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A A W ECI G O SP


FROM THE EDITOR’S DESK No 21

Mar-Apr 2012

VALUE CREATION AND RETENTION 12 20 A L W ECIA OG SP

DESIGN Senior Art Director Sandesh S. Rangnekar Senior Designer M. Balagopalan Senior Photographer Rajesh Burman Photographer Basim Al Maharbi Production Manager Ramesh Govindraj MARKETING Senior Advertising Managers Shivkumar Gaitonde Avi Titus Senior Media Sales Excutive Girija Shankar Mohanty CORPORATE Chief Executive Sandeep Sehgal Executive Vice President Alpana Roy Senior Business Support Executive Radha Kumar Distribution United Media Services LLC Published by United Press & Publishing LLC PO Box 3305, Ruwi, Postal Code - 112 Muscat, Sultanate of Oman Tel: (968) 24700896, Fax: (968) 24707939 Email: akshay@umsoman.com All rights reserved. No part of this publication may be reproduced without the written permission of the publisher. The publisher does not accept responsibility for any loss occasioned to any person or organisation acting or refraining as a result of material in this publication. OER accepts no responsibility for advertising content. Copyright © 2012 United Press & Publishing LLC Printed by Oriental Printing Press Correspondence should be sent to: Oil & Gas Review United Media Services LLC PO Box 3305, Ruwi 112, Sultanate of Oman Fax: (968)24707939 Email: akshay@umsoman.com

THE BIG CHALLENGE

I

n the quest to integrate the local economies with global market-place for a fast paced growth, many countries tend to ignore one aspect – in-country value! They often realize that though they are building huge economies but the fruits of the economic growth are not optimally retained in the local community. Does it mean that we should all shun market capitalism and become a social welfare state? Not really. There could be a balanced approach which not only encourages profit generation but also motivates the corporates to become a true socially responsible citizen by working hard towards creating value and working doubly hard on retaining it within the local community in a sustainable manner. Oman has adopted a very ambitious but wise policy of maximising in-country value. The oil & gas major Petroleum Development Oman (PDO) which has been the breeding ground for leadership development has once again taken the lead in showing the right path in this direction. It has implemented a detailed multi-dimensional plan to generate thousands of new employment opportunities for Omanis and significantly increasing the spending on Omani products & services. And it has shared the company’s short-term and long-term targets on various counts bringing in a high degree of transparency. Taking a cue, the other lead players in the oil & gas sector are working on developing similar plans and integrating them in their overall business strategy. For optimal benefits, all the leading companies in various sectors need to follow suit and develop their own initiatives without compromising on their strategic business objectives beyond the acceptable level. Like PDO, others should also set prior targets and measure them periodically. If we could create an additional 10 per cent in-country value, it translates into billions of dollars in a year! Enjoy reading the issue!

Akshay Bhatnagar Group Managing Editor akshay@umsoman.com

An

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Presentation

Mar-Apr, 2012

Read the emag: www.ogronline.com


Leaders in Catering and Multi Service in the Sultanate of Oman For over 25 years, SOCAT L.L.C has been providing service solutions to all kind of sectors in the Sultanate of Oman. Founded in 1985, SOCAT LLC is operated by a Technical Service Agreement with the French based international company SODEXO. Every day, 413,000 SODEXO employees dedicate themselves to the well being and comfort of millions of customers in over 80 countries around the world. SOCAT gained the experience and “the know-how” to provide tailor made service solutions to companies operating in the Sultanate of Oman. From the Oil and Gas sector to civil engineering, whether it is in the capital or thousands of kilometers away in the most remote areas, SOCAT LLC services 90,000 meals daily and contributes to the well-being and development of Omani society.

SOCAT delivers an array of services including but not limited to • Catering • Housekeeping • Laundry • Pest Control • Cleaning • Landscaping • Environmental Services • Preventive and Corrective Maintenance • Camp Building and set up • Building Maintenance • TV and Satellite systems By adopting our program, you will be teaming up with a reliable partner that can deliver and manage virtually all aspects of your operations and have everything running smoothly from day one. For Oman, SOCAT LLC - unique provider, is perfectly positioned to make it happen

HACCP, ISO 9001 & ISO 22000 For Central Ware House Certified

Tel: +968 24400700, Fax: +968 24400777, Commercial Dept. Direct Tel: +968 24400712 P.O. Box 232, Code 111, CPO, Sultanate of Oman, Web Site: www.socat.com

High Standards

Years of experience around the Globe

Competitive rates to suit client needs


CONTENT

COVER STORY PETROLEUM DEVELOPMENT OMAN

26

Maximising In-Country Value

30

Increased Production REGULARS:

8 Oman News 14 In the News 60 OPEC Market Report 64 Regional Round-Up

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4

Mar-Apr, 2012

68 Global Round-Up 71 Tenders 79 Job Postings 80 Book Corner


CONTENT HR DEVELOPMENT

COMMERCIAL VEH VEHICLES

36 MB Holding Co.’s New Leadership

40

Development Programme

INTERVIEW

Mercedes-Benz – The Brand You Can Trust

BEYOND OIL & GAS:

44

LG’s New Notebooks IWC’s Portofino Chronograph Watch h

Sherif El Sayed Country Manager-Oman, GL Noble Dento

Luxury Yachts Guess Fragrances Bespoke Rolls-Royce Ghost

COLUMN

Veronica – Floating Luxury

774

54 Abdalla S. El-Badri Secretary General, OPEC

EVENT REPORTS

MARKETING FEATURES

18 OPAL-10 Years of Excellence

48 Mott MacDonald

20 In-Country Value (ICV)

49 Global Industrial Services

Conference

22 Oil & Gas West Asia (OGWA)

22 6

Exhibition & Conference 2012

Mar-Apr, 2012

50 Sodexo/Socat 51 Hempel


OMAN NEWS

Gutech starts a new programme in Petroleum Geoscience The German University of Technology in Oman (GUtech) will start its new Master’s of Science programme in Petroleum Geoscience in the second week of March, according to Professor Dr. Wiekert Visser, Head of the MSc programme in Petroleum Geoscience at GUtech. The main goal of the part-time programme is to accommodate students who are already working in the oil, gas and mining industry or related ministries and who would like to continue their academic studies. The GUtech Executive Masters have been designed by professors of the Department of Geosciences at RWTH Aachen University in Germany, GUtech’s parent-university. “The courses are fully integrated into the needs of the oil and gas industry worldwide,” said Professor Wiekert, who himself has a vast background in the oil and gas industry, with over 20 years of work experience at Shell International including five years in Oman. “During the MSc programme, the students will study how hydrocarbons are formed, how they are stored in the subsurface reservoirs and how they are produced,” said Professor Wiekert. The key disciplines of the programme are geology, geophysics, geochemistry, petrophysics and reservoir engineering. In addition, a large number of minor subjects are offered, such as unconventional oil and gas deposits.”Anybody with a B.Sc in Geosciences and an IELTS score of at least 6.0 can apply for the MSc programme.

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Renaissance revenue up 14.4pc Renaissance Services SAOG, the Omani-based international oil and gas services company, recently announced its preliminary results for the year ended December 31, 2011. Renaissance is expected to post revenues of RO290 million, up by more than 14 per cent from RO253 million in 2010, according to a company statement. However net profit in 2011, at RO2.3 million, was impacted by a series of extraordinary items which the company has successfully addressed. The total cost of one-off items amounted to RO11.4 million, but was partially offset by a RO3.1 million

write-back of tax provisions, based on a recent tax ruling issued by the Supreme Court in Oman on foreign dividends. The company achieved strong revenue growth and operational performance for 2011. Stephen Thomas, CEO of Renaissance, said, “The fundamental business of Renaissance and the opportunities for the company’s future growth remain strong. In 2011, we addressed a series of one-off operational challenges and we are now well-placed to move forward and progress the company’s dynamic growth strategy.”

Shell Oman Marketing celebrates 1,000 days LTI free For a company that has thousands of customers driving in everyday across more than 150 stations, a fleet of tankers delivering inflammable products across the length and breadth of Oman and storage and distribution operations at different locations, Shell Oman Marketing Company has achieved a new milestone in having done 1,000 days with no lost-time-due to injury (LTI). In line with the Shell Group’s global vision of “Goal Zero” which is having Zero incidents, Shell Oman adopted a series of strict measures over the past few years to eliminate/reduce incidents across all of its operations. Khamis Al-Siyabi, Corporate and Retail HSSE manager remarked, “It is indeed a matter of pride that we are able to carry out our work in a safe environment free from incidents. We have tried over the years to spread the message of safety not only to our employees, but also to our contractors, business partners, our customers and the Omani society at large through different means including conducting specialized training, road safety shows, print advertising and a tie up with local authorities.”


Oman LNG offers RO1.5mn support to health sector

Omanoil signs for a new filling station in Sohar Oman Oil Marketing Company (omanoil) has signed an agreement with local community contractor, Port City Development, for the establishment of a state-of-the-art forecourt located in Sohar’s Industrial Area which will feature a filling station, ahlain convenience store and quick service restaurants to serve a perpetually growing demand. Omanoil’s strategized retail network is matching the country’s aspiring economic development for a sustainable future while providing its customers throughout the Sultanate with excellent products and services. “The newest addition to our growing retail network realizes our commitment to the nation and its people by enriching projects that fulfill His Majesty’s Vision 2020. By aligning and assimilating the nation’s ambitions with our own, we are pursuing parallel paths of progress and contributing to the nation’s economic and social advancement,” said Hussain bin Jama Al Ishaqi, Omanoil Retail General Manager. “We will harness our strategic location in Sohar’s flourishing port and meet customer demands for quality products and innovative services through our philosophy of convenient one-stop-shopping experiences.”

Glori Energy gets an EOR contract from PDO Glori Energy, a leader in sustainable, enhanced oil recovery and provider of the AERO (Activated Environment for Recovery of Oil) System, has signed a field implementation contract with Petroleum Development Oman (PDO). Under the agreement, Glori will deploy its AERO System for enhanced oil recovery into an existing PDO field in southern Oman. When compared to alternative enhanced oil recovery methods, Glori’s technology, which is based on natural biologic processes, has a much lower cost and is more environmentally sustainable. Under the contract, Glori immediately deploys resources and commences its S3 Process to customize the AEROTM System for the PDO field. Upon completion of the customized solution, Glori’s team will work with PDO to implement the AEROTM System in the field. In support of this contract and other opportunities in the region, Glori will expand the capabilities of its regional office located in Muscat, Oman. “Glori is delighted to have the opportunity to enter into this field implementation project with PDO,” said Stuart Page, CEO of Glori Energy. “As our first Middle East project, this contract represents a key expansion of Glori’s geographical scope and establishes a footprint for Glori in a very important oil region. Glori has demonstrated compelling results in field projects in the US and looks forward to achieving similar success in Oman.”

A total of nine MoUs were signed between Oman LNG and Ministry of Health under which Oman LNG offered RO 1.5 million to support health sector in Oman. The signatories to the MoUs were Dr Darwish bin Saif al Mahrabi, Under-Secretary for Administrative and Financial Affairs at the Ministry of Health and Dr Brian Denis Buckley, General Manager and Chief Executive of Oman LNG. The fund will equip seven hospitals and medical institutes, including Jalan Bani Bu Ali Hospital, Royal Hospital, Ibra Hospital, Ibra Institute of Nursing, Sultan Qaboos Hospital in Salalah, Khoula Hospital and Sur General Hospital with some cutting-edge medical technologies and infrastructure. Terming the Oman LNG’s initiative as unique, Dr Darwish said the nature of all the agreements were core health business, education and training and the agreements focused primarily on promoting the health services sector. Dr Buckley termed this to be a partnership with the Ministry of Health to boost one of the most important sectors in the country under the company’s corporate social responsibility (CSR). He said: “The goal here is to contribute towards country’s development especially to provide people with quality healthcare through our partnership with Ministry of Health. Supporting the health sector has been always on our top priority, so that will eventually make the medical centres and hospitals ready to support the country’s growth and aspirations.”

Mar-Apr, 2012

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OMAN NEWS

Shell’s seminar on ‘The Journey Towards Future Energy’ Shell hell recently conducted an Energy Seminar ed by Shell technical experts Devin Garrity, Garrity led Shareholder Representative and Director and; Dr. Elaine Leith, Shell Technology Oman Manager

who shared the Shell story on ‘The Journey Towards Future Energy’ Energy’. The seminar was organized by Shell Chair and Oil and Gas Research Center, at Sultan Qaboos University. It was used

as a platform for Engineering faculty and students to explore the challenges and opportunities of the Energy future affecting the globe and the MENA region. Devin Garrity highlighted: “As populations grow and energy demand surges, the strains on the environment will intensify. Many scientists agree we need to halve CO2 emissions to avoid serious climate change. Shell is working with partners to help meet the world’s future energy ne needs responsibly.” Dr. Elaine Leith added, “S “Shell invests $1 billion per year in technology res research and development, more than any other inte international oil company. We are developing tec technologies to enhance oil recovery, as well as to enable us to go into deeper and more ch challenging locations to produce oil and gas, all in an effort to produce more energy, in a clean and smart way”.

United Engineering Services acquire assets in Malaysia United Engineering Services (UES), one of the leading engineering oilfield services provider and a subsidiary of MB Holding LLC, has announced the acquisition of Professional Power Craft (PPC) International Sdn Bhd and Wise Marine assets. Both companies are based in Malaysia. Having started operations in 1979, today UES is among the leading oil field services companies in Oman having completed three decades of operations. With a publicly announced commitment to proactively address the Oman and regional maritime/defence and security sectors, this strategic acquisition provides UES, the engineering design and manufacturing arm of MB Holding, an entry into the advanced composites industry. These company portfolios are complementary to the Aluships and Oceanco acquisitions last year and brings the advanced composite built fast interceptor craft manufacturing portfolio to Oman. Usama Al Barwani, Managing Director, United Engineering Services, said “I have been determined to ensure that UES remains at the forefront of engineering excellence and an effective way to achieve this is by expanding into newer fields and facets of engineering and also establishing ourselves in more higher value expertise. I am delighted to have secured this capability through the acquisition of Professional Power Craft and Wise Marine assets. Professional Power Craft is a leading player internationally in the composite material domain catering to the marine industry. This acquisition makes us the only company in Oman that uses 3D infusion technology for advance composite materials. We will be developing a tailored training and development programme for Oman careers in this leading edge capability.”

Omanoil added 10 more filling stations in 2011 Oman Oil Marketing Company (omanoil) ended 2011 with over 1 billion liters in fuel sales and 10 new filling stations to make up a total of 132 to date, earning its position as the fastest growing 10

Mar-Apr, 2012

retail network in the Sultanate, according to a company statement. Oman’s visionary fuels and lubricants marketing company is set to revel in 2012 with a resolute retail network

expansion of five new strategically located filling stations designed to augment the nation’s infrastructure development blueprint, the first of which is already operational in Saqsuq, Barka. Confidently maintaining the company’s growth engine status, Omanoil’s year on year retail business unit volume has grown by more than 20 per cent due to the opening of new service stations and enhanced customer services, with additional facilities offered at filling stations. Expansion plans will incorporate developments to continue upgrading existing retail facilities with customers’ best interest in mind. In its journey to achieving total satisfaction and sustaining the level of excellence for the thousands it serves every day, Omanoil will adopt state-of-the-art technology, implement rigorous staff training programmes and explore new business activities.


OMAN NEWS

Blood disorder patients graduated training funded by PDO Petroleum Development Oman (PDO) recently organized a special graduation ceremony for 48 blood disorder patients. The event held under the auspices of Dr. Muna bin Salim al Jardaniya, Undersecretary for Technical Education & Vocational Training, Ministry of Manpower, paved the way for these individuals who have successfully completed a PDO-funded intensive - training in office work that included IT, Accounting, English Language and Administration to find suitable jobs. The initiative was initiated in July last year when PDO joined hands with the Oman Hereditary Blood Disorders Association (OHBDA) to help this non-profit organization provide blood disorder awareness programmes with a view to curbing the spread of the blood disorder diseases in Oman and helping these affected young men and women improve the quality of their life. “We hope to have provided these young people with some key skills and tools that should enable them to improve the quality of their life and to find additional sources of sustainable income” said PDO’s Managing Director, Raoul Restucci at the graduation ceremony. “In July last year PDO signed a memorandum of understanding (MOU) with OHBDA to fund the training of 48 patients from all over the country in order to develop their skills,” Restucci said. “They have since completed training courses where they studied IT, Accounting, English and Administration” he added.

Topaz Energy & Marine secures GAC Marine contract Renaissance Services subsidiary Topaz Energy & Marine has been awarded a contract from GAC Group to provide completion services for two crew/cargo vessels. Topaz’s NicoCraft shipyard in Abu Dhabi has been awarded the contract based on the shipyard’s capabilities and established track record. The construction and engineering works that will be undertaken as part of the contract include structural works, outfitting and equipment installation. Upon delivery, the vessels will be approximately 22 metres long, will carry 24 passengers plus 7 crew, as well as up to 15 tonnes of cargo. Johan Fulke, Managing Director - Marine Services of GAC Marine LLC, said, “NicoCraft has all the specifications we were looking for in a GCC-based company; they are industry professionals who know how to deliver the right end-product on time and within budget. This contract marks the start of an exciting new relationship for both our companies.” GAC is a global provider of integrated shipping, logistics, marine and related services with operations in over 300 offices worldwide. Thomas Bower, Managing Director of the Topaz Marine Engineering Division, commented, “Our first contract win with GAC is further recognition that our combined expertise in the construction and repair of aluminium and steel vessels are truly world class. The shipyard has successfully delivered over 20 vessels in the last 3 years,and has gained international recognition as an efficient and safety conscious operation.” Bower added, “This contract also reaffirms NicoCraft’s ability to grow and leverage its credentials beyond regional players, attracting global companies such as GAC to come and build at its shipyard. We look forward to a long-term, collaborative partnership between the two companies.”

