Oil & Gas Middle East - April 2010

Developing Qatars largest oshore oil reservoir

Maersk Oil is now developing Qatars largest oshore oil reservoir, together with Qatar Petroleum. e Al Shaheen eld development plan is currently the worlds largest and most complex, oering unique opportunities to work with the latest technologies and a rewarding career at the forefront of the oil and gas industry.

e Al Shaheen eld, Qatar was deemed uneconomical for development until Maersk Oils pioneering horizontal well technology made development possible. Today its reservoirs are among Qatars biggest oil producers.

e Al Shaheen Field Development Plan (FDP 2005) encompasses the construction and installation of 15 new platforms and the drilling of over 160 wells.

At Maersk Oil we foster a creative environment where employees are empowered to develop solutions to overcome these highly technical and complex challenges.

With operations around the world including Qatar, the North Sea, Brazil, Algeria, Angola, Kazakhstan and the US Gulf of Mexico, Maersk Oil oer excellent prospects for your future as part of an international and culturally diverse team.

As we make the most of Qatars resources, you can make the most of the opportunities we oer.

Explore more at www.maerskoil.com

Part of the A.P. Moller- Maersk Group, and active since 1962, Maersk Oil operates some 800,000 barrels of oil equivalent per day. Maersk Oil has activities in several locations such as the North Sea, Qatar, Brazil, Algeria, Angola, Kazakhstan and the US Gulf of Mexico.

CONTENTS

www.arabianoilandgas.com April 2010 Oil&Gas Middle East 1

APRIL 2010

20 ARAMCO ADDRESSSaudi Aramcos CEO and president Khalid Al-Falih says the need for oil and gas will not diminish despite the emergence of renewables.

25 OIL& GAS AWARDSOil & Gas Middle East presents the rst awards ceremony and welcomes nominations for the prestigious gongs.

28 IRAQ UPDATEA comprehensive update of the situation of the oil and gas industry in Iraq.

30 OMAN FOCUSOman is boosting its production levels through cutting edge enhanced oil recovery projects.

28

REGULARS2 WEB HIGHLIGHTS

4 COMMENT

7 REGIONAL NEWS

16 NEWS ANALYSIS

77 PROJECTS

5737 ADIPEC PREVIEWADIPEC 2010 kicks off in October this year and Oil and Gas Middle East gives you a complete preview of the event.

46 DRILL PIPE COATINGSDrill pipe coatings can protect the crucial interior of a pipe during the drilling process. NOV Tuboscopes Jack Dyer explains all.

57 MAERSK OIL QATARExclusive picture special from the Al Shaheen offshore eld develop-ment mega-project.

60 OPEN HOUSEDrydocks World CEO Geoff Taylor reveals his ambitions to tackle the upstream EPC market.

66 OPEN HOUSENabil Alalawi talks candidly on Iraq, Iran and how hes engineering a 77% growth plan in 2010.

44 BIG PICTUREShells Pearl topsides left the Dubai J Ray McDermott yard in March. We were there.

73

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WEB HIGHLIGHTS

ONLINE SPECIAL REPORT

The online home of:

Offshore Arabia 2010 reviewArabianOilandGas.com reports directly from offshore Arabia 2010, which was held in the Dubai National Exhibition Centre in March. With interviews, news photos and comprehensive coverage of the show, all you need to know about Offshore Arabia is wasily accessible. All the offshore oil and gas industry in the Middle East was out in force and ArabianOilandGas.com was there to bring you bang up to date.

Decision imminent on Shah gas development according to project CEO, talking exclusively to ArabianOil-andGas.com at an industry event in Abu Dhabi.

ArabianOilandGas.com

Petrofac wins gas sweet-ening facilities project from Qatar Petroleum in Qatar worth a total of US$600 million.


Iyad Allawi says new hydrocarbon law to be passed quickly and Iraq will honour deals already signed with major oil firms in past six months.


Hundreds arrested following security fears for upstream infrastructure. Unclear how disturbance will affect sector.


BREAKING NEWS AND VIEWS FIRST

FORMER PM: IRAQ WILL HONOUR DEALS

PETROFAC SECURES $600M QP CONTRACT

SHAH GAS PROJECT TO START UP IN 2014: CEO

KSA ALERT: OIL INDUSTRY TERRORISM THREAT

1 Petrofac secures $600m Qatar Petroleum contract

2 Shah sour gas project to start up in 2014- CEO

3 Aramco to shelve Ras Tanura plans - report

4 Jacobs wins Saudi Aramco sulphur contract

5 Laffan re nery to be inaugurated next week

SPOT POLL

36.4% No27.3 % Yes18.2 % No affect9.1% What sanctions?9.1% Conflict is likely

MOST POPULAR NEWS

WOULD FURTHER SANCTIONS AGAINST IRAN IMPROVE CROSS TRADE GULF LINKS??

SAUDI ARAMCO GALLERYA look at Saudi Aramco, the state owned Saudi oil giant in pictures. Including shots of its HQ and research centre. ArabianOilandGas.com

IN PICTURES

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COMMENT

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R ecruitment agents and HR personnel have revealed to Oil & Gas Middle East this month that many of the deep cuts local firms made in 2008 and 2009 appear to have been too deep, and hiring is firmly back on the agenda.

Whilst on the one hand a return to the good old days of hiring and recruiting from all over the world is a sure and healthy sign that the industry has bounced back from a period of inactivity and lean times, these individuals are concerened that a buoyant market will quickly ascend into a frenzied round of class-act poaching, which plagued managers and section heads from 2006 right through most of 2008.

Finding talent in the region should, in theory, be easier than ever, they say. When companies had to slash overheads and manpower, the people who were let go were inevitably not their most prized assets. As harsh as it sounds, managers will do everything possible to retain their best performers, and let the deadweight go.

This means that companies willing to start poaching know that by looking locally they will find the cream of the crop, without having to bother with the pesky matter of relocations. Whilst every contractor out there will be delighted to see the down-ward pressure on margins easing, the more astute account managers will be concerned how the perceived bounce-back in the energy business will impact the prices they are currently getting from suppliers.

One Abu Dhabi executive recently told me that in the wake a a decent quarter of busines, all of a sudden he was facing the unexpected challenge of staff retention.

Its madness. After 18 months of belt-

Energy bounces backIndustry already seeing signs of poaching problems again

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

Published by and 2010 ITP Business Publishing, a member of the ITP Publishing Group Ltd. Registered in the B.V.I. under Company Registration number 1402846.

Is your company braced for a return to boom-time economics and talent retention problems?

Audited by: BPA Worldwide.Average Qualified Circulation: 7,370(July - December 2009)

tightening suddenly Im seeing a return to the antics of 2007, and frankly that wasnt good for business.The pervading feeling throughout the upstream community has certainly become more optimistic of late. This is clearly a great relief to some, and should be celebrated. However, managers will do well to stay in tune with whats happening outside their own firms, or end up paying the price. Ensuring job satisfac-tion might never have been so important.

Daniel Canty, EditorE-mail: [email protected]

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Abu Dhabi National Oil Company (AD-NOC) and ConocoPhillips have awarded a US$300m construction contract for their Shah gas project to Al Jaber Group. Al Jaber Group will build the infrastructure, includ-ing roads as well as units such as gas treat-ment plants. The project will treat around 1 billion cubic feet of gas from Shah, and pump around 540 million cfd of processed gas into the UAE network. The initial works package is estimated to be worth around $300 million.

The award of the Shah Projects Early Works Package to Al Jaber Energy Services Company signals the beginning of what will ultimately be a new benchmark for the gas processing and sulphur recovery industries worldwide, said Dr Nick Coles, organiser of the SOGAT conference.

