oil & gas middle east - dec 2009

NEWS, DATA AND ANALYSIS FOR THE MIDDLE EAST’S ENERGY PROFESSIONALS December 2009 • Vol. 5 Issue 12

An ITP Business Publication

An ITP Business Publication

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GAME CHANGER

CEO & CHAIRMAN OF QATARGAS SAYS 42 MILLION TONNES EXPORT PER ANNUM IS ON FOR 2010TAKING GAS TO THE WORLD: FAISAL AL SUWAIDI

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

Technology is keeping IOCs relevant in an NOC world

Technology is keeping IOCsrelevant in an NOC world

SHELL IN THE MIDDLE EAST

Biggest cranes in the world being used on Middle East upstream projectsBiggest cranes in the world being usHEAVYWEIGHT DIVISION

Schlumberger reveals breakthrough tight gas management techniquesSchlumberger reveals breakthrough tight gas management techniques

THE TOUGH STUFF

How Qatar transformed the international energy landscape

CONTENTS

www.arabianoilandgas.com December 2009 Oil&Gas Middle East 1

DECEMBER 2009

20 SLAYING THE DRAGONDragon Oil is the current subject of a takeover bid from ENOC. How-ever, minority shareholders have spoken out against the offer.

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

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

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

52

REGULARS2 COMMENT

4 WEB HIGHLIGHTS

7 REGIONAL NEWS

65 PROJECTS

72 FACE TO FACE

30

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

42 DRILLING FORECASTRod Westwood provides a com-plete fi ve year forecast of drilling and workover projections for the Middle East and North Africa.

48 SHIPPING SHOWCASEBeluga CEO Niels Stolberg on how the project shipping business has fared through the economic crisis.

52 E&P INTERVIEWShell executive vice president of upstream activities talks about the company’s projects.

57 HEAVY LIFTINGOil & Gas Middle East takes a look at the heavy lift sec-tor and asks what the future holds.

62 ASK THE EXPERTAlan Roddis of AESSEAL reveals how to extend rotating equipment life.

57

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2 Oil&Gas Middle East December 2009 www.arabianoilandgas.com

COMMENT

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A report by a leading energy research company, featured in this edition, has said that drilling and workover

expenditure in the Middle East and North Africa (MENA) region has the potential to increase to US$27.9 billion per year by 2014.

The oilfield services market report 2010-2014, which can be found on page 42, should make for cheery reading for upstream service providers. It says that despite the global recession, expenditure is still likely to rise by around a third.

The report rightly highlights Iraq as a major growth area in the region as the country, fingers crossed, will soon enter a hectic activity period as it finally begins to ramp up production. The Gulf state could be producing around 3.9 million barrels of oil per day by 2014.

Much of this regional increase will stem from the re-invigoration of major producing nations, coupled with emerging countries looking to accelerate production for both domestic consumption and export.

Gas production will undergo the biggest transformation. Natural gas production

Gas is burning issueFocus on challenging gas projects for IPTC in Doha

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

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

As Qatar nears completion on many of its mega-projects the IPTC conference fl ies into Doha.

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

alone is expected to grow by 50% across the MENA region over the next five years. Last month Yemen made its first ever LNG export delivery to South Korea, and with Abu Dhabi’s mega sour gas EPC contracts out to tender, it is clear that gas will be taking a much more dominant role in the regional energy mix in the coming years.

This month sees Doha play host to the International Petroleum Technology Conference (IPTC), with an expected draw of over 3000 professionals. The programme will address upstream issues that chal-lenge industry specialists and manage-ment around the world, with a strong focus on the gas business.

To complement this major event, we met with Lee Ramsey, Schlumberger’s tight gas expert and manager of the Tight Gas Center of Excellence in Saudi Arabia, to get a flavour of his presentation to the IPTC (See page 25). The IPTC conference is taking place December 7- 9. Oil & Gas Middle East will see you there.

Daniel Canty, EditorE-mail: [email protected]

Gulf Drilling International. An ISO 9001, ISO 14001 and OHSAS 18001 certifi ed company Telephone: 00974 4637333 Fax: 0097 4637222 Visit: www.gdi.com.qa

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Onshore and Offshore


WEB HIGHLIGHTS

Getty Images

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ONLINE SPECIAL REPORT

The online home of:

Ten largest petrochemical fi rmsArabianOilandGas.com brings you a list of the top ten largest petrochemical companies in the world. It is highly likely that the CEO’s of most petrochemical companies will be pleased to see the back of 2009. This year has been a true annus horribilis for a sector ravaged by a huge drop in demand for its products due to the global economic slow-down that has happened over the past 12 months. However, most of the big players are still making a profit, just not as big as the profits they made over the past two or three boom years.

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

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

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

Iraq’s Oil Minister has said he expects fierce competi-tion between international oil companies in the second round of bidding on the country’s oil fields. ArabianOilandGas.com

BREAKING NEWS AND VIEWS FIRST

MAINTENANCE PLANNED FOR RAS TANURA

UAE TO GO AHEAD WITH PAKISTAN REFINERY

EPC RESOURCE CHALLENGE STILL EVIDENT

IRAQ EXPECTS TOUGH AUCTION IN ROUND TWO

1 Exclusive: ENOC CEO on Dragon Oil deal

2 Dragon shareholders question ENOC offer price

3 Noster issues Dragon Oil statement

4 Maintenance to force Ras Tanura shutdown

5 Technip scoops $408 million Gasco contract

SPOT POLL

65 % Yes

25 % No

10 % Not sure

MOST POPULAR NEWS

DO YOU THINK DRAGON OIL IS BEING UNDERVALUED?

READ THE INDUSTRY’S VIEWS

Why you don’t want to work for Ajman PetroleumArabianOilandGas.com

LATEST FROM THE BLOG

Getty Images

Better stimulation in tight gas An operator in Oman needed to reverse a production decline from a field where the reservoir rock is among the hardest in the world. It has a high stress fracture gradient and a Young’s modulus that is twice the U.S. hard rock range. At a depth of 16,000 ft, temperatures are as high as 320 degF, with hydrogen sulfide (H2S) present.

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KSA to build giant gas plantSaudi Arabia is finalising plans to build the Kingdom’s largest ever gas plant to supply utilities and other industries, Saudi Ara-mco’s chief executive, Khalid al-Falih has announced.

The new gas plant is expected to process more than 1.8 billion cubic feet per day (cfd) of gas, Falih told Arabian-OilandGas.com from the side-lines of the launch of the US$10 billion Petro Rabigh plant, the largest integrated oil refinery and petrochemical production facility ever built at one time.

“This plant (Wasit) will be the biggest gas plant we have ever built and will process all offshore non associated dry gas which will go a long way to meeting rising demand for utili-ties and industries.”

The Wasit Gas Development programme at Moneefa is split into several projects that include building gas processing facili-ties, two offshore gas platforms, one tie-in platform, subsea power and communication links and pipelines.

CONTRACT WINSNC-Lavalin announced in Sep-tember that it has been awarded

Wasit Gas Development project will include Saudi Arabia’s largest production plant

a front-end engineering (FEED) and project management serv-ices contract by Saudi Aramco for the Wasit Gas Development Program.

The Wasit Gas Development Program will provide for the production and processing of up to 2.5 billion standard cubic feet per day (SCFD) of gas from the Aribiyah and Hasbah offshore non-associated sour gas fields, to meet the future demands of the Kingdom of Saudi Arabia. SNC Lavalin’s contract is fixed for five years.

“SNC-Lavalin is very pleased with this contract award, which both reinforces our long-term relationship with Saudi Aramco

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

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

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

LEAD NEWS

$10.3Billion The Petro Rabigh integrated refi n-ery is estimated to have cost part-ners Saudi Aramco and Sumitomo Chemical close to US$10.3 billion. Khalid Al-Falih, CEO of Saudi Aramco.

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


REGIONAL NEWS

Halliburton wins Ghawar dealUS giant wins five-year turnkey drilling contract in KSA’s South Ghawar field

“This award builds on the success we delivered on the Khurais mega-project, reflecting our leading technol-ogies and solid performance,” added Gasser Badrashini, Halli-burton’s Middle East and North Africa regional vice president.

In November Halliburton announced a 2009 fourth quarter dividend of nine cents ($0.09) a share on the compa-ny’s common stock payable in December.

ABB secures UAE pipeline electronics contract worth $21m ABB has won a US$21 mil-lion deal with EPC contractor, China Petroleum Engineering & Construction Corporation (CPECC) to design and supply an integrated electrical system for the billion dollar Abu Dhabi Crude Oil Pipeline (ADCOP) project in the UAE.

The pipeline has a length of 400km and a diameter of 48 inches. It will transport an esti-mated 1.5 million barrels of crude oil per day. Construction work on the project began back in 2008 and it is hoped it will be completely finished in August 2011, the company reports. ABB will provide an integrated electrical system for the 400km pipeline

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

“As a proven performer in the oil and gas industry, ABB is proud to be a part of this land-mark project in the UAE,” said Bjarte Pedersen head of the Process Automation Division in the Middle East and Africa for Swiss firm ABB.

“Our comprehensive auto-mation system will help the owner, IPIC, get the maximum value out of their control system investment, while providing a secure evolution path forward to help them maintain their competitiveness and reach their productivity targets in the years to come,” he added.

50%The Ghawar Field is responsible for around half of all Saudi Aramco’s daily oil production.