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Mar-Apr, 2012


ORPIC ACHIEVES RECORD RESULTS ORPIC, Oman’s integrated refining and petrochemicals business, has reported production of 46.99 million barrels of fuel in 2011, a record performance that represented a 34.16 per cent increase over 2010. The company’s’ refineries used 58.01 million barrel of crude oil during 2011 which is 16.7 percent higher than the amount used in 2010. The company’s Sohar Refinery produced 32.17 million barrels of gasoline, gas oil, liquid petroleum gas and aviation fuel, marking a 67.16 per cent increase over the year before. Mina Al Fahal Refinery produced 14.82 million barrels. The overall production of both Sohar and Mina Al Fahal refineries saw an overall increase of 34 per cent in 2011 when compared to 2010. The increase reflects more effective utilisation of the plants, helping to deliver greater profitability for the company. These production rates helped ORPIC to increase its supply of fuels to the domestic market. During the second half of the year, Orpic supplied 100 per cent of the nation’s increasing gasoline and diesel requirements, leading to a large reduction in imports of these products. Fuel imports decreased from five million barrels recorded

for 2010 to only one million barrels in 2011; these were imported during the first half of 2011 and no barrels were imported in the second half of the year. ORPIC had announced its preliminary financial results, reporting operating profits of RO150 million, an increase of $470 million over 2010. Musab Al Mahruqi, CEO of ORPIC, said: “As the major producer of fuels in Oman, we really do keep the nation moving. The more fuel we produce, the less the country has to import. In 2011, we achieved our highest production rates ever, with almost 47 million barrels of fuel for cars, trucks, ships and planes used locally and the surplus was exported to the international markets. Fuel production rates were boosted by the improved operational performance of ORPIC’s plants. Sohar Refinery had stable operation at capacity levels and above for most of the year, with average throughout at 93 per cent of capacity, compared to a historical annual rate not exceeding 75 per cent in 2010. At MAF Refinery, the company recorded an 85 per cent performance for the year.�

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IN THE NEWS

VALE’S $1.36BN INDUSTRIAL COMPLEX INAUGURATED Vale achieved full production capacity of 9 million metric tons per year at its US$1.36 billion Industrial Complex in the Port of Sohar. By creating a ‘virtual iron ore mine’, the global diversified mining company’s operations in the Sultanate of Oman will contribute to solidifying the country’s frontier market status and competitiveness in the global economy as a base for integrated steel production in the Middle East, North Africa and Asia, including India. The company’s operations in Oman employ 1,200 people of which 450 are Vale direct employees and 750 are contractors working on site, with another 3,120 jobs generated indirectly. The company has achieved an Omanization rate of more than 60 per cent amongst its direct employees. Vale’s Industrial Complex comprises of two pelletizing units, each with a nominal production capacity of 4.5 million metric tons of directreduction pellets per year, and a Distribution Center with a throughput capacity of 40 million metric tons per year. The company’s first production line commenced operations in April 2011, successfully supplying pellets to key steel producers in the region. To maximize its Distribution Center capabilities, Vale partnered with Sohar Industrial Port Company to build a 1.4 kilometer deep-water terminal. This terminal is one of the first ports in the world to receive Very Large Ore Carriers (VLOCs) that boast a capacity of 400,000 tons and are responsible for transporting the world’s purest iron ore from Brazil to the shores of the Sultanate. The Pelletizing Plant and Distribution Center in Oman, together with a floating transfer station in Subic Bay in the Philippines, a Distribution Center and Port under construction in Malaysia and the VLOCs, are part of Vale’s strategy to increase its flexibility and competitiveness in serving the world’s fastest growing markets, on an equal footing with its closest competitors. “We have a solid commitment to Oman,” said Vale President & CEO, Murilo Ferreira. “We have joined forces with the government, the private sector and the community where we operate to catalyze 14

Mar-Apr, 2012

sustainable development. At each stage, we ensure that our relationships with our partners are based on transparency, respect and trust.” Vale has invested US$40 million in technologies to reduce the project’s environmental impact, such as electrostatic precipitators and a 3,150 meter wind fence to control particulate matter emissions. The site also has a continuous emissions monitoring system and 100% of the water used is recycled. To augment its highly efficient logistics system, Vale has signed an agreement with Oman Shipping Company to build four chartered ships exclusively for the company’s use. Two vessels are scheduled to become operational by mid 2012 while the other two by the end of 2012. “Over the last 41 years, Oman has established itself as a unique development model amongst its neighbors,” said Marcos Beluco, Vale’s Country Manager. “His Majesty Sultan Qaboos bin Said’s Vision 2020 is based on self-sustained growth in a private sectorled and export-oriented economy. In line with this vision, we have created a virtual iron ore

mine in the Sultanate that will support its steel intensive phase of economic development and serve the growing demand in the region.” Beluco explained that Vale is dedicated to realizing the nation’s efforts to significantly reduce its dependence on oil by diversifying economic resources. The company’s Pelletizing Plant and Distribution Center will assist in creating a natural pull for downstream industries, attracting large multi-national companies to the region which will in turn provide a greater incentive for service industries to capitalize on the Sultanate’s competitive advantage. From the onset, Vale has played an instrumental role in building a solid industrial infrastructure by positively promoting the development of the local economy through extensive social, economic and environmental investments. These investments are not only limited to physical assets but extend to sustainable social development, environment protection and preservation, job generation and advancement of the local supply chain.


IN THE NEWS

First in GCC - Voltamp Manufactures 125 MVA Transformer for OETC

Voltamp Power LLC, a fully owned subsidiary of Voltamp Energy SAOG, successfully Tested 125 MVA 132/33 kV Power Transformers in presence of engineers from Oman Electricity Transmission Company SAOC (OETC). The transformer was 100% manufactured at their Sohar Power Transformer Factory located in the Sohar Industrial Area, Sultanate of Oman. This is the first of the four units of 125 MVA order received from OETC last year. The balance three units are also in advanced stage of completion and will be delivered in the next 2 months.

Nos. 20 MVA orders from Majan Electricity Co. and Raykun Al Yaqeen International LLC, a private Contractor for a Project in Oman. Voltamp assures a World Class product at competitive prices. Voltamp has been at the forefront of introducing hi-tech electrical products manufactured in the Sultanate. It was the first manufacturing unit in the Sultanate to introduce LV Switchgears in 1987, later Distribution Transformer in 1992 and now the Power Transformers up to 315 MVA 220 kV Class. Voltamp is well reputed in the Region for Quality product and services.

“With the operation of this new World Class Power Transformer Plant our dream has come true. We can now cater to Oman’s requirement for the complete range, from pole mounted to the Extra high Voltage 220 kV Class Power Transformers. We want to cut Oman / GCC’s dependence of sourcing them from outside the Region. We are committed to offer European Quality at local prices and local service backup” says Qais bin Mohamed Al Yousef, Chairman, VOLTAMP ENERGY SAOG.

Ala Hassan Moosa , AGM Marketing and HR at Sohar, says “This is perhaps the first factory manufacturing hi-tech capital goods in Oman and this 125MVA transformer is indeed the first unit of this capacity to have been manufactured in the GCC. Commissioning of this factory is a proud moment for Oman and all Omanis. Voltamp now gratefully seeks support and orders from Omani companies in order to make this venture a grand success.”

Earlier in December 2011, Voltamp Power received an approval from DCRP, Oman for 20 MVA 33/11.5 kV Power Transformer. Voltamp is the first and only local Omani Company to have been accorded this approval. Voltamp will manufacture the large Power Transformers at their new World Class facility at Sohar, Oman. Voltamp bagged orders for total of 15

Last year Voltamp’s Power Transformer Factory was formally inaugurated by H.H. Sayyid Shihab bin Tariq Al Said on Wednesday, 5th October 2011 in presence of distinguished personnel from the Ministries, Government, Semi-Government, Oman Utility Companies, Oil & Gas Sector, Industries, Banks, Financials Institutions, etc. The first 20 MVA 33/11.5

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kV Power Transformer was successfully type tested for Short circuit tested at KEMA, Netherlands in August 2011. This World Class Power Transformer manufacturing facility which was has built at a Project cost of RO 11 Million with a built up area of 14,500 sq m over a plot of total 80,000 sqm. The Technology providers are the Tatung Company of Taiwan. Aasit M. Naik, General Manager, Central Marketing adds “Voltamp also has proven capabilities for repairs of transformers up to 315 MVA 220 kV Class. We have a dedicated Engineering Service Division which has so far repaired 42 different makes of Transformers. This capability is also unbeatable in the GCC. In addition to Power & Distribution Transformers across all ranks and types, including Corrugated Tank Transformers. Adds Pronab Chakraborty, General Manager, Switchgear SBU, “We are also a premier manufacturer of low voltage Switchgear and packaged substations, including the Intelligent Motor Control Systems in the Oil & Gas sector, which has found extensive application. Voltamp Energy SAOG is a public company incorporated in the Sultanate of Oman and the shares are listed on the Muscat Stock Exchange. It currently produces a large range of power and distribution transformers, low voltage switchgear and package sub-stations through its 4 manufacturing units located in Rusayl and Sohar, Oman.


EVENT

OPAL – 10 YEARS

O

man Society for Petroleum Services (OPAL) celebrated its tenth anniversary at the Grand Hyatt Hotel in February. The event commemorated the decade-long journey of enhancing the local workforce and thus providing value addition to the thriving oil and gas sector of the Sultanate of Oman. The event was held under the auspices of Nasser bin Khamis al Jashmi, Under-Secretary of the Ministry of Oil and Gas and attended by a large audience comprising government officials and OPAL member companies.

On the occasion Mohamed al Harthy, CEO, OPAL said: “This event is an opportunity to show gratitude to those who had the vision of coming up with the idea of founding the society and those who worked hard to make it a proud organisation we all know today. We at OPAL are fully committed to continuously providing a platform for our more than 320 member companies while delivering the best training and development to the Omani youth.” 18

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OF EXCELLENCE

Mar-Apr, 2012

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EVENT

BUILDING THE FUTURE

The In-Country Value (ICV) conference hosted by Oman Society for Petroleum Services (OPAL) explores the potential of a comprehensive ICV strategy for Oman’s oil and gas sector, reports Muhammed Nafie

Mohamed Al Harthy, CEO of OPAL and Secretary of In-Country Value Committee

T

he overriding objective of Oman’s Vision 2020 was to transform the country’s oil wealth into a broader-

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based industrial wealth by developing industrial competence that will induce growth in the economy and sustain it after oil and gas. Although much has

been done in this direction by investing in people and reducing the dependency on imported goods and services, a lot more needs to be done for developing


talented technical professionals and stimulating the productivity of local industries. An ambitious stride towards achieving this goal was the recent conference on maximising in-country value (ICV) across the oil industry in the Sultanate, organised by the Oman Society for Petroleum Services (OPAL) under the auspices of Nasser bin Khamis al Jashmi, Under-Secretary of the Ministry of Oil and Gas. ICV refers to the total spend retained in country that can benefit business development, contribute to human capability development and stimulate productivity in the Omani economy. In addition, ICV also entails setting standards and expectations, lobbying for change, identifying enablers, raising awareness and accountability. An integrated ICV programme which OPAL and the Ministry of Oil & Gas sponsor seeks to achieve increased employment of skilled Omanis by creating more meaningful jobs, and set up a self-sufficient repair/servicing and manufacturing industry to serve the oil and gas sector and other industries in Oman and the region. The conference was the first milestone in the development of ICV in the Oman’s oil and gas sector, bringing companies and leaders and subject matter experts together to exchange views, discuss and debate the concept to further enhance the development of ICV. Themed ‘Deepening InCountry Value Strategy in Oman’, the conference germinated from the belief that formation of an ICV strategy in the oil and gas sector is of significant importance to the national economy of the country. The conference was aimed at laying the foundation which will eventually support job creation, human capability building and establishing industries

to support the oil and gas sector with products and services provided by Omanis. The presentations and discussions at the conference revolved around the perspectives of the government, operators, contractors and suppliers on in-country value opportunities.The conference brought together key oil and gas industry stakeholders to examine the progress of ICV development in Oman and share best practices in the delivery of ICV through skills development, job creation, local manufacturing etc. It also provided an opportunity for Oil and Gas operators to share contracting and procurement opportunities for Omani companies. Speaking on the occasion, Al Jashmi said that the government accorded top priority to In- Country Value Strategy by setting up an Oil and Gas ICV Committee, chaired by himself and with various ministries and the CEO’s of Oil and Gas companies as members. “This is the start of an ongoing collective engagement between government, contractors and operators,” he said. “We need more commitment from Omani contractors to this government strategy. We need them to invest in capability and capacity development in Oman. We want them to take advantage of the oil sector to create a center of excellence and a knowledge based hub to manage other areas. Most importantly, we want them to help create a sustainable environment for local businesses to thrive.” “The in-country value strategy can create immense value for the nation, in terms of developing manufacturing and services, employment generation and educating and training Omani professionals,” said Mohamed Al Harthy, CEO of OPAL and Secretary of In-Country Value Committee.

“This is the start of a journey and it will take the commitment of all of us here to maximise the ICV delivery in our country. I know this is a true differentiator for Oman as a nation, for Oman within the GCC and for Oman as a ‘player’ in the international oil and gas arena. “This is a journey in which we all win and most importantly we will be taking the necessary steps to building industrial competences and capabilities within Oman, which are internationally competitive. This will also lead to the transformation of oil wealth in to a broader based industrial wealth, which will create sustainable employment within Oman for many decades to come, even after our Oil and Gas has declined significantly.” “The introduction of international standards both in goods and services is fundamental and this is equally important in training. When we train our people to international standards, they then become part of the global skill pool in their chosen profession and can be internationally mobile,” added al Harthy. Ernest Nwapa, CEO of the Nigerian Content Development and Monitoring Board, and Willy Olsen, senior advisor to INTSOK, a foundation established by the government and the Norwegian Oil and Gas industry, were the guest speakers at the conference. Mohamd Al Toki, CEO, Grofin MENA Region, gave a presentation on what Grofin has to offer for helping support ICV business development in Oman. There were also panel discussions with the top executives of BP, Oxy and PDO and other members of the Oil and Gas ICV Committee. The conference was followed by two ‘Wave 1 ICV Opportunities’ workshops at PDO’s HLD Training Centre. Mar-Apr, 2012

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EVENT

MEETING OF MINDS

Oil & Gas West Asia (OGWA) Exhibition and Conference 2012 shapes the region’s Oil and Gas industry

O

man continues to be an attractive investment destination for international oil firms and to dominate the overall structure of the economy. With the country’s burgeoning demand for oil and gas, the government is investing in billion-dollar projects in large-scale exploration and expansion projects to help boost oil and gas production, enhanced oil recovery techniques, discovery of new oil and gas fields, and assessment of potential alternative energy. As Oman gains momentum as a global player, Omanexpo highlights these developments in the 8th edition of Oil & Gas West Asia (OGWA) Exhibition and Conference, recognized internationally as a high-profile event for the region’s oil and gas industry. It is set to be held from April 16 to 18, 2012 at the Oman International Exhibition Centre. It will be inaugurated by His Majesty Sultan Qaboos bin Said’s personal representative His Highness Sayyid Assad bin Tariq Al Said. OGWA is a gathering of local and international oil and gas companies companies from the GCC, technology and service providers, equipment suppliers, and other companies directly serving the industry’s requirements. Since its launch, it has been receiving the patronage of the Ministry of Oil & Gas, Petroleum Development Oman, Oman LNG, and other leading companies. For the first time, it will co-organize the OGWA Forum with IIR Middle East,

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EVENT

which will be from April 15 to 16 at the Radisson Blu Hotel, Muscat. The forum will focus on “New Dynamics in Sustainable Oil and Gas: Investment, Opportunities and Cooperation” and is targeted at C-level executives, managing directors, general managers and senior managers shaping the petroleum sector in West Asia. It is a platform for exclusive dialogue among the region’s NOCs and IOCs. The industry’s movers, shakers, policy makers, and the brightest and the best in oil and gas will share their insights into the direction of optimized and integrated Upstream and Downstream sectors. OGWA will also hold the SPE EOR Conference alongside the exhibition, and will focus on discussing enhancing the recovery of oil through new technology and techniques in order to maintain production of hydrocarbons and liquefied natural gas. OGWA 2012 is supported by The Ministry of Oil & Gas, Petroleum Development Oman, Oman Chamber of Commerce & Industry and Oman Society for Petroleum Services. The show’s roster of partners includes IIR Middle East and Oman International Exhibition Centre (Strategic Partners), Society of Petroleum Engineers (Conference Content Partner), Agility (Official Logistics Partner), Gulf Energy (Lanyard Sponsor), and Intercontinental Hotel Muscat (Official Hotel). For more information on OGWA 2012, you may contact Gaith Aloul at +968 99712077, or gaith.aloul@omanexpo.com or visit www.ogwaexpo.com

The Media Partner of OGWA 2012 24

Mar-Apr, 2012


COVER STORY

Raoul Restucci, Managing Director of PDO

MAXIMISING INCOUNTRY VALUE Petroleum Development Oman (PDO) has embarked on an ambitious plan to secure long-term sustainable commercial benefits for the Sultanate and generate thousands of new employment opportunities for the nationals 26

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P

etroleum Development Oman’s (PDO) role as the Sultanate’s largest company and a national champion means that it has a special responsibility to support the vision and guidance of His Majesty Sultan Qaboos and His Government in establishing increased employment and development opportunities. In the second half of 2011, PDO developed the blueprint for a new “In-Country Value” strategy, aimed at supporting local community companies, increasing the procurement of local goods and services, and improving the capacity and capability of the Omani people and companies in order to secure long-term sustainable commercial benefits for the Sultanate. PDO has identified three primary drivers for developing In-Country Value. They include: License to Operate – To comply with and build on the National Objectives Programme and applicable local laws and address government and local community expectations. Sustainable Development – Contribute to the Omani society and economic growth and to the development of local communities to achieve a mutually beneficial and sustainable environment for carrying out oil and gas operations. Commercial Benefits – In the execution of PDO’s activities, improve the capacity and capability of the Omani people and companies with which it engages, in order to achieve reductions in costs of PDO’s operations, whilst creating sustainable In-Country Value development and increased Gross National Product. Throughout 2011, together with the Ministry of Oil and Gas and the

In response to His Majesty Sultan Qaboos’ directives to create 50,000 jobs for Omani nationals, PDO committed to employ an extra 1,000 Omanis throughout its operations and provide 200 scholarships

contractor community, PDO worked to maximise In-Country Value and established clear targets throughout its operations. As a direct result, by the year-end, PDO had created close to 4,300 new jobs for Omanis while awarding 25 percent of its well engineering contracts to Omani-owned enterprises. However, that’s not all. The oil & gas major has set ambitious targets for In-Country Value in the coming years. It plans to double the number of skilled Omanis employed by the contracting community from the current 15 percent to 30 percent by the third quarter of 2013. It also intends to increase the spending on in-country goods by $100 million per annum with a target of 50 percent of total spending on in-country goods by 2020. PDO plans to increase the spending on in-country services by $100 million per annum with a target of 75 percent of total spending on in-country services by 2020. In early 2012, PDO jointly set up a new In-Country Value (ICV) committee under the leadership of Nasser bin Khamis al Jashmi, Undersecretary at the Ministry of Oil and Gas, OPAL, other operators, and its contractor community to develop a common and integrated approach to local job creation and goods and services delivery. The first ICV conference was organized recently along with a programme of practical workshops aimed at turning its blueprints into reality.