One of the key papers to be presented at last months Sour Oil and Gas Advanced Technology conference 2010 (SOGAT) focused on the challenge of transporting 10,000 tonnes of sulphur per day from the main plant in the large dunes180 km south east of Abu Dhabi to a new sulphur terminal in Ruwais. Speaking to Oil & Gas Middle East on the sidelines of the sixth interna-tional SOGAT conference in Abu Dhabi, the newly installed chief executive officer of the project operator, Saif Al Ghafli said that the owners (ADNOC and Conoco) were still in talk with Union Railways regarding the transport of sulphur from the Shah Field.

Initially a hot sulphur pipeline was considered the best option, but the owners are talking directly with the rail company and this is being considered, he revealed. If a rail option is selected over the buried pipe-line then the proposed sulphur granulation plant will be shifted from the Ruwais site which has been earmarked for it, to the Shah

field itself. Al Ghafli said he is expecting to announce the major contracts for the $10 billion project in the coming weeks.

The project will set a new standard for sour gas developments, as the sulphur content is 23% - a level so corrosive projects of this nature were once considered unviable.The owners are very happy with the prices which have been tendered, and I expect to be able to make an announcement any day now, he said. First gas from the project is expected in early 2014 and will go some way to contributing to the ever increasing future power demands in the UAE. The project is definitely going ahead - Abu Dhabi needs this, said Al Ghafli.

Shah decision in weeks - Al Gha i$300m initial works package awarded to Al Jaber in March

Saif Al Gha i gave the keynote address at SOGAT 2010.

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REGIONAL NEWS

AlMansoori nails Key JV dealPressure pumping specialists tie up with Abu Dhabi OFS firm in joint venture deal

onshore energy production service company.

The joint venture will bring several new services to AlMansooris capabilities in coil tubing, workover rigs, pumping/cementing, frac-turing and acidising, as well as see Key Energy services estab-lish a base in the Middle East.

Although AlMansoori has strong roots in the Middle East, the companys interna-tional reach has consistently grown and North America has been a market that has become increasingly impor-tant to us, said Nabil Alalawi, CEO of AlMansoori Special-ized Engineering.

Key Energy has seen a bounceback in form in its primary US market, recently announcing a fourth quarter 2009 increase in revenue of

Offshore service heavyweight Bergen Oil eld opens in OmanBergen Oilfield Services AS (BOS), the Norwegian off-shore seismic survey company has established a full repre-sentative office in the Sultan-ate of Oman.

Abu Dhabis home grown oil-field service and supply giant AlMansoori Petroleum Serv-

ices has signed a joint venture agreement with Key Energy Services, an American-based

The opening coincides with an important exploration 2D survey win for the BOS Atlantic in Omani waters. The BOS says the Atlantic is one of the best equipped 2D vessels around today and the firm has every confidence of estab-lishing this as a key area for future business.

Offshore exploration has seen something of a renais-sance in the Middle East, as technological improvements in seismic acquisition and reser-voir characterisation have driven national and private

Nabil Alalawi is chief executive of cer of Al Mansoori Specialized Engineering.

BOS owns a eet of three high-end 2D seismic acquisition vessels.

29% on Q3 for its production services segment. Fourth quarter revenue stood at US$56.1 million, buoyed prima-rily from a 54% increase in US generated pressure pumping revenue.

This is Keys first venture in the Middle East and AlMan-sooris reputation and experi-ence in the region assures us that the partnership will be a successful one. The JV will enhance AlMansooris portfolio of services to provide a very impressive and full service offering to the industry and we look forward to progressing further oppor-tunities with AlMansoori in both the Middle East and North Africa, added Don Weinheimer, senior vice pres-ident of production services at Key Energy.

2490Gross tonnage of the BOS Atlantic, which recently won an offshore Oman 2D seismic survey tender.

Source: BOS

oil companies to re-examine littoral and oceanic waters.

The Oman office will be run locally by Alf Hesthag.

REGIONAL NEWS


Iraq operator announcedLongford Energy eyes exploration prospects in Kurdistan Region

Longford Energy announced in March it has been appointed as the operator of the Chia Surkh Block and plans to commence seismic acquisition during the second quarter of 2010.

Longford acquired a partici-pating interest in a PSC Contract in June 2009 for the Chia Surkh Block, which covers approxi-mately 985 square kilometres,

in the Sulaymaniyah Governo-rate of the Kurdistan Region of Iraq. The Block contains a historical discovery as well as multiple exploration prospects. An initial resource estimate was completed by DeGolyer and MacNaughton Canada in September 2009 for the shallow tertiary horizons of the discov-ered field. The independent assessment established a gross unrisked prospective resource with a best estimate of 132 million barrels of potential ulti-mate recoverable oil on the field as of September 1 2009. Long-ford said last month that it has identified up to five exploration prospects and leads that could provide significant opportuni-ties to further discoveries and resource expansion.

Longford has completed the establishment and regis-tration of its Kurdistan office in the city of Sulaymaniyah,

HIGHLIGHTS

and in preparation for the start of operations, a professional management team comprising of foreign staff personnel and local nationals have been put in place. A 300km 2D seismic acquisition program has been prepared and approved. The seismic program has been designed to evaluate both the known Chia Surkh Field and up to four exploration prospects on the Block. The Chia Surkh Field will be evaluated for near term development potential and the exploration targets, defined by surface anticlines, will be further appraised for explora-tion drilling.

Longford is in the early plan-ning stages to drill the first exploration well on the Chia Surkh Field during the fourth quarter of 2010.

Keep up to date with Iraq contracts at

www.ArabianOilandGas.com

132Million barrelsLongfords best estimate for ulti-mate recoverable oil in the Chia Surkh Block, Kuridustan Region of Iraq

Source: Longford Energy

Iran has proposed to develop the Arash Natural Gas Field together with Kuwait, according to Mahmoud Zirakchianzadeh, head of the state owned Offshore Oil Company. Iran has proposed that develop-ment, investment, production and managementbe done on a joint basis by the parties involved, said Zirakchianzadeh. Kuwait was ex-pected to accept Irans idea of joint development of the eld, he said.

Kuwait Energy Company (KEC)has announced the discovery of a new oil well in the northern area of Burg El-Arab (BEA) eld in the Egyp-tian western desert. The newly dis-covered well, BEA N-1X, is located in a separate fault block in the northern part of the eld. The well was tested in December last year and produced an initial rate of 280 barrels of 33API oil per day with no water. The new discovery is another milestone for KECs exploration efforts in Egypt. This discovery is a result of their ongoing efforts, said Sara Akbar, deputy chairman and CEO of KEC.

Total has signed an agreement to ac-quire a 50% interest in Kazakhstans concession held by OilTechnoGroup (OTG), the Kazakh subsidiary of Polands Petrolinvest. The 5500km2

onshore license presently being ex-plored is in northwestern Kazakhstan. As operator of the license, Total will proceed with a work programme that includes reprocessing of seismic data and drilling of a well. An encouraging well has already been drilled.

The Kurdistan Region of Iraq recommenced oil exports in June 2009. The region is rich in oil and associated natural gas reserves.

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REGIONAL NEWS

Saudi Aramco has awarded Bak-er Hughes a two year contract for two coiled tubing drilling packages designed to re-enter existing wells in the gas fields of southern Saudi Arabia. Baker Hughes will provide project management and oversight and downhill drilling and completion services. This is an important award for Baker Hughes, notes Khaled Nouh, president of Bak-er Hughes, Middle East. The contract will allow us to demon-strate our project management capabilities, both in the KSA and in the wider Middle East region, on a very important project for Saudi Aramco, he added.

Baker Hughes nets Aramco drilling deal

d l d

MIS wins NDC rig deal Project is MIS highest rig refurbishment contract to dateUAE-based Maritime Indus-trial Services Co. Ltd. Inc. an-nounced in March that it signed a US$55.4 million contract with Abu Dhabis National Drilling Company (NDC) for the refur-bishment of jack-up drilling rig NDC Al Bzoom.

