Professor. Dr. Pogaku Ravindra
Ms. Adriana Amaludin
Energizing Sustainable Future
“Oil and Gas Engineering- Key to a Sunrise Industry in
Sabahfrom an Academic
Perspective”
Flow of Thoughts
•Upstream, Midstream and Downstream Operations
•Recent Trends in Oil and Gas Sector in Malaysia
•NKRA in Oil and Gas – Sustain, Grow and Diversify
•UMS Education Programmes and Research Projects
•Collaboration with StakeholdersEnergizing Sustainable Future
The Scope of Energy Oil & Gas
gk
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Upstream Activities : Exploration, Drilling, Completion & Production
• Exploration– Seismic– Exploratory Drilling
• Appraisal– Appraisal Drilling– Well Testing
• Field Development– Dev. Drilling– Reservoir– Production– Facilities
• Work over / EOR/EGR
•Refining/Processing/Treatments–Petrol, diesel, kerosene, grease,
bitumen–Gases: ethane, propane, butane
•Petrochemicals–Plastics, synthetic rubber, solvents
•Transmission/Distribution•Marketing•Consumer Products Manufacturing•Services•Others
Downstream Activities : Processing, Treatment & Marketing
Energizing Sustainable Future
Recent Trends in Oil and Gas Sector in Malaysia
•Malaysia produces 2% of the world’s natural gas
• Accounts for about 13% of the world's Liquefied Natural Gas (LNG) exports
• Sold largely to Japan, South Korea and Taiwan
•Malaysia : 3rd largest in the Asia Pacific region (After China & India)
• As a net exporter of oil and gas, 40% of Malaysia’s total revenue derived from petroleum sources.
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National Key Economic Areas(NKEA) Five major growth spots of Oil and
Gas
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Regional oil storage and trading hub
Innovative approaches in
developing marginal fields
Intensifying domestic
exploration activities
Enhanced Oil recovery (EOR)
initiatives
Refinery And Petrochemicals Integrated Development Project (RAPID) in Pengerang, Johor and
several major downstream petroleum and petrochemical
projects.
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NKEA OIL AND GAS SECTOR:SUSTAIN
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New Oil and Gas Discoveries
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Date Resource
Quantity Location JV
Jan 2013
Oil and Gas
Initial flows: 440 bbl./d crude oil,11.5 MM cf./d natural gas
Adong Kecil West-1 well in Block SK333, onshore Sarawak
JX Nippon Oil & Gas Exploration (Onshore Sarawak) Limited and PETRONAS Carigali Sdn Bhd.
April 2013
Natural Gas
1.5-3 trillion cubic feet of gas (Est.)
B-14 well, Block SK310, onshore Sarawak
Newfield Exploration Company, Partners Diamond Energy Sarawak and Petronas Carigali Sdn Bhd.
May 2013
Oil 200 million stock tank barrels (MMstb)
Cendor Graben-2, Block PM304, Offshore Peninsular Malaysia
Petrofac (Malaysia PM304) Ltd, Petronas Carigali Sdn Bhd, Kuwait Foreign Petroleum Exploration Company and Petro Vietnam Exploration Production Corporation Ltd.
Nov 2013
Gas 247 metres of gas column
Pegaga-1 well, Offshore of Block SK320, NW of Bintulu, Sarawak
PETRONAS Carigali Sdn Bhd and Mubadala Petroleum
Dec 2013
Gas 292 metres of gas column
Sintok-1 well, Offshore of Block SK320, NW of Bintulu, Sarawak
PETRONAS Carigali Sdn Bhd and Mubadala Petroleum
Marginal Oil Fields Development
• PETRONAS - Initiated Risk Sharing Contracts (RSC) for Marginal Oil Fields development
• Marginal Oil Fields Development – Aims to rejuvenate the oil and gas industry, since majority of Malaysian oil fields are entering the mature phase
•Mature phase: Declining oil and gas extraction, after 30 years of exploration and production (E&P)
• Malaysia has around 106 marginal fields, with approx. 580 million barrels of oil.