Source: Energy Information Administraion

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

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

rigs, directional and hori-zontal drilling, logging while drilling, cementing, mud engi-neering, wireline logging, completion, perforating, and other well construction activi-ties, including engineering and management of the entire drilling operations.

“Our selection by Saudi Aramco for yet another project of this magnitude demonstrates its continued confidence in our ability to successfully execute complex and challenging oper-ations. This contract award includes a full range of Hallibur-ton’s integrated technologies and services and provides a platform for future successes,” Ahmed Lotfy, Halliburton’s Eastern Hemisphere president, reported in a company state-ment to the press.

Getty Images

Getty Images

REGIONAL NEWS


EPC resource issuesBottlenecks in quality resources caused by region’s megaprojectsObtaining quality resources for some projects is still a major is-sue in the Middle East, accord-ing to the country manager of Qatar Kentz.

“We still see some bottle-necks in quality resources for completing projects, mega projects still have the best resources but we see some easing in this area as projects complete,” Martin Walsh revealed, speaking exclusively to ArabianOilandGas.com.

He added that the firm is now hopeful for the year ahead. “With our current backlog we are well positioned for 2010 and with new mega projects moving again we foresee good potential in all our Gulf operating units,” said Walsh.

Qatar Kentz recently won an engineering, procurement

and construction contract for a receiving and loading facility in Ras Laffan Industrial City.

“The project incorporates pipeline work within Ras Laffan, crossing several independent operator areas.

The coordination and inter-face management within Ras Laffan will be one of the major

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

HIGHLIGHTS

Oman Oil Company (OOC) is set to sign an agreement for the acquisition of a higher stake in Bahrat Oman Refi neries Limited (BORL), the Oman Daily Observer has reported. BORL is currently developing a refi nery complex in India at a cost of US$ 2 billion. The two fi rms will be working together on the six million metric tonnes per annum grass roots refi nery at Bina in Madhya Pradesh. The de-velopment includes a crude supply system consisting of a single point mooring system, a crude oil storage terminal and a 935km long cross country crude pipeline. The agree-ment will reportedly increase OOC’s stake in BORL from the current 2% up to 26%. Production on the Bina refi nery is set to be completed soon, with production slated for April 2010.

Abu Dhabi’s IPIC will play a key role in building a US$5 billion oil refi nery on the Pakistani coast, Pa-kistani offi cials have confi rmed. The refi nery will be built in the province of Baluchistan, in south-western Pakistan, according to the Saudi Press Agency. “The major conten-tious issues have been resolved and the project will soon be kicked off,” said a senior offi cial of Pakistan’s Ministry of Petroleum and Natural Resources.

focus areas for the project team,” said Walsh.

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

GE wins multi-million dollar Qatargas contractGE Oil & Gas has been awarded a multi-million dollar, six-year contract to supply Qatargas Operating Company Ltd (Qa-targas) with advanced pipeline integrity management services for the company’s liquefied nat-ural gas (LNG) network in the Gulf state.

The Florence-based oilfield services provider said that the pipelines services contract, to be carried out by the GE’s PII Pipeline Solutions busi-ness, includes the building and deployment of a custom pipeline integrity management system (PIMS) as well as the

company providing Qatargas with the associated integrity management (IM) elements, including manuals and proce-dures covering in-line inspec-tion (ILI), software automation and engineering assessments.

“While Qatargas already has a strong pipeline integrity management programme in place, the company continually works to adopt industry best practices, including the imple-mentation of GE’s comprehen-sive PIMS programme,” said Sheikh Ahmed Al Thani, chief operating officer, Engineering & Ventures for Qatargas.

The statement from GE Oil & Gas added that while the earlier inspection deals covered two LNG pipelines, the new integrity management contract will cover additional offshore product lines that will rely significantly on PII Pipe-line Solutions’ extensive ‘wet gas’ experience.

Meanwhile, separate to the pipeline services contract, GE Oil & Gas’ global services business previously signed an 18-year customer service agreement to support Qatargas operations at the Ras Laffan receiving site.

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

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

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

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

REGIONAL NEWS


Baker Hughes is bullish

Spending in the Middle East is set to rise next year, according to Baker Hughes, which released its third quarter results in No-vember. The firm described its international Q3 figures as disap-pointing, but believes that cus-tomer spending has now reached its low point.

Baker Hughes Incorporated announced that net income for the third quarter 2009 was $55 million, compared to $429 million for same period 2008.

Revenue for the third quarter 2009 was $2.23 billion, down 26% compared to $3.01 billion for the third quarter 2008 and down 4% compared to $2.34 billion for the second quarter 2009.

“Third quarter North America operating margins rebounded from the low set in the second quarter of 2009. Aggressive cost cutting in the first half of 2009

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

enabled us to absorb additional price decreases and improve profitability on modest activity increases,” explained Chad Deaton, Baker Hughes chairman, president and CEO.

“International results were disappointing with revenue less than expected and price discounting greater than expected,” he added.

Deaton cited a gradually improving North American market as an optimistic indicator,

Chad Deaton, chairman, president and chief executive offi cer of Baker Hughes with Yusuf Omair Bin Yusuf, chairman of ADNOC.

EVENTS

IPTC 20097-9 DecemberDoha, Qatar

IRAQ PETROLEUM 20097-9 DecemberConference - London, UK

MENA NATURAL GAS DISTRIBUTION SUMMIT 20098-10 December 2009Conference - Cairo, Egypt

15TH MAINTENANCE MANAGEMENT CONFERENCE13-17 December 2009Conference - Dubai, UAE

WORLD FUTURE ENERGY SUMMIT18-21 January, Abu Dhabi, UAE

SAUDI OIL AND GAS 201017 - 20 JanuaryConference & Exhibition - Riyadh, Saudi Arabia

OIL & GAS MAINTENANCE TECHNOLOGY / PIPELINE REHABILIATION & MAINTENANCE 201018-20 January 2010Exhibition - Manama, Bahrain

INTERSECJanuary 17 – 19, 2010, Exhibition & Conference - Dubai, UAE

OILTECH BAKU 201023 - 24 February 2010Conference - Baku, Azerbaijan

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

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

Source: Baker Hughes.

and said that global markets should be improving soon. “Internationally, we believe that customer spending reached its low point this quarter and that forecasts for increasing economic growth, particularly in China, India and the Middle East, combined with modest spare production capacity are supporting higher oil prices and laying the foundation for increased spending in 2010.”

In August this year Baker Hughes splashed out $5.5 billion on pressure pumping specialist BJ Services. Deaton said the trans-action is expected to complete in Q1 2010.

“With the pending addition of BJ Services, we expect to signifi-cantly advance our competitive-ness as we improve our customer intimacy, operational effective-ness, and product portfolio.”


REGIONAL NEWS

MB Petroleum rig dealWorkover rig provision for Barik sandstone testing operations

Abu Dhabi fi rm tops Platts EMEA tableMajor oil companies maintained their stronghold as the world’s top-performing energy busi-nesses, according to the 2009 Platts Top 250 Global Energy Company Rankings, announced in Singapore last month.

ExxonMobil retained the number one spot in the Platts Top 250 for the fifth consecu-tive year. In second and third place were Chevron and Shell, followed by BP and Total in fourth and fifth, respectively. Altogether, integrated oil and gas companies (IOGs) carved out the 13 top spots in the 2009 Platts rankings, and took 30 of the top 50 places.

There was cause for special celebration for Abu Dhabi National Energy company (TAQA), which was named as the fastest growing EMEA region energy company, with a compound growth rate of 85%. The company came third overall in the global survey, pipped by two US firms in the list of the world’s 50 fastest-growing energy companies.

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

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

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

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but it was neither logged nor tested at the time. Additional tests will also be performed on the Lower Al Bashir layer.

Based on data from previous operators, the Lower Al Bashir layer could contain some 8 to 10 million barrels of recoverable oil. Data obtained while drilling suggest that the Barik sand-stone is considerably thicker than the Lower Al Bashir layer. If the testing of the Barik sand-stone is successful, it could have an important impact on the reserve potential of the Farha South structure.

“We are delighted with the results so far, and have high expectations for even better results from the upcoming tests,” Tethys’ managing director Magnus Nordin told Oil & Gas Middle East.

Tethys has a 50% interest in the licenses covering Blocks 3 and 4. Consolidated Contractors Energy Development (Oman) Ltd holds the remaining 50%.

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REGIONAL NEWS

Chevron’s Wafra steamfl ood joyPilot project paves way to realise billions of barrels of oil from carbonate reservoirsChevron has announced the suc-cessful start up of its large scale pilot (LSP) steamflood project at the Wafra field in the onshore partitioned neutral zone (PNZ) in Kuwait.

The US $340 million LSP is the final test in a ten year staged assessment by SAC to determine the technical and economic viability of thermal recovery projects in the Eocene heavy oil carbonate reservoir.

“Chevron is applying new technologies to free-up in commercial quantities the poten-tial of the First Eocene carbonate

reservoir. It is a potential in the onshore PNZ and elsewhere measured in billions of barrels of new energy resources,” George Kirkland, executive vice president for global upstream and gas, Chevron, said.

The three year project could potentially lead to a full-field steamflooding of the reser-voir, which would mark the first commercial application of a conventional steamflood in a carbonate reservoir anywhere in the world.

“We bring four decades of experience in enhanced oil recovery to this project and Ahmed Al-Omer, Saudi Arabian Chevron.

