Page 1

October - November 2013 Vol. 10 No. 6 ` 150

OFFSHORE WORLD VOL. 10 NO.6 OCTOBER - NOVEMBER 2013

Reservoir Management Assset In ntegriity in Pipelines Riskk Maanagem ment in n Downstrream Sand Sampling in Fracking Real-time Monitoring

Mumbai ` 150

ADIPEC Special International Exhibition & Conference 10-12, February 2014 | Mumbai, India

OSW Cover new.indd 1

05-12-2013 17:49:36


www.oswindia.com

Advt Blid.indd 2

Offshore World | 2 | OCTOBER - NOVEMBER 2013

05-12-2013 16:05:13


Offshore World | 13 | OCTOBER - NOVEMBER 2013

Advt Blid.indd 13

www.oswindia.com

05-12-2013 15:46:00


contents INTERVIEW VOL. 10 NO. 6 OCTOBER - NOVEMBER 2013 MUMBAI ` 150

OFFSHORE WORLD R.NO. MAH ENG/ 2003/13269 Chairman Publisher & Printer Chief Executive Officer

Jasu Shah Maulik Jasubhai Shah Hemant Shetty

EDITORIAL Editor Features Writer Sub Editor Editorial Advisory Board Design Team Events Management Team Subscription Team Production Team

Mittravinda Ranjan (mittra_ranjan@jasubhai.com) Rakesh Roy (rakesh_roy@jasubhai.com) Supriya Oundhakar (supriya_oundhakar@jasubhai.com) D P Mishra, H K Krishnamurthy, N G Ashar, Prof M C Dwivedi Mansi Chikani, Amol Patkar Abhijeet Mirashi Dilip Parab, Girish Kamble V Raj Misquitta (Head), Arun Madye

PLACE OF PUBLICATION: Jasubhai Media Private Limited

210, Taj Building, 3rd Floor, Dr. D. N. Road, Fort, Mumbai 400 001. Tel: +91-22- 4213 6400, + 91 -22-4037 3636, Fax: +91-22-4037 3635

SALES

General Manager, Sales Amit Bhalerao (amit_bhalerao@jasubhai.com) Prashant Koshti (prashant_koshti@jasubhai.com)

Taking a Toll on Recoveries

- Sudhir Vasudeva, Chairman & Managing Director, ONGC

‘Expansion will boost entrepreneurial opportunities’ 23

- Prasad K Panicker, Executive Director - Kochi Refinery, BPCL

GUEST COLUMN

Haunting E&P Companies…

8

- Debasish Mishra

FEATURES

Managing Reservoir Assets 10

- Dr M R Srinivasan

Fracturing Sand - Prospective Asian Sources 14 - Jajati Nanda, Pallavi Managave & Ompraksh Pal

MARKETING TEAM & OFFICES

Mumbai Godfrey Lobo / V Ramdas / Sabyasachi Das Taj Building, 3rd Floor, 210 D N Road, Fort, Mumbai 400 001 Tel: 91-022-40373636, Fax: 91-022-40373635 E-mail: godfrey_lobo@jasubhai.com, v_ramdas@jasubhai.com, sabyasachi_das@jasubhai.com Ahmedabad Vikas Kumar 64/A, Phase-1, GIDC Industrial Estate Vatva, Ahmedabad 382 445 Tel.: 91-079-49003636/627, Fax: 91-079-25831825 Mobile: 09712148258 E-mail: vikas_kumar@jasubhai.com Vadodara Pervindersingh Rawat 202 Concorde Bldg, Above Times of India Office R C Dutt Road, Alkapuri, Baroda 390 007 Telefax: 91-0265-2337189, Mobile: 09737114204 E-mail: pervinder_rawat@jasubhai.com Bengaluru Princebel M / Huliraj. E.N Mobile: 09444728035, 09481888718 E-mail: princebel_m@jasubhai.com, huliraj_mba@jasubhai.com Chennai / Coimbatore Princebel M / Yonack Pradeep 1-A, Jhaver Plaza, 1st floor, Nungambakkam high Road, Chennai 600 034 Tel: 044-43123936, Mobile: 09444728035, 09176963737 E-mail: princebel_m@jasubhai.com, yonack_pradeep@jasubhai.com Delhi Priyaranjan Singh / Suman Kumar 803 Chiranjeev Tower, Nehru Place, New Delhi 110 019 Tel: 011 2623 5332, Fax: 011 2642 7404 E-mail: pr_singh@jasubhai.com, suman_kumar@jasubhai.com Hyderabad Princebel M / Sunil Kulkarni Mobile: 09444728035, 09823410712 E-mail: princebel_m@jasubhai.com, sunil_kulkarni@jasubhai.com Kolkata E-mail: industrialmags@jasubhai.com Pune Sunil Kulkarni Suite 201, White House, 1482 Sadashiv Peth, Tilak Road, Pune 411 030 Tel: 91-020-24494572, Telefax: 91-020-24482059 Mobile: 09823410712 E-mail: sunil_kulkarni@jasubhai.com

6

Pipeline Integrity Monitoring Approach 21

- Iain Weir-Jones, PhD, PEng Risk Management in Downstream 25

- Ram K Goyal & Vinod Menon

Energy Commodities Exhibit Mixed Price Movement 28

- Niteen M Jain & Nazir Ahmed Moulvi

CASE STUDY

Future is Digital 19

- Anand Vishnubhotla

NEWS FEATURE

Iran Crude: India’s Strategic Need 30

- Gaurav Menghi

TRENDS

News 32

Subscription Rate (per year): Indian - ` 810/-; Foreign - US$ 120 Price of this copy: ` 150/-

MARKET INSIGHTS

The Publishers and the Editors do not necessarily individually or col­lectively identify themselves with all the views expressed in this journal. All rights reserved. Reproduction in whole or in part is strictly prohibited without written permission from the Publishers.

Products 44

Events Diary 5 3

Jasubhai Media Private Limited M

E

D

I

A

AN ISO 9001 : 2008 CERTIFIED COMPANY

Registered Office: 26, Maker Chambers VI, 2nd Floor, Nariman Point, Mumbai 400 021, INDIA Tel.: 022-40373737, Fax: 022-2287 0502 E-mail: sales@jasubhai.com Printed and published by Mr Maulik Jasubhai Shah on behalf of Jasubhai Media Pvt. Ltd., 26, Maker Chamber VI, Nariman Point, Mumbai 400 021 and printed at Varma Print, Pragati Industrial Estate, N M Joshi Marg, Lower Parel, Mumbai 400 011 and published from 3rd Floor, Taj Building, 210, Dr. D N Road, Fort, Mumbai 400 001. Editor: Ms. Mittravinda Ranjan, 26, Maker Chamber VI, Nariman Point, Mumbai 400 021.

www.oswindia.com

PROJECT UPDATE 51

BOOKSHELF 54 Cover Page Image Courtesy: ONGC

Offshore World | 4 | OCTOBER - NOVEMBER 2013


Offshore World | 5 | OCTOBER - NOVEMBER 2013

Advt Blid.indd 5

www.oswindia.com

05-12-2013 15:35:18


interview

Taking a Toll on Recoveries Geopolitical issues and political unrest are giving a run to oil companies for their recoveries. This interview summarises impasse between Sudan and South Sudan, political disturbances in Syria, challenges arising out of such situations during overseas assets acquisition in these countries and future plans. Sudhir Vasudeva, Chairman & Managing Director, ONGC, exclusively talks to Offshore World about the geopolitical issues faced by ONGC, challenges during acquisition of the assets and future plans in such situations. Excerpts:

Sudhir Vasudeva Chairman & Managing Director ONGC

What are the geopolitical issues in Sudan, South Sudan and Syria which are directly affecting production from the assets in these countries? After secession of South Sudan from Sudan in July 2011, majority of oil producing areas of approximately 60 per cent with reserves of about 55 per cent of Block 1, 2 & 4 [Greater Nile Oil Project (GNOP)] and entire Block 5A are situated in South Sudan whereas majority of processing facilities and Crude Oil Transportation System (SCOTS) along with export terminal are situated in Sudan and therefore, South Sudan, being a landlocked country, has to depend on Sudan for use of all these facilities for export of its crude oil in the international market. Post secession, Sudan and South Sudan had a number of political and economical issues to be resolved. Due to differences on commercial terms for the transport of crude oil produced in South Sudan by using the facilities of Sudan and in response to confiscation of

its oil cargoes by Sudan, the Government of South Sudan suspended all petroleum operations and production from all its producing assets in South Sudan in January, 2012. The continued impasse and mistrust between the two countries led to invasion of GNOP’s Base Camp and Central Processing Facility (CPF) situated in Heglig field in Sudan in April 2012 and resulted into severe damage to the production facilities in the field. Due to this, the crude oil pumping from Heglig CPF to Marine Terminal was stopped, which was resumed again in early May 2012 after carrying out major repairs and mobilisation of new power generators. Consequent to intervention by the United Nations and under the auspices of African Union High-level Implementation Panel (AUHIP), both Sudan and South Sudan could resolve their key differences and signed the ‘Cooperation Agreement’ in September, 2012 covering all the major issues between the two countries. The

>> Though some of the outstanding issues between Sudan and South Sudan are yet to be resolved, both the countries have been seriously involved in meetings between the top leadership of the two countries and have taken a number of confidence building measures to ensure continued flow of crude oil from South Sudan using the facilities in Sudan. www.oswindia.com

Offshore World | 6 | OCTOBER - NOVEMBER 2013


agreement on ‘Oil and Related Economic Matters’ referred to as ‘Oil Agreement’ was also signed, which covered the commercial terms and fees on crude oil of South Sudan for processing, transportation and transit for export by using facilities in Sudan. Production from Block 5A and Block 1, 2 & 4 in South Sudan resumed on 6 th April and 13 th April, 2013 respectively. In June, 2013, Sudan accused South Sudan of extending support to some rebel groups of Sudan and threatened to stop flow of crude oil from South Sudan. However, with intervention of AUHIP and other world leaders, the matter was resolved peacefully and Sudan lifted its threat of stopping of crude oil flow from South Sudan on 5 th September 2013. Though some of the outstanding issues between Sudan and South Sudan are yet to be resolved, both the countries have been seriously involved in meetings between the top leadership of the two countries and have taken a number of confidence building measures to ensure continued flow of crude oil from South Sudan using the facilities in Sudan. In Syria, the political unrest against the existing regime started in March 2011. Due to EU sanctions on Government Oil Companies in Syria, foreign partners in AFPC Project declared Force Majeure with effect from 2 nd Dec 2011. Syrian employees

>>Acquisition of oil & gas assets overseas is a challenge in almost all the countries be it Sudan, South Sudan, Syria or any other country. Challenges are in terms of competition, geo-political situation, political relationship with India, security situation etc. So, we deal with each specific acquisition according to the ground realities. and Management in AFPC continued to produce oil till December 2012 from AFPC oilfields till it was impossible to produce due to oilfield areas being in control of rebels. In Block 24, oil production discontinued in May 2012. At present, there is no production from the Syrian projects as the oilfield areas are in control of rebels, refineries and pipelines in control of Government of Syria. What challenges did ONGC face during acquisition of assets in these countries? Acquisition of oil & gas assets overseas is a challenge in almost all the countries be it Sudan, South Sudan, Syria or any other country. Challenges are in terms of competition, geo-political situation, political relationship with India, security situation etc. So, we deal with each specific acquisition according to the ground realities. In terms of balanced portfolio, ONGC is trying to have a balance of investments in politically stable countries and otherwise from risk management perspective. At the time of acquisition- Block 24 in 2004 and AFPC project in 2005, the political situation in Syria was normal and there were no challenges during that period.

What are ONGC’s future plans in such situations as the company is facing production challenge in such overseas assets? a) OVL along with other consortium partners CNPC of China and Petronas of Malaysia are constantly engaged with the Governments of Sudan and South Sudan. This also includes diplomatic efforts to create an atmosphere of trust, cooperation and peaceful border conditions to continue petroleum operations that would be congenial for sustaining oil production in both the countries. b) The secession of South Sudan in July 2011 and subsequent security incidents in GNOP areas in 2012 have resulted into sharp decline in production from Sudan and suspension of petroleum operations in South Sudan during FY 2013. In order to increase production, OVL along with other consortium partners have undertaken several measures like drilling of more wells, early monetisation of new discoveries and implementation of other production enhancement activities. c) Production from Block 1, 2 & 4 and Block 5A has been partially resumed from April 2013. The Joint Operating Companies of Block 1, 2 & 4 and Block 5A in South Sudan are in the process of resumption of other field activities like repair of sick wells, drilling of new wells and other related activities. d) Further, OVL along with other foreign partners of the consortium have been making sustained efforts towards expansion of their activities and increase production from Sudan and South Sudan. In Syria, on resolution of political problem and improvement of security situation, OVL can resume operations in Syria under the existing agreements. But, resolution of political situation is taking longer than expected timeframe. sw

Offshore World | 7 | OCTOBER - NOVEMBER 2013

www.oswindia.com


guest column

Haunting E&P Companies… Oil has become a precious commodity in today’s world. Geopolitical issues are haunting E&P companies for their under recoveries. Most of t h e E & P c o m p a n i e s w h i c h a re operating in politically unstable countries are either withdrawing from those countries or halting their production.

On the eve of World War I, First Lord of the Admiralty Winston Churchill made a historic decision to shift the power source of the British Navy’s ships from coal to oil. He intended to make the fleet faster than its German counterpart. But, the switch also meant that the Royal Navy would rely not on coal from Wales but on insecure oil supplies from what was then Persia. Energy security thus became a question of national strategy. Churchill’s answer? “Safety and certainty in oil,” he said, “lie in variety and variety alone.” “On no one quality, on no one process, on no one country, on no one route, and on no one field must we be dependent,” - this has been the cornerstone of energy security since that time and countries like India that depends on import for 80 per cent of its consumption – it’s even more critical. India has been attempting to secure supply since a long time - since domestic reserves are dwindling and NELP outcomes have been disappointing, both public and private sector companies have ventured out for oil and gas assets abroad. The biggest of them all is ONGC Videsh that has invested in Vietnam, Myanmar, Russia, Kazakhstan, Iraq, Syria, Libya, Nigeria, Sudan, South Sudan, Brazil, Columbia, Cuba - that is almost 13 countries other public sector entities like BPCL has almost made smaller but noteworthy investment in Mozambique and Brazil. There are many in private sector like Reliance and Videocon who have made forays into E&P business abroad. Syria is volatile but there are positive indications due to US’s decision not to attack. Libya is getting normalised. Middle-East is calm post -Arab spring. Nigeria has local government elections soon so it is politically similar to India (inactive). South Sudan is and has always been turbulent. Political instability in these countries is definitely impacting the production from the assets.

Debasish Mishra Senior Director | Consulting Deloitte Touche Tohmatsu India Pvt Ltd

www.oswindia.com

Challenges in all these are manifold First, there are many countries, which are either in conflict zone or just coming out with one. Example, Iraq, Offshore World | 8 | OCTOBER - NOVEMBER 2013

Sudan, Libya etc. Indian diplomacy is still at nascent stage compared to the Western powers and has very limited influence. Also, India as a country is shying away from engaging directly in these countries unless it is part of UN peace-keeping force. Second, there are countries like Russia, Kazakhstan, where getting a stake in an oil field is more of a countryto-country engagement than a commercial decision and they would often flex their muscles - here an emerging power like India has to show some strength in getting a good bargain. China is often two steps ahead of India in such places. Third, there is increasing push towards resources nationalisation in many countries. This is a real risk in countries in Latin America. Again E&P companies have to undergo many challenges like high security costs, low high-skilled local manpower and high level of corruption. E&P companies in India are suffering from Policy paralysis in the wake of upcoming elections and focus on KG-D6 and gas pricing are grabbing too much attention now-a-days. Most of the Indian E&P players are looking for international assets like ONGC (through OVL), RIL, and Videocon. Overall, it’s much more driven by the External Affairs Ministry than ONGC or the Oil Ministry. Securing supply routes is also another critical factor. Many believe US is going to soon have “energy independent” given their luck with Shale Gas and Tight Oil. Many believe after 2017, they will at least not depend for oil outside American continent. That puts the onus on securing supply routes on countries like India and China. For example, India will import for a long time from Saudi and other Middle-East countries - this supply will come via the Gulf of Eden and the Persian Gulf. Piracy emanating from Somalia is a major problem in that region. Also recent incident of Iran flexing its muscle by detaining an Indian tanker for nearly a month shows that we need to have a robust supply routing, where there is heavy coordinating with the Indian Navy to ensure security. sw


Offshore World | 9 | OCTOBER - NOVEMBER 2013

Advt Blid.indd 9

www.oswindia.com

05-12-2013 15:53:31


features Asset Management

Ma nag ing Reser voi r A ssets A sound management practice in reservoir assets consists of setting goal, developing and implementing plan, monitoring and evaluating performance and revising necessary unworkable plans, without jeopardising the ultimate goal of asset management to maximise economic benefits by optimising recovery along with minimised CAPEX and OPEX. The article presents sound reservoir management practice in developing new field, revitalising a mature oil field to enhance economics in projects at various stages of the reservoir life cycle. The life cycle of a reservoir starts with exploration that leads to discovery followed by delineation of the reservoir, development of the field and finally abandoning the same.

to manage the reservoir assets. The relative importance of these strategies will vary from asset to asset and from time to time with in the development life cycle.

Reservoir asset management and processes exemplify sound reservoir management practice in developing a new field, revitalising a mature oil field. Reservoir performance analysis supported by economic results is executed at various stages of the life cycle. A sound management practice in reservoir assets consists of setting goal, developing and implementing plan, monitoring and evaluating performance and revising necessary unworkable plans, without jeopardising the ultimate goal of asset management to maximise economic benefits by optimising recovery along with minimised CAPEX and OPEX.

Financial Strategy of Integrated Reservoir Management The principal financial strategy of managing the reservoir asset is -- maximise the cash flow subject to capital and operating budgets and safeguarding funds flow from the existing investments. The primary key output of reservoir management is the protection of funds flow from existing investments in terms of wells and infrastructure. The secondary key output is to generate the options and strategies for production optimisation from the reservoir assets. These takes care of both the short term (maximising production) and long term increase of reserves and manage/defer abandoning. The asset management can predict generation of funds and decide allocation to new strategies and options in implement based on availability of capital, cash generation requirement and risk appetite. With a two pronged approaches on cost reduction and enhanced personnel productivity, the cost base can be kept minimum. Cost reduction is achieved through lowering cost of manpower and IT. The personnel productivity is enhanced by adopting staffing practices. Increasing the efficiency on day to day basis, reservoir management allows more resource allocation to identified investment opportunities.

The general management of Reservoir Assets is triggered by the following business drivers: 1. Volatility of Oil Prices 2. Changes in Geographical Emphasis 3. Rapid Advancement in Technology 4. Environmental and Safety Requirements

Implementing Integrated Reservoir Management The following strategy is applied to achieve the re-engineering of the reservoir management practice: • Develop culture of learning with a consistent focus on technology pertinent to the asset’s goals. • To achieve continuous improvement establish performance measures. • Formulate an integrated, multi-skilled engineering team, which forms the basis of the successful reservoir asset management.

The current volatility in oil prices seems to continue over the medium term which lays emphasis on low cost production of hydrocarbon. Cost cutting is being done by applying new technology and new business models. There are various strategies

This calls for widening of the knowledge to encompass other disciplines and skills, promoting learning culture which generates the knowledge of available resources leading to soliciting the most appropriate solutions.