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Enhanced Oil Recovery (EOR)
Energizing Sustainable FutureSource:drillinginfo.com
Enhanced Oil Recovery (EOR)• 50% of Malaysia’s producing oil fields have EOR potential
(Estimated)
• Currently, more than 10 EOR projects in the pipeline at various maturation stages.
• Since Sept 2014, EOR implemented at Tapis oil field (Offshore Terengganu)
• This project, worth RM10 billion – boost declining production between 25,000 to 35,000 barrels per day (bbl./d) in 2016 and between 3,000 to. 4,000 bbl./d in 2017.
• Tapis is one of seven mature fields offshore Peninsular Malaysia, developed by ExxonMobil and PETRONAS via 25-years PSC
• Work is being carried out on seven fields: Seligi, Guntong, Tapis, Semangkok, Irong Barat, Tebu and Palas
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EOR cont.’• Shell and PETRONAS agreed to invest $12 billion over 30 years in two EOR projects offshore Sarawak and Sabah (Baram Delta and North Sabah) covering nine fields.
• Expected to boost reserves by 750 million barrels and use the world’s first offshore, chemical injection process for resource recovery
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Deepwater Projects
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Source: Frost and Sullivan
Deepwater Projects
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Location
JV Status Remark
Kikeh Oil Field
Murphy Oil and Petronas Carigali
In Operation
Recoverable reserve base: 400 to 700 million barrels of oil. Production plateau: 120,000bpd for the first 8 years
Gumusut / Kakap
Shell (operator), ConocoPhillips, Petronas Carigali, Murphy Sabah Oil
In Operation
1st deep water floating production system - 19 subsea wells. Came on stream : End of 2011, production of 25,000 bbl./d.Production will increase to 120,000 bbl./d after new floating production system is commissionedNatural gas produced along the oil is re-injected into the reservoir - improves oil recovery.
Malikai, Offshore Sabah
Shell and ConocoPhillips
Under Development
Holds a production capacity of 60,000 bbl./d. Tied into the Kebabangan Northern Hub development project (KBB) via a liquid and dry gas pipeline after first gas is drawn from KBB. Expected to come online in the 3rd Quarter of 2015.Ties together Gumusut/Kakap, Malikai and Kikeh oil fields.
Oil Pipelines•Malaysia – Relatively limited oil pipeline network,
relies on tankers and trucks to distribute products onshore.
•Malaysia’s main oil pipelines connect oil fields offshore Peninsular to onshore storage and terminal facilities.
• Peninsular Malaysia: 124-mile Tapis pipeline runs from Tapis oil field, ends at the Kerteh plant in Terengganu, as does the 145-mile Jerneh condensate pipeline.
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Oil Pipelines
• Sabah: The oil pipeline connects offshore oil fields with the onshore Labuan oil terminal – this network will expand following the development of the Kebabangan cluster, Malikai, Gumusut / Kakap and Kikeh oil fields.
• Sarawak : Several other oil pipelines connecting offshore fields with the onshore Bintulu oil terminal
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Refining, Storage and Transit• Malaysia – Plans to become a regional oil trading and
storage hub by increasing the country’s refining and storage capacity – due to rising regional and domestic demand for crude oil and oil products.
• PETRONAS: Plans to build a RM60 billion Refinery And Petrochemicals Integrated Development (RAPID) complex in Pengerang, Johor (End of 2017). This project includes a 300,000 bbl./d refinery.
• Malaysia’s expansion of its oil terminal and storage capacity : To meet the growth of oil storage and trading within Asia.
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Refining, Storage and Transit Cont.’• Malaysia’s oil product and crude oil terminals: Located along the
eastern coast of Peninsular Malaysia and offshore as floating storage and production facilities.
• MISC Berhad and Vitol Group: Plans to double the storage capacity at Johor Terminal (the country’s largest oil terminal) by mid-2014
• Pengerang oil storage terminal: Comes online on 2017
• Sabah Oil and Gas Terminal (SOGT), Kimanis: Receive oil and gas starting 2014
• SOGT – Central hub for hydrocarbon development in offshore Sabah with a design capacity to process
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Crude Oil: 260,000 bbl./d,Condensates: 77,000 bbl./dNatural Gas: 1.3 billion cubic
feet/day
Source: Facts Global Energy, IHS Global Insight, OGJ, IEA, Petronas, Shell (2013)Energizing Sustainable Future
Outlook for the Oil and Gas Industry
• Oil and Gas Industry: Continues an important role in Malaysian economy
• PETRONAS: Has a 5-years RM300 billion capital expenditure (CAPEX) plan to reverse declining production
• There is much catch up to do after having spent only RM72 billion (24% of the amount) between 2011 and January 2013.