Dubai nets offshore fl eet deal

Drydocks World has signed a strategic alliance agreement with ADNATCO-NGSCO, the shipping arm of the ADNOC group of companies.

The agreement was signed during a ceremony held in Dubai by ADNATCO general manager Ali Obaid Al-Yabhouni and Drydocks World execu-tive vice chairman and regional CEO, Hamed Bin Lahej. ‘’This is an important agreement that

cements the close working rela-tionship between ADNATCO and Drydocks World,” Al-Yab-houni said. “In recent years, our vessels have used Drydocks World’s world-class facility in Dubai for major maintenance programs and the experience has encouraged us to formalise a closer working relationship.”

ADNATCO is currently expanding its fleet and will receive 15 new vessels in 2010.

National Oilwell Varco, the provider of major mechanical components for land and off-shore drilling rigs, announced in November that its board had approved a special one-time cash dividend of US $1.00 per share of common stock. The cash dividend will be paid in December.

The news came shortly after the firm had announced that it earned a net income of US $385 million in the third quarter 2009, compared to a Q2 income of US $220 million.

“This one-time special cash dividend and commencement of a regular quarterly dividend both reflect our commitment to enhancing stockholder value,”

Solid NOV performanceprompts special dividends

said Pete Miller, chairman, president and chief execu-tive officer of National Oilwell Varco (NOV).

As of September 30, 2009, the company’s cash and cash equivalents stood at a total of approximately US $3.2 billion.

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

are pleased with the progress we have made testing the tech-nology in the onshore PNZ’s First Eocene carbonate reser-voir,” said Ahmed Al-Omer, pres-ident of Saudi Arabian Chevron.

“It’s through our long-standing partnership with the Kingdom and our joint opera-torship with Kuwait Gulf Oil Company, that we are able to apply innovative technology expected to grow recoverable reserves in the onshore PNZ, and to create thousands of jobs in the process, as well as provide other benefits for the region,” Al-Omer concluded.

$7.3Billion Backlog for capital equipment orders for NOVs Rig Technology segment was $7.3 billion at September 30 2009.

Source: NOV Investor Relations.

REGIONAL NEWS


Dana Gas profi ts soar by 64%Revenue from hydrocarbon sales up 12%, buoyed by strong operations in EgyptDana Gas, the Middle East’s larg-est regional private sector natural gas company, has announced its financial results for the quarter ending September 30, 2009.

Revenue from the sale of hydrocarbons increased to US$97.7 million, with gross profit reaching $38.9 million.

These figures represent increases of 12% and 64% respec-tively, compared to the same period last year, mainly due to new condensate sales from the company’s operations in the Kurdistan Region of Iraq (which commenced in October 2008)

and continued strong operations in Egypt.

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

The CEO added that he expects to announce reserve addi-

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

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tions following an independent review, and operations in Iraq were currently continuing apace.

“In the Kurdistan region of Iraq, Dana Gas is continuing to

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

REGIONAL NEWS


Thierry Pilenko, Technip chairman & CEO.

Technip nets $415m gas dealAbu Dhabi Gas Industries (Gas-co) has awarded a US$415 mil-lion gas development contract to France’s Technip.

The contract is for engi-neering, procurement and commissioning (EPC) work on Gasco’s ‘Asab 3’ project, which will be completed in the third quarter of 2012, the firm said in a statement.

Gasco has already awarded about $9 billion for major gas projects in the Gulf emirate. Gasco is 68 per cent owned by the Abu Dhabi National Oil Company (Adnoc), with the rest held by Royal Dutch Shell, Total and Partex.

The ‘Asab 3’ project is being developed to process an addi-tional 150 million cubic feet per day of associated gas from the existing Asab, Shah and Sahil oil fields.

‘The Asab 3 project will facil-itate increased oil production from new ADCO facilities which are presently under develop-ment,’ Gasco said in a state-ment. ADCO is the Abu Dhabi Company for Onshore Oil Oper-ations, the onshore division of Adnoc.

French firm scoops Asab 3 project, the latest in ADNOC’s $9 billion project pipeline

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

SAUDI VENTURETechnip continued a strong November, announcing a tie-up with SaudConsult to set up a 50/50 joint venture company aimed at developing a new engi-neering centre in Saudi Arabia.

The planned Engineering Centre of Excellence will be located in Al Khobar, Saudi Arabia with broad execution capability and a focus on front end engineering design (FEED), detailed engineering, procure-ment and construction manage-ment (EPCM) services serving Saudi Arabia’s oil, gas, petro-chemical and other industries.

Thierry Pilenko, Technip chairman and CEO, stated: “Our partnership will give us the opportunity to develop a world-class engineering centre in Saudi Arabia, with a strong local content and a high inter-national profile. This move is in line with our Group’s strategy to increase proximity to the Middle East market through the development of local oper-ating centers.”

Eng. Dr. Tarek Shawaf, Saud-Consult chairman stated: “Our new joint venture with Technip will create an engineering power house unmatched in diversity, competency and without doubt, local depth and experience. Our vision for this joint venture is to be the engineers of choice in Saudi Arabia and the region.

Saudconsult takes special pride in developing Saudi engineering graduates who now have become leaders in the industry. Our new partnership will further enhance our endeavour to hire, train and retain young Saudi graduates and create an indigenous work force capable of contributing to the wealth and prosperity of our nation.”

Pending regulatory clear-ance and after completion of local incorporation processes,

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

the new company is expected to begin operations by mid 2010 with about 500 employees.

$9billionGASCO has signed contracts total-ling $9 billion for its Integrated Gas Development (IGD) project so far this year.

Source: ArabianOilandGas.com

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MENA NEWS

Yemen begins LNG exportsFirst cargo shipped to South Korea, country targets 6.7m tonnes LNG output per year

exported to both the Asian and Atlantic markets.

“Since Yemen’s gas poten-tial was discovered, Total has supported the country in devel-oping its gas industry and in becoming an LNG exporter,” declared Yves-Louis Darricar-rère, president of Total Explora-tion and Production.

Medgaz pipeline to start commissioning in 2010 Medgaz is expected to start commissioning the gas pipe-line linking Algeria to Spain in March 2010, according to Pedro Miro, president of Medgaz.

The commercial startup of the pipeline will be in June 2010, the Algerian daily El-khabar reported in November.

The pipeline is expected to transport 8 billion cubic metres per year of natural gas initially, and will eventually reach 16 billion cubic metres.

The total cost of the project is US$1.34bn. Algerian state controlled Sonatrach owns 36%

Saipem. Steel pipes were deliv-ered by Nippon Steel, and three compressor trains were supplied by Dresser-Rand.

Lloyd’s Register provided pipeline inspection and certifica-

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

320 kilometre gas pipeline from Maarib in eastern Yemen.

The plant has Total as the main shareholder with a 39.6% stake and is aiming to reach a total production capacity of 6.7 million tonnes of LNG a year.

Yemen is a poor country and a small oil producer. Last year Yemen produced less than 300 000 barrels per day of crude oil and production is decreasing by 5-6% a year.

The plant started produc-tion with the first train while the construction of the second train is being completed. Total production capacity will reach 6.7 millions tonnes of LNG per year (Mt/y). Following the three gas sales agreements signed in 2005 with Kogas, GDF-Suez and Total Gas & Power, LNG from Yemen LNG will be

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

of the project, Cepsa and Iber-drola from Spain both control 20%, Endesa controls 12% and Gas de France controls 12%.

In 2006, BP and Total with-drew from the project. Spain’s Gas Natural may become a partner of the project, taking a slice of Sonatrach’s shares.

The length of the onshore section of the pipeline is 547 kilometres, while the offshore section spans 210 kilometres. The Algerian onshore section of the pipeline was constructed by Spie Capag and the offshore section was constructed by

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

Yemeni President Ali Abdullah Saleh.

478.5Billion cubic metres of natural gas reserves held by Yemen - 1 January 2009 est.

Source: ArabianOilandGas.com

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

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NEWS ANALYSIS


NEWS ANALYSIS

Is ENOC slaying the Dragon?Confusion, frustration and anger reigned last month, as ENOC attempted to buy out the remaining shares of Dragon Oil it does not cur-rently own.

ENOC announced at the start of November that it had agreed a deal to acquire Dragon Oil in a US $1.15 bil-lion deal. Saeed Khoory, group chief executive of ENOC, revealed in a state-ment: “ENOC is delighted to have agreed to fully acquire Dragon Oil. This acquisition is an exciting development for ENOC and represents a major step in ENOC’s strategy of building a vertically integrated oil and gas group with a strong upstream position.”

Khoory also described in an exclusive interview with ArabianOilandGas.com the hopes his firm had for Dragon Oil. “Taking full ownership of Dragon Oil will increase the combined entity’s financial strength and execution capa-bility to develop the assets fur-ther. The focus will be to con-tinue to develop the operations in Turkmenistan,” Khoory told the website.

“The focus of Dragon Oil’s operations is Turkmenistan,

ENOC’s agreement to buy Dragon Oil at one point appeared to be a done deal, however, a shareholder fight back has put the acquisition in doubt

and we will continue to put efforts in developing the oper-ations there, as it has sizea-ble gas and oil resources and growth opportunities,” he added in the interview.

However, the confidence of Khoory that the deal was all but completed was met with a bar-rage of criticism from minority shareholders of Dragon Oil.