Isopach Map

www.oswindia.com

Offshore World | 10 | OCTOBER - NOVEMBER 2013


With Best Compliments From EGS SURVEY PVT. LTD. THE INDIAN MULTINATIONAL WITH A PERSONAL TOUCH Accredited by BSI with Quality Management System standards ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007 & ISO/TS 29001:2010

Specialist in Hydrographic & Swath Bathymetry Surveys Offshore Platform Site & Pipeline Route Surveys Submarine Cable Route Surveys Seismic Side Scan Sonar Surveys Gradiometer Surveys for UXO Search Offshore & Marine Construction Survey Support Shallow & Deep Water Oceanography Weather Forecasting Services Wide Area Positioning Services Possesses Latest State of the Art Survey Equipments, Underwater Sensors Trained and Experienced Man power Marine Deposits

Alluvium Rock

Tie ups with the world renowned specialized institutes and companies Capable to carry out surveys and studies anywhere in the world EGS GROUP also has Companies in the UK, the USA, Hong Kong, Australia, Kazakhstan, Singapore, SE Asia & Mauritius For further information please contact: EGS Survey Pvt. Ltd., C 005/006, Platform Level Floor, Tower No. 8, Railway Station Complex, C.B.D. Belapur, Navi Mumbai – 400614. Tel.: +91 22 2759 5100. ● Fax: +91 22 2759 5110 E-mail: egsindia@egssurvey.in ● Website: www.egssurvey.in

Offshore World | 11 | OCTOBER - NOVEMBER 2013

www.oswindia.com


A prudent application of infil - drilling and improved. Hydrocarbon recovery methods intertwined with, systematic data acquisition and management, which allow detailed tracking of production and injection are a must for combating production decline and managing reservoir energy. Use of 4D seismic (time lapse 3D seismic) in managing the reservoir assets is slowly becoming the norm of the day. New developments use this (4D) along with reservoir start up and appraisal to strategise the development and manage the aged fields & use it to look into balance in reserves and prolonged field life.With the help of 4D seismic data, analysis and interpretation, the infil target wells to be drilled can be planned. They also can provide a strong support for interpreting well behaviour in terms of OWC (Oil Water Contact). They can be studied for performance prediction by integrating to understand water coning etc.

Sucker Rod Pump Operated Well

• Maturity: Stage at which the reservoir is well understood while the quality of reserves changing due to depletion trend. This is influenced by various issues like technical, logistics, HSE and economic. The top most priority in this is identifying and evaluating the factors which control the flow of hydrocarbon in reservoirs. This involves in getting the effects of capillarity, gravity, rock heterogeneity, the phase changes and chemical reactions that are typical with multiphase flow. Drilling Rig

Real-time Reservoir Management This is another emerging concept in managing reservoir asset discipline. In this, the emphasis is shifted from mad rush to and gas (natural resources) to be extracted, to a controlled process, where production can be monitored and optimised. This will transform the core competenc y of oil majors i.e., reser voir asset management. Real-time reservoir asset management demonstrated the use of new technology like Nanotechnology and produce hydrocarbons at lesser cost with minimum personnel intervention, hence maximising efficiency and enhance revenues. Th e t r u e re a l t i m e re s e r vo i r m a n a g e m e nt a n d co nt ro l co m b i n e s the various connected disciplines and improve the efficiency of data utilisation and sharing. The key drivers for real-time reservoir asset management are the four stages in the development: • Exploration: where the reservoir structure and contents are investigated but not defined well. • Delineation: where the assessment of size and extent are being done. • Development: During this phase the reservoir being well understood and the production is at peaking level. www.oswindia.com

The technical challenges like modelling of Pore scale processes, complicated heterogeneity in few reservoirs and macroscopic flow instabilities and large scale modelling of EOR, do exist. Once the reservoir is reasonably modelled and characterised, we can predict how the possible modifications in production / field development strategies will affect hydrocarbon production rate and recovery. These predictions can be tested under logistic and economic constraints. We may have to evaluate the safe design limits for pipe lines and other production facilities especially for planning for combating Health & Safety hazards. While the design of production facilities involves being able to predict, it should take care of handling Asphaltenes, Wax, H2S, CO2 corrosion etc. and also handling increasing water production. Such production scenarios are obtained from the reservoir model which in turn is based on thorough and accurate understanding of fluid composition and the rock chemistry. sw Dr M R Srinivasan Professor, Department of Petroleum Engineering and Geoscience University of Petroleum and Energy Studies Email: mrsrinivasan@ddn.upes.ac.in

Offshore World | 12 | OCTOBER - NOVEMBER 2013


Offshore World | 13 | OCTOBER - NOVEMBER 2013

Advt Blid.indd 13

www.oswindia.com

05-12-2013 16:27:22


features Sand Sampling

Fracturing Sand – Prospective Asian Sources Increased hydraulic fracturing activities around the globe have substantially increased the demand for hydraulic fracturing sands. Sands used for hydraulic fracturing must be aligned with the quality standards framed by the American Petroleum Institute (API) and, more recently, the International Organization for Standardization (ISO). White sand from Ottawa & brown sand from the Southeast US are considered best quality sands for hydraulic fracturing. The study was performed on samples from at least ten sources from each Asian country/region. Some samples passed the stringent norms of API and ISO. However this paper represents comparative data of only four of those Asian sands which not only passed the norms set by API and ISO but also represented close characteristics with Ottawa sand.

Hydraulic fracturing is a well stimulation method specially performed on reservoirs with low permeability to increase the flow of hydrocarbons into the wellbore. Specially engineered fracturing fluid is pumped into the pay zone or desired area to be fractured at a rate and pressure high enough to extend and wedge open the fracture hydraulically (Veatch et al 1989). Proppants such as strong grains of sand are added to the fracturing fluid to keep the fracture open after fluid injection has stopped. The amount of proppant used, the manner in which it is carried into the fracture, and properties of the proppant material play a pivotal role in maintaining productivity throughout the life of the well (Martinez et al. 1987). It is estimated that up to 90 per cent of the wells currently operating have been fractured and that, in the future, 60 to 80 per cent of new wells might need to be fractured to remain viable (Kamat et al 2011). All the properties of sand grain proppants, including roundness, size distribution, resistance to crush under the influence of closure stress, grain size distribution, and proppant density, can affect the resultant fracture conductivity. Conductivity of a propped fracture is one of the most important factors that directly affect well productivity, along with the propped fracture area, reservoir permeability, and drainage radius (Montgomery and Steanson 1985). Selection of a high-quality sand grain type to use as proppant is crucial for a successful hydraulic fracturing treatment. Several global standard proppants are available in the market for hydraulic fracturing stimulation. However, procuring these proppants for remote locations can be challenging in terms of both cost and time. This paper evaluates different proppants from Asian countries to support the local production. Use of these locally available proppants for fracturing treatments can help to save time and reduce production costs. The properties of several 20/40-mesh sands were examined for grain size distribution, proppant strength, quantities of fines and impurities, roundness and sphericity, and proppant density. The purpose of this study was to compare the characteristics of Asian sands with the existing best quality proppants in the market. The following experiments were performed on sand samples in accordance with API RP 56 (1989) and ISO 13503-2 (2006). Sand Sampling Sand samples were collected from different global sources, and their properties were compared with Ottawa sand. The samples used are shown in Figure 1. www.oswindia.com

Sample 1: Ottawa Sand, 20- to 40-mesh, White Color

Sample 3: India, 20- to 40-mesh, White Color

Sample 2: China, 20- to 40-mesh, White Color

Sample 4: Malyasia, 20- to 40-mesh, Red Color

Sample 5: Arab, 20- to 40-mesh, White Color

Figure 1: Sample Information

Experimental Work and Results Sieve Analysis: Samples were first dried at a temperature of 110 ±5ºC (230 ±9ºF). Suitable sieve sizes (US 16- to 50-mesh) were used to obtain the required information as specified and nested in order of decreasing size of opening, where the pan was placed below the bottom sieve. The sample was placed on the top sieve, and then a lid was placed over the top sieve. The sieves were then agitated using a

Offshore World | 14 | OCTOBER - NOVEMBER 2013


Who’s Who th 14 Edition

Who’s Who is an exhaustive listing & fact book on CHEMICAL PROCESS, PHARMA BIOTECH, HYDROCARBON INDUSTRY & INDUSTRIAL SAFETY

AN ISO 9001:2008 CERTIFIED COMPANY

Offshore World | 15 | OCTOBER - NOVEMBER 2013

Advt Blid.indd 15

www.oswindia.com

05-12-2013 17:57:15


commercial sieve shaker for 10 min. The weight of material retained was determined on each sieve. The grains passed and retained were calculated by percentage. The sieve nest arranged from top to bottom as 16-, 20-, 30-, 35-, 40-, 50-mesh, and pan. To meet API requirements of a 20/40-mesh proppant, the following criteria must be met: • A minimum of 90 per cent of the tested sand sample should fall between the designated sieve sizes, 20 (840 micron) to 40 (419 micron). • No more than 0.1 per cent of the total sample should be larger than the first sieve size. • No more than 1 per cent of the total sample should be smaller than the last sieve size. Parameters

1

2

3

4

5

Vol. retained at 16-mesh, %

0.1

0.1

0.1

0.1

0.1

Vol. retained at 20-mesh, %

6.1

4.7

5.7

6.7

4.6

Vol. between 20- to 40-mesh, %

90.6 91.7 91.2

90.0

91.4

Vol. passed 40-mesh, %

2.9

3.3

2.7

3.1

3.5

Vol. passed to pan, %

0.3

0.2

0.3

0.1

0.4

Table 1: Particle Size Distribution by Manual Sieving

Bulk Density: An empty 100-mL measuring c ylinder was placed on an electronic balance and the weight was recorded. Next, the measuring cylinder was filled with a free-flowing sand sample up to the 100-mL mark. The weight was recorded again and bulk density was calculated using the following equation: Bulk density = volume of dry sand in grams / volume of dry sand in cc....................Eq 1

Figure 2: Krumbein and Sloss (1963) chart.

Images of the samples were taken using a microscope, and the individual images were compared with the Krumbein and Sloss char t. Results were obtained from an average study of 20 grains of each sample (Table 3). Sample

1

2

3

4

5

Avg. sphericity

0.85

0.85

0.85

0.80

0.75

Avg. roundness

0.75

0.75

0.75

0.75

0.70

Table 3: Sphericity and Roundness Value

High-density proppants are more difficult to suspend in fracturing fluid and transport into the fracture. Fracture width will be narrower using denser proppant. Thus, higher-density proppants require more mass of material to create the same fracture as lower-density proppants (Table 2). For typical hydraulic fracturing treatments, the density of the proppant will significantly impact the achieved fracture width. Fracture width will be narrower with denser proppant.

Turbidity: Turbidity in water results from the presence of suspended clay, silt, or finely divided inorganic matter. Turbidity is a measure of the optical property of a suspension that results from the scattering and absorbing of light by the particulate matter present. The samples were dispersed in deionised (DI) water and manually shaken to suspend the clay, silt, or finely divided matter. The suspension properties of the samples were measured using a Hach® spectrophotometer at 450 nm as formazin turbidity units (FTU). As recommended by API, the turbidity value for fracturing sand should be less than 250 FTU.

Sample

1

2

3

4

5

Sample

1

2

3

4

5

Bulk density

1.54

1.55

1.54

1.53

1.55

Turbidity in FTU

110

130

100

140

160

Table 2: Bulk Density (in g/cc)

Table 4: Turbidity Result

Sphericity and Roundness: Par ticle sphericity is a measure of how closely a sand par ticle or grain approaches the shape of a sphere. A per fectly spherical par ticle provides the greatest amount of pore space and minimum resistance for hydrocarbon flow (Gottschling 2005). Grain roundness is a measure of the relative sharpness of grain corners or of grain cur vature. Roundness is measured on the same grain for which sphericity is measured. The most widely used method of determination is visual comparison of images of the samples with the chart developed by Krumbein and Sloss (1963) (Figure 2). Individual grains are observed under a high-resolution microscope with 40× magnification. Recommended values of sphericit y and roundness should not be less than 0.6 for fracturing sand.

Acid Solubility: Acid solubility signifies the presence of acid-soluble materials in the sample. The materials can be carbonates, feldspars, iron oxide, clays, etc., which can be present in fracturing sand as contaminants. For this test, 5 g of a dry sample was dispersed in 100 mL of an acid mixture (12 per cent hydrochloric (HCl) acid and 3 per cent hydrofluoric (HF) acid). Because of the hazards associated with using HF acid, an equivalent q u a nt i t y o f a m m o n i u m b i - f l u o r i d e wa s u s e d i n s te a d. Th e te s t wa s per formed at 150°F in a water bath for 30 min. Then, the samples we re c l e a n e d w i t h D I wate r, d r i e d, a n d we i g h e d. Th e we i g ht l o s s wa s re p o r te d a s a c i d s o l u b i l i t y. A s p e r A P I re co m m e n d at i o n s, t h e acid solubility of 20- to 40-mesh fracturing sand should not be more than 2 per cent.

www.oswindia.com

Offshore World | 16 | OCTOBER - NOVEMBER 2013


ADVERTISE TO EXPAND your reach through

Portable Ultrasonic Flow Measurement in Hazardous Areas

FLUXUS® F608 and G608 f f f f

Extremely Resistant Instantly in Service Accurate and Reliable Highly Versatile

Perfectly suited for the Flow Measurement of Liquids and Gases f f f f f

Offshore & Upstream Midstream & Downstream Gas Storage & Transport Chemical Industry Energy Sector

The ideal Solution for the Oil and Gas Industry

For Details Contact

Jasubhai Media Pvt. Ltd. Taj Building, 3rd Floor, 210 Dr D N Road Fort, Mumbai - 400 001 Tel: 022-4037 3636, Fax: 022-4037 3635 Email: industrialmags@jasubhai.com

www.flexim.com

Offshore World | 17 | OCTOBER - NOVEMBER 2013

Advt Blid.indd 17

www.oswindia.com

05-12-2013 16:18:52


Sample

1

2

3

4

5

Acid solubility, %

1.08

1.42

0.98

1.03

1.10

Table 5: Acid Solubility

Mineralogy: The mineralogical composition of the samples was tested to determine the presence of undesired compounds, such as carbonates, feldspars, and clay. The samples were ground to pass through a 200-micron sieve, mounted on XRD sample holders, and run to produce diffraction using PANalytical X’PERT PRO defraction system in the 2θ range of 4 to 65°. The XRD patterns were analysed with the Rietveld technique using data available from the International Centre for Diffraction Data (ICDD) library. The powdered samples were also analysed by XRF using PANalytical Epsilon 3 software for elemental analysis as oxides. Phases

Sample 1

Sample 2

Sample 3

Sample 4

Sample 5

Quartz

99

98

99

99

99

K-spar

TR

TR

TR

TR

TR

Na-spar

TR

TR

TR

TR

TR

Calcite

TR

TR

TR

TR

Dolomite

TR

40-mesh sand, the percentage of crushed sand passing through the 40-mesh screen is the crush strength. API recommends that fines generated should not exceed 14% for US 20/40-mesh size. According to ISO standards, the fines generated should not exceed 10%, irrespective of grain size. In this paper, the crush resistance test was performed according to the procedure given in API RP 56 (1989). The crush resistance of grains indicates their compressive strength capacity. This is one of the more important criteria for proppant selection. The more fines generated at the prescribed stress level, the greater the probability of fines migration plugging the flow channels. The samples were subjected to a stress level of 4,000 psi (Table 9). The samples passed the test, generating less than 14 per cent fines. Sample

1

2

3

4

5

Fines, %

7.88

8.27

7.14

6.82

7.46

Table 9: Crush Resistance at 4,000 psi

Conclusion All the properties of the four samples of Asian origin found quite close to Ottawa sand and hence considered as best quality proppants for hydraulic fracturing as per norms of API and ISO. These samples were selected after detailed study of at least 10 samples from each region/country. This satisfies representation of every Asian region as natural habitat of quality fracturing sand, which can serve to minimize production costs. sw

Table 6: XRD Results in % Abbreviations: K-spar = potassium feldspar; Na-spar = sodium feldspar; TR = trace.

Elemental Oxides Sample 1

Sample 2 Sample 3 Sample 4 Sample 5

SiO2

98.9

98.6

99.4

99.3

98.8

Al2O3

0.5

0.7

0.6

K2O

0.2

0.4

0.3

CaO

0.3

0.2

0.4

0.4

0.2

Fe2O3

0.1

0.1

0.2

0.3

0.1

Table 7: XRF Results in %

Loss on Ignition: Known quantities of samples were exposed to a temperature of 1000°C in a muffle furnace for 1 hr to determine the temperature stability of the fracturing sands. Any weight loss was reported as a loss on ignition caused by the presence of carbonates, organic compounds, etc. Sample

1

2

3

4

5

Loss on ignition, %

0.4

0.3

0.2

0.3

0.3

References API RP 56, Recommended Practices for Testing Sand used in Hydraulic Fracturing Operations, first edition. 1989. Washington, DC: API. ISO 13503-2, Measurement of properties of proppants used in hydraulic fracturing and gravel-packing operations, first edition. 2006. Geneva, Switzerland: ISO. Gottschling, J.C. 2005, Analysis of Non-API Industrial Sands for use in Hydraulic Fracturing, Paper SPE 98019, presented in SPE Eastern Regional Meeting, Morgantown, West Virginia, USA, 14–16 September. http://dx.doi.org/10.2118/98019-MS. Kamat, D., Saaid, I.M., and Dzulkarnain, I. 2011. Comparative Characterization Study of Malaysian Sand as Proppant. World Academy of Science, Engineering and Technology 57. Martinez, S.J., Steanson, R.E., and Coulter, A.W. 1987. Formation Fracturing. Petroleum Engineering Handbook, ed. Howard B. Bradley. Richardson, Texas: Society of Petroleum Engineers. Montgomery, C.T. and Steanson, R.E. 1985. Proppant Selection: The Key to Successful Fracture Stimulation, J. Pet Tech 37 (12): 2163–2172. http://dx.doi.org/10.2118/12616-PA. Veatch Jr., R.W., Moschovidis, Z.A., and Fast, C.R. 1989. An Overview of Hydraulic Fracturing in Recent Advances in Hydraulic Fracturing, Vol. 12. Richardson, Texas: Monograph Series, SPE.

Table 8: Loss on Ignition at 1000°C in %

Crush Resistance: Proppant breakage and fines generation causes decreased pack conductivity because generated fines can flow with hydrocarbons and plug the flow channels. A crush resistance test is conducted to determine the amount of fines that will be generated when a certain pressure is exerted on the sand sample. This test provides an indication of the stress level at which crushing is excessive and the maximum stress to which the material can be subjected. The test pressures are chosen based on closure stresses encountered downhole in an oil or gas well. The crush resistance test is performed by applying force on a specific weight of sand using an API-recommended-size piston in a cylinder at a particular stress level. The percentage of fines passing through the bottom screen is the crush strength. For 20- to www.oswindia.com

Offshore World | 18 | OCTOBER - NOVEMBER 2013

Jajati Nanda Sr Scientist – Analytical Science Halliburton Technology Center – Pune (India) E-Mail: jajati.nanda@halliburton.com Pallavi Managave Sr Lab Professional – Analytical Science Halliburton Technology Center – Pune (India) E-Mail: pallavi.managave@halliburton.com Omprakash Pal Pr Scientist – Analytical Science Halliburton Technology Center – Pune (India) E-Mail: omprakash.pal@halliburton.com


Case study

Future is Digital Digital Oilfield users require the right mix of technology in accessing accurate and real-time reporting, system monitoring, audio and video collaboration tools and more reliable & safer operational systems in their upstream business to maintain a safe, robust and secure environment. In this paper, the digital oilfield management technology in helping well management and surveillance, and also ensure optimal production processes is outlined and one of the ongoing projects is used as the case study. The case study addresses the digital advantages in one of the biggest digital oilfield projects - Athena oilfield off the coast of Scotland - to help personnel spend less time gathering data and more time meeting the organisation’s operational objectives. Information technology has been a key component of the upstream oil and gas business, however the upstream oil and gas industry is under continuing pressure to reduce costs, increase productivity and ensure efficient use of resources, particularly skilled human resources. To this end, companies have been focusing on core business activities, developing production capacity to match demand and using technology as a business enabler. There are, therefore, clear business drivers for better utilising IT to provide accurate and real-time reporting, system monitoring, audio and video collaboration tools and more reliable and safer operational systems in their upstream business. As the oil industry becomes more reliant on technology to support key operations on the Digital Oilfield, there is a critical need to maintain a safe, robust and secure environment. With increased threats from unstable geopolitics, terrorism and environmentalism through to hackers, viruses and worms, the industry recognises that something proactive must be done to manage risks associated with confidentiality, integrity and availability of information systems, which are increasingly at the heart of their business. Contrary to wishful thinking, it’s not simply a matter of building the infrastructure, installing equipment and flipping a switch to begin operating. Instead, new oilfields require the right combination of technology and planning at every step of the process. From start to finish, without adequate means to obtain critical information, the process can be long, cumbersome and ripe with the chance of error. Case Study: Athena Oilfield Ithaca Energy, the development and production company, realised this and took the necessary steps to minimise improvisation in the development of the Athena oilfield off the coast of Scotland. As the operator of the project, Ithaca Energy sought the latest monitoring technology available to help with well management and surveillance, and also ensure optimal production processes. To have a top-notch oilfield, Ithaca Energy needed to find the right mix of technology to help personnel spend less time gathering data and more time meeting the organisation’s operational objectives.