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Private Investment:RM189 billion
Public Investment: RM106 billion
Outlook cont.’
• PETRONAS started the year with a five-years umbrella contract awarded to four engineering services contractors
• Contract scope: Domestic upstream oil and gas engineering services (front end engineering design and detailed design works)
• Growth for oil production is set to outpace consumption due to positive demand for oil within the Asian region.
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Technip Consultant
(M) Sdn Bhd,
Perunding Ranhill
Worley Sdn Bhd, RNZ
Integrated (M) Sdn Bhd and
MMC Oil &
Gas Engineering Sdn Bhd.
NKEA OIL AND GAS SECTOR:GROW
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GAS – THE RISING SUN OF ENERGY
• Globally, conventional recoverable gas resources:
• More than 120 years of current global consumption
• Total recoverable resources: Can sustain current production level (for more than 250 years)
• In the Southeast Asia Energy Outlook 2013 report:
• Gas production in SE Asia will rise from 203 to 260 billion m3 (from 2011 to 2035)
• Main Contributors: Indonesia, Malaysia and Myanmar.
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GAS – THE RISING SUN OF ENERGY (Contd.)
• Malaysian gas production (2011): 56 billion m3 (2nd largest in ASEAN region)
• Offshore Peninsular Malaysia Production: To satisfy domestic demand;
• Offshore Sarawak Production: 33 billion m3 feeds the Malaysia LNG (Bintulu) liquefaction terminal
• Strong prospects of continued exports of gas in the medium term:
Backed by recent discoveries and new developments, the gas terminal will operate at full capacity (through at least 2018).
• The country’s gas production is projected:
Will reach 70 billion m3 in 2020, before declining slightly to 65 billion m3 in 2035.
Energizing Sustainable Future
LNG Prospectus
• LNG : Meet the growing demand for efficient, cleaner and greener energy from environmentally conscious energy consumers in Asia.
• LNG currently contributes about 10% of the energy requirements in Asia and the share is expected to rise to 14% by 2035 (Source: IEA)
• The Oil & Gas industry: Responding to this new challenge by aiming to supply more LNG to energy hungry countries in Asia.
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LNG Prospectus Cont.•PETRONAS: Embarking on new projects to increase its LNG output in the coming years through project expansion and acquisition.
•The company will build new LNG production facilities including
•PETRONAS LNG 9 (Train 9) project within the PETRONAS LNG Complex in Bintulu;
•Floating LNG projects offshore Bintulu.
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LNG Prospectus Cont.• PETRONAS’ subsidiary company, Malaysia LNG
Sdn Bhd. (MLNG) and which operates the PETRONAS LNG Complex: working on 8 new capital projects to increase the plant’s production capacity and reliability.
• These projects include
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MARLIN project (MLNG boil off gas re-liquefaction project) MLNG Boiler Rejuvenation project
(MBR)MLNG Dua Rejuvenation projectCO2 Removal Capacity Restoration projectMLNG New Boiler projectROSE project and Industrial Effluent Treatment
System Upgrade
LNG prospectus Cont.• MLNG:
• Production of 29.8 Million Tonnes Per Annum (MTPA) of LNG by 2016 (increase of 4.1 MTPA - current production of 25.7 MTPA)
• Additional output: Train 9 (3.6 MTPA) and MARLIN project (0.5 MTPA), estimated completion in 2016.
• MLNG Dua Rejuvenation project: Ensuring continued safe operation and sustain the reliability and integrity of MLNG Dua plant for another 15 years, after 2015.
