the operations with a dedicated team of specialists that will at times be involved in performing two conductor installation operations simultaneously.

The two-year contract, which features two one-year

options to renew, represents the first time that CIS will have worked on behalf of Weatherford in Kazakhstan, although the company has been working in the region since 2005. Over time, CIS has successfully completed numerous conductor installation operations around the world for Weatherford International. Currently, CIS is working on behalf of Weatherford in Colombia, Nigeria, Gabon, Brunei, Malaysia and Romania, among others.

CIS is a member of Acteon’s Conductors, Risers and Flowlines group of companies.

S28 ORME 7 2012 Innovations 04_Layout 1 24/10/2012 18:52 Page 181

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Innovations

S28 ORME 7 2012 Innovations 04_Layout 1 24/10/2012 18:52 Page 182

Emerson and Statoil to collaborate on Total Uncertainty Management program EMERSON PROCESS MANAGEMENT has announced that it is teaming up with Norwegian state oil and gas company, Statoil, to create a Total Uncertainty Management program. The program will focus on how exploration and production companies can improve history matching and uncertainty management and quantification across the entire reservoir characterisation workflow through Roxar ENABLE™, Emerson’s history matching and uncertainty estimation software solution. The result will be more accurate and realistic production scenarios generated from numerous reservoir models.

The program is one of a number of commercial implementation projects Emerson is conducting for Statoil. Innovative solutions for horizon and fault uncertainty – both crucial to total uncertainty management – are expected to be unveiled in the first part of 2013.

The program’s enhancements to Roxar ENABLE, combined with the uncertainty management capabilities of Emerson’s Roxar RMS™ reservoir modelling software, will lead to commercial software applications that allow uncertainties to be quantified across the complete reservoir characterisation and development workflow. By analysing multiple plausible realisations and incorporating the data into their decision-making,

E&P companies can better quantify the effects of uncertainties on volumes and cumulative production so they can improve risk management.

Key elements of the Total Uncertainty Management program, which will take place over three years, will include: 6 Further improvements to the proxy-based history matching technique behind Roxar ENABLE, based on research and field trials by Statoil.

Proxy-based history matching and uncertainty has been shown to be a very effective means of using historical data to reduce the uncertainty of production forecasts.

6 The implementation of Statoil's innovative algorithms in Ensemble Kalman Filter-type (EnKF) history matching and uncertainty. EnKF is a powerful history matching technique, particularly successful in handling the production effects seen on 4D seismic.

6 A continued focus on integrated workflows between geological modelling, simulation, the forward modelling of seismic and history matching – a workflow common to both proxy based and EnKF type methods.

6 The maximising of the use of cluster and cloud computing within history matching and uncertainty management - essential for high volume and integrated workflows.

“Whether it be as input to field development

and operational plans, investment proposals, or a future divestment, the ability to accurately generate future production estimates, quantify uncertainty, and minimise financial risk is one of the industry’s greatest challenges,” said Kjetil Fagervik, managing director of Emerson’s Roxar software solutions. “We are therefore delighted to be working with Statoil on such an important project and also delighted that they have selected Roxar ENABLE and our integrated reservoir modelling workflow as the best means of achieving the goal of greater uncertainty management – so crucial for maximising production and recovery from each individual reservoir. From workflow integration to 4D seismic, the incorporation of new mathematical algorithms, and horizon and fault uncertainty, we look forward to seeing many innovative developments over the next three years.”

Roxar ENABLE, which is now integrated within Emerson’s reservoir engineering solution, Roxar Tempest™, is used by operators worldwide for better understanding and measurement of uncertainty in reservoir production performance estimates, speeding up the history-matching process typically by a factor of four. Roxar ENABLE can be used at any stage of a field’s life, from bid appraisal to abandonment, and whether production data is available or not.

Permasense launches long-range corrosion monitoring system PERMASENSE LIMITED HAS developed a new long-range corrosion monitoring system which allows retrieval of data from monitoring locations up to 40km (25 miles) from the gateway location. Building on the proven technology of the Permasense short-range system, the long-range system has been developed to allow for easy deployment on pipeline and feeder lines upstream and midstream. Again, the system offers an efficient and safe way to monitor the integrity of pipework enabling better informed decision making and improving operator flexibility.

The Permasense long-range system uses the same ultrasonic wall thickness measurement sensors as in the short-range system, but sensors are cabled to a range extender which incorporates a long-range antenna. Thus data can be retrieved even from remote monitoring locations, enabling systems to be configured to meet the needs of various upstream facilities.

182 Oil Review Middle East Issue Seven 2012

The gateway relays the frequent measurements made by the sensors to the customer’s server, which hosts the Permasense Data Manager software, giving near real-time visibility of pipe integrity. The data can also be readily exported from the database to any customer application.

The permanently installed solutions that Permasense provides can operate in extreme temperature environments and inaccessible locations, and offer an efficient and safe way for corrosion monitoring. Continuous measurement presents a step change in the levels of corrosion rates that can be determined and the accuracy of that determination.

“This is a significant development and emphasises our strong commitment to ongoing product development," said Permasense's chief executive officer, Dr Peter Collins, "The team here at Permasense has responded to industry needs in developing this new long-range system.”

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Communications & IT

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The oil and gas industry has been steadily adopting new wireless technologies over the last decade and vMonitor has been developing their new Wireless HART lineup of instruments at their R&D facility in India.

Pushing the

Wireless HART agenda W

ITH LARGE AREAS to cover, changing environmental conditions, difficult terrains, shrinking numbers of skilled workers, HSE considerations and the increasing capital expenditure and maintenance of wired systems, the Oil & Gas industry has been steadily adopting new wireless technologies over the last decade.

As the oil and gas industry is slowly moving more and more toward the Digital Oilfield many companies are embracing wireless instruments, remote terminal units (RTU’s) and electrical. On top of this, workers in the field have requirements to be able to log into company networks from wherever they and security cameras are now being setup to feedback much needed information on potential vandals, thieves and other threats.