The contract, which is MIS highest contract to date in its refurbishment value stream, will cover the Rig Integrity Assurance Programme (RIAP) as its base scope for the modifi-cation and refurbishment work on the rig.

The signing ceremony was held under the patronage of HE Abdalla Nasser Al Suwaidi, chairman of NDC, and Abu Dhabi National Oil Company (ADNOC) deputy CEO and exploration & production director, with the contract being signed by Abdalla Saeed Al Suwaidi, NDCs general manager and Kevin Hudson, MIS managing director.

We enjoy a solid business association with MIS. This is not the first time that NDC contracts MIS for its special-ised rig refurbishment works, nor will it be the last time, said Mr. Abdalla Al Suwaidi at the signing ceremony. We look forward to a continued strong relationship with MIS.

Kevin Hudson reiterated the sentiment. This agreement builds on an excellent track

record between the two compa-nies. We will do everything in our capacity to ensure that this project further strengthens our partnership with NDC.

Rig NDC Al Bzoom, which is a Baker Marine BMC- 150-IC design with a rated water depth capacity of 110 ft and drilling depth of 18,000 ft, will be used to drill oil wells in Abu Dhabis offshore fields upon completion.

Kevin Hudson is managing director of Sharjahs Maritime Industrial Services.

Khaled Nouh, Baker Hughes, Middle East.


REGIONAL NEWS

Topaz posts $65m pro t for 2009Recession resilient performance thanks to upstream work according to marine firm

ABB scoops $2.8 million pipeline deal in Dukhan, QatarABB, the leading power and au-tomation technology group, has signed a US $2.8 million deal with leading contractor Black-Cat Engineering & Construction

UAE engineering giant To-paz Energy and Marine has posted a net profit of US$65 million for 2009, demonstrat-ing year on year growth of 7%, 14% and 38% respectively.

The firm also revealed revenues of $448 million, demonstrating strong growth throughout the year.

This is an outstanding achievement in a volatile economic climate and reflects the inherent strengths of our business. Facing great adver-sity, we have demonstrated our business to be one that grows shareholder value in a measured and responsible fashion in any economic cycle, said Fazel Fazelbhoy,

the CEO of Topaz Energy and Marine.

Topazs recession resil-ience is a result of a consid-ered blend of long and short-term contracts, exposure to geographies of strategic importance to global energy markets and our refusal to jump on the bandwagon of speculative vessel new-buildings at the peak of the market, he added.

The firms global explora-tion and production spend is projected to rise by approxi-mately 10% in 2010, with the firm expecting a visibly firmer market in this year, but with continued weakness in the first six months.

to design and develop a major integrated Safety Integrity Level 3(SIL 3) and process control so-lution for a gas pipeline project in Dukhan, Qatar.

Fazel Fazelbhoy, CEO of Topaz Energy and Marine.

The gas pipeline process control and safety solution will come from ABB.

Dukhan is home to one of Qatars large oil fields and is located in the western part of the country. The Dukhan field encompasses four reser-voirs, three of which are oil reserves and one containing associated gas. The production facilities located in the oil field produce over 335,000 barrels per day.

ABB will supply SIL 3 control-lers for emergency shutdown, process control, and fire and gas systems as well as its SIL3-com-pliant System 800xA for new and existing plants on the field as part of an upgrade and devel-opment plan. The ABB system provides a host of new automa-tion functions and gives opera-

tors at Dukhan secured central-ised access to these functions. This will result in improved safety standards, less down-time for the gas transmission network, and lower operating costs as well.

This is one of the first projects where the process control and safety system are integrated on the same plat-form, revealed Johan de Villiers, country manager for ABB in Qatar. ABB is very excited to be a part of this landmark project as it will be an excellent reference for the regions safety market and will also establish our 800xA solution as a reliable and serious contender for the safety market.

REGIONAL NEWS


Iran seeking $200bn investments in oil, gas and refinining plans

BP leads $6bn Chirag project State oil company approves massive deepwater development package

Azerbaijans steering commit-tee for the development of the Azeri, Chirag and thr deep-water portion of the Gunashli (ACG) fields, sanctioned in-vestment in the new Chirag Oil Project (COP) in March.

The $6 billion development plan is the next major step in the ongoing development of the ACG field in the Azerbaijan sector of the Caspian Sea. The COP development will allow recovery of an additional 360 million barrels of oil in total. This aim will be achieved by installing new wells that will primarily target the currently producing Fasila reservoirs and also the Balakhany X, IX and VIII reservoirs located above the Fasila.

The project is planned to increase oil production and recovery from the ACG field through a new offshore facility which is designed to fill a crit-ical gap in the field infrastruc-ture between the existing Deepwater Gunashli (DWG)

Iran is to embark on a US$200 billion oil, gas and refining in-vestment plan over five years to avoid a decline in production, the countrys oil minister has said in March.

For the next five years, we are now planning seriously for investment of upstream and downstream of US$200 billion worth of investment, Masoud

A drilling engineer on the Dada Gorgud rig in the Azeri Field, Azerbaijan, which drilled the AZB001 well.

Iranian Oil Minister Masoud Mirkazemi.

and Chirag-1 platforms. This is a step forward

towards realisation of Azerba-ijans energy production growth plans aimed at posi-tioning the country as one of the major suppliers to the worlds oil markets, said Rovnaq Abdullayev, presi-dent of the State Oil Company of the Azerbaijan Republic

Mirkazemi told reporters ahead of the OPEC meeting in March.

The minister also revealed that sanctions will not affect the plans, which will intro-duce a degree, a percentage of efficiency as oil and gas fields in the country move towards depletion.

Therefore a step should be taken so that investment will be

also absorbed by this process of...increasing production, Mirkazemi said. Its about 31 years since Iran got independ-ence and some countries do not like it, he said in reference to western sanctions imposed on the Islamic republic. These kind of sanctions will not have any effect on investment.

(SOCAR). We believe the projects immediate bene-fits are even more valuable to us because for the first time the projects world class multi-billion dollar facilities will be fabricated inside the country fully utilising local resources.

Some $4 billion of the total project value will be spent on

the construction of facilities and the pre-drill programme, and the balance of the sum will be spent on the platform development well drilling during the production period.

First oil from the Chirag Oil Project, the latest stage in ACGs development stretching back more than 15 years, is expected in late 2013.


NEWS ANALYSIS

NEWS ANALYSISBlack Cat on the prowlHas Qatars largest engineering and construction firm outgrown its native borders?

Qatars home grown Black Cat Engineering and Construction has been grabbing headlines for all the right reasons in recent weeks. The company, which began with a small office in Doha and a single portacabin site office in Dukhan oil and gas field, is today stamping its mark upon many of Qatars most am-bitious upstream and energy related projects, and may well start to look to Gulf, or even international markets, as much of its domestic project portfolio reaches fruition.

The companys evolution into Qatars largest EPIC and maintenance contractor for the upstream oil and gas industry has coincided with quite unpar-alleled activity in the small Gulf state. Today the company claims a manpower base of over 2500 men and anticipated annual turnover just shy of the $100 million mark.

In October last year AMEC, one of the largest interna-tional engineering and project

Qatars Black Cat Engineering and Construction could well be about to pounce on projects outside its home turf.

management companies, joined forces with Black Cat, forming a joint venture agreement to offer asset support services to the oil, gas and petrochemical sectors in the country.