that threatens new oilfields. In addition, new oilfields are frequently subjected to variations in well performance, artificial lift variables, topsides process conditions and other factors. These, in turn, can cause large fluctuations in total production. Also, process data obtained in these conditions is frequently subjected to flat-lines, drop-outs and errors that require cleansing for proper and accurate data processing. Well rate estimations require calculations and correlations using accepted first-principle methods, and these must be adjusted and re - calibrated according to field conditions. These estimations must then be presented clearly and accurately to decision-makers — and in a format that allows them to consult with their peers and respond to situations in a timely manner. Digital Advantages The Athena oilfield required technology that would address these factors as much as possible while ensuring optimal production processes. Ithaca Energy found the answer to its requirements in digital oilfield management technology for the flexibility and control it offered. Central to achieving this was selection of well surveillance software from Honeywell — Well Performance Monitor (WPM) — which provides an easy-to-understand, real-time snapshot of key operations through one information hub, helping key personnel and decision-makers visualise the performance of the entire Athena oilfield. For Ithaca Energy, choosing the WPM software was the first step in the process toward establishing a digital Athena oilfield. Just as critical: the implementation process, which entailed determining the proper approach, as well as the appropriate phases and structure of the system. Working with

>> With increased threats from unstable geopolitics, terrorism and environmentalism through to hackers, v i r u s e s a n d wo r m s, t h e i n d u s t r y r e c o g n i s e s t h a t something proac tive must be done to manage risks Ithaca Energy needed technology that would provide real-time insight into associated with confidentiality, integrity and availability oilfield processes and performance to combat the uncertainty and inaccuracy of information systems. Offshore World | 19 | OCTOBER - NOVEMBER 2013

www.oswindia.com


>> The WPM technology extracts summary information and key performance indicators from real-time process data historians, production databases and engineering well models, allowing operators to visualise field performance data and manage equipment assets. with the well model and suggests potential adjustments to make to parameters, providing engineers with the level of detail necessary to accurately determine which parameters actually require adjustments. In addition, visual models help predict what each well is capable of producing. The WPM technology extracts summary information and key performance indicators from real-time process data historians, production databases and engineering well models, allowing operators to visualise field performance data and manage equipment assets. This presents a picture of where shortfalls in production are occurring so engineers can take immediate steps to correct them, and maximise the production potential of each well. WPM also helps personnel manage costs associated with surveillance by enabling engineers to identify abnormal situations quickly and react faster to disturbances. Honeywell, Ithaca Energy took a vertical (from data sources to end-user visualisation) and phased approach to deployment, implementing an adequate amount of functionality at every automation/IT layer to achieve the business objectives, but allowing room for growth and adaptation based on potential new objectives and future levels of functionality. From a timing perspective, the phased implementation also ensured Ithaca Energy would have a fully-tested system available upon first operation of the oilfield, eliminating costly uncer taint y and guesswork during the ramp-up period of the new field. It also left room for future growth and improvement. Once the oilfield was up and running, the WPM system enabled Ithaca Energy’s engineers to monitor how the Athena wells performed compared to expectations. Ithaca Energy also selected an out-of-the-box module for Well Test Validation to complement WPM, further supporting the objective of establishing optimal well performance conditions. Taking a three-phased approach, Ithaca Energy first established system requirements and developed a general design for the integrated system. At its core, the Athena oilfield development is based on electrical submersible pump (ESP) wells. Athena engineers sought to automate the well production test capture, analysis and validation process, so Ithaca Energy formed the project’s main objectives around the set of functions as applicable to ESP wells, and by modifying WPM’s Well Test Validation module, as required, in order to achieve those objectives.

Fine-Tuned Performance The second stage of implementation entails deploying the software in a simulated environment, which is enabling operations managers to test the system, train personnel and fine-tune processes so that they can be as fully operational as possible when the wells begin to produce. This is especially critical due to the fact that the oilfield is being developed concurrently. Conclusion Well Performance Monitors are easily deployable and versatile solutions for intelligent field and well surveillance with a proven successful install base for a growing list of customers. Built on open and secure industry standards, the solution is control-system vendor neutral, with existing installs integrating numerous data sources in a wide variety of geographical locations. It has demonstrated scalability and versatility, as it is used to integrate remote facilities with low well counts to multiple field operations with hundreds of wells. Well Performance Monitors allows rapid deployment and immediate return on investment through an out of the box intuitive interface that presents prioritised views of total field and individual well performance, whilst retaining the ability to meet specific customer needs. sw

Using the Well Test Validation module, production engineers were able to quickly calculate and re-calculate, as required, well test results based on stable process variable averages in order to easily capture valid well tests, even prior to creating the well test record. If the well test is deemed valid, the system executes a match www.oswindia.com

Offshore World | 20 | OCTOBER - NOVEMBER 2013

Anand Vishnubhotla Business Head, Advanced Solutions Honeywell Process Solutions India Email: anand.vishnubhotla@honeywell.com


features Real-Time Monitoring

Pipeline Integrity Monitoring Approach Real-time data in monitoring the structural integrity of oil and gas pipelines aids pipeline operators for taking real, concrete steps to mitigate risks – real or perceived – associated with the use of pipelines to transport vital materials, and the risks that such infrastructure might suffer a failure leading to environmental damage or other consequences. In this article, the author illustrates the Real-time monitoring key advantages over previous-generation technologies in effectively mitigating the operational risks, data collection to improve the operator’s Mean-Time-To-Respond and reducing operating cost.

The last thing pipeline and resource companies need is an equipment failure that could cost millions of dollars in lost production, wreak havoc on the environment and result in skyrocketing legal fees. But as history has shown, such mishaps can happen, in particular when pipelines and related structures such as pump shacks and compressor stations are located in highly sensitive areas such as unstable hillsides, marshes, bogs, swamps, river crossings and steep grades. Real-time monitoring is designed to overcome these and other design and construction challenges, and to keep pipelines, associated equipment and assets in running smoothly by monitoring their health in real-time. Real-time monitoring provides clear and unassailable evidence that pipeline operators have taken real, concrete steps to mitigate risks – real or perceived – associated with the use of pipelines to transport vital materials, and the risks that such infrastructure might suffer a failure leading to environmental damage or other consequences. Since such failures rarely happen instantaneously, vigilant monitoring is the only safeguard, allowing the operator to make informed decisions with the benefit of early awareness and operational response.

pipeline or throughout a site where a number of high value concern areas needs to be monitored on an ongoing basis. Typically, the sensors are interrogated periodically and their average outputs are stored as a single sample. Therefore, local variance from one reading to another cannot disproportionately skew the results observed by monitoring personnel, and the incidence of false positives or false negatives is greatly reduced. Under normal circumstances, a channel is sampled at a rate of 2000 sps and the sampling duration is defined by the operator at the time of commissioning. Currently, a sampling duration of 125 msec is used, which allows the averaging of 250 readings. A node is assigned a unique address and communicates to a head end unit (HEU) over a dedicated cable that provides both power and data signals. The node may be deployed at spacings between 5 or 500 metres of pipeline, or on foundations, rotating equipment, power generators and so forth. Higher spacing densities on pipelines will typically be adopted when assessing the behaviour of over or underbends, or where other structural features are present such as tie downs or expansion structures.

Real-time monitoring provides three key advantages over previous-generation technologies that manually monitor the structural integrity of oil and gas pipelines and enhances the environmental safety of pipeline operations. Operators are no longer required to walk the length of an instrumented section of pipe, or asset; they can simply be emailed ongoing reports as to the assets health, or monitor via a PC in the comfort of their office. This enables operators to access real-time data in their pipeline operations centre, providing superior visibility and enabling rapid response to changing conditions, which was not previously possible.

Conversely, long, near horizontal sections of pipe, may see a significant reduction in real-time-monitoring node density unless geotechnical risks such as liquefaction sensitive soils due to seismic loading are deemed to exist.

Real-Time Monitoring System A real-time monitoring system is typically an aggregation and transmission node, buried in situ at a monitoring point on a pipeline, or asset that captures data from up to 16 discrete sensor inputs. These sensors can include strain gauges, piezometers, inclinometers, displacement transducers or other sensors with analog/digital outputs. Multiple nodes are connected in series to provide protection over long lengths of

>> Real-time monitoring provides clear and unassailable evidence that pipeline operators have taken real, concrete steps to mitigate risks – real or perceived – associated with the use of pipelines to transport vital materials, and the risks that such infrastructure might suffer a failure leading to environmental damage or other consequences.

Monitoring nodes are connected via a passive serial connection to the main backbone cable, which is protected from vandalism or environmental damage because it is attached to, and buried with the pipe, either secured directly or contained within protective conduit.

Offshore World | 21 | OCTOBER - NOVEMBER 2013

www.oswindia.com


Advances in Real-Time Monitoring There are three primary benefits to real-time monitoring as compared to legacy pipeline monitoring systems using intermittent manual readings. All of these benefits can be realised using a completely non-intrusive methodology that can be located in hostile or inaccessible areas, underwater or through any other type of terrain. • Mitigating Operational Risk: Once the normal procedures are established and in use by the pipeline operator, it is possible to initiate internal service level commitments, and build business controls that ensure ownership and accountability for this performance is clearly assigned. It ultimately becomes possible for the operator to demonstrate how the total exposure to risk (from physical failure, operator negligence, or force majeure) can be greatly reduced because the data collection by a Real-Time Monitoring System and the operational processes in place to support that data collection all collaborate to improve the operator’s Mean-Time-To-Respond. • Real-Time Pipeline Monitoring: Legacy systems do not provide live visibility into pipeline integrity monitoring because the data collection processes are manual and inconsistently periodic. Therefore the risk of failing to detect changes in critical parameters in a timely manner is significant. In fact, early warning signs from sensors for geomechanical changes in the surrounding ground, for example, might never be noticed.

>> Real-time monitoring benefits much advance as compared to legacy pipeline monitoring systems using intermittent manual readings. Real-time monitoring advantage can be realized using a completely non-intrusive methodology that can be located in hostile or inaccessible areas, underwater or through any other type of terrain.

The essential value of real-time monitoring is therefore one of enabling the pipeline operator to implement a standard library of response processes when certain conditions are detected on one or more nodes. This can be achieved without any increase in staffing because the data presentation software provides the triage and discrimination functions necessary to highlight only when anomalous conditions are present. Therefore, the operator may be confident that data is being archived in a non-repudiable repository, and that whatever trigger conditions are desired can be unequivocally associated with an operational response procedure. These, in turn, can be measured for performance against target as part of standard operational audits.

• Reduced Operating Costs: Traditional monitoring nodes required an above-ground access point for the operator to use in connecting to the sensors and retrieve any accumulated data. These points were subject to numerous physical and environmental risks such as vandalism, weather exposure, or displacement due to seismic or relative movement between the surficial material surrounding the pipe and the pipe itself. Conclusion Real-time monitoring of critical infrastructure is no longer a nice luxury; it is essential not only for operational performance management, but also as part of the broader Corporate Social Responsibility strategy, with all its attendant public relations implications. sw

Iain Weir-Jones, PhD, PEng President, Weir-Jones Engineering Consultants Ltd Email: iain.weir-jones@weir-jones.com www.oswindia.com

Offshore World | 22 | OCTOBER - NOVEMBER 2013


interview

‘Expansion will boost entrepreneurial opportunities’ The surge in demand of petroleum products in the country is pushing refiners to augment their refining capacities. Kochi Refinery BPCL, which is expanding its capacity from current capacity of 30.5 MMTPA to 36.5 MMTPA, will satiate growing energy needs in the Indian market. Prasad K Panicker, Executive Director, Kochi Refinery - BPCL, speaks exclusively to Offshore World and provides insights into the modernisation of existing units, upgrading of residue streams to produce value added products to the company’s basket and the proposed petrochemical complex. He says that production of petrochemical derivatives of propylene will open multitude of entrepreneurial opportunities for investors to set up downstream units to produce petrochemical products. Prasad K Panicker Executive Director Kochi Refinery - BPCL

What kind of production is BPCL targeting through proposed integrated refinery expansion project (IREP) at Kochi refinery? There are manifold applications. The demand of petroleum products in the country is growing at a healthy rate, which is encouraging refiners to increase their refining capacities. The integrated refinery expansion project (IREP) of BPCL, which is being implemented at Kochi, is an effort to meet the country’s growing energy needs and making auto fuels more environment-friendly. Present refining capacity of BPCL is 30.5 MMTPA. Post implementation of IREP, the refining capacity would be 36.5 MMTPA, which is about an increase of 20 per cent in refining capacity. An additional 5.3 MMTPA of petroleum products will be available in the market after the expansion. The estimated cost of the IREP is ` 14, 225 crore. The project is targeted to be completed by December 2015. The project envisages increasing the current Kochi refining capacity by 6 MMTPA from the present

9.5 MMTPA to 15.5 MMTPA and producing propylene as the feedstock for BPCL’s proposed petrochemical complex. We are modernising the refinery to produce auto fuels complying with Euro –IV & Euro V specifications and upgrading the residue stream from the refinery to value-added products to minimise heavy stream generation from the refinery. The capacity expansion of the proposed IREP by 6 MMTPA will be facilitated with installation of a new state-of-the-art energy efficient Crude Distillation Unit (CDU), which will replace the existing 4.5 MMTPA CDU-1, is now quiet old and energy inefficient. This will result in substantial energy savings and reducing energy footprint. We have also envisaged associated process units like Delayed Coker Unit (DCU), Fluid Catalytic Cracker Unit (FCCU), VGO Hydro-treater (VGO HDT), Diesel Hydrotreater (DHDT) Sulfur Recovery Unit (SRU) and Hydrogen Generation Unit (HGU), etc along with matching utilities and off-site facilities as part of the IREP expansion at Kochi refinery.

>>The estimated cost of the IREP is ` 14, 225 crore. The project is targeted to be completed by December 2015. The project envisages increasing the current Kochi refining capacity by 6 MMTPA from the present 9.5 MMTPA to 15.5 MMTPA and producing propylene as the feedstock for BPCL’s proposed petrochemical complex. Offshore World | 23 | OCTOBER - NOVEMBER 2013

www.oswindia.com


Product

Present

Post IREP

(TMT)

(TMT)

Propylene

50

500

LPG

480

1088

MS

1115

1894

SKO

360

240

HSD

4384

7882

ATF

400

600

Naphtha

392

617

FO/ LSHS

1400

0

Bitumen

250

250

Sulphur

33

277

Petcoke

0

1338

Available products post implementation of IREP at Kochi Refinery , BPCL

Tell us about the proposed plan of ` 6000 crore to venture into the downstream petrochemical business with the propylene supplies from the proposed expansion? As a value addition, we have envisaged propylene-based petrochemical unit through joint venture, and are currently in talks with some major petrochemical companies to partner for technology and marketing expertise. Propylene, a petrochemical building block produced directly from the refining facility, will be used as the petrochemical feedstock to produce niche petrochemical products like Acrylic acid, Acrylates, Super Absorbent Polymer (SAP), Oxo-alcohol etc. The petrochemical unit will be implanted in tandem with the refinery expansion project. What kind of opportunities will the expansion of Kochi refinery offer for the further downstream industry in Kerala and other Southern part of the country? Once the project is implemented, the products available for the market include Propylene, Naphtha, Motor Spirit (MS), Liquified Petroleum Gas (LPG), Superior Kerosene Oil (SKO), High Speed Diesel (HSD), Air Turbine Fuel (ATF), Furnace Oil/Low Sulphur Heavy Stock (FO/LSHS)

fuel oil, Bitumen, Sulphur, and Petcoke. Further, Kochi refinery will commence production of 1.3 MMTPA petcoke - a new product that will be offered as well. Petcoke can be used as fuel for the cement plants located in Andhra Pradesh and Tamil Nadu, and other than that there is also a possibility of setting up petcoke based power plant. The cost of power generation is comparable with coal and cheaper as compared with the power generated from other thermal sources such as naphtha. As instructed by the Government of Kerala, the teams of Kerala State Electricity Board (KSEB) and BPCL have carried out a joint study to prepare a Preliminary Feasibility Report for the proposal of setting up a Petcoke-based 500 MW capacity power plant in Kochi. Additional sulfur production will benefit Kerala based industries like the Fertilisers & Chemicals Travancore Ltd (FACT) and Travancore Titanium Products Ltd. Production of petrochemical derivatives of propylene and products like Acrylic acid, Acrylates, N-butanol etc will open multitude of entrepreneurial opportunities for investors to set up downstream units to produce petrochemical products. Which are the key markets earmarked for production and how do you plan to move the increase in production from the refinery to the users (India & overseas)? There is a healthy demand of petroleum products in the country; however, we are targeting the Southern part of the country, mainly Kerala, Tamil Nadu and parts of Andhra Pradesh. We will supply the products partly to other major demand centers either in the Western and the Eastern regions as well. Additional products produced post IREP would be moved through rail, road and pipelines to

>>There is a proposal to lay a LPG pipeline from Kochi to Coimbatore to transport additional LPG post implementation of planned IREP. The proposal is submitted to the Petroleum & Natural Gas Regulatory Board (PNGRB) for approval. We will get into action once we receive the necessary clearance from PNGRB www.oswindia.com

Offshore World | 24 | OCTOBER - NOVEMBER 2013

the demand centres, and naphtha would be exported through tankers. Presently, there is a pipeline connectivity from Kochi to Coimbatore and Karur, which we intend to extending up to Bangalore. Have you received clearances for the proposed Kochi Coimbatore LPG pipeline for transferring additional LPG and also extension to Devangonthi? There is a proposal to lay a LPG pipeline from Kochi to Coimbatore to transport additional LPG post implementation of planned IREP. The proposal is submitted to the Petroleum & Natural Gas Regulatory Board (PNGRB) for approval. We will get into action once we receive the necessary clearance from PNGRB. As far as extension of Kochi Coimbatore POL pipeline is concerned, the line will be extended to Devangonthi, which is near to Bangalore. The proposed pipeline also needs clearance from PNGRB and the bidding process is going on. The bid will be opened by January 2014. How are you handling the subsidies imposed by the Government on the oil marketing companies? Subsidies are provided to compensate the under recoveries when retail products are sold to the customers. Refinery gets Refinery Transfer Price (RTP), which is calculated based on the international product prices. How has the depreciation of rupee against dollar by almost 44 per cent in the last two years impacted Gross Refining Margins (GRM) of Kochi refinery? It is true that of late, the continuous rupee decline against international currency impacted the raw material cost and has increased substantially. But the GRM of our refinery has seen a marginal impact, which is primarily due to corresponding increase in product prices globally. However, the retail selling prices of some of the major petroleum products are capped and thus affected the market margins and the profitability of the company on the whole. sw


features Process Safety

Risk Management in Downstream The paper highlights the need for a major change in process safety and risk management practices in downstream industry, particularly in the wake of the continuing stream of incidents of fires, explosions and releases of toxic substances from refineries worldwide despite availability of a major pool of smart designers, operators, planners, inspectors and engineers, IIT-graduates and other highly qualified personnel at its command. In the media-dominated modern times, news of the fires and explosions in our industry travels at lightning speed. Images of smoke-filled skies and fireballs get repeated exposure on television screens. Public’s tolerance of our process incidents is wearing thin. We need a paradigm shift in our approach to process safety and risk management to stay in business.

deal with the clean-up and compensations. The adverse impact in the marketplace is also extremely severe; see Figure 1 which shows a company losing almost 50 per cent of its market value as a result of just two highly-publicised process safety events: an explosion and fire in one of its refineries and a massive oil spill from one of its platforms in the Gulf of Mexico.

In the wake of the continuing stream of incidents of fires, explosions and releases of toxic substances from our facilities and operations, the media and the general public have begun to seriously ask us: Why are we failing to prevent these tragic incidents from occurring? We are supposed to be the smart designers, operators, planners, inspectors, and engineers; we have terabytes of computing power at our finger tips; we have access to all kinds of sophisticated materials of construction; we use space-age automation and control systems; we have IIT-graduates and other highly qualified personnel at our command… and yet these incidents occur!