• MBR: Rejuvenation of 8 boilers after 30 yrs. of operation (To improve their reliability and restore their capacity of 380 tonnes each boiler)Energizing Sustainable Future
LNG prospectus Cont.• PETRONAS: Also embarking on a new LNG production facility
called the Floating LNG (FLNG) offshore Bintulu – further monetization of small and stranded gas fields.
• PETRONAS FLNG1 project : Contribute additional 1.2 MTPA to the LNG production capacity when completed and commissioned in 2015.
• The second Floating LNG project (FLNG2) will come on stream in 2016, and will add another 1.5 MTPA.
• As of 2012, the largest importer of MLNG’s production:
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Japan (62%)
Korea (17%)
Taiwan (12%)
China (9%)
Oil and Gas Industry Shining in Sabah
Energizing Sustainable Future
Kinabalu Non Associated Gas
(KNNAG)ConocoPhillips
Sipitang Oil and Gas
Development Corporation
Petronas Carigali Sdn.
Bhd,
Sabah Shell Berhad
Talisman Energy
Murphy Sabah Oil .Co.Ltd.
Kebabangan Petroleum Operating
Company Sdn Bhd (KPOC)
PETRONAS Carigali Sdn
Bhd
ConocoPhillips, Sabah Gas Ltd
Shell Energy Asia Ltd. M3NERGY
NKEA OIL AND GAS SECTOR:DIVERSIFY
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Biofuel Technology
•Renewable fuel sector such as ethanol and biomass based fuels can expand production activities
• Implementation of Green Technology for sustainable society
• To complement the conventional oil and gas resource supply
•Biodiesel productionEnergizing Sustainable Future
Challenges with Drop in Oil Prices• Analysts forecast: Oil prices may not go up to 100 $ per barrel.
• Malaysian Oil and Gas sector:
• Major income generator for Malaysia.
• Resources, assets, projects should be managed effectively – reduce the unit production cost to be smaller than market price of crude oil for better profit margins
• Sanctioned projects – Need to be revisited for redesign, re-negotiated up to re-bid (if necessary) to save lot of unnecessary cost.
• However, we cannot compromise with items related to safety.
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Upstream Challenges
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Management and
Information
Increasing the
production of liquid
fuels
Sources of Crude Oil
Operational Challenges
Energy Demand
and Supply
Environmental Pollution
Fluctuating Crude Prices
Economic Uncertainty
The People Shortage Marketing
Downstream Challenges
Energizing Sustainable Future
Business Joint Ventures
Global Refining Capacity
Corporate communicatio
n
Distribution Activities for Oil Products
Crude Supply Mechanism
Health, Safety and
Environmental Security
Manpower and Economy
Refinery incapability
and the Need for Expansion
Pricing The cost of Services
Moving Forward
• Information Technology (IT) & automatic devices (includes robotics): Needed to solve challenges in the oil and gas industry.
• The latest technologies for data management, analysis, relaying and dissemination – ensuring effectiveness in the various value chains of the oil and gas industry.
• The text based format of XML as well as the structured format of DBMS – effective documentation of the processes to ensure appropriate data management. Energizing Sustainable Future
Moving Forward Contd.• NKRL (Narrative Knowledge Representation Language):
Express information and set up knowledge base – e.g. monitoring gas leakages in processing plants by setting up alarm systems and notifications.
• Other IT state of the art technologies can be used to monitor rig activities at real time – ensure all round efficiency and overcome challenges.
• The good news: Many key players in the oil industry have begun leveraging the benefits of IT, but this is not enough.
• Integrated Oil and Gas Companies (IOCs) need to cooperate in upstream and the downstream sector to ensure efficiency in the entire processes.
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Petroleum Data Integration, Information and Data Management • IT industry in oil and gas industry: Developed by the
World Wide Web Consortium (W3C) about a decade ago.