“In response to His Majesty Sultan Qaboos’ directives to create 50,000 jobs for Omani nationals, PDO committed to employ an extra 1,000 Omanis throughout its operations and provide 200 scholarships. Working with its contractors, PDO interviewed thousands of citizens in multiple locations and successfully recruited more than 4,000 people, four times more than the Company’s original promise,” said Raoul Restucci, Managing Director of PDO. In addition, PDO and its contractors launched several training initiatives aimed at securing the future employment of skilled Omanis. In 2011 and early 2012, more than 295 Omanis started on-the-job training with PDO contractors at four training centres with an additional 87 workshop technicians being trained by PDO in Fahud. Additionally, PDO is providing on-thejob technical assistance training to 36 people who have started work in several PDO departments. PDO’s highly successful flagship Technician Omanisation Programme (TOP) is expected to be expanded from training 90 young Omanis a year to 270 over the next two years. In all, the number of Omani people interviewed and recruited by PDO and placed with contractors was more than 3,500 while an additional 787 new staff and trainees were recruited by PDO directly. As of December 31, an all-time record of 4,722 Omanis were employed at PDO Mar-Apr, 2012

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bringing the Company’s Omanisation rate to over 80 percent. An integral element of PDO’s policy of providing In-Country Value is its work and relationships with local Omani businesses. Over the years, PDO has supported many Omaniowned companies, and is now working to support the next phase of local company development through the new Government-established Super Local Community Contractors (SLCCs), four of which (two in the North, two in the South) have been assigned to PDO. PDO has established a dedicated team 28

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helping SLCCs identify and develop business opportunities. This included specially ring fenced work contracts assigned to each of the four SLCCs covering PDO’s core business, including the supply of well pulling hoists, flow line replacements and oil well maintenance. In addition to the allocation of these contracts, the Company has provided dedicated support to the SLCCs. It has appointed a business consultant to help and guide SLCCs to develop their business plans and setting up HSE and management systems that meet industry standards. It has seconded PDO’s

experienced staff members to each of the four companies to help them better understand oil and gas operations. It is training Omanis living in the concession area so that they are suitably skilled for employment by SLCCs. It has allocated industrial plots and workshops at PDOowned locations and purchases all the necessary equipment to execute the assigned work. “PDO will continue to expand the use of local community companies in its concession area and they will be bidding for work in various PDO projects,” added Restucci.


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SERVICES Automation Services • Commissioning and Startup • Scheduled Onsite Support • Emergency Onsite Support • Instrument Verification• Metering Validation Mechanical Services • Retrofitting of Mechanical Seals • Fishing, Milling, Casing patching, Perforation • High Temperature & Pressure Pipeline Repair Valve Automation • Integration & Testing• Repair & Onsite Service


COVER STORY

INCREASED PRODUCTION

Notwithstanding the challenge of developing increasingly complex reserves, Petroleum Development Oman (PDO) remains committed to a long-term oil production target of 550,000 barrels per day for the coming years.

“P

etroleum Development Oman (PDO) continues to implement and seek best practice to ensure that it continues to provide a sustainable stream of oil and gas, the income of which can be used for the benefit of the nation and people of the Sultanate of Oman. This intensive and technology-lead effort has paid off, and for the fourth successive year, combined production of oil, condensate and gas has increased,” said Raoul Restucci, Managing Director of PDO.

Raoul Restucci, Managing Director of PDO

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OIL & GAS PRODUCTION IN 2011 In 2011, PDO’s total production of hydrocarbons stood at 1,206,000 barrels per day, the second highest barrels of oil equivalent production on record. Daily oil and condensate production in 2011 stood at 549,280 and 93,600 barrels per day respectively, and non-associated and associated gas production at 463,000 and 85,000 barrels of oil equivalent respectively. The performance has been consistent with PDO’s long-term oil targets of 540,000-560,000 barrels a day and plans to grow gas production. This is the second highest off-take rate in PDO’s history (in terms of barrels of oil equivalent), exceeded only in 2001 when production reached 1.21 million barrels per day. “Our objective remains the delivery of sustainable long-term


production targets, underpinned by the optimal exploitation and development of Oman’s hydrocarbon resources. It focuses on maximising recovery from conventional oil and gas fields and increasingly exploring for unconventional opportunities. In this respect, 2011 proved to be a very special year for PDO in that we secured strong reserves replacement ratios in excess of our production for both oil and gas, but we also identified new unconventional opportunities that are expected to provide longer-term sustainability and growth to PDO’s production plans,” said Restucci. On the oil front, PDO’s Exploration Department identified the light tight oil potential prospectivity; two wells were drilled in the South and one well in the North, results of which are very encouraging. Contrary to conventional discoveries, unconventional plays have greater potential, the scope and opportunity of which can dramatically change the supply landscape just as unconventional gas has changed the North American landscape. “Over the next few

years, there will be an appraisal campaign to define the extent and distribution of the oil across the prospective areas, but confirming commerciality will only happen in later years, if appraisal and testing is successful,” informed Restucci. For more than half a century, PDO’s exploration teams have been looking for oil and gas in the Company’s concession area known as Block 6. In the process, PDO has discovered more than 120 commercial oil and gas fields. “We believe that there is still potential for further significant discoveries. PDO’s shareholders agree with us, and in recent years, have committed financial resources that have allowed us to continue to expand our exploratory work. Between 2006 and 2011, we made eight major discoveries and 2011 was no exception,” said Restucci. In the greater Lekhwair area in the northeast of PDO’s concession area, an exploration team made two additional oil discoveries close to existing oilfields; Lekwhair-724 and Mazkhour-5. Both discoveries are in the Upper Shuaiba

reservoir (Cretaceous age) and have already been connected up to existing local PDO facilities for production. Early test results are very encouraging for PDO with a combined production rate from these two wells in excess of 2,600 barrels per day. In the south of Oman, PDO exploration well Sakhiya-21 discovered oil in an intra-salt Ara stringer carbonate reservoir near the Harweel production station. The oil-bearing unit represents a new stringer objective with excellent reservoir parameters that had not previously been recognised in the Ara stratigraphy. The well sustained an oil flow of over 1,800 barrels per day during the production test. The eventual recoverable volumes from the field, including the use of miscible gas injection as a secondary recovery scheme, is expected to be over 35 million barrels of oil. For its part, PDO’s gas exploration team also had a successful year with yet another gas discovery in 2011

Mar-Apr, 2012

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at Rabiha-1, in the north of PDO’s concession area. The new discovery is 10 kilometres to the southwest of the Khulud South discovery announced in 2010 and 6.5 kilometres west of the Khulud West gas discovery revealed last year. Rabiha was one of the four wells drilled targeting unconventional gas reserves in the Haima group. “The Ghudun sandstone, in which the gas is trapped, is fully preserved in Rabiha and is of reasonably good reservoir quality, but its distribution in the surrounding area needs to be studied in more detail. The well flowed gas to the surface during a flow test, and an appraisal well is planned in 2012 to properly assess reservoir distribution and commerciality,” stated Restucci. He added, “Overall, these discoveries of both oil and gas come from a variety of reservoirs and depths, demonstrating the significant potential that continues to be available in the PDO concession area. As a result, PDO will continue its extensive efforts to find both new oil and new gas fields.” Over the coming years, PDO plans to continue to invest in 3D seismic acquisition using state-of-the-art technology known as wide azimuth. PDO started 3D seismic data acquisition using special seismic teams working round-the-clock in south Oman in early 2010. Since then, PDO has acquired data covering over 7,500 square kilometres, and in 2012, will launch a major new seismic acquisition drive in north Oman’s Al Huwaisa/Yibal area covering an area of 7,500 square kilometres. “PDO’s widespread use of wide azimuth 3D data collection reflects a policy of using the most modern technology as and when it becomes commercially available. Often PDO is a regional, and sometimes, global pioneer in the development of new technology. One example of early-stage technology 32

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uptake is the use of what is called Time Frequency Electromagnetic Profiling, the latest innovation using electromagnetic signals to seek out hydrocarbons in underground reservoirs. This technology was originally developed in China and is on trial by PDO in the Marmul area, the first time this technology will be used in the Middle East. If successful, the technology could be utilised across PDO’s operations,” informed Restucci. Another technology being implemented by PDO, as a premier for this region, is a process known as hydrofrac monitoring. The technique is based on lowering a number of geophones into an observation well to record micro-seismic events. In effect, the

technology listens to energy emissions that result when reservoir rock crack, a natural process known as fraccing. By identifying the location of each frac, geologists can identify the best place to drill exploration and production wells. In the second half of 2011, PDO performed the region’s first hydrofrac monitoring test in the Amin Tight Gas Reservoir Formation. The trial was conducted in some extreme conditions, namely a 5,000 metre deep reservoir with a downhole temperature of around 175°C. Results are currently being evaluated and a second test will take place in 2012 at the Khulud field. “Our ability to continue delivering oil and gas at the sustainable levels we have set ourselves, depends on the


“Our other steam injection project at Amal is progressing as planned and is on target for first production in the first half of 2013. The project’s control room has already been completed and key equipment such as the steam generator and water treatment plant are already on-site,” informed Restucci. PDO’s Gas Directorate has also had a busy year delivering new projects. Gas fields in PDO’s concession area are operated by the Company on behalf of the Government of Oman, which owns all the non-associated gas resources in Block 6. Increasingly, production from aging gas fields requires extra effort in order to be maintained.

successful execution of a steady stream of major new oil and gas projects. In fact, we need to bring on-stream at least one major new project a year if we are to continue achieving our long-term oil production target of 540,000 to 560,000 barrels per day. At present, we have 750 million barrels of hydrocarbon resources under development across a number of major projects in the execution phase,” Restucci said. In late 2011, PDO achieved first production and first steam at its Qarn Alam steam project, a major enhanced oil recovery project. 2,700 tons of steam is being pumped into underground reservoirs at Qarn Alam, which will help release much of the heavy crude oil from the field. Production will increase incrementally over time, and thanks to the steam

injection, the field is expected to reach a production plateau of 40,000 barrels per day of crude oil in 2015-2016. In south Oman, PDO continues to work towards the completion of what is without a doubt the most complex and technologically ambitious project ever undertaken by the Company, the Harweel miscible gas project. More akin to a chemical plant than a conventional oil facility, the Harweel plant was completed last year but pre-commissioning tests revealed anomalies in some critical equipment. To ensure safety and integrity of the facilities, this equipment is now in the process of being repaired, and where necessary, replaced and the plant is expected to come on stream by the second quarter of 2012.

Most gas flows naturally to surface, but over time, gas starts flowing at a slower rate. To counteract this decline, PDO has turned to depletion compression, which uses powerful compressors to boost the recovery of gas from underground reservoirs. Two major depletion compression projects are currently underway. The first, at Kauther, is almost complete and is scheduled for start-up in the second half of 2012. The second, at Saih Nihayda, is well underway with major equipment already ordered and construction advancing ahead of schedule. The project is expected to be completed in the middle of 2013. PDO is also working to develop a new gas field in Lekhwair. Site construction activities have already started and design contracts awarded. The project involves construction of a gas processing facility that will treat an average of three million standard cubic metres per day of gas. The project will comprise a single train in the Lekhwair gas plant for exporting gas to the Government Gas Plant in Yibal, while condensate will be delivered to the existing Lekhwair production station. In many fields, oil flow starts declining Mar-Apr, 2012

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COVER STORY

after less than 30 percent of the reserves have been produced. Maintaining the life of each field and ensuring maximum recovery is one of PDO’s strategic priorities. In effect, each oilfield has to be individually nurtured by petroleum engineers with tailor-made strategies. For example, the Marmul oilfield in south Oman has been producing oil since 1980. By 2004, production had fallen by close to 40 percent from its peak. Since then, a series of interventions starting with water injection, and more recently polymer injection have resulted in a steady increase in the field’s production. Despite its age, Marmul is currently producing more than ever before. It is hardly surprising that given the large number of new fields being developed and the search for new oil reserves at existing fields that one of PDO’s biggest costs is drilling. “Over the past five years, PDO Well Engineering Directorate has worked intensively to improve efficiency and reduce costs. For example, in 2007 the average well cost $1,000 per metre and took over three hours to drill. By 2011, this had fallen to $875 per metre and less than two-and-a-half hours drilling time,” said Restucci. He added, “Before PDO commits financial resources to implementing capital-intensive EOR projects, it carries out intensive studies to ensure that the right technology is chosen. In many cases, small-scale field trials are carried out to make sure that the chosen technology works in practice. In 2011, one such trial was held at the Habhab field in south Oman. “The field with an estimated 2.4 billion barrels of oil was originally discovered in 1982, but the heavy nature of the crude meant that it was impossible at that time to produce. Today, petroleum engineers are working to identify 34

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enhanced recovery solutions. As a first step, PDO engineers, working with local contractors, installed a temporary steam generating facility able to inject up to 130 tons of steam a day into the reservoir, 1,600 metres below the surface. Within a few days, oil was successfully brought to the surface. PDO’s petroleum engineering teams are currently evaluating results and progress with additional recovery, state-of-theart, technologies for comparison and longer-term development selection.” With 1.2 billion barrels of oil in place, the Amin field is PDO’s seventh largest oilfield. Even though just 13 percent of that oil has been produced, output has been falling, meaning that there is plenty of potential for increased recovery if the right technology can be adopted. PDO’s geologists and petroleum engineers believe that the field can produce as much as it has to date, if not more. Studies carried out by the Company suggest that capital-intensive Enhanced Oil Recovery (EOR) technologies such as steam or polymer injection might not necessarily provide the best solution or value for money. Instead, PDO is considering plans to inject water into underground aquifers below the reservoir in order to maintain pressure and enable wells to continue producing at stable rates over the next few years. The Amin Infill and Water Injection Project involves the drilling of 118 horizontal producing wells and a further 35 vertical injection wells that will pump up to 70,000 cubic metres a day of water deep underground to help sustain oil production. Water injection provides a cost-effective solution and gives PDO time to continue studying EOR that could be implemented in the years to come. LOOKING AHEAD “The ongoing efforts by PDO and

its highly-trained employees mean that the Company is well placed to continue delivering value to the nation and people of Oman. PDO’s long term potential, specifically its ability to continue to produce hydrocarbons in our concession area, is matched only by the increasing complexity of its projects. The Company’s list of present and possible future projects known as the Hydrocarbon Maturation Funnel, shows just how few conventional projects are available for development,” said Restucci. He continued, “Many of our future projects are either Enhanced Oil Recovery (EOR) projects or ‘sour’ projects, meaning those involving the production of oil and gas containing hydrogen sulphide gas. In its search for gas, PDO is pursuing equally challenging opportunities. The Khulud gas discovery, first announced in 2010, has now been identified as two distinct fields: Khulud South and Khulud West. At Khulud South, five appraisal wells are planned, and the Gas Directorate is confident that the field is commercially viable. At Khulud West, further appraisal will take place in 2012, and both fields will be hooked up to an early production system allowing gas from test wells to be exported directly to the PDO gas system.” He added, “Notwithstanding the challenge of developing increasingly complex reserves, PDO remains committed to a long-term oil production target of 550,000 barrels per day for the coming years. Condensate and gas production will further enable us to target in excess of 1.2 million barrels of oil equivalent over the programme period. Our commitment is to continue providing stable oil and gas production and high returns on investment as well as wider value to the Sultanate of Oman, not just in terms of energy and revenues, but also in the form of promoting local business and employment.”