EMERGING TRENDThe JV should be seen as part of a wider trend, which is accel-erating in the region, of forming top tier, preferred bidder status firms with global competencies, but national backing. Its a mix thats bound to win. Indeed, the same synergies have long been

exploited in joint venture outfits created from international oil company minority stakeholders and the national oil companies. Few of the world scale projects embarked upon in the Gulf re-gion have not had an IOC name attached. Shells Pearl GTL plant with QatarGas, the upcom-ing Shah sour gas development company has ConocoPhilips onboard as a major stakeholder, and countless other examples exist throughout the upstream project landscape. Even local service providers, such as Al

$100MBlack Cat Engineering and Construc-tion currently boasts an annual turnover around the $100m mark.

Shaheen Well Services in Qatar, have taken a technological leap bringing onboard Weatherford as partners.

Of the Black Cat, AMEC deal, the official word was that the JV combines the global capabilities and strong relation-ships of AMEC, with the long established local capabilities and market position of Black Cat. The deal could prove crit-ical for both companies, essen-tially delivering a one stop shop bringing international best practice capabilities, with

NEWS ANALYSIS


AMEC has worked on many Gulf projects, including offshore UAE.

the all important local delivery touch to customers in Qatar. Exactly what a national oil or gas company would have on its wish list.

This new joint venture is part of our long term strategy to not only work in countries but also to be an integral part of their future. I am delighted to be working with Black Cat as we come together to form a world class service for Qatar, part of our strategically important Middle East region, said Tony Cruddas, president of AMECs

Natural Resources Growth Regions Business.

Sheikh Hamad bin Abdulla al-Thani, Black Cat chairman said, We have created this joint venture company to offer truly world class services to world class companies like QP and its international partners. The JV with AMEC enables us to offer much needed services to the rapidly expanding oil and gas production facilities in Qatar.

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NEWS ANALYSIS

(QIPCO Holding) in 1999. The fresh injection of capital from QIPCO has seen turnover and profitability increase five-fold since the acquisition. With a healthy backlog of over $165 million (excluding a $467 million joint venture project for the Ras Laffan Emergency and Safety Training College), Black Cat has been well placed throughout the downturn and continue its rapid expansion.

The company is currently executing projects in Dukhan, Mesaieed and Ras Laffan and its client base includes Qatar Petroleum, Gasal (a JV between

QP and Air Liquide), Rasgas, Qatargas, QChem, Qafco, Petrofac and Hyundai. Recent and ongoing projects include pipelines and compressor stations, storage facilities, control room upgrades and brown field modifications to existing process plants.

The company has managed to expand its originally fairly limited array of contracting services to include all aspects of engineering, construction and maintenance of oil, gas, and petrochemical plants.

PROJECT WATCHLast month Black Cat awarded a $2.8 million deal with ABB to design and develop a ma-jor integrated Safety Integrity Level 3 and process control so-lution for a gas pipeline project in Dukhan. Dukhan is home to one of Qatars largest oil fields, encompassing four reservoirs,

AMEC, Black Cats new JV partner has a massive upstream pedigree.

three of which are oil reserves and one containing associated gas. The production facilities located in the oil field produce over 335 000 barrels per day.

Last year the firm scooped a major contract from QP for the EPIC of Sweet Fuel Gas Supply to Dukhan consumers. With an approximate contract value of $110 million, the project is scheduled for completion in March 2012.

The project consists of sweet fuel gas supply system pipelines and associated facili-ties. The construction activities include but are not limited to the construction of pipelines with sizes ranging from 4 inch to 36 inch diameter.

In addition, 42km pipeline, cable trenching, road works, 62 culverts, 83 track crossing, pig launchers and receiver stations, valve stations, 33 KV sub-station & control system works are involved.

As Arabian Gulf states seek to seal more of the value-creation projects within their borders, ambitions to retain more of

$165MThe BCEC project backlog currently stands at $165 million, excluding a $467 million order for the Ras Laffan Emergency training college.

the value-add service revenue comes as a natural progression. Such partnerships have already proven hugely successful else-where. In the UAE the state investment firm Mubadala joined forces with interna-tional service and EPC provider Petrofac to form Petrofac Emir-ates, in a 50/50 joint venture.

Since then the JV firm has outstripped the pack when it comes to winning major deals in Abu Dhabis upstream busi-ness, but also outside its own home ground. Last year saw the nationally-backed, internation-ally accomplished partnership net billions of dollars worth of business.

The JV, formed back in 2008, promptly scooped a major contract award from Gasco, worth approximately $2.1bn, with a value to Petrofac Emir-ates of around $1bn.

The 48-month lump-sum contract which kicked off in 2009 is for the construction of the 4th NGL train at the Ruwais complex in Abu Dhabi. The firm is considered amongst the front-runners for work on the devel-opment of the Shah Sour Gas Field, with contracts expected to be announced in by June this year. As far as companies to keep an eye on go, we suspect Black Cat is about to pounce on projects in the wider Gulf. Qatar is a fantastic proving ground, but the companys aspirations, and financial clout, suggest it cant be caged there forever. Petrofac Emirates CEO, Peter Warner.

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CERA WEEK COVERAGE


When I say adequacy, I mean that we need to ensure adequate and reliable supplies of energy to meet the growing needs of the global population. Even today, billions of our fellow human beings lack access to ade-quate supplies of energy from modern sources. The worlds population will be expanding not only in numbers, but also in their demands for higher living standards and greater prosper-ity. We must be able to meet those expectations.

Regarding affordability, Al-Falih said that if energy becomes prohibitively expensive then: We may jeopardise global eco-nomic stability and growth, and risk tipping the world into a have and have-not scenario. The way I see it, energy has always been an enabler of prosperity rather than a drag on development and will continue to play that positive role.

Al-Falih said the third side of the Triple A Triangle, accept-ability, refers to environmental protection. Our consumers will not feel secure unless they know

that we are doing our utmost to provide energy in a manner that is environmentally responsible, he said. Stewardship of the environment is not only a moral duty for energy providers but also a sound economic choice and good business.

Al-Falih encouraged listen-ers to pursue strategies and

activities that incorporate these Triple-A imperatives.

He said that, first, industry leaders need to adopt a prag-matic, yet progressive, attitude toward energy issues. We must understand that any path we choose to enhance global energy security will require hard work, massive investments

Saudi Aramcos technology and research centre in Dahran, Saudi Arabia. Oil and gas will still play a vital role.

and most importantly suf-ficient time to implement.

Secondly, leaders need to encourage wise and timely investments in petroleum, given the central and leading role it will continue to play in meeting energy demand.

Third, the energy sector must make concurrent invest-

ments in both conventional and alternative sources that allow real competition to flourish; and fourth, leaders must consider and address the issue of envi-ronmental protection and sus-tainability.

In the end, we need to meet growing energy demand to per-mit economic growth and social

development, and do so in a manner that protects our envi-ronment, he said.

FUTURE SOURCES OF ENERGYDuring his keynote address, Al-Falih specifically addressed the issues and perceptions related to traditional versus alternative energy sources needed to meet future demand.

Even with the great strides we have made as an industry, we find a great deal of uncer-tainty surrounding the future of energy in general and of petroleum in particular, he said. There are assumptions the industry is going to some-how fundamentally transform the face of energy overnight. Such an assumption ignores the thorny issues of how and how quickly we are going to get from here to there how much it will cost and who will pay for it.

He added that even though there is great promise in a number of alternative energy sources, leaders need to stay

The worlds population will be expanding not only in numbers, but also in their demands for higher living standards and greater prosperity. We must be able to meet those expectations


CERA WEEK COVERAGE

focused on the fact that hydro-carbons will remain the domi-nant energy source for decades to come. He went on to say that the consensus view is that, 20 years from now even with technological advances between now and then fossil fuels will continue to satisfy about 80% of total energy consumption.

I do want to clarify that the industry should continue to invest in the most promising renewable sources, he said.

I do not believe in an either-or choice but rather a comple-mentary approach. Given that global energy demand is set to double over the next 40 years, I strongly believe we will need contributions from all sources.