“ENOC made an offer on November 2 for all shares not owned by ENOC. The offer has yet to be voted on, and as it stands, does not reflect the true value of the company and

is certainly not acceptable to me. Many other sharehold-ers feel the same,” said Andy MacKay, a Dragon Oil minor-ity shareholder.

The concerns of MacKay were echoed by other share-holders. “Why did the com-pany fail to take advantage of once in a lifetime acquisition opportunities during the finan-cial crisis, a time during which it sat on nearly US$1 billion in cash?” Ross Evans asked.

“ENOC’s holding in the company means that the cash is worth nearly GBP2.50 a

share to them, so they are funding half the purchase of the company with money that should have been used for divi-dends or acquisitions, both of which would have significantly increased the share price,” he added.

Shortly after these and sev-eral more shareholders got in touch with ArabianOilandGas.com, Baillie Gifford & Co, the largest minority shareholder in Dragon Oil, announced it would be rejecting the offer, claiming it “materially understates” the value of the company.

Minority shareholders in London have reacted with anger at the offer of ENOC for Dragon Oil.

NEWS ANALYSIS


ENOC group CE Saeed Khoory

Richard Sneller, head of emerging markets equities at Baillie Gifford & Co, said: “We plan to reject the offer on behalf of our clients, whose holdings under our manage-ment currently amount to 4.2% of the issued share capital of the company, by voting against the scheme of arrangement and matters related to it.”

Another large minority shareholder soon followed suit, as London-based hedge fund manager Noster Capital also spoke out against the bid. “ENOC’s offer for the minor-

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ity interest it doesn’t already own in DGO is opportunistic

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

French investment firm Carmignac Gestion has since become the third institutional shareholder to reject the deal.

ENOC’s takeover offer will fail if holders of more than 12.125% of Dragon Oil shares reject the ENOC offer.

ENOC recently revealed it would not be increasing the offer of GBP4.55 per share, describing the offer as final. Share prices in Dragon are fall-ing fast; the price is down 5.1% since the first shareholder rejected the deal. Minority shareholders, now knowing a better offer will not be forth-coming, must attempt to cash out and run, or decide to stay and fight.

IRAQ ANALYSIS


NEWS ANALYSIS

IOCs warm to new deals

ExxonMobil and Shell recently triumphed over a LUKoil and ConocoPhillips consortium to be awarded Iraq’s 8.6 billion barrel West Qurna-1 project. Samuel Ciszuk, IHS Global Insight Mid-dle East energy analyst, takes a closer look at the deal.

Iraq’s huge 15-billion-barrel West Qurna reservoir complex has long been seen as one of the big prizes in the oil industry, with production being cheap and easy to develop and the possibility of more oil being discovered in deeper horizons thought to be rather high. The field, located in the prolific and relatively stable southern Basra governorate is currently producing 270 000 to 280 000 b/d, but will (according to earlier comments by the

Revised deals on tax and remuneration status in wake of Exxon and Shell success

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

The Iraqi Oil Ministry will have to rapidly expand its pipeline network.

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

winning consortium), be devel-oped to a production plateau of 2.1 million b/d, within the Oil Ministry’s stipulated seven-year development and production ramp-up period that is planned.

ExxonMobil and Shell’s offer (ExxonMobil 80%, Shell 20%) is, however, somewhat lower then their initial bid to raise produc-tion to 2.325 million b/d in the unsuccessful first licensing round, although the companies at that point were unwilling to agree to the Oil Ministry’s low US$1.9/b remuneration fee for the increment, offering a US$4/b bid themselves.

LUKoil will be particularly disappointed to lose out, having done work and studies on the West Qurna field complex and

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

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

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NEWS ANALYSIS


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

round, where interest and competition for those fields not laying in contested northern areas now looks like it could be quite high.

The agreement on these three crucial fields in Iraq will significantly strengthen the

government, but will also draw the ire of its hardest opponents, both in parliament and among insurgents, raising the risk that the oil industry will be increas-ingly targeted during the run-up to the election. The fact that several years of failed attempts

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

Samuel Ciszuk, IHS Global Insight

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

Samuel Ciszuk is the Middle East energy analyst for IHS Global Insight.

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TIGHT GAS SPECIAL REPORT


TIGHT TIMESA

round the world there are trillions of cubic feet of gas that could be used to supplement the

world’s energy supplies. How-ever, much of this abundant resource is difficult to produce because the gas is held in tight reservoirs where the perme-ability of the reservoir rocks is extremely low.

Producing tight gas is chal-lenging, yet considering the quantities available and the long-term producability of this resource, such non-conventional gas is now being regarded as a significant energy resource for the future. Tight gas could help to address the predicted deficit between energy supplies and demand in the coming decades.

To understand the economic viability of the complex, uncon-ventional gas developments of tomorrow, Middle East opera-tors must focus on new solu-tions today.

A concerted technological effort to better understand tight gas resource characteristics and to develop solid engineer-ing approaches is necessary to deliver significant production increases.

Schlumberger has risen to the challenge, and through real collaborative efforts with Saudi Aramco and its international oil company partnerships, its Tight Gas Center of Excellence in Dhahran, is delivering bona fide leaps in reservoir under-standing.

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

THE BASICSThe permeability of rock for-mations is essentially what gov-erns how easily gas held within will flow. High permeability car-bonate formations have higher porosity and often have natural fractures through which gas will easily flow, and are typically pro-lific producers without the need for technically sophisticated approaches.

“In the Middle East people are accustomed to working with

carbonates which have a very high permeability that will pro-duce naturally or, if the wellbore is damaged, a matrix stimulation with a little bit of acid,” explains Ramsey. “However, tight gas fields (today Schlumberger has a working definition of 0.1 mil-lidarcy and below as tight gas), will usually not flow with a sim-ple perforation. It requires a much deeper understanding of the reservoir and accurately tai-lored solutions that fit, as well as specialist treatment fluids and techniques,” he adds.

“What we are advocating is that the decision of whether to use a well for production should not be made exclusively on initial flow appraisals. With improved understanding of the

With trillions of cubic feet of gas tied up in low permeability reservoirs, tight gas production has become the hot topic. Schlumberger’s Lee Ramsey talks to O&G ME

Seismic fi eld work being carried out by Saudi Aramco.



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

UNITS OF MEASUREMENTreservoir characterisation, bet-ter informed decisions could be made.”

Indeed, obtaining commer-cial flow rates is a crucial factor when drilling and completing tight gas wells. In the Middle East, tight gas wells are typi-cally deeper and hotter than other gas wells, making them more expensive to complete.

“On the surface of things it would seem simple to transfer the technology and knowledge from experiences in North America. However, because we can be working at depths of 18 000ft – 20 000ft and tempera-tures approaching 350 degrees Farenheit in Saudi Arabia, the wells in North America do not share the same high tempera-ture and high pressure charac-teristics, as they are typically between 6000ft and 12 000ft so we find that the toolbox is much smaller.”

This hostile environment becomes additionally challeng-ing when the highly specialist equipment needed is rarely the sort that sits in inventory. “These pieces of kit tend to have long lead times; a good example would be 15K pack-ers, sliding sleeves, upper and lower downhole comple-tion equipment, which are essentially made to order,” says Ramsey.

An additional benefit which has come from the concen-trated learning environment is that the research is highlighting cru-cial gaps in the

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

ACCESS POINTTo achieve optimum flow rates, options to drill vertical, horizon-tal, or multilateral wells must be considered alongside the optimum number of zones, or stages within a zone.

In tight gas wells, production from a single zone is often less than expected. Especially when you have been used to working on prolific high permeability wells. To increase tight gas pro-duction, multiple zones in verti-cal wells or multiple stage frac-ture treatments within a zone on a

horizontal well are required. In striving for maximum produc-tivity from a tight gas reser-voir, whether in new or existing wells, attaining that production level crucially depends on an appropriate open hole or cased hole strategy.

“Generally when we talk about perforating in tight gas fields we mean taking a shaped charge and going through the

well casing. Tight gas wells aren’t going to produce without a simple fracturing treatment. This is quite the opposite of typical Middle Eastern field experiences, where matrix acidizing yields good results.” To fully exploit tight gas operators need to

breakthrough that well bore damage and get a fracture of sig-

nificant length out into the reservoir.

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

MARGINAL ECONOMICSFor real results multiple zones and multiple stages are needed, as well as extremely detailed petrophysical and geomechanical analysis to make these profitable. That requires a real, genuine para-digm shift in thinking, says Ramsey. “Not only in terms of the clients, but also with the relevant ministries in terms of the rules and regulations – multiple zone projects require quite intricate approvals.”

Most of what the TGCoE is engaged in is as much research, meaning gaining a much better understanding about what is there through

exploration wells, as it is about production. “Res-

ervoir engineers can get very stressed out

on the economics,

“Today it is possible. It is challenging, but by building the expertise to tackle the challenges of the future we are unlocking valuable reserves” Lee Ramsey, Schlumberger

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



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

because we are working with a lot of exploration wells, which is expensive.”

But, for the time being, the upper management levels are willing to fund this research and gain that hugely valuable knowl-edge. “There is the chance they could pull the plug and wait for technology to move along five years, but the message we are hearing is that this is about really learning and understand-ing what our technology gaps are – so the gas price has not altered that desire,” he says.

According to Ramsey, IOC partners in Saudi Arabia have been working with production rates two or three times below economical expectations. “If a field is targeting 10 Million scfd a day, and production is falling short of 3 million scfd a day, then it’s time to look very closely at the problem, but that’s where we can help,” beams Ramsey.