HR DEVELOPMENT

GROOMING LEADERSHIP

MB Holding Company has embarked on a unique and ambitious Leadership Development Programme to foster and create leadership talent to drive a new phase of growth in the company’s success journey. Mohammed Al Kharusi, DirectorCorporate Operations and Peter Salleh, Group Learning & Development Manager, of MB Holding Company spoke to Akshay Bhatnagar at length on the development

Mohammed Al Kharusi, Director-Corporate Operations

WHAT IS THE GREATEST LEADERSHIP CHALLENGE OMANI COMPANIES FACE ESPECIALLY WHEN THEY GROW FROM A SMALL-TO-MEDIUM SIZE TO A LARGE FIRM OR THEY ATTAIN A CRITICAL SCALE TO BECOME A MULTINATIONAL COMPANY OR THEY BECOME LARGE AT A FASTER PACE THROUGH QUICK MERGERS & ACQUISITIONS ROUTE? MOHAMMED: Most companies whether small or large do not have adequate number of staff with the 36

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potential to be developed to occupy current and future leadership positions (I call it bench strength, like in a football team) when required. For example, if one of the leaders leaves or is transferred to another role you should ideally have a competent or a groomed successor or a number of staff in reserve with adequate potential who are capable of taking that role. This equally applies with Mergers & Acquisitions that you can take one of your trusted staff from your talent pool (leader in-waiting) to take that position. The challenge is that they have to have technical/functional skills as well as the

leadership behaviours suitable for that business. That’s what we call succession planning but to do that we need to have the talent in place. We need to have “home grown” leaders with the right set of skills, capabilities and mindset and who can assume leadership roles not just in the native market but anywhere in the globe. If you look at MB as an example, we started as a trading firm in early 1980s but over a period of time the nature of our business has changed exponentially and we are no longer a local player. We have become a global company. We encourage leadership


talent with a global mindset in sync with our business vision. ‘Think Global, Act Local’ as we say. DUE TO GLOBAL ECONOMIC SLOWDOWN, WE HAVE SEEN A GROWING TREND TOWARDS COST LEADERSHIP WHERE COMPANIES ARE LOOKING AT ACHIEVING LOWEST COST OF OPERATION, MANY A TIMES AT THE EXPENSE OF LOSING BETTER TALENT AND LOWER HUMAN TALENT DEVELOPMENT INVESTMENT. WHAT IS YOUR OPINION ABOUT IT? HOW COMPANIES COULD STRIKE A BALANCE BETWEEN ESTABLISHING COST LEADERSHIP AND ACHIEVING STRATEGIC BUSINESS OBJECTIVES? MOHAMMED: If you have adequate talent in place, you can downsize. But if you don’t have enough talent then you have a problem in hand. Leadership involves not only doing the right things but also doing them cost effectively. The global economic slowdown has put pressure on companies to retain their top talent and think more creatively and cut out the unnecessary waste. This normally demands stretching your existing staff with more challenging roles or bringing in higher level skills or more investment in your human capital to enable you to achieve a lower cost of operation with fewer resources or with re-engineered processes. The balance can be achieved by looking at the cost impact of doing or cutting a specific activity and the value generated or eroded. Un-intended consequences of that decision have to be studied and mitigated. For example, if you need to automate a certain process which will lead to a lower cost of operation with less people, generating faster and higher quality results then you may have to invest in the short term in order to achieve the value in the long term, leading to a more

Peter Salleh, Group Learning & Development Manager

sustainable cost reduction. Individuals who will go through this experience will add a valuable experience to their toolkit that they would otherwise not get in a normal growth scenario. With or without a downturn, the companies must have a good Employee Value Proposition (EVP) to offer. At MB, we have Individual Development Plan (IDP) for every employee so that they are clearly aware of their career growth path and act accordingly. WHAT HAVE BEEN THE BIGGEST CHALLENGES YOU HAVE FACED IN DEVELOPING HUMAN RESOURCES WITHIN MB GROUP? HOW YOU HAVE MANAGED TO OVERCOME THEM PRIOR TO LDP HAPPENED? AND WHAT OTHER COMPANIES COULD LEARN FROM YOUR EXPERIENCE? MOHAMMED: The biggest challenge we have faced is that prior to 2008, the business grew faster than the support infrastructure such as HR, procurement, finance and their related processes. Consequently, the support processes were not developed fast enough to support the rapid growth of the business. At the same time, not enough investment was put in to

develop new processes and the relevant competences of the staff. These ideally have to be kept evergreen to cope with new business challenges and in our case evolution of human resource practices. We are on a transformation journey. We have progressively implemented what we call internally the “6 Carat HR Diamond” (see the graphic on page 39) which conceptually depicts a set of integrated processes for talent management. The six processes (the carats) are firstly, HR Functional Excellence which depicts all the processes, systems, technologies and people competences required to support the processes in HR i.e. HR in HR. The other five processes required are in the business practiced jointly by the Line and HR – we call these “HR in the Business” namely Resourcing the Business, Performance & Reward Management, Learning & Competence Development, Leadership Development and importantly, Employee Communication & Engagement. We ensured that the existing basic processes were addressed first and corrected them and then addressed the development of best practices which were not yet in place. We have now largely addressed Mar-Apr, 2012

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capable and adept at dealing with the various business issues and challenges, capitalizing the strengths and capabilities of the Group, and turning business threats to opportunities. In addition, the need to have leaders who can help drive the respective businesses to set clear business goals and agenda, inspire, motivate and develop the workforce, and help champion and facilitate the various change and business improvement initiatives across the Group.

I have always believed that our people are our biggest asset and we need to further develop our focus on this asset to ensure our future and longterm success Dr. Mohammed Al Barwani Chairman, MB Holding Company

most of these and are well on our way of achieving our vision which is : “working in close partnership with the business utilising the best in class talent management processes by 2013”. What happens is that when the companies are growing fast, they concentrate more on the business development say generating more revenue and more contracts thinking that other things can wait as they don’t impact the bottom line in the short-term! It is a major challenge for any organization that is going through this phase. As they move on, they realize the importance of building the support infrastructure and the capability of their 38

Mar-Apr, 2012

human capital to sustain the business in the long term. WHAT IS THE UNDERLYING THOUGHT BEHIND LEADERSHIP DEVELOPMENT PROGRAMME (LPD)? PETER: This is one of the defined processes within the 6 Carat Diamond. It addresses the need to “grow, develop and nurture”, and ensure a steady supply of our own leaders (i.e. the “talent pipeline”) who can assume the current and future leadership roles of the Group. It is also geared towards meeting the need to have and develop our own leaders who are

SHARE THE EXPERIENCE OF THE ORIGINATION OF THE CONCEPT AND THE PROCESS FOLLOWED IN THE DEVELOPMENT OF THE LDP. MOHAMMED: The idea was conceived just over three years ago as part and parcel of the vision for people management underpinned by the “6 Carat HR Diamond”. It was to fulfill the Group’s aspiration and commitment i.e. “Employees with leadership potential are further developed and groomed to become effective leaders by developing their leadership competencies through the appropriate training, work exposure, self-learning, coaching and a succession plan which will enable them to assume suitable leadership roles over time.” PETER: An elaborate multi-phase process was adopted in realizing and developing the LDP. We first established and articulated the “business case” for the programme and sought the businesses’ and shareholders’ support to proceed. Thereafter we designed the “blue-print” covering the what, why, who, when, where and how elements of the programme and tested this with the various key stakeholders in the Group and sought their inputs. Moving on, we identified a suitable external partner to undertake the detailed design and development of the programme based on the needs that have been identified. Consequently, two unique but inter-related programmes were


jointly developed i.e. the “Experienced Leaders Programme (ExLeP)” and the “Emerging Leaders Programme (EmLeP)”. We presented and tested the final product with the key stakeholders i.e. HR Leadership Team, followed by the shareholders & MB directors, and subsequently, the management teams of the respective companies. Based on inputs/feedback received from the above engagement process, the necessary “fine-tuning” was made to the final programme. Finally, the programme was launched towards the end of January this year with the first modules for experienced leaders and the emerging leaders delivered in February.

HR 6 CARAT DIAMOND

In putting the programme together, the Group made a substantial investment in engaging the services of a leading HR development firm, Meirc Training & Consulting, for the detailed design, development and delivery of the programme which mirrors the set of leadership competences and behaviours defined for the MB Group. These tasks included the programme objectives, content, structure, modules, learning methodology, resources and scheduling. HOW MANY LEADERS AND ‘WOULD BE LEADERS’ WOULD UNDERGO THIS PROGRAMME? MOHAMMED: We are currently

looking at about 160 existing leaders (excluding overseas companies) and about 80 emerging leaders although we expect this number to grow substantially once the assessment process has been completed. WHAT IS GOING TO BE YOUR CRITERIA TO SELECT THEM? SHARE DETAILS OF THE PROGRAMMES THEY WOULD UNDERGO AND WHAT KINDS OF SKILLS/FUNCTIONAL CAPABILITIES THEY ARE EXPECTED TO DEVELOP/ACQUIRE? MOHAMMED: Existing leaders are current managers or heads of departments occupying specific roles in the companies nominated by their respective businesses after due prioritization process and ability to complete the one year programme. Emerging leaders are staff who are in the company for more than three years with “above target performance” and in specific job grades, have the potential to occupy at least three positions above their current job level, possess a bachelor’s degree or the equivalent professional qualification, competent in spoken English and willing to commit to complete the programme within 15 months duration and nominated by their respective businesses. The leadership capabilities to be developed are divided into three areas. First is “Leading Self”. This addresses Managerial Leadership, Emotional Intelligence, Change Management, Communication and Creative Problem Solving. The second is “Leading Others”. It encompasses Team Building, Conflict Resolution, Performance Management, Coaching & Counseling. And the next is “Leading the Business”. Strategic Planning & Management, Developing and Implementing a Business Plan, Planning, Budgeting & Cost Optimization, and Customer Service are part of it. The participants will work on a business related

project to apply what they have learnt and that can add value to the businesses. WHEN FEW EMPLOYEES ARE PLACED ON A FAST TRACK GROWTH BACKED UP BY AGGRESSIVE TRAINING PROGRAMMES, MANY A TIMES THE ORDINARY ACHIEVERS WITHIN THE RANKS FEEL ALIENATED AND GETS DEMOTIVATED. HOW DO YOU PLAN TO ADDRESS THIS CRITICAL ISSUE WHICH MAY ARISE AS A RESULT OF LDP? MOHAMMED: These two LD programmes were especially designed for current and emerging leaders, and those who have been identified with the potential to assume current and future leadership roles and senior management positions in the Group. We have assessed and identified those individuals who will be required to go through this development programme. Every individual in this group will have the opportunity to go through the programme, and this will be implemented in phases over the course of the next five years – given the maximum number of 15 participants per cohort. For the rest of the MB staff, their development needs are equally taken care of. These are appropriately addressed through the existing in-house “Multi-Level Training Programme (MLTP) i.e. a programme that offers a series of training modules targeted at staff at the individual contributor, supervisory and middle management levels. This critical issue will also be addressed through coaching of the participants. Existing leaders who will manage such staff will be offered a coaching and mentoring training to support their development needs. We will be using the GROW Model as one of the techniques. This should equip them with the necessary tools and confidence to address such issues. Mar-Apr, 2012

39


COMMERCIAL VEHICLES

THE BRAND YOU CAN TRUST Riding high on the strong brand equity and product portfolio of Mercedes-Benz, Zawawi Trading Companyâ&#x20AC;&#x2122;s (ZTC) Commercial Vehicle Division is on the threshold of a new phase of growth, says David Swain, Head of Commercial Vehicle Sales & Marketing. Excerpts from an interview with him follows: TELL US ABOUT YOUR BACKGROUND AND WHAT HAS BEEN THE BRIEF TO YOU IN ZTC? Iâ&#x20AC;&#x2122;ve worked in markets such as the UK and New Zealand for many years for a variety of commercial vehicle manufacturers. As far as the Middle East is concerned, earlier in my career I spent three years in Saudi Arabia and four years in Dubai, travelling extensively through the Middle East region. I have joined Zawawi Trading to manage the growth of the commercial vehicle business. This segment has not been the focus area before for the company as passenger cars tended to take preference. My role here is to take the commercial vehicle division to the next level. My priorities being, to strengthen the sales team with more people and equip them with better sales techniques. The expansion of the network is another area that has been identified as a key driver for sales growth along with broadening our product portfolio. 40

Mar-Apr, 2012


Mar-Apr, 2012

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COMMERCIAL VEHICLES

all adds up to an excellent choice when looking at whole life costs. On the truck side, we offer a full range of commercial vehicles to suit all applications here in Oman. From specialist all-terrain vehicles through to trucks designed to operate at a GVW in excess of 250 tonnes – whatever your business we have the truck to do the job. WHAT ALTERATIONS YOU HAVE MADE IN YOUR PRODUCT PORTFOLIO MIX AND WHAT’S THE PLAN FOR 2012 AND BEYOND? We didn’t make too many changes in our product mix in 2011 but continued to expand our sales into market segments that are consistently required in Oman. We were lucky to sell into some niche areas of the market but these made up a small proportion of our sales.

HOW WAS 2011 FOR YOU? It was very good. We experienced a substantial growth over the performance of 2010 in terms of sales and profitability. Our performance in 2011 has given us an excellent platform for sales in 2012. WHAT WERE THE MAIN REASONS BEHIND THE GOOD PERFORMANCE LAST YEAR? I only joined the company in May last year so unfortunately can’t take all the credit for last year’s performance! On a serious note, we had worked very hard to generate orders towards the end of 2010 and many of those orders translated into actual business for us in the beginning of 2011which meant we started 2011 on a very strong footing. Like most other businesses in Oman, we also faced some challenges due to the flow on effect of social issues toward the beginning of the second quarter. As a result of this, much of the institutional business slowed down for a quarter or two. However, business improved in the second half of the year 42

Mar-Apr, 2012

with new tenders being floated for a large number of infrastructure development projects. In the new fiscal year, we have seen a great demand for our products. It has been a very busy start to 2012. CAN YOU TAKE US THROUGH YOUR PRODUCT RANGE? We have been the official distributor for Mercedes-Benz for over 30 years in Oman. In fact, this year is our 35th year, something we are very proud of. In the CV division, we offer the complete range of vehicles offered by Daimler for commercial operations. The commercial vehicle range starts with the ‘Viano’ which is a seven-seat multi-purpose vehicle (MPV). Our van range offers all variants from the Vito at 1.5 tonnes, the Sprinter at 2.5-5.0 tonnes, upto the Vario with an amazing 8.5 tonne capability – not bad for a van! The van range offered by Daimler is, by no means, the cheapest in the market but the depth of flexibility in payload, drivability, vehicle options and overall build quality, aligned with the brand perception of Mercedes-Benz

2012 however, is set to be a different story altogether. This year will see a lot in the approach taken to the market from Zawawi Trading Company. We have ambitious plans to expand our product range throughout the medium, heavy and extreme duty areas of the market. By introducing products from the complete range offered by Daimler, we look to expand into more markets here in Oman. This will help drive our ambitious growth plans for 2012 and beyond, ensuring sales revenues to further fund our network aspirations. Our product range will expand to take in the highly competitive medium range of vehicles, as well as highlighting such segments as Oil & Gas where Daimler has unique products that can only serve to assist those companies operating in the harsh environments offered in Oman. The Unimog is a perfect example of a vehicle highly suited to specialized operations here in Oman, but has never really been made available to commercial operations before. In addition to this, we will be introducing


the complete range of Daimler Trucks North America products to the Oman market; this brings such powerhouse products as Freightliner, Thomas Built Bus and the almost indestructible Western Star range of heavy haulage vehicles. 2012 is going to be a very busy year for products in Oman. WHAT ABOUT THE BUS SEGMENT? Zawawi enjoys the enviable position of offering a bus product in all sectors of the market here in Oman – the only down side being that we cannot and do not wish to compete in the cheaper end of the market. The bus products offered by Zawawi Trading Co. are all manufactured to the highest quality and safety standards as per Daimler’s strict productions requirements. Our range of buses starts with the Vito 10 seat minibus all the way to a Mercedes 54 seat luxury coach. The Sprinter offers an amazing array of bus variants to the PSV market, with the ability to tailor production to the customer’s demands. In addition to this, we also offer an extremely diverse range of specialized vehicles such as patient transfer vehicles, disability vehicles and full blown emergency ambulances built to meet stringent health organization requirements. In 2012, we see vans as being a significant growth area for us here in Zawawi Trading Co. We have a structured plan in place to tap into the van market, especially the niche vans segment. For example, we have a van that can seat up to five people, with storage space at the back which may be used for numerous applications (i.e. specialist tools). It is perfectly suited for many applications in the oil & gas sector. WHAT DO YOU HAVE TO OFFER IN THE TRUCK SEGMENT FOR THE OIL & GAS SECTOR & ALLIED LOGISTICS?

We have a very wide range of trucks that offers a great value to our customers in the oil & gas space. Take the example of rig moving; not an area we have had much success in up to now, but with the introduction of the Western Star range of trucks we now have access to tailor made vehicle solutions to suit all and any customer requirement. In addition to this, we can further expand on our already successful fuel tanker business, through the introduction of new product, plus expanding on the current range of vehicles offered. Once again, Unimog has yet to be viewed by the oil & gas industry; when shown the flexibility of this unique vehicle I am sure it will become an instant hit. Other than tanker operations, the oil & gas industry has been a largely untapped market for us and we see a huge potential for business here in the future. Our trucks score very highly in meeting the strict HSE norms of the oil & gas sector, so I have no doubt regarding their ability to provide the exacting solutions for operators in this crucial economic sector. DO YOU FIND THE BUSINESS DEVELOPMENT IN THIS SEGMENT PRIMARILY TENDER DRIVEN? Our experience to date has not been driven too much by tenders. However I don’t think we have particularly fared well in this sector. I believe it is primarily driven around brand and product awareness and more importantly, relationships. We are currently working on both counts to aggressively and effectively disseminate product information and further strengthen our existing relationships and foster new ones. WHICH SECTORS COMPRISE YOUR MAJOR CLIENTELE? To date, the majority of our commercial vehicle sales have been from private contractors and fleets who are involved in executing Government tenders or

infrastructure projects. We have a good working relationship with Government and public sector organizations but are looking to expand more into specialist areas, to assist in the growth of the Daimler brand of products in Oman. HOW STRONG IS YOUR SALES NETWORK AND SPARE PARTS AVAILABILITY? Currently, our retail network comprises two sales outlets and service workshops in Muscat and Salalah. We are currently finalizing our plans to expand our network this year. By travelling across the country and meeting people in the marketplace, we now have a better understanding of the requirements of the transport industry here in Oman. This has helped us to gauge what the market expects and to take suitable actions. In addition to the two locations, we have just purchased two sprinter vans which are fitted out with tools to carry out most service needs of transport operators. These are now ready to offer servicing to vehicles in locations outside Muscat and Salalah. This gives us the ability to offer services to current and prospective customers, whilst we go about putting more permanent infrastructure in place. As far as spare parts availability is concerned, we carry a range of stock commensurate with the requirements of the market. If for some reason we don’t carry it, we also have the back up of a huge regional parts distribution centre based in Dubai from which we can also supply parts. The introduction of a new dealer management system has also now given us better, more accurate data flow between departments, ensuring a consistent, positive approach to customer service. The ability to measure our performance internally, means we can now manage our operations more effectively to give our customers a better overall experience from all departments here at Zawawi Trading Company. Mar-Apr, 2012

43


INTERVIEW

PIONEERING EXCELLENCE

GL Noble Denton offers consulting expertise across the entire asset lifecycle by combining exceptional engineering and analytical skills with operational experience of offshore and onshore oil and gas assests. Sushmita Sarkhel speaks to Sherif El Sayed, Country Manager, Oman, regarding their plans in the Sultanate

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TELL US ABOUT THE STRENGTHS OF GL NOBLE DENTON THAT GIVES THE COMPANY AN EDGE IN MEETING THE UNIQUE REQUIREMENTS OF A MARKET LIKE OMAN. GL Noble Denton’s strength lies in the ability to offer clients a unique mix of local oil and gas industry knowledge supported by a global network of more than 3,000 technical experts in more than 80 countries across the world. This blend of local expertise and global experience means that we can approach our clients’ projects with in-depth knowledge of their individual operations, while also providing insight into innovative technical approaches that are being applied to oil and gas projects in other markets. Many of GL Noble Denton’s consultants are widely regarded as leaders in their fields, and our clients appreciate our ability to involve them in their projects.

