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

December 2009 • Vol. 5 Issue 12

An ITP Business Publication

HEAVYWEIGHT DIVISION Biggest cranes in the world being us used on Middle East upstream projects

THE TOUGH STUFF

The Qatargas II project covers two LNG trains (Qatargas trains four and five).

Schlumberger reveals breakthrough tight gas management techniques

MENA DRILLING OUTLOOK Major jor players to step up workover and completion activity in 2010

SHELL IN THE MIDDLE EAST Technology is keeping IOCs relevant in an NOC world

GAME CHANGER

How Qatar transformed the international energy landscape

TAKING GAS TO THE WORLD: FAISAL AL SUWAIDI CEO & CHAIRMAN OF QATARGAS SAYS 42 MILLION TONNES EXPORT PER ANNUM ISAnON FOR 2010 ITP Business Publication


CONTENTS

Reservoir Seismic Services

DECEMBER 2009

52 *Mark of Schlumberger. © 2009 Schlumberger. 09-DC-0125

30

57

Predict rock properties between wells and optimize production In a large oil field in China, a Reservoir Seismic Services (RSS) team built predictive models for a drilling campaign that resulted in five times the production of conventionally drilled wells.

20 SLAYING THE DRAGON

34 LNG INTERVIEW

57 HEAVY LIFTING

Dragon Oil is the current subject of a takeover bid from ENOC. However, minority shareholders have spoken out against the offer.

Faisal Al Suwaidi, CEO of Qatargas reveals how his company has played a vital role in transforming energy markets.

Oil & Gas Middle East takes a look at the heavy lift sector and asks what the future holds.

22 IRAQ INSIGHT

42 DRILLING FORECAST

62 ASK THE EXPERT

Samuel Ciszuk of IHS Global Insight takes a closer look at some of the deals being thrashed out in Iraq latest bidding rounds.

Rod Westwood provides a complete five year forecast of drilling and workover projections for the Middle East and North Africa.

Alan Roddis of AESSEAL reveals how to extend rotating equipment life.

25 TIGHT GAS

48 SHIPPING SHOWCASE

With trillions of cubic feet of gas in low permeability reservoirs, tight gas is a hot topic.

Beluga CEO Niels Stolberg on how the project shipping business has fared through the economic crisis.

30 QATAR FOCUS

52 E&P INTERVIEW

A comprehensive look at the gas rich country of Qatar with a project focus and exclusive interviews.

Shell executive vice president of upstream activities talks about the company’s projects.

REGULARS 2 COMMENT 4 WEB HIGHLIGHTS

RSS predicts rock properties between wells— with a proven track record of improved drilling success. Our unique offering combines expertise, workflows, and technologies for seamless solutions that include Q Q

Q

advanced data processing optimization industry-leading simultaneous global inversion using ISIS* characterization technology optimized reservoir models formatted for Petrel* seismic-tosimulation software.

Benefits: Precise field development planning, enhanced drilling efficiency, and maximized production www.slb.com/rsc

7 REGIONAL NEWS

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65 PROJECTS 72 FACE TO FACE

December 2009 Oil&Gas Middle East

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COMMENT

Gas is burning issue Focus on challenging gas projects for IPTC in Doha

Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: 00 971 4 210 8000, Fax: 00 971 4 210 8080 Web: www.itp.com Offices in Dubai & London ITP Business Publishing Ltd CEO Walid Akawi Managing Director Neil Davies Deputy Managing Director Matthew Southwell Editorial Director David Ingham VP Sales Wayne Lowery Publishing Director Jason Bowman Editorial Energy Group Editor Daniel Canty Tel: +971 4 435 6257 email: daniel.canty@itp.com Senior Energy Writer Peter Ward Tel: +971 4 435 6436 email: peter.ward@itp.com Contributors Ventures, Kevin Baxter, Abdelghani Henni Advertising Commercial Director Jude Slann Tel: +971 4 4356348 email: judith.slann@itp.com Sales Manager David Wheeler Tel: +971 4 4356376 email: david.wheeler@itp.com Studio Group Art Editor Daniel Prescott Designer Lucy McMurray Photography Head of Photography Sevag Davidian Chief Photographer Nemanja Seslija Senior Photographers Efraim Evidor, Khatuna Khutsishvili Staff Photographers Khaled Termanini, Thanos Lazopoulos, |Jovana Obradovic, Rajesh Raghav, Ruel Pableo, Lyubov Galushko

As Qatar nears completion on many of its mega-projects the IPTC conference flies into Doha. report by a leading energy research company, featured in this edition, has said that drilling and workover expenditure in the Middle East and North Africa (MENA) region has the potential to increase to US$27.9 billion per year by 2014. The oilfield services market report 20102014, which can be found on page 42, should make for cheery reading for upstream service providers. It says that despite the global recession, expenditure is still likely to rise by around a third. The report rightly highlights Iraq as a major growth area in the region as the country, fingers crossed, will soon enter a hectic activity period as it finally begins to ramp up production. The Gulf state could be producing around 3.9 million barrels of oil per day by 2014. Much of this regional increase will stem from the re-invigoration of major producing nations, coupled with emerging countries looking to accelerate production for both domestic consumption and export. Gas production will undergo the biggest transformation. Natural gas production

A

alone is expected to grow by 50% across the MENA region over the next five years. Last month Yemen made its first ever LNG export delivery to South Korea, and with Abu Dhabi’s mega sour gas EPC contracts out to tender, it is clear that gas will be taking a much more dominant role in the regional energy mix in the coming years. This month sees Doha play host to the International Petroleum Technology Conference (IPTC), with an expected draw of over 3000 professionals. The programme will address upstream issues that challenge industry specialists and management around the world, with a strong focus on the gas business. To complement this major event, we met with Lee Ramsey, Schlumberger’s tight gas expert and manager of the Tight Gas Center of Excellence in Saudi Arabia, to get a flavour of his presentation to the IPTC (See page 25). The IPTC conference is taking place December 7- 9. Oil & Gas Middle East will see you there. Daniel Canty, Editor E-mail: daniel.canty@itp.com

To subscribe to the magazine, please visit: www.ArabianOilandGas.com 2

Oil&Gas Middle East December 2009

Production & Distribution Group Production Manager Kyle Smith Production Manager Eleanor Zwanepoel Production Coordinator Devaprakash Managing Picture Editor Patrick Littlejohn Image Retoucher Emmalyn Robles Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami Circulation Head of Circulation & Database Gaurav Gulati Marketing Head of Marketing Daniel Fewtrell ITP Digital Director Peter Conmy ITP Group Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin Circulation Customer Service Tel: +971 4 435 6000 Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages.com Printed by Color Lines Press Subscribe online at www.itp.com/subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

"53).%33

BPA Worldwide Circulation Statement Average Qualified Circulation: 7,188 (Jan - June 2009)

Published by and © 2009 ITP Business Publishing, a member of the ITP Publishing Group Ltd. Registered in the B.V.I. under Company Registration number 1402846.

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An advocate for excellence, aspires to be a world class drilling services provider

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WEB HIGHLIGHTS

The online home of:

MOST POPULAR NEWS

ONLINE SPECIAL REPORT Getty Images

ENOC CEO on Dragon 1 Exclusive: Oil deal shareholders question ENOC 2 Dragon offer price

3 Noster issues Dragon Oil statement to force Ras Tanura 4 Maintenance shutdown scoops $408 million Gasco 5 Technip contract

LATEST FROM THE BLOG

Ten largest petrochemical firms ArabianOilandGas.com brings you a list of the top ten largest petrochemical companies in the world. It is highly likely that the CEO’s of most petrochemical companies will be pleased to see the back of 2009. This year has been a true annus horribilis for a sector ravaged by a huge drop in demand for its products due to the global economic slowdown that has happened over the past 12 months. However, most of the big players are still making a profit, just not as big as the profits they made over the past two or three boom years. BREAKING NEWS AND VIEWS FIRST MAINTENANCE PLANNED FOR RAS TANURA Getty Images

Saudi Aramco is planning a complete shutdown of operations for a 45 day period in order for maintenance on the plant to be carried out. ArabianOilandGas.com

UAE TO GO AHEAD WITH PAKISTAN REFINERY Getty Images

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The UAE is to go ahead with the construction of a US $5 billion oil refinery in Pakistan’s south western Balochistan province, DPA has reported. ArabianOilandGas.com

Oil&Gas Middle East December 2009

EPC RESOURCE CHALLENGE STILL EVIDENT Obtaining quality resources for some projects is still a major issue in the Middle East, according to the country manager of Qatar Kentz. ArabianOilandGas.com

READ THE INDUSTRY’S VIEWS Why you don’t want to work for Ajman Petroleum ArabianOilandGas.com SPOT POLL DO YOU THINK DRAGON OIL IS BEING UNDERVALUED?

65 % Yes 25 % No 10 % Not sure

IRAQ EXPECTS TOUGH AUCTION IN ROUND TWO Iraq’s Oil Minister has said he expects fierce competition between international oil companies in the second round of bidding on the country’s oil fields. ArabianOilandGas.com

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PowerSTIM

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WELL OPTIMIZATION SERVICE

Better stimulation in tight gas An operator in Oman needed to reverse a production decline from a field where the reservoir rock is among the hardest in the world. It has a high stress fracture gradient and a Young’s modulus that is twice the U.S. hard rock range. At a depth of 16,000 ft, temperatures are as high as 320 degF, with hydrogen sulfide (H2S) present. Stimulation programs designed using a heavy brine extended-delay borate crosslinked fluid and optimized using the PowerSTIM* well optimization program resulted in: ■

increased hydrocarbon production—more than 38%

the reversal of a 5-year production decline in this field.

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LEAD NEWS

KSA to build giant gas plant Wasit Gas Development project will include Saudi Arabia’s largest production plant Saudi Arabia is finalising plans to build the Kingdom’s largest ever gas plant to supply utilities and other industries, Saudi Aramco’s chief executive, Khalid alFalih has announced. The new gas plant is expected to process more than 1.8 billion cubic feet per day (cfd) of gas, Falih told ArabianOilandGas.com from the sidelines of the launch of the US$10 billion Petro Rabigh plant, the largest integrated oil refinery and petrochemical production facility ever built at one time. “This plant (Wasit) will be the biggest gas plant we have ever built and will process all offshore non associated dry gas which will go a long way to meeting rising demand for utilities and industries.” The Wasit Gas Development programme at Moneefa is split into several projects that include building gas processing facilities, two offshore gas platforms, one tie-in platform, subsea power and communication links and pipelines.

The massive gas plant is expected to provide for the production and processing of up to 2.5 billion SCFD of gas per day.

a front-end engineering (FEED) and project management services contract by Saudi Aramco for the Wasit Gas Development Program. The Wasit Gas Development CONTRACT WIN Program will provide for the SNC-Lavalin announced in Sep- production and processing of up tember that it has been awarded to 2.5 billion standard cubic feet per day (SCFD) of gas from the Aribiyah and Hasbah offshore non-associated sour gas fields, to meet the future demands of the Kingdom of Saudi Arabia. SNC Lavalin’s contract is fixed for five years. “SNC-Lavalin is very pleased The Petro Rabigh integrated refinery is estimated to have cost partwith this contract award, which ners Saudi Aramco and Sumitomo both reinforces our long-term Chemical close to US$10.3 billion. relationship with Saudi Aramco

$10.3 Billion

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carrying out oil and gas projects in the Kingdom of Saudi Arabia, and also highlights SNC-Lavalin’s world class gas treatment plant engineering expertise,” said Jean Beaudoin, executive vice-president at SNC-Lavalin.

Karan gas field come onshore in 2011. Drilling at Karan began last year. Al-Falih added that Aramco is planning to start drilling in deeper offshore frontiers in 2012.

GAS CRUNCH Saudi Arabia is short of gas to meet demand from power plants and industry. Energy consumption has risen in the world’s top oil exporter in recent years as record oil export revenues fuelled an economic boom. Saudi Arabia is currently experiencing annual gas demand growth of 7%. Aramco expects to see gas production from the

Khalid Al-Falih, CEO of Saudi Aramco.

December 2009 Oil&Gas Middle East

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REGIONAL NEWS

Halliburton wins Ghawar deal US giant wins five-year turnkey drilling contract in KSA’s South Ghawar field Getty Images

Halliburton will provide drilling rigs and conduct horizontal drilling at the Ghawar field.

Saudi Aramco has announced that Halliburton has won an integrated turnkey drilling contract, the first of its kind awarded by the national oil company, for the giant Ghawar field.

Ghawar is the largest and most productive oil field in the world and is located approximately 200km from the city of Dharan. The contract involves provision of drilling

rigs, directional and horizontal drilling, logging while drilling, cementing, mud engineering, wireline logging, completion, perforating, and other well construction activities, including engineering and management of the entire drilling operations. “Our selection by Saudi Aramco for yet another project of this magnitude demonstrates its continued confidence in our ability to successfully execute complex and challenging operations. This contract award includes a full range of Halliburton’s integrated technologies and services and provides a platform for future successes,” Ahmed Lotfy, Halliburton’s Eastern Hemisphere president, reported in a company statement to the press.

“This award builds on the success we delivered on the Khurais mega-project, reflecting our leading technologies and solid performance,” added Gasser Badrashini, Halliburton’s Middle East and North Africa regional vice president. In November Halliburton announced a 2009 fourth quarter dividend of nine cents ($0.09) a share on the company’s common stock payable in December.

50%

The Ghawar Field is responsible for around half of all Saudi Aramco’s daily oil production. Source: Energy Information Administraion

ABB secures UAE pipeline electronics contract worth $21m

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“As a proven performer in the oil and gas industry, ABB is proud to be a part of this landmark project in the UAE,” said Bjarte Pedersen head of the Process Automation Division in the Middle East and Africa for Swiss firm ABB. “Our comprehensive automation system will help the owner, IPIC, get the maximum value out of their control system investment, while providing a secure evolution path forward to help them maintain their competitiveness and reach their productivity targets in the years to come,” he added. ABB will provide an integrated electrical system for the 400km pipeline

Oil&Gas Middle East December 2009

Getty Images

ABB has won a US$21 million deal with EPC contractor, China Petroleum Engineering & Construction Corporation (CPECC) to design and supply an integrated electrical system for the billion dollar Abu Dhabi Crude Oil Pipeline (ADCOP) project in the UAE. The pipeline has a length of 400km and a diameter of 48 inches. It will transport an estimated 1.5 million barrels of crude oil per day. Construction work on the project began back in 2008 and it is hoped it will be completely finished in August 2011, the company reports.

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REGIONAL NEWS

EPC resource issues

HIGHLIGHTS

Bottlenecks in quality resources caused by region’s megaprojects Obtaining quality resources for some projects is still a major issue in the Middle East, according to the country manager of Qatar Kentz. “We still see some bottlenecks in quality resources for completing projects, mega projects still have the best resources but we see some easing in this area as projects complete,” Martin Walsh revealed, speaking exclusively to ArabianOilandGas.com. He added that the firm is now hopeful for the year ahead. “With our current backlog we are well positioned for 2010 and with new mega projects moving again we foresee good potential in all our Gulf operating units,” said Walsh. Qatar Kentz recently won an engineering, procurement

Kentz recently won an EPC contract for Ras Laffan Industrial City.

and construction contract for a receiving and loading facility in Ras Laffan Industrial City. “The project incorporates pipeline work within Ras Laffan, crossing several independent operator areas. The coordination and interface management within Ras Laffan will be one of the major

focus areas for the project team,” said Walsh. “Kentz has been working in Ras Laffan for many years and our team for this project is made up of Kentz long serving employees who have completed similar multi interface projects within Ras Laffan Industrial City,” Walsh concluded.

GE wins multi-million dollar Qatargas contract GE Oil & Gas has been awarded a multi-million dollar, six-year contract to supply Qatargas Operating Company Ltd (Qatargas) with advanced pipeline integrity management services for the company’s liquefied natural gas (LNG) network in the Gulf state. The Florence-based oilfield services provider said that the pipelines services contract, to be carried out by the GE’s PII Pipeline Solutions business, includes the building and deployment of a custom pipeline integrity management system (PIMS) as well as the

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company providing Qatargas with the associated integrity management (IM) elements, including manuals and procedures covering in-line inspection (ILI), software automation and engineering assessments. “While Qatargas already has a strong pipeline integrity management programme in place, the company continually works to adopt industry best practices, including the implementation of GE’s comprehensive PIMS programme,” said Sheikh Ahmed Al Thani, chief operating officer, Engineering & Ventures for Qatargas.