Recent events in Iran, Qatar and Saudi Arabia have put digital security at the forefront of many people’s mind, meaning that newer wireless protocols not only need to be fast but need to be safe.

With the ever increasing number of Oilfield services companies joining the market the other feature on operator’s wishlist is interoperability.

That is: the ability to work with multiple numbers of instruments from different manufactures seamlessly.

One company trying to pack all of these features into the one package is vMonitor. vMonitor has been involved in the Digital Oilfield for over ten years servicing over 59 clients in 14 countries in locations such as: Venezuela, Mexico, Nigeria, Kuwait, Oman, India, United Arab Emirates and more. vMonitor has been developing their new Wireless HART lineup of instruments which they are showcasing at their year’s ADIPEC, at their R&D facility in India.

Wireless HART is a protocol that creates a mesh between many wireless devices therefore creating a network

“vMonitor has always been a company at the forefront of wireless technologies,” said COO Sami Suheil. “Wireless HART protocol will help solidify that position further.”

Wireless HART is a protocol that creates a mesh between many wireless devices therefore creating a network. There are currently over 30 million HART enabled devices in service worldwide meaning that HART technology is the most widely used field communication protocol for process instrumentation.

The network uses IEEE 802.15.4 compatible radios operating in the 2.4GHz Industrial, Scientific, and Medical radio band. The radios employ directsequence spread spectrum technology and channel hopping for communication security and reliability, as well as TDMA synchronized, latency-controlled communications between devices on the network.

Each device in the mesh network can serve as a router for messages from other devices. Meaning, a device doesn't have to communicate directly to a gateway, but just forward its message to the next closest device. This extends the range of the network and provides redundant communication routes to increase reliability. vMonitor is part of the HART foundation, the international, not-for-profit membership organization, that not only owns the technology for the communication protocol but also sets standards, holds documentation and gives training.

The new wireless protocol will be built into a next generation version of vMonitor’s lineup of instruments which includes: pressure, temperature, level and multivariable sensors.

Interoperability

VMonitor WirelessHART System

184 Oil Review Middle East Issue Seven 2012

As the Digital Oilfield grows from a useful tool to a business necessity one of the key features that operators are looking for in products is interoperability. By offering products that are easily interoperable with other brands gives end-users the flexibility to pick and choose the best solution for their requirement rather than sticking with a single platform. These requirements have been packed into vMonitor’s next generation iSens lineup by their R&D teams in Mumbai and Houston.

The iSens is a battery powered, long range, multi frequency and low cost intelligent wireless sensor ideally suited for remote monitoring in hazardous Oil & Gas environments (Class 1 Div 1 Certifications).

The iSens communicates using either vMonitor’s WMP wireless protocol for long distance communication, or wireless HART Protocol.

S29 ORME 7 2012 IT_Layout 1 24/10/2012 18:51 Page 185

Communications & IT

S29 ORME 7 2012 IT_Layout 1 24/10/2012 18:51 Page 186

The iSens is compatible with a wide range of Wireless HART enabled gateways from companies like: Emerson, Phoenix Contact, Pepperl-Fuchs, Endress and more.

iSensDP10 Features: • Interoperable with other Wireless HART field devices and gateways • >99.99 per cent data reliability, even in the most industrial environments • Every iSensDP10 can act as both an endpoint and a router, increasing network reliability.

• Leverages SmartMesh network manager’s Intelligent Networking Platform to ensure optimal mote performance and Remote Configuration Capabilities • Industry-leading Wireless Sensor technology optimized for batterypowered operation • Automatic network-wide coordination for efficient power usage • Built-in Wireless Diagnostics data • Report by Exception Capabilities • Signal Strength Indicator • Selectable 1 second to 24 hours Sampling and Reporting Interval • Guaranteed Wireless Message Delivery • Up to 200 Wireless Nodes per Gateway • Threshold Alarming • Value Change Alarming • Wireless HART Protocol • Optional LCD • Manual Force To Transmit Switch • Direct Mount or Pipe Stand • Microsoft™ Windows Configuration tool

186 Oil Review Middle East Issue Seven 2012

Lessons Learned Now in their third generation of wireless instrumentation vMonitor has been supplying Digital Oilfield solutions for companies such as Petroleum Development Oman (PDO), Kuwait Oil Company (KOC), Abu Dhabi Oil Company (ADCO), PDVSA, PEMEX, Shell, Schlumberger, ZADCO and more.

“Since our inception vMonitor has strived to be at the forefront of wireless technologies for the oil and gas sector,” Said COO Suheil “Wireless HART enabled instrumentation extends the company’s portfolio of industry solutions further. We carefully develop each of our products thanks to the direct feedback we receive everyday from the field from our clients.”

“The next generation iSens line is built upon 10 years of knowledge gained from our previous models mixed with our client’s requirements.” vMonitor will be launching the Wireless HART enabled iSnens lineup at ADIPEC. ■

iSensDP10 in action in Kuwait

S30 ORME 7 2012 IT 02_Layout 1 24/10/2012 18:47 Page 187

OSISOFT HAS RELEASED the latest version of the PI ProcessBook, which is a desktop client for graphic visualisation of PI System data that allows users to create dynamic, interactive, graphical displays featuring real-time and historical PI System data.

The data can be viewed from multiple sources. Additionally, it provides tools for analysing data on the display and incorporates Microsoft Visual Basic for Applications (VBA), so that special routine chores can be automated.

PI ProcessBook display example

Cisco and Yahsat to offer joint satellite services CISCO WILL DELIVER satellite services in collaboration with UAEbased Al Yah Satellite Communications Company (Yahsat) to government entities and other industries such as oil and gas where field work is required.

Using the Cisco TelePresence VX Tactical (VX Tactical), high-definition video which is specifically designed for remote field locations, a first for the Middle East, the companies are ensuring that collaboration is truly possible from anywhere.

This high-definition video collaboration system is part of the Cisco TelePresence portfolio, which offers a total solution approach including content sharing, recording, firewall traversal, and management capabilities.