Compliance-based Approach has Largely Failed It appears that mere compliance with the laws of the country you are operating in, and following what is sometimes referred to as RAGAGEP (Recognised and Generally Accepted Good Engineering Practices) are not sufficient to prevent the low-probability-high-consequence events that make headlines on news channels. The regulations as drafted are all excellent (see Table 1 for some examples) and go a long way in reducing the likelihood and consequences of process safety events; however they are not deemed sufficient in the light of our recent experiences. Just prior to the terrible Vizag fire of August 2013, the company had fully implemented a detailed PSM (process safety management) system. The Richmond Refinery (in California) was in full compliance of all federal, state, and municipal regulations prior to the fire of August 2012, the Texas City refinery had passed all audits prior to the tragic event of 2005… the evidence piles on.

The industry cannot ignore this diminishing tolerance for spills, fires and explosions. And the decisions related to penalties arising from such an event to be imposed on the offending company are no longer being limited to be taken by market forces and regulatory and judiciary agencies hitherto charged with this task. In the US, the Executive branch of the government intervened directly in the oil spill incident in the Gulf of Mexico. The offending company’s CEO was called to the White House and had to immediately set up a USD 20 billion separate account to

Country

Legislation or RAGAGEP

India

OISD Regulations

USA

OSHA 1910.119

USA

EPA RMP Rule

UK

HSE COMAH regulation

Australia

Risk Assessment Framework

EEC

Directive 89/391/EEC

Singapore

Risk Management Act of 2006

Table 1: Some Excellent Regulations

Figure 1: Adverse impact of process safety events on market value of a company.

We need a major shift in our approach to process safety: we must develop a better understanding of the FLEXA risks we face (FLEXA is an insurance term that means Fire, Lightning, Explosion, and Aircraft/Act of God), we have to stop confusing between personnel safety performance and process safety performance, we have to take all fire incidents very seriously, we have to infuse knowledge-based

Offshore World | 25 | OCTOBER - NOVEMBER 2013

www.oswindia.com


any direct dollar losses. In the US, the refining business has led a stifled life over the past several decades, initially due to stringent environmental regulations and uncertain refining margins. The impact has been so severe that there have been no new refineries built in the US since the mid-70’s. In the current context, several new factors have added to the burden carried by the refining business in the US (see Figure 2). Their plants are getting old, their experienced workforce is retiring or leaving for the more lucrative upstream business, and the public’s expectation of performance increases day by day. The public simply wants to use the fossil fuels they produce; it doesn’t want to see them, hear from them or smell them. So a refinery is expected to operate very quietly, with zero flaring and zero discharges, and with no incidents. Fire at Vizag Refinery – 23 August 2013 (photo: Courtesy inet report)

decisions in our process safety management rather than rely on mere sound-bites and cheerleading, and we have to return to basics of intrinsic safety. Only then we stand a chance. Remodel the Consequence Scale of Your Risk Matrix In qualitative risk management, most practitioners rely on a ‘Risk Matrix’ that defines the likelihood or probability of a loss event on the Y-axis and the consequential cost on the X-axis; the resulting risk space is then divided into various categories ranging from Very Low to Very High. In a traditional matrix, the consequence axis was dominated by potential ‘property damage’ and ‘business interruption’ losses associated with the event under consideration. In the modern context, we need to highlight the environmental impact and ‘reputation losses’ that can far outweigh

Figure 2: Challenges ahead for downstream.

www.oswindia.com

Process Safety vs Personal Safety In the 1920’s, W H Heinrich, who was an engineering superintendent in a travelers’ insurance company, presented accidents data in the form of a triangle with three sections, the top representing the highest severity. He concluded that for every one serious accident (fatality or major injury) there were 29 injury accidents and 300 accidents where no injury resulted. For decades to follow, the 1-29-300 ratio was known as the Heinrich Triangle of Accidents (also sometimes referred to as the Heinrich Pyramid of Accidents). Further enhancements to the Triangle were provided by a safety professional in the USA, Frank Bird, who in the 1970’s analysed almost two million incident records. More refined ratios between the minor and major events were determined. Also, a further lower level was added to the triangle to represent ‘at risk’ behavior of workers contributing to all near misses and incidents. The idea developed from there was that if in a company you were able to reduce the number of at-risk behaviors of your workforce you will see a corresponding reduction in the number of loss events occurring in your company. It was postulated that the beneficial impact of reducing the bottom of the triangle will propagate proportionately all the way to the apex of the triangle. That is to say, reducing the number of at-risk acts of the workforce will reduce the number of high-consequence events in the industry. The concept is visually presented in Figure 3.

Figure 3: The Heinrich Triangle does not address Process Safety.

Offshore World | 26 | OCTOBER - NOVEMBER 2013


At the heart of the Heinrich Triangle (and all others that followed subsequently) was the assumption that personal safety and process safety are a complete homogeneous mix in that one cannot and should not be thought of as anything different from the other; these were not to be treated as two separate concepts. What was good for enhancing personal safety was surely good for enhancing process safety. And as a corollary, if a company had shown an excellent personal safety record then surely the company could be assumed to have an equally excellent record of process safety. This myth was busted once and for all with the BP Texas City event of 2005. We learnt the painful lesson that the linkage between personal safety and process safety was rather tenuous. Achieving an injury-free record did not mean that everything was rosy at the process safety front also; and vice versa. In terms of the Heinrich Triangle, what it means is that there is a very particular and specific class of at-risk behaviors that contribute to process safety events. These are represented as various polygons floating in the overall pool of at-risk behaviors in Figure 3. If we simply reduce the overall pool of at-risk behaviors then there is no guarantee that process safety events will also reduce as a result. One could easily imagine a situation where you can reduce the base of the triangle without affecting the polygons at all. Hence if you intend to reduce the likelihood of process safety disasters in your company, you need to reduce the size of the polygons or eliminate the polygons altogether. There is No Such Thing as a ‘Small Fire’ Traditionally, we have reported refinery fires by using severity scales calling some fires as minor or small while others major or significant. For example, fires with direct damage of less than USD 1000 were labeled as ‘Non-reportable fires’ and those above USD 1000 as ‘Reportable Fires’. Even the recently issued American Petroleum Institute’s recommended practice (API RP754) categorises fires in Tier 1 and Tier 2 Process Safety Events, depending upon damage cost. In the refining business, we need to get away from that mindset. We need to etch it onto our hearts and brains that there is no such thing as a small fire. The Chevron Richmond Refinery fire did not result in any significant injury to any plant personnel, yet the public outcry would have us believe otherwise. Every fire in a refinery, no matter how ‘small’ it is, must be properly investigated at the highest level, preferably personally by the CEO or the Managing Director or the Director of operations. The entire workforce, including all contractors, need to fully appreciate that in the context of refinery operations there is no such thing as a small fire. Knowledge-based PSM (Process Safety Management) It can be successfully argued that lack of technical knowledge on the part of personnel involved has been a root cause or a causal factor in almost all process safety events on record in our industry. As a result of a recent loss of containment incident in a US refinery, they identified 66 corrosion mechanisms that can occur in a typical refinery. Ask your people how many of these 66 they are intimately familiar with. The Board Rooms and the CEOs are demanding to know the answer to a simple question: Can it happen again to us, or can it happen to us in one of our other facilities? And they don’t want a wishy-washy answer full of ifs and buts. They are demanding a simple YES or NO. And if the answer is YES, they are asking what it would take to convert the answer to NO. Well, you need people who know what needs to be known to achieve a zero loss-of-containment record. What is the corrosion mechanism? Is the material above auto-ignition temperature? Can we quickly isolate the source if a leak is detected? In this context,

to some extent, the traditional Hazops have also failed us. A company CEO, during his site visits, casually asked his middle managers: “What are the top five hazards or risks that you see in your facility?” Most could not answer and those who did were just shooting from the hip. None of the traditional PHA methods insist that the findings need to be disseminated to all personnel in such a manner that the team’s conclusions make sense to them and that they can all at least understand the major risks identified and assessed for their areas of operation. Intrinsic Safety Principles – Back to Basics We need to emphasise the basic principles of intrinsic safety to all our personnel. • Procure the right asset through life-cycle cost analysis (not the lowest cost at the time of purchasing, but one that gives the lowest overall cost of ownership from ‘cradle to grave’). • Install it correctly ensuring compliance with all construction and erection standards (use Process Safety Management principle of Pre-Start-up Safety Reviews – PSSR). • Operate it within safe operating parameters using basic principles of operational excellence. • Maintain the equipment with optimum mix of various types of maintenance (breakdown, preventive, and predictive) and track performance through plant condition monitoring instrumentation. • Inspect the equipment at specified intervals governed by principles of risk-based inspection, equipment inspection history, on-line gauging, and other techniques. • Carry out safe disposal of the asset at the end of its life to ensure that there are no environmental or third-party liability issues that could crop up at a later date. Concluding Remarks The basic recipe is simple: do not let the hydrocarbons and toxic materials come out of the pipes and vessels in which these are supposed to be contained in. The Boardrooms have to have the Vision that it is doable and are therefore willing to open the purse strings. The engineers and operators then have to turn this Vision into Reality. Learning lessons from past incidents is extremely cost effective. Do not let past incidents go to waste. There is a wealth of information in many of the incident investigation reports. The Jaipur IOC incident investigation report is one of the best. It is freely available from the internet; study it thoroughly. This report should be made a compulsory reading for all chemical engineering students worldwide. sw

Offshore World | 27 | OCTOBER - NOVEMBER 2013

Ram K Goyal Bahrain Petroleum Company, Bahrain Email: Ram_k_goyal@bapco.net Vinod Menon Bahrain Petroleum Company, Bahrain Email: Vinod_menon@bapco.net www.oswindia.com


features Energy Watch

E ne rgy Comm odi ti es E xh i bi t M i xe d Price Movement Energy commodities exhibited mixed price movement in the past two months of September and October 2013. While, ICE Rotterdam monthly coal futures prices rose the most by 10.78 per cent on winter restocking by utilities, CER (Carbon Emitted Reduction) futures prices on ICE-ECX platform continued to move down by dropping the most amongst energy commodities i.e. by 13.56 per cent (albeit with low prices base).

Data release showing growth in US and Chinese manufacturing (August), improving the energy demand outlook, helped NYMEX (CME) light sweet crude oil (WTI) futures to star the month of September at US$ 108.54, up by 0.83 percent from previous month’s close. Later, increasing likelihood of a US military strike on Syria, raising concerns over oil supplies from the Middle East and data showing a sizable decline in US crude inventories, further lifted oil prices. Eventually with conflict over Syria intensifying, crude oil futures moved up to US$ 110.7 on September 6, which eventually emerged as highest prices for the period under review (September-October). Thereafter, outlook for energy demand weakened with data releases showing dull US retail sales and consumer sales data. Notably, waning prospects of imminent US strike on Syria led to the fall in oil prices. Oil prices further continued to move down as oil production at oil fields in Libya resumed, increasing the output and in turn further abating the crude oil supply risk from the Middle East. Intermittently, crude oil got brief spells of respite from prices fall as data release from China

indicated a significant rise in manufacturing activity in the country and US Federal Reserve surprisingly refrained from any specific announcement on tapering of its stimulus program. Overall, oil prices continued south bound journey on easing supply concerns from Middle East, especially after US President Barack Obama announced that the government was determined to find diplomatic solutions to the civil war and geopolitical turbulence in Syria and the dispute with Iran over its nuclear programs. The fall in oil prices were later also supported by the report that United Nations inspectors started investigating alleged chemical weapons attacks in Syria. By end of September, conjectures on a possible US government shutdown with stalemate in US Congress on budget deal, kept crude oil prices under pressure. With US government administration eventually closing down partially, crude oil market participants continued to remain apprehensive on its impact on oil demand. Nevertheless, data releases showing increase in China’s non-manufacturing data and lower than expected weekly jobless claims ensured some brief respite to falling oil prices. Overall, oil prices continued to fall as the partial closure of US

Source: Bloomberg

www.oswindia.com

Offshore World | 28 | OCTOBER - NOVEMBER 2013


administration eventually lasted for 16 days, impacting oil demand sentiments. Additionally, increase in US crude oil inventory levels and data showing fall in China’s September exports helped in lowering of oil prices. Notably, the US government shutdown caused the delay of several government issued economic data, thus restricting the flow of information in oil markets. Later, while the International Energy Agency upgraded its oil demand growth forecast, it also mentioned about having plenty of supply in the pipeline, especially predicting strong growth in non-OPEC supply next year. Further in the month of October, geopolitical risks receded, as Iranian diplomats met with their counterparts from other major powers in Geneva; to reach a consensus with regard to its nuclear program and subsequently a potential timeline for the easing of sanctions on Iran. This ensures that eventually Iran will be able to resume its oil exports without any limitations, removing supply concerns and thereby pressurizing crude oil prices to lower levels. Notably, with sustained increase in US oil inventory levels, crude oil futures stooped down to lowest point in September-October of US$ 95.95 on October 24. Amidst the steady fall in oil prices, crude oil prices though were intermittently supported by incidents of unrest and violence in the Middle East, US raids in Somalia and kidnapping of the Libyan Prime Minister. Later by the end of the month of October, despite recovering from lows on improvement in Chinese manufacturing and some bargain hunting, oil prices remained under pressure on data release showing a drop in US consumer confidence and sustained rise in US oil inventory levels. Finally, crude oil futures closed the month of October at US$ 96.38, registering a fall of 10.47 percent in the two-month period. The downtrend in crude oil prices was also reflected in crude oil’s two popular derivates i.e. heating oil and gasoline (on CME-NYMEX platform). While, heating oil futures registered a fall of 5.47 percent, gasoline futures prices dipped by 12.75 percent in the two months of September-October, the seasonally weak demand period of the year for gasoline. Interestingly, the other major energy commodity natural gas futures (traded on NYMEX-CME platform) saw no change in its prices over the two month period. Contrasting factors such as rise in US natural gas stocks,

subdued Atlantic hurricane season (fewest number of hurricanes since 1982) vis-a-vis upcoming winter season, which is seasonally high demand period, led to a range-bound price movement for natural gas. Amongst other energy commodities, ICE Rotterdam monthly coal futures prices moved up by 10.78 percent in September-October period. Coal prices were boosted by supply worries in Europe and renewed import interest from top buyer China apart from seasonal winter restocking by utilities. A second rebel attack on a coal railway in just 10 days in Colombia, a major supplier to Europe, heightened supply worries amid the winter heating season. In emission market segment on ICE-ECX platform, CER futures prices continued to trade down, falling 13.56 percent amid persisting uncertainty over global CER market. On the other hand, European Union allowances (EUA) futures moved up by 5.71 percent, largely boosted from the intention of Lithuania, holder of the European Union bloc’s rotating presidency, that it would seek a mandate to start talks on a measure to temporarily cut supply. sw (The views expressed by authors are their personal opinions)

Niteen M Jain Senior Analyst, Department of Research & Strategy Multi Commodity Exchange of India Ltd E-mail: niteen.jain@mcxindia.com Nazir Ahmed Moulvi Senior Analyst, Department of Research & Strategy Multi Commodity Exchange of India Ltd E-mail: nazir.moulvi@mcxindia.com

Offshore World | 29 | OCTOBER - NOVEMBER 2013

www.oswindia.com


news features

Iran Crude: India’s Strategic Need Volatile crude oil prices and a depreciating Rupee against USD has inflated India’s crude oil import bill. Recently as rupee weakened and global crude oil price increased on account of geo-political tension in Middle East, concerns regarding high current account deficit mounted. To reduce the oil driven increase in current account deficit and under recoveries, government is contemplating alternatives including an increase in crude oil purchase from Iran, which has agreed to receive payment in rupees. It is estimated that USD 8.5 billion can be saved by importing an additional 11 Million tons from Iran.

Indian economy has been faced with high current account deficit, growth rate at decade low level and steep fiscal shortfall. To add on to this, rupee touched all time low levels against dollars and Brent price touched high levels of 117 USD/bbl. India currently imports around 80 per cent of crude oil, which accounts for about 30 per cent of India’s primary energy mix. Since crude oil is traded in US dollars, high crude oil price coupled with depreciating rupee value is expected to inflate the import bill. As Indian fuel market is not fully deregulated, the prices are not being passed on to end consumers which further aggravate the high current account deficit situation. Even the phased hike in diesel price is not expected to have any significant impact on the reduction of deficit. Middle East Tensions In last week of August risk premium on Brent widened resulting in price hike to six month high of 115 USD/bbl due to concern regarding the possibility of US militar y inter vention in Syria. Sanctions on Iran and recent labor and payment problems in Libya have led to OPEC crude disruptions to 2 mbpd. Thus, geopolitical tensions and fall in production raised the concerns about instability in the World’s key oil producing

region. This led to sharp increase in Brent crude oil price resulting in hike in Indian crude oil basket price. Indian Crude basket comprises of Brent with 38.6 per cent and Dubai and Oman each with 30.70 per cent . Indian Crude Basket price in Q3 2013 increased to 107.59 USD/bbl, an increase of around 6.25 per cent over Q2 2013 average price. This 6 per cent increase price led to increase in under-recovery and which eventually resulted in increase in current account deficit. Rupee Depreciation Indian Oil companies pay for import in USD, so with sharp decline in rupee the crude purchase becomes costly. As far as for downstream companies, when crude price increases the refinery margin and import parity also goes up. So with increase in crude price the product price also increases however, the increase in prices is not passed on completely to end users and results into a disproportionate increase in under recoveries. For example for BPCL ` 1 depreciation against the USD the under-recovery increases by 80 to 90 paisa. In September when USD exchange rate was at 62, BPCL had an under-recovery of above ` 10 on diesel.

Source: PPAC

www.oswindia.com

Offshore World | 30 | OCTOBER - NOVEMBER 2013


Month Imported Imported Crude Crude oil oil Value Volume (‘Million USD) (‘000 MT)

Exchange Rate Indian Crude (USD- INR) Oil Basket Price (USD/bbl)

Jan-13 14351

18345

54.30

109.55

Feb-13 10784

13366

53.83

112.68

Mar-13 11470

14936

54.45

106.45

Apr-13 12201

16408

54.28

101.58

May-13 12401

17180

54.73

101.14

Jun-13 10450

14378

58.23

101.15

Jul-13

12115

16415

59.80

104.86

Aug-13 13031

17117

62.80

108.45

Sep-13 11698

16300

63.78

109.47

Commodity Under-recovery as on Sept 2013

Under-recovery as on Aug 2013

Diesel

` 14.50/litre

` 10.22/litre

Kerosene

` 36.83/litre

` 33.54/litre

LPG

` 470.38/cylinder

` 412/cylinder

Crude oil price and exchange rate in July increased by 3.66 per cent and 2.70 per cent respectively, which resulted in 15.93 per cent increase in crude oil import value, whereas crude oil imported volume increased by 14.17 per cent. Similarly, Crude oil price and exchange rate in August increased by 3.43 per cent and 5.02 per cent respectively, which resulted in 7.57 per cent increase in crude oil import value, whereas crude oil imported volume increased by 4.27 per cent. Whereas, in September with crude oil price trading near 110 USD/bbl and USD-INR exchange rate at 64 the crude oil import volume and value fell by 4.77 per cent and 10.23per cent respectively. Rise in crude price coupled with depreciating rupee, petroleum subsidy over last two months has increased by ` 20,000 crore.

Source: PPAC, Economic Times

Measure To Reduce Crude Oil Import Bill In order to control the widening current account deficit, India has to control the import bill and therefore it has set a target of USD 25 billion cut in the import bill in the current fiscal. The main measure that would help in reducing CAD by USD 8.5 billion is import from Iran. India imported 13.1 million tons of crude oil from Iran in the last fiscal year. This year, it has already imported 2 million tons and aims to import another 11 million tons of crude oil this year. This has been possible due to the waiver on Iranian crude oil purchase during sanctions. This would result in a saving of USD 8.5 billion in foreign exchange (this is considering that the international price of the crude oil would be USD 105 per barrel). In the last fiscal, India paid in EUR in order to clear 55 per cent of the crude oil purchased through Ankara based Halkbank, whereas, the remaining forty five percent of the purchases was settled in rupees through the Kolkata based UCO bank. However, the payment in euros through Turkey was ceased this year (February 6), and now the payment is done only in rupees, which in turn, helps in saving foreign exchange outgo and reduces the current account deficit. Iranian Oil Ministry is also planning to import 8-10 million liters of Indian premium gasoline per day instead of accepting full payment of crude oil in rupees. The Government of India has agreed to provide ` 1000 crore sovereign guarantee to back local insurers for refineries using Iranian crude oil. This will boost imports paid in local currency and ease off pressure on Indian rupee.