82 per cent of oil and gas executives are either highly or somewhat confident about the business outlook for their company, compared with 76 per cent last year. Nearly two thirds (63 per cent) of executives plan to invest either somewhat or substantially more over the next year

providing third-party inspection services at construction sites to worldwide vendors, advanced engineering consultancy for gas distribution, asset optimization and asset integrity management for the main oil and gas operators in the Sultanate of Oman. For example, Al Rusail Power Company selected GL Noble Denton to design, install and commission a Predictive Emissions Monitoring System (PEMS) for their 665MW natural-gas-fired open cycle power station. We have also been involved in conducting feasibility studies with respect to the installation and supply of gas pipelines and are also looking at similar projects at Duqm.

Unlike other technical advisors to the oil and gas industry, GL Noble Denton prides itself on being able to provide world-class technical services and software across the entire lifecycle of any asset, anywhere in the world. We use more than 140 years of experience to help our clients plan, design and develop, operate and optimise and assure their onand off-shore assets. We work on a wide range of assets across various stages of their development, from planning new gas distribution networks in growing cities, to developing life extensions of oil platforms, testing the integrity of asset designs at our full-scale hazardous test site in the UK, and providing third party inspections for natural gas pipelines and other assets.

WHAT IS YOUR ASSESSMENT OF THE OIL & GAS MARKET IN OMAN? WHAT ARE ITS WEAKNESSES AND OPPORTUNITIES? The oil and gas market in Oman is very promising and there are a number of CAPEX Projects which will start in 2012 as well as the OPEX expenditure for the main oil and gas operators to maintain integrity, minimize the operational risks and enhance asset optimization.

KINDLY SHARE THE KEY PROJECTS THAT HAVE BEEN EXECUTED BY YOUR COMPANY IN OMAN SO FAR. Our role in projects have ranged from

GL Noble Denton has commissioned the Economist Intelligence Unit, the leading research and analyst group, to research the views and opinions of nearly 200 oil and gas industry leaders on the outlook

for the oil and gas industry in 2012. The findings were published in a report called Big Spenders in January, and reveal that oil and gas industry leaders have forecast improved performance and higher levels of capital expenditure this year despite concerns over global economic instability 82 per cent of oil and gas executives are either highly or somewhat confident about the business outlook for their company, compared with 76 per cent last year. Nearly two thirds (63 per cent) of executives plan to invest either somewhat or substantially more over the next year, particularly in the upstream sectors and nearly a third (29 per cent) of oil and gas executives said that the greatest business opportunities in 2012 will be in the Middle East region. Respondents from the Middle East are more than twice as likely to increase expenditure on research and development than their North American counterparts this year. HOW DO YOU PLAN TO CREATE A SYNC BETWEEN YOUR BUSINESS STRATEGY AND EMERGING OPPORTUNITIES IN OMAN? GL Noble Denton has a clear vision to become the leading technical advisor to the oil and gas industry and our operations in Oman (and across the Middle East) play a crucial role in this. We have developed a strong reputation in Oman for Mar-Apr, 2012

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INTERVIEW

more consistent approach according to the report, ensuring that they continually have the right level of talent. WHILE THIS APPROACH WILL HELP COMBAT FUTURE ISSUES WITH SKILLS SHORTAGES, WILL IT HELP TO RESOLVE THE IMMEDIATE NEED FOR SKILLED PROFESSIONALS THAT WILL THREATEN THE GROWTH OF THE INDUSTRY OVER THE NEXT 10 TO 15 YEARS? We think not. This is why operators will continue to rely on the expertise of third party technical advisors like GL Noble Denton, who can provide the experience needed to help oil and gas companies develop and optimise their assets, when they don’t have the right people in-house.

delivering world-class technical solutions to help clients develop and operate safe, efficient and sustainable assets, which plays directly into GL Noble Denton’s overall business strategy. We have also developed our business to reflect the continually-evolving needs of our clients. The oil and gas market has changed dramatically in recent years and demand for our services has grown as a result.

Unit’s research, the issue of skills shortage comes out of the survey as one of the major obstacles to growth over the next 12 months, not only in Oman but other countries as well. Last year, skills issues came fifth on the list of barriers and were only identified as a top three issue by 25 per cent of respondents. This year, the issue has risen to second on the list, and has been identified as a key barrier by 34 per cent of respondents.

For example, we have seen the oil and gas industry in Oman and across the world take a far more proactive approach to ensuring the safety and integrity of their assets after the tragic Macondo incident in the Gulf of Mexico in 2010. As a result, demand for our global inspection and quality assurance services have increased dramatically.

According to Big Spenders the industry’s long-standing skills gap appears to be getting oil companies’ full attention, and lessons are being learned. The report highlights specific case studies on how BP and Shell are trying to overcome the problem. BP has developed a strategy to resolve future skill shortages by moving away from the tradition of recruiting in line with the cyclical price of oil.

WHAT IS YOUR TAKE ON MEETING THE CHALLENGES OF LACK OF LOCAL FACULTY IN OMAN? According to the Economist Intelligence

In the past, companies have lowered their levels of recruitment when oil prices are low and increased recruitment in more prosperous times. Today, BP is taking a

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DO YOU THINK UNCONVENTIONAL GAS COULD CHANGE THE GAME IN THE COMING YEARS? The discovery of huge unconventional gas reserves in North America, Europe, China (shale) and Australia (coal bed methane) has caused a glut in global supply which has caused a depression in natural gas prices. But there is widespread doubt as to whether the shale gas revolution in particular will be the industry game changer some thought that it would be. What it does mean, however, is that large-scale LNG importers such as North America may be able to supply their own demand by tapping their shale gas resources, rather than bringing in LNG from regions such as the Middle East. 10 years ago, gas from shale accounted for 2 per cent of US natural gas production. Today it is approaching 30 per cent and rising. The rise of Australia’s role as an exporter of coalbed methane through LNG does pose a threat to other LNG-producing countries, however, as the country continues to ramp up the production of huge reserves.


Trusted Brands for your Prestigious Projects Al-Raid group is one of the largest multi divisional and diversiÀed group operating in The Sultanate of Oman. The company represents some of the most prestigious OilÀeld equipments and has expertise in valves, drilling equipments, instrumentation products and piping materials. PRODUCT RANGE• Valves- Ball, Gate, Globe and Check. ESD & Control Valves. • Piping Materials- Pipes, Casings and Tubing’s & Pipe Fittings. • Instrumentation- Level Gauges, Flow Elements, Fittings & Transmitters. • Drilling Equipments: Drill Collars, Heavy Weight Drill Pipes, Kellys, Stabilizers, Sleeves, Pup Joints, Well Heads, Xmas Trees, Primary Cementing Equipment, Linger Hanger Equipment and Services & other downhole equipment and services. • System Integrators – PLC & SCADA

SAMIL INDUSTRIES

DAEJU CONTROL CO., LTD

BRITISH INSPECTING ENGINEERS – UK

For More Information: R.K.E Sargunam, Contact No: +968 99253103, Email: sargunam@alraidoil.com

Al Raid Oil and Gas Technical Services LLC

Al Raid House, P.O Box: 234, P.C. 114, Muttrah, Sultanate Of Oman Tel: +968 24564477, 24567493, Fax: +968 24567492 Email: sales@alraidoil.comȆ Website: www.alraidoil.com Valves

Piping Materials

Drilling Equipments

Instrumentation


MARKETING FEATURE

Mott MacDonald Global leader in oil, gas and petrochemicals Mott MacDonald is a leading, employee-owned global management, engineering and development consultancy with $1.7 billion revenue and more than 14,000 staff working in 140 countries. The consultancy provides leading-edge solutions for public and private sector clients across its core business sectors including oil, gas and petrochemicals, power, transport, buildings, water and the environment, communications, health and education and international development. Our Oman office is staffed with nearly 500 multidisciplinary professionals capable of delivering over one million engineering staff-hours per year.

Our Oman operations began in 1968 and since then we have been providing the local oil and gas industry with a wide range of multidisciplinary services while working with major national and international oil companies. We have also helped deliver projects in the power, water and buildings sectors. Relationships developed over the years with various oil majors, municipal authorities, local consultants, EPC contractors, planners and others have endured to this day, making us one of the most respected firms in the Sultanate.

Besides the traditional oil, gas and petrochemicals services and skills we are renowned for, we are also involved in other key infrastructure areas in Oman. We often draw from our multidisciplinary skills for the delivery of more complex projects making us a one-stop-shop for our clients. Mott MacDonald has grown from strength to strength over the last four decades and is committed to the professional development of its Omani staff, ensuring there are opportunities for them to grow in experience. As a member of Oman Society for Petroleum Services (OPAL) we enjoy an outstanding Omanisation track record by constantly striving to train, develop and retain local talent. In Oman, we are the only oil & gas engineering consultant certified with ISO 9001, ISO 1400, OSHAS 18001 and ISO/TS 29001. Our methodical approach to safety is demonstrated by the record figure of 22 million staff-hours without loss time incident achieved during the service provided to PDO over a five-year integrated engineering and maintenance contract.

We enjoy a 44-year-old relationship with Petroleum Development Oman as well as more recent partnerships with clients such as Oxy, Daleel, OGC, ORPC and OLNG. We are particularly proud of being involved in prestigious enhanced oil recovery (EOR) projects in the Sultanate. The early results of these projects demonstrate how implementing such technology can add new life to an oilfield by greatly improving its recovery factor and output. During the last few years, Mott MacDonald has had the privilege of being involved in many high-profile EOR projects such as Mukhaizna Steam Flood for Oxy, the Marmul Polymer Injection Project and the Qarn Alam Steam Project for PDO. The Qarn Alam Steam Project was recently recognised with the Engineering Achievement of the Year award at the Oil & Gas Middle East Awards 2011.

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DELIVERING EXCELLENCE

Global Industrial Services (GIS) LLC has become the most sought after Instrumentation and Calibration Services provider with its high quality services meeting the industry demand

T. K Vijayan Managing Director, Global Industrial Services (GIS) LLC

Mar-Apr, 2012

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MARKETING FEATURE

QUALITY SERVICE PROVIDER

Sodexo/Socat has been setting new benchmarks with its commitment towards bringing the best quality of daily life solutions to Oman landscaping, housekeeping, laundry, pest control and cleaning, etc. The company has become the preferred choice for leading companies in sectors such as oil & gas, hospitals, schools, defense, etc.

Eric Jouane General Manager, Socat LLC.

M

any companies are realizing the benefits of outsourcing services to meet the challenges of the economic slowdown or make use of the emerging business opportunities. The primary reasons behind outsourcing are cost optimization and concentration on core activities. Socat LLC has been one of the first companies in Oman to recognize the importance of this trend way back in 1985 when the company was formed. It is the leading company in Oman in the business of providing services solutions to a wide variety of sectors in the Sultanate. Its broad array of services includes catering, preventive & corrective maintenance, camp building and set-up, building maintenance, TV & satellite systems, environmental services, STP operation & maintenance,

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Socat is uniquely positioned to serve the interests of multinational giants as well as prominent Omani business institutions. It has partnered with Sodexo, France based 16 billion Euro global leader in designing, managing and delivering service solutions. Socat is being operated in Oman, by a long standing technical service agreement with Sodexo, under the banner of Sodexo/Socat. Sodexo caters to millions of customers in over 80 countries through employee strength of over 413,000, including 11,100 strong workforce in the Gulf region alone. Sodexo operates 33,400 sites across the world serving 50 million consumers daily. Sodexo/Socat has the advantage of offering catering services plus many other services under one umbrella. So the client has the comfort level of dealing with one entity for multiple services and doesn’t need to go through the pain of dealing with multiple vendors. This is quite advantageous in sectors such as oil & gas where project sites are located in various far flung areas. “With operations in Oman for decades and access to global expertise in the area, we have gained the experience and ‘know how’ to provide tailor-made service solutions to companies operating in the Sultanate of Oman. From the oil & gas

sector to civil engineering, whether it is in the capital or thousands of kilometers away in the remote areas, we are serving 90,000 meals daily and contributing to the well-being and development of the Omani society,” said Eric Jouane, General Manager, Socat LLC. He added, “By adopting our programme, you will be teaming-up with a reliable partner that could deliver and manage virtually all aspects in your operations and having everything running smoothly from day one. For Oman, Sodexo/Socat, a unique provider, is perfectly positioned to make it happen.” Visit www.socat.sodexo.com


A NOVEL VENTURE Hempel centralises global Oil and Gas activities in Houston, Texas, and launches Global Oil and Gas Center of Excellence

H

empel, a supplier of protective coatings since 1915, has centralised its global Oil and Gas activities in Houston, Texas, USA by creating a Global Center of Excellence for the industry. The centralisation of Hempel’s Oil and Gas operations in Houston is a statement of the company’s commitment to its Oil and Gas customers and the industry as a whole. The industry poses unique challenges, and specialist experience and expertise is required to meet these challenges. With this initiative, Hempel is bringing its technical consultants and Oil and Gas specialists closer to companies who can benefit from their knowledge. Houston is known as the global headquarters of the oil and gas industry. Most of the industry’s major players are based in this city, and Hempel already supplies coatings to many of these companies. Hempel delivers coating solutions in markets including offshore, refineries, LNG, petrochemicals, storage tank terminals, transmission pipelines, deepwater exploration, unconventional gas, and oil sands. Kunal Nadkarni, Hempel’s Group Oil and Gas Manager, explains, “One of the pillars of Hempel’s global oil and gas strategy is to be close to the customers. With this Center of Excellence, we are bringing our technical expertise and market knowledge

right to the doorstep of many of the world’s biggest players. And because this is our corporate Oil and Gas headquarters, we have all the capabilities and agility we need to serve our customers to the best possible level.” According to Dimitris Likouressis, Group Protective Marketing Manager at Hempel, “This is another milestone in an aggressive global growth strategy by Hempel. Over recent months, we have boosted our oil and gas team with experienced industry players, and this has culminated in the establishment of this oil and gas Center of Excellence. We will be able to deliver better solutions to our customers by meeting local requirements as well as any global requirements from multinational companies. It marks an important step forward in our ambitious plans to further develop our oil and gas business.” Hempel’s customers are reacting positively to this development. “Keppel AmFELS welcomes Hempel’s efforts to better its service to its customers. We wish Hempel success in these customer-focused initiatives,” stated Heinz Lundberg, Project Manager for Keppel AmFELS. With the addition of the Global Center of Excellence, Hempel now provides a full-service oil and gas centre in Houston, which is home to the manufacturing site, local R&D, Engineering and Project Team, Technical Service Department, Sales, Marketing, and the North American Oil and Gas team. Corporate Oil and Gas functions, including the Group Manager and Business Development Manager, are also based here.


No effort is good enough, unless you

In association with

Ministry of Environment and Climate Affairs


www.omangreenawards.com

Under the auspices of

H E Mohamed Al Toobi Minister of Environment and Climate Affairs

5 June

2012

An

Initiative

What’s your claim? Nominations are open for Green Initiatives that can inspire sustainable measures for a greener HQYLURQPHQW :ULWH LQ WR XV DERXW \RXU LQLWLDWLYHV WKDW JR EH\RQG SURÀWV DQG FRQWULEXWH WR preservation of our environment. OMAN GREEN AWARDS 2012 - Oman’s leading platform that brings together socially conscious private and government institutions to recognise and reward green initiatives that inspire the nation to action. You could nominate your own initiative, your organisation’s initiatives or any individual’s initiative.

For nominations please log on to our website or call 24700896 For partnership enquiries please call Ahmed 99356490

Nominations close on 10/04/2012


COLUMN

INVESTING FOR THE FUTURE IN

TURBULENT TIMES

‘OPEC members in the MENA region are expected to invest around $200 billion in 83 upstream projects through 2015,’ says Abdalla S. El-Badri, OPEC Secretary General.

T

he Middle East & North Africa (MENA) region’s geographic position - and its abundant natural resources - has given it immense strategic importance. And its circumstances have become closely linked to the stability of the rest of the world. This is why it should always be kept in a state of peace and tranquility.