The VX Tactical is designed to be used in harsh environments and its tactical high impact plastic shell minimizes impact while an aluminium interior frame provides structural strength. Its 17.5-inch screen is fully readable in sunlight, and the high-definition camera provides a quality image of the field user and environment.

The VX Tactical can also be set up in a mobile TelePresence conference room scenario with an external microphone, camera, and monitor.

This rugged and lightweight mobile TelePresence product features Cisco's superior codec technology in a portable, briefcase-style form factor. The unit is based on a Cisco TelePresence System SX20 Quick Set codec (SX20) and supports H.323, and Session Initiation Protocol (SIP) dual stream up to 6 Mbps.

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Oil Review Middle East Issue Seven 2012 187

Communications & IT

Latest PI Processbook version available

Communications & IT

S30 ORME 7 2012 IT 02_Layout 1 24/10/2012 18:47 Page 188

Redline awarded contract for wireless oilfield network A US OIL and gas company has awarded Redline Communications Group a contract for a high-capacity wireless network for communications between wells and drilling rigs in the oilfield, and their centralised control offices.

The US firm is expanding its operations to Oman and asked Redline to help them meet their communications requirements.

“This contract is a major achievement for Redline and we are proud to have been selected as the network backbone for yet another oilfield project with this customer,” said Eric Melka, Redline's chief executive officer.

Delivery of products and services has already begun and full deployment of the network is expected to take up to 18 months.

The Virtual Fiber™ network will be built using Redline’s RDL-3000 and ELTEMT systems, rugged and reliable wireless broadband equipment designed by Redline for harsh environments, and engineered and built to the exacting standards required by the energy sector.

Redline’s Virtual Fiber network system offers the ability to instantly adjust to the living oil field as a whole, from individual well production, to drilling rigs, to the pressure of a part or all of the reserve itself, based on a variety of sensor data, including pressure, temperature, and flow. This capability allows the oil company to optimally run each well or each drill, maximising drilling efficiency and uptime while minimising breakdowns from drilling too quickly through hard rock or other obstacles that could hamper the drilling activity.

“Major oil and gas producers worldwide are turning to real-time monitoring and control capabilities to expand production at new, existing and mature oilfields,” said Bojan Subasic, Redline’s associate vice president development and production.

AVEVA adds to its enterprise portfolio AVEVA LAUNCHED AVEVA NET Gatekeeper and AVEVA Change Manager, two new additions to the AVEVA Enterprise portfolio that together ensure information integrity throughout the asset lifecycle, supporting safety, operational efficiency and maintaining regulatory compliance.

The new AVEVA NET Gatekeeper manages the handover of technical information, gathered from any source system, and simultaneously validates its integrity against the project information standards, before it is accepted into the AVEVA NET Workhub. It generates detailed reports on the accuracy of all information for any necessary correction by the information owner, ensuring that only accepted, validated information is made available for visualisation and contextualisation.

Working with AVEVA NET Gatekeeper, the new AVEVA The AVEVA NET Gatekeeper interface Change Manager maintains information integrity and regulatory compliance through fullyaudited, best-practice information change management processes.

As a result, Owner Operators can make informed decisions based on an interactive overview of all changes made across projects, and ensure trustworthiness of all information throughout the entire life of the 'as-built' asset.

"These two new products ensure the complete reliability and integrity of all technical information to help eradicate such issues," said Derek Middlemas, COO and Head of Enterprise Solutions, AVEVA.

188 Oil Review Middle East Issue Seven 2012

Invensys strengthens refinery-wide optimisation solutions INVENSYS OPERATIONS MANAGEMENT has introduced new refinerywide optimisation solutions that complement its existing portfolio of SimSci-Esscor hydrocarbon processing industry (HPI) offerings.

The company has issued two new offerings: a yield accounting solution and an off-sites solution integrated with planning and scheduling systems.

The Invensys Yield Accounting solution streamlines data transfer between off-sites software and yield accounting software to ensure that the correct information is being used. It then converts that process data into reliable operating information by using built-in data reconciliation algorithms. The solution increases accuracy and reliability for receipt, shipment and process data. Using the solution also results in more consistent, reliable data for cost accounting, equipment utilisation and other plant-wide key performance indicators that could yield a typical 250,000 bpd refinery an excess of US$8.5mn per year in savings.

Invensys also released an off-sites solution that integrates planning, scheduling and off-sites systems to its SimSci-Esscor ROMeo optimisation software. This new solution allows refineries that already have blend operations and optimisation practices in place to leverage these two sources of information, ultimately improving efficiency and profitability. As a result of this integration, Invensys can provide an easier way to update linear programming models when refinery feedstock profiles or physical configurations are significantly changed.

New wireless comms system for field operations EMERSON HAS RELEASED Mobile Worker: Voice and Video, a communications technology designed to help process manufacturers save time and money on plant maintenance and trouble-shooting by bringing the problem to the experts rather than bringing the experts to the problem.

Emerson partnered with AudiSoft to deliver a hands-free, highdefinition voice and video solution that plant personnel can wear into remote field locations anywhere in the world.

From the problem area, the field engineer can securely visually and verbally communicate live via a Wi-Fi access point, cellular, or satellite wireless connection with remote experts who, from their laptop or PC, can see and diagnose the problem, then instruct the field engineer through the problem’s resolution.

"We have a lot of customers with processes and field devices in remote locations—from platforms hundreds of miles offshore. If we can help them resolve their problems without flying expert consultants to the location, we can save them critical time and potentially millions of dollars in downtime," said Emerson’s Bob Karschnia, vice president of wireless.

The Mobile Worker kit includes a video camera and noisecancelling microphone that attach to a hardhat, a small touchscreen interface that straps to the chest, and an additional video camera that can be hand-held to zoom into areas too small for the headset camera to access.

Secure, encrypted communication allows real-time conferencing over the plant network or the Internet to solve remote problems much faster and more cost-effectively than transporting an expert to the site.

"We continue to find new wireless applications to help our customers manage their processes in challenging industrial environments. This is another valuable application they can add to their toolbox,” she added.

The Mobile Worker kit is rated for ATEX Zone 2 use, with Class 1 Division 2 certification.