The statement from GE Oil & Gas added that while the earlier inspection deals covered two LNG pipelines, the new integrity management contract will cover additional offshore product lines that will rely significantly on PII Pipeline Solutions’ extensive ‘wet gas’ experience. Meanwhile, separate to the pipeline services contract, GE Oil & Gas’ global services business previously signed an 18-year customer service agreement to support Qatargas operations at the Ras Laffan receiving site.

Oman Oil Company (OOC) is set to sign an agreement for the acquisition of a higher stake in Bahrat Oman Refineries Limited (BORL), the Oman Daily Observer has reported. BORL is currently developing a refinery complex in India at a cost of US$ 2 billion. The two firms will be working together on the six million metric tonnes per annum grass roots refinery at Bina in Madhya Pradesh. The development includes a crude supply system consisting of a single point mooring system, a crude oil storage terminal and a 935km long cross country crude pipeline. The agreement will reportedly increase OOC’s stake in BORL from the current 2% up to 26%. Production on the Bina refinery is set to be completed soon, with production slated for April 2010. Abu Dhabi’s IPIC will play a key role in building a US$5 billion oil refinery on the Pakistani coast, Pakistani officials have confirmed. The refinery will be built in the province of Baluchistan, in south-western Pakistan, according to the Saudi Press Agency. “The major contentious issues have been resolved and the project will soon be kicked off,” said a senior official of Pakistan’s Ministry of Petroleum and Natural Resources.

$2.12 Billion

IPIC H1 profits surged more than 15-fold to $2.12 billion following the sale of Barclays instruments.

December 2009 Oil&Gas Middle East

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For over 75 years in the Middle East, we’ve invested in more than just energy.

As one of the Middle East’s leading energy development companies, we at Chevron believe not just in the process of extracting energy but also in the investment of energy in the correct and best way possible. Therefore, along with global integrated energy solutions, from refining oil and processing gas, producing petrochemicals and lubricants and developing innovative fuel technologies, we’re also investing in Middle Eastern communities. Helping them achieve a better tomorrow, through educational and economic development, training and employment. We aspire to be more than just an energy company. And we aim to do that by investing in the most potent source of energy there is - Human Energy. To learn more, visit us at chevron.com

CHEVRON is a registered trademark of Chevron Corporation. The CHEVRON HALLMARK and HUMAN ENERGY are trademarks of Chevron Corporation. ©2009 Chevron Corporation. All rights reserved.


REGIONAL NEWS

Baker Hughes is bullish

EVENTS

Price discounting eats into profits as revenue falls to $2.23 billion

IPTC 2009 7-9 December Doha, Qatar

IRAQ PETROLEUM 2009 7-9 December Conference - London, UK

MENA NATURAL GAS DISTRIBUTION SUMMIT 2009 8-10 December 2009 Conference - Cairo, Egypt

15TH MAINTENANCE MANAGEMENT CONFERENCE 13-17 December 2009 Conference - Dubai, UAE

WORLD FUTURE ENERGY SUMMIT Chad Deaton, chairman, president and chief executive officer of Baker Hughes with Yusuf Omair Bin Yusuf, chairman of ADNOC.

18-21 January, Abu Dhabi, UAE

Spending in the Middle East is set to rise next year, according to Baker Hughes, which released its third quarter results in November. The firm described its international Q3 figures as disappointing, but believes that customer spending has now reached its low point. Baker Hughes Incorporated announced that net income for the third quarter 2009 was $55 million, compared to $429 million for same period 2008. Revenue for the third quarter 2009 was $2.23 billion, down 26% compared to $3.01 billion for the third quarter 2008 and down 4% compared to $2.34 billion for the second quarter 2009. “Third quarter North America operating margins rebounded from the low set in the second quarter of 2009. Aggressive cost cutting in the first half of 2009

SAUDI OIL AND GAS 2010

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enabled us to absorb additional price decreases and improve profitability on modest activity increases,” explained Chad Deaton, Baker Hughes chairman, president and CEO. “International results were disappointing with revenue less than expected and price discounting greater than expected,” he added. Deaton cited a gradually improving North American market as an optimistic indicator,

-26% Baker Hughes Q3 revenue fell 26% year-on-year, falling from $3.01 billion for Q3 2008 to $2.23 billion in 2009. Source: Baker Hughes.

and said that global markets should be improving soon. “Internationally, we believe that customer spending reached its low point this quarter and that forecasts for increasing economic growth, particularly in China, India and the Middle East, combined with modest spare production capacity are supporting higher oil prices and laying the foundation for increased spending in 2010.” In August this year Baker Hughes splashed out $5.5 billion on pressure pumping specialist BJ Services. Deaton said the transaction is expected to complete in Q1 2010. “With the pending addition of BJ Services, we expect to significantly advance our competitiveness as we improve our customer intimacy, operational effectiveness, and product portfolio.”

17 - 20 January Conference & Exhibition - Riyadh, Saudi Arabia

OIL & GAS MAINTENANCE TECHNOLOGY / PIPELINE REHABILIATION & MAINTENANCE 2010 18-20 January 2010 Exhibition - Manama, Bahrain

INTERSEC January 17 – 19, 2010, Exhibition & Conference - Dubai, UAE

OILTECH BAKU 2010 23 - 24 February 2010 Conference - Baku, Azerbaijan

SOUR OIL & GAS ADVANCED TECHNOLOGY (SOGAT) 28 March - 1 April 2010 Conference - Abu Dhabi, UAE

December 2009 Oil&Gas Middle East

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REGIONAL NEWS

Abu Dhabi firm tops Platts EMEA table

MB Petroleum rig deal

Major oil companies maintained their stronghold as the world’s top-performing energy businesses, according to the 2009 Platts Top 250 Global Energy Company Rankings, announced in Singapore last month. ExxonMobil retained the number one spot in the Platts Top 250 for the fifth consecutive year. In second and third place were Chevron and Shell, followed by BP and Total in fourth and fifth, respectively. Altogether, integrated oil and gas companies (IOGs) carved out the 13 top spots in the 2009 Platts rankings, and took 30 of the top 50 places. There was cause for special celebration for Abu Dhabi National Energy company (TAQA), which was named as the fastest growing EMEA region energy company, with a compound growth rate of 85%. The company came third overall in the global survey, pipped by two US firms in the list of the world’s 50 fastest-growing energy companies.

Workover rig provision for Barik sandstone testing operations

The Barik sandstone in Oman Block 3 displayed excellent oil shows during drilling.

Tethys and partner CCED Oman Ltd (the operator) have contracted MB Petroleum to provide the MB 49 workover rig to conduct testing operations on Blocks 3 and 4 onshore Oman. The 450 hp rig is currently being mobilised on Block 3 and testing operations began in November. The Barik sandstone, which displayed excellent oil shows whilst drilling, was not fully evaluated at the time and will now be tested.

The Farha South-3 well was drilled to appraise the Farha South oil discovery in February and March of this year on Block 3. The Lower Al Bashir sandstone tested more than 754 bpd. The main objective of this additional test is to assess the productivity of a previously untested and potentially oil bearing reservoir encountered above the Lower Al Bashir. The Barik sandstone, had excellent oil shows when it was drilled,

but it was neither logged nor tested at the time. Additional tests will also be performed on the Lower Al Bashir layer. Based on data from previous operators, the Lower Al Bashir layer could contain some 8 to 10 million barrels of recoverable oil. Data obtained while drilling suggest that the Barik sandstone is considerably thicker than the Lower Al Bashir layer. If the testing of the Barik sandstone is successful, it could have an important impact on the reserve potential of the Farha South structure. “We are delighted with the results so far, and have high expectations for even better results from the upcoming tests,” Tethys’ managing director Magnus Nordin told Oil & Gas Middle East. Tethys has a 50% interest in the licenses covering Blocks 3 and 4. Consolidated Contractors Energy Development (Oman) Ltd holds the remaining 50%.

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local expertise in Qatar.

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REGIONAL NEWS

Chevron’s Wafra steamflood joy Pilot project paves way to realise billions of barrels of oil from carbonate reservoirs Chevron has announced the successful start up of its large scale pilot (LSP) steamflood project at the Wafra field in the onshore partitioned neutral zone (PNZ) in Kuwait. The US $340 million LSP is the final test in a ten year staged assessment by SAC to determine the technical and economic viability of thermal recovery projects in the Eocene heavy oil carbonate reservoir. “Chevron is applying new technologies to free-up in commercial quantities the potential of the First Eocene carbonate

reservoir. It is a potential in the onshore PNZ and elsewhere measured in billions of barrels of new energy resources,” George Kirkland, executive vice president for global upstream and gas, Chevron, said. The three year project could potentially lead to a full-field steamflooding of the reservoir, which would mark the first commercial application of a conventional steamflood in a carbonate reservoir anywhere in the world. “We bring four decades of experience in enhanced oil recovery to this project and

Dubai nets offshore fleet deal

Drydocks World - Dubai has signed an alliance deal with ADNATCO-NGSCO.

Drydocks World has signed a strategic alliance agreement with ADNATCO-NGSCO, the shipping arm of the ADNOC group of companies. The agreement was signed during a ceremony held in Dubai by ADNATCO general manager Ali Obaid Al-Yabhouni and Drydocks World executive vice chairman and regional CEO, Hamed Bin Lahej. ‘’This is an important agreement that

14

cements the close working relationship between ADNATCO and Drydocks World,” Al-Yabhouni said. “In recent years, our vessels have used Drydocks World’s world-class facility in Dubai for major maintenance programs and the experience has encouraged us to formalise a closer working relationship.” ADNATCO is currently expanding its fleet and will receive 15 new vessels in 2010.

Oil&Gas Middle East December 2009

are pleased with the progress we have made testing the technology in the onshore PNZ’s First Eocene carbonate reservoir,” said Ahmed Al-Omer, president of Saudi Arabian Chevron. “It’s through our longstanding partnership with the Kingdom and our joint operatorship with Kuwait Gulf Oil Company, that we are able to apply innovative technology expected to grow recoverable reserves in the onshore PNZ, and to create thousands of jobs in the process, as well as provide other benefits for the region,” Al-Omer concluded. Ahmed Al-Omer, Saudi Arabian Chevron.

Solid NOV performance prompts special dividends National Oilwell Varco, the provider of major mechanical components for land and offshore drilling rigs, announced in November that its board had approved a special one-time cash dividend of US $1.00 per share of common stock. The cash dividend will be paid in December. The news came shortly after the firm had announced that it earned a net income of US $385 million in the third quarter 2009, compared to a Q2 income of US $220 million. “This one-time special cash dividend and commencement of a regular quarterly dividend both reflect our commitment to enhancing stockholder value,”

said Pete Miller, chairman, president and chief executive officer of National Oilwell Varco (NOV). As of September 30, 2009, the company’s cash and cash equivalents stood at a total of approximately US $3.2 billion.

$7.3 Billion

Backlog for capital equipment orders for NOVs Rig Technology segment was $7.3 billion at September 30 2009. Source: NOV Investor Relations.

www.arabianoilandgas.com


REGIONAL NEWS

Dana Gas profits soar by 64% Revenue from hydrocarbon sales up 12%, buoyed by strong operations in Egypt Dana Gas, the Middle East’s largest regional private sector natural gas company, has announced its financial results for the quarter ending September 30, 2009. Revenue from the sale of hydrocarbons increased to US$97.7 million, with gross profit reaching $38.9 million. These figures represent increases of 12% and 64% respectively, compared to the same period last year, mainly due to new condensate sales from the company’s operations in the Kurdistan Region of Iraq (which commenced in October 2008)

and continued strong operations in Egypt. “Overall, we are pleased with the underlying results, reflecting strong performance from across the company,” said Dana Gas chief executive officer, Ahmed Al-Arbeed. “Our Egypt exploration programme is continuing to yield discoveries and we expect to take the production rate close to 39 000 barrels of oil equivalent (boe) per day by the end of the year. Our exploration success ratio in Egypt of 64%, speaks for itself.” The CEO added that he expects to announce reserve addi-

Dana Gas and Crescent Petroleum are partners on gas projects in the Kurdistan Region.

tions following an independent review, and operations in Iraq were currently continuing apace. “In the Kurdistan region of Iraq, Dana Gas is continuing to

supply gas to the Erbil power station and continues its progress in constructing the LPG plant in the country,” Al-Arbeed revealed in a company statement.

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December 2009 Oil&Gas Middle East

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REGIONAL NEWS

Technip nets $415m gas deal French firm scoops Asab 3 project, the latest in ADNOC’s $9 billion project pipeline Abu Dhabi Gas Industries (Gasco) has awarded a US$415 million gas development contract to France’s Technip. The contract is for engineering, procurement and commissioning (EPC) work on Gasco’s ‘Asab 3’ project, which will be completed in the third quarter of 2012, the firm said in a statement. Gasco has already awarded about $9 billion for major gas projects in the Gulf emirate. Gasco is 68 per cent owned by the Abu Dhabi National Oil Company (Adnoc), with the rest held by Royal Dutch Shell, Total and Partex. The ‘Asab 3’ project is being developed to process an additional 150 million cubic feet per day of associated gas from the existing Asab, Shah and Sahil oil fields. ‘The Asab 3 project will facilitate increased oil production from new ADCO facilities which are presently under development,’ Gasco said in a statement. ADCO is the Abu Dhabi Company for Onshore Oil Operations, the onshore division of Adnoc. Getty Images

Thierry Pilenko, Technip chairman & CEO.

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Gasco said last year it was investing $25 billion in gas processing plants and pipelines to meet surging gas demand.

SAUDI VENTURE Technip continued a strong November, announcing a tie-up with SaudConsult to set up a 50/50 joint venture company aimed at developing a new engineering centre in Saudi Arabia. The planned Engineering Centre of Excellence will be located in Al Khobar, Saudi Arabia with broad execution capability and a focus on front end engineering design (FEED), detailed engineering, procurement and construction management (EPCM) services serving Saudi Arabia’s oil, gas, petrochemical and other industries. Thierry Pilenko, Technip chairman and CEO, stated: “Our partnership will give us the opportunity to develop a world-class engineering centre in Saudi Arabia, with a strong local content and a high international profile. This move is in line with our Group’s strategy to increase proximity to the Middle East market through the development of local operating centers.” Eng. Dr. Tarek Shawaf, SaudConsult chairman stated: “Our new joint venture with Technip will create an engineering power house unmatched in diversity, competency and without doubt, local depth and experience. Our vision for this joint venture is to be the engineers of choice in Saudi Arabia and the region.

Technip was involved in the EPC work for Trains 4 and 5 for Qatargas (pictured).

Saudconsult takes special pride the new company is expected in developing Saudi engineering to begin operations by mid 2010 graduates who now have become with about 500 employees. leaders in the industry. Our new partnership will further enhance our endeavour to hire, train and retain young Saudi graduates and create an indigenous work force capable of contributing GASCO has signed contracts totalto the wealth and prosperity of ling $9 billion for its Integrated Gas Development (IGD) project so far our nation.” this year. Pending regulatory clearance and after completion of Source: ArabianOilandGas.com local incorporation processes,

$9billion

December 2009 Oil&Gas Middle East

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MENA NEWS

Yemen begins LNG exports First cargo shipped to South Korea, country targets 6.7m tonnes LNG output per year Getty Images

478.5 Billion

cubic metres of natural gas reserves held by Yemen - 1 January 2009 est. Source: ArabianOilandGas.com

Yemen has begun exporting LNG after its newly built plant sent off its first shipment last month. The first shipment of LNG was sent to South Korea, with a further six shipments expected by the end of the year. The project is the country’s largest energy investment, worth US$4.5 billion and involving a

exported to both the Asian and Atlantic markets. “Since Yemen’s gas potential was discovered, Total has supported the country in developing its gas industry and in becoming an LNG exporter,” declared Yves-Louis Darricarrère, president of Total Exploration and Production. Getty Images

A Yemini soldier keeps watch over the newly operational Belhaf LNG Terminal.

320 kilometre gas pipeline from Maarib in eastern Yemen. The plant has Total as the main shareholder with a 39.6% stake and is aiming to reach a total production capacity of 6.7 million tonnes of LNG a year. Yemen is a poor country and a small oil producer. Last year Yemen produced less than 300 000 barrels per day of crude oil and production is decreasing by 5-6% a year. The plant started production with the first train while the construction of the second train is being completed. Total production capacity will reach 6.7 millions tonnes of LNG per year (Mt/y). Following the three gas sales agreements signed in 2005 with Kogas, GDFSuez and Total Gas & Power, LNG from Yemen LNG will be

Yemeni President Ali Abdullah Saleh.