The economic imperative is there, and it is encouraging to see that today’s bottom line isn’t holding back this essen-tial research. “The amount of reserves recoverable will be huge once we understand

where the sweet spots are. There are still a lot of challenges out there in terms of geophys-ics and geology and petrophys-ics and other domains, but we have some extremely encour-aging case studies from both North America and Saudi Ara-bia where production increases are not only encouraging, but profitable operations.”

RIGHT LOCATIONA great deal of the learning tak-ing place through the TGCoE will be applicable to many mar-

kets, both regionally and inter-nationally, but what was really exceptional, and made Saudi Arabia a great fit was a combi-nation of the potential, the activ-ity levels in the country, and particularly the level of collabo-ration between the companies involved, explains Ramsey.

“The importance of gas to regional economies has changed – so that is perhaps a game changer. Having been through the prolific gas wells, and then the deep tough stuff, I think the evolution in the Gulf region will follow the same pat-tern that the North American market has been through.”

The extent of the reserves that exist in Saudi Arabia’s tight gas fields simply can’t be ignored. And despite a bumpy 2009 for gas prices (though largely confined to a sickly North American market) the desire to push ahead with tight gas projects has not abated in Saudi Arabia, in fact, it is prov-

The drilling of multiple stage exploration wells is yielding encouraging results.

ing a powerful draw for new recruits, explains Ramsey.

“Firstly the domestic energy needs of GCC countries are pow-erful motivators to learn more about this type of resource. And because it is so important, and such a challenge, with a great opportunity, we are actually being approached by people who are ready for a new chal-lenge in their career, and this is where they want to be.”

In North America Shale gas, once a classic “non-conven-tional” resource are now becom-ing the “new conventional”.

Similarly with tight gas, peo-ple are now delivering such encouraging results that in certain circles it’s discussed as the new conventional. “That’s probably a bit of bravado and going a bit far,” laughs Ramsey. For tight gas specialists and the companies that master the know-how the future appears bright indeed.

“Today it is possible. It’s challenging, but by building the expertise to tackle the chal-lenges of the future we are unlocking valuable reserves,” concludes Ramsey.

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


GAS POWERQatar’s phenomenal gas projects have stunned the world with their speed and scope. As the country enters a new era of production we take stock of the nation today

Qatar is mainly known as a gas player, with its reserve base cen-tred on the offshore

North Fields which adjoin Iran’s South Pars complex. The country accelerated into world gas export market lead-ership in 2006 and now plans to increase LNG production to 77 million tonnes a year by early 2010 through a number of large-scale projects.

Regional exports through the Dolphin Energy pipeline are already feeding the UAE and Oman much needed gas. The pipeline can currently carry up to a maximum of 2 billion stand-

ard cubic feet a day (scf/day) of refined methane gas from Qatar. Its design capacity is 3.2 billion scf/day. Usage of the additional 1.2 billion scf/day capacity is subject to a future agreement between Dolphin Energy and the Qatari authorities, though this has not yet materialised.

Further new gas initiatives await a review of the country’s reservoirs following a morato-rium imposed in 2003 banning further development on the super-giant North Field.

The Qatargas joint ventures could quickly increase produc-tion capacity by about 12 million tonnes per year once a morato-

rium on new LNG projects on the North Field is lifted, Qatar-gas CEO Faisal Al-Suwaidi recently told reporters at the World Natural Gas conference in Buenos Aires.

Al-Suwaidi said the new capacity would come from removing bottlenecks in exist-ing LNG production trains. Qatar imposed the moratorium on new LNG projects at its giant North Field, reasoning it needed time to study and take stock of how the reservoir responded to higher production levels.

Qatar operates several joint ventures with international oil companies to produce LNG

under the Qatargas and Rasgas operating companies.

Qatar is the smallest oil pro-ducer in OPEC. Its proven oil reserves stand at around 15.2 billion barrels. The onshore Dukhan field, located along the west coast of the peninsula, is the country’s largest producing oil field.

Qatar also has six offshore fields: Bul Hanine, Maydan Mahzam, Id al-Shargi North Dome, al-Shaheen, al-Rayyan, and al-Khalij. Despite the coun-try’s significant oil production and reserves, oil accounts for less than 15% of its domestic energy consumption.

QATAR COUNTRY PROFILE


Qatar’s proven natural gas reserves stood at 910.5 trillion cubic feet (Tcf) as of January 2007, about 15% of total world reserves and the third-largest in the world behind Russia and Iran. Most of Qatar’s natural gas is located in the massive off-shore North Field, a geological extension of Iran’s South Pars field, which holds an additional 280 Tcf of recoverable natural gas reserves.

Qatar has focused on enhanced oil recovery (EOR) projects to extend the life of its oil fields, particularly at the onshore Dukhan field, and, through its partnership with Maersk Oil Qatar, a massive $6 billion investment to stem decline and boost output from the Al-Shaheen field. Most new

exploration and production (E&P) work is being carried out by international oil compa-nies in offshore areas through Production Sharing Contracts (PSC), including ExxonMobil, Chevron, and Total. While there is substantial E&P work under-way, there have not been any major oil discoveries in Qatar during the last decade.

Qatar Petroleum is actively pursuing a number of world-scale gas-to-liquids conver-sion projects for the produc-tion of synthetic fuels and base oil stocks. The projects are all integrated with offshore devel-opment to supply the large amounts of natural gas feed-stock needed for these projects.

As the focus shifts away from the mega-export projects which

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

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

• Proven oil reserves: 15.2 billion barrels

• Oil production: 1.1 million barrels per day

• Oil consumption: 99,000 barrels per day

• Crude oil distillation capacity: 200 000 barrels per day

• Major ports: Umm Said, Ras Laffan

• Major refineries: Umm Said (200 000 bpd capacity)

QUICK FACTS

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



QATAR PROJECT REVIEW

The finishing touches are being put on the Qatar Pearl GTL project, which will be the world’s largest gas to liquids plant, converting gas into 140 000 barrels per day of clean-burning liquid transport fuel and other products. The project will also produce 120 000 barrels of oil equivalent per day of natural gas liquids and ethane.

Shell’s Andy Brown, Pearl GTL managing director, explains how the Pearl gas to liquids plant is trans-forming the Ras Laffan landscape.

“Pearl GTL is an enormous complex of 20 kilometres by 10 kilo-metres. Offshore from the Pearl site is the North Field, it’s the largest gas reserve in the world; 900 trillion cubic feet of gas, and the Pearl GTL project has been allocated a block

QATAR PEARL GTL

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

The Dolphin project was the first cross-border gas processing plant and pipeline network to be built in the Middle East and became opera-tional back in July 2007.

The project was brought to frui-tion by a private company called Dolphin Energy, which is 51% owned by Mubadala, Abu Dhabi’s investment arm. Large international oil companies Total and Occidental each hold a minority stake in the development and brought technical abilities to the project.

The 364km pipeline runs from Ras Laffan on the upper tip of the Qatar peninsular, to Taweelah in Abu Dhabi, one of the Emirate’s primary electricity and desalination plants. Dolphin is now tasked with

DOLPHIN PIPELINE

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

DOLPHIN PIPELINE

QATAR’S MAJOR PROJECTS

in the North Field 24 kilometres long by 12 kilometres wide in which we are now drilling wells, that will produce gas which will come 60 kilometres through a pipeline to the Pearl GTL plant when we start up production on the project.”

Two of the world’s largest hydro-crackers are already in place in the plant, ready to turn the gas and oxygen mix into GTL products such as diesel fuels, lubricant oils, deter-gent feed stocks, and petrochemical feedstocks as well.

The original schedule has slipped, but construction is expected to be complete around the end of 2010 with project ramp-up then taking a further 12 months.

The Pearl GTL plant will process about 3 billion barrels-of-oil-equiv-

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

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

Workers examine two vessels before installation at the Pearl

GTL plant in Qatar.


QATAR PROJECT REVIEW

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The Al Shaheen Block 5 field, which sits just shy of 80 kilometres off the Qatar coast has seen oil production grow to over 300 000 barrels per day, and for a time was generating Qatar’s largest hydrocarbon revenue stream.

The Field Development Plan (FDP) signed in 2005, has positioned Maersk Oil Qatar at the heart of QP’s oil producing future. The exten-sion project, (2005 FDP), aims to increase production beyond the 330 000 bpd recorded in 2008, and includes an investment package estimated at US$6 billion, which covers EOR expenditure as well as infrastructure investment.

The 2005 FDP is a huge undertaking. The project encompasses the drilling of more than 160 production and water injection wells over a six year period. Fifteen new platforms were required, (several currently on barges inching their way towards Qatar’s waters from overseas international contractors).

These platforms are to be twinned with accommodation and production facilities and the whole project is to be interconnected by subsea pipelines.

“We are currently on schedule with the FDP which is a real achieve-ment considering the size and complexity of the FDP, with significant installations and hook-ups taking place, whilst maintaining high levels of production uptime,” revealed Saad Al-Mohannadi, deputy manag-ing director of Maersk Oil Qatar.

“We’re understandably pleased by the progress being made which is currently about 90% complete and of the cooperation with Qatar Petroleum, which has enabled such progress. 126 out of 169 planned long horizontal wells have been drilled within the FDP 2005; the drill-ing campaign is 75% complete,” he added.