Abdalla S. El-Badri Secretary General, OPEC

Unfortunately this has not always been the case. Recent events have illustrated how delicate things are. Unrest of different sorts has spread across the MENA region for months - and this has affected oil supply levels. Thankfully, the enormous effort of OPEC’s member countries - eight of which are located in the MENA region - has helped to mitigate the impact on oil supplies. In fact, many of OPEC’s members in the region are strategic trading partners with the rest of the world, especially as key suppliers of oil. Their overall resource endowments speak to their importance. OPEC member countries in MENA together have 840 billion barrels of proven crude oil reserves. They also have around 80 trillion cubic metres of proven gas reserves. This represents about 58 per cent and 43 per cent of global totals, respectively. For most of these countries, oil and gas also form the backbone of their economies and

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trade. Last year, oil alone accounted for more than one-third of their combined GDP. And represented more than two-thirds of their total exports. These exports are absolutely critical since their revenues are essential to meet the social and development needs of OPEC countries. The amount of oil supplied daily to the market by OPEC members in the MENA region is also substantial. In 2011, they produced around 23.1 million b/d. This is more than 90 per cent of all oil production in the entire MENA region. The MENA region is obviously critical to satisfying the world’s energy needs. This is why any uncertainty in the region is likely to have a serious global impact. THE GLOBAL ECONOMY But today the world cannot afford any uncertainty. The lingering effects of the 2008 global economic crisis continue to negatively affect some of the world’s biggest economies. Economic conditions in the US remain weak - though we are seeing some positive signs, which we hope will continue. There is also persistent high unemployment across OECD countries. More importantly, there is the ongoing sovereign debt crisis in the Euro-zone, where nine countries recently had their credit-ratings downgraded. If this


situation continues without a solution, it may end up affecting the global economy dramatically. Then there is the risk of a slow-down in the biggest developing countries, which is also weighing on global prospects. Even in China, GDP growth slowed in the last quarter of 2011 and is expected to slow further during the first quarter of 2012. GLOBAL DEMAND But despite this economic uncertainty, our data show long-term growth in energy consumption. In our World Oil Outlook, OPEC sees global energy demand increasing under all scenarios - with primary global energy demand to 2035 doubling in the Reference Case. Fossil fuels are seen as making up 82 per cent of this by 2035, having fallen slightly from 87 per cent today. The dominant growth here is expected to be demand in non-OECD developing countries. In OPECâ&#x20AC;&#x2122;s Reference Case, we see overall oil demand going from

88 mb/d in 2011 to 93 mb/d by 2015 - reaching around 110 mb/d by 2035. Around 80 per cent of this projected increase will occur in developing Asia. No increase, however, is expected from OECD countries in the long-term to 2035. The key to this future oil demand growth will be the transportation sector in non-OECD countries, which will account for 88 per cent of the demand increase to 2035. DOMESTIC DEMAND Another source of rising oil demand is growing domestic demand in the MENA region. In fact, some countries in the region have some of the fastest growing energy demand in the world. And domestic consumption of crude oil - primarily for powergenerating purposes - has increased in several countries. Of course, these countries realize that with local energy consumption rising, they need to find

ways to expand and diversify their energy supplies. Otherwise, this may negatively affect their oil exports. Some OPEC countries in MENA are already exploring for more oil and gas. Others are developing recent gas discoveries. But countries are looking at other alternatives, too - including solar, wind and even nuclear power - to meet rising domestic energy consumption. If the problem of satisfying domestic energy demand while also keeping crude export levels is left without a solution, it could seriously affect some MENA countries. INVESTMENTS With energy demand growing both in MENA and developing Asia, the importance of maintaining upstream energy investments is clear. In fact, an estimated $525 billion in oil, gas and electricity generation are seen over the next four or five years across the entire Mar-Apr, 2012

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MENA region. More specifically, in OPEC’s Member Countries in MENA, we can see a strong commitment to upstream investments in crude oil, NGLs and GTLs. Our Members in the MENA region are expected to invest around $200 billion in 83 upstream projects through 2015. This is expected to result in an estimated net increase of liquids capacity of about 4.6 million b/d. In addition, downstream investment projects across the entire MENA region continue to point to the growing importance of oil and gas products. Capital requirements for the oil and gas downstream, for example, across the entire MENA region are expected to be in the range of $207 billion. This is seen as adding 1.4 mb/d to the region’s overall refining capacity through 2015 - with the majority expected to come from new grassroots projects, as well as several expansion projects. 56

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OPEC’S ROLE By maintaining their overall commitment to energy investments in the oil sector, OPEC’s Members are not only safeguarding their oil revenues. They are also taking steps to ensure global supply. OPEC Member Countries - which produce two-fifths of global crude supply - will continue to strive to meet consumer demand while ensuring market stability. Through OPEC, they will also continue to use production allocations or any other means to respond to the market and ensure its stability. At the last OPEC meeting in December, our Members agreed to produce an average of 30 million b/d in 2012 unless something drastic happens to disrupt the market. But there are other actions that our Members have taken to ensure supply and stability. The growing use of Enhanced Oil Recovery techniques, for example, has

helped many of them increase their proven reserves, keep older oil fields productive and be better prepared to respond to supply emergencies. But ongoing coordinated efforts are needed to make sure that global supply is balanced and that the market is stable. Any situation of oversupply, for example, would be detrimental to the industry - and could lead to the adverse situation we faced in the 1980s. OIL COMPANIES There is also an increased collaboration between our Member Country National Oil Companies (NOCs) and the world’s International Oil Companies (IOCs). And many things can be achieved together - especially in the area of technological know-how. But the role of our NOCs has also been evolving. Many of them are now investing abroad - beyond their home countries, outside of their “comfort zone” - and are engaging


in healthy competition with IOCs in the international arena. This is a good development. It means we have more energy actors around the world and a more interesting global landscape. So as our crude oil sources grow more diverse, the diversity of producers is expanding as well. THE ENERGY MIX Expanding our energy resources is good for the world - especially for the poor in the developing world who still rely on the burning of biomass. Most recently, we have been monitoring the development of shale gas in the Americas with interest, especially since many of OPEC’s Members in the MENA region - Algeria, Iran, Libya, Qatar and Saudi Arabia - are also gas producers. Generally, we think shale gas holds great promise. We see it as part of diverse energy mix - something we have always welcomed. But shale gas is still in early stages of development. And there are concerns about the potential environmental impact of hydraulic fracturing, especially on groundwater supplies. While technology and scientific innovation will help eventually solve these problems, it will take time. The contributions of technology and R&D also remain critical to the oil industry. In fact, OPEC continues to participate in R&D conferences with other energy stakeholders. Sharing experiences with new technology can benefit everyone. We have seen this happen with efforts to reduce the industry’s environmental impact. Carbon Capture and Storage technology, for example, has been discussed and shared by many in the industry. It has been recognized as having important climate change mitigation potential.

Recently, we have been monitoring the development of shale gas in the Americas with interest, especially since many of OPEC’s Members in the MENA region Algeria, Iran, Libya, Qatar and Saudi Arabia - are also gas producers

Behind everything lies the importance of relationships - between producers and consumers, among IOCs and NOCs, and among all stakeholders. Bringing us together is a commitment to keeping the market stable. But it is important to stress once more how important the MENA region is to the rest of the world. It certainly has its share of challenges and difficulties. But in terms of energy, it is vital - which is why we should always strive to ensure peace, cooperation and stability there. Cooperative exchanges and constructive actions can achieve great things. In December, OPEC Members had agreement on 30 million b/d. Today we are already at 30.6 million barrels and

there is no shortage in the market. Soon even Libyan production will be back and we hope we can then look forward to stability - not just in the MENA region but in the global markets. We hope 2012 does not turn out to be a challenging year. But, as in the past, we in OPEC are always ready to continue that “quest” to meet the world’s energy needs - and, when necessary, take actions that are of benefit to all. Excerpts from the keynote address by OPEC Secretary General, in the Middle East & North Africa Energy 2012, Investing for the Future in Turbulent Times, Chatham House, London, U.K in January 2012. Mar-Apr, 2012

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MARKET REPORT

MARGINAL DECREASE IN DEMAND Demand for OPEC crude in 2012 is projected to average 30.0 mb/d, around 0.1 mb/d lower than in the previous report and about 0.1 mb/d less than in the previous year

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T

he OPEC Reference Basket averaged $111.76/b in January, representing a gain of $4.42 or 4.1 per cent over the previous month. Prices were on an upward trend heading into January, supported by bullish and better-than-expected US economic data and revived geopolitical tensions in the Middle East, which helped to boost the risk premium in crude oil prices. A weakening of the dollar against the euro also provided some support; however, gains were limited by weak demand growth concerns stemming from uncertainties about economic growth in the EU and credit downgrades to some key European countries. Crude futures also rose higher in January, with WTI up $2.15 to $100.82/b and ICE Brent up $4.06 to $111.78/b. The world’s economic growth has been revised down slightly to 3.4 per cent in 2012 and remains at 3.6 per cent for 2011. The US continues recovering and is expected to grow by 2.2 per cent in 2012. Japan’s 2012 forecast has been revised down to 1.8 per cent from 1.9

The world oil demand growth in 2012 has been revised down by 120 tb/d to 0.9 mb/d, while the forecast for 2011 remains unchanged at 1.0 mb/d.

per cent previously, amid efforts to combat the after-effects of last year’s triple disasters. The Euro-zone’s deceleration has continued and 2012 growth expectations were revised to minus 0.2 per cent from plus 0.2 per cent previously. Emerging markets seem to be experiencing slower momentum compared to last year. As a result, the forecasts for China were revised down from 8.5 per cent

to 8.2 per cent and for India from 7.4 per cent to 7.2 per cent for 2012. While global output activity has shown some recovery in the past weeks, downside risks prevail and the Euro-zone debt crisis, slowing growth in the developing economies, and the fragile improvement in the US warrant close monitoring. The world oil demand growth in 2012 has been revised down by 120 tb/d to 0.9 mb/d, while the forecast for 2011 remains unchanged at 1.0 mb/d. Recent economic setbacks have pushed the global demand forecast lower. Worries about the US economy along with EU debt concerns are adding to the uncertainties impacting world oil consumption this year. High retail petroleum prices have led to a further reduction in transport fuel usage. Non-OECD regions, especially China, India, the Middle East, and Latin America, are expected to contribute most of the forecast oil demand growth this year. Waning OECD economies are negatively affecting the oil market and imposing a considerable range of uncertainty over the short term.

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MARKET REPORT

The Non-OPEC supply is estimated to have increased by 0.1 mb/d in 2011, following a minor downward revision, mainly due to adjustments to actual fourth quarter production data. In 2012, non-OPEC oil supply is forecast to increase by 0.7 mb/d, following a minor downward revision. Brazil, the US, Canada, Colombia, and Russia are seen as the major contributors to supply growth in 2012. OPEC NGLs are expected to increase by 0.4 mb/d

in 2012, following similar growth the previous year. In January, total OPEC crude oil production averaged 30.90 mb/d, according to secondary sources, representing a marginal increase of about 56 tb/d over the previous month. Expectations of tighter supply following the closure of several refineries in the Atlantic Basin helped product markets to exhibit a sharp recovery in January, despite weak demand in the region. This situation, along with additional support

OIL PRICES, US DOLLAR AND INFLATION The US dollar continued to strengthen in January against the euro, the pound sterling and the Swiss franc, while weakening against the Japanese yen. The US dollar appreciated by 2.0 per cent against the euro. The average exchange rate of the US dollar compared to the euro stood at $1.2913/€ in January, compared to a December rate of $1.3176/€. Against the Swiss franc, the US dollar rose by 0.6 per cent, while gaining 0.5 per cent against the pound sterling. Compared to the yen, the US dollar fell by 1.1 per cent. The euro’s weakness in January was especially driven by concerns regarding the development of the Euro-zone’s sovereign debt crisis at the beginning of January, although many challenges remain. On the other hand, indicators of the state of the US economy have provided evidence that the economy there has improved over the past weeks. However most recently, successful debt auctions, particularly by Spain and Italy, have pushed the exchange rate at the beginning of February again up to above the $1.30/€ level to almost $1.32/€. The weakness of the euro versus the yen, too, was visible in January when the euro fell to its lowest level in more than 11 years to reach around ¥98.0/€. It has since recovered to trade now above the ¥100.0/€ level at the beginning of February. Near-term future developments mainly depend on, firstly, the ability of the Euro-zone to convince market participants that the strategies to resolve the Euro-zone’s issues are working and, secondly, their successful implementation of the necessary budget restructuring efforts. Furthermore, it remains to be seen how the development of the US economy continues. In nominal terms, the OPEC Reference Basket price gained $4.42/b, or 4.1 per cent, from$107.34/b in December to $111.76/b in January. In real terms, after accounting for inflation and currency fluctuations, the Basket price rose by 5.1 per cent, or $3.38/b, to $69.63/b from $66.26/b (base June 2001=100). Over the same period, the US dollar increased by 0.9 per cent against the import-weighted modified Geneva I + US dollar basket while inflation remained flat.

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coming from stronger demand in Asia, allowed refinery margins to increase across the globe. In the tanker market, clean and dirty spot freight rates declined in January due to increased new world scale flat rates on higher bunker prices, plentiful tonnage supply, improved weather conditions, and lower tonnage demand. In January, VLCC rates decreased 4 per cent, Suezmax dropped 2 per cent, and Aframax declined 20 per cent. OPEC sailings remained steady in January, averaging 23.6 mb/d, while fixtures indicated growth of 16 per cent. US commercial oil stocks in January reversed the downward trend of the last four months, growing by 11.5 mb. Despite this build, inventories remain 21.0 mb or 2.0 per cent below a year ago, but 14.4 mb or 1.4 per cent above the five-year average. Crude and products increased by 9.2 mb and 2.3 mb respectively. The most recent monthly data shows commercial oil inventories in Japan fell by 7.4 mb in December, down for the third consecutive month. Stocks moved to a deficit of 1.7 per cent compared to a year ago and stood 6.4 per cent below the five-year average. The bulk of the stock draw came from products, which declined by 7.0 mb, while crude edged down 0.4 mb. Demand for OPEC crude in 2012 is projected to average 30.0 mb/d, around 0.1 mb/d lower than in the previous report and about 0.1 mb/d less than in the previous year. The demand for OPEC crude in 2011 remains unchanged from the previous assessment at 30.1 mb/d, some 0.4 mb/d above the 2010 level. Excerpts from the OPEC market report released in February 2012


REGIONAL ROUND-UP

TAQA signs UK North Sea Farm-in Agreements

New coating for SRB Bacteria

Abu Dhabi National Energy Company (TAQA), a publicly listed company on the Abu Dhabi Securities Exchange, announced two farm-in agreements with a subsidiary of Fairfield Energy Limited (Fairfield) for oil and gas licences in the UK North Sea. The agreements will result in TAQA Bratani Limited, a wholly owned subsidiary of TAQA, acquiring a 50 per cent interest in licences P184, P474 and P1634 which include the Darwin oil discovery and prospective exploration acreage south of Darwin in consideration for TAQA undertaking a work programme on the licences and making a cash payment to Fairfield. The licences are located next to the TAQA operated North Cormorant and Pelican fields in the Northern North Sea and cover blocks 211/27a, 211/27c and 211/27e. Leo Koot, managing director of TAQA Bratani Limited said: “These licences are located adjacent to our existing core infrastructure and represent an excellent opportunity for TAQA to expand its footprint in the Northern North Sea. Darwin has very exciting exploration and development potential and we look forward to working with Fairfield to appraise the opportunity. The activity that will result from this transaction and other agreements we have entered into during the past year speak directly to our long-term commitment to the region.”

A wide-spectrum of bacteria, including Sulphate Reducing Bacteria (SRB) and microbiological induced corrosion can now be eliminated from oil and gas pipelines as well as tanks, according to Swiss-based Sterilos Group. In what is said to be a ground-breaking yet simple process that kills a whole host of bacteria without using harsh chemicals by using the natural effect, Bodo Schenk, Sterilos Group Sales Director, also confirmed that the process is ‘eco-friendly’. “The new Sterilos Microsilver product can be especially helpful for the oil and gas industry due to its special coating which kills the SRB bacteria’s plus others forever because of the depot effect of the Sterilos products and this stops the corrosion. The oil and gas industry spends billions on corrosion every year and Sterilos Microsilver products can avoid that,” he said during the Kuwait Oil & Gas Summit held in February. “Sterilos offers different systems for old and new pipelines including an additive, which can be used as an alternative to chemicals like THPS. Sterilos products are proven to be effective against previously multi-resistant germs and offer long-term anti-bacterial protection that is non-toxic and kind on the environment.” Schenk explained that Sterilos Microsilver products are able to swiftly bind with many others frequently used building and building-care materials, such as paint and varnish making it easy and convenient to apply. “The effect is immediate, and what is revolutionary is that Microsilver can be applied at any stage, even after a pipeline is finished or in operation by just painting it on.” He confirmed that approved tests have found Microsilver to be effective in stamping out microorganisms when applied to walls, drywalls, wood, metal and metal building components such as pipelines, tanks, beams, trim, screws and even small items, such as nails.

Saudi Aramco & S-Oil renew contract Saudi Aramco and Korean firm S-Oil have signed a contract for the renewal of the crude oil supply. The contract demonstrates the relationship, formed more than 20 years ago between the two companies, remains strong and serves as a model of economic cooperation between the Kingdom of Saudi Arabia and the

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Republic of Korea. The relationship between Saudi Aramco and S-Oil dates back to 1991 when a Saudi Aramco affiliate purchased a 35 percent stake in S-Oil. The renewal of the crude oil supply contract follows the inauguration last October of S-Oil’s Onsan Refinery Project.