He added, however, that the industry should invest at the appropriate levels in our tried-and-true energy sources including oil.

ARAMCO FOCUSAl-Falih also touched on the steps that Saudi Aramco is tak-

ing to help meet current world demand and also ensure ade-quate energy supplies in the future. He said the company has been building capacity both in the upstream and downstream sectors, including integrated refining and petrochemical facil-ities both in Saudi Arabia and foreign countries.

He added at the confer-ence that Saudi Aramco has not

slowed down in making sub-stantial investments in capital growth, which have increased the companys production capac-ity to an unprecedented 12 mil-lion barrels per day.

Schlumbergers Carbonate Research Centre is in Dharan, Saudi Arabia.

The consensus view is that, 20 years from now even with technological advances between now and then fossil fuels will continue to satisfy about 80% of total energy consumption

He also said that investments will roughly double the compa-nys gas capacity over a 10-year period and that there will be an increase in capital investments made by the downstream joint ventures.

The company is mak-ing equally substantial invest-ments in developing its great-est resource our people, Al-Falih added.

These investments are a tan-gible reflection of our belief that oil will remain a major player on the worlds energy scene for the foreseeable future. Our vision has always been focused on the

longer term. Just as we have done for more than 75 years we will build for today as well as for future generations.

Al-Falih concluded his key-note address by telling listen-ers, If we commit ourselves to working collaboratively then I believe that our collec-tive energy future will no longer be characterised by the uncer-tainty of its prospects but rather by its unlimited potential.

Following his address, Al-Falih touched on the follow-ing areas in response to ques-tions submitted from the audi-ence: Saudi Aramco has and will remain committed to invest-ing in its capital expansion pro-grams even during a time of unstable world markets and ris-ing costs to help ensure glo-bal energy security.

Additionally, the company is making a considerable invest-ment in developing in-Kingdom gas resources through new gas discoveries and processing facil-ities.

Renewables are playing an increasingly important role in meeting the worlds energy demands. Aramco is looking to develop gas.

Every once in a while there comes somebody who comes up with a com-pletely revolutionary idea. This idea of the VersaRig which we are introducing into the market here is very unique business. It was invented some time back by a person from Oklahoma, who had the idea but didnt have the marketing capability or the ability to take it to the step of commercialism. We were able to bring this idea with this gentleman and bring it to the world. We have the exclusive rights for the whole Eastern hemisphere and it is very revolutionary and is a complete new concept of how people service the oil wells. The recep-tion from clients is how did we not know about this earlier? It is such a simple idea, how come nobody has even talked about this? Always the revolutionary ideas are the simple ideas.


The Middle Easts upstream oil and gas community will have a glittering new addition to its calendar in De-cember this year, with the first ever

Oil & Gas Middle East awards. Hosted by ITP Business, publisher of ArabianOilan-dGas.com and Oil & Gas Middle East, on 14th December 2010 the ceremony will be held at the Westin Hotel in Dubai.

The aim of the Oil & Gas Middle East Awards is to celebrate excellence amongst the regions outstanding upstream indus-try. The awards will to seek out best in class organisations, projects, and the people who have proven that going that extra mile, even when part of a multinational company or multi-billion dollar project, can make a real difference.

From young engineers climbing the first rungs on the upstream career ladder, to the project manager who has overcome seem-

ingly insurmountable odds to bring projects in on time and on budget, right through to exemplary leadership at the top the Oil & Gas Middle East Awards will identify those performers responsible for positioning the Middle East at the heart of the worlds energy sector.

The Awards website has been live since March and is now receiving entries. Judg-ing by initial traffic and enquiries the event promises to be just the ticket to round off the year that energy bounced back.

The launch of some of the worlds most ambitious energy schemes and the suc-cessful delivery of mega projects in Saudi Arabia, Abu Dhabi, Qatar, and of course Iraq will no doubt prove that 2010 heralded a new era of quality and excellence in the upstream business. Globally acknowledged as the dominant source of the next genera-tions energy, now the Middle Easts NOCs

DIARY

and their partners have shown that they are leaders in operational excellence and qual-ity project management too.

Nominations are open to companies, individuals and projects.

NOCs, international majors, service companies and environmental initiatives are all invited to participate and can do so through the website.

AWARDS JUDGINGAfter the closing date for submissions all nominations will be collected and reviewed by the judging panel. Each award winner will be decided by consensus among the judges and no correspondence will be entered into by outside parties. Judging will be based on the strength of the submissions together with a review of the nominees activities in the area of nomination. Details of the execu-tive judging panel will be announced shortly.

AWARDS

DEC 142010


DIARY

AWARDS

PROJECTS Best upstream Gas Project Best upstream Oil Project Best enhanced oil or gas recovery project Offshore project of the year

COMPANIES Best international collaborative project Best exploration and production performance Best technology implementation Middle East oil field service provider of the year Engineering Achievement 2010

PEOPLE Young engineer of the year Best project manager Oil & Gas Middle Easts Outstanding Leader of 2010

JUDGES AWARDS Best implemented environmental programme Most successful national graduate training programme Best corporate social responsibility initiative Lifetime achievement

THE AWARDS HAVE BEEN SEPARATED INTO FOUR DISTINCT CATEGORIES TO HONOUR THE BEST IN CLASS PROJECTS, COMPANIES, INDIVIDUALS AND INITIATIVES THROUGHOUT THE UPSTREAM ENERGY WORLD IN THE MIDDLE EAST. Full details of awards categories and the nomination process can be found online at www.ArabianOilandGas.com/Awards

IRAQ WATCH


Ministry about the start-up of work, as has the Eni-led consor-tium developing the Zubair field. Yesterday also saw news that Russias LUKoil, the operator of

the West Qurna-2 TSC, had sent a technical team to engage in talks with state-owned South Oil Company (SOC) late last week, in order to prepare the way for an approval of its early work and preliminary development plan.

Budgetary issues were also reportedly on the agenda at the 12.8-billion-barrel non-devel-oped supergiant oilfield, which LUKoil will develop together with Norways Statoil. Shell and Petronas have also recently detailed their early planning and development plans enough to officially state a first production target of 175 000 b/d for 2012 at the Majnoon field, which ulti-

mately is hoped to yield 1.8 million b/d of crude.

While companies are pre-paring their full-scale

entry into Iraq, the

government- and coalition-forming negotiations look set to drag on, given the very even result between the elections two largest opposing factions. Incumbent prime minister Nuri al-Malikis State of Law alliance saw itself beaten to the top spot by Iyad Allawis Iraqiya list by a margin of two parliamentary seats, and neither is able to form a ruling coalition without at least two of the other principal politi-cal groupings.

The very close outcome of the elections, with only a slight advantage for the Iraqiya party, has raised fears again that politi-cal frustrations in the coming weeks and months might spill over into violence. This has been exacerbated by initial sig-nals from Prime Minister al-Maliki that he is contesting the

election result. Still, it is uncer-tain whether Allawis Iraqiya will be able to summon up a coa-lition, given that it would prob-ably have to work with at least one of the INA factionsif not the whole listto gather the necessary support, which looks like an unlikely match. The upside for oil companies is that any victor needs a lot of money to fund reconstruction and will need oils revenues during the upcoming period.

Samuel Ciszuk of IHS Global Insight.

PARLIAMENTARY SEATS IN IRAQS ELECTIONIraqiya 91State of Law 89INA 70Kurdistania 43Others 32TOTAL 325

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OMAN COUNTRY PROFILE

tiveness of Oman to interna-tional companies. Indeed, Oman has continued to attract foreign investors, despite the slow global market condition, he said, attributing this appeal to the healthy state of the Sul-tanates oil and gas sector and its prospects for growth in the future.