AL SHAHEEN DEVELOPMENT PLANAL S

Maersk Oil Qatar’s JV project with Qatar Petroleum is a colossal offshore undertaking.



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Speaking to Oil & Gas Middle East from his Doha office earlier this year, Faisal Al-Suwaidi,

chairman and CEO of Qatar-gas was upbeat and excited about the roll out of Qatar’s LNG industry.

“This is a fast-growing sector, especially for the hot economies of the world. China and

FUELLING THE WORLDIndia will have to import large quantities of gas. There are two main reasons. Firstly, they need to introduce this as part of their energy mix. Secondly, if they are to meet their Kyoto commit-ment, they will need to rely more on natural gas to reduce their emissions,” says Al Suwaidi.

The CEO says he expects LNG consumption will con-

tinue to rise by 10% a year for the next decade. LNG is cheaper (per ther-mal unit) than oil too. So why isn’t the whole world switching to LNG? Al Suwaidi is pragmatic: “I think that you will need all types of fuel to sat-isfy world demand in the future. I’m not sure that it’s a ques-tion of competition

anymore; it’s a question of col-

laborating and making sure

that we produce enough energy types to satisfy demand. It’s more about working together.”

The fact that governments the world over are making it a key feature in their energy plans is evidence enough that nations have to look in different places to meet their energy demands.

By 2010 Qatargas will be exporting 42 million tonnes per annum to markets in three con-

tinents, up from the 10 million tonnes that it shipped last year.

Al Suwaidi explains how the market has evolved.

“The main production areas or reserves are in Russia, Qatar, Iran and Canada. Until recently this was a regional business - the country would send gas next door to another country, or somewhere in the region. But, thanks mainly to Qatar and its partners’ efforts, we have glo-balised the gas market.”

FIELD MANAGEMENT“We know there is plenty of reserve there. It’s not a question of reserves. The North Field is still at 900 TCF [trillion cubic feet - two TCF is defined as a giant field],” states Al Suwaidi.

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

To make sure that the profit and energy of Qatar’s gas fields is properly harnessed, QP, the parent organisation, took a mor-atorium on further development of the North Field in 2005 amid fears that too fast an expansion could jeopardise the future of the supply.

“You could ruin the field in 10 years or you could properly manage it and the reserves will

be there for the next 100 years. That is why QP brought a mor-atorium to take time out and study the field and make the right decision, says Al Suwaidi”.

Despite all of his weighty responsibilities, Suwaidi says his toughest job is keeping expectations in check. “Qatar-gas has more shareholders than other LNG companies, and 54 nationalities in our employment. So the most challenging thing is managing the expectations of so many shareholders and employ-ees of different backgrounds. But saying that, it’s very inter-esting, fulfilling work.”

Faisal Al Suwaidi, CEO of Qatargas

For the full interview with Faisal Al Suwaidi from April 2009 go to www.ArabianOilandGas.com

“You could ruin the fi eld in 10 years or you could properly manage it and the reserves will be there for the next 100 years. That is why QP brought a moratorium”



W ith years of success in the Qatar market, GE’s boldly brand-ed office building

in central Doha is home to the company’s wide range of businesses from energy, water technologies and security to aviation and healthcare across the Middle East. This flagship corporate facility is in addition to the major investment in a GE Oil & Gas service work-shop in Ras Laffan.

Since March 2007 the com-pany’s regional energy business has been under the stewardship of Mohammad Ayoub, regional general manager for GE Oil & Gas, and has delivered huge growth, helped along by the

QATAR IS HUB OF CHOICE

colossal gas projects for Qatar-gas and Ras Gas.

“Qatar has been a real suc-cess story for us. It’s become a benchmark within GE Oil & Gas and when we look at mov-ing into new areas we bench-mark that against the Qatar experience we have had.”

Despite the tight environ-ment in 2009, Ayoub says GE Oil & Gas has bucked the over-riding trends, and secured sub-stantial business growth.

“In 2009 business for new projects was almost 300% what we did in 2008, and for the over-all business group, including services, business was probably double, so it’s been a great year for us.”

GE Oil & Gas supplied the gas turbine-driven compres-sion strings with low emissions capability for much of the LNG refrigeration service, as well as the gas compression units along the Qatargas and Rasgas trains.

In September this year Qatar inaugurated Train 5 of the Qatar-gas II project, marking the half-way point for its giant gas export infrastructure plans. Much of the big ticket items surround-ing the Qataragas and Rasgas projects are in place today, but Ayoub says the business pipeline in Qatar is far from dry. “Now that the principal infrastructure is in place we are moving to the second phase of our opera-tions in Qatar,” explains Ayoub.

Qatar is home to GE Oil & Gas’ Middle Eastern HQ. Mohammad Ayoub, regional general manager explains how 2009 worked to Qatar’s advantage

“We have been very active part-ners on the major LNG projects going on here, mainly supply-ing gas compression units for the liquefaction trains, which are rated for an annual capac-ity of approximately 7.8 million tonnes. At the same time we built our Qatar service centre, which is now fully operational.”

The service centre is located in Ras Laffan, near the major receiving terminals for the gas produced at the giant North Field. When there is scheduled maintenance the service shop is nearby to minimise the down-time and ensure a quick inter-vention. In November it was announced that GE Oil & Gas’ PII Pipeline Solutions business

Installation of GE gas compression units for Qa-targas’ Train 1 LNG facility.



Mohammad Ayoub, regional general manager for GE Oil & Gas.

GE carrying out the modular exchange for Qatargas Train 1 LNG facility.

had been awarded a multi-mil-lion dollar, six-year contract to supply Qatargas with advanced pipeline integrity management services to enhance the moni-toring and maintenance of the company’s liquid natural gas (LNG) network. Under the agreement GE Oil & Gas will build and deploy a custom pipe-line integrity management sys-tem (PIMS) to drive Qatargas’ overall integrity management processes.

In addition to the mainte-nance and service contracts GE has in place, the focus in Qatar will be shifting to the domestic infrastructure, explains Ayoub. “A good example of that is the Barzan gas processing project.”

The initial phase of the Bar-zan project will supply gas to meet Qatar’s infrastructure, industry growth and desali-nation demands. In February 2007 Qatar Petroleum and Exx-onMobil agreed to form a joint venture to oversee the project development. According to Exxon figures, when fully oper-ational, Barzan and Al Khaleej Gas (AKG) projects will pro-duce almost 3 billion cubic feet per day of North Field natural

gas to meet Qatar’s domestic gas needs.

Despite project revisions in Qatar, Ayoub says that the state energy companies have been quite shrewd operators through the past year.

“In Qatar, the crisis had cer-tain advantages. There were too many projects being executed at the same time, and the oppor-tunity to re-prioritise these was a timely one. Obviously Qatar stayed very active, and compe-tition has become intense, but Qatar is playing that fact to its own advantage.”

Whilst the focus of the projects in Qatar is shifting to domestic infrastructure, Ayoub says other regional centres may dominate the GE project pipe-line in the years ahead.

“Abu Dhabi has been very active – in fact the most active market in the Middle East in the last 12 months. The Integrated Gas Development network mega-project is huge, and there is the Shah Sour Gas project. That said, we see a lot of poten-tial in Saudi Arabia, the United Arab Emirates and Kuwait, so as a regional hub Qatar is still a great fit for us.”

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A l Shaheen Well Serv-ices was established in June 2008 as a joint venture company be-

tween Qatar Petroleum and Weatherford, with the mission to provide a full range of oilwell services and supply of equip-ment at offshore and onshore locations of QP, its subsidiaries and joint ventures.

The JV has initially focused on directional drilling, tubular running, drilling tools and wire-line services, both open and cased-hole, though is constantly rolling out Weatherford’s latest technology solutions.

Mohamed Al-Sayed, chief executive officer of Al Shaheen Well Services spoke to Oil & Gas Middle East from the com-pany’s flagship offices in Doha, and says his primary mission is to deliver world-class technol-ogy solutions to local operators.

“Although we are a relatively new entity as a brand, the JV company bought out Weather-ford Qatar so the infrastructure, technology portfolio and serv-ice contracts were already in place. We have since expanded that offering and will soon include training and a wider array of services than was origi-nally available here in Qatar,” explains Al-Sayed.

The company launched just as the effects of the global eco-nomic crisis wrought havoc on energy markets, with oil tum-bling and rig counts decimated across the Gulf region.

“Of course, launching at that time impacted our busi-

AL SHAHEEN TAKES FLIGHTness plans and our projections. Originally we were looking at a market accommodating 32 rigs, and that shrunk very quickly to around 18 rigs. However, our market share did not shrink. By 2010 and 2011 we anticipate the Qatar domestic market to be back at its original size.”

Al-Sayed says that workover and maintenance related busi-ness was hit hardest across the whole national market, but adds each Middle Eastern mar-ket has its own dynamics. “The Qatari market has a lot of opera-tors and a lot of wells engaged in some of the most challenging drilling operations anywhere. Qatar remains a very attractive market because it is not all just about oil. The gas market is far more stable largely because the projects and sales contracts are long-term ventures.”

In spite of the downturn in rig utilisation, Al-Sayed says the company managed to grow its operations. “The pedigree that the company has inherited from the Weatherford Qatar opera-tions and the cutting edge tech-nology solutions we can bring to the local market has enhanced our activity in Qatar. We are already one of the major service providers in the domestic mar-ket and have managed to grow market share by working with all of the major QP partners, including Maersk Oil Qatar, Total and Oxy.”