S30 ORME 7 2012 IT 02_Layout 1 24/10/2012 18:47 Page 189

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S30 ORME 7 2012 IT 02_Layout 1 24/10/2012 18:47 Page 190

Emerson reaches milestone on wireless operation usage EMERSON PROCESS MANAGEMENT has said that more customers than ever have adopted wireless technologies for not only hard-to-reach, extreme applications, but also for critical, day-to-day process control and monitoring requirements.

Clocking more than 1 billion total hours of wireless operations across 10,000 systems, Emerson Smart Wireless technology has proven its reliability, costs savings and significantly reduced installation time, Emerson said in a statement.

Emerson Smart Wireless technology, based on the internationally recognised IEC 62591 WirelessHART standard approved in 2010, is now widely implemented in refineries, oil fields and offshore platforms around the world to obtain real-time plant data to optimize operations, improve worker and plant safety, and reduce emissions and other environmental impacts.

Among the industries benefiting the most from wireless technology are upstream oil & gas producers, refineries, and chemical facilities.

A technology first adopted for use in harsh, remote environments where wired instrumentation was not feasible, Smart Wireless technology has proven its reliability and performance in traditionally wired applications.

Since its release five years ago, Emerson estimates put the total installed savings resulting from Smart Wireless field devices at more than US$350mn and reductions in commissioning and installation time totalling 16 man-years.

The adoption of this technology has now spread to more than 120 countries and more than 10,000 separate wireless systems.

“We knew wireless technology offered substantial savings and it is gratifying to see its rapid and widespread adoption," said Bob Karschnia, Emerson Process Management vice president, wireless.

New long-range wireless solution COOPER BUSSMANN HAS launched a long-range wireless Ethernet modem for high-speed and reliable connectivity, the ELPRO 945U-E. The 945U-E is a license-free wireless transceiver capable of long-range and high-bandwidth communications.

The Wireless Ethernet Modem Router is useful for remote well-head monitoring, and pipeline leak detection.

Operating at 900MHz and up to 630mW, the 802.11 standardsbased modem is optimised for The wireless router is useful for pipeline throughputs of up to 54Mbps, leak detection which provides robust and secure two-way wireless communications in challenging outdoor environments typical of industrial monitoring and control applications.

Capable of operating in Access Point/Client configuration, functioning as a network Bridge/Router, or serving as a Serial Server (RS232/485), the ELPRO 945U-E offers node-to-node deterministic mesh network repeatability for further range and multiple channel spacing options to increase network scalability. Integrated Modbus server capability allows seamless I/O expansion through the use of ELPRO 115S Expansion Modules.

Microsoft showcases latest technology

SIS and StormGeo sign offshore solutions software deal

MICROSOFT SHOWED ITS latest technologies and best practices related to the oil and gas industry at the recent Idoc 2012 event.

The company said that it can help customers surpass traditional barriers to make better, faster decisions and achieve greater efficiency level.

Tareq Hijazi, regional country manager for Microsoft in Oman and Bahrain said, "We recognise the strategic importance of Oman oil and gas sector to the national, regional and worldwide economies and we are committed to contributing to its success through building strong alliances with Oman Ministry of Oil and Gas, and the Petroleum Development of Oman."

Microsoft presented its latest cloud computing offering and Windows Azure. Dr. Ali Ferling, worldwide managing director for Oil and Gas Industries at Microsoft, explained that the upstream oil and gas industry has been experiencing information overload, consequently upstream operators are calling for a simpler and more unified computing environment to help manage information overload.

“We are providing the technology and the framework to make implementing digital oilfields an effective reality. One of our latest frameworks is Microsoft Upstream Reference Architecture. MURA is a set of foundational principles that govern an IT architecture structure for the oil and gas industry. It seeks to deliver the consistency needed to support unification and simplification of upstream IT infrastructure, while providing energy companies with the flexibility to innovate and establish competitive differences," he said. "Cloud computing presents a new opportunity for upstream operator. It will be particularly useful for managing large volume of data like seismic and reservoir. Microsoft Cloud also offers the Azure platform which developers can use,” Ferling added.

STAR INFORMATION SYSTEMS (SIS) and StormGeo have signed an agreement to work together to develop a range of innovative software solutions for the offshore and shipping industries.

StormGeo has also taken a 15 per cent stake in SIS – with an option to increase this in the future – which will provide SIS with valuable funding to continue its global expansion activities.

By joining forces with StormGeo, SIS will be able to take advantage of its office locations around the world, particularly in Houston and Dubai, to better serve its markets.

SIS provides software systems for maintenance, safety management, purchasing and logistics within both shipping and offshore, while StormGeo provides meteorological decision systems to the offshore industry.

Both companies believe that they will be able to offer operators of ships, rigs and offshore supply vessels unique benefits in terms of safety, performance and cost savings and improve risk management.

SIS and StormGeo said that they hope to release their first jointlyproduced product within the next twelve months.

Detailed meteorological information and decision systems already provide the shipping and offshore industries with crucial tools to safeguard people and equipment while operating in harsh conditions.

SIS and StormGeo believe that his data becomes even more powerful when it is combined with operational data – from engine management to handling events and initiating safety measures.

“We see that our customers are facing new and more demanding requirements for safe operation from the authorities and their own customers,” said Per Anders Koien, chief executive officer of Star Information Systems.

Erik Langaker, chairman of StormGeo added, “We recognised that there could be an opportunity for StormGeo to integrate other software suppliers’ asset data with our more traditional meteorological forecasting and risk assessment models.”