We have floated a few ten-ders in the middle of the year, and we are in discussion with some of the interested compa-nies, the results of which will be known before the end of the year. We are also in prepara-tion for a new bid round soon. We are confident that we will get reputable companies to work on them. Our doors are open for any size of companies who are willing to be our part-ners. Our process is transpar-ent, Dr Al Rumhy stated.

GASOn the gas front, Oman contin-ues to meet the demand of cus-tomers, Dr Al Rumhy said, not-ing that gas availability is cur-rently well over 99.8 per cent. But he acknowledged produc-tion challenges in the continu-ing quest to boost gas output. We have to be smarter in the way we develop our fields by selecting the right technology for the right field, he noted.

Oman is hoping to also increase LNG production in order to export it and the eco-nomic crisis that has hit 2009 has provided more time for the country to come up with

In 2009 Petroleum Development Oman (PDO) approved the full-scale development of the Amal East and West fields by means of steam-based enhanced oil recovery (EOR) techniques. Amal will become the site of the fourth field-development project in the the PDO EOR portfolio, which currently consists of a polymer-injection project at Marmul, a miscible-gas injection project at Harweel and a steam-injection project at Qarn Alam.

This is another milestone in the execution of our strategy for the long-term sustainability of the nations oil and gas produc-tion. That strategy is based on the application of appropriate tech-nology and the development of capable people, PDOs managing director John Malcolm said.

PDO has been producing oil by conventional means since 1984 at Amal, which is in south Oman. But the oil is heavy, limiting the rate of production as well as the percentage of the oil in place that can ultimately be recovered. The application of steam will enable the Amal oil to be produced more quickly and in greater volumes. The peak production rate from the two fields is expected to be three times the current production rate. Steam-injection trials to support the full field development have been ongoing at Amal since 2007.

Steam will be used in different ways in each field. In Amal West, the steam will drive oil from dedi-cated injection wells towards

OMANS PROJECT PIPELINE

dedicated producing wells. At Amal East, which contains heavier oil, the steam injection and oil production will take place through the same wells. The steam is first injected into the reservoir, allowing it to heat the oil around the wells, and then the hot oil and water are back-produced from the same well in a repeated cycle. The field-development plan calls for a total of 300 new wells to be drilled over a 14-year period. Facilities ready to receive the hot oil are planned to be in place by the end of 2012.

MARMUL UPDATEPetroleum Development Oman successfully commissioned its first full-scale enhanced oil recovery project at Marmul in February this year. The Marmul Polymer Project in the south of PDOs concession area, will add a further 8,000 barrels per day of oil production over the coming years. This is an ambitious and novel project that involved

building a water treatment plant with a capacity of 80 000 cubic metres per day and a polymer preparation and injection facilities station which will have a capacity of 17 500 cubic metres per day, said Malcom. It is an excellent example of the increasing applica-tion of new technology to increase production at PDOs mature oilfields.

The main Al Khlata reservoir has very heavy, viscous crude and production will be substantially increased using polymer flooding as an enhanced oil recovery tech-nique. Polymer flooding works by adding polymer to water in order to make it more viscous before it is injected into the reservoir. Increasing the viscosity of water leads to a more effective oil sweep which increases both production and the ultimate recovery factor. The project will lead to a 10% increase in the oil recovery factor from the Al Khlata reservoir.

Omans largest upstream company, PDO is embarking on a massive enhanced oil recovery project in 2010

New EOR project PDO

The eld-development plan calls for a total of 300 new wells to be drilled.

1.2 T ftOman has targeted increasing its gas production to 1.2 trillion ft by 2013Source: EIA



new supplies to meet its goals. PDO dominates the natural gas upstream sector, although foreign companies have been enlisted in new exploration and production products, particu-larly in the reservoirs which are more geographically com-plex.

Natural gas production in 2008 was estimated at nearly 848 billion cubic feet and it is

believed that production vol-umes could reach 1.2 trillion cubic feet (Tcf) by 2013. The Khazzan and Makarem fields are estimated to contain signif-icant volumes of natural gas, and BP is currently develop-ing them, hoping to achieve

production in 2010. Foreign companies are contracted by Oman to produce gas from the more technically challenging fields.

Omans domestic natural gas pipeline system is control-led by the Oman Gas Com-

ALTERNATIVE ENERGY?

In November 2009 technical and financial advi-sory contracts for the Duqm coal-fired power plant were finalised, as Oman pushes forward in its bid to improve electricity generation capacity.WorleyParsons and KPMG, respectively, won the bids to build the 1 000MW station, the Sultanates first coal-powered generation site.The two contracts mean that we are going ahead with Omans first coal-fired power project at Duqum, an official from the state-run Public Authority for Electricity and Water told Reuters.The Duqm IWPP - worth an estimated US $2 billion, including its desal plant - is one of five major ventures that the Omani government is pursuing in order to match capacity to demand.The others are the 420MW Mirbat plant, Barka III (650MW), Sohar II (650MW) and the upgrade of the

Oman has signed key contracts for coal-fired Duqm power plant

The return of king coal

Ghubrah plant in Muscat (additional 500MW).The Sultanates lack of natural resources makes the coal-fired option feasible; over in the UAE, Ajman signed a deal with MMC last year to build a coal-fired plant in the emirate.

A coal red power station has been suggested in Oman.

5.52009 EIA estimates for Omans crude oil reserves stood at 5.5 billion barrels. The agency says production peaked in 2008 at 970,000 BPD.

PDOs state-of-the-art infrastructure.

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nals, power plants and other assorted domestic end users.

The consumption of gas in Oman has increased recently. Factors such as the foray into EOR projects, an economic diversification programme and the 2008 oil price boon all had a significant impact. Between 2007 and 2008 the consumption is believed to have increased by nearly 25%. It is thought that consumption could reach 580 Bcf by 2013. Some of this demand is satisfied through imports from Qatar via the Dolphin pipeline.

Last year Omans sole nat-ural gas exports were LNG. Approximately Bcf of LNG was exported in 2008, and nearly two thirds of that went to South Korea, with the remain-der being shipped out to Japan, India, Taiwan and Spain. Oman has three LNG production trains, with a combined capac-ity of approximately 320 Bcf.

RECENT NEWSPetroleum Development Oman (PDO) announced in February 2010 the discovery of three new oil fields, one with a major volume of oil in place.

The company has also found a potentially large gas field.

Following an ambitious exploration programme in cen-tral Oman, PDO said the major oil discovery had been made at Al Ghubar South, close to the existing Al Ghubar and Qarn Alam fields.

In all, four exploration and appraisal wells were drilled in 2009 to confirm the discovery,

Production is expected to increase to between 850,000 and 900,000 bpd in 2010 Oil and Gas Minister Dr Mohammed bin Hamad al Rumhy

and further drilling to deline-ate further extensions of the field is planned during 2010.

The amount of oil in place could be in excess of 1 billion barrels, the company said.

During 2009, PDO made two further oil discoveries at Dafiq West in the north of PDOs concession area and Anbar in the central region of the Sultanate.

OXY IN OMANOxys Oman operations are concentrated at the giant Mukhaizna oil field in south-central Oman, the Safah field in northern Oman, and adjacent areas. During its 30-year tenure in Oman, Oxy has increased production, reserves and scope, and today is the countrys second-largest oil producer.At Mukhaizna, Oxy has implemented an aggressive drilling and devel-opment program, including a major pattern steam flood project for enhanced oil recovery. As of year-end 2008, gross daily production was over six times higher than the production rate in September 2005, when Oxy assumed operation of the field. Oxy plans to steadily increase production through continued expansion of the steam flood project.

The Anbar discovery, close to the existing Sadad field, fol-lowed an innovative drilling campaign in which 12 wells were drilled in a grid pattern.