The company’s ambition is to capture more of the value-add services for the indigenous Qatari market, and has recently

QP joint venture with Weatherford targets Qatari well services business

Al Shaheen Well Services can tap into the global resources of Weatherford.



The Al Shaheen Well Services expert explains the Compact Micro Imager tool utility to visitors at the Technical Day.

Mohamed Al-Sayed, CEO.

hosted a technology showcase day in Doha, to build awareness of its full portfolio.

“Our technologies can help meet our clients’ objectives at enhancing production and recovery by optimising pro-duction in Qatar’s maturing oil fields and exploiting the vast natural gas resources of Qatar’s North Field. This is why it was important to share this technol-ogy with our partners through such events,” says al-Sayed.

In addition to building the domestic market capabilities, Al-Sayed says it is important that the company plays a role in technology and knowledge transfer to local employees.

“We are planning to recruit a lot more Qatari’s so we are being very active in working with universities and recruit-ment events. Ideally we would to see Qatari’s in place as the backbone of the company. This is not an overnight process, but we hope that in the coming years we will attract a lot of local talent to the business.

To augment that proc-ess, and encourage a skills and knowledge based genera-tion of well service experts, Al

Shaheen Well Services is work-ing on a new training centre, the first of its kind in Qatar, to teach drilling support and well support services. “The centre will be made available to all of the companies in Qatar. It will have a full range of simulators, and will be unique because of its proximity to much of the drilling and workover activity, so it will enable students to go and learn

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in working environments too,” says Al-Sayed.

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

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DRILLING & WORKOVERSPECIAL REPORT : MIDDLE EAST 5-YEAR FORECAST

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

MENA DRILLING REPORT


December 2009 Oil&Gas Middle East 43

Exploring MENA drilling and workover potential to 2014Rod Westwood, Senior Analyst, Douglas-Westwood Limited

W ith two thirds of global oil reserves and an estimated 45% of the world’s

natural gas reserves, the Middle East & North Africa (MENA) region is rightly re-garded as the world’s most in-fluential oil and gas province. In this article the author dis-cusses the market for drilling and workover operations in the region over the 5-year pe-riod to 2014.

ONSHORE OIL PRODUCTIONIn 2009, MENA produced circa 21 million bpd of onshore oil and accounted for 40% of global production – although this is far below the region’s production capability and a reduction on 2008 levels. OPEC’s desire to influence, stabilise and increase oil pricing – in tandem with a reduction in exploration incen-tives reduced production by an estimated 11.9%.

As MENA production con-tinues to increase over the com-ing years, we estimate that by 2015 the region will have an onshore crude output of around 27 million bpd (a 28% increase over 2009 production levels). At this time, the region will rep-resent an estimated 45% of glo-bal onshore oil production. Evi-dently, the MENA region plays a highly influential role in global oil supply and disruption (both planned and unplanned). It can therefore severely influence the global demand/supply balance and oil prices worldwide.

It is anticipated that Iraq will be a prime onshore growth country; in 2000, Iraqi oil pro-duction was the third high-

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

“Growth has the potential to be swift throughout 2010 and we believe that spending could grow to reach $27.9 billion per annum by 2014” Rod Westwood, Douglas-Westwood

augmentation in production lev-els. Hence, by 2015, Iraq has the potential to succeed both Iran and Kuwait to become the second largest MENA pro-ducer at 4.3 million bpd – 16% of total MENA onshore output at that time.

In 2009, the North African states of Algeria, Libya and Egypt accounted for around 18% of MENA onshore oil pro-duction. However, maturing fields in Algeria and Libya cou-pled with the revitalisation of

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

OFFSHORE OIL PRODUCTIONMENA offshore oil production is focused on two key areas; the Persian Gulf states of Saudi Ara-bia, Qatar, UAE and Iran in the Middle East and the Mediter-ranean states of Algeria, Egypt and Libya in North Africa.

At present, the region does not hold the same influence over the offshore oil industry, although 2009 production still accounted for 23% of the global total at an estimated 6.5 million bpd (equivalent to Saudi Ara-bia’s onshore output). The eco-nomic downturn and OPEC’s influence on oil supply drove a

Douglas-Westwood Limited is an independent company that carries out business research for the international energy industries. Its market analysis, surveys and forecasts are used by many of the world’s major energy companies, the leading industry contractors and manufacturing companies.


www.arabianoilandgas.com

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



7.5% decrease in offshore oil production between 2008 and 2009, although recovery is expected to be swift given sta-bilised oil pricing and recov-ery from the global recession. By 2015, total production will have grown to reach an esti-mated 9.3 million barrels of oil per day, at which point offshore territories will be responsible for more than a quarter of total oil production.

Offshore, the majority of MENA oil production is accounted for by five countries – Saudi Arabia, UAE, Qatar, Iran and Egypt – countries that together produced 95% of the region’s oil offshore in 2009. Kuwait, Libya and Oman have minor production capabilities which are extremely limited. They are unlikely to impact sig-nificantly on future investment. Algeria, Iraq, Syria and Yemen have no offshore production at all. Heavily-developed Egypt

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

GAS MARKETSHistorically the MENA region has focused on the crude oil industry and, whilst it does not dominate world gas markets, it is still a significant contributor to global output. In 2009, the region accounted for just under 18% of global gas production.

Given its large gas reserves, the MENA region has the poten-tial to dramatically increase its gas production. The continued development of LNG and GTL technology will enable MENA countries to export gas and gas-derived products to new mar-kets worldwide such as China. In 2008, MENA exported 168 billion cubic metres of gas, 56% of which was transported using LNG technology.

Qatar is currently the larg-est LNG exporter in the world and is undergoing a signifi-cant expansion of its Qatargas and Rasgas facilities. By 2011, Qatar will be capable of export-ing 77 million metric tonnes per year of LNG, accounting for approximately 27% of global liq-uefaction capacity in that year.

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

THE AUTHOR:ROD WESTWOOD

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

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



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

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

we believe that spending could grow to reach $27.9 billion per annum by 2014 based on expec-tations of oil price recovery and increased capital expenditure budgets, particularly offshore.

The combination of OPEC production cuts and the impact

remedial operations. Growth in onshore drilling-related oilfield services will therefore be cost-driven over the forecast period.

Saudi Arabia is responsi-ble for approximately 18% of onshore drilling expenditure

at present within the MENA region – however, we expect this to decrease to 17% by 2014 when Saudi Arabia will be suc-ceeded by Oman. Over the next five years, growth in off-shore drilling expenditure has the potential to average 11.8% per annum. Iran and KSA will be responsible for a large por-tion of this given, for the former nation, the development and production of offshore gas in the South Pars field.

The economic climate has had less of an effect on the workover markets, given the relative low cost of interven-tion operations and the sig-nificant benefits gained. Most commonly, full workover rigs are not required and less costly wireline or coiled tubing units are used as deployment method for downhole tools and pumping. Oman and Saudi Ara-bia together represent the larg-est expenditures on workover operations onshore, given the maturity and significant well-stocks contained within these nations.

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

“The impact of decentivised operator spending and OPEC production cuts saw expenditure decrease by an estimated 2.2% overall in 2009” Rod Westwood, Douglas-Westwood

of reduced oil prices on opera-tor exploration plans caused an inevitable dip in drilling activity between 2008 and 2009 – an esti-mated decrease of 6.9% onshore and 12% offshore (where costs are far higher, particularly in

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

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



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

of many onshore basins. Much of the growth will be driven by increased drilling in Iraq which is seeing a revitalisation of its oil and gas industry after several years of decline. Gas produc-tion in Iran is another important growth market due to the devel-opment of the South Pars field.

Onshore markets have dom-inated MENA drilling expendi-ture historically, although it is expected that given increased focus on the offshore environ-ment will see expenditure on grow and the gap will narrow. Offshore and onshore drilling will be almost equal by 2014 whilst larger, more mature onshore wellstocks requir-ing high volumes of workover activity will maintain onshore expenditure throughout the period and beyond. In 2008, MENA exported 168 billion cubic metres of gas, 56% as LNG.

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


UPSTREAM PROJECT CARGO

SMOOTH SAILING

Leaders in Fluid Engineering


Beluga Shipping handles outsized project cargo loads for the upstream oil and gas industry.

SEISMIC VESSELS


The shipping industry has taken a battering over the past few months, but with the worst of the financial storm braved, is there nothing but clear seas ahead? Oil and Gas Middle East asks Niels Stolberg, president and CEO of Beluga Shipping

The shipping industry has been hit by the econom-ic recession in different ways. The conventional

container shipping sector has taken a large hit during the troubled times. However niche markets such as heavy lifting and project cargo tend to fare better.

“Project cargo in general is a stable and slowly reacting mar-ket. However, container ship-ping has been hit hard since it is largely dependent on consum-ers’ behaviour. Project cargo can rely on financially safe invest-ments and long-term contracts,” reveals Niels Stolberg, president and CEO of Beluga Shipping.

There has been speculation that the current climate would result in project cargo shipping companies facing an oversup-ply of tonnage, partly due to the increase in the global fleet over the past few years. Stolberg believes this could be an issue for the sector in general, but one Beluga has covered.

“The global fleet has largely increased in number over the past few years but Beluga pro-vides a young, modern and

flexible fleet divided into three types, so we can always offer the client a perfectly suited vessel,” he states.