New vehicle captures carbon

QP-QAPCO to develop a petrochemical complex Dr. Mohammed bin Saleh Al-Sada, Qatar’s Minister of Energy & Industry and Chairman and Managing Director of Qatar Petroleum, signed a Heads of Agreement (HOA) with Qatar Petrochemical Company (QAPCO) for the development of a new, mega-petrochemical complex in Ras Laffan Industrial City. The complex includes a world-scale steam cracker, with the feedstock coming from natural gas plants in Ras Laffan. The project is scheduled for completion in 2018. “This mega-project is yet another major step in our progress towards sustainable development of Qatar’s vast hydrocarbon resources as envisioned by His Highness the Emir Sheikh Hamad bin Khalifa Al Thani,” said Dr. Al-Sada. “It is an important milestone in the industrial development of the State of Qatar, especially for its petrochemical industry.” Qatar Petroleum has 80 per cent equity interest in the project, with QAPCO taking up the remaining 20 per cent stake. QP and QAPCO will jointly develop the petrochemical complex. QP and QAPCO have been working together for the past few months to plan the development of the project, which will contribute in meeting the continuously growing global demand for various petrochemical products. The plant will produce 1.4 million metric tons per annum (MMTA) of ethylene, 850 thousand metric tons per annum (KMTA) of high-density polyethylene (HDPE), 430 KMTA of linear low-density polyethylene, 760 KMTA of polypropylene, 83 KMTA of butadiene. These products will be marketed primarily in high-growth markets in Asia, Africa and Latin America. “This new project is a great example of implementing Qatar’s long-term strategy. It is definitely a key milestone in our long journey to become a significant global petrochemicals producer from the GCC region,” said Hamad Rashid Al-Mohannadi, Chairman of QAPCO.

New oil minister in Kuwait Kuwait’s His Highness the Amir Sheikh Sabah Al-Ahmad Al-Sabah has named a new cabinet with 10 new faces, including the oil and defense ministers. Hani Hussein, a former chief executive officer of national oil conglomerate Kuwait Petroleum Corp, was appointed oil minister, replacing Mohammad Al-Busairi.

Saudi Aramco’s Research and Development Center (R&DC) has developed and tested a prototype vehicle to demonstrate the viability of capturing and storing carbon dioxide (CO2) emissions, thereby reducing potential impact of combustion engines on the environment. This is the first time in the world for a research center to develop and test such a technology. In only 18 months, R&DC conceived the idea, completed the design and made the prototype pickup vehicle, which demonstrated the concept will work. The results show that the truck is capable of capturing an average of 10 percent of CO2 emissions. The technology reduces emissions by separating and storing CO2 from the exhaust stream while avoiding impacting the engine design or performance. It is powered using heat that is normally wasted, project leader Esam Z. Al-Hamad said. The goal is to have cars outfitted with this technology to unload the CO2 while refueling. Saudi Aramco and other research centers are conducting studies on ways to benefit from the stored CO2. “The current size of the technology fits a truck because the research team intentionally overdesigned and sized the different components and added extra equipment for testing purposes using off-the-shelf parts,” said Senior. Lab Scientist Wajdi E. Sadat. The research team is working to refine the design, reducing the size of the system to fit on a passenger car, he added. This firstof-a-kind prototype positions the R&DC as a leader in CO2 capture from mobile sources. Five provisional patents were submitted by the team based on the knowledge gained during research for the project.

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REGIONAL ROUND-UP

Dolphin Energy issues $1.3bn in new bonds

APICORP achieves record Q4 2011 results The Arab Petroleum Investments Corporation (APICORP), a multilateral bank owned by the ten member states of the Organisation of Arab Petroleum Exporting Countries (OAPEC), announced record profits for the fourth quarter (Q4) of 2011. Profits grew 86 per cent from Q4 2010 to over US$57.5 million. Commenting on the announcement, Ahmad Bin Hamad Al-Nuaimi, Chief Executive and General Manager of APICORP said: “The achievements made in the fourth quarter will help further bolster the net worth of APICORP and serve to reinforce its fiscal stability in what we expect will continue to be a challenging economic environment in 2012.” APICORP’s total assets rose 7.4 per cent year-on year to above US$ 4.63 billion at the end of December 2011. Total equity at the end of 2011 climbed over 6.6 per cent, compared to 2010, to US$ 1.2 billion. Al Nuaimi also commented on Moody’s Investors Services’ recent reaffirmation of APICORP’s A1 rating for long-term debt and Prime 1 for short-term debt. “The rating affirmation, with a stable outlook, is a strong testament to APICORP’s robust capitalization, liquidity, and our commitment to strong banking fundamentals.” said Al Nuaimi. Since its founding in 1975, APICORP has played a vital role in fostering the development of the Arab energy industry. The Bank has invested in 14 joint ventures in the oil and gas industry. It has also participated in direct and syndicated energy transactions worth an estimated $127 billion. APICORP‘s aggregate commitments in these transactions, both equity and debt, are valued in excess of US$12 billion.

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Dolphin Energy Limited has successfully issued $1.3bn of ten-year senior secured bullet bonds. The initial $1bn bond was priced on February 7, 2012 with an additional $300m tap bond priced on February 9, 2012 due to strong investor demand. The two issues of bonds will be fully fungible, carry a coupon of 5.5 per cent and mature on 15 December 2021. The $1.3bn bonds have received an A+ rating from Fitch and an A1 rating from Moody’s, both with stable outlook. Dolphin Energy CEO, Ahmed Ali Al Sayegh, said, “As a result of strong investor demand, we decided to increase the size by another US$300m. We were able to attract strong demand and price our bonds at the tight end, despite the current volatile markets.” Al Sayegh added, “The level of initial demand and the performance of the bonds in the secondary market demonstrate the great job our staff and sponsors have done in telling Dolphin Energy’s story to investors. The capital markets recognize the strength of the business and appreciate our high credit quality and increased transparency.” Dolphin Energy Limited was created to develop substantial energy projects throughout the GCC and to create long-term economic wealth and new business opportunities forGCC citizens, far into the future. Dolphin Energy’s major strategic initiative, the Dolphin Project, involves the production and processing of natural gas from Qatar’s North Field, and transportation of the dry gas by sub-sea export pipeline from Qatar to the UAE, which began in July 2007. The long term customers for Dolphin gas are ADWEC (Abu Dhabi Water & Electricity Company), DUSUP (Dubai Supply Authority) and OOC (Oman Oil Company). Each has signed a gas supply agreement with Dolphin Energy for 25 years. Dolphin Energy is owned 51 per cent by Mubadala Development Company, on behalf of the Government of Abu Dhabi - and 24.5 per cent each by Total of France and Occidental Petroleum of the USA.

Tasweeq enters into a long-term supply agreement with QPI and its Asian partners Qatar Petroleum International (QPI) has signed a “Joint Venture Agreement” with Siam Cement Group (or SCG) and its Vietnamese partners in Bangkok to invest in the petrochemicals complex in Long Son Island in southern Vietnam, valued approximate $4.5bn. Qatar International Petroleum Marketing Company Ltd. (Tasweeq) and PV GAS (a subsidiary of Petro Vietnam) signed a long- term feedstock agreement to supply propane and naphtha to the petrochemical complex. SCG will hold a 28 per cent stake in the project, while TPC will have 18 per cent, the Vietnam partners (Petro Vietnam and Vinachem) will have 29 per cent, and the Qatari partners (QPI Vietnam) will hold a 25 per cent stake. Construction of the entire petrochemicals complex is expected to take 4-5 years, and will consist of a 1.4 million ton olefins cracker which is highly flexible feedstock (ethane, propane, and naphtha), and supporting infrastructures such as port and jetty, common utilities, and storage facilities. Furthermore, the cracker will be fully integrated into a wide array of downstream products, including PE, PP, and PVC related products.


Poland gives Green Light to massive fracking efforts There is perhaps no more controversial energy source after nuclear than “hydraulic fracturing,” or “fracking,” of subterranean shale deposits containing pockets of natural gas. While the process can liberate previously unusable sources of natural gas, political, environmental and scientific concerns have risen along with production, as evidence mounts that fracking is responsible for everything from polluting subterranean aquifers to causing regional earthquakes. But no matter - during his 24 January State of the Union address, U.S. President Barack Obama wholeheartedly embraced hydraulic fracturing without even mentioning it, telling his audience, “We have a supply of natural gas that can last America nearly 100 years. And my administration will take every possible action to safely develop this energy.” Tree-hugging environmentalists and seismologists be damned - according to Obama, the full exploitation of these resources will “support more than 600,000 jobs by the end of the decade,” no small consideration in an election year. Across the Atlantic, European Union members, particularly in Eastern Europe, are considering the benefits of fracking, though coming to differing conclusions. On 18 January, 166 members of Bulgaria’s Narodno Sabranie (National Assembly) 240 parliamentarians voted to impose an indefinite ban on shale gas exploration and extraction in Bulgaria using hydraulic fracturing or other similar technology. Six National Assembly members voted in favor of the practice, along with three abstentions. Poland has taken a different tack, noting that thanks to fracking of natural gas shale deposits, in 2009 the United States became the world’s largest gas producer, overtaking Russia and driving down prices. The day after the contentious Bulgarian vote Polish Treasury Minister Mikolaj Budzanowski told reporters that Polish companies with permits to explore for shale gas in the country must intensify drilling to start production of the fuel by 2014 or 2015, with Polish companies each drilling 12 wells and performing 12 hydraulic fracking operations annually. The reason for such enthusiasm? “Simple,” said Budzanowski, “Poland’s shale-derived gas could be as much as 50 percent cheaper than the Gazprom natural gas Poland now receives from the 2,607 mile-long Yamal-Europe natural gas pipeline, which currently costs Warsaw more than $500 per 1,000 cubic meters (tcm) for West Siberian output.” Seeking to cut the expensive Russian natural gas umbilical cord, Poland has high expectations for its projected indigenous production shale natural gas, as it currently depends on Russian Gazprom supplies for nearly two-thirds of its annual gas consumption of 14 bcm, estimating its domestic reserves of conventional natural gas at some 100 bcm, which would only meet domestic needs for slightly more than seven years. In contrast, the U.S. Energy Information Administration has estimated Poland could have the biggest shale natural gas reserves in Europe, amounting to some 5.3 tcm. No wonder Warsaw is interested.And, letting no grass grow under their feet, the Polish government has already granted more than 100 exploration permits to companies, including U.S. energy giants Chevron and Exxon Mobil. Injecting a bit of nationalist pride however, Budzanowski reiterated an earlier appeal for state-owned utilities

to participate in developing shale natural gas extraction. Leaving reporters in no doubt as to the importance that the Polish government placed on the rapid ramping up of shale natural gas production Budzanowski added, “I will expect the Treasury-owned companies to present plans to drill as many wells as possible within the next two years and this is the most important task from the perspective of (the nation’s) shale gas policy.” Poland’s love affair with fracking began last year. On 18 September 2011, Polish Prime Minister Donald Tusk told an audience in Lubocin, northern Poland, where shale natural gas exploration had begun, “Being a moderate optimist, the commercial exploitation of shale gas will begin in 2014” before adding that Poland could achieve “gas security” by 2035. Referring to the larger geo-strategic implications of such policies Tusk added, “After years of dependence on our large neighbor (Russia), today we can say that my generation will see the day when we will be independent in the area of natural gas and we will be setting terms” before insisting that he had been “assured that well conducted exploration and production would not pose a danger to the environment.” Accordingly, whatever the ultimate fate of fracking in the U.S. and cautious European states like Bulgaria as additional environmental and scientific studies about the practice are conducted, Poland seems for better or worse to have firmly embraced the practice for the foreseeable future. One can only hope that it is a judgment call that they will not soon have cause to regret in what in what Foreign Affairs Minister Radosław Sikorski has called “the gold rush of the 21st century.” Coincidently, on 11 January Waldemar Tyl of the Warsaw Appeals Prosecutor’s Office announced that seven people, including government officials, have been charged with corruption during the granting of licenses for shale gas exploration, adding that bribes of tens of thousands of dollars apparently changed hands over the second half of 2011 alone. Surely a coincidence, like those earthquakes and aquifer pollutants. Nothing to see here, move along. Mar-Apr, 2012

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GLOBAL ROUND-UP

Is Deepwater Horizon the New Ecuador? gets settled. Oil gushed from the Macondo well thousands of feet below the surface for most of the summer of 2010 before crews were finally able to control the spill. Fishing lanes were closed and the coastal tourism sector, still recovering from Hurricane Katrina, suffered dearly. Eleven rig workers were killed.

Nearly two years after the worst accidental offshore oil spill in the history of the energy industry, some of the biggest companies in the world are busy pointing their legal fingers at one another in court over who has to pay what in claims, damages and fines over the deadly Deepwater Horizon oil spill. A federal judge recently ruled that BP is still obligated to a clause in its contract with Transocean that would protect the rig owner from damages related to the spill. That means BP still has to shell out money to settle claims filed by those along the southern U.S. coast impacted by the spill. BP, meanwhile, is suing Halliburton, something Halliburton said was ridiculous. If the legal mess over Chevron’s case involving Ecuador is any indication, former BP boss Tony Hayward will be pushing 80 before this

A federal report determined a faulty cement barrier was at least one of the underlying causes of the accident. In October, the government outlined seven different violations for operator BP, four for rig-owner Transocean and four for Halliburton, which worked on the cement barrier. BP sued Halliburton, which said it was looking forward to court. Ecuadorian and U.S. courts were involved in a case that more or less started in the 1970s, depending on which part you examine, when Chevron was accused of dumping billions of gallons of untreated wastewater into the rainforest. They even made a movie out of it! Both sides are locked in a legal mess that is still in some lower court somewhere hung up on who knows what. While that’s the first time an indigenous group managed to sue a giant corporation like Chevron, some legal aspects of the case that began some 40 years ago are still locked in court somewhere and there’s no end in sight. During federal investigations into the 2010 oil spill, all three companies collectively blamed each other for the disaster that prompted Hayward to complain he wanted his life back. BP is unlikely to abandon trying to spread the financial liability anytime soon. If 30,000 Ecuadorians backed by the slick and oh-so persistent Amazon Watch can keep Chevron tied up in court for this long, one can only imagine how long the Deepwater Horizon mess will linger in the courts.

Solar Yacht sails around the world powered by nothing more than the Sun The World Future Energy Summit has recently finished in Abu Dhabi and one of the highlights was the Turanor, an impressive solar powered yacht designed and built by Planet Solar. It is the largest boat of its kind to ever sail and the first to ever circumnavigate the globe powered entirely by the sun. It steadily cruises at an average speed of five knots, but is capable of reaching more than double that on clear, calm, sunny days. The project was conceived by Raphaël Domjan of Switzerland as a method of demonstrating the possibilities that current solar technology holds for clean transportation. The yacht carries a huge rack of Lithium-Ion batteries capable of storing up to three days’ worth of sailing power, easily enough to allow transit to continue throughout the night, or during overcast skies. Never once in thousands of miles has the boat had to turn on its diesel back up, in fact the diesel is only on board is to satisfy the insurance companies. Whilst the Turanor has sailed around the world it has generated lots of media attention and public interest which has helped to boost recognition of the solar

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industry and the potential there within. At a price of $20 million the boat will not itself be available to everyone, but the investors are already experiencing ROI from the concepts that it has proven and the other ideas it has tested. One useful technology that could be put into the general market is the software created by Planet Solar which uses weather data to steer the boat into the sunniest areas, a very useful tool for future solar transport. The mammoth trip also demonstrated that neither the solar panels nor batteries suffered significant wear from salt or water, another important discovery for future solar powered boats. Solar transport still faces many obstacles before it can be mass produced for sale to the general public at reasonable prices, it is more likely that the first solar powered yachts will be available for luxury cruisers. Still, it is obvious that the basic concepts of clean transportation are tenable, now we just need to be patient and wait.


GLOBAL ROUND-UP

Using Ocean Temperature Differences to Create Renewable Energy Ocean Thermal Energy Conversion (OTEC) is an idea for creating renewable energy by exploiting the difference in ocean temperatures between the surface and the seabed. The OTEC permit office first opened in 1981 as part of NOAA, America’s National Oceanic and Atmospheric Administration, the marine counterpart to NASA. It was created after the oil price spike of the 1970’s when interest in alternative power sources rose. Oil prices eventually settled and as a result interest in the alternative power sources dwindled, so in 1994, just 13 years later the OTEC office was closed without ever having issued a permit. Good old American bureaucracy. Now, again during times of high oil prices, alternative energy sources are back with vengeance. All options are being considered and one of them is OTEC. Luckily the concept is reasonably simple. A fluid with a low boiling point, such as ammonium, is vaporised in a heat exchanger using surface water from the sea with an average temperature of about 25°C. The resulting gas has a sufficient pressure to drive a turbine and create electricity. The gas is then cooled using seawater pumped up from a depth of about one kilometre and with an average temperature of about 5°C. The liquid ammonia can then be reheated and the whole process started again. Theoretically this means that OTEC plants can be built anywhere with a surface water temperature of 25°C and a depth of at least one kilometre. One company pursuing OTEC technology is Lockhead Martin, which is collaborating with a smaller firm called Makai Ocean Engineering to build a 10 megawatt plant in Hawaii that is projected to open in 2015. Then if this plant is successful the idea is to construct a 100 megawatt plant by 2020. Most of the technology necessary can be taken from existing areas of engineering, such as deepwater oil drilling, where the heat exchangers and pipework required to make a 10MW plant already exist. The 100MW

facility however will need a pipe that is not only 1km long but also ten metres in diameter, in order to supply the necessary amount of water. It must also be strong enough to resist waves and ocean climates for decades. Kerry Kehoe, the current head of OTEC activities at NOAA, estimates such a facility could cost $1 billion. Approximately 87 percent of the 2012 spending programme is budgeted for upstream crude oil and natural gas exploration and production projects. Another 11 percent is associated with the company’s downstream businesses that manufacture, transport and sell gasoline, diesel fuel and other refined products, fuel and lubricant additives, and petrochemicals.