190 Oil Review Middle East Issue Seven 2012

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Project Databank Compiled by Data Media Systems

OIL, GAS AND PETROCHEMICAL PROJECTS Project A1.8 mbpd Phase 1 Development Project (Bab Field) - Thamama G and Habshan 2 1.8 mbpd Phase 1 Development Project (Bida al-Qemzan) 1.8 mbpd Phase 1 Development Project (Overview) ADCO - 1.8 mbpd Phase 1 Development Project (Qusahwira Field) ADCO - Bab Field Gas Compressors Installation Phase 2 ADCO - Bab Field Gas Compressors Installation - Gas Phase 1 ADCO - Shah Field Compressor Unit ADGAS - Das Island Flaring & Emission Reduction ADGAS - Das Island LNG Jetty Q1-2015 ADGAS - Das Island Pentane Storage Facility ADMA-OPCO - 100 MBD DAS Facilities Upgrade Project ADMA-OPCO - Integrated Gas Development (Habshan Platform Offshore Facilities) ADMA-OPCO - Nasr Field Development - (Overview) ADMA-OPCO - Nasr Field Development Full Field Package ADMA-OPCO - SARB Offshore Oil Field Development Artificial Islands - Package 1 ADMA-OPCO - SARB Offshore Oil Field Development Package 2 ADMA-OPCO - SARB Offshore Oil Field Development Package 3 ADMA-OPCO - SARB Offshore Oil Field Development Package 4 ADMA-OPCO - Umm Al Lulu Field Development (Overview) ADMA-OPCO - Umm Al Lulu Field Development Phase 1 ADMA-OPCO - Umm Al Lulu Field Development Phase 2 Aegean Marine Petroleum Network Fujairah Oil Storage Terminal Asab, Bab, Bu Hasa and Ruwais (ABBR) Modifications Project (Asab 3) Asab, Bab, Bu Hasa and Ruwais (ABBR) Modifications Project (Bab Gas Processing Facilities) Asab, Bab, Bu Hasa and Ruwais (ABBR) Modifications Project (Overview) BOROUGE - Borouge III - Polyolefins BOROUGE - Borouge III - Ethane Cracker Borouge III (Cross-Linked Polyethylene Conversion Unit-XLPE) Borouge III (Low Density Polyethylene-LDPE) Borouge III (Non-process Buildings) Borouge III (Overview) Borouge III - Offsites and Utilities CONCORD ENERGY - Petroleum Storage Facility Dana Gas - Zora Gas Field Das Island Flares Modifications - Revamp Project Emirates LNG - Fujairah LNG Field Development Program Bab Field - Habshan 1 - Phase 1 Fujairah Port Facilities Expansion Fujairah Storage Tank Terminal Gas Distribution (NGD) Network Abu Dhabi

Sector Oil

Facility Budget Oil Field Development 683000000

Status EPC

Start Date Q3-2008

Completion Date Q3-2012

Oil

Oil Field Development 300000000

EPC

Q1-2009

Q2-2012

Oil Oil

Oil Field Development 3000000000 Oil Field Development 560000000

EPC EPC

Q1-2007 Q1-2009

Q1-2017 Q4-2012

Gas

Gas Production

500000000

EPC ITB

Q1-2011

Q4-2014

Completed

Q4-2007

Q2-2012

Gas Production 1000000000 Gas Gas Gas

Gas Production 300000000 Gas Production 100000000 Liquefied Natural Gas (LNG)

EPC FEED 50000000

Q2-2010 Q1-2012 On Hold

Q2-2014 Q3-2015 Q2-2006

Gas Oil Gas

Gas Storage Tanks 65000000 Oil Field Development 48000000 Gas Processing 600000000

EPC ITB EPC EPC

Q2-2010 Q2-2010 Q3-2006

Q1-2015 Q2-2014 Q2-2012

Oil, Gas, Offshore Oil, Gas, Offshore Oil

Oil Field Development 5000000000

EPC

Q4-2006

Q4-2013

Oil Field Development 500000000

FEED

Q2-2011

Q1-2015

Oil Production

260000000

EPC

Q1-2010

Q3-2013

Oil, Gas

Oil & Gas Field

500000000

EPC ITB

Q1-2010

Q1-2016

Oil, Gas

Gas Pipeline

300000000

EPC ITB

Q1-2010

Q3-2015

Oil, Gas

Gas Processing

500000000

EPC ITB

Q1-2010

Q4-2015

Oil

Oil Field Development 2000000000

EPC

Q1-2007

Q1-2018

Oil

Oil Field Development 500000000

EPC ITB

Q1-2007

Q1-2018

Oil

Oil Field Development 500000000

EPC ITB

Q2-2010

Q4-2015

Oil

Oil Storage Tanks

100000000

EPC

Q2-2010

Q4-2012

Gas

Gas Processing

600000000

EPC

Q3-2007

Q4-2012

Gas

Gas Processing

30000000

EPC

Q4-2007

Q4-2012

Gas

Gas Field Development 1000000000

EPC

Q3-2007

Q4-2012

Petrochemicals Polyolefins Petrochemicals Ethane Cracker Petrochemicals Polyethylene

1450000000 1075000000 200000000

EPC EPC EPC

Q2-2009 2008 Q2-2008

Q4-2013 Q4-2013 Q4-2013

Petrochemicals Low Density Polyethylene (LDPE) Petrochemicals Aromatics Petrochemicals Polyolefins Petrochemicals Offsites & Utilities Oil Oil Storage Tanks Gas Gas Exploration Oil, Gas Gas Processing Gas Liquefied Natural Gas (LNG) Oil, Gas Exploration

500000000

EPC

Q1-2010

Q4-2013

110000000 4500000000 1000000000 250000000 100000000 50000000 1000000000

EPC EPC EPC EPC FEED EPC ITB FEED

Q3-2009 Q1-2008 Q1-2010 Q1-2010 Q1-2010 Q1-2011 Q4-2012

Q1-2014 Q4-2013 Q4-2013 Q2-2013 Q3-2014 Q3-2014 Q2-2014

400000000

EPC ITB

Q4-2011

Q4-2014

Oil Oil Gas

100000000 165000000 300000000

Construction Q4-2011 EPC Q1-2012 EPC ITB Q1-2005

Q3-2014 Q2-2013 Q4-2015

Oil Storage Tanks Oil Storage Tanks Gas Network

S31 ORME 7 2012 DMS Projects_Layout 1 24/10/2012 18:45 Page 193

GASCO - Habshan Acid Gas Flaring Recovery GASCO - Habshan Direct Depressurization (HDD1) GASCO - Habshan Nitrogen Generation and Injection Project (NBNR Package) GASCO - Habshan Nitrogen Generation and Injection Project (NGI Package) GASCO - Habshan Nitrogen Generation and Injection Project (Overview) GASCO - Integrated Gas Development (Fourth NGL Recovery Train at Ruwais) GASCO - Integrated Gas Development (Habshan 5 Gas Processing Plant) GASCO - Integrated Gas Development (Habshan 5 Offsites and Utilities) Gasco - Integrated Gas Development (IGD) - Expansion GASCO - Integrated Gas Development (LPG Storage Tanks at Ruwais) GASCO - Yas Mina Zayed Gas Pipeline Gasoline and Aromatics Expansion Project (GAE)