“According to the Institute of Shipping Economics and Logis-tics, the super heavy lift market segment in particular - where highest tonnage and crane capacities are necessary - will be stable for the next ten years or even beyond. This reflects Beluga’s core business; we fol-low the clear direction of super heavy lift, where only a few com-panies can offer what is required by the customers.”

This oversupply of tonnage, together with the increase in size of the global fleet, has had a major impact on rates within the industry.

“There is a massive slump in the project and heavy lift seg-ment below 200 tonnes single weight modules (general cargo and bulk), with rates dropping even to 50% of their previous level,” explains Stolberg.

“For the sector covering oil and gas cargo, typically above 300 tonnes, rates have become stable and in the super heavy lift sector rates are very attractive





and there are great opportuni-ties to be had,” he adds.

Due to the drop in oil prices, shipping companies have ben-efited from a drop in bunker fuel costs. “We have saved some costs due to the price reduction, but we have also saved bunker costs due to sailing efficient routes such as the Northern Sea Route and the Northeast-Passage which we did in the summer of 2009 with the MV Beluga Fraternity and the MV Beluga Foresight – these ves-sels saved about US $100,000 each on bunker costs by trans-iting the Arctic Ocean instead of taking the long way around through the Suez Canal,” com-ments Stolberg.

The Suez Canal also poses the much talked about piracy problem when travelling past the Gulf of Aden. This problem has become such a serious issue that it is having a huge impact on insurance rates.

“In certain aspects insurance rates have risen by ten to 50% – in regions with the danger of war, rates rise accordingly; in this respect Somalia has to be regarded as a war zone. Since [the insurance policies] Hull & Machinery or Protection & Indemnity have not sufficiently covered the problem, there is fairly new insurance policy about to be set up: Kidnap & Ransom,” explains Stolberg.

The situation has led to ship-ping companies taking some-times drastic measures in order to avoid a catastrophe. Stolberg


reveals that his company runs monthly seminars in order to teach seafarers how to behave in an emergency. NATO razor wire is installed on Beluga’s ves-sels and they move through the Gulf of Aden only in military escorted convoys. However the firm does not use firearms of its own.

“We do not appoint external guards on our vessels and we deny weapons on board. We also do not use long range acoustic devices since they are not effi-cient enough and can be mis-taken for real weapons which could lead to uncontrollable escalation,” affirms Stolberg.

“As a sustainable approach we are strongly supporting a political solution. For example the aid programme ‘Somalia against Piracy’, with UN soldiers bringing freedom to Somalia.”

Oil and gas business is key for the company, according to Stolberg. “Oil and gas is a very strong market with attractive projects and lucrative future per-spectives, it is one out of four or five central markets that Beluga is focussing on.”

It would be easy to say Bel-uga is lucky to be in the niche market it is. However, the firm appears to be so focused and meticulous in its planning, it is clear in this case luck has noth-ing to do with it. Each challenge has been met and dealt with head on, and with the economic skies clearing - and the heavy lift sector stabilising, it’s all plain sailing from here on in. Niels Stolberg is president and chief executive offi cer of Beluga Shipping.

Heavy Load: A 1100 tonne buoy which, at 27 metres tall, restricts bridge view.


E&P INTERVIEW

Construction at the Qarn Alam steam injection, enhanced oil recovery project, in Oman.


E&P INTERVIEW

F or a recent event in Dubai, Shell called on the servic-es of Michael Schumacher to back up its road safety

campaign. This type of clout dem-onstrates just how big the firm is – and it is oil and gas activities that provide the core of the firm’s activities.

In the Middle East the company has dealt in oil and gas for over 100 years, and is showing no signs of slowing down. Raoul Restucci executive vice president – Shell Upstream International, describes the company’s role in the Middle East region.

“We operate and have ambi-tions in just about every country in the Middle East and North Africa. We are actively involved in over 14 countries, in one form or another. Our key positions remain Oman and Qatar in terms of oil and gas development opportunities, and in the downstream sector there is of course Saudi Arabia,” states Restucci.

“To be honest, across the entire region we have a very significant spread and opportunities over the whole value chain,” he adds.

The company’s solid stature and reputation can offer its clients a number of advantages. “IOCs like Shell bring to the table long term win-win arrangements. Through the difficult stages we will carry on irrespective because we have a long term approach to things. Whether it is financial crises, polit-ical challenges, embargos or sanc-

Game PlanShell exploration and production executive vice president Raoul Restucci speaks exclusively to Peter Ward on the company’s Middle Eastern strategy

tions, we stay through thick and thin,” comments Restucci.

The rise of NOCs and their increasing capabilities has led to large international oil companies changing the way they present themselves. “In the early develop-ment and exploration stages in the 1930s, 1940s and 1950s, the IOCs brought the major capabilities and skills and then we entered a phase of nationalisation. Now you find that many of these NOCs are very well established with a very strong skills base and are excellent stew-ards of their natural resource base.

Very often they have strong finan-cial capacities,” explains Restucci.

“What companies like Shell bring to the table are key areas of technology and technology deploy-ment. It’s not just about developing the special technology; it is the application of the integrated skill set that goes around it. It’s about how you bring a whole technology platform and successfully deploy it. Technology is not about having it, it is about using it,” he adds.

Two areas where Shell is currently working most prolifically are Qatar and Oman. In Oman Shell is involved in the enhanced oil recovery (EOR) projects which the country has pinned many of its oil export hopes. “In our estab-lished positions, our largest invest-ments are in Qatar and Oman in upstream. For downstream it is Saudi Arabia, where we have invested in excess of US$8 billion. In terms of the oil and gas stream, you’ve got in Oman an increasing shift from conventional oil to EOR activities going forward.

“In Qatar there is a massive level of investment and activity. We have got about 75 000 contractors helping us develop QatarGas 4, the LNG project there, but also the gas to liquids (GTL) project, which is the largest plant in the world. That is without doubt the largest invest-ment at the moment that we have in the region,” Restucci affirms.

Like all of the major interna-tional oil companies, Shell has a close eye on Iraq and the potential

+ 100 countries where Shell operates

~102,000 number of employees

2% amount of world’s oil Shellproduces

3% amount of world’s gas Shellproduces

3.2 million barrels of gas and oilShell produces every day

+25 refineries and chemical plantsShell runs (figures for 2008)

1 ranking by Fortune 500 in 2009

NUMBERS GAME


E&P INTERVIEW

Shell has supplied LNG to Kuwait and has a team in the country which is working on the development of potential upstream opportunities.

The Middle East currently has a number of hotbeds of oil and gas activity, almost too many to choose from. Although specialised tech-nology can be required to access some of these hotbeds, Shell is aiming to reach all of them, and with the resources it has to call upon, it is managing it.

“If we look at exploration, we are heavily involved in opportu-nities in Saudi Arabia where we have had encouraging results and a continued commitment there. We are also at the early stages of a very significant programme in Libya,” Restucci says.

“We have had very successful exploration and drilling in the western area of the desert in Egypt; we are very excited because we have a new position in the Nile delta which we have just recently started drilling.

“The quality of the seismic surveys in Oman is really unlocking a lot more poten-

tial there too. And of course it is all hands on deck to try and secure a number of development opportuni-ties in Iraq, so I guess there are a number of exciting hotbeds.”

One of the strengths of Shell is that with its many divisions and resources, clients can benefit from a more integrated approach. “We bring extensive knowledge in supply chain management in terms of the integrated approach and the integrated value chain. So by setting up a partnership with Shell, you could start with a simple exploration opportunity, but then you know that you have the development, marketing, trading and the processing capabilities,” reveals Restucci.

“It is the opportunity for the integrated value chain and I guess

that is why today we continue

to be

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

investment opportunities there. “It is a very large resource base which is undeveloped. We have partici-pated in round one of the licensing and we now have teams which are participating in round two,” reveals Restucci.

“We signed a Heads of Agree-ment in September 2008 on what we call the South Gas joint venture which is a partnership between the South Gas Company, which has 51%, Shell holds 44% and Mitsubishi, which holds 5%. The project starts by collecting the flared gas in significant volumes, processing and treating it and then resupplying the local power gener-ation and LPG units.”

Restucci adds that any surplus volumes of gas could eventu-ally be exported, but in the initial phase the collected gas will just be treated, processed and put back into the national economy

for much needed domestic power generation.

Recently, Major IOCs Total and Chevron pulled out of Kuwait, and speculation was raised whether other major international oil compa-nies would follow suit. However, Shell is staying put in a country where it has a long standing pres-ence, Restucci says.

“We have been involved in Kuwait since 1948 so we have an extensive legacy of options, partic-ularly in the downstream sector. And in the future I expect a continued working engage-ment with Kuwait Petro-leum. It is part of a long established relation-ship and I think we are building our presence, and I’m quite excited about some of the discussions going on at the moment.”

• Raoul assumed his present position in May 2005. Prior to this role, Raoul was chief executive officer for the Americas for Shell Explora-tion & Production with responsibility for Shell’s E&P businesses in the western hemisphere

• Raoul has filled a number of roles in addition to his responsibilities at Shell. After working in The Hague in production technology, he held several positions in Brunei in the areas of well-site operations, production engineering and economics.

• Raoul joined Shell International in 1980, following his graduation from Nottingham University with a degree in mining engineering. In addition, Raoul is an alumnus of HRH Prince of Wales Business & Environment Program.

RAOUL RESTUCCI: IN PROFILE

Raoul Restucci, executive VP, Shell Upstream International.

E&P INTERVIEW