Medgaz pipeline to start commissioning in 2010 Medgaz is expected to start commissioning the gas pipeline linking Algeria to Spain in March 2010, according to Pedro Miro, president of Medgaz. The commercial startup of the pipeline will be in June 2010, the Algerian daily El-khabar reported in November. The pipeline is expected to transport 8 billion cubic metres per year of natural gas initially, and will eventually reach 16 billion cubic metres. The total cost of the project is US$1.34bn. Algerian state controlled Sonatrach owns 36%

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of the project, Cepsa and Iberdrola from Spain both control 20%, Endesa controls 12% and Gas de France controls 12%. In 2006, BP and Total withdrew from the project. Spain’s Gas Natural may become a partner of the project, taking a slice of Sonatrach’s shares. The length of the onshore section of the pipeline is 547 kilometres, while the offshore section spans 210 kilometres. The Algerian onshore section of the pipeline was constructed by Spie Capag and the offshore section was constructed by

Oil&Gas Middle East December 2009

Saipem. Steel pipes were delivered by Nippon Steel, and three compressor trains were supplied by Dresser-Rand. Lloyd’s Register provided pipeline inspection and certifica-

tion services, including vendor works inspection for the pipeline and equipment, certification for the onshore and offshore pipe lay, and the construction of the compressor station. Getty Images

The onshore pipeline is 547 km long, while the offshore section spans 210 km.

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NEWS ANALYSIS

NEWS ANALYSIS Is ENOC slaying the Dragon? ENOC’s agreement to buy Dragon Oil at one point appeared to be a done deal, however, a shareholder fight back has put the acquisition in doubt Confusion, frustration and anger reigned last month, as ENOC attempted to buy out the remaining shares of Dragon Oil it does not currently own. ENOC announced at the start of November that it had agreed a deal to acquire Dragon Oil in a US $1.15 billion deal. Saeed Khoory, group chief executive of ENOC, revealed in a statement: “ENOC is delighted to have agreed to fully acquire Dragon Oil. This acquisition is an exciting development for ENOC and represents a major step in ENOC’s strategy of building a vertically integrated oil and gas group with a strong upstream position.” Khoory also described in an exclusive interview with ArabianOilandGas.com the hopes his firm had for Dragon Oil. “Taking full ownership of Dragon Oil will increase the combined entity’s financial strength and execution capability to develop the assets further. The focus will be to continue to develop the operations in Turkmenistan,” Khoory told the website. “The focus of Dragon Oil’s operations is Turkmenistan,

20

Minority shareholders in London have reacted with anger at the offer of ENOC for Dragon Oil. and we will continue to put efforts in developing the operations there, as it has sizeable gas and oil resources and growth opportunities,” he added in the interview. However, the confidence of Khoory that the deal was all but completed was met with a barrage of criticism from minority shareholders of Dragon Oil. “ENOC made an offer on November 2 for all shares not owned by ENOC. The offer has yet to be voted on, and as it stands, does not reflect the true value of the company and

Oil&Gas Middle East December 2009

is certainly not acceptable to me. Many other shareholders feel the same,” said Andy MacKay, a Dragon Oil minority shareholder. The concerns of MacKay were echoed by other shareholders. “Why did the company fail to take advantage of once in a lifetime acquisition opportunities during the financial crisis, a time during which it sat on nearly US$1 billion in cash?” Ross Evans asked. “ENOC’s holding in the company means that the cash is worth nearly GBP2.50 a

share to them, so they are funding half the purchase of the company with money that should have been used for dividends or acquisitions, both of which would have significantly increased the share price,” he added. Shortly after these and several more shareholders got in touch with ArabianOilandGas. com, Baillie Gifford & Co, the largest minority shareholder in Dragon Oil, announced it would be rejecting the offer, claiming it “materially understates” the value of the company.

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NEWS ANALYSIS

Richard Sneller, head of emerging markets equities at Baillie Gifford & Co, said: “We plan to reject the offer on behalf of our clients, whose holdings under our management currently amount to 4.2% of the issued share capital of the company, by voting against the scheme of arrangement and matters related to it.” Another large minority shareholder soon followed suit, as London-based hedge ENOC group CE Saeed Khoory fund manager Noster Capital also spoke out against the bid. ity interest it doesn’t already “ENOC’s offer for the minor- own in DGO is opportunistic

and inadequate. It significantly undervalues its oil reserves and values their gas reserves at zero. Not to mention the strategic geopolitical location of its assets, well positioned for an energy starved China, which has proven in the recent past to be a willing minority partner in promising oil and gas projects,” said Pedro de Noronha, managing partner at Noster Capital. French investment firm Carmignac Gestion has since become the third institutional shareholder to reject the deal.

ENOC’s takeover offer will fail if holders of more than 12.125% of Dragon Oil shares reject the ENOC offer. ENOC recently revealed it would not be increasing the offer of GBP4.55 per share, describing the offer as final. Share prices in Dragon are falling fast; the price is down 5.1% since the first shareholder rejected the deal. Minority shareholders, now knowing a better offer will not be forthcoming, must attempt to cash out and run, or decide to stay and fight.

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December 2009 Oil&Gas Middle East

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NEWS ANALYSIS

IRAQ ANALYSIS IOCs warm to new deals Revised deals on tax and remuneration status in wake of Exxon and Shell success Getty Images

working tirelessly to revive an old production-sharing agreement (PSA) signed by the previous regime, but then rescinded shortly before the 2003 invasion.

BETTER TERMS

Oil Minister Hussein al-Shahristani with ExxonMobil’s Richard Vierbuchen.

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winning consortium), be developed to a production plateau of 2.1 million b/d, within the Oil Ministry’s stipulated seven-year development and production ramp-up period that is planned. ExxonMobil and Shell’s offer (ExxonMobil 80%, Shell 20%) is, however, somewhat lower then their initial bid to raise production to 2.325 million b/d in the unsuccessful first licensing round, although the companies at that point were unwilling to agree to the Oil Ministry’s low US$1.9/b remuneration fee for the increment, offering a US$4/b bid themselves. LUKoil will be particularly disappointed to lose out, having done work and studies on the West Qurna field complex and The Iraqi Oil Ministry will have to rapidly expand its pipeline network.

Oil&Gas Middle East December 2009

Getty Images

ExxonMobil and Shell recently triumphed over a LUKoil and ConocoPhillips consortium to be awarded Iraq’s 8.6 billion barrel West Qurna-1 project. Samuel Ciszuk, IHS Global Insight Middle East energy analyst, takes a closer look at the deal. Iraq’s huge 15-billion-barrel West Qurna reservoir complex has long been seen as one of the big prizes in the oil industry, with production being cheap and easy to develop and the possibility of more oil being discovered in deeper horizons thought to be rather high. The field, located in the prolific and relatively stable southern Basra governorate is currently producing 270 000 to 280 000 b/d, but will (according to earlier comments by the

After the signing of BP and CNPC’s Rumaila contract, IHS Global Insight notes the terms offered by the Iraqi side have improved significantly, although for domestic political reasons these changes have only been referred to as clarifications. Most significantly, the Iraqi Oil Ministry has agreed to change the way the country will apply a 35% tax, only levying it on “profit oil” and not on the part of the remuneration which covers the cost recovery.

IOCs have evidently also changed their views on the Iraqi contracts, not only because of the revised tax conditions, but also because of different political circumstances and much more favourable timing. While agreeing to a contact in the mid-year first licensing round - in the vein of BP and CNPC - might have resulted in having to undertake significant investments a good few months before the mid-January 2010 general election in Iraq, agreeing at this point means that no material investment has to take place before the results of the ballot are well known and the strength of the country’s political factions are able to be accurately assessed.

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NEWS ANALYSIS

OIL LAW FEARS Given the political opposition to foreign and/or private investment in Iraq’s oil industry in many quarters and the continued lack of a national oil law—making it relatively easy for a future government to scrap or substantially renegotiate contracts—this has been a very tangible fear among IOCs. This timing issue will now, however, also—together with the encouraging examples of the Rumaila, Zubair, and West Qurna-1 contracts— be positive news for the second licensing

www.arabianoilandgas.com

“Iraq’s massive 15-billion-barrel West Qurna reservoir complex has long been seen as one of the big prizes in the oil industry” Samuel Ciszuk, IHS Global Insight

round, where interest and competition for those fields not laying in contested northern areas now looks like it could be quite high. The agreement on these three crucial fields in Iraq will significantly strengthen the

at single-handedly starting development by the dilapidated Iraqi state-owned oil industry, or to bring in IOC help now finally seem to have yielded results will nevertheless be seen as positive by many in Iraq, rekindling a hope of accelerated reconstruction among the population, which the government will have to manage closely in order for it not to be turned into quick disappointment.

government, but will also draw the ire of its hardest opponents, both in parliament and among insurgents, raising the risk that the oil industry will be increasingly targeted during the run-up Samuel Ciszuk is the Middle to the election. The fact that East energy analyst for IHS several years of failed attempts Global Insight.

December 2009 Oil&Gas Middle East

23


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TIGHT GAS SPECIAL REPORT

TIGHT TIMES With trillions of cubic feet of gas tied up in low permeability reservoirs, tight gas production has become the hot topic. Schlumberger’s Lee Ramsey talks to O&G ME round the world there are trillions of cubic feet of gas that could be used to supplement the world’s energy supplies. However, much of this abundant resource is difficult to produce because the gas is held in tight reservoirs where the permeability of the reservoir rocks is extremely low. Producing tight gas is challenging, yet considering the quantities available and the long-term producability of this resource, such non-conventional gas is now being regarded as a significant energy resource for the future. Tight gas could help to address the predicted deficit between energy supplies and demand in the coming decades.

A

To understand the economic viability of the complex, unconventional gas developments of tomorrow, Middle East operators must focus on new solutions today. A concerted technological effort to better understand tight gas resource characteristics and to develop solid engineering approaches is necessary to deliver significant production increases. Schlumberger has risen to the challenge, and through real collaborative efforts with Saudi Aramco and its international oil company partnerships, its Tight Gas Center of Excellence in Dhahran, is delivering bona fide leaps in reservoir understanding.

Lee Ramsey, manager of the Tight Gas Center of Excellence (TGCoE), tells Oil & Gas Middle East that the exciting developments are important steps to a real game changing approach to the tight gas conundrum.

THE BASICS The permeability of rock formations is essentially what governs how easily gas held within will flow. High permeability carbonate formations have higher porosity and often have natural fractures through which gas will easily flow, and are typically prolific producers without the need for technically sophisticated approaches. “In the Middle East people are accustomed to working with

carbonates which have a very high permeability that will produce naturally or, if the wellbore is damaged, a matrix stimulation with a little bit of acid,” explains Ramsey. “However, tight gas fields (today Schlumberger has a working definition of 0.1 millidarcy and below as tight gas), will usually not flow with a simple perforation. It requires a much deeper understanding of the reservoir and accurately tailored solutions that fit, as well as specialist treatment fluids and techniques,” he adds. “What we are advocating is that the decision of whether to use a well for production should not be made exclusively on initial flow appraisals. With improved understanding of the

Seismic field work being carried out by Saudi Aramco.

www.arabianoilandgas.com

December 2009 Oil&Gas Middle East

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TIGHT GAS SPECIAL REPORT

reservoir characterisation, better informed decisions could be made.” Indeed, obtaining commercial flow rates is a crucial factor when drilling and completing tight gas wells. In the Middle East, tight gas wells are typically deeper and hotter than other gas wells, making them more expensive to complete. “On the surface of things it would seem simple to transfer the technology and knowledge from experiences in North America. However, because we can be working at depths of 18 000ft – 20 000ft and temperatures approaching 350 degrees Farenheit in Saudi Arabia, the wells in North America do not share the same high temperature and high pressure characteristics, as they are typically between 6000ft and 12 000ft so we find that the toolbox is much smaller.” This hostile environment becomes additionally challenging when the highly specialist equipment needed is rarely the sort that sits in inventory. “These pieces of kit tend to have long lead times; a good example would be 15K packers, sliding sleeves, upper and lower downhole completion equipment, which are essentially made to order,” says Ramsey. An additional benefit which has come from the concentrated learning environment is that the research is highlighting crucial gaps in the

technology – and the feedback from Dhahran to research centres throughout the Schlumberger regional and global network is helping to address these. To add to the already significant challenges, the fields in question are often remote from existing facilities and operating bases.

ACCESS POINT To achieve optimum flow rates, options to drill vertical, horizontal, or multilateral wells must be considered alongside the optimum number of zones, or stages within a zone. In tight gas wells, production from a single zone is often less than expected. Especially when you have been used to working on prolific high permeability wells. To increase tight gas production, multiple zones in vertical wells or multiple stage fracture treatments within a zone on a

UNITS OF MEASUREMENT A darcy (or darcy unit) and millidarcies (mD) are units of permeability – a measurement the ability of fluids to flow through rock or other porous media. A medium with a permeability of 1 darcy permits a flow of 1 cm³/s of a fluid with viscosity 1 cP (1 mPa•s) under a pressure gradient of 1 atm/cm acting across an area of 1 cm². A millidarcy (mD) is equal to 0.001 darcy.

“Today it is possible. It is challenging, but by building the expertise to tackle the challenges of the future we are unlocking valuable reserves” Lee Ramsey, Schlumberger horizontal well are required. In striving for maximum productivity from a tight gas reservoir, whether in new or existing wells, attaining that production level crucially depends on an appropriate open hole or cased hole strategy. “Generally when we talk about perforating in tight gas fields we mean taking a shaped charge and going through the well casing. Tight gas wells aren’t going to produce without a simple fracturing treatment. This is quite the opposite of typical Middle Eastern field experiences, where matrix acidizing yields good results.” To fully exploit tight gas operators need to break- through that well bore damage and get a fracture of significant length out into the reservoir.

Lee Ramsey is manager of the Schlumberger Tight Gas Center of Excellence in Saudi Arabia.

26

Oil&Gas Middle East December 2009

“When we are dealing with exploration wells, this fracturing is really a part of the reservoir characterisation. If you want to understand what you really have there, you going to have to confirm that by fracturing and testing extensively,” explains Ramsey.

MARGINAL ECONOMICS For real results multiple zones and multiple stages are needed, as well as extremely detailed petrophysical and geomechanical analysis to make these profitable. That requires a real, genuine paradigm shift in thinking, says Ramsey. “Not only in terms of the clients, but also with the relevant ministries in terms of the rules and regulations – multiple zone projects require quite intricate approvals.” Most of what the TGCoE is engaged in is as much research, meaning gaining a much better understanding about what is there through exploration wells, as it is about production. “Reservoir engineers can get very stressed out on the economics,

www.arabianoilandgas.com


TIGHT GAS SPECIAL REPORT

because we are working with a lot of exploration wells, which is expensive.” But, for the time being, the upper management levels are willing to fund this research and gain that hugely valuable knowledge. “There is the chance they could pull the plug and wait for technology to move along five years, but the message we are hearing is that this is about really learning and understanding what our technology gaps are – so the gas price has not altered that desire,” he says.

where the sweet spots are. There are still a lot of challenges out there in terms of geophysics and geology and petrophysics and other domains, but we have some extremely encouraging case studies from both North America and Saudi Arabia where production increases are not only encouraging, but profitable operations.”

RIGHT LOCATION A great deal of the learning taking place through the TGCoE will be applicable to many mar-

“The reserves recoverable will be huge once we understand where the sweet spots are” Lee Ramsey, Schlumberger

According to Ramsey, IOC partners in Saudi Arabia have been working with production rates two or three times below economical expectations. “If a field is targeting 10 Million scfd a day, and production is falling short of 3 million scfd a day, then it’s time to look very closely at the problem, but that’s where we can help,” beams Ramsey. The economic imperative is there, and it is encouraging to see that today’s bottom line isn’t holding back this essential research. “The amount of reserves recoverable will be huge once we understand

45% Unconventional gas constitutes about 45% of estimated global recoverable reserves of 850 trillion cubic metres. Source: IEA

28

kets, both regionally and internationally, but what was really exceptional, and made Saudi Arabia a great fit was a combination of the potential, the activity levels in the country, and particularly the level of collaboration between the companies involved, explains Ramsey. “The importance of gas to regional economies has changed – so that is perhaps a game changer. Having been through the prolific gas wells, and then the deep tough stuff, I think the evolution in the Gulf region will follow the same pattern that the North American market has been through.” The extent of the reserves that exist in Saudi Arabia’s tight gas fields simply can’t be ignored. And despite a bumpy 2009 for gas prices (though largely confined to a sickly North American market) the desire to push ahead with tight gas projects has not abated in Saudi Arabia, in fact, it is prov-

Oil&Gas Middle East December 2009

The drilling of multiple stage exploration wells is yielding encouraging results. ing a powerful draw for new recruits, explains Ramsey. “Firstly the domestic energy needs of GCC countries are powerful motivators to learn more about this type of resource. And because it is so important, and such a challenge, with a great opportunity, we are actually being approached by people who are ready for a new challenge in their career, and this is where they want to be.” In North America Shale gas, once a classic “non-conventional” resource are now becoming the “new conventional”.