Gas Gas Gas

Gas Processing Gas Processing Nitrogen

100000000 100000000 100000000

EPC EPC ITB FEED

Q1-2011 Q1-2011 Q1-2010

Q2-2014 Q1-2014 Q1-2015

Gas

Nitrogen

160000000

EPC

2011

Q1-2014

Gas

Nitrogen

400000000

EPC

Q1-2010

Q4-2014

Gas

3000000000

EPC

Q3-2006

Q3-2013

Gas

Natural Gas Liquefaction (NGL) Gas Processing

5000000000

EPC

Q1-2008

Q3-2013

Gas

Gas Field Development 1800000000

EPC

Q3-2006

Q2-2013

Oil, Gas

Gas Production

12000000000

Q1-2012

Q1-2015

Gas

LPG Storage Tanks

700000000

Feasibility Study EPC

Q2-2006

Q3-2013

Gas Processing Aromatics

45000000 950000000

FEED On Hold

Q3-2011 Q2-2005

Q2-2015

Oil Storage Tanks Nitrogen

130,000,000 260000000

EPC EPC ITB

2007 Q1-2007

2012 Q3-2014

Oil Storage Tanks

250000000

EPC

Q1-2012

Q4-2014

Bulk Storage

127000000

EPC

Q4-2011

Q4-2013

Gas Processing

1500000000

EPC

Q1-2006

Q3-2013

Pipeline Oil Storage Tanks Pipeline Terminal Refinery Oil & Gas Field

1000000000 350000000 900000000

Q2-2009 Q2-2009 Q2-2009 2010 Q2-2010 Q1-2010

Q4-2012 Q4-2012 Q4-2012

5000000000 500000000

EPC EPC EPC On Hold FEED EPC

CPF (Central Processing Facility) Offshore Platform Carbon Dioxide

500000000

EPC

Q3-2003

Q2-2012

400000000 500000000

EPC EPC ITB

Q2-2008 Q1-2012

Q2-2012 Q4-2015

Carbon Dioxide

2500000000

EPC ITB

2008

Q1-2015

Hydrogen Nitrogen Acid Gas

2,200,000,000 On Hold 100000000 EPC 47000000 EPC

2009 Q4-2010 Q1-2009

2014 Q1-2013 Q3-2014

Acid Gas

550000000

EPC

Q1-2008

Q4-2014

Acid Gas

5500000000

EPC

Q1-2008

Q1-2014

Acid Gas

1450000000

EPC

Q1-2008

Q1-2014

Acid Gas

600000000

EPC

Q1-2008

Q4-2014

Acid Gas

196000000

EPC

Q1-2008

Q4-2014

Acid Gas

500000000

Shelved

2010

Q4-2014

Acid Gas

600000000

EPC

Q1-2010

Q3-2013

Acid Gas

624000000

EPC

Q1-2009

Q1-2014

Acid Gas

300000000

EPC

Q1-2008

Q4-2014

Acid Gas 12000000000 Oil Field Development 3600000000

EPC EPC

Q1-2007 Q3-2005

Q2-2014 Q4-2012

Oil Field Development 2300000000

EPC

Q1-2006

Q4-2012

Oil Field Development 1300000000

EPC

Q1-2006

Q4-2012

Oil, Gas Oil, Petrochemicals GPS Chemoil - Fujairah Oil Storage Terminal Expansion Oil Habshan Nitrogen Generation and Gas Injection Project (CRI Package) Hamriya Jetty and Pipeline Network Project Oil, Gas Marine Works 2 Horizon Terminals - Falcon Jetfuel Pipeline & Oil, Pipeline Bulk Terminal Facilities Integrated Gas Development Gas (Process Units and Utilities on Das Island) Inter Refineries Pipeline (IRP) - Phase 2 Oil Inter Refineries Pipeline (IRP) - Phase 2 (Package 1) Oil Inter Refineries Pipeline (IRP) - Phase 2 (Package 2) Oil Invest AD - Fujairah Grain Terminal Petrochemicals IPIC Fujairah Refinery Oil, Refining Jarn Yaphour and Rahman Oil and Oil, Gas Gas Fields Development Lower Zakum Central Super Complex Demothballing Oil Lower Zakum Field Development Oil, Offshore MASDAR - Carbon Capture and Storage Program Gas Phase I (Mussafah Steel Rolling Mill) MASDAR - Carbon Capture and Storage Program Gas Phase I (Overview) MASDAR - Hydrogen Power Plant Gas Mirfa - Ruwais Nitrogen Pipeline Project Gas Onshore Shah Sour Gas Field Development Gas (Package 1 - Gas Gathering Facility) Onshore Shah Sour Gas Field Development Gas (Package 11 - Sulphur Treatment Facilities at Shah) Onshore Shah Sour Gas Field Development Gas (Package 2 - Main Process Plant) Onshore Shah Sour Gas Field Development Gas (Package 3 - Sulphur Recovery Units) Onshore Shah Sour Gas Field Development Gas (Package 4 - Offsites and Utilities) Onshore Shah Sour Gas Field Development Gas (Package 5 - Pipelines) Onshore Shah Sour Gas Field Development Gas (Package 6 - Liquid Sulphur Pipeline) Onshore Shah Sour Gas Field Development Gas (Package 7 - Sulphur Handling Terminal) Onshore Shah Sour Gas Field Development Gas (Package 8 - Solid Sulphur Storage Handling and Marine Facilities) Onshore Shah Sour Gas Field Development Gas (Package 9 - Early Works and Site Preparation) Onshore Shah Sour Gas Field Development - (Overview) Gas Sahil-Asab-Shah (SAS) Oil Full Field Development - Overview Sahil-Asab-Shah (SAS) Oil Full Field Development - Package A Sahil-Asab-Shah (SAS) Oil Full Field Development - Package B