India’s Government Grudgingly Releases Report on Nuclear Power’s Effect on Human Health India is betting heavily on nuclear power to meet its surging energy needs. While India currently has six nuclear power plants (NPPs) with 20 reactors generating 4,780 megawatts, seven other reactors are under construction and are expected to generate an additional 5,300 megawatts. This current rate of nuclear power generation pales into insignificance with New Delhi’s future plans, as on 22 February Power Minister Sushilkumar Shinde told a seminar at the India International Nuclear Symposium, “India plans to have a total installed nuclear capacity of 63,000 megawatts by the year 2032, using both indigenous technology and imported reactors. Nuclear technology has several distinct advantages - it is compact and highly manageable in terms of handling, transportation and storage of the fuel. Thermal technologies have the problems of greenhouse gas emissions, fly-ash and handling, transportation, storage problems of large quantities of fuel as well as

availability of coal.” As for worries about the hazards of nuclear power generation, earlier this month Atomic Energy Commission Chairman Srikumar Banerjee told a gathering at the Department of Atomic Energy’s Raja Ramanna Center for Advanced Technology in Indore, “All atomic energy plants in the country are totally secured as per international standards and are also capable of dealing with natural calamities like tsunamis or earthquakes.” But amidst the bland assurances lurks a darker reality. After being in denial for years, last month the selfsame Department of Atomic Energy for the first time admitted that the deaths of its employees and their dependents at the Kalpakkam nuclear site were caused by multiple myeloma, a rare form of bone marrow cancer linked to nuclear radiation. Source: www.oilprice.com

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TENDERS

Tender Watch WORK

COMPANY

DETAILS

Provision of Casing External Corrision Protection

PDO

www.pdo.co.om

Provision of Completion Materials and Gas lift

PDO

www.pdo.co.om

Provision of Casing, Tubing and Running Services

PDO

www.pdo.co.om

Amal Steam HRSG Project

PDO

www.pdo.co.om

Zauliha Gas Plant Project

PDO

www.pdo.co.om

Qatar Petroleum

www.qp.com.qa

EPIC for PFC equipment for 33kv Electrical Network

Qatar Petroleum

www.qp.com.qa

Civil, Electrical and Minor A/C maintenance services in Doha

Qatar Petroleum

www.qp.com.qa

Qatar Petroleum

www.qp.com.qa

Qatar Petroleum

www.qp.com.qa

Strengthening Concrete Foundations at Qalhat Plant

Oman LNG

www.omanlng.com

Arc for Electrical Works for a period of 24 months

GAIL India Ltd.

www.tenders.gov.in

Stocking & Supply of Downhole Completion Equipment, Accessories and Services for Offshore and Onshore Operations on Call-Off basis

EPIC for Auto Samplers and other Instrument PCRS within Dukhan Fields Overhaul/Replacement of Crude Oil Storage Tanks T-5007,T-5005 & T-5051 in Halul

Source: From different corporate and tender websites

Mar-Apr, 2012

71


It's time to wake up to the potential


72%

Oman’s economic hubs have the advantage of easy access to a young, educated talent pool! The time to capitalise on it is now…

of Oman’s population lives in its cities*

Oman Forum will be the first broad-based platform of its kind. It will bring together important stakeholders from the public and private sectors, academia, student bodies, and workers’ unions to propose long-term strategies to tackle the key challenges facing the economy. The convergence of diverse perspectives over two distinct sessions is meant to help identify solutions that are not just potentially more effective, but eminently practical as well.

*Source: World Development Indicators (WDI) 2010, The World Bank

‫ﺑﻨﺎء اﻟﻜﻔﺎءات اﻟﻮﻃﻨﻴﺔ‬

Building National Talent Date: 17 April 2012, Time: 9.00 am - 1.00 pm Venue: Al Bustan Palace Ritz-Carlton An initiative by

Reserve an exclusive table today. Please call Rekha @ 99269147. In association with

The Research Council

Ministry of Civil Services

Strategic Partners

Media Partners

Knowledge Partner

For partnership enquiries please contact: AHMED 99356490


BEYOND OIL & GAS

FUTURE PERFECT LG Electronics (LG) showcased four new notebook models and an allin-one PC at the Consumer Electronics Show (CES) 2012 in Las Vegas. These new products will be available in Oman in March 2012.

TECHNOLOGY Z330: The Z330 is the most compact product in LG’s newest Super Ultrabook™ Series, boasting vastly superior features above and beyond Intel’s Ultrabook™ requirements, while remaining attractive in both performance and portability. Powered by the 2nd generation Intel® CoreTM i7 processor, it requires less than 10 seconds to complete booting and a mere two seconds to recover from stand-by mode. The Z330 is equipped with the latest SATA3 Solid State Drive (SSD), which is more than 11 times faster than an ordinary hard drive. It boasts uniform slimness of 14.7mm throughout and is extremely light, weighing a mere 1.21 kg. The model is surrounded by a metallic cover with a gyro-brush line finish, completing the Z330’s urban chic look. Z430: The Z430 is a 14-inch notebook which boasts powerful performance in a sleek, compact chassis. Powered by the Intel® Core i7 processor and equipped with SSD and HDD, the Z430 offers Super Speed Boot with 12 seconds booting time and large storage capacity of up to 500GB. Such powerful features are packed into a superbly thin 19.9 mm thin chassis. The Z430 is the most compact 14-inch notebook available in the market, as its slim bezel enables the notebook to employ a 14-inch display panel in a chassis ordinarily used for 13-inch notebooks. The 1.5 kg Super Ultrabook’s design is completed by a modern, chic 74

Mar-Apr, 2012

exterior that combines a metallic cover with a gyro-brush line finish. P535: A CINEMA 3D notebook designed to please style-conscious consumers looking for a comprehensive entertainment experience, the P535 builds on the sophisticated slim design philosophy of LG’s P-Series notebooks. The 15.6inch super-slim LED backlight display contributes to the thinness of the 24.1mm chassis and its weight of 2.2 kg, making the P535 up to 24 per cent slimmer and 27 per cent lighter than the closest competing 15-inch 3D notebooks. Powered by the second generation Intel® Core™ i7 processor and NVIDIA’s latest GeForce GT 630M graphics card, the P535 boasts unbeatable performance, along with a wide display panel that exhibits superior CINEMA 3D capabilities. A540: Powered by the second generation Intel® Core i7 processor with quad-core

processors, the A540 offers consumers a full package of 3D entertainment through its glasses-free 3D display panel, the SRS premium sound effect and the 4.1 channel 3D sound. The NVIDIA® GT555M graphics card adds significant horsepower when watching HD movies, playing games or editing videos. The A540 comes with a 3D editing program that allows users to personalize their 3D images and videos. LG V300: Initially unveiled in 2011 with the second generation Intel® CoreTM i7 processor, the V300 is LG’s first-ever all-in-one PC featuring Film Patterned Retarder (FPR) 3D technology and an IPS display. FPR technology enables the V300 to offer the most vivid, immersive full HD 3D viewing experience on a 23-inch Full HD display without any eye fatigue. The employment of an IPS display significantly widens the viewing angle to 178 degrees and also allows users to enjoy multimedia content with superior picture quality


LIFESTYLE

CLASSIC & CONTEMPORARY With a limited special edition for the Laureus Sport for Good Foundation, IWC Schaffhausen is showing its support for the sixth time to children and adolescents who are confronted with the most trying conditions in the course of their everyday lives. The watch manufacturer is launching the Portofino Chronograph in characteristic Laureus blue as a symbol of hope for a better future. Since 2005, the Schaffhausen based company has been a driving force behind Laureus, which supports over 90 projects worldwide that give socially underprivileged children and adolescents the hope of a better life and show them ways of helping themselves. Every year, in keeping with a revered tradition, IWC Schaffhausen selects a model from its collection as a means of supporting the Laureus Sport for Good Foundation.

LUXURY ON BOARD Three Azimut Yachts models and the most recent addition to the Atlantis family were on exhibit at Boot Düsseldorf 2012 which was held from January 21 – 29, 2012 at Messe Düsseldorf, one of the largest fair zones in Europe. They included the Azimut 40S, the entry level model for the sport collection, and Azimut 45, the flybridge motor-yacht which has already won Boat of the Year at Genoa. Also present were Azimut 60, the innovative eighteen metre boat which places a high priority on privacy as well as Atlantis 38,

of 2,500 watches. The exclusive timepiece in the hallmark shade of blue combines understated elegance with a distinctive sporting flair and is a perfect example of successful design and modern technology. The aggregate timing displays are joined by a small seconds at “9 o’clock”, which elegantly counterbalances the day and date displays on the opposite side of the dial. The Portofino Chronograph Edition Laureus Sport for Good Foundation is powered by the tried and tested 79320 calibres with a 44-hour power reserve and automatic winding with a ball bearing rotor. A special watch for a special cause indeed!

In 2012, it is the Portofino Chronograph’s turn to sustain this sport-inspired range of watches. The Portofino Chronograph Edition Laureus Sport for Good Foundation in stainless steel is available in a limited edition Mar-Apr, 2012

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BEYOND OIL & GAS

notes combine the unexpected: spicy cardamom with bracing mandarin pulp and exotic pink pepper. The heart is as tender as the man himself, featuring vanilla orchid, crushed violet leaves and rich, luxurious Vetiver. A wild tropical grass with astonishingly deep roots, Vetiver emits a distinct warm, sensual and earthy note that adds just the right amount of sexy sophistication and texture. Once the scent unfolds, warm, seductive notes linger on the skin: smooth Amberwood, creamy Sandalwood, Patchouli, and Skin musk. The resulting Oriental Woody Fougere is a intoxicating statement. The range will include a 100 ml, 50 ml, and 30 ml Eau de Toilette, 200 ml Shower Gel, 75 ml after-shave balm, deodorant stick, and deodorant body-spray. the new entry level model rounding out the Atlantis range, a line which has been rejuvenated over the last two years with the restyling of the 44, the 48, and the 58.

spaces and a well-equipped cockpit as well as two comfortable cabins suitable for longer cruises.

For those who prefer to have a skipper as well as a high degree of privacy, the new Azimut 60 is the yacht which fills the bill. Its internal organisation is typical of larger yachts, with three spacious guest cabins in the bow area and crew areas in the stern. High performance is delivered by two 800 mhp Man engines.

SENSUAL NOTES Coty Beauty is pleased to announce the newest menâ&#x20AC;&#x2122;s scent in the trendsetting Guess Fragrances portfolio: Guess Seductive Homme. Guess Seductive Homme is designed for the confident, free-spirited, sophisticated man. The top

Azimut 40S is the entry level boat in the S Collection, the sporty range of the sea. Reaching speeds up to 35 knots, it has a dinette with retractable hardtop as well as generous amounts of glazing making you feel like you are out in the open sea even when the boat is closed. Below deck there are two cabins and two heads, a cabin with a double bed in the bow and one with twin beds amidships. Atlantis 38 is the entry model of the Atlantis open series and combines style with the concept of an authentic Mediterranean boat. Atlantis 38 has generous outdoor 76

Mar-Apr, 2012

Like the fragrance itself, the Guess Seductive Homme bottle is undeniably masculine. This strong bottle is topped with a weighted gunmetal colored cap with a satin finish. A magnetic closure mimics the power of the GUESS man, while the shiny collar boasts a subtly de-bossed Guess logo. The fluid is a transparent, warm gunmetal and the iconic triangular Guess logo on the carton completes the luxe, sophisticated package.


AUTO BESPOKE LUXURY More than half of clients who specified a Rolls-Royce Ghost in 2011 turned to bespoke personalisation. The service, which includes anything from the application of unique paint colours, coach lines and tread plates to whole vehicle designs featuring champagne sets, humidors and picnic cabinets, helped drive Rolls-Royce to record sales last year. In total, 56% of Ghost and Ghost Extended Wheelbase models sold around the world featured bespoke design in 2011. The move to highly personalised RollsRoyce Ghost models follows an increase in sales of bespoke Phantom family cars last year. More than eight in every ten Rolls-Royce Phantom models passed through the hands of the team’s designers and skilled craftspeople, before being delivered to a client. In some markets in the Middle East every Phantom featured bespoke content. “It is always our goal to exceed our clients’ highest expectations and fulfill their innermost desires,” said Torsten Müller-Ötvös, Rolls-Royce CEO. “With

highly bespoke Phantom and Ghost models, we are able to achieve this. The passion with which our bespoke craftspeople create these beautiful cars is reflected in some truly outstanding examples delivered across the globe last year.” The proportion of Phantom family cars with bespoke content delivered to Middle Eastern clients rose from 75 per cent in 2005 to 99 per cent last year, while in Europe the figure increased from 50 per cent to 89 per cent. In North America it rose from 30

per cent to 84 per cent over the same period and in Asia Pacific from 50 per cent to 79 per cent. In August 2011 Rolls-Royce announced an expansion of its bespoke operation to meet growing demand, doubling the number of bespoke experts working at the Home of Rolls-Royce in Goodwood by the end of the year. The company is also about to expand its manufacturing facility, partly due to the increase in demand for bespoke cars. Mar-Apr, 2012

77


BEYOND OIL & GAS

FLOATING LUXURY

Located at the heart of Duqm Port, Veronica is Oman’s first Floating Hotel

Owned and operated by DSME Oman LLC (Daewoo Shipbuilding & Marine Engineering Oman LLC), operators of the Oman Drydock Company (ODC), Veronica, a world-class, state-of-the-art facility is poised to woo tourists and business guests alike to the Sultanate. Veronica will be in a unique position to exclusively address the amenities and accommodation requirements of both business guests and tourists visiting the scenic wilayat of Duqm. Highlights of the Floating Hotel Veronica’s entertainment facilities include several multi-cuisine restaurants and bars, a fully equipped spa and gym, swimming pools, lounges, business centre, library, theatre, banquet and meeting facilities, a clinic and pharmacy and a salon. Veronica offers guests a variety of dining options. Guests may choose to dine at the Lido Garden by the poolside, a chic al fresco dining area or have a more intimate candle-light dinner at the Coral Restaurant. International cuisine by renowned Executive Chef Andreas Katzer features an eclectic menu and delectable seafood fare. Veronica is also an ideal venue for banquets, workshops or corporate events. The hotel is open to business clients and the general public, and is also an ideal weekend retreat for friends, family and gives travellers and tourists the opportunity to explore some of Duqm’s finest natural treasures, like the Duqm Rock Garden, the fishing town of Ras Duqm, the Arabian Oryx Sanctuary, Nafoon and Ras Markaz. For further information www.veronicaduqm.com 78

Mar-Apr, 2012

and

inquiries,

please

visit


JOB POSTINGS

POSITION

COMPANY

LOCATION

FOR DETAILS

Communication Production Services Advisor

Shell

Qatar

www.shell.com

Deputy Chief Emergency Response Officer

Shell

Qatar

www.shell.com

Mechanical Integrity Inspectors

Shell

Qatar

www.shell.com

Well and Reservoir Management Regional Manager

Shell

Dubai

www.shell.com

Technical Delivery Manager-Hydrocarbon Maturation

Shell

Dubai

www.shell.com

Commissioning Engineering Coordinator

Petrofac

Algeria

www.petrofac.com

Design Engineer – Piping

Ramsis Engineering

Bahrain

www.naukrigulf.com

Design Engineer - Structurals

Metscco Heavy Steel Ind.

Saudi Arabia

www.metscco.com

Specialist Generation – Power & Utilities

BAPCO

Bahrain

www.bapco.net

Shutdown Maintenance Engineer

BAPCO

Bahrain

www.bapco.net

Subcontracts Manager

Petrofac

Turkmenistan

www.petrofac.com

Turnaround Execution Engineer

An Oil Refining Co.

Abu Dhabi

www.soshr.net

HSE Manager

PPMS International

Malaysia

www.naukrigulf.com

Senior Corrosion Engineer

Island Falcon Technical Services

Abu Dhabi

www.islandfalcon.com

Service Engineer

Yokogawa Middle East

Muscat

www.yokogawa.com

Source: From different corporate and recruitment websites

Mar-Apr, 2012

79


BOOK CORNER

BLOWOUT

The thriller by Byron L. Dorgan and David Hagberg revolves around US’s insatiable appetite for energy. When American scientists get close to solving the problem with clean energy that doesn’t rely on foreign oil, unexpected forces try to stop them. This is where small town lawman and a new journalist become the unlikely pair who must stop the enemy. To believe the series of events postulated in this story could happen, we have to buy into the belief that a whole lot of people in power are more than self-serving, but downright evil, that we’ve reached a tipping point where the good people in power can no longer stand against the bad.

KAZAKHSTAN

SURPRISES AND STEREOTYPES AFTER 20 YEARS OF INDEPENDENCE

Twenty years ago, Kazakhstan was an impoverished and backward Central Asian state. Today it is the anchor of the region, rising in economic performance and international respect. The book authored by Jonathan Aitken explains how in twenty short years Kazakhstan has gone from an impoverished and chaotic Central Asian state to the region’s economic and political powerhouse - a young country whose 16 million people have their eyes fixed optimistically on the future. Aitken said that is a “surprise” to many people who don’t know about modern Kazakhstan, which too often suffers from negative stereotypes.

THE OIL CURSE

HOW PETROLEUM WEALTH SHAPES THE DEVELOPMENT OF NATIONS

Countries that are rich in petroleum have less democracy, less economic stability, and more frequent civil wars than countries without oil. What explains this oil curse? And can it be fixed? In this groundbreaking analysis, Michael L. Ross looks at how developing nations are shaped by their mineral wealth--and how they can turn oil from a curse into a blessing. Ross traces the oil curse to the upheaval of the 1970s, when oil prices soared and governments across the developing world seized control of their countries' oil industries. Before nationalization, the oil-rich countries looked much like the rest of the world; today, they are 50 percent more likely to be ruled by autocrats--and twice as likely to descend into civil war--than countries without oil.The Oil Curse shows why oil wealth typically creates less economic growth than it should; why it produces jobs for men but not women; and why it creates more problems in poor states than in rich ones. It also warns that the global thirst for petroleum is causing companies to drill in increasingly poor nations, which could further spread the oil curse. This landmark book explains why good geology often leads to bad governance, and how this can be changed. 80

Mar-Apr, 2012



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