Five of the wells encoun-tered oil in the Gharif reser-voir and these are currently being hooked up to the exist-ing production network in the area as part of an early produc-tion system designed to evalu-ate the new field.

The new Dafiq West field is close to the Dafiq field which was originally discovered in 2005. A production test well at Dafiq West has already been connected to local production system, joining three existing

A PDO employee on inspection rounds.

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test wells from the Dafiq field. Once the evaluation process is completed, the Dafiq West and Dafiq fields will be jointly developed.

PDO also said it had made a large gas discovery at Khulud in the north of PDOs conces-sion area.

Gas in potentially large vol-umes was found at a depth of more than 5000 metres. Two new wells are currently planned in the area in 2010 to help evaluate this discovery, the company added.

Shell, through PDO, has a fuel blending plant just outside of Muscat. Marine lubricants and fuels are produced here.

These four discoveries rep-resent an important success for PDOs exploration efforts during 2009, managing direc-tor John Malcolm said.

They highlight the con-tinued hydrocarbons poten-tial of Omans subsurface and shows that there will be oppor-tunities for further explora-

tion for many years to come. Omans output is dwarfed by its OPEC member neighbours, but it is on course to remain an exporter for now.

222 KOmans refining capacity stands at approximately 222 000 barrels per day.


ADCO GM INTERVIEW

Abdul Munim Al Kindy tells Oil & Gas Middle East how enhanced oil recovery projects are no longer the preserve of the depleted field, and how ADIPEC couldnt come at a better time

T owering above the rapidly trans-forming Abu Dhabi skyline and commanding views which stretch from jack-ups rigs at one end of the corniche, to the gleaming dome of the Emirates Palace in the other is the Abu Dhabi Company for Onshore Operations, (ADCO) HQ. This is the nerve centre for a

company capable of churning out over half a billion barrels of black gold a sustain-able capacity rate touching 1.4 million bar-rels of crude each day.

The resources belong, of course, to Abu Dhabi, and ADCO works as an operator firm within the ADNOC group umbrella. ADCO can trace its origins back to 1939

ADCO GM INTERVIEW

(laying claim to being the oldest organisa-tion in the country). The company switched its legal status to operator on its 40th anni-versary in 1979, and ever since has served its stakeholders key minority IOC part-ners and the National interest.

The switch itself was largely administra-tive in its nature, but freed the company up

Abdul Munim Al Kindy, general manager of Abu Dhabi Company

for Onshore Oil Operations.


ADCO GM INTERVIEW

to strike an incredibly efficient balance of technical skills from its upstream partners, combined with the capital backing and vast resource wealth of the ADNOC Group.

The mix has proved a potent one. In spite of the collapse of the oil price in November 2008, the company has forged ahead with its onshore E&P projects and today is tackling some of the most technically chal-lenging frontier projects anywhere on the planet. Sustaining production in mature fields and increasing output at new sites

pioneering cutting edge enhanced oil recovery project schemes.

Oil & Gas Middle East spoke with Abdul Munim Saif Al Kindy, ADCO general man-ager ahead of the most recent ADIPEC conference leadership panel, of which he is this years chair.

The sense of history with ADCO is intermingled with the promise and hopes for the future of Abu Dhabi, the two inextri-cably linked when Al Kindy talks about his current role.

The company began life with a conces-sion and ten years later drilled its first well. Unfortunately that was dry and drilling moved on to Sharjah and Dubai. It wasnt until 1958 that the company made its first discovery, and we began shipping in 1963. From there, well what you see around you in Abu Dhabi today is inextricably linked to ADCO.

Indeed, the majority 60% in fact of Abu Dhabis crude output is thanks to the activities of ADCO. However, with a raft of new projects the numbers will reflect an even greater proportion of the states rev-enues to the onshore operator.

Today it is around 60%, but we will play a more dominant role in crude output as we increase our oil production, reveals Al Kindy.

The company is also the UAEs largest producer of gas. We produce around 4.5 billion cubic feet of gas per day from associ-ated and non-associated production. Almost at point of source we pass this to our sister company GASCO, he says.

THE CARBON CONUNDRUM The company has major plans afoot to sus-tain that gas production. There are some really interesting recycling projects which will enable us to reduce the natural gas we currently use for injection, such as CO2 enhanced recovery techniques which war-rant a proper investigation.

On November 11 last year the com-pany began the first advanced CO2 injec-tion project on a carbonate reservoir in the MENA region. If we can technically assert the value of CO2 in terms of enhanced oil recovery then we may start a much wider EOR scheme at one of our major fields by 2016, reveals Al Kindy.

The general manager says that whilst the technical challenges and commercial viability issues of EOR projects remain sig-nificant, the way the company is formed with key stakeholder partners means it has access global experience and knowledge when it comes to understanding of CO2 injection projects.

One of the significant contributions which our major oil company partners make to ADCO is the input of technology,

The ADIPEC 2008 conference was chaired by Ali Al Jarwan, general manager of ADMA-OPCO.

Abdul Munim Al Kindy.

Abdul Munim Al Kindy joined the Abu Dhabi Petroleum Company (ADPC) in 1975, as an apprentice, and continued his further educa-tion in the UK. He graduated in Mechanical Engineering in 1982. He occupied a number of senior positions in all onshore fields and terminals. In 1990 he joined British Petroleum, on secondment, and worked in North Sea operations, commercial, and strategy develop-ment. In 1997 he was appointed as the deputy general manager of ADCO, joined National Drilling Company in 2001, as General Manager. He returned to ADCO in 2007 as its general manager, and will be the chairman of the 2010 ADIPEC conference in November.

ADCO GM IN PROFILE


ADCO GM INTERVIEW

Abu Dhabi will pull put all the stops for ADIPEC.

so between our stakeholder partners we can tap a wealth of experience and knowl-edge when it comes to CO2 injection. These partnerships have been quite effec-tive in terms of shaping and contributing to our objectives and programs.

Whilst many firms around the world are dabbling with carbon sequestration and storage, Al Kindy says the work being done at ADCO is helping the company con-solidate a regional leadership role in devel-oping and executing CO2 related EOR projects actually increasing production.

The application of CO2 has proven its worth in fully depleted reservoirs and sand-stone formations, but some of the projects we have in our portfolio and in our sights will mean injection during the early stage of a big fields life. We dont really know exactly how the field will react because there are a lot of variables including poros-ity, geology et cetera.

Al Kindy hints that a wider supply issue may develop fruitful relationships within Abu Dhabis own borders, and form part of a carbon masterplan. Of course, the

The problem was, and always has been, that the industry as a whole tries to do the same things all at the same time. This is a cyclical industry, so to be an ef cient operator you have to position yourself well ahead of demand curves Abdul Munim Al Kindy, ADCO general manager

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ADCO GM INTERVIEW

commercial aspect of establishing a car-bon supply partner needs to be examined very closely, but I think we will have a lot of interesting opportunities to work with Masdar.

AHEAD OF THE CURVEAbu Dhabi reinvigorated its status as a focal point for upstream oil and gas firms when the repercussions of a tumbling oil price sent shockwaves across the E&P world. By forging ahead with many of its upstream developments Abu Dhabi became the watchword for oilfield service companies not just within the region, but globally.

Problems for many operators were beginning to show well in advance of the global financial crisis and subsequent oil price freefall in 2008. When the futures mar-kets for crude deliveries reached a peak in excess of $147, the problem for operators was to battle with was far from one of reve-nues indeed it was spiralling costs. As the pool of able and available EPC contractors became stretched ever more thinly, the cost of upstream projects skyrocketed.

The problem was, and always has been, that the industry as a whole tries to do the same things all at the same time. This is a cyclical industry, so to be an efficient opera-

tor you have to position yourself well ahead of demand curves.