Conclusion The Indian government needs to cut down high current account deficit as it would cause problems in the near future. Currently, CAD is highly responsible for several problems, which the India economy is facing like the fall of rupee in the foreign exchange market, inflation, fiscal deficit and stock market crash. The main advantage in buying crude from Iran is that its crude is economical than Saudi Arabia and Iraq, it gives 90 days credit to Indian OMC’s and it accepts some payment in rupee. This increase in crude oil import sw from Iran will cut down the current account deficit by another 8.5 USD billion. References http://www.firstpost.com/economy/losses-on-diesel-at-record-rs-14-50-a-litre-pricehike-inevitable-now-1113879.html http://businesstoday.intoday.in/story/falling-rupee-syria-crisis-india-iran-ties/1/198407.html http://www.globalkashmir.net/pmo-calls-meet-to-discuss-hiking-iranian-oil-imports/#sthash.zO1RA0WS.dpuf http://www.business-standard.com/article/economy-policy/iran-may-spoil-govt-s-plan-tocurtail-dollar-dependence-113090900033_1.html http://ar ticles.economictimes.indiatimes.com/2013-09-13/news/42041953_1_ halkbank-rupee-payments-oil-import-bill http://www.tehrantimes.com/economy-and-business/110717-iran-may-barter-crude-oil-for-indian-premium-gasoline http://articles.economictimes.indiatimes.com/2013-09-02/news/41688706_1_account-deficit-litre-hike-arrest-rupee http://iimaconsulting.wordpress.com/2013/09/09/syria-rupee-and-crude-imports/ Petroleum Planning and Analysis Cell (PPAC)

Concern over US military action against Syria has also eased now as Syrian Government agreed to turn over its Chemical Weapons to international agency. This settlement has reduced the chance of supply disruption from Middle East region. Offshore World | 31 | OCTOBER - NOVEMBER 2013

Gaurav Menghi Research Analyst Beroe Inc Email: gaurav.menghi@beroe-inc.com www.oswindia.com


news

India Energy Majors Rejig Top Decks to Steer Production and Profitability

D K Sarraf, Head, ONGC Videsh (OVL)

Mumbai: New faces are replacing the old in many Indian energy majors as Essar Oil, ONGC, Oil India, Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum and the Directorate General of Hydrocarbons (DGH) are going through a top-deck churn.

appointed to the board of this Navaratna company. On the regulatory front, there will soon be a new head at DGH. B N Talukdar, the current Director - Exploration, Oil India, is the new incumbent. Talukdar will replace R N Choubey. S Vardarajan, CMD BPCL

Also many women executives are making it to the top in this churn, with some taking over critical positions while a few others are poised to head companies. Rupshikha Borah, Director - Finance, OIL

B N Talukdar, Director - Exploration, Oil India

Leading the new brigade, D K Sarraf, the current Head of ONGC Videsh (OVL), will be the new Chairman and Managing Director of Oil & Natural Gas Corp (ONGC). Sarraf will replace Sudhir Vasudeva in February 2014. At Oil India, Rupshikha Borah has taken over as Director Finance, becoming the first lady functional director to be

N i s h i Va s u d e va , Director – Marketing, HPCL

There’s a change at Indian Oil Corporation (IOC) as well where B Ashok, who is currently Executive Director Retail, set to take over as the new Chairman of IOC, the country’s largest fuel retailer. While at BPCL, former Director - Finance, S Vardarajan, took over as Chairman and Managing Director of the company.

At HPCL, the 57-year-old Nishi Vasudeva, Director – Marketing, will break the glass ceiling to become the first woman ever to Head a Navratna PSU.

Approval for OVL-OIL’s Offshore Mozambique Stake

ONGC Strengthens its Overseas Acquisition Portfolio

New Delhi: The cabinet Committee on Economic Affairs has approved ONGC Videsh Limited (OVL) and its partner Oil India Limited (OIL) to acquire 20 per cent Participating Interest (PI) in Rovuma Area 1 Offshore Block in Mozambique, the proposal of the Ministry of Petroleum and Natural Gas to authorise.

Mumbai: In the aim of strengthening its oversees acquisition portfolio, ONGC Videsh Ltd (OVL), the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), has acquired oil blocks in Asian countries like Myanmar & Bangladesh and in Brazil.

The giant Mozambique gas field, which is estimated to hold as much as 65 trillion cubic feet of gas, has been done in two parts - OVL and OIL will jointly acquire Videocon’s 10 per cent stake for about USD 2.475 billion, while OVL, on its own, will acquire Andarko Petroleum’s 10 per cent stake for USD 2.64 billion.

OVL, which has stakes in the A-1 and A-3 gas discovery blocks and three other offshore acreages in Myanmar, was awarded two oil and gas exploration blocks B-2 (Zebyutaung-Nandaw) and EP-3 (Thegon-Shwegu) - in that country.

Cairn Suggests Swap Route to Export Rajasthan Crude Jaipur: Cairn India has suggested to the government a ‘swap’ mechanism, in collaboration with a public sector oil refiner to be nominated by the Petroleum and Natural Gas Ministry, the alternative way to export crude oil from its Rajasthan block without flouting domestic laws. The proposed mechanism will help the explorer get higher value for the produce which, at present, it sells at a discount. Simply put, the nominated refiner will swap the Rajasthan crude with a variety that is more suitable for it. At present, India does not allow export of domestically produced oil and gas, as it is yet to attain self-sufficiency. P Elango, CEO, Cairn India, said that the company does not believe that the right place to test crude price is in the market — domestic and international and also recognises that export is not easy in our context. Swap is a different agreement. Our suggestion is that we can swap this crude oil both to get the volume and the price. www.oswindia.com

The 50:50 joint venture of OVL and OIL has been awarded shallow water blocks SS-4 and SS09 in Bangladesh. OVL has also brought an additional 12 per cent stake in a Brazilian oilfield for USD 529 million from Petronas after blocking a Chinese entry.

Govt to Set up Hydrocarbon Data Center New Delhi: In making hydrocarbon prospecting more flexible in the country, the government of India is planning to set up a National Data Repository (NDR) centre in the coming years, informed Rajeev Kumar Sinha, Chief Technical Officer, DirectorateGeneral of Hydrocarbons. The NDR expect to set up by 2015 or 2016, depending on how fast the centre is set up and data converted for use by oil companies, he added. The centre would have legacy data, dating back to 1947. Once the data centre is in operation, a more flexible system would be proposed to the Government such as the use of open acreage licensing policy (OALP) which would offer more flexibility to the hydrocarbon prospecting companies in selecting acreage. Depending on the acceptability, OALP could be a joint option with the existing New Exploration Licensing Policy.

Offshore World | 32 | OCTOBER - NOVEMBER 2013


LNG Demand Weakens in Industry and Power Sector New Delhi: India’s import of Liquefied Natural Gas (LNG) has been reduced due to weak rupee and poor demand from the industries and power plants. The energy-starved country is expected to reduce its LNG consumption further during winters when its prices in international markets go up normally. According to Petroleum Planning and Analysis Cell (PPAC), India imported an average of 0.91 million tonne of LNG a month between April and August

India has Oil Reserves to Last Just 20 Days: Govt New Delhi: Though India is likely to commission its first strategic oil storage facility in 2014, currently the country has the lowest cover for crude oil among developing economies including China and Japan, according to government data. As India is heavily dependent on oil imports, building the crude oil reserves strategy is considered a must since these stocks provide an insurance against any oil supply disruptions to economies. India’s public sector units and joint venture refineries are expected to import around 777 million barrels of crude oil in 2013-14. While most developing nations like China & Japan have 26 & 25 days each crude oil inventory compared to developed nations such as the US that is maintaining a cover of 56 days, according to the report. The refinery throughput of China stood at 9,371 kilo barrels per day in 2012 and its crude stock build is around 665,000 barrels per day. This is equivalent to an inventory level of around 2,42,725 kilo barrels and provides a 26-day cover. While the refinery throughput of Japan is 3,400 kilo barrels per day for 2012. Japan’s crude oil inventory is 85,790 kilo barrels which has a 25-day cover. In contrast, the US has the maximum strategic reserves compared to most nations. With a refinery throughput of 15,006 kilo barrels per day, the US’ crude oil inventory stood at 10,55,962 kilo barrels as on September 6, 2013.

2013, which is on the lines of previous three fiscals. However, India imported only 0.70 million tonne of LNG in July. India imported highest 11.63 million tonne of LNG in 2011-12, which came marginally down to 10.90 million tonne in 2012-13. India’s dependence on imported LNG was on rise due to fall in domestic production of natural gas.

Produce Oil, Gas before Clearing Investment Plans: Govt

M Veerappa Moily, Union Oil Minister

The Ministry had in February allowed companies to explore for more reserves within a currently producing oil and gas field. This permission had led to RIL finding more gas reserves 2 km beneath the currently producing gas fields while Cairn found more oil within its prolific Rajasthan fields. The ministry has now approved a mechanism to enable early monetisation of the finds contained with an already producing area.

Rajan Assures to Tackle Oil Sector’s Dollar Demand

3-Phase Exploration Strategy on Shale Gas New Delhi: After shale exploration policy opened for only national oil companies, the ministry of petroleum and natural gas has finalised that ONGC would get 50 blocks in first phase, while another 75 blocks in second and 50 blocks in third phase and on the other hand, OIL would be able to explore 5 blocks each in all three phases under nomination regime. Based on this, state-run ONGC would take up 175 blocks and Oil India another 15 blocks in three assessment phases. While each assessment phase would be for three years each, NOCs would be able to take up second phase once the first phase is completed. As per the policy, companies would get the liberty to select petroleum exploration license or mining lease (PEL/PML) areas, which would be treated as blocks. At the same time, one pilot well is compulsory in each block during the assessment phase, in every 200 square kilo metre.

New Delhi: In a vital development that will give major boost to the E&P players in India, Petroleum Ministry has allowed companies like Reliance Industries and Cairn India to start producing oil and gas from discoveries even before field investment plans are approved. Oil Minister M Veerappa Moily has approved 5-page guidelines for production and development of oil and gas discoveries made within an already producing field, enabling E&P players to start early monetisation of discoveries.

Raghuram Rajan, Governor, RBI

New Delhi: Raghuram Rajan, the newlyappointed Governor of Indian Reserve Bank of India (RBI), is confident that the country would have adequate foreign exchange resources to finance the current account deficit (CAD) and his assurance that dollar repayments by oil marketing companies to the central bank could be rolled over and even made in rupees if necessary, saw the Indian rupee recover smartly from all-time lows.

Rajan noted that ‘the majority’ of the OMC demand was now back in the markets, in a process that had begun on October 14. Since August 28, the RBI had been funding these purchases through a special swap window. The market, he pointed out, had absorbed the demand smoothly and had been unaware of the shift until talk from the finance ministry. “If the exchange market is calmer, this additional demand will be easily absorbed. But if not, we could roll over some portion of the swaps so that they mature at a calmer time. We can even consider settling in Indian rupees,” added Rajan.

Offshore World | 33 | OCTOBER - NOVEMBER 2013

www.oswindia.com


news India to Drive Global Oil Demand by 2020: Dr Fatih Birol New Delhi: India is set to become the biggest driver of global oil demand by year 2020, said Dr Fatih Birol, Chief Economist, International Energy Agency, on the sidelines of the publication of IEA’s World Energy Outlook 2013. The size of India’s economy and growing population means the country will need more Dr Fatih Birol, Chief Economist, and more energy to continue its growth. International Energy Agency Around a quarter of incremental oil demand globally will start coming from India alone post 2020. Similarly, by that time India will be world’s single largest importer of coal, according to IEA’s World Energy Outlook 2013. “India’s oil consumption will exceed 8 mbpd by 2035, which is more than current consumption of Japan, Korea and Australia combined,” explained Dr Birol.

Oil Ministry Seeks Easier Nod for Licences New Delhi: Aftermath the mining giant BHP Billiton surrendered nine of its oil and gas blocks in India due to not getting defence ministry clearances, the Ministry of Petroleum and Natural Gas is taking precautionary measures to ensure companies do not give up oil and gas exploration blocks after the next round of New Exploration Licensing Policy (NELP) bidding, which is expected to take place in January 2014. The oil ministry is planning to offer as many as 68 blocks or areas for exploration of oil and gas in the 10 th round of NELP. The ministry has set up an expert committee, including one ex-army man, an ex-navy man and an ex-forest official, to look into prospective blocks that could face defence and environment hurdles. The committee would try to get initial clearances in advance and also avoid sensitive blocks coming under defence areas.

BPCL to Expand Refining Capacity Kochi: To augment its refiner y capacity, Bharat Petroleum Corp Ltd (BPCL) has lined up investments about USD 4 billion (around ` 25,340 crore). S Varadarajan, Chairman and Managing Director, BPCL, said that capacity expansion and innovation are imperatives to sustain in the present-day business environment, on the sideline of three -day S Varadarajan, Chairman and Managing Director, BPCL meet, a national conclave of petroleum refiner y exper ts. The company had earlier said it would increase its refining capacity from the current 30.5 million tonne a year to 47.5 mt by 2016-17. The Petroleum Ministr y along with other ministries is taking effor ts to enhance energy security through exploration, he added. www.oswindia.com

Iraq Offers Longer Credit to Indian Oil Buyers New Delhi: Iraq is willing to double the credit period on crude sales to 60 days if Indian refiners buy more in 2014. Iran has also sweetened the deal to expand its dwindling market share by offering free shipment and a nominal discount to Indian refiners. India, the world’s fourth-biggest oil importer and Iran’s secondbiggest client, relies on outside supplies for 80 per cent of its oil needs, or about 3.7 million barrels per day (bpd). Iraq along with Saudi Arabia stepped up sales to India after western sanctions shut payment avenues and made trade with Tehran difficult. Iraq displaced Iran as second biggest oil seller to India in 2011/12. In the last fiscal year that ended in March Iraq supplied about 13 per cent of India’s overall oil imports, according to the preliminary government data. B K Namdeo, Head of Refineries, Hindustan Petroleum Corporation Limited (HPCL), said that Iraq is very positive and willing to raise credit period to 60 days and waive off opening of letters of credit (LCs) provided volumes are increased. Middle East oil producers are also offering better terms to grab a bigger slice of the Asian market as the US shale oil boom has changed the global energy landscape with Washington ceding its ranking as top oil importer to China. Kuwait will also decide in the next three months on raising 90 days credit on crude sales to India from the current 60 days, its said Mustapha al-Shamali, Oil Minister, Kuwait.

Oil Refineries should Improve Margins: Rae Kochi: To keep pace with global standards, Petroleum refineries, both in the public and private sectors, should to upgrade their refining capacities, said Vivek Rae, Petroleum Secretary. He said that petroleum refineries should ensure pace setter performance for improving margins, reliability and efficiency, on the sidelines of the 18th Refinery Technology Meet (RTM) in Kochi. Rae added that the Union government had strengthened the public sector petroleum companies to achieve global standards. The RTM, themed ‘Pace setter performance for improving margin, reliability and efficiency’, would deal with various aspects of global energy scenario, refining process optimisation, up-gradation and integration, among others.

Hardy Oil & Gas Developing Operations in India New Delhi: UK-based Hardy Oil & Gas PLC said that it is moving forward with operations at its D3 block off the east coast of India. The oil and gas exploration and production company, with assets in India, said it has undertaken various geophysical studies of the site and has received a Declaration of Commerciality for gas discoveries in the block with the Government of India. The company said its joint venture at the D3 block is seeking a 12 month extension for the licence at the site, until the end of 2014. Hardy said that exploration drilling is expected to recommence in 2014. Hardy Oil also said it plans to complete discussions with its joint venture partner to increase Hardy’s interest in the GS-01 block off the west-coast of India.

Offshore World | 34 | OCTOBER - NOVEMBER 2013


Oil Ministry Plans More Legroom for Explorers New Delhi: To woo the domestic oil explorers, the Oil Ministry is moving to remove areas of friction with explorers by giving them more legroom in meeting timelines set for various stages of exploring and developing oil and gas blocks. The changes outlined in the ministry’s note for seeking Cabinet approval reflects oil minister M Veerappa Moily’s desire to create a more conducive environment for investment by ushering in a more balanced approach towards dealing with delays and other issues reported by explorers. The crux of the proposals lies in allowing more flexibility in block oversight for dealing with issues and makes it easier to extend timelines in case these are

missed due to genuine reasons. To this end, an apex panel headed by the oil minister is being proposed with secretaries of pertinent ministries as members. It would also lift investor sentiments ahead of the government’s tenth round of block auction. There are two proposals that would go a long way in smoothening government’s dealings with explorers. The first one is giving block oversight panels power to extend timelines by six months for onland blocks and 12 months in case of offshore blocks. The second is to allow explorers more time to notify a discovery and declare their finds as commercially viable, called ‘declaration of commerciality’ in industry parlance.

India Still Part of Iran-Pak Gas Pipeline Project: Tehran Payment Assurance from Pakistan to Sign Gas Pact: India New Delhi: Aftermath the reporting on Iran-Pakistan gas pipeline prepared by the Sustainable Development Policy Institute (SDPI), the Petroleum Ministry has clarified its stand by saying India is still part of the Iran-Pakistan gas pipeline officially as the modalities between Iran and India for the supply of gas, including gas price, were still under discussion. The ministry said that the SDPI report was based on false assumption and misleading.

New Delhi: India has sought from Pakistan sovereign payment guarantees, before it can sign a contract to export natural gas through a pipeline from Punjab. State-owned gas utility GAIL India Ltd plans to initially supply gas at 5 million standard cubic metres per day to Pakistan through a 110-km pipeline from Jalandhar to the international border near Attari. But before GAIL enters into a gas supply contract with a Pakistani firm, New Delhi wants Pakistan to provide payment guarantees. Besides sovereign guarantees, India wants sureties for three months payment and advance termination commitments.

The ministry said they officially did not know whether India has any objection to the gas price being negotiated between India and Iran. The ministry said that the contract price of crude oil imported by India was in US dollars.

Govt Takes Initiative to Woo Foreign Investors

It said that due to the hassles in payment transmission due to Iran’s geopolitical situation, India and Iran agreed to convert the US dollar value of payments to the equivalent in Indian rupee. The petroleum ministry said that though price discussion between India and Iran is confidential, based on the updated market information the price.

Bhatinda-Srinagar Gas Pipeline in Limbo Jammu: The fate of much hyped ` 880 crore Bhatinda-Srinagar gas pipeline project sanctioned about three years back is hanging in balance as the company entrusted with the execution has failed to meet the procedural formalities for starting the work. Even as the project awarded to M/s Gujarat State Petronet Limited (GSPL) - a subsidiary of Gujarat government, in June 2011 is on the verge of missing the three-year deadline fixed for its completion, the state government is waiting for the company to submit the ‘Intend’ and sign Memorandum of Understanding (MoU) to pave way for land acquisition. The project has been proposed to make possible round-the-clock LPG supply to Kashmir which faces frequent shortage of cooking gas in winters due to closure of Srinagar-Jammu highway, sometime for days together.

New Delhi: The Prime Minister’s Office (PMO) has personally taken the initiative in making all efforts to woo back global investors into the country’s energy sector and drive India’s growth story. Detailed parleys are being held at the highest level to woo foreign investors through road shows and detailed presentations are being given on India’s growth story and on some of the big ticket investment projects in the energy sector. Personal invitations are being extended to top ministers across the world to visit India along with their business community. Bilateral communications are also being made with cash-rich Gulf nations to attract investments from their sovereign wealth funds into India’s infrastructure projects. Bilateral communications are also being made with cash-rich Gulf nations to attract investments from their sovereign wealth funds into India’s infrastructure projects. At a recent inter-ministerial meeting at the PMO, it was decided that a portfolio of investment proposals should be sent to Gulf countries including Kuwait, UAE, Qatar and Saudi Arabia. The power ministry held talks with ambassadors and senior diplomats from 12 countries — Germany, France, the UK, Turkey, Russia, Saudi Arabia, Denmark, Australia, Israel, Netherlands, Spain and Sweden — in the Capital to invite participation in two big ticket power projects worth ` 500 billion in Tamil Nadu and Odisha. Moreover, investors who have announced they are pulling out from India are being wooed to reconsider. For instance, BHP Billiton, which walked out of nine oil and gas blocks in the country, got a letter from the petroleum ministry requesting top officials to come to India so that pending issues could be sorted out.