Q1-2016 Q1-2012

S31 ORME 7 2012 DMS Projects_Layout 1 24/10/2012 18:45 Page 194

Satah Field Development (Main Construction Package) Oil, Gas, Offshore Oil Production Satah Field Development (Overview) Oil Oil Field Development Satah Field Development (Water Facilities Package) Oil, Gas Oil Production Shah Habshan Sulphur Granulation Plant Gas Gas Production Socar Aurora Fujairah Terminal Oil, Gas Oil Storage Tanks Fujairah Oil Storage Terminal - Phase 2 Tacaamol Aromatics Olefins and Petrochemicals Petrochemical Plant Nitrogen Chemicals (Naphtha Cracker) Tacaamol Aromatics Olefins and Petrochemicals Petrochemical Plant Nitrogen Chemicals Project (Overview) TAKREER - Ruwais Refinery Expansion (Overview) Oil, Refining Refinery TAKREER - Carbon Black Plant Petrochemicals Polymers TAKREER - Hamriyah Free Zone Tank Farm Oil Oil Storage Tanks TAKREER - Ruwais Flare Gas Recovery Gas Gas Processing Gas Storage Tanks VOPAK HORIZON - Fujairah Oil Terminal Expansion(Phase 7)Oil, Gas ZADCO - Umm Al Dalkh Full Field Development Oil, Offshore Oil Field Development ZADCO - Upper Zakum Full Field Oil Oil Field Development Development (Dredging Package) ZADCO - Upper Zakum Full Field Oil Pipeline Development (Main Oil Line) ZADCO - Upper Zakum Full Field Oil Oil Field Development Development (Offshore Water Facilities) ZADCO - Upper Zakum Full Field Oil Oil Field Development Development - 750 Project (Overview) ZADCO - Upper Zakum Full Field Development Oil, Gas Oil Production 750 Project - Surface Facilities - EPC 2

500000000 500000000 100000000 479000000 130000000

EPC EPC EPC EPC EPC

Q4-2005 Q3-2005 Q4-2005 Q1-2009 Q2-2012

Q4-2013 Q4-2013 Q4-2013 Q3-2013 Q4-2013

5000000000

PMC ITB

2011

Q4-2015

10000000000

PMC

Q2-2009

Q1-2015

10000000000 200000000 250000000 150000000 100000000 650,000,000 635000000

EPC EPC EPC EPC EPC ITB On Hold EPC

Q1-2006 Q4-2010 Q1-2006 Q2-2011 Q1-2011 2014 Q1-2009

Q1-2014 Q4-2015 Q2-2014 Q3-2014 Q4-2016 2016 Q3-2013

400000000

EPC

Q2-2006

Q1-2013

50000000

Shelved

2011

Q4-2012

5000000000

EPC ITB

Q1-2007

Q3-2015

4200000000

EPC ITB

Q1-2012

Q1-2015

Project Focus Project Summary

Project Backgrounds Abu Dhabi Oil Refining Company (Takreer) plans to build a gas flare recovery system at the Ruwais Industrial Complex as part of Abu Dhabi's effort with Masdar to reduce carbon-dioxide emissions. The project aims to recover the previously flared gas streams at the Ruwais refinery, and the collected gas will be sent to the fuel gas system in order to partially replace the natural gas used for energy applications.

Project Name

TAKREER - Ruwais Flare Gas Recovery

Name of Client

TAKREER - Abu Dhabi Oil Refining Company

Budget ($ US)

150,000,000

Award Date

Q4-2012

Project Status

Facility Type

Gas Processing

Feb 2012

FEED study is still in progress.

Status

EPC

Apr 2012

Start Date

Q2-2011

the deadline to submit the technical bids are 9 April 2012. And commercial bids 9 May 2012.

End Date

Q3-2014

Aug 2012

Commercial bid round delayed to 9 August 2012.

Location

Ruwais, U.A.E.

05 Sep 2012

Intecsa and Alsa Engineering joint venture awarded the EPC contract.

Project Scope The project consists of two phases:

The scope of work also involves the installation of:

■ Phase I will take place in the hydrocracker section of the Ruwais Refinery

■ liquid ring compressor and its auxiliaries (circulation water pumps, circulation

■ Phase II will take place in the hydroskimmer section of the Ruwais Refinery

water cooler)

■ flare gas pre-cooler and after–cooler ■ associated civil, electrical and instrumentation works

Project Finance Abu Dhabi Oil Refining Company (Takreer) is the project client.

PQ

Bidders

Awarded

-

- Litwin - Consolidated Contracting Company (CCC) - Essar Construction - ABB - Punj Lloyd - SINOPEC - China Petroleum & Chemical Corporation

- Intecsa - ALSA Engineering

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S31 ORME 7 2012 DMS Projects_Layout 1 24/10/2012 18:45 Page 196

Middle East & North African Rig Count The Baker Hughes Rig Count tracks industry-wide rigs engaged in drilling and related operations, which include drilling, logging, cementing, coring, well testing, waiting on weather, running casing and blowout preventer (BOP) testing.