Al Kindy says that ADCO, with the bless-ing of the Supreme Petroleum Council, was able to push ahead with a lot of the projects it had slated, and has achieved quite excep-tional gains from the timely access to EPC contractors during a market downturn.

We have gained probably 30% on our budgets. This hasnt just been approaching the market and demanding better prices, it can only come about through open and transparent competition.

The general manager says that once the marketplace understands and trusts the openness of the process, real competition comes into play.

For example, on a billion dollar project, if you had eight bidders, the variation in prices tendered can be a little as 1%. This is because all the contractors drive their mar-gins in order to win business, and because of this we have seen some excellent results on our budgets and forecasts.

The SAS project (Sahil, Asab and Shah field development) was budgeted at $4.5 billion but was awarded for $3.5 billion, and the Bab compression facility, which was tendered for $1.5 billion was awarded for almost a 40% saving, reveals Al Kindy.

The company has almost come to the completion phase for many of its big ticket projects, so the emphasis from the opera-tors perspective has shifted to one of timely execution, bringing projects in on time and on budget.

ADCO is in execution phase for high-end EOR projects as the sun sets on the era of easy oil.

The Abu Dhabi Crude Oil Pipeline Project aims to offset reliance on Arabian Gulf oil terminals while reducing shipping congestion through the Strait of Hormuz, essentially strengthening overall export capability on the eastern coast of the United Arab Emirates.Originating from Habshan in Abu Dhabi - the current collection point for Abu Dhabis onshore crude oil production - ADCOP will terminate in Fujairah. The 48-inch-diametre pipeline has been designed to transport some 1.5 MMBPD of crude oil from ADCO facilities at Habshan over a distance of 370 km to an oil terminal in Fujairah for export through offshore loading facilities. The scale of the project is immense and encompasses the construction of the main oil terminal and offshore loading facilities at Fujairah, in addition to the installation of the main pipeline.ADCOP is an IPIC project, and ADCO will become the operator once it is completed. When the pipeline is operational ADCO will have two terminals to export from, which gives the market new options and added security of supply, explains Al Kindy.

IN THE PIPELINE


ADCO GM INTERVIEW

ROAD TO ADIPECThis November will see Abu Dhabi fling open its doors once more to the worlds

upstream community for the colos-sal Abu Dhabi International Petro-

leum Exhibition and Conference (ADIPEC), which runs 1st - 4th

November. Al Kindy will be Chairing this years conference,

and he says the tim-ing of the event

(which is held every two

years), could not be any better. It really is an interesting time for ADIPEC It is ideal really. This is where the key indus-try issues surrounding the oil that will fuel us all for the next twenty years will be dis-cussed. There is a real and fundamental urgency for suppliers and developers to come together and see what is out there and come up with new ideas, he says.

Whether you are looking at methods to sustain your production or increase your production, this is the time that everybody is doing it. ADIPEC 2010 is really coming at a critical juncture for the industry.

Enhancing human capital and building a homegrown knowledge pool is one of Al Kindys personal priorities, though he stresses the company is already a high-acheiver in this field. We have a situation facing us where the future supplies of oil will be heavier, more sour, and in physically more challenging downhole environ-ments to work in.Whilst important work is being made with enhanced oil recovery and digital oilfield improvements, Al Kindy says the solution will not simply come from improving pracitices and recovery rates. Technology is not the catch-all solution. We must ensure we have the human capital in development now in order to implement the develop-ments the industry is working on now. Al Kindy highlights the ageing staff issue which is facing every upstream operator. Somehow this has to be tackled without dilution to the knowl-edge pool. We are continuously exploring how we can attract youngsters to the industry. There is an underlying image for the upstream industry

BUILDING A NATIONAL WORKFORCE

The SAS project (Sahil, Asab and Shah eld development) was budgeted at $4.5 billion but was awrded for $3.5 billion, and the Bab compression facility, which was tendered for $1.5 billion was awarded for almost a 40% saving, Abdul Munim Al Kindy

The Petroleum Institute in Abu Dhab is preparing the next generation.

with the youth of today. The general manager points out that many college and university aged students view oil and gas as short term and environmentally damaging. Its more important than ever that this trend is reversed. Locally we have been aggressive in trying to find effective solutions. ADNOC pioneered the setting up of the Petroleum Institute, and we now have male and female collages covering five key disciplines, and we are seeing the quality engineers coming in. This is definitely already having a positive impact and is allowing us to see quality engineers who are easily integrated into our organisations come through the system. We have prepared the ground work in fact ADNOC has been a pioneer of integrating females into field work in this region.

818 men 219 womenThe Petroleum Institute in Abu Dhabi currently has over a thousand under-graduate students enrolled. To date 44 graduates have begun careers with the ADNOC group of companies.

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ADCO GM INTERVIEW

The conference and exhibition is the largest gathering of upstream suppliers and technology firms in the Middle East, and the conference has always delivered topical and thought-provoking sessions.

Speaking for ADCO, it will be really important for us to share views with peers in the industry and exchange technical know-how. The SPE (Society of Petroleum Engineers), has help made this industry quite an open one in the way it promotes the sharing of ideas, and myself and the steering committee have been working very closely with the SPE to bring experts to Abu Dhabi to discuss what they have been working on. Ultimately its a fantas-tic learning tool, and is really exciting for young engineers.

The committee, through the SPE have been receiving and collating abstracts for a few months, but the excitement surround-

The ADIPEC 2010 conference steering committee meet at ADCOs HQ in Abu Dhabi to nalise the agenda.

Al Kindy says ADIPEC 2010 is shaping up to be the most successful yet.

ing this years event is evident in the sub-missions to date. By this time two years ago we had received 80, to date we have over 290 a massive increase. Last time over 800 abstracts were submitted in total, and I hope we can exceed that.

At the time of going to press Oil & Gas Middle East discovered the call for papers has been extended to April 15.

With the theme Delivering Energy in the Low Carbon Era: Chal-lenges and Opportunities, the pro-gramme committee for ADIPEC 2010, co-chaired by Fareed Abdulla, ADCO and David Marsland, Shell, has set its focus on vision, surface and sub-surface technical top-ics and aims to

produce the most comprehensive edition of ADIPEC yet.

The topics are set to draw out the best of the technical proficiency and futuristic vision from our industry experts including drilling and completion technology, future exploration and geosciences approaches, intelligent fields, CO2 management, enhanced hydrocarbon recovery, conser-vation strategies in HC production, HSE, the next generation of field developments and projects, and operations of the future.

Someone wise once said to me that to be an expert in any field in the oil and gas industry starts with reading every SPE paper on the subject. Very slowly you build from there. This conference is going to be an excellent platform and tool for the del-egates, beams Al Kindy.

We have gained probably 30% on our budgets. This has not just been by approaching the market and demanding better prices, it can only come about through open and transparent competition Abdul Munim Al Kindy

April 2010 Oil&Gas Middle East 43


ADIPEC PREVIEW

The Middle Easts premier upstream event kicks off on November 1st have you got your stand yet?

Hifazat Ahmad, ADIPEC 2010 event director

NEWS FLASHwww.ArabianOilandGas.com is the official online Media Partner for ADIPEC 2010 Make sure you are up to speed by logging on today. For unique news and views in the run up to ADIPEC, and to post your own news in the run up to the show contact us by e-mail at [email protected]

ADIPEC 2010, the worlds second larg-est upstream oil and gas event is almost totally sold out, with seven months still to go, according to Hifazat Ahmad, this years event director.

We are now close to 96% sold out, revealed Ahmad. The overall space in the

main halls at Abu Dhabi National Exhibition Centre (ADNEC), excluding the concourse, is around 31 000m2, and so far over 30 000m2 has been sold.

OTC in Houston still holds the top spot in terms of footfall, exhibi-tor numbers and floor

space, but ADIPEC, which is tar-geting its biggest year to date, is fast approaching the numb

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