Offshore World | 37 | OCTOBER - NOVEMBER 2013

www.oswindia.com


Numaligarh Refinery in Expansion Mode

Essar Energy to Exit from KPRL Mumbai: Essar Energy announced that it intends to sell its 50 per cent stake in Kenya Petroleum Refineries (KPRL), which operates an oil refinery in Mombasa, as it does not find it viable to upgrade the plant. The Mombasa refinery is the first international refinery acquired by any Indian company in East Africa. In a statement, Essar Energy said that the company has the right to exercise a put option under which the government of Kenya would buy the stake for USD 5 million. Essar had acquired the stake in July 2009 for USD 7 million from BP, Chevron and Royal Dutch Shell.

Lanka Stalls IOC Plan to Hit back at India New Delhi: Sri Lanka may be starting the process of downgrading ties with India. Indian Oil Corporation’s (IOC) Lankan arm, Lanka IOC, which leased oil storage tanks at Trincomalee, has hit a dead end as it attempts to set up a joint venture with Ceylon Petroleum Corporation for about 84 tanks. Coming months after the Rajapaksa government decided to ‘repossess’ a number of unused tanks, the move is being seen by some as retaliation for India’s recent moves. Petroleum secretary Vivek Rae has asked foreign secretary Sujatha Singh to take up the issue at the diplomatic level since the Lankans were refusing to engage the petroleum ministry. He said Lanka IOC had given a proposal for a joint venture to the Lankans in May but there was no response yet. Colombo had also rebuffed oil minister Veerappa Moily who had discussed the issue with his Lankan counterpart at a recent Asian energy roundtable in Seoul.

India Ports to Benefit from LNG Boom New Delhi: The growing liquefied natural gas (LNG) demand in India will certainly boost the Indian ports’ LNG re-gasification terminals possibilities.Virtually every port in India is looking to set up liquefied natural gas (LNG) receiving terminals to cash in on the country’s efforts to reduce its dependence on traditional and costly fossil fuels and switch to the more efficient, cleaner and ecofriendly option. It is also an indication that locally produced gas—despite the grandiose plans announced by explorers—may not be enough to meet India’s huge appetite for the fuel for use in power plants, fertilizer units, petrochemical plants, automobiles and households.

news

Guwahati: In the run up to the implementation of its mega refinery expansion plan, Assam-based Numaligarh Refinery Ltd (NRL), a subsidiary of Bharat Petroleum Corporation Ltd (BPCL), has signed two important memorandums of understanding (MoU), one with Dhamra Port Company Limited (DPCL) for import of crude oil and LPG and the other with Cement Corporation of India (CCI) for utilisation of raw petroleum coke, likely to be generated at NRL after its proposed capacity expansion. The capacity augmentation of NRL from its current 3 MMPTA (million metric tonnes per annum) to 9 MMTPA had been included in the 12th five year plan of Union ministry of petroleum and natural gas along with a proposed crude oil pipeline for transportation of imported crude from Dhamra port in Odisha to Numaligarh Refinery in order to meet the additional crude requirement consequent to refinery expansion.

Govt Throws its Whole Weight to Hold back BHP Billiton Mumbai: In fearing for sending a negative sentiment towards foreign inventors after BHP Billiton surrendered nine oil and gas exploratory fields it won at auctions citing regulatory trouble, The Petroleum & Natural Gas Ministry will invite BHP Billiton to discuss the issue. The Ministry is trying to convince the world’s largest miner to change its decision. As per the ministry, government is taking initiatives to make the exploration business hassle-free and regulatory hurdles can no longer be used as an excuse to exit the upstream business and the Cabinet Committee on Investment has been taking quick decisions to ensure continued exploration activities where work had stopped due to several issued raised by the defence, commerce and environmental ministries.

Paradip Port, GAIL Sign Pact for Gas Terminal Paradip: Paradip Port and public sector pipeline operator GAIL (India) have signed an initial agreement for setting up a liquefied natural gas terminal at Paradip at a joint investment of ` 3,108 crore. The project would be a send-out capacity of 4.8 million tonne per annum in phase one by 2017 with a storage capacity of 170,000 cubic metre. The pact was signed by Sudhansu Sekhar Mishra, Chairman, Paradip Port, and Sanjeev Dutta, Executive Director, GAIL in the presence of Union Minister of Shipping G K Vasan.

The Future of Rupee is Tied to Oil Imports

India has four LNG re-gasification terminals at Dahej and Hazira in Gujarat, and Dabhol in Maharashtra and Kochi in Kerala, all on the country’s western seaboard. On the western coast alone, more facilities are being planned at Mundra, Pipavav, Chhara and Nana Layja, all in Gujarat.

New Delhi: The weakness or strength of the Indian rupee will continue to be largely determined by the level and costs of the country’s crude oil imports, according to Ignatius Chithelen, Managing partner of Banyan Tree Capital Management, a New York-based investment management firm.

New facilities are also proposed at Kakinada, Gangavaram, Krishnapatnam, Ennore, Dhamra, Paradip and Karaikal on the eastern coast. All of these are expected to ramp up capacity to 50 million metric tonnes per annum (mmtpa) of LNG from the existing 19.8.

About 30 per cent of India’s energy needs are met by petroleum. But some 80 per cent of this oil is imported — the major factor behind the country’s ballooning trade and current account deficits. In the fiscal year ending March 2013, India’s net oil import was 2.6 million barrels per day (bpd).

www.oswindia.com

Offshore World | 38 | OCTOBER - NOVEMBER 2013


India to Spend USD 2.2 billion to Triple Crude Oil Reserve New Delhi: In seeking to protect the economy against supply disruptions, India – the fourth largest energy consumer of the world after the US, China and Russia – will spend USD 2.2 billion to more than triple its proposed emergency crude oil reserves. Rajan K Pillai, CEO, Indian Strategic Petroleum Reserves Ltd, said that four caverns with a combined capacity of 12.5 million tonnes will be built at a cost of Rs13,300 crore and add to three with 5.03 million tonnes of capacity under construction. The government may turn to its biggest refiners

Indian Oil Corporation and Hindustan Petroleum Corporation to help fill the reservoirs. The government is seeking to shield the country from perennial political risk in the Middle East and Africa, which account for 85 per cent of its imports. Sanctions by the European Union and the US against Iran forced India to halve its estimated oil imports from the Persian Gulf nation in the last four years, while civil wars in Syria and Sudan have limited purchases.

NELP X to be Announced by Jan 15

India in Pipeline Diplomacy New Delhi: In comforting news for energy-hungry India, the transnational Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project is turning into a reality with US energy giant Chevron likely to be chosen to construct and run the 1,800 km long pipeline. New Delhi is also seeking to tap hydrocarbons from Russia’s vast reserves with a similar pipeline that could link or run parallel to it. Prime Minister Manmohan Singh during his talks with President Vladimir Putin is expected to seek heightened energy cooperation between the two countries. India has stakes in the Sakhalin-1 project, off the east coast of Russia and is also scouting for energy in the Tomsk region in Siberia. India, which is set to become the third largest energy consumer in the world by 2025 after the US and China, has been trying to firm up gas transmission projects with other countries, including one through Iran and Pakistan and from Myanmar, but none of them have worked out so far due to various constraints. The TAPI pipeline now looks set to be concretised with Chevron to be selected to lead a consortium to finance and run the pipeline.

Gas Discoveries of RIL to be Taken Away Mumbai:Petroleum Minister M Veerappa Moily has approved taking away five gas discoveries -- D4, D7, D8, D16 and D23 - from Reliance Industries over the company’s failure to meet timelines but has allowed it to retain three other finds; however, agreed with RIL’s contention that the company would retain D29, D30 and D31 gas finds in the KG-D6 block. The final decision on this may well be referred to the Cabinet by the ministry. There is also the possibility that RIL may yet again seek arbitration on the issue. It has already initiated such a proceeding on the USD 1.7 billion penalty.

Uniform Rise in Gas Price for Producers Soon New Delhi: The government may soon implement the Cabinet’s four-month old decision to raise gas price uniformly for all producers. This follows a proposal to secure bank guarantees from Reliance Industries, which will be encashed if the company is found guilty of hoarding gas produced from its KG-D6 block. The government could not notify the Cabinet-approved gas price formula in June after some departments sought to deny higher prices for RIL’s KG-D6 fields that produced much lower gas than the approved production plan.

New Delhi: The Petroleum and Natural Gas Ministry has informed that the tenth round of New Exploration Licensing Policy (NELP) would be announced by January 15, 2014. In this round x of NELP total 86 hydrocarbon blocks will be auctioned to attract more investment into the exploration and production (E&L) sector. In which 53 to 55 blocks had received all clearances from different agencies while clearances for the rest would be received by the time of bidding. Veerappa Moily, Union Minister for Petroleum and Natural Gas, said that that out of these identified blocks, 53 to 55 blocks had received all clearances from different agencies while clearances for the rest would be received by the time of bidding.

India Takes First Step into Shale Exploration New Delhi: After the Govt allowed the state-owned companies to start exploration for shale oil and gas in the country, Oil and Natural Gas Corporation (ONGC) has announced that the first shale well spud in Gujarat’s Cambay Basin will dedicate to the nation in the presence of Minister for Petroleum & Natural Gas, M Moily. The drilling of Jambusar-55, the first well under the pilot programme of ONGC has been drilled to a depth of 1,735 metres, and further drilling is in progress. For its shale exploration pilot programme, ONGC had signed a memorandum of understanding with the ConocoPhillips, US. The two undertook joint studies of the four basins: Cambay, Krishna Godavari, Cauvery and Damodar. Based on the studies, a shale gas pilot drilling programme was firmed up in the Broach depression area of Cambay Basin in technical collaboration with Conoco.

PlantPAx from Rockwell Automation Mumbai: The latest release of the PlantPAx process automation system from Rockwell Automation allows companies across multiple industries to improve operator effectiveness with automated procedures, enhanced visualization and new skid-integration capabilities. The system’s new sequencer tool enables companies to easily automate process procedures, perform system modifications, and sequence actions directly through human-machine interface (HMI) faceplates. If a process change is necessary or an abnormal event occurs, a user with the appropriate login privileges can modify the sequence directly from the HMI screen, rather than waiting for a control system expert to modify the procedure code.

Offshore World | 39 | OCTOBER - NOVEMBER 2013

www.oswindia.com


news India Pushes Hard to Get TAPI Pipeline

Oil Minister Can’t Join Global Energy Pact

New Delhi: Amid of China’s aggressive approach in securing its energy security needs from the Central Asian Region, India has batted strongly for the 1735-km Turkmenistan, Afghanistan, Pakistan, India (TAPI) pipeline, which will have a capacity to carry 90 million metric standard cubic metres a day (mmscmd) of gas for a 30-year period, to make the project operational by 2017.

New Delhi: The finance ministry has blocked the oil ministry’s latest push to join the Energy Charter Treaty, saying India would not gain anything by joining the legally binding agreement that would impact states’ rights on subsoil resources and weaken the government’s rights on natural resources in case of dispute with foreign investors.

China had already operationalised its gas pipeline from Turkmenistan and was in the process of initiating work on the second pipeline. Hence, the Ministry of Finance has written to the Petroleum and Natural Gas Ministry and the Indian Ambassador to Turkmenistan that in light of the developments and aggression by the Chinese, India may need to take concerted action to ensure that the pace of implementation of the TAPI project is speeded up.

India-Vietnam Agree to More Collaboration on Oil Exploration

The treaty is an international agreement providing a multilateral framework for cross-border trade, transit and investments in energy and lays down binding dispute resolution procedures. Some 54 countries and the EC are signatories. The oil ministry has two transnational pipeline projects — from Iran and Turkmenistan — on the table as well as gas shipping plans from the US. It feels the treaty will help protect Indian investments, allow free trade in equipment based on WTO rules, transit freedom for oil, gas and power through pipelines or grids and provide a transparent mechanism for stateto-state or investor-to-state dispute resolution.

New Delhi: India and Vietnam have signed an agreement for developing and expanding oil exploration in the South China Sea. In order to expand oil exploration projects in the disputed South China Sea, the two countries have decided to allocate new oil blocks too. Call it a move to enhance the bilateral ties, both the country premiers - Prime Minister of India Manmohan Singh and Nguyen Phu Trong, General Secretary of the Communist Party of the Socialist Republic of Vietnam - discussed on a number of topics related to key bilateral and regional issues, apart from signing 7 more pacts.

Policy on Oil and Gas Survey Data Sale likely Soon

The MoU further strengthened the associations of both the countries in terms of exploration, development and production of petroleum resources and new investments by OVL and Gas blocks in Vietnam. On the other way round, India has also invited to participate in open blocks in India and the third countries.

The policy is aimed at attracting global companies for data acquisition. They would get 10-year exclusive rights for selling the data to Indian and foreign oil and gas companies. The government will also get access to the data once it is ready.

Iran’s Deal will Boost India’s Oil Security New Delhi: The truce arrived at between Tehran and six world powers over the former’s nuclear programme is set to end the long-standing payment crisis for Indian oil companies, which are hoping to soon restart paying for crude oil imported from Iran in dollars or euros. According to experts, the development will soon bring down global crude oil prices back to around USD 100 a barrel. However, on the other hand, it will spell doom for Petroleum Minister M Moily’s ambitious plan to save USD 8.4 billion worth of foreign exchange outgo by paying for 100 per cent of oil imports from Iran in rupee terms. Also, the agreement will do away with the need to have a ` 2,000-crore Indian Energy Insurance Pool for covering refineries’ risk in importing crude oil from that country. www.oswindia.com

Mumbai: The government is planning to grant 10-year exclusivity rights for geological data mined through a speculative survey to encourage new business stream in the oil and gas exploration and production sector, informed Petroleum Secretary Vivek Rae. Vivek Rae, Petroleum Secretary, GOI

IOC to Acquire Canadian Shale Gas Asset New Delhi: Indian Oil Corp Ltd (IOC), country’s biggest refinery, is in talks to buy Malaysian state oil company Petronas Dagangan’s 10 per cent in a Canadian shale gas asset. The Malaysian firm, through its wholly-owned subsidiary Petronas International Corp, had in 2011 bought Canada’s Progress Energy Resources Corp in a Canadian Dollar 5.2 billion deal to get the Altares, Lily and Kahta shale gas assets in north-eastern British Columbia. IOC’s plan to take 10 per cent will also include an offtake agreement for the Indian energy company. IOC is looking to expand its protfolio of exploration and producing assets while Petronas wants to share some of its costs. The deal between IOC and Petronas have not yet been finalised as negotiations are far from being concluded.

Offshore World | 40 | OCTOBER - NOVEMBER 2013


International 3D Survey at Offshore Australia Australia: WHL Energy informed that the CGG Viking II vessel has started acquiring the La Bella 3D marine seismic survey offshore southeast Australia. Final processed data should be ready in mid-May 2014. The survey will cover a total of 867 sq km (335 sq mi) in the VIC/P67 permit and is expected to take 34 days to complete. CGG will deploy its BroadSeis technology to provide a high-resolution image of the subsurface geology of the La Bella gas field and surrounding gas/condensate exploration prospects. WHL adds that the data should allow a more precise definition of contingent resources and will assist development planning.

CGC to Manage Nor way ’s O ffshore Seismic Data Bank Norway: The Norwegian Petroleum Directorate (NPD) and oil companies in the Diskos group have contracted CGG for operation of seismic databases from 20152020. CGG’s three contracts cover the Seismic, Well, and Production modules. The Diskos database is a shared way to store and to distribute seismic data, well data, and production data from the Norwegian shelf. It was first launched in 1995 as a cooperation among NPD, Statoil, Norsk Hydro, and Saga Petroleum. Today, 56 oil companies, numerous service companies and all Norway’s universities are involved. Diskos holds nearly 600 terabytes of digital seismic, well and production data from the Norwegian shelf, and data volumes are expected to grow over the next few years. Data in the databases is accessed via a secure, high-speed communications network.

O ffshore Gabon Seismic Focuses to Presalt Gabon: A new 3D seismic survey is under way on the Dussafu PSC offshore Gabon, according to Harvest Natural Resources. Work on the 1,260-sq km (486-sq mi) 3D program started in October and first results are expected to become available during 2Q 2014. The survey will provide the first 3D coverage over the outboard area of the license, where presalt prospectivity has been recognized on 2D data. The new data should also enhance placement of future development wells on the Ruche and Tortue fields. Harvest is progressing plans for a cluster development.

More Seismic Coverage at Offshore Newfoundland Canada: TGS and PGS will co-operate on a new 2D seismic survey offshore eastern Canada. The Northeast Newfoundland Shelf 2D survey, covering 5,000 km (3,107 mi), is an expansion of a previously announcedsurvey off Newfoundland. On completion, TGS will have a 25,000-km (15,534-mi) data bank over the region, covering developed fields and others under development such as Hibernia, Terra Nova, Hebron, White Rose, and Statoil/ Husky’s recent Mizzen, Harpoon, and Bay du Nord discoveries. The new survey will employ PGS GeoStreamer technology, with final data available to clients next summer. This summer TGS completed acquisition of the 20,000-km (12,427mi) NE Newfoundland Flemish Pass 2D project, after which the vessel started work on the 3,000-km (1,864-mi) Labrador Sea 2D Deep Basin survey, again under the joint venture with PGS.

Further Seismic Studies at Offshore Guyana Guyana: CGX Energy continues to seek partners for its three licenses offshore Guyana, and has made available a technical data room at its Houston office. The company is about to start re-processing part of its 3D seismic data set for the offshore Corentyne block, which is expected to be completed by the end of the year. In addition, the company has granted Repsol Exploracion permission to acquire seismic in certain portions of the concession while working on a 3D survey in the Kanuku block. Repsol will supply the resultant data to CGX free of charge. The new Corentyne license, drawn up late last year, applies to the offshore part of the original Corentyne license and comprises 1.5 million acres (6,212 sq km).

Assessment of Frontier Barents Sea 2D Seismic Data Norway: The Norwegian Petroleum Directorate (NPD) has completed acquiring 2D seismic over the new Norwegian maritime zone in the northeastern sector of the Barents Sea. Artemis Atlantic started the program on July 28. NPD geologists will interpret the 13,200 km (8,202 mi) of data. Mapping of the new zone in the Barents Sea started last year, on assignment from the Norwegian government, as part of a program to obtain a better overview of Norway’s potential oil and gas resources. The concession takes in part of block 16/5. The well will be drilled 8.9 km (5.5 mi) southeast of well 16/4-6 S in PL 359 and 8.3 km (5.1 mi) west of well 16/5-1, which was drilled by Elf in 1971.

Seismic on Offshore Ireland Survey Ireland: Petroleum Geo-Services (PGS) has completed its first full-scale simultaneous acquisition of towed streamer electromagnetic (EM) data and 2D GeoStreamer seismic. The multi-client survey over licensing options 13/1 and 13/23 offshore southern Ireland comprised around 3,000 line km (1,864 mi) of seismic and towed streamer EM data. It was acquired during four weeks this summer in the Fastnet and Celtic Sea basins. The new survey should confirm the presence of deeper targets, and the GeoStreamer 2D data should improve resolution of shallower formations, including ties to the 400-MM barrel Barryroe field. Offshore World | 41 | OCTOBER - NOVEMBER 2013

www.oswindia.com


news International Another Oil Discovery at North Sea US: Dana Petroleum has made an oil discovery in the Moray Firth after the drilling of the entirely Dana-operated Liberator exploration well. Dana also reported a gas discovery in the Pharos prospect in the southern North Sea. Using Diamond Offshore Drilling Inc’s Ocean Nomad drilling rig, Dana drilled the 13/23d-8 well on the Liberator prospect in license P1987. The well encountered hydrocarbons in a Lower Cretaceous captain sandstone reservoir. The rig will be sent to the northern North Sea for further operations on Dana’s Western Isles development. Paul Griffin, Managing Director, Dana, said that this is the second North Sea discovery that Dana has made within the last month, and our fifth discovery in the last 3 years. The discovery lies close to existing infrastructure and we will now undertake further evaluation work to determine its commercial potential.

O i l Co n f i r m e d Offshore Nigeria

in

O yo

Field

Nigeria: The Allied Energy PLC-operated Oyo-7 well on OML 120 offshore Nigeria, first well to penetrate Miocene in Oyo field, has confirmed the presence of oil in Miocene. The well found hydrocarbons in three intervals totaling 65 ft as interpreted from logging while drilling data, said partner CAMAC Energy Inc. CAMAC said it will integrate the results into studies to solidify further exploratory plans on OML 120 and 121.