Country

Land

THIS MONTH OffShore Total

LAST MONTH Land OffShore Total

Land

LAST YEAR OffShore Total

Middle East ABU DHABI DUBAI ETHIOPIA IRAN JORDAN KUWAIT OMAN PAKISTAN QATAR SAUDI ARABIA SUDAN SYRIA YEMEN TOTAL

20 0 0 0 0 31 50 14 2 63 0 27 4 211

7 0 0 0 0 0 1 0 4 18 0 0 0 30

27 0 0 0 0 31 51 14 6 81 0 27 4 241

16 0 0 0 0 29 48 16 3 58 0 27 4 201

7 0 0 0 0 0 1 0 6 19 0 0 0 33

23 0 0 0 0 29 49 16 9 77 0 27 4 234

14 0 0 0 0 33 42 17 2 55 0 27 3 193

10 1 0 0 0 0 0 0 5 11 0 0 0 27

24 1 0 0 0 33 42 17 7 66 0 27 3 220

42 51 13 5 111

0 13 0 0 13

42 64 13 5 124

46 59 0 3 103

0 12 0 0 12

46 71 0 3 120

37 57 0 4 98

0 9 0 1 10

32 66 0 5 103

North Africa ALGERIA EGYPT LIBYA TUNISIA TOTAL

Source: Baker Hughes

196 Oil Review Middle East Issue Seven 2012

S32 ORME 7 2012 Arabic_Layout 1 25/10/2012 15:37 Page 197

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S32 ORME 7 2012 Arabic_Layout 1 25/10/2012 15:37 Page 198

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EagleBurgmann Middle East FZE..............129 Elliott Group ......................................................27 Emirates ..............................................................25 Euroblast Middle East ....................................76 Europoles Middle East LLC ............................77 Expotim International Fair ORG. INC (Gulf Oil & Gas Cruise 2013) ........................23 FES Developments B.V. ................................172 Fine Tubes Ltd. ..................................................82 Franz Schneider GmbH & Co. KG Armaturenfabrik ................................................95 Fugro Geoteam AS..............................................7 GAC ......................................................................71 Garda World ......................................................65 Gates Engineering & Services....................113 Giant Reinforced Plastic Industries (GRP) 97 Global Pipe Company ..................................131 Grainger ............................................................129 Gulf Sondex FZCO ............................................92 HB Rentals..........................................................85 Hermes Datacomms......................................186 Hi-Force Ltd. ......................................................29 Hisaka Middle East Co. Ltd. ..........................52 Honghua Golden Coast Equipment FZE..155 Hydroflow Pump Rental Est ..........................10 IceBlue Refrigeration Offshore Ltd. ............46 IIR Exhibitions (MEE 2013)..........................206 Imtex Controls Ltd. ..........................................14 Inmarco Industries FZC ..................................12 Inova Geophysical Equipment Ltd. ..........191 International Exhibition Services S.r.l. (OMC 2013) ............................................199 ION Geophysical ............................................189 Isisan..................................................................123 John Zink International Luxembourg Sarl ............................................177 Jotun Paints U.A.E. Ltd (LLC)............................3 Kaeser Kompressoren FZE ............................55 KCH Separation BV ......................................111 MABI AG Insulation machinery ................145 Magnatech International BV ........cover wrap

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Magnetrol International N.V. ........................31 Magus International......................................131 Marelli Motori S.p.A.........................................37 Marjan Industrial Development ................135 McCoy Drilling & Completions ..................147 Megarme ............................................................50 Metscco Heavy Steel Industries Company Limited ......................211 Microtest AG....................................................185 Middle East Tubular Services Ltd. ............112 Mimo Contracting ............................................99 Miros AS............................................................141 Mott MacDonald Ltd.....................................101 MSA Middle East............................................103 Nexans ................................................................19 NOVOMET FZE ..................................................57 Nymphea Environnement............................171 Oeltechnik........................................................137 Oil Lift Technology Inc. .............................. 173 Olympus Industrial ..........................................51 Oman Cement Company................................39 Oryx Engineering Solutions LLC ................124 Outokumpu Armetal Stainless Pipe Co Ltd.......................................96 Paqell ................................................................181 PCC Energy Group ............................................21 Pentagon Freight Services ............................98 Peri LLC ............................................................149 Petrotech Enterprises (L.L.C.)................53,151 Prakash Steelage Limited............................107 Pure Technologies Ltd. ................................127 R STAHL MIDDLE EAST FZE ........................100 Red Helix International Ltd.........................153 Regent Energy Group....................................121 Rittal Middle East FZE ....................................77 Sabin Metal Corporation ................................33 Safehouse Habitats ..........................................95 Saga PCE Pte Ltd.................................................2 Saudi Arabian Development Co. Ltd. ......127 Saudi Leather Industries Company Ltd. ..175 Saudi Steel Pipe

Company â&#x20AC;&#x201C; Dammam ..........................49, 133 Schlumberger Oilfield Mktg Communications ..............................................69 Schlumberger Technical Services, Inc. ........4 Schoeller - Bleckmann UK..........................115 Scomi Oiltools (Cayman) Ltd. ....................119 Seco Tools AB..................................................167 Shree Steel Overseas FZCO ............................6 Sin Hiap Chuan Hardware and Engineering Pte Ltd ............63 SOTRA MARINE PRODUKTER AS ................77 Southern California Valve............................168 STAUFF - Walter Stauffenberg GmbH & Co KG ..............................................122 Stevens Supply International ....................169 Stevens Supply (Duraband) ......................197 Sulzer Pumps Middle East ..........................105 Suraj Limited......................................................59 T.D. Williamson SA ..........................................83 Techma FZCO ..................................................179 Techma FZCO GTT..........................................199 Technip - Region Middle East ....................109 Technomak Energy International FZC......126 Tenaris..................................................................35 Tercel Oilfield Products ................................163 Thomas & Betts..............................................105 TMK Middle East ..............................................60 Top Oil Field Industries Ltd FZC ................125 Trans Asia Pipeline Services FZC ..............170 Tranter Heat Exchangers ME (Cyprus) Ltd...............................................145 Triplefast Middle East Ltd. ..........................157 Ulterra Drilling ................................................139 United Business Media Ltd.........................201 United Metallurgical Company / JSC OMK....................................143 Valbruna Gulf FZE ............................................84 Veritas-MSI China Company Limited............8 VF Imagewear ................................................137 Voestalpine Tubulars GmbH & Co. KG ......45 Voith Turbo GmbH & Co KG ..........................61

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