Similarly with tight gas, people are now delivering such encouraging results that in certain circles it’s discussed as the new conventional. “That’s probably a bit of bravado and going a bit far,” laughs Ramsey. For tight gas specialists and the companies that master the know-how the future appears bright indeed. “Today it is possible. It’s challenging, but by building the expertise to tackle the challenges of the future we are unlocking valuable reserves,” concludes Ramsey.

www.arabianoilandgas.com


QATAR COUNTRY PROFILE

GAS POWER Qatar’s phenomenal gas projects have stunned the world with their speed and scope. As the country enters a new era of production we take stock of the nation today atar is mainly known as a gas player, with its reserve base centred on the offshore North Fields which adjoin Iran’s South Pars complex. The country accelerated into world gas export market leadership in 2006 and now plans to increase LNG production to 77 million tonnes a year by early 2010 through a number of large-scale projects. Regional exports through the Dolphin Energy pipeline are already feeding the UAE and Oman much needed gas. The pipeline can currently carry up to a maximum of 2 billion stand-

Q

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ard cubic feet a day (scf/day) of refined methane gas from Qatar. Its design capacity is 3.2 billion scf/day. Usage of the additional 1.2 billion scf/day capacity is subject to a future agreement between Dolphin Energy and the Qatari authorities, though this has not yet materialised. Further new gas initiatives await a review of the country’s reservoirs following a moratorium imposed in 2003 banning further development on the super-giant North Field. The Qatargas joint ventures could quickly increase production capacity by about 12 million tonnes per year once a morato-

Oil&Gas Middle East December 2009

rium on new LNG projects on the North Field is lifted, Qatargas CEO Faisal Al-Suwaidi recently told reporters at the World Natural Gas conference in Buenos Aires. Al-Suwaidi said the new capacity would come from removing bottlenecks in existing LNG production trains. Qatar imposed the moratorium on new LNG projects at its giant North Field, reasoning it needed time to study and take stock of how the reservoir responded to higher production levels. Qatar operates several joint ventures with international oil companies to produce LNG

under the Qatargas and Rasgas operating companies. Qatar is the smallest oil producer in OPEC. Its proven oil reserves stand at around 15.2 billion barrels. The onshore Dukhan field, located along the west coast of the peninsula, is the country’s largest producing oil field. Qatar also has six offshore fields: Bul Hanine, Maydan Mahzam, Id al-Shargi North Dome, al-Shaheen, al-Rayyan, and al-Khalij. Despite the country’s significant oil production and reserves, oil accounts for less than 15% of its domestic energy consumption.

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QATAR COUNTRY PROFILE

The Qatargas facilities in Ras Laffan have undergone a truly breathtaking transformation.

Qatar’s North Field holds more than 900 trillion cubic feet of natural gas reserves, the largest non-associated natural gas field in the world.

QUICK FACTS • Proven oil reserves: 15.2 billion barrels • Oil production: 1.1 million barrels per day • Oil consumption: 99,000 barrels per day • Crude oil distillation capacity: 200 000 barrels per day • Major ports: Umm Said, Ras Laffan • Major refineries: Umm Said (200 000 bpd capacity)

www.arabianoilandgas.com

Qatar’s proven natural gas reserves stood at 910.5 trillion cubic feet (Tcf) as of January 2007, about 15% of total world reserves and the third-largest in the world behind Russia and Iran. Most of Qatar’s natural gas is located in the massive offshore North Field, a geological extension of Iran’s South Pars field, which holds an additional 280 Tcf of recoverable natural gas reserves. Qatar has focused on enhanced oil recovery (EOR) projects to extend the life of its oil fields, particularly at the onshore Dukhan field, and, through its partnership with Maersk Oil Qatar, a massive $6 billion investment to stem decline and boost output from the Al-Shaheen field. Most new

exploration and production (E&P) work is being carried out by international oil companies in offshore areas through Production Sharing Contracts (PSC), including ExxonMobil, Chevron, and Total. While there is substantial E&P work underway, there have not been any major oil discoveries in Qatar during the last decade. Qatar Petroleum is actively pursuing a number of worldscale gas-to-liquids conversion projects for the production of synthetic fuels and base oil stocks. The projects are all integrated with offshore development to supply the large amounts of natural gas feedstock needed for these projects. As the focus shifts away from the mega-export projects which

have dominated the Ras Laffan landscape over the last decade, QP is turning its sights to major domestic projects. QP is partnering with ExxonMobil on two domestic gas development and pipeline projects: Al Khaleej Gas (AKG) and Barzan Gas. AKG produces pipeline natural gas for local and regional power generation. AKG-1 started up in 2005. AKG-2 is being built and will double the production of natural gas. ExxonMobil is working with Qatar and Qatar Petroleum on further development of pipeline gas through the Barzan project. When operational, Barzan and AKG-2 will produce almost 3 billion cubic feet per day of natural gas to meet Qatar’s infrastructure and industrial needs.

December 2009 Oil&Gas Middle East

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QATAR PROJECT REVIEW

QATAR’S MAJOR PROJECTS DOLPHIN PIPELINE

Dolphin Energy’s Ras Laffan export terminal is awaiting further allocations.

The Dolphin project was the first cross-border gas processing plant and pipeline network to be built in the Middle East and became operational back in July 2007. The project was brought to fruition by a private company called Dolphin Energy, which is 51% owned by Mubadala, Abu Dhabi’s investment arm. Large international oil companies Total and Occidental each hold a minority stake in the development and brought technical abilities to the project. The 364km pipeline runs from Ras Laffan on the upper tip of the Qatar peninsular, to Taweelah in Abu Dhabi, one of the Emirate’s primary electricity and desalination plants. Dolphin is now tasked with

developing additional condensate storage in Qatar. Adel Al Buainain, general manager, Qatar Dolphin Energy, explained: “There are a number of common facilities shared by a number of operators in Ras Laffan, and we are managing the condensate tank storage facility. We are supervising the construction of these new facilities.” The facilities are expected to be completed by mid-2010. The Export Pipeline will initially carry 2 billion standard cubic feet a day (scf/day) of refined methane gas from Qatar. Its design capacity is 3.2 billion scf/day. Usage of the additional 1.2 billion scf/day capacity will be subject to a future agreement between Dolphin Energy and the government of Qatar.

QATAR PEARL GTL The finishing touches are being put on the Qatar Pearl GTL project, which will be the world’s largest gas to liquids plant, converting gas into 140 000 barrels per day of clean-burning liquid transport fuel and other products. The project will also produce 120 000 barrels of oil equivalent per day of natural gas liquids and ethane. Shell’s Andy Brown, Pearl GTL managing director, explains how the Pearl gas to liquids plant is transforming the Ras Laffan landscape. “Pearl GTL is an enormous complex of 20 kilometres by 10 kilometres. Offshore from the Pearl site is the North Field, it’s the largest gas reserve in the world; 900 trillion cubic feet of gas, and the Pearl GTL project has been allocated a block

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in the North Field 24 kilometres long by 12 kilometres wide in which we are now drilling wells, that will produce gas which will come 60 kilometres through a pipeline to the Pearl GTL plant when we start up production on the project.” Two of the world’s largest hydrocrackers are already in place in the plant, ready to turn the gas and oxygen mix into GTL products such as diesel fuels, lubricant oils, detergent feed stocks, and petrochemical feedstocks as well. The original schedule has slipped, but construction is expected to be complete around the end of 2010 with project ramp-up then taking a further 12 months. The Pearl GTL plant will process about 3 billion barrels-of-oil-equiv-

Oil&Gas Middle East December 2009

Workers examine two vessels before installation at the Pearl GTL plant in Qatar.

alent over its lifetime. Last month saw the installation of the final heavy paraffin synthesis reactor, one of 24, made in Germany and the UAE. “Much work remains to be done, but the installation of the last

reactor is an important milestone in the construction of Pearl GTL. Shipping enormous pieces of equipment and installing them with millimetre precision is a considerable feat of engineering,” says Brown.

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QATAR PROJECT REVIEW

AL S SHAHEEN DEVELOPMENT PLAN Maersk Oil Qatar’s JV project with Qatar Petroleum is a colossal offshore undertaking.

The Al Shaheen Block 5 field, which sits just shy of 80 kilometres off the Qatar coast has seen oil production grow to over 300 000 barrels per day, and for a time was generating Qatar’s largest hydrocarbon revenue stream. The Field Development Plan (FDP) signed in 2005, has positioned Maersk Oil Qatar at the heart of QP’s oil producing future. The extension project, (2005 FDP), aims to increase production beyond the 330 000 bpd recorded in 2008, and includes an investment package estimated at US$6 billion, which covers EOR expenditure as well as infrastructure investment. The 2005 FDP is a huge undertaking. The project encompasses the drilling of more than 160 production and water injection wells over a six year period. Fifteen new platforms were required, (several currently on barges inching their way towards Qatar’s waters from overseas international contractors). These platforms are to be twinned with accommodation and production facilities and the whole project is to be interconnected by subsea pipelines. “We are currently on schedule with the FDP which is a real achievement considering the size and complexity of the FDP, with significant installations and hook-ups taking place, whilst maintaining high levels of production uptime,” revealed Saad Al-Mohannadi, deputy managing director of Maersk Oil Qatar. “We’re understandably pleased by the progress being made which is currently about 90% complete and of the cooperation with Qatar Petroleum, which has enabled such progress. 126 out of 169 planned long horizontal wells have been drilled within the FDP 2005; the drilling campaign is 75% complete,” he added.

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QATAR COUNTRY PROFILE

FUELLING THE WORLD

Faisal Al Suwaidi, CEO and chairman of Qatargas says his country has played a vital role in transforming energy markets and is delivering gas to the world

peaking to Oil & Gas Middle East from his Doha office earlier this year, Faisal Al-Suwaidi, chairman and CEO of Qatargas was upbeat and excited about the roll out of Qatar’s LNG industry. “This is a fast-growing sector, especially for the hot economies of the world. China and

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India will have to import large quantities of gas. There are two main reasons. Firstly, they need to introduce this as part of their energy mix. Secondly, if they are to meet their Kyoto commitment, they will need to rely more on natural gas to reduce their emissions,” says Al Suwaidi. The CEO says he expects LNG consumption will continue to rise by 10% a year for the next decade. LNG is cheaper (per thermal unit) than oil too. So why isn’t the whole world switching to LNG? Al Suwaidi is pragmatic: “I think that you will need all types of fuel to satisfy world demand in the future. I’m not sure that it’s a question of competition anymore; it’s a question of collaborating and making sure

Faisal Al Suwaidi, CEO of Qatargas

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Oil&Gas Oil Oi O i &Gas Mi il M Middle iddlle E East ast December Dec D eccemb ember er 2009 200 20 009 00

that we produce enough energy types to satisfy demand. It’s more about working together.” The fact that governments the world over are making it a key feature in their energy plans is evidence enough that nations have to look in different places to meet their energy demands. By 2010 Qatargas will be exporting 42 million tonnes per annum to markets in three con-

To make sure that the profit and energy of Qatar’s gas fields is properly harnessed, QP, the parent organisation, took a moratorium on further development of the North Field in 2005 amid fears that too fast an expansion could jeopardise the future of the supply. “You could ruin the field in 10 years or you could properly manage it and the reserves will

“You could ruin the field in 10 years or you could properly manage it and the reserves will be there for the next 100 years. That is why QP brought a moratorium” tinents, up from the 10 million tonnes that it shipped last year. Al Suwaidi explains how the market has evolved. “The main production areas or reserves are in Russia, Qatar, Iran and Canada. Until recently this was a regional business - the country would send gas next door to another country, or somewhere in the region. But, thanks mainly to Qatar and its partners’ efforts, we have globalised the gas market.”

be there for the next 100 years. That is why QP brought a moratorium to take time out and study the field and make the right decision, says Al Suwaidi”. Despite all of his weighty responsibilities, Suwaidi says his toughest job is keeping expectations in check. “Qatargas has more shareholders than other LNG companies, and 54 nationalities in our employment. So the most challenging thing is managing the expectations of so many shareholders and employees of different backgrounds. FIELD MANAGEMENT “We know there is plenty of But saying that, it’s very interreserve there. It’s not a question esting, fulfilling work.” of reserves. The North Field is For the full interview with Faisal Al still at 900 TCF [trillion cubic Suwaidi from April 2009 go to feet - two TCF is defined as a www.ArabianOilandGas.com giant field],” states Al Suwaidi.

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QATAR COUNTRY PROFILE

QATAR IS HUB OF CHOICE Installation of GE gas compression units for Qatargas’ Train 1 LNG facility.

Qatar is home to GE Oil & Gas’ Middle Eastern HQ. Mohammad Ayoub, regional general manager explains how 2009 worked to Qatar’s advantage ith years of success in the Qatar market, GE’s boldly branded office building in central Doha is home to the company’s wide range of businesses from energy, water technologies and security to aviation and healthcare across the Middle East. This flagship corporate facility is in addition to the major investment in a GE Oil & Gas service workshop in Ras Laffan. Since March 2007 the company’s regional energy business has been under the stewardship of Mohammad Ayoub, regional general manager for GE Oil & Gas, and has delivered huge growth, helped along by the

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colossal gas projects for Qatargas and Ras Gas. “Qatar has been a real success story for us. It’s become a benchmark within GE Oil & Gas and when we look at moving into new areas we benchmark that against the Qatar experience we have had.” Despite the tight environment in 2009, Ayoub says GE Oil & Gas has bucked the overriding trends, and secured substantial business growth. “In 2009 business for new projects was almost 300% what we did in 2008, and for the overall business group, including services, business was probably double, so it’s been a great year for us.”

Oil&Gas Middle East December 2009

GE Oil & Gas supplied the gas turbine-driven compression strings with low emissions capability for much of the LNG refrigeration service, as well as the gas compression units along the Qatargas and Rasgas trains. In September this year Qatar inaugurated Train 5 of the Qatargas II project, marking the halfway point for its giant gas export infrastructure plans. Much of the big ticket items surrounding the Qataragas and Rasgas projects are in place today, but Ayoub says the business pipeline in Qatar is far from dry. “Now that the principal infrastructure is in place we are moving to the second phase of our operations in Qatar,” explains Ayoub.

“We have been very active partners on the major LNG projects going on here, mainly supplying gas compression units for the liquefaction trains, which are rated for an annual capacity of approximately 7.8 million tonnes. At the same time we built our Qatar service centre, which is now fully operational.” The service centre is located in Ras Laffan, near the major receiving terminals for the gas produced at the giant North Field. When there is scheduled maintenance the service shop is nearby to minimise the downtime and ensure a quick intervention. In November it was announced that GE Oil & Gas’ PII Pipeline Solutions business

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QATAR COUNTRY PROFILE

had been awarded a multi-million dollar, six-year contract to supply Qatargas with advanced pipeline integrity management services to enhance the monitoring and maintenance of the company’s liquid natural gas (LNG) network. Under the agreement GE Oil & Gas will build and deploy a custom pipeline integrity management system (PIMS) to drive Qatargas’ overall integrity management processes. In addition to the maintenance and service contracts GE has in place, the focus in Qatar will be shifting to the domestic infrastructure, explains Ayoub. “A good example of that is the Barzan gas processing project.” The initial phase of the Barzan project will supply gas to meet Qatar’s infrastructure, industry growth and desalination demands. In February 2007 Qatar Petroleum and ExxonMobil agreed to form a joint venture to oversee the project development. According to Exxon figures, when fully operational, Barzan and Al Khaleej Gas (AKG) projects will produce almost 3 billion cubic feet per day of North Field natural

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gas to meet Qatar’s domestic gas needs. Despite project revisions in Qatar, Ayoub says that the state energy companies have been quite shrewd operators through the past year. “In Qatar, the crisis had certain advantages. There were too many projects being executed at the same time, and the opportunity to re-prioritise these was a timely one. Obviously Qatar stayed very active, and competition has become intense, but Qatar is playing that fact to its own advantage.” Whilst the focus of the projects in Qatar is shifting to domestic infrastructure, Ayoub Mohammad Ayoub, regional general manager for GE Oil & Gas. says other regional centres may dominate the GE project pipeline in the years ahead. “Abu Dhabi has been very active – in fact the most active market in the Middle East in the last 12 months. The Integrated Gas Development network mega-project is huge, and there is the Shah Sour Gas project. That said, we see a lot of potential in Saudi Arabia, the United Arab Emirates and Kuwait, so as a regional hub Qatar is still a great fit for us.” GE carrying out the modular exchange for Qatargas Train 1 LNG facility.