Light Oil Discovers at Murzuk Basin Libya: A group led by Repsol has added a light oil discovery on the 4,400 sq km NC 115 block in the Murzuk basin in the Sahara 800 km south of Tripoli, Libya. The A1-129/02 discovery well flowed 528 b/d of 40° gravity oil on a 32/64-in. choke from perforations at 4,502-22 ft in the Ordovician Memouniat formation. Total depth is 1,836 m. The well is the third of eight that the company will drill on the block. Repsol began an exploratory campaign on the block this year that will continue through the end of 2015. www.oswindia.com

Fifth Oil Discovery at Northern Kenya Kenya: Tullow Oil PLC and Africa Oil Crop have reported a fifth oil discovery in northern Kenya where they plan to run six rigs full time for the foreseeable future. The Agete-1 exploratory well on Block 13T has discovered and sampled movable oil with an estimated 100 m of net oil pay in good-quality sandstone reservoirs. Agete-1 is the fifth consecutive oil discovery in the first of a chain of multiple rift basins on Africa Oil’s acreage in the region. Agete-1 derisks several follow-on prospects north of and on trend with the Twiga South, Ekales, and Ngamiaoil discoveries and adds to the significant resource base already discovered.

Third Norwegian Sea Oil Discovered Norway: Statoil ASA and its partners in PL 348/348B have made an oil discovery 15 km northeast of Njord field in the Norwegian Sea’s Snilehorn prospect. The volume of the discovery ranges 55-100 million bbl of recoverable high-quality light oil. Exploration well 6407/8-6 and sidetrack 6407/8-6A, which was drilled by the Songa Trym drilling rig, have proved several oil columns in Jurassic-aged formations. The main wellbore also has proved oil at a deeper level in reservoir rocks of Triassic age, possibly Grey Beds formation.

Oil Discovers at Masila Basin Yemen: A group led by DNO International ASA, Oslo, has tested 36° gravity oil at a rate of 5,900 b/d at the Salsala-1`discovery well on Block 32 in the Masila basin of east-central Yemen. The company attained the 5,900 b/d initial rate before choking flow to 3,400 b/d due to limited tank space. The flow came from a 32-m perforated interval in the Jurassic Shuqra formation. Block 32 contains two fields, Godah and Tasour, which are averaging 2,500 b/d of oil. DNO International will place the well on extended production test and plans to spud an appraisal well in early 2014 as part of a fast-track development. Block 32 interests are DNO International 38.95 per cent, Ansan Wikfs 42.93 per cent, TransGlobe Energy Corp 13.12 per cent, and Yemen Oil & Gas Corp 5 per cent.

Egypt to Develop Sinai Oil Fields Egypt: Egypt has announced its plans to develop the Sedr, Assal and Matarmah oilfields, which it claims was ‘over-exploited’ by the Israelis during their 12-year occupation of Sinai. Egypt seeks to develop three oilfields that it says were mishandled by Israel when the latter occupied the SinaiPeninsula between 1967 and 1979. The Sedr, Assal and Matarmah oilfields had all been ‘overexploited’ by Israel during the latter’s 12-year-long occupation, the source told Anadolu Agency.

Second Oil Finds at Hawler in Iraq Kurdistan Iraq: Oryx Petroleum Corp has gauged a potentially commercial Jurassic oil and sour gas discovery at Ain Al Safra, its second oil discovery on the Hawler license in the northern part of the Kurdistan Region of Iraq. The company plans to appraise the AAS-1 discovery next year as part of the multiwell appraisal and development drilling program on the license, where Oryx is operator with a 65 per cent participating and working interest. The company drillstem tested together the base of the Alan formation and the Mus formation whose fracture systems it believes to be in communication. Two intervals were perforated in a section totaling 58 m. The well was successfully flowed using 20/64-in. and 16/64-in. chokes. Offshore World | 42 | OCTOBER - NOVEMBER 2013


International Jasmine Oil Field Starts Production

Oil Production Starts from Chad’s Badila Field

UK: ConocoPhillips and partners have started production from Jasmine gas and condensate field in the central North Sea offshore the UK. The high-pressure, high-temperature field can produce 140,000 boe/d.

Chad: Caracal Energy, Calgary, said oil production has begun from Badila field in southern Chad and was being pumped through a pipeline at a rate of 5,100 b/d. The companies have drilled the Badila-4 and 5 wells. The Mangara-5 development well went to 3,339 m and was completed in Cretaceous C and D sands. Caracal will spud Mangara-6 this month to test the areal extent of the E sands on the field’s west side.

Development involves a 24-slot wellhead platform bridge-linked to an accommodation and utilities platform; a 16-in. multiphase pipeline bundle; and riser and processing platform bridge-linked to the existing Judy platform about 6 miles east of the field. ConocoPhillips (36.5 per cent interest), Eni (33 per cent), and BG Group (30.5 per cent) discovered Jasmine in 2006.

Oil Production Starts from Papa-Terra Offshore Brazil Brazil: Petroleo Brasileiro SA (Petrobras) and a Brazilian subsidiary of Chevron Crop have begun crude oil production from Papa-Terra’s floating production, storage, and offloading vessel offshore Brazil. Petrobras is operator of Papa-Terra with 62 per cent interest while Chevron holds 37.5 per cent. Papa-Terra is a heavy oil development in 3,900 ft of water on Block BC-20 in the southern Campos basin about 70 miles southeast of Rio de Janeiro. Discovered in 2003, it contains Brazil’s first tension-leg wellhead platform, the P-61, expected to begin production next year. Papa-Terra has installed capacity to produce 140,000 b/d of crude.

Production Ramps up at Deepwater Jubilee Field Ghana: Tullow Oil has informed that the first planned maintenance shutdown on the Jubilee FPSO Kwame Nkrumah offshore Ghana has been completed ahead of schedule. Phase 1A development drilling has boosted well capacity to more than 150,000 b/d of oil. Tullow expects Jubilee to produce more than 120,000 b/d by year-end, subject to completion of the gas optimization work. The recently drilled Akasa-2A appraisal well successfully tested the downdip extent of the Akasa accumulation, and the partners continue to study development options for Mahogany, Teak, and Akasa in the West Cape Three Points license.

Natural flow from the E sands at Mangara-5 was 1,917 b/d at 160 psi flowing wellhead pressure. The well made more than 1,450 bbl in 53 hr. Field sampling estimates indicate oil of 35°-39° gravity and a producing gas-oil ratio of 100 scf/stb. The group estimates that 1,500-2,500 b/d could be achieved on an electric submersible pump.

Strong Growth in Canadian Oil and Gas Output: NEB Canada: The National Energy Board (NEB), an independent Canadian federal regulatory tribunal, has forecasted that Canadian production of crude oil will increase by 60 per cent and of natural gas by 32 per cent during 2013-35 if markets take the supply and transportation capacity develops as needed. But those conditions combine to represent a ‘key uncertainty’, mentioned in the NEB’s annual energy forecast. If these assumptions do not hold, pipeline constraints and price differentials will likely impact oil producers and the broader energy system in coming years, NEB said. In its reference case, the agency projects an increase in crude oil production to 5.84 million b/d from 3.66 million b/d in 2013. Gas production in the reference case climbs to 17.4 bcfd in 2035 from 13.2 bcfd in 2013. The reference case assumes 2035 prices of USD 110/bbl for West Texas Intermediate (WTI) crude oil and USD 6.20/MMbtu for Henry Hub natural gas.

Libra Offshore Oil Production to Begin by 2020 Brazil: Offshore Libra oil field, the biggest oil discovery of Brazil, will not enter production until 2020 and peak output will come at least four years later, said the operator Petrobras. Libra has an estimated 8-12 Bbbl of recoverable oil, and peak production is expected in 2024–2025. The Libra field operation will be controlled by a five-member consortium of Petrobras, Shell Brasil, Total (France), China National Petroleum Corp (CNPC), and CNOOC Ltd. Consortium member shares are: Petrobras, 10 per cent; Shell Brasil, 20 per cent; Total, 20 per cent; CNPC, 10 per cent; and CNOOC, 10 per cent. In addition to its above share, Petrobras holds a 30 per cent mandatory stake, which also calls for Petrobras to hold the oilfield operatorship.

Gas Potential Confirms in Evans Shoal Italy: Eni has completed the Evans Shoal North-1 appraisal well in the Evans Shoal gas field in the Timor Sea, offshore Northern Australia, on behalf of the NT/P48 exploration permit partners. Results suggest Evans Shoal contains at least 8 tcf of in-place raw gas. The field is in the NT/P48 exploration permit in the north Bonaparte basin, 300 km (186 mi) northwest of Darwin. Evans Shoal North 1 was drilled in 111 m (364 ft) of water to a TD of 3,955 m (12,975 ft), 12 km (7.4 mi) from the Evans Shoal-2 well. Results suggest these wells share common reservoir characteristics and are in hydraulic communication. On test, gas flow from the latest well reached an equipment-constrained rate of 30 MMcf/d. Eni says it is committed to fasttrack development of known resources in this area. Its partners in the NT/P48 joint venture are Shell (operator), Petronas Carigali (Australia), and Osaka Gas Australia. Offshore World | 43 | OCTOBER - NOVEMBER 2013

www.oswindia.com


products

ELECTRONIC FLOW METER The Brooks MassRate 5700 is a gas flow meter specially designed to satisfy the needs of purge gas, process analysis and analytical flow measurement applications. The MassRate 5700 utilizes a proven thermal mass flow sensor which provides excellent repeatability, wide turndown and an electrical output signal. It has a rugged all SS construction and no moving parts providing superior corrosion resistance and long-term reliability. The MassRate 5700 is an economical meter with an electrical output signal making it ideal for replacing turbine meters, variable area meters and other volumetric devices.

LPG DISPENSERS Oil & Gas Plant Engineers India Pvt Ltd offers special LPG dispensers procured from their Principals, Fluussigas Anlagen GmbH, Germany (FAS). These dispensers are approved by Explosives Department as well as Weights & Measures. The new generation of electronic LPG dispensers being supplied is complete with SS housing. A typical dispenser is complete with reliable and accurate piston meter, vapour eliminator, valves, pressure gauges, high pressure dispensing hose, LPG nozzles, safety relive valves, diaphragm type accumulator and differential valve, etc. The unit includes all required safeties and has inbuilt protection against network failure with electronic totalizator including temp compensation. For details contact: Oil & Gas Plant Engineers India Pvt Ltd 108-109, Chiranjiv Tower-43, Nehru Place, New Delhi 110 019 Tel: 011-26447007, 26427233, 26482594 | Fax: 91-011-26482593

For details contact: Brooks Instrument 301, 3rd Floor, A to Z Indl Estate Ganpatrao Kadam Marg Lower Parel, Mumbai 400 013 Tel: 022-66270780

GAS FLOW METER HYDRAULIC TURBINE DRIVEN MULTIPHASE SUBMERSIBLE PUMP In challenging subsea applications it is important that performance and revenue are assured, and operating costs are controlled. In other words, no matter how variable the well conditions are, oil lift pumps have to work right the first time, every time and for a long time. From the beginning, the oil industry has been relied on the proven power of hydraulics to assist in drilling wells. ClydeUnion Pumps, a SPX Brand, has been utilised this approach in the application of hydraulic turbine driven multiphase submersible pump (HSP) technology to provide you with the ultimate solution in uptime and reliability. Since 2000, ClydeUnion Pumps HSP technology has been successfully producing heavy, gassy crude through multiple subsea wells in the North Sea that have demonstrated HSPs can typically achieve run lives at least 3 times longer than the industry average for ESP systems with exceptional performance and availability. For details contact: ClydeUnion Pumps 149 Newlands Road,Cathcart,Glasgow G44 4EX,U.K. Email : cu.ads@spx.com; Website : www.clydeunion.com www.oswindia.com

Heatech Engineers offers range of gas flow meters. These meters are used to test the flow of the gas in various pipe equipments and other gas-oriented furnaces or industrial appliances. This meter is used in testing purposes, especially on various gas burners and gas equipments to ensure that the required amount of gas-pressure is obtained. Heatech Engineers has carefully crafted this range using high class raw material. For details contact: Heatech Engineers No: 33/3 C, Ganesh Layout, Nallampalayam, Ganapathy PO Coimbatore, Tamil Nadu 641006 | Tel: 0422-6576521

REGULATED GAS FLOW Modern vacuum processes require a plethora of: regulated gas flows: calibrated helium leaks; cooling water; liquid nitrogen; compressed air for pneumatic valve operations and many others. High Vacuum India’s Gas/ Liquid Management pages contain all the unlikely but necessary valves, flow regulators, plastic tubing, and compressed air fittings to make a process happen in a vacuum system. For details contact: High Vacuum India No: 593, Motappa Layout, 6 th Cross, Kodihalli, HAL 3 rd Stage Bengaluru, Karnataka 560 008 | Tel: 080-41152889

Offshore World | 44 | OCTOBER - NOVEMBER 2013


PORTABLE GAS DETECTOR & ONLINE GAS DETECTOR MSA Instruments offers wide range of small, light and simple to use portable gas detector to meet the client’s requirements. All these products are made of premium grade raw material. These gas detectors are well designed and are highly in demand. A team of skilled technicians and trained engineers design these products. It features interchangeable i-module intelligent sensors and simple single button operation. For details contact: MSA Instruments 18, Netaji Subhas Road, 2 nd Floor, Kolkata 700 001 Tel: 033-22307457, 22313743 | Fax: 91-033-22313743

The Pall HLP6 oil purifier combines excellent efficiency of mass transfer purifiers with an exceptional level of reliability and ease of use. Water contamination in oil systems is responsible for major maintenance and operational problems of critical components in lubrication and hydraulic circuits. From power generation turbines to paper machines, these problems include increased corrosion in the system, especially at bearing locations; increased oil oxidation and acid build-up; and sluggish response of control systems. For details contact: Pall India Pvt Ltd Sumer Plaza, CTS -419, Marol Maroshi Road Andheri (E), Mumbai 400 059 Tel: 022-67995555, 67995649 | Fax: 91-022-67995556

OIL & GAS PIPELINE LEAKAGE DETECTORS For pipelines larger than 4-inch (100 mm) dia, SmartBall offers unparalleled leak sensitivity and accurate location capability. It is easy to deploy and can be used to complement existing pipeline integrity programs or as an integrity check on non-piggable lines. The device consists of an instrumented aluminum core in a urethane shell. The device contains a range of instrumentation, including an acoustic data acquisition system that listens for leaks as the ball travels through the pipeline. SmartBall differs from conventional inspection pigs, in that it is not a full dia instrument. The ball is smaller than the pipe dia. It rolls silently through the pipeline and the absence of mechanical noise allows unsurpassed acoustic sensitivity. The device can detect pin-hole size leaks as low as 0.03 gallons per minute (0.1 liters/min). This is exponentially more sensitivity than CPM-based leak detection systems; and the advantage increases along with pipeline dia. Leak location accuracy is within 10 ft (3 m) and given additional reference points can be even further tightened. The device can be deployed and retrieved using existing pigging facilities. In non-piggable lines, the device can be launched using off-the-shelf fittings. Travel time is 28 hours for up to 4-inch (100 mm) lines and up to 110 hours for larger lines. For details contact: ANK Seals Pvt Ltd U 149, MIDC Nagpur, Maharashtra 440 016 Tel: 07104-234210, 325094

OIL PURIFIER

OIL PURIFIERS Oil purifiers from Chaudhary Marine are very high on efficiency. The company specializes in customized oil purification systems, which are designed to suit the requirements and specifications of their clients. For details contact: Chaudhary Marine Plot No: 293, Nr TCI , Alang Bhavnagar Road , Bhavnagar, Gujarat 364 081 Tel: 0278-2560443

ELECTROSTATIC OIL PURIFIER Pon Engineers Pvt Ltd offers a comprehensive range of electrostatic oil purifier. In this purifier, chemical breakdown of oil molecules takes place and additives degrade with time pressure and temperature owing to their oxidizing and polar nature. To form an insoluble sediment/contaminant, these chemicals effectively combine together. This sediment/contaminant is commonly termed as varnish and tar. For details contact: Pon Engineers Pvt Ltd No: 81, Kalyani Indl Estate, Vanagaram Road Athipet, Ambattur Indl Estate, Chennai 600 058 Tel: 044-26880660, 26880460 | Fax: 91-044-26880460

Offshore World | 47 | OCTOBER - NOVEMBER 2013

www.oswindia.com


products

OIL PURIFIERS

LPG GAS FILTERS

Oil purifiers from AR Marine International are known for purifying the oil very efficiently. These oil purifiers are in accordance with the set industrial standards are extensively demanded. Precision engineered oil purifiers available are equipped with advanced features. For details contact: AR Marine International Ra- House, Plot No: 114 Swastik Park-2, Sadsar Road Bhavnagar, Gujarat 364 002 Tel: 0278-2560984

Gas And Gas is among the most sought after companies in the domain of manufacturing and supplying of LPG gas filters which are finished as per the industry parameters. These are truly versatile and are highly reliable. These gas filters makes use of the liquefied petroleum gas. In addition to this, these LPG gas filters are available at suitable prices to meet the requirement of different customers. For details contact: Gas And Gas No: 25C, 4th Street, K R Puram R S Puram PO, Coimbatore, Tamil Nadu 64102

OIL PURIFIER

LPG GAS FILTER

Oil purifier is the equipment to make crude oil pure and usable. The purification is done immediately. Superior quality filter is fitted with the purifier for efficient purification.

For details contact: Shree Vahanwati Marine Export 6, Sanjivani Complex, Jail Road , Bhavnagar, Gujarat 364 002 Tel: 0278-6541306, 2520670

LIQUEFIED NATURAL GAS Liquefied Natural Gas is predominantly methane CH4 that has been converted to liquid form for its ease of transportation. LNG achieves a higher reduction in volume then CNG so that energy density of LNG is 2.4 times higher then CNG. LNG is mainly used because of its ease of transportation in market where it is regasified and distributed to customer. ISISAN provides the whole turnkey solution to customer which includes distribution through transport tankers, storage facility and regasification process.

Eco Gas System India Pvt Ltd offers this machine for inline cleaning of external surface of LPG gas filter. This machine is simple to operate with minimum maintenance. For this, an operator just has to simply load and unload the cylinders on rotating diabolic rollers. For details contact: Eco Gas System India Pvt Ltd No: 4, Crystal Apartment, Malkani Complex Opp: Excel, Industries, S V Road , Jogeshwari (W), Mumbai 400 102 Tel: 022-26781545. 66981832

PRESSURE VESSELS FOR LIQUIDS & GASES The highly experienced team of Fabromatic Industries offers pressure vessels for liquids and gases . It is manufactured using premium grade stainless steel. These SS pressure vessel can also be customized as per the customer’s requirement. These pressure vessels are widely used to store gases and liquids at the desired pressures.

For details contact: Isisan Energy Solutions Pvt Ltd 333, Powai Plaza, Hiranadan Garden Powai Mumbai 400 001 Tel: 022-25704356 www.oswindia.com

For details contact: Fabromatic Industries Plot No: 257/2, Road No: 1, GIDC, Kathwada Ahmedabad, Gujarat 382 430 Tel: 079-29293207 Offshore World | 48 | OCTOBER - NOVEMBER 2013


TETRA GAS DETECTOR

OIL RIGS

Tetra is a flexible multi-gas monitor for the detection of flammable gases, oxygen and a wide range of toxic gases. Available in rechargeable or disposable battery format and with or without an internal pump, it is used extensively in the utilities, chemicals and hydrocarbon processing markets. Intrinsically safe, Tetra is one of the only portable gas detectors with embedded software designed to the exacting requirements of IEC 61508-3, guaranteeing reliable and dependable operation.

JKGIT has a broad range of equipment, systems and components for land drilling rigs, truck-mounted rigs, and work over rigs; the main products include drilling rigs, rig spare parts, drilling tools and pipes, oil and gas tubes, and instruments and transport vehicles.

For details contact: Super Safety Services 5, Indu Chambers, 349/353 Samuel Street, Majid (W), Mumbai 400 003 Tel: 022-23473300, 23473311, Fax: 91-022-23473024

The list of equipments that JKGIT manage to source for oil and gas industry are: 1) drilling rigs - AC VF drive drilling, DC drilling rig, electro mechanical drilling rig, chain drive drilling rig, belt drive drilling rig; 2) special purpose vehicles - truck mounted rigs, work over rigs, trail mounted rigs, drilling engineering vehicles; 3) drilling rig’s part - crown block, traveling block, hook, swivel, rotary table, draw works, mud pumps, BOP and RAMS, solid control systems, mast, sub structure, diesel engine, auxiliary engine, motor, SCR and MCC; and 4) instrumentation and tool.