• This technology is called XML (Extensible Markup Language):
• It uses tags and unstructured patterns in developing requisite data for information dissemination
• Structured so that the information would be readable by both machines and humans
• XML is the most beneficial method information disseminationEnergizing Sustainable Future
UMS OIL AND GAS CORPORATION:
EDUCATION PROGRAMMES AND RESEARCH COLLABORATIONS
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Education Programs
• UMS Oil and Gas Corporation offers a whole range of Oil and Gas Engineering Programmes:
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Master of Engineering in
Oil and Gas Engineering
Master of Science in
Safety, Health,
Environment and Quality Technology
Bachelor of Engineering Oil and Gas Engineering
Diploma in Oil and Gas
Engineering (Instruments)
Diploma in Oil and Gas
Engineering (Mechanical)
Diploma in Oil and Gas
Engineering (Process)
Diploma in Oil and Gas
Engineering (Utility
Management)
Executive Bachelor
Degree and Diploma
Programme
Professional / Competency courses for the Oil and
Gas Industry
Seminars, conference, workshops
UMS COLLABORATION WITH OIL AND GAS INDUSTRY
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Sabah State GovernmentMalaysian Public Works Department
Policymakers
Herriot -Watt University, ScotlandRiam Institute of TechnologyUniversidae Nacioal Timor Lorosa’e (UNTL)Meta Skills Training Service
Academic Collaborators
Talisman Malaysia Limited (TML)Kudat Offshore Oil and Gas Sdn. Bhd.PETRONAS Chemicals Methanol LabuanYayasan SabahTokyo Econet Limited Company (TELC)Centro Ecotech Energy Technology (Dongguan) Co.LtdForever SabahMIMOS Bhd.UMS Link-Silver Kris Sdn.Bhd.Labuan Financial Service Authority
Oil and Gas Industry Collaborators
COLLABORATION PROPOSED
Faculty of Engineering UMS is actively doing research in oil and gas and biofuel technology. UMS offers collaborations in the following niche areas:
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Oil and Gas Engineering
Deepwater Engineerin
g
Safety and Environme
nt
Integration studies of Pipelines
Enhanced Oil and
Gas Recovery
Downstream
Processing
EOR Projects at UMS
•Comparative and hybrid methods study between different methods of EOR by using Prototype EOR model and simulation.
• Experimental studies to optimize the CO2 injection mobility for increasing the volumetric sweep efficiency percentage of oil recovery.
•RSM, Minitab, Matlab, Hysis, Super Pro, LCA software shall be used for modeling and simulation of EOR projects.
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MEOR Projects at UMS
•RSM, Minitab, Matlab, Hysis, Super Pro, LCA software shall be used for modeling and simulation of MEOR projects.
• Laboratory investigation of pH, electrical conductivity, and temperature relationships in Sabah shallow and deep water
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MEOR advantages
•Highly economical,
• Low toxicity,
•biodegradability and biocompatibility,
•selectivity and specificity .
•MEOR therefore, offers good alternative in improving the recovery of crude oil from reservoir utilizing microorganisms and their metabolic products
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MEOR Schematic
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Figure: Schematic of MEOR (www.netl.doe.gov).
MEOR Schematic
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Figure: Schematic of Microbial flooding recovery. (www.netl.doe.gov).
Natural Gas Projects at UMS contd.
•REMOVAL OF CARBON DIOXIDE FROM NATURAL GAS FOR LNG PRODUCTION
•RSM, Minitab, Matlab, Hysis, Super Pro, LCA software shall be used for modeling and simulation of MEOR projects.
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Collaboration can be proposed through:
Industry attachment to the students
Employment opportunities for
the graduates and post
graduates of UMS
Research Collaboration with Industry
Consultancy in Upstream and Downstream-
Based Industries
Tailor-made Academic and
Training Courses relevant to
Industry
Incubation Centre for Technology
Development with Industry
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Final Thoughts• Sun shining future in Malaysia for Oil and Gas
Operations
•UMS: A premier human resource development destination for generating the quality human capital with the involvement of all the stakeholders for sustainable society.
Sustain – New Discoveries of
Oil and Gas Reserves (Offshore
and Onshore)Enhanced Oil
Recovery (Increasing
Efficiency of Oil Production from Mature Wells)
Grow – Information Technology
Development (Overcome
Upstream and Downstream Challenges)
Diversify – Developing Biofuel
Technology to Complement
Conventional Oil and Gas Resources
Thanks for your kind attention
Sabah is Shining
Keep Smiling
Energizing Sustainable Future