December 2009 Oil&Gas Middle East

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QATAR COUNTRY PROFILE

AL SHAHEEN TAKES FLIGHT QP joint venture with Weatherford targets Qatari well services business l Shaheen Well Services was established in June 2008 as a joint venture company between Qatar Petroleum and Weatherford, with the mission to provide a full range of oilwell services and supply of equipment at offshore and onshore locations of QP, its subsidiaries and joint ventures. The JV has initially focused on directional drilling, tubular running, drilling tools and wireline services, both open and cased-hole, though is constantly rolling out Weatherford’s latest technology solutions. Mohamed Al-Sayed, chief executive officer of Al Shaheen Well Services spoke to Oil & Gas Middle East from the company’s flagship offices in Doha, and says his primary mission is to deliver world-class technology solutions to local operators. “Although we are a relatively new entity as a brand, the JV company bought out Weatherford Qatar so the infrastructure, technology portfolio and service contracts were already in place. We have since expanded that offering and will soon include training and a wider array of services than was originally available here in Qatar,” explains Al-Sayed. The company launched just as the effects of the global economic crisis wrought havoc on energy markets, with oil tumbling and rig counts decimated across the Gulf region. “Of course, launching at that time impacted our busi-

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ness plans and our projections. Originally we were looking at a market accommodating 32 rigs, and that shrunk very quickly to around 18 rigs. However, our market share did not shrink. By 2010 and 2011 we anticipate the Qatar domestic market to be back at its original size.” Al-Sayed says that workover and maintenance related business was hit hardest across the whole national market, but adds each Middle Eastern market has its own dynamics. “The Qatari market has a lot of operators and a lot of wells engaged in some of the most challenging drilling operations anywhere. Qatar remains a very attractive market because it is not all just about oil. The gas market is far more stable largely because the projects and sales contracts are long-term ventures.” In spite of the downturn in rig utilisation, Al-Sayed says the company managed to grow its operations. “The pedigree that the company has inherited from the Weatherford Qatar operations and the cutting edge technology solutions we can bring to the local market has enhanced our activity in Qatar. We are already one of the major service providers in the domestic market and have managed to grow market share by working with all of the major QP partners, including Maersk Oil Qatar, Total and Oxy.” The company’s ambition is to capture more of the valueadd services for the indigenous Qatari market, and has recently Al Shaheen Well Services can tap into the global resources of Weatherford.

December 2009 Oil&Gas Middle East

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QATAR COUNTRY PROFILE

hosted a technology showcase day in Doha, to build awareness of its full portfolio. “Our technologies can help meet our clients’ objectives at enhancing production and recovery by optimising production in Qatar’s maturing oil fields and exploiting the vast natural gas resources of Qatar’s North Field. This is why it was important to share this technology with our partners through such events,” says al-Sayed. In addition to building the domestic market capabilities, Al-Sayed says it is important that the company plays a role in technology and knowledge transfer to local employees. “We are planning to recruit a lot more Qatari’s so we are being very active in working with universities and recruitment events. Ideally we would to see Qatari’s in place as the backbone of the company. This is not an overnight process, but we hope that in the coming years we will attract a lot of local talent to the business. To augment that process, and encourage a skills and knowledge based generation of well service experts, Al

The Al Shaheen Well Services expert explains the Compact Micro Imager tool utility to visitors at the Technical Day. Shaheen Well Services is working on a new training centre, the first of its kind in Qatar, to teach drilling support and well support services. “The centre will be made available to all of the companies in Qatar. It will have a full range of simulators, and will be unique because of its proximity to much of the drilling and workover activity, so it will enable students to go and learn

in working environments too,” says Al-Sayed. With drilling work expected to pick up quickly in 2010, AlSayed says the company’s timetable and ambitions are firmly back on track. “Right now we are bidding for some major tenders in Qatar, and we hope that in two to three years time we will have doubled our market share.” Mohamed Al-Sayed, CEO.

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MENA DRILLING REPORT

DRILLING & WORKOVER

SPECIAL REPORT : MIDDLE EAST 5-YEAR FORECAST

Drilling and workover expenditure in the Middle East and North Africa regions is predicted to grow at 13% each year to 2014.

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Oil&Gas Middle East December 2009

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MENA DRILLING REPORT

Exploring MENA drilling and workover potential to 2014 Rod Westwood, Senior Analyst, Douglas-Westwood Limited ith two thirds of global oil reserves and an estimated 45% of the world’s natural gas reserves, the Middle East & North Africa (MENA) region is rightly regarded as the world’s most influential oil and gas province. In this article the author discusses the market for drilling and workover operations in the region over the 5-year period to 2014.

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ONSHORE OIL PRODUCTION In 2009, MENA produced circa 21 million bpd of onshore oil and accounted for 40% of global production – although this is far below the region’s production capability and a reduction on 2008 levels. OPEC’s desire to influence, stabilise and increase oil pricing – in tandem with a reduction in exploration incentives reduced production by an estimated 11.9%. As MENA production continues to increase over the coming years, we estimate that by 2015 the region will have an onshore crude output of around 27 million bpd (a 28% increase over 2009 production levels). At this time, the region will represent an estimated 45% of global onshore oil production. Evidently, the MENA region plays a highly influential role in global oil supply and disruption (both planned and unplanned). It can therefore severely influence the global demand/supply balance and oil prices worldwide. It is anticipated that Iraq will be a prime onshore growth country; in 2000, Iraqi oil production was the third high-

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est in the Middle East, estimated at 2.6 million bpd – 12% of MENA onshore production. The effects of the second Gulf War had a significant impact on Iraqi production and by 2003, production had dropped to 1.3 million bpd. However, improvement in the political stability of the country and an injection of Western investment has the potential to lead to a significant

the local North African gas industry will see this share drop to an estimated 15% by 2015. This was highlighted at the latest licensing round in Algeria, which took place in December 2008, where only four out of the eleven contract areas were awarded due to a lack of interest from foreign players. Concern has also been made by some western companies about

“Growth has the potential to be swift throughout 2010 and we believe that spending could grow to reach $27.9 billion per annum by 2014” Rod Westwood, Douglas-Westwood augmentation in production levels. Hence, by 2015, Iraq has the potential to succeed both Iran and Kuwait to become the second largest MENA producer at 4.3 million bpd – 16% of total MENA onshore output at that time. In 2009, the North African states of Algeria, Libya and Egypt accounted for around 18% of MENA onshore oil production. However, maturing fields in Algeria and Libya coupled with the revitalisation of Douglas-Westwood Limited is an independent company that carries out business research for the international energy industries. Its market analysis, surveys and forecasts are used by many of the world’s major energy companies, the leading industry contractors and manufacturing companies.

the amount of government involvement in the sector, especially in Libya where demands include the appointment of a Libyan chief executive for joint ventures.

OFFSHORE OIL PRODUCTION MENA offshore oil production is focused on two key areas; the Persian Gulf states of Saudi Arabia, Qatar, UAE and Iran in the Middle East and the Mediterranean states of Algeria, Egypt and Libya in North Africa. At present, the region does not hold the same influence over the offshore oil industry, although 2009 production still accounted for 23% of the global total at an estimated 6.5 million bpd (equivalent to Saudi Arabia’s onshore output). The economic downturn and OPEC’s influence on oil supply drove a

December 2009 Oil&Gas Middle East

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MENA DRILLING REPORT

THE AUTHOR: ROD WESTWOOD Rod Westwood is a senior analyst with Douglas-Westwood Limited. His market modelling experience spans a wide variety of sectors, having contributed to a multitude of studies examining a variety of oil & gas sectors, onshore and offshore, including drilling, workover, enhanced recovery and ROVs.

7.5% decrease in offshore oil production between 2008 and 2009, although recovery is expected to be swift given stabilised oil pricing and recovery from the global recession. By 2015, total production will have grown to reach an estimated 9.3 million barrels of oil per day, at which point offshore territories will be responsible for more than a quarter of total oil production. Offshore, the majority of MENA oil production is accounted for by five countries – Saudi Arabia, UAE, Qatar, Iran and Egypt – countries that together produced 95% of the region’s oil offshore in 2009. Kuwait, Libya and Oman have minor production capabilities which are extremely limited. They are unlikely to impact significantly on future investment. Algeria, Iraq, Syria and Yemen have no offshore production at all. Heavily-developed Egypt

38% The MENA region wellstock is expected to grow by 38.1% by 2014. Source: Douglas-Westwood.

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is the only offshore territory expected to see decline over the 2010-2015 period – by 12.2%. The most significant growth stems from KSA and Iran.

GAS MARKETS Historically the MENA region has focused on the crude oil industry and, whilst it does not dominate world gas markets, it is still a significant contributor to global output. In 2009, the region accounted for just under 18% of global gas production. Given its large gas reserves, the MENA region has the potential to dramatically increase its gas production. The continued development of LNG and GTL technology will enable MENA countries to export gas and gasderived products to new markets worldwide such as China. In 2008, MENA exported 168 billion cubic metres of gas, 56% of which was transported using LNG technology. Qatar is currently the largest LNG exporter in the world and is undergoing a significant expansion of its Qatargas and Rasgas facilities. By 2011, Qatar will be capable of exporting 77 million metric tonnes per year of LNG, accounting for approximately 27% of global liquefaction capacity in that year.

Oil&Gas Middle East December 2009

Annual drilling and workover expenditure could reach $27.9 billion by 2014.

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MENA DRILLING REPORT

Iran, following Qatar’s lead, is developing a number of LNG projects utilising gas from the giant South Pars field. Expansions are also planned for LNG terminals in Algeria and Libya.

DRILLING & WORKOVER EXPENDITURE For the focus countries of Algeria, Egypt, Iran, Iraq, Libya, Kuwait, Oman, Qatar, Saudi Arabia, Syria, UAE and Yemen, total onshore and offshore drilling and workover expenditure on oilfield services reached $17.5 bn in 2008 (inclusive of all major cost segments but excluding certain aspects of expenditure such as logistics). The impact of decentivised operator spending and OPEC production cuts saw expenditure decrease by an estimated 2.2% overall in 2009. Growth has the potential to be swift throughout 2010 and

we believe that spending could grow to reach $27.9 billion per annum by 2014 based on expectations of oil price recovery and increased capital expenditure budgets, particularly offshore. The combination of OPEC production cuts and the impact

terms of rig & crew expenditure). Recovery is expected to be faster in onshore areas than offshore – however, beyond 2010 it is unlikely that onshore drilling will see strong growth given the maturity of the basin and an increased focus on

“The impact of decentivised operator spending and OPEC production cuts saw expenditure decrease by an estimated 2.2% overall in 2009” Rod Westwood, Douglas-Westwood of reduced oil prices on operator exploration plans caused an inevitable dip in drilling activity between 2008 and 2009 – an estimated decrease of 6.9% onshore and 12% offshore (where costs are far higher, particularly in

remedial operations. Growth in onshore drilling-related oilfield services will therefore be costdriven over the forecast period. Saudi Arabia is responsible for approximately 18% of onshore drilling expenditure

at present within the MENA region – however, we expect this to decrease to 17% by 2014 when Saudi Arabia will be succeeded by Oman. Over the next five years, growth in offshore drilling expenditure has the potential to average 11.8% per annum. Iran and KSA will be responsible for a large portion of this given, for the former nation, the development and production of offshore gas in the South Pars field. The economic climate has had less of an effect on the workover markets, given the relative low cost of intervention operations and the significant benefits gained. Most commonly, full workover rigs are not required and less costly wireline or coiled tubing units are used as deployment method for downhole tools and pumping. Oman and Saudi Arabia together represent the largest expenditures on workover operations onshore, given the maturity and significant wellstocks contained within these nations.

OFFSHORE

Offshore MENA oil production accounts for 23% of the global total at an estimated 6.5 million barrels per day.

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Oil&Gas Middle East December 2009

Offshore, workover expenditure will be lower than onshore based on a less mature producing environment. The economic downturn has impacted some countries, whilst others that are in an earlier stage of offshore development or have long-term plans in place for the extraction of huge reserve bases, for example Iran and Saudi Arabia, are thought to have seen some growth to 2009. An average annual growth of 13.0% is expected over the next five years, in order to service a wellstock predicted to grow by a total of 38.1% over the same period.

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MENA DRILLING REPORT

13% Average annual growth rate for workover spend in the Middle East and North Africa Region. Source: Douglas-Westwood

CONCLUSION Despite experiencing a drop in production in 2009 due to the global recession and OPEC’s price stabilisation methods, the MENA region is expected to see a growth in oil and gas production, both onshore and offshore from 2010 through to 2015. Offshore areas and gas production is forecast to grow at higher levels than onshore oil production due to the maturity

of many onshore basins. Much of the growth will be driven by increased drilling in Iraq which is seeing a revitalisation of its oil and gas industry after several years of decline. Gas production in Iran is another important growth market due to the development of the South Pars field. Onshore markets have dominated MENA drilling expenditure historically, although it is expected that given increased focus on the offshore environment will see expenditure on grow and the gap will narrow. Offshore and onshore drilling will be almost equal by 2014 whilst larger, more mature onshore wellstocks requiring high volumes of workover activity will maintain onshore expenditure throughout the period and beyond.

In 2008, MENA exported 168 billion cubic metres of gas, 56% as LNG.

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Oil&Gas Middle East December 2009

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UPSTREAMSEISMIC PROJECTVESSELS CARGO

The shipping industry has taken a battering over the past few months, but with the worst of the financial storm braved, is there nothing but clear seas ahead? Oil and Gas Middle East asks Niels Stolberg, president and CEO of Beluga Shipping he shipping industry has been hit by the economic recession in different ways. The conventional container shipping sector has taken a large hit during the troubled times. However niche markets such as heavy lifting and project cargo tend to fare better. “Project cargo in general is a stable and slowly reacting market. However, container shipping has been hit hard since it is largely dependent on consumers’ behaviour. Project cargo can rely on financially safe investments and long-term contracts,” reveals Niels Stolberg, president and CEO of Beluga Shipping. There has been speculation that the current climate would result in project cargo shipping companies facing an oversupply of tonnage, partly due to the increase in the global fleet over the past few years. Stolberg believes this could be an issue for the sector in general, but one Beluga has covered. “The global fleet has largely increased in number over the past few years but Beluga provides a young, modern and

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flexible fleet divided into three types, so we can always offer the client a perfectly suited vessel,” he states. “According to the Institute of Shipping Economics and Logistics, the super heavy lift market segment in particular - where highest tonnage and crane capacities are necessary - will be stable for the next ten years or even beyond. This reflects Beluga’s core business; we follow the clear direction of super heavy lift, where only a few companies can offer what is required by the customers.” This oversupply of tonnage, together with the increase in size of the global fleet, has had a major impact on rates within the industry. “There is a massive slump in the project and heavy lift segment below 200 tonnes single weight modules (general cargo and bulk), with rates dropping even to 50% of their previous level,” explains Stolberg. “For the sector covering oil and gas cargo, typically above 300 tonnes, rates have become stable and in the super heavy lift sector rates are very attractive

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December 2009 Oil&Gas Middle East

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UPSTREAM PROJECT CARGO

and there are great opportunities to be had,” he adds. Due to the drop in oil prices, shipping companies have benefited from a drop in bunker fuel costs. “We have saved some costs due to the price reduction, but we have also saved bunker costs due to sailing efficient routes such as the Northern Sea Route and the NortheastPassage which we did in the summer of 2009 with the MV Beluga Fraternity and the MV Beluga Foresight – these vessels saved about US $100,000 each on bunker costs by transiting the Arctic Ocean instead of taking the long way around through the Suez Canal,” comments Stolberg. The Suez Canal also poses the much talked about piracy problem when travelling past the Gulf of Aden. This problem has become such a serious issue that it is having a huge impact on insurance rates. “In certain aspects insurance rates have risen by ten to 50% – in regions with the danger of war, rates rise accordingly; in this respect Somalia has to be regarded as a war zone. Since [the insurance policies] Hull & Machinery or Protection & Indemnity have not sufficiently covered the problem, there is fairly new insurance policy about to be set up: Kidnap & Ransom,” explains Stolberg. The situation has led to shipping companies taking sometimes drastic measures in order to avoid a catastrophe. Stolberg

reveals that his company runs monthly seminars in order to teach seafarers how to behave in an emergency. NATO razor wire is installed on Beluga’s vessels and they move through the Gulf of Aden only in military escorted convoys. However the firm does not use firearms of its own. “We do not appoint external guards on our vessels and we deny weapons on board. We also do not use long range acoustic devices since they are not efficient enough and can be mistaken for real weapons which could lead to uncontrollable escalation,” affirms Stolberg. “As a sustainable approach we are strongly supporting a political solution. For example the aid programme ‘Somalia against Piracy’, with UN soldiers Heavy Load: A 1100 tonne buoy which, at 27 metres tall, restricts bridge view. bringing freedom to Somalia.” Oil and gas business is key for the company, according to Stolberg. “Oil and gas is a very strong market with attractive projects and lucrative future perspectives, it is one out of four or five central markets that Beluga is focussing on.” It would be easy to say Beluga is lucky to be in the niche market it is. However, the firm appears to be so focused and meticulous in its planning, it is clear in this case luck has nothing to do with it. Each challenge has been met and dealt with head on, and with the economic skies clearing - and the heavy lift sector stabilising, it’s all plain sailing from here on in. Niels Stolberg is president and chief executive officer of Beluga Shipping.

Leaders in Fluid Engineering 50

Oil&Gas Middle East December 2009

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E&P INTERVIEW Construction at the Qarn Alam steam injection, enhanced oil recovery project, in Oman.

52

Oil&Gas Middle East December 2009

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E&P INTERVIEW

Game Plan Shell exploration and production executive vice president Raoul Restucci speaks exclusively to Peter Ward on the company’s Middle Eastern strategy or a recent event in Dubai, Shell called on the services of Michael Schumacher to back up its road safety campaign. This type of clout demonstrates just how big the firm is – and it is oil and gas activities that provide the core of the firm’s activities. In the Middle East the company has dealt in oil and gas for over 100 years, and is showing no signs of slowing down. Raoul Restucci executive vice president – Shell Upstream International, describes the company’s role in the Middle East region. “We operate and have ambitions in just about every country in the Middle East and North Africa. We are actively involved in over 14 countries, in one form or another. Our key positions remain Oman and Qatar in terms of oil and gas development opportunities, and in the downstream sector there is of course Saudi Arabia,” states Restucci. “To be honest, across the entire region we have a very significant spread and opportunities over the whole value chain,” he adds. The company’s solid stature and reputation can offer its clients a number of advantages. “IOCs like Shell bring to the table long term win-win arrangements. Through the difficult stages we will carry on irrespective because we have a long term approach to things. Whether it is financial crises, political challenges, embargos or sanc-

F

www.arabianoilandgas.com

tions, we stay through thick and thin,” comments Restucci. The rise of NOCs and their increasing capabilities has led to large international oil companies changing the way they present themselves. “In the early development and exploration stages in the 1930s, 1940s and 1950s, the IOCs brought the major capabilities and skills and then we entered a phase of nationalisation. Now you find that many of these NOCs are very well established with a very strong skills base and are excellent stewards of their natural resource base.

NUMBERS GAME + 100 countries where Shell operates

~102,000 number of employees

2% amount of world’s oil Shell produces

3% amount of world’s gas Shell produces

3.2 million barrels of gas and oil Shell produces every day

+25 refineries and chemical plants Shell runs (figures for 2008)

1 ranking by Fortune 500 in 2009

Very often they have strong financial capacities,” explains Restucci. “What companies like Shell bring to the table are key areas of technology and technology deployment. It’s not just about developing the special technology; it is the application of the integrated skill set that goes around it. It’s about how you bring a whole technology platform and successfully deploy it. Technology is not about having it, it is about using it,” he adds. Two areas where Shell is currently working most prolifically are Qatar and Oman. In Oman Shell is involved in the enhanced oil recovery (EOR) projects which the country has pinned many of its oil export hopes. “In our established positions, our largest investments are in Qatar and Oman in upstream. For downstream it is Saudi Arabia, where we have invested in excess of US$8 billion. In terms of the oil and gas stream, you’ve got in Oman an increasing shift from conventional oil to EOR activities going forward. “In Qatar there is a massive level of investment and activity. We have got about 75 000 contractors helping us develop QatarGas 4, the LNG project there, but also the gas to liquids (GTL) project, which is the largest plant in the world. That is without doubt the largest investment at the moment that we have in the region,” Restucci affirms. Like all of the major international oil companies, Shell has a close eye on Iraq and the potential

December 2009 Oil&Gas Middle East

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E&P INTERVIEW

RAOUL RESTUCCI: IN PROFILE • Raoul assumed his present position in May 2005. Prior to this role, Raoul was chief executive officer for the Americas for Shell Exploration & Production with responsibility for Shell’s E&P businesses in the western hemisphere • Raoul has filled a number of roles in addition to his responsibilities at Shell. After working in The Hague in production technology, he held several positions in Brunei in the areas of well-site operations, production engineering and economics. • Raoul joined Shell International in 1980, following his graduation from Nottingham University with a degree in mining engineering. In addition, Raoul is an alumnus of HRH Prince of Wales Business & Environment Program.

“I expect a continued working engagement with Kuwait Petroleum. It is part of a long established relationship” Raoul Restucci, exective VP, Shell Upstream International

investment opportunities there. “It is a very large resource base which is undeveloped. We have participated in round one of the licensing and we now have teams which are participating in round two,” reveals Restucci. “We signed a Heads of Agreement in September 2008 on what we call the South Gas joint venture which is a partnership between the South Gas Company, which has 51%, Shell holds 44% and Mitsubishi, which holds 5%. The project starts by collecting the flared gas in significant volumes, processing and treating it and then resupplying the local power generation and LPG units.” Restucci adds that any surplus volumes of gas could eventually be exported, but in the initial phase the collected gas will just be treated, processed and put back into the national economy

54

Shell has supplied LNG to Kuwait and has a team in the country which is working on the development of potential upstream opportunities. The Middle East currently has a number of hotbeds of oil and gas activity, almost too many to choose from. Although specialised technology can be required to access some of these hotbeds, Shell is aiming to reach all of them, and with the resources it has to call upon, it is managing it. “If we look at exploration, we are heavily involved in opportunities in Saudi Arabia where we have had encouraging results and a continued commitment there. We are also at the early stages of a very significant programme in Libya,” Restucci says. “We have had very successful exploration and drilling in the western area of the desert in Egypt; we are very excited because we have a new position in the Nile delta which we have just recently started drilling. “The quality of the seismic surveys in Oman is really unlocking a lot more poten-

tial there too. And of course it is all hands on deck to try and secure a number of development opportunities in Iraq, so I guess there are a number of exciting hotbeds.” One of the strengths of Shell is that with its many divisions and resources, clients can benefit from a more integrated approach. “We bring extensive knowledge in supply chain management in terms of the integrated approach and the integrated value chain. So by setting up a partnership with Shell, you could start with a simple exploration opportunity, but then you know that you have the development, marketing, trading and the processing capabilities,” reveals Restucci. “It is the opportunity for the integrated value chain and I guess that is why today we continue to be

for much needed domestic power generation. Recently, Major IOCs Total and Chevron pulled out of Kuwait, and speculation was raised whether other major international oil companies would follow suit. However, Shell is staying put in a country where it has a long standing presence, Restucci says. “We have been involved in Kuwait since 1948 so we have an extensive legacy of options, particularly in the downstream sector. And in the future I expect a continued working engagement with Kuwait Petroleum. It is part of a long established relationship and I think we are building our presence, and I’m quite excited about some of the discussions going on Raoul Restucci, executive VP, at the moment.” Shell Upstream International.

Oil&Gas Middle East December 2009

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E&P INTERVIEW

Oman and Qatar (pictured) are two of Shell’s major focus areas in the Middle East region, and the firm is actively involved in bidding in Iraq. successful across the region in setting up new partnerships.” Despite the expected recovery in the economy, there have been lessons to be learnt from 2009, as Restucci describes. “You can only go so fast I guess. If you go beyond your means sooner or later you have to square up. You can’t go beyond your means for too long.

www.arabianoilandgas.com

“I think companies have learnt that lesson, we have been in business for over 100 years we have had our ups and downs and various cycles but the reality is that we continue to be pretty confident and we remain bullish about going forward.” With a recovery in sight, Shell is hopeful of a good year ahead in 2010. Restucci says stability in the

market would be one of his hopes for 2010, as volatility has played a significant part in this year’s business. However, he believes a good year in 2010 will be carrying on in the same vane as previous ones. There are challenges facing Shell. An increasing complexity of projects is one of the issues that Restucci believes the company will have to hurdle in the future.

Another is attracting and retaining the best people and in doing so, keeping the skills set of the company at the same level. “But the real challenge is to continue to attract and develop local entities that are seen as local but can also leverage global expertise. I think that is the right mix and that is one of our success factors here,” Restucci concludes.

December 2009 Oil&Gas Middle East

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HEAVY LIFT

he heavy lift industry is primarily associated with construction. Particularly in the Middle East, cranes are invariably linked to the build sector and were once the source of many urban legends surrounding the percentage of the world’s cranes located in Dubai. But with the construction sector suffering from a slowdown over the past few months, heavy lift companies have focused more of their attention on oil and gas based business in the Middle East.

HEAVYWEIGHT T

DIVISION

With construction work declining in recent months, have heavy lift firms focused more on oil and gas projects?

www.arabianoilandgas.com

December 2009 Oil&Gas Middle East

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HEAVY LIFT

“The upstream oil and gas sector shows a trend of gradual development of the Middle East infrastructures. This has resulted in a potential growth in the market for boom cranes, as oil and gas and its related projects have proved to be more resilient through 2009 in the present scenario, due to the down trend of the construction sectors which are expected to take off again during the second quarter of 2010,” Mohammed Razzaqi, product manager of Darwish Bin Ahmed and Sons reveals. Frank Hillerbrandt, managing director of Stahl Crane Systems also confirms that oil and gas has moved into the spotlight for heavy lift firms. “Our success in the oil and gas industry is growing reasonably in the year 2009 compared to the rest of the market,” he states. This increase in business has been witnessed most in certain areas of the Middle East. “The United Arab Emirates, Qatar, Saudi Arabia have experienced the most dramatic growth. Saudi Arabia is the largest regional market and is followed by UAE, and Kuwait,” says Razzaqi.

big job,” states Hussein Ansar, deputy manager of Dubai based firm Fabexi Trading. However some firms are now looking to actively exploit countries such as Saudi Arabia, as Hillerbrandt explains. “In the past we have been much more concentrated of the market outside of Saudi Arabia. We now want to extend our leading position which we are holding in the other Middle East areas to Saudi Arabia.” Liebherr, a company involved in manufacturing the cranes used in the industry, also sees the benefits of being involved in oil and gas. “Oil and gas projects were less affected than construction work. After the real estate collapse in October 2008 many huge projects were cancelled (e.g. Arabian Canal), this was not seen in the oil and gas sector,” states Wolfgang Beringer, sales promotion, Liebherr. The company offers a wide range of cranes, although not all of its range is used extensively in the Middle East. “Generally we offer our complete range of cranes, but mainly we sell in this area mobile cranes from 70 – 1200 tonne capacity, crawler

“Security is the big issue, you have to work hand in hand with the safety people. A lot of paper work has to be done.” Wolfgang Beringer, Liebherr.

However working outside of the country where a company is based can bring in logistical issues. “When the equipment is going out of the UAE there are logistical problems with that. So we are only interested if it is a

58

cranes from 280 – 750 tonne capacity and harbour mobile cranes in the range of 100 tonne capacity,” comments Beringer. Beringer also states Saudi Arabia, the UAE and Qatar as the countries which make up

Oil&Gas Middle East December 2009

Heavy lift equipment is always in demand in the oil and gas sector. the biggest market in the Middle East, and adds Bahrain to the list also. The major use of cranes in the region for the energy sector is in erecting rigs, moving of rigs and shutdowns, according to Beringer. “The biggest markets are Qatar, Saudi Arabia and the UAE(Abu Dhabi), Kuwait and Oman. But also remaining market leaders in KSA and UAE are still in the process of overhauling their standards to EN and ISO and this will give us the chance to supply our products according to latest and most safe standards,” reports Hillerbrandt. One of the major challenges which is affecting the heavy lift industry, and one which should not be ignored, is keeping the

highest standards of safety intact and working well. “Security is the big issue, you have to work hand in hand with the safety people. A lot of paper work has to be done. The cranes have to be equipped with emergency shutdown systems, spark arrestors,” says Beringer. Hillerbrandt agrees that the main challenges revolve around safety, particularly when working in the oil and gas sector. He reveals that special explosion proof specifications are required in order to suit various hazardous areas classifications. Corrosion protection measures are also needed to be put in place due to the marine environments that heavy lift equipment are sometimes needed to work in.

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HEAVY LIFT

CASE STUDY: WORLD’S STRONGEST CRANE The world’s largest boom telescopic mobile crane, a Liebherr LTM11200-9.1, was used for moving parts in the fabrication of a self-propelled rig known as a ‘Seajack’ at Lamprell’s UAE yard, through the first week of August. Specialist ‘builder’ Lamprell needed to lift and place the top two segments on the rig – fittingly named Leviathan. The four legs, each totaling a height of 86.46m, incorporate eight segments. For the 7th and 8th segments, each weighing 52 tonnes , the crane was positioned alongside the Seajack to provide a 26m radius and capitalise on the cranes telescopic boom – capable of reaching up to 100m – to ensure fast lifts and speedier erection times for each of the legs. The Al Faris Rental crane was configured with 202 tonne counterweights and an 88.30m boom length. Additionally, in a twin lift with a Liebherr LTM1500-8.1 500t capacity mobile crane, the cranes were used to lift and position a Huisman marine

crane at the stern of the seajack for permanent installation. The LTM11200 was configured with a 53.3m boom and superlift and the LTM1500 with a 31.7m boom to lift the 138t Heisman in a ‘top and tail’ operation. The Seajack ‘Leviathan’ is a self propelled, self elevating lift boat intended for harsh environment conditions and was commissioned to install wind turbines in the North Sea. Equipped with the latest Class 2 dynamic positioning technology the vessel is fitted with high standard accommodation for up to 90 people. The alternative option for Lamprell was to use Al Faris’s 500t Liebherr’s in a tandem lift operation with both cranes being rigged on luffing jib configuration. This was ruled out as the cranes would have had to be repositioned for each of the four legs; taking more time to complete the job and adding a further expense to the client.

“The industry needs to develop more health and safety processes and instruction manuals. Extended Quality procedures. (e.g. factory shop test) and an adherence to high level of quality management is needed and strong cooperation between supplier and customer and/or contractor is vital,” states Hillerbrandt. “The cranes have to be in top condition and they are inspected by the owners of the plants or third parties.” Another challenge is the amount of competition and the increasingly higher standards demanded from customers. “Our challenge is the competition with other companies which are operating in this market. Some of them are older than us in the UAE market so it is our

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December 2009 Oil&Gas Middle East

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HEAVY LIFT

challenge to offer services at competitive prices and standard of quality for this field,” comments Ansar. “Customers are difficult these days with higher standards than even two years ago. Accordingly we have upgraded our standards to be accepted by the customers. This is the main challenge for us,” he adds.

Companies in the heavy lift sector have had to find alternative forms of business following the construction slowdown, and for the many firms with a vested interest in oil and gas, the solution was obvious. With the industry now looking like it is rebounding there can now be a lighter outlook for heavy lifting.

SAFETY STUDY: STAHL CRANES QATARGAS ORDER The six 80 tonne overhead travelling cranes with explosion protected hoists are used for maintenance work in a gas liquefaction plant. The most important requirement, and part of the order, was for the cranes to be load tested before erection and commission on the customers site. In order to minimise expensive testing periods, and thus downtimes, all the cranes were to be load tested and be accepted by the customer on STAHL CraneSystems premises. The firm therefore built an unique test rig specifically for this purpose, with which cranes

with an S.W.L up to 150t can be tested. This test rig offers all our customers the advantage of being supplied by fully tested cranes. The project was also completed ahead of schedule. QatarGas scheduled approximately 17 months for manufacturing and erecting the six cranes and refurbishing and modernising the existing cranes in another LNG plant. To the gratification of Qatar Gas, Stahl managed to complete the whole volume of the order within 14 months. The success of this project had a big impact as Stahl recently received an order for replacing four existing hoists. The world’s strongest mobile crane lifts a rig in the UAE.

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

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Oil&Gas Middle East December 2009

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ASK THE EXPERT

Alan Roddis, AESSEAL

Ask the

Expert Question: How can I extend my exploration rotating equipment life? Expert: Alan Roddis, B.Eng, MDip, AESSEAL plc Engineering Director If you have a question you want answered, or a topic discussed, please send it to daniel.canty@itp.com echanical seals are employed in many items of rotating equipment in many industries throughout the world. Reliability engineers in the oil and gas industry commonly understand that mechanical seal life longevity is a function of the seal environment. i.e. the best seal technology in the world will not perform to its maximum potential if it is installed in a poor seal environment.

M

STANDARDS Over the last two decades the Centrifugal Pump Specification;

API610 Editions 6 to 10 has recognized the fact that a good seal environment improves seal life. As such over the last two decades, API610 has increased the “stuffing box bore” or “seal chamber” size defined in the specification. The standard has changed the cross sectional area between the rotating shaft and pump housing from 0.500” (12mm) to 1.375” (35mm) over the various specification Editions, as shown in Figure 1 (see below). The underlying principle of this change is that more fluid around the mechanical seal faces improves heat dissipation and cooler seals last longer.

API682 is the premier mechanical seal specification for the Oil and Gas industry. The standard describes the principles of mechanical seal life longevity and it widely promotes cartridge seals with multiple springs which urge the two counter rotational seal faces together. Unfortunately the API682 standard does not define the position of the multiple springs in relation to the process media. Given the multiple springs are typically very small, around 4mm in diameter, their position within the seal is important. In an attempt to conform to the API682 standard, many mechanical

seal manufacturers have deployed “component seal technology” fitted onto thick cartridge seal sleeves for their API682 qualification tested product offerings, as shown in Figure 2 (above right). The means that the small 4mm diameter springs and setscrews holding the inboard rotary seal holder onto the cartridge sleeve, are mounted directly in the process media. It also means that the majority of the equipment seal chamber cross section is now filled with metallic seal components and not cooling and lubricating process fluid, thereby negating the best practice intentions of API610 seal chamber cross sectional changes.

Fig1: Seal chamber changes defined in API610 Ed.6 (1981) to Ed.10 (2004)

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Oil&Gas Middle East December 2009

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ASK THE EXPERT

Fig 2: API682 seal design with multiple springs located in the process media.

THE EXPLORATION INDUSTRY IS CHANGING The offshore and onshore exploration industry has changed in the last decade. Today, as oil fields deplete, increasing amounts of sand is being pulled up with the crude oil. This sand slurry enters the process stream and creates havoc to the process equipment. As sand contaminates the mechanical seal chamber, it clogs the exposed process-side multiple springs, leading to premature seal failure, as shown in Figure 3. If the seals multiple springs become clogged and seized, they become ineffective in their intended duty. This clearly affects the rotating equipment life. If seal faces are not adequately cooled

4

AESSEAL is the world’s fourth largest supplier of mechanical seals.

and lubricated by a suitable volume of process fluid surrounding them, they overheat. This clearly affects the rotating equipment life.

OPTIONS If you do nothing except specify and select an API682 compliant mechanical seal with multiple springs and setscrews positioned out of the process media you will increase the probability of equipment longevity. Furthermore, if you specify and select a mechanical seal which has an idealized seal environment around the seal faces, you will again increase the probability of equipment longevity. Figure 3 shows a cartridge mechanical seal design that meets this “common sense” criteria. Such designs are highly suitable for today’s oil extraction environment and thereby “future-proof” rotating equipment assets as engineers search and pursue oil extraction from further afield.

Fig 4: API682 seal with the multiple springs located out of the process media.

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Fig 3: API682 seal failure where the multiple springs have clogged.

December 2009 Oil&Gas Middle East

63


PROJECTS

Ongoing and upcoming projects Information is supplied by Ventures Middle East. Tel: +971 2 622 2455. URL: www.ventures-uk.com BAHRAIN Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Redevelopment of the Refinery in Bahrain

Bapco

Chevron Lummus Global (US)

Not Appointed

100

FEED

Redevelopment of Awali Onshore Oil Field

Bapco / National Oil and Gas Authority (NOGA) / Occidental Petroleum Corporation (US)

Not Appointed

1000

Study

Lube Base Oil Project

Bapco / Nestle

Jacobs Engineering

Samsung Engineering Company

430

Execution

Offshore Field Development

Bapco

Fugro Robertson Limited (UK)

Occidental Petroleum Corporation / PTT Exploration and Production (PTTEP)

2000

Execution

KUWAIT Ptitle

Client

Consultant

EPC Contractor

Budget ($M)

Status

Project Kuwait Scheme

KPC / KOC

Sproule Associates Limited (Canada)

Not Appointed

7000

FEED

Gas Pipeline From BS-131 to Mina Al Ahmadi

KOC

AMEC

Petrofac International

544

Execution

Crude Oil Manifold at GC 27

KOC

Not Appointed

30

EPC Bid

Gathering Center 16 in West Kuwait

KOC

Fluor Corporation

Not Appointed

750

EPC Bid

Gathering Centre 24 at Sabriya

KOC

AMEC

SK Engineering & Construction

621

Execution

Repair and Replacement of Pipelines in Southeast Kuwait

KOC

Arabi Enertech

17

Execution

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

KOC

Instruments Installation and Maintenance Co. (ImCo)

4

Execution

Effluent Water Injection Phase I & Sea Water Injection Phase II

KOC

Not Appointed

750

FEED

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

KOC

Not Appointed

30

EPC Bid

Crude Oil Flow Pipelines in North Kuwait

KOC

Not Appointed

110

EPC Bid

Gas Compressor at GC 16 & Gas Reinjection at Minagish

KOC

Safwan Petroleum Technologies

67

Execution

Gas Pipeline between Booster Station 140 & GCMB Manifold

KOC

United Gulf Construction Company (UGCC)

7

Execution

AMEC, Kuwait

LPG Filling Plant at Umm Alaish

KOTC

Mina Al Ahmadi Refinery Upgrade - Phase 1

KPC

Not Appointed

100

FEED

Almeer Techical Services Company/ Flour Corporation

140

Execution

Upgrade of South Ghudair Gathering Centre Flowlines Upgradation & General Support Services

KOC / SAT

Arabi Enertech

27

Execution

Saudi Arabian Texaco/ KGOC

Mushrif Trading

23

Execution

Maintenance Services for KOC

KOC

Petrofac, Kuwait

125

Execution

Mina al Ahmadi - Doha West Pipeline

Ministry of Energy (Electricity & Water)

Penspen International (UK)

Heavy Engineering Industries & Shipbuilding Company (Heisco)

128

Execution

Gas Booster Station 160

KOC

AMEC, Kuwait

Snamprogetti Kuwait

649

Execution

Maintenance of Mina Abdullah Refinery in the South

Kuwait National Petroleum Company (KNPC)

Kharafi National, Kuwait

111

Execution

Jurassic Early Production Facility (EPF)

KOC

Not Appointed

400

EPC Bid

Booster Station 132

KOC

Not Appointed

800

EPC Bid

Drilling Service in Kuwait - Contract 4

KOC

Weatherford Oil Tools Middle East

80

Execution

Al Zour North Project - Pipeline Packages

Ministry of Energy

Not Appointed

136

EPC Bid

New Base Oil Plant at Shuaiba

KNLOC

Not Appointed

400

Study

Dry Crude Storage Tank at Gathering Centre 1

KOC

Bridge and Roof Company

9

Execution

Gathering Center 14 in the South East

KOC

Almeer Technical Services

45

Execution

Fluor Corporation

NJS Consulting/Al Dowailah

OMAN Project Title

Client

EPC Contractor

Budget ($M)

Status

Sohar Bitumen Refinery

Sohar Industrial Port Company (SIPC)

Mashael Group of Companies

200

Execution

Nimr C Full Field Water Injection Project

PDO

Al Hassan Engineering

65

Execution

Harweel Cluster Phase - 2

Petroleum Development Oman (PDO)

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

960

Execution

www.arabianoilandgas.com

Consultant

AMEC, Abu Dhabi

December 2009 Oil&Gas Middle East

65


PROJECTS Project Title

Client

EPC Contractor

Budget ($M)

Status

Crude Oil Stabilisation Unit at Mukhaizna

Occidental Mukhaizna

Consultant

Not Appointed

55

EPC Bid

Mabrouk Field Project

PDO

Galfar/Integrated Engg. & Construction Co;

1500

Execution

Asphalt Plant at the Sohar Refinery Complex

Sohar Refinery Company

Engineers India Ltd.

Not Appointed

80

FEED

Gas Compressor Station at the Nimr field

Oman Gas Company

Tecnicas Reunidas / Worley Parsons

Galfar Engineering & Contracting, Oman

36

Execution

Octal Petrochemical Project at Salalah Free Zone

Octal Holding

Uhde

National Construction & Trading Co. LLC (NCTC)

700

Execution

Kauther Gas Compression Project

PDO

Petrofac International, Oman

350

Execution

Aromatics Complex in Sohar

AOL

LG International / GS Engineering & Construction

1200

Execution

Two New Gas Pipelines in the South of the Sultante

PDO

Not Appointed

101 - 250

EPC Bid

Depletion-Compression Project at Saih Nihayda

Petroleum Development Oman (PDO)

Not Appointed

350

EPC Bid

Pipeline Between the Nimr Field and the Port City of Salalah

Oman Gas Company

Not Appointed

51

EPC Bid

Marmul Central Development - Phase 3

Petroleum Development Oman (PDO)

Gulf Petrochemicals Services, Oman

61

Execution

Qarn Alam EOR Project - Off-plot Package

PDO

Galfar Engg. & Cont.

139

Execution

Jacobs Engineering

Qarn Alam EOR Project - On-plot Package

PDO

MEG WorleyParsons

Dodsal

450

Execution

Methanol Plant in Salalah

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

Jacobs Engineering

GS Engineering & Construction

910

Execution

Oil & Gas Pipeline in Musandum

Oman Oil Company (OCC)

Not Appointed

500

EPC Bid

Saih Rawl Gas Depletion Project

PDO

Tecnicas Reunidas, Oman

Bahwan Engineering Company (BEC)

545

Execution

Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Petrochemical Complex at Ras Laffan

QP/Total

Not Appointed

Not Appointed

3000

Concept

Low-Sulphur Condensate Storage Facility at Ras Laffan

Dolphin Energy Limited, Qatar

Qatar Engineering & Construction Company

212

Execution

Al-Shaheen Oil Refinery

Qatar Petroleum

Axens France

Not Appointed

5000

EPC Bid

Block 4 North

Qatar Petroleum/Anadarko

Not Appointed

Wintershall, Germany

150

Execution

Acid Gas Removal Pant in Dukhan

Qatar Petroleum (QP)

Technip, Qatar

Not Appointed

350

EPC Bid

Melamine Project at Mesaieed

Qatar Melamine Co.

Eurotecnica/Urea Casale

QECC

250

Execution

Petrochemical Complex at Ras Laffan

QP /ExxonMobil Corporation

Not Appointed

Not Appointed

3000

FEED Bid

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

Qatar Petroleum (QP)

J Ray McDermott, Dubai

100

Execution

Oryx GTL - Phase 2

QP/Sasol/Chevron

Not Appointed

1400

Study

Gas Pipeline Network within Ras Laffan Industrial City

Qatar Petroleum

Mott MacDonald Qatar

Larsen & Toubro, Qatar

123

Execution

Olefins Complex

QP/ Shell

Not Appointed

Not Appointed

2500

Study

QATAR

       

     



        "$ #   

$  

   !""     

66

Oil&Gas Middle East December 2009

www.arabianoilandgas.com


PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Condensate Refinery at Ras Laffan

Laffan Refinery Company

Technip, Qatar

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

602

Execution

Pearl GTL Project - Pipelines Package

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

J Ray McDermott

150

Execution

Q-Chem 2

Q-Chem

Aker Kvaerner

Daewoo Engineering & Construction, Qatar

700

Execution

Pearl GTL Project - Package C8

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

Veolia/Saipem/Al Jaber

101 - 250

Execution

Pearl GTL Project - Storage Tanks Package

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

CB&I

400

Execution

QVC Expansion Project

QVC

Not Appointed

Not Appointed

31 -100

Study

Ras Laffan-Mesaieed Ethylene Pipeline

Q Chem ll / Ras Laffan Olefins Co.

Punj Lloyd

45

Execution

Methanol Capacity Expansion at Mesaieed

Qafac

Mustang Tampa

Not Appointed

501 - 750

FEED

Gas to Liquids Project-3 (Pearl GTL)

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

Consolidated Contractors International Company (CCC)

16000

Execution

Low Density Polyethylene Unit at Mesaieed

Qapco

Uhde

Uhde/Tefken

549

Execution

Al Shaheen Project - Packages 17 & 18

Maersk Oil Qatar

NPCC

600

Execution

HFO Bunkering Project

Qatar Petroleum

Maritime Industrial Services

60

Execution

Condensate Refinery at Ras Laffan - Phase 2

Laffan Refinery Company

Not Appointed

800

Study

Al Khaleej Gas Development Phase 2 - Onshore Package

Exxon Mobil/ Ras Gas

Chiyoda

Chiyoda/Technip

1600

Execution

Plateau Maintenance Project

Qatargas

Technip, Qatar

Not Appointed

1200

EPC Bid

Al Shaheen Project - Package 13

Maersk Oil Qatar

J Ray McDermott

185

Execution

Two New Glycol Regeneration Trains in Dukhan

Qatar Petroleum

Worley Parsons

Qatar Kentz

101 - 250

Execution

Ras Gas 3 - Trains 6 & 7

Rasgas 3

Chiyoda Foster Wheeler

Chiyoda/Technip

13000

Execution

Qafco V

Qafco

Not Appointed

Saipem/ Hyundai Engineering & Construction Co

3200

Execution

Al Shaheen Project - Package 12

Maersk Oil Qatar

Qatar Engineering & Construction Company

100

Execution

reliability focused engineering

www.aesseal.com

contact: don van rooyen email: donvr@aesseal.co.za tel: +971 4 2669595 / +971 2 6778700 cell: +971 (0) 508120142

www.arabianoilandgas.com

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

• • • • •

solutions extending equipment life

December 2009 Oil&Gas Middle East

67


PROJECTS Project Title

Client

Headworks for Muaither RPS and Associated Pipelines

Qatar General Electricity & Water Corporation (Kahramaa)

Consultant

EPC Contractor

Budget ($M)

Status

Al Waha Contracting

109

Execution

Ethane Cracker cum Aromatics Complex at Mesaieed

QP/Honam

Foster Wheeler

Not Appointed

3500

EPC Bid

Common Sulphur Project

DEL

Washington Group International

Not Appointed

101 - 250

FEED

Pearl GTL Project - Wellhead Platforms Package

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

J Ray McDermott

300

Execution

Al Khaleej Gas Development Phase 2 - Offshore Package

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

Chiyoda Corporation, Qatar

J Ray McDermott, Qatar

300

Execution

Gas Sweetening Facilities Integrated Project at Mesaieed

Qatar Petroleum

Worley Parsons

Not Appointed

350

EPC Bid

Doha Urban Pipeline Relocation Project

Qatar Petroleum

Tebodin

Punj Lloyd

181

Execution

Pearl GTL Project - Package C2

QP/Royal Dutch/Shell

JGC Corporation/Halliburton

Linde

900

Execution

Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Marjan, Zuluf and Safaniya Oil Fields Upgrade

Saudi Aramco

WorleyParsons

J Ray McDermott

250

Execution

South Rub Al Khali Gas Development

SRAK

KCA Deutag Drilling

2000

Execution

5 Sulfur Recovery Units in Uthmaniyah & Shedgum

Saudi Aramco

Imad Company for Trading & Contracting

150

Execution

Stroytransgaz

200

Execution

ABB Lummus Global

350

Execution

SAUDI ARABIA

Shbab-1 Oil Pipeline Project

Saudi Aramco

Sasref Refinery - Ultra-low Sulphur Diesel Complex

Sasref

ABB Lummus Global

Jubail-2 Export Refinery - Pipeline and Offsite Package

Saudi Aramco/Total

Technip

Gulf Consolidated Contractors (GCC)

300

Execution

Onshore Maintenance Potential Project

Saudi Aramco

RHM/CAT/Suedrohrbau

300

Execution

Sasref Refinery - Control Systems Upgrade

Sasref

Petrocon Arabia / Yokogawa Middle East

100

Execution

Biaxially Oriented Polypropylene Plant (BOPP) in Dammam

Rowad National Plastics Co.

Yanbu Gas Plant Expansion

Saudi Aramco

Jubail-2 Export Refinery - Distillation and Hydrotreating

Saudi Aramco / Total

Jacobs Engineering Inc.

DMT Technology Holding

53

Execution

Enppi

180

Execution

Tecnicas Reunidas (TR)

1200

Execution

Petrochemical Complex - Polyolefins Package

SCP

Parsons E&C

Daelim Industrial Company

1200

Execution

Ras Tanura Refinery

Saudi Aramco

WorleyParsons

Not Appointed

8000

Feed

Ras Abu Ali Upgrade

Saudi Aramco

Zuhair Fayez Partnership Consultants

Bonatti S.p.A

160

Execution

Hawiyah Plant Expansion

Saudi Aramco

Jacobs Engineering Inc.

Tecnicas Reunidas

400

Execution

Shedgum - Yanbu NGL Line Expansion - Phase 2

Saudi Aramco

Suedrohrbau

200

Execution

Ras Tanura Refinery - DHT Unit

Saudi Aramco

Samsung Saudi Arabia Ltd.

500

Execution

Refining & Integrated Petrochemicals Complex

Nama

Not Appointed

1500

Study

Ebgaig - Al Khobar Natural Gas Pipeline

SWCC

Not Appointed

100

FEED

Ethylene Amines Project At Jubail

Arabian Amines Company

Jacobs Engineering / Burns & McDonnell Engineering

Hyundai E&CC / Hanwha E & C

300

Execution

Jubail - 2 Export Refinery - Aromatics Plant

Saudi Aramco / Total

Axens

Samsung Saudi Arabia Ltd.

650

Execution

Jubail-2 Export Refinery - Coker Unit Package

Saudi Aramco / Total

Foster Wheeler

Samsung Saudi Arabia Ltd / Chiyoda Corporation

850

Execution

Karan Field Exploration - Platforms Package

Saudi Aramco

J Ray McDermott

500

Execution

Foster Wheeler

New Domestic Refinery in Jubail

Saudi Aramco

Not Appointed

5000

EPC Bid

Jubail Petrochemical Complex - Phase 3

Sipchem

Not Appointed

8000

EPC Bid

Petrochemicals Complex in Yanbu

Saudi Aramco / Sabic

Not Appointed

Not Appointed

3000

Study

Karan Field Exploration - Onshore Elements Package - Gas Facilities

Saudi Aramco

Foster Wheeler /A. Al Saihati , A. Fattani & Al Othman Consulting Engineering Company (Sofcon)

Hyundai Engineering & Construction Company (HDEC)/ Petrofac

600

Execution

Rabigh Refinery Expansion - Phase 2

Petro-Rabigh / Saudi Aramco / Sumitomo Corporation

JGC Corporation

Not Appointed

4000

FEED

Ammonia Plant In Jubail

Sipchem

Haldor Topsoe

Not Appointed

10

FEED

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

Saudi Aramco

Jacobs Engineering Group Inc.

Snamprogetti / Imad Company for Trading & Contracting

1300

Execution

Yanbu Export Refinery - Hydrocracker Package

Saudi Aramco/ConocoPhilips

Kellogg Brown & Root (KBR)

Not Appointed

1200

EPC Bid

Jubail-2 Export Refinery - Storage Tank Package

Saudi Aramco / Total

Technip, Saudi Arabia

Punj LIoyd Ltd / Petro Steel

1000

Execution

Karan Field Exploration - Offshore Elements Package

Saudi Aramco

Petrocon Arabia, Saudi Arabia

J Ray McDermott

1000

Execution

Fertiliser Complex Expansion at Jubail - Urea & Ammonia Plant

Saudi Arabian Fertilizer Company (Safco)

Not Appointed

150

EPC Bid

68

Oil&Gas Middle East December 2009

www.arabianoilandgas.com


PROJECTS Project Title

Client

Wafra Steam Injection - Phase 2

Chevron / Saudi Aramco

Consultant

EPC Contractor

Budget ($M)

Status

Saudi Arabian Texaco INC

500

Execution

Jubail - 2 Export Refinery - Plant Utilities Package

Saudi Aramco / Total

Technip

SK Engineering & Construction

150

Execution

Manifa Oil Field Redevelopment - Onshore Package

Saudi Aramco

Foster Wheeler

JGC Corporation / TR / Snamprogetti

2500

Execution

Manifa Oil Field Redevelopment - Platforms Package

Saudi Aramco

J Ray McDermott, Saudi Arabia

800

Execution

Ras Tanura Petrochemicals Complex

Saudi Aramco / Dow

ASU at Jubail

National Industrial Gas Company (GAS)

Petrokemya - 4 in Jubail

Petrokemya

Upgrade of the Oil Refinery at Yanbu

Sasref Refinery Expansion

Kellogg Brown & Root

Not Appointed

17000

FEED

Samsung Saudi Arabia Ltd.

300

Execution

Technip / Aker Kvaerner

Not Appointed

10

FEED

Saudi Aramco Mobil Refinery Company Ltd. (Samref)

Worley Parsons, Saudi Arabia

Worley Parsons, Saudi Arabia

2000

Execution

Sasref

ABB Lummus Global

Not Appointed

275

FEED

Client

Consultant

EPC Contractor

Budget ($M)

Status

Replacement of Oil & Water Pipelines

Adma - Opco

Technip / Worley Parsons, Abu Dhabi

Adnoc Storage Facility in Hamriyah Free Zone

Takreer

Borouge Complex Expansion - Phase 2: Offsites and Utililies

AUH Polymers Company

Hail Field Development

ADCO / Gasco

Crude Oil Pipeline Replacement

Zadco

OGD-3/ AGD-2 - Pack 2

GASCO

OGD-3/ AGD-2 - Pack 4 Green Diesel Project in Ruwais

UNITED ARAB EMIRATES Project Title

Costain

900

Execution

Not Appointed

150

EPC Bid

Foster Wheeler

Technicas Reunidas

1230

Execution

Not Appointed

Not Appointed

749

Study

Not Appointed

300

EPC Bid

Bechtel

Bechtel

1460

Execution

GASCO

Bechtel

Snamprogetti

1420

Execution

Takreer

Wood Group Mustang

GS Engineering & Construction

350

Execution

Umm Shaif Gas Injection Facilities

Adma - Opco

WorleyParsons

Hyundai Heavy Industries

1597

Execution

Modifications to 41 Well Head Towers

Adma - Opco

WorleyParsons

Not Appointed

150

EPC Bid

www.arabianoilandgas.com

December 2009 Oil&Gas Middle East

69


PROJECTS Project Title

Client

Consultant

EPC Contractor

Budget ($M)

Status

Zakum West Gas Processing Facilities Project

Adma - Opco

Technip

Technip / NPCC

300

Execution

Asab Full Field Development

ADCO

Foster Wheeler

Petrofac

1000

Execution

Bab Oil field Development - Phase 2

ADCO

Technip

SK Engineering & Construction Company

805

Execution

Gas Processing Facility in UAQ

Gulf Energy Company

Technip/Kvaerner

Not Appointed

120

EPC Bid

Umm al Dalkh Full Field Development

Zadco

Not Appointed

Not Appointed

650

Study

Sahil Phase-2 Development

ADCO

Foster Wheeler

Tecnicas Reunidas / CCC

250

Execution

Onshore and offshore Sour Gas Development

ADNOC / ConocoPhilips

Fluor Corporation

Not Appointed

10000

EPC Bid

IGD - Gas Processing Platform - Pack 6

Adnoc / Adma-Opco

Fluor Corporation Abu Dhabi

NPCC

405

Execution

Borouge Complex Expansion - Phase 2: Olefins Conversion Unit

AUH Polymers Company

ABB Lummus Global, Abu Dhabi

Samsung Corporation, Dubai

300

Execution

Fertil Plant Expansion

Fertil

Jacobs Engineering

Not Appointed

450

EPC Bid

OAG Network-Das Island Compression Facilities

Adgas

Fluor Corporation

Technip

610

Execution

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

Gasco

Fluor Corporation

NPCC

241

Execution

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

Gasco

Fluor Corporation

CCC

400

Execution

OGD-3/ AGD-2 Pack 3

GASCO

Bechtel

Bechtel

1241

Execution

Borouge Complex Expansion - Phase 2: Ethane Cracker

AUH Polymers Company

Linde

1100

Execution

Development of Qusahwira & Bida Al-Qemzan Fields

ADCO

Not Appointed

1800

EPC Bid

Taweelah-Qidfa Gas Pipeline

DEL

Stroytransgaz, Abu Dhabi

418

Execution

Asab Gas Development (AGD) Modifications - Package 1

GASCO

Veco Engineering

Not Appointed

500

EPC Bid

Jebel Dhanna Crude Oil Storage Tanks

Adco

ILF Consulting

Not Appointed

100

EPC Bid

LNG Storage Hub in Techno Park, Dubai

DMCC / Techno Park / LNG Impel

Not Appointed

2000

FEED

Umm Al Lulu Oil Field Development

Zadco

Tebodin Middle East, Abu Dhabi

Not Appointed

1500

EPC Bid

New Refinery in Fujairah

AGOL

Mott MacDonald

Not Appointed

1000

Study

Borouge Complex Expansion - Phase 3: PDH & Phenolics Complex

AUH Polymers Company

Not Appointed

Not Appointed

1000

Study

Abu Dhabi Gas Grid

ADNOC Distribution

Not Appointed

Not Appointed

1000

Pre FEED Bid

Zirku Production Facilities Debottlenecking

Zadco

Technip, Abu Dhabi

Not Appointed

450

EPC Bid

Upper Zakum - Fujairah Oil Pipeline

IPIC/Conoco Phillips

WorleyParsons

China Petroleum Construction Corporation

3290

Execution

Flowlines & Wellhead Installations to ADCO

Abu Dhabi Company for Onshore Oil Operations (ADCO)

Mott MacDonald

Al Husam General Contracting

100

Execution

Tank Terminals in Fujairah

Emarat

Penspen International

Not Appointed

22

EPC Bid

Khubai-Margham Gas Pipeline

Margham Dubai Est.

Parsons Brinkerhoff

Not Appointed

30

FEED

Integrity Enhancement of Fire Protection System at Umm Al Nar Refinery

Takreer

Not Appointed

Not Appointed

15

EPC Bid

Integrated Gas Development (IGD) - Das Island Process & Utilities Package

Adnoc / Adgas

Fluor Corporation

Hyundai Heavy Industries(HHI),Abu Dhabi

1000

Execution

Satah Full Field Development

Zadco

Tebodin Middle East, Abu Dhabi

Not Appointed

250

FEED

Expansion of Sulphur Handling Facility in Ruwais

Takreer

Washington Group Int'l

Dodsal

272

Execution

Cathodic Protection on Wellhead Casing in Bab and Ruwais Fields

ADCO

ILF Consulting Engineers, Abu Dhabi

EMDAD LLC, Abu Dhabi/ Alsa Engineering

27

Execution

Gas Exploration Facilities - Kahaif, Moveyid and Sajaa

BP Exploration Operating Co Ltd(BP Sharjah)

AMEC, Abu Dhabi

Not Appointed

500

FEED

Expansion of Ruwais Refinery - Package 1

Takreer

Bechtel

Not Appointed

400

EPC Bid

Crude Oil Storage Tanks at Umm al-Nar Refinery

Takreer

Engineers India Ltd

Al Hussam General Contracting

33

Execution

Washington Group International / Veco Engineering

New SCADA System at Umm Shaif and Lower Zakum

Adma - Opco

WorleyParsons

Telvent

50

Execution

Integrated Gas Development (IGD) - Ruwais Storage Tanks Package

Gasco / Adnoc

Fluor Corporation

Chicago Bridge & Iron (CB&I), Dubai

533

Execution

NGL Pipeline from Asab to Ruwais

Gasco

VECO

Dodsal

153

Execution

Gas Injection Topsides at Upper Zakum

Zadco

Technip

Not Appointed

400

FEED

Shah Full Field Development

Adco

Foster Wheeler

CCC / Tecnicas Reunidas

250

Execution

Integrated Gas Development (IGD) - Ruwais 4th NGL Train Package

ADNOC / Gasco

Fluor Corporation, Abu Dhabi

Petrofac International / GS Engineering & Construction

2100

Execution

Refinery in Fujairah

IPIC

Foster Wheeler

Not Appointed

12000

Concept

70

Oil&Gas Middle East December 2009

www.arabianoilandgas.com


CLASSIFIEDS

CER

ION

SWISS

TI

F I C AT

ISO 9001:2000 ISO 14001:2004

Leaders in Fluid Engineering

www.arabianbusiness.com/energy

December 2009 Oil&Gas Middle East

71


FACE TO FACE

FACETOFACE

Waleed Refaay, managing director, Society of Petroleum Engineers Middle East, North Africa and India

SPE enjoying global growth What role does the SPE play today? SPE provides a worldwide forum for sharing technology, knowledge and the latest solutions for overcoming the technical challenges of finding and producing more oil and gas reserves. SPE also helps address critical issues of the future such as sustainability and carbon capture. SPE members can access this global body of knowledge through SPE conferences and exhibitions, online resources including access to more than 80 000 technical papers, magazines, peer-reviewed journals, books, short courses and local section meetings. A vital part of SPE’s mission is maintaining high professional standards by offering members continuing education options globally. SPE Petroleum Engineering Professional Certification offers an international credential recognising petroleum engineering expertise. Has 2009 been a difficult year for the SPE? Over the past year, SPE has responded to the global economic crisis that has significantly impacted the upstream oil and

natural gas industry. In the midst of this downturn, members have been relying more than ever on SPE for global access to technical knowledge from world-class experts, networking opportunities and professional resources that help them solve problems and improve performance. In 2009, SPE took many actions to mitigate the impact of the poor economy, while keeping the quality of our programmes high. These include moving events to major oil centres to reduce travel costs in response to company travel cutbacks. We added new online technical resources, and addressed the language and culture needs of members worldwide with locally specific solutions. What are your hopes and expectations for 2010? SPE continues to grow and add new members globally. We remain financially strong. Our focus is on providing the highest quality technical content and access to the latest technology that our members need in order to carry out their jobs better, wherever they are located, through the conferences, publications and online resources that we offer.

“We believe that SPE has a unique position in providing technical content”

72

Oil&Gas Middle East December 2009

What trends have you seen in the market over the past year? We believe that SPE has a unique position in providing technical content. We are pursuing opportunities to partner with other professional societies on events to offer more multidisciplinary content at our events and through joint exhibitions. We know our efforts to work more closely together on the operation of conferences will be appreciated by the petroleum industry in this region.

programmes help to accelerate the transition of these young members into careers by offering professional and technical skill development through workshops, publications, section networking groups and online mentoring. We are also working to attract more young people to our profession through scholarships and other similar programmes.

What challenges are you currently facing? Our challenges are good ones – meeting the needs of a growing membership. SPE has had extraordinary growth globally. In addition, we have an increasing number of members age 35 and under. Preparing young people for careers in our industry remains an industry priority. SPE’s

Waleed Refaay, managing director, SPE Middle East

www.arabianoilandgas.com


ntributing to our future

Š desert: Total / T. Gonzalez

Imagine if discovering gas and developing its production became a priority to satisfy global energy demand

Worldwide demand for natural gas is growing at a greater pace than for any other fossil fuel. As a forerunner in the chain of LNG specialists, Total is pursuing developments in natural gas around the world by setting up new projects in Australia, Norway, Qatar, Yemen and Nigeria, because satisfying the planet’s energy needs is our priority. www.total.com

Our energy is your energy


Oil & Gas Middle East - Dec 2009