GAS LEAK DETECTOR The Detecto-Pak 4 is a portable flame ionization gas leak detector for leak surveys. Many of the design features in the DP4 are based on intelligent electronics that save time and money. It reads from 0-10, 0-50, 0-100, 0-1,000 and 0-10,000 parts per million (PPM) and has a fast response time due to its strong internal sample pump. Other features include a large backlit display with visual and audio alarms, auto fuel shut-off, hot wire ignition and a convenient membrane touch pad top panel that allows easy fingertip instrument operation. For details contact: Monroe Measurement & Control Pvt Ltd 2 Mudra Appartment, Above Dena Bank Nr Stadium Petrol Pump, Navarangpura, Ahmedabad, Gujarat 380 014 Tel: 079-26407753

For details contact: JK Global Infratrade Euro House 4 th Floor Chincholi Bunder Road B/h Inorbit Mall, Malad (W) Mumbai 400 064 Tel: 022-42511155

DRILLING RIGS

Gas leak alarms are used for detecting gas leaks and avoiding accidents. Easy to install, these wall-hung detectors have an audio alarm that alerts the client when the gas leak concentration reaches a dangerous level. This gives adequate time to take the necessary actions towards avoiding loss of lives and property.

Swarna Oil & Gas Field Pvt Ltd offers drilling rigs and its parts in different models - Model ZJ20DBS, Model ZJ30DBS, Model ZJ40DBS, Model ZJ50DBS and Model ZJ70DBS. The available tools are tricone rock bits: TCI and steel tooth bits 3 7/8” - 36”, PDC bits matrix body and steel body 3 1/8” - 17 1/2”, drag bits 3-wing and 4-wing step type and chevron type, PDC cutter for oil well drilling bits, coalfield mining drilling bits, geology exploring, drill collars (spiral and slick and nonmagnetic):size 3 1/8” - 11”, heavy weight drill pipe and square kellys and hexagonal kellys, drilling jars and stabilizers, casing centralizers and solid control equipments.

For details contact: The Hot Plate Centre Shop No: 2, Transport Center New Punjabi Bagh Flyover, Rohtak Road, Delhi 110 035 Tel: 011-28313352, 28313769

For details contact: Swarna Oil & Gas Field Pvt Ltd Darul Amn, Mirzamahalla Midnapore, West Bengal 721 101

GAS LEAK ALARM

Offshore World | 49 | OCTOBER - NOVEMBER 2013

www.oswindia.com


products

NITROGEN GASES (STANDARD & UHP GRADE) Super Oxytech Pvt Ltd offers nitrogen gas (standard and UHP grade) using latest technology. Their quality analyst checks proper composition in liquid gases. Owing to their best features, they are widely appreciated by their valued clients. These ensure efficiency even in adverse conditions. For details contact: Super Oxytech Pvt Ltd No: 147/1/22, J N Mukherjee Road, Ghusuri, Howrah, West Bengal 711 107 Tel: 033-26559770, 26557280 | Fax: 91-033-26551890

OIL PURIFIER Pioneer Maritime Corpn is one of the leading companies in the procurement of the oil purifier from vessels and with the help of their technical staff and services available makes them recondition in their warehouse. As per customer requirement they also provide reconditioning services. For details contact: Pioneer Maritime Corpn 103 Rucha Apartment ,Plot No: D-11 Sec.20, Airoli, Navi Mumbai 400 708 Tel: 022-65168454

LPG FLOW METERS From a range of flow metering technologies available Cosmic Technologies offer the best solution as per the specific demands of ones application. Many years of experience helps them select just the right system for LPG flow ;measurement, be it low cost volumetric flow monitoring application or density compensated totalisation. Their differential pressure based flow measurement systems follow international standards like ISO 5167 which means that time tested technologies like orifice plates, venturis, flow nozzles, pitot tubes, etc, deliver predictable and accurate metering results. Their system can easily be interfaced to SCADA or DCS systems as various options like analog retransmission and RS485-MODBUS outputs are available. For details contact: Cosmic Technologies Plot No: 87, Indl Area, Phase 9, Mohali, Punjab 160 062 Tel: 0172-5096230 E-mail: vikram@cosmictechNo:com / info@cosmictechNo:com www.oswindia.com

APV HEAT EXCHANGERS From its APV brand, SPX provides range of plate heat exchanger technologies for oil and gas production in both onshore and offshore locations. APV heat transfer solutions play an important role in applications ranging from cooling and heating to condensing and evaporation of process fluids in crude oil stabilization, gas dehydration, gas sweetening, regasification and utility cooling. APV heat transfer solutions for the oil and gas industries are based on a complete range of plate-type heat exchangers including gasketed, semiwelded and welded plate options. These range from high capacity, heavy duty units to small, compact designs which are available as standard solutions or as customized units based on ground-breaking designs and various materials. In higher temp and pressure applications, the APV Hybrid series of welded plate heat exchangers stand out as an obvious choice for operation in areas such as wet crude heaters, lean-rich interchangers, sour gas coolers, amine re-boilers and acid condensers covering processes including crude stabilization, gas dehydration and gas sweetening. The APV Hybrid heat exchangers reduces external energy input demand, while its design flexibility enables very low-pressure drops to be achieved without compromising performance. Optimised plate corrugation patterns reduce the risk of fouling and increase heat recovery respectively, depending on the duty conditions and priorities. Also available is the APV ParaWeld series. These semi-welded plate heat exchangers are designed with welded channels to allow handling of aggressive fluids and are available with either conventional or special gaskets to match specific duty requirements. The units are highly suitable, functioning as main propane pre-heaters and propane evaporators. Using the special APV Paramine gasket solution with APV semi-welded heat exchangers provides a superior plate-andgasket combination specifically designed to handle high concentrations of sour gas. These units are suitable in applications such as medium to high temp lean/rich Amine interchanger duties and resolve conventional gasket lifetime issues. For details contact: SPX Flow Technology 13320 Ballantyne Corporate Place Charlotte, North Carolina 28277, U.S.A. Tel: +44 (0) 1604 889921 E-mail: Maryanne.Johnson@spx.com

Offshore World | 50 | OCTOBER - NOVEMBER 2013


project update

Media Barter with gulfoilandgas.com

Projects Database Petrochemical Plants and Refineries Major Projects in the Middle East, Africa and Caspian Sea

Project

Country

Value ($)

Status

Bahrain Refinery Expansion

Bahrain

6,500,000,000

Bidding

Yateem Oxygen - Carbon Dioxide Extraction Plant

Bahrain

-

Execution

Basra Refinery - Fluid Catalyst Cracking (FCC) Unit

Iraq

430,000,000

Bidding

Karbala Refinery

Iraq

4,000,000,000

Bidding

Missan Grassroots Refinery

Iraq

6,000,000,000

Bidding

Nasiriyah Grassroots Refinery

Iraq

8,000,000,000

Bidding

Al Zour Refinery

Kuwait

190,000,000

Bidding

Clean Fuels Project (CFP)

Kuwait

18,500,000,000

Execution

Duqm Refinery and Petrochemical Complex

Oman

6,000,000,000

Bidding

Sohar Refinery Expansion

Oman

1,500,000,000

Bidding

Yibal Depletion Compression - Phase III

Oman

-

Execution

QAFAC - Carbon Dioxide (C02) Recovery Plant

Qatar

80,000,000

Execution

QP/Qapco Al Sejeel Petrochemical Complex Development

Qatar

7,400,000,000

FEED

Ras Laffan Condensate Refinery - Phase 2

Qatar

1,200,000,000

Execution

Farabi Petrochemicals Plant

Saudi Arabia

1,000,000,000

Planning

Jizan Export Refinery

Saudi Arabia

7,000,000,000

Execution

Petro Rabigh Refining & Petrochemical Complex - Phase 2

Saudi Arabia

6,600,000,000

Execution

SATORP - Jubail Export Refinery

Saudi Arabia

9,600,000,000

Execution

Chemaweyaat - Taweelah Petrochemicals Complex Phase 1

UAE

10,000,000,000

FEED

IPIC - New Fujairah Oil Refinery

UAE

3,500,000,000

Bidding

Ruwais Refinery New Facilities

UAE

500,000,000

Execution

Socar - Aurora Fujairah Storage Terminal Development Africa

UAE

180,000,000

Execution

Africa

Country

Value ($)

Status

Algiers Refinery Revamping

Algeria

300,000,000

Execution

Skikda Refinery Upgrade

Algeria

2,600,000,000

Execution

Lobito (SonaRef ) Refinery

Angola

8,000,000,000

Execution

Soyo Refinery

Angola

-

Planning

Cameroon Ammonia Urea Fertilizer Plant

Cameroon

1,400,000

Study

Alexandria Petrochemicals Complex - Polyethylene Plant

Egypt

-

Execution

Middle East

Offshore World | 51 | October - November 2013

www.oswindia.com


Africa

Country

Value ($)

Status

ERC - Mostorod Refinery

Egypt

3,700,000,000

Execution

E-Styrenics Polystyrene Plant

Egypt

758,000,000

Execution

Suez Tank Terminal

Egypt

-

Study

Tahrir Petrochemicals Complex

Egypt

3,750,000,000

Study

Port-Gentil Refinery [NEW]

Gabon

1,000,000,000

Planning

Atwereboanda LPG Storage Facility

Ghana

200,000,000

Study

Mbini Refinery

Guinea

404,000,000

Execution

Kenya Petroleum Refineries Limited (KPRL) Mombasa Refinery

Kenya

17,000,000

Execution

Mellitah Complex

Libya

-

Execution

OCP-Diammonium Phosphate Facilities

Morocco

170,000,000

FEED

Zinder Refinery (Soraz)

Niger

980,000,000

Execution

Akabuyo Refinery

Nigeria

7,500,000,000

Planning

Eleme Fertilizer Plant

Nigeria

1,200,000,000

Execution

Coega (Mthombo) Refinery

South Africa

10,000,000,000

FEED

Mnazi Ammonia/Urea/Methanol Project

Tanzania

-

Study

Hoima Oil Refinery

Uganda

2,500,000,000

Study

Caspian Region

Country

Value ($)

Status

Azerikimya Ethylene-Polyethylene Plant

Azerbaijan

-

Execution

Oil, Gas Processing & Petrochemical Complex (OGPC) Project

Azerbaijan

15,000,000,000

Study

Sumgayit Nitrogen Fertilizer-Urea Complex

Azerbaijan

-

Study

Abadan Refinery Upgrade

Iran

3,000,000,000

Execution

Bandar Imam Petrochemical Complex

Iran

-

Execution

Esfahan (Isfahan) Refinery Expansion

Iran

2,500,000,000

Execution

Ham - Petrochemicals Complex (Olefins 13)

Iran

-

Execution

Imam Khamenei Gas Refinery

Iran

-

Study

Karoon Isocyanates Complex

Iran

-

Execution

Lavan Refinery Upgrade

Iran

-

Execution

Parsian Gas Refinery

Iran

400,000,000

Execution

Persian Gulf Star Gas Condensate Refinery (PGSCR)

Iran

2,600,000,000

Execution

Tabriz Refinery Expansion (Shahriar Refinery)

Iran

2,000,000,000

Execution

Atyrau Refinery Upgrade

Kazakhstan

1,040,000,000

Execution

Karachaganak Gas Refinery

Kazakhstan

3,700,000,000

Study

Pavlodar Refinery

Kazakhstan

40,000,000

Execution

Antipinsky Oil Refinery

Russia

135,664,000

Execution

Belogorsk Gas Processing Plant & Petrochemical Complex

Russia

-

Planning

Far Eastern Petrochemical Company Construction (FEPCO) Projecl

Russia

5,000,000,000

Study

Moscow Refinery Upgrade

Russia

-

Execution

Togliatti Ammonia and Hydrogen Plant

Russia

350,000,000

Study

Tuapse Refinery Upgrade

Russia

2,000,000,000

Execution

www.oswindia.com

Offshore World | 52 | October - November 2013


events diary Oil & Gas Asset Integrity Management Conference

PETROTECH-2014 Date: January 12-15, 2014 Venue: India Exposition Mart Limited, Greater Noida, Delhi (NCR) Event: The PETROTECH series of International Oil & Gas Conference and Exhibitions is a biennial platform for national and international experts in the oil & gas industry to exchange views and share knowledge, expertise and experiences. The event also aims to explore areas of growth in petroleum technology, exploration, drilling, production and processing, refining, pipeline, transportation, petrochemicals, natural gas, LNG, petroleum trade, economics, legal and human resource development, marketing, research & development, information technology, safety, health and environment management in the oil & gas sector. As the prime showcase of India’s hydrocarbon sector, this mega event attracts scientists, technologists, planners and policy makers, management experts and entrepreneurs to solicit their views in order to catalyse achievement of global energy security. PETROTECH-2014 is being organized under the aegis of the Ministry of Petroleum & Natural Gas, Government of India, by Oil and Natural gas Corporation Limited and PETROTECH. For details contact: PETROTECH-2014 Secretariat Oil & Natural Gas Corporation Ltd Jeevan Bharati, Tower - II, Indira Chowk, New Delhi - 110001 (INDIA) Tel.: +91-11-23312607/ 23301169/ 23301170 , Fax: +91-11-23315207 Email: secretariat@petrotech.in

Date: March 24-26, 2014 Venue: Houston Marriott South at Hobby Airport, Houston, Texas Event: Returning to Houston in 2014, The 2nd Annual Asset Integrity Meeting will provide the best practice strategies for improving asset performance in critical environments and operating safely in anticipation of regulatory change in the entire oil & gas industry from operation to execution of oil platforms. It will be a learning session about technological innovations that provide definitive methods for capturing data to make more informed decisions. The Oil & Gas Asset Integrity Management will bring together 200+ frontline operators & senior leaders at one unique event, from across Asset Development, Deep water, Exploration, Pipeline Integrity incl. Pigging to Plant & Operations Integrity, Process safety, Personal Safety, etc. Asset Integrity Management is structured to give the ample time to make new connections and strengthen prior relationships with the peers of similar job function and experience. As an Invite-Only meeting, we create the conversations that matter. For details contact: Sponsorship Director Mark Barrett Phone: +1 (646) 200.7494 Mark.Barrett@wbresearch.com

Oil & Gas World Expo 2014

Offshore Energy Exhibition and Conference 2014

Date: February 10-12, 2014 Venue: Bombay Exhibition Centre, NSE Complex, Goregaon, Mumbai, India Event: Oil & Gas World Expo 2014, the 6 th International Exhibition & Conferences, scheduled in 10-12 February, 2014, will organise by CHEMTECH Secretariat and supported by CHEMTECH Foundation, who are pioneers in conceiving international Exhibitions and Conferences since 1975.

Date: 28-29 October 2014 Venue: Amsterdam RAI, the Netherlands Event: The 7 th edition of Offshore Energy conference will host between 500 and 600 exhibitors and is expected to attract over 10,000 professionals from all over the world. Both the exhibition and the extensive conference program of Offshore Energy 2014 will address the technical, operational and commercial challenges associated with industry growth.

For the entire ‘Upstream’ value chain related to Oil & Gas exploration, production and transportation, the expo will provide a platform to showcase India’s growing engineering and technological capabilities in the entire upstream hydrocarbon value chain. The increasing number of exhibitors since its first edition in 2004 reflect India’s growing role in the global hydrocarbon sector. For details contact: Chemtech Secretariat 26, Maker Chambers VI, Nariman Point, Mumbai 400 021, India Tel: +91-22-40373737 Fax: +91-22-22870502 Email: conferences@jasubhai.com

The 2014 technical program will once again feature an international faculty of speakers covering a broad palette of topics. Meetings range from high caliber panels and technical sessions to annual meetings of industry organizations and masterclasses, catering to professionals from board level to operational level and young talents. For details contact: NAVINGO BV Westerlaan 1 3016CK Rotterdam The Netherlands Tel: +31 (0)10 2092600 Fax: +31 (0)10 4368134 Email: me@navingo.com

Offshore World | 53 | OCTOBER - NOVEMBER 2013

www.oswindia.com


book shelf CORROSION CONTROL IN THE OIL AND GAS INDUSTRY Author: Sankara Papavinasam Price: $158.52 Hardcover: 1020 Publisher: Gulf Professional Publishing Book Description: The effect of corrosion in the oil & gas industry impacts to the failure of parts, thus resulting the shut down of the plant to clean the facility. The annual cost of corrosion is estimated to the global oil and gas industry as exceeding USD 60 billion. In addition, corrosion commonly causes serious environmental problems, such as spills and releases. An essential resource for all those who are involved in the corrosion management of oil and gas infrastructure, Corrosion Control in the Oil and Gas Industry provides engineers and designers with the tools and methods to design and implement comprehensive corrosion-management programs for oil and gas infrastructures. The book addresses all segments of the industry, including production, transmission, storage, refining and distribution. I N T E G R AT E D R E S E R V O I R A S S E T M A N A G E M E N T: P R I N C I P L E S AND BEST PRAC TICES Author: John Fanchi Price: $74.76 Hardcover: 376 Publisher: Gulf Professional Publishing Book Description: It is often found that lack of adequate understanding of reservoir management techniques and best practices among reservoir managers, thus needed to optimise these skills for the development of oil and gas fields. This book introduces the readers to the processes and modeling paradigms needed to develop the skills to increase reservoir output and profitability and decrease guesswork. Written by an expert professional/educator, the book brings together concepts and terminology, creating an interdisciplinary approach for solving the technical diversity of modern reservoir management. The book starts with an overview of reservoir management, fluids, geological principles used to characterization, and two key reservoir parameters (porosity and permeability). This is followed by an uncomplicated review of multi-phase fluid flow equations, an overview of the reservoir flow modeling process and fluid displacement concepts. . www.oswindia.com

PROJECT MANAGEMENT FOR THE OIL AND GAS INDUSTRY: A WORLD SYSTEM APPROACH (INDUSTRIAL INNOVATION SERIES)ON Authors: Adedeji B Badiru and Samuel O Osisanya Price: $101.92 Paperback: 781 Publisher: CRC Press Book Description: Project management for oil and gas projects comes with a unique set of challenges that include the management of science, technology, and engineering aspects. Underlining the specific issues involved in projects in this field, Project Management for the Oil and Gas Industry: A World System Approach presents step-by-step application of project management techniques. Using the Project Management Body of Knowledge (PMBOKŽ) framework from the Project Management Institute (PMI) as the platform, the book provides an integrated approach that covers the concepts, tools, and techniques for managing oil and gas projects. The authors discuss specialized tools such as plan, do, check, act (PDCA); define, measure, analyze, improve, control (DMAIC); suppliers, inputs, process, outputs, customers (SIPOC); design, evaluate, justify, integrate (DEJI); quality function deployment (QFD); affinity diagrams; flowcharts; Pareto charts; and histograms. They also discuss the major activities in oil and gas risk assessment, such as feasibility studies, design, transportation, utility, survey works, construction, permanent structure works, mechanical and electrical installations, and maintenance. RISK GOVERNANCE OF OFFSHORE OIL AND GAS OPERATIONS Authors: Preben Hempel Lindøe, Michael Baram, Ortwin Renn Price: $105.80 Hardcover: 450 Publisher: Cambridge University Press Book Description: This book evaluates and compares risk regulation and safety management for offshore oil and gas operations in the United States, United Kingdom, Norway, and Australia. It provides an interdisciplinary approach with legal, technological, and sociological perspectives on their efforts to assess and prevent major accidents and improve safety performance offshore. Presented in three parts, the volume begins with a review of the technical, legal, behavioral, and sociological factors involved in designing, implementing, and enforcing a regulatory regime for industrial safety. It then evaluates the four regulatory regimes that encompass the cultural, legal, and other contextual factors that influence their design and implementation, along with their reliance on industrial expertise and standards.

Offshore World | 54 | OCTOBER - NOVEMBER 2013


Offshore World | 55 | OCTOBER - NOVEMBER 2013

Advt Blid.indd 55

www.oswindia.com

05-12-2013 17:32:54


RNI No: MAHENG/2003/13269. Date of Publcation: 1’st of every alternate month.

Offshore World | 1 | JUNE - JULY 2013

NEW Advt Blid.indd 1

www.oswindia.com

05-12-2013 16:44:52

OSW Oct_Nov 2013  

The Oct_Nov issue of OSW insights on various facets and facts to the Asset Integrity and Risk Assignment ranging from upstream to midstream...

Read more
Read more
Similar to
Popular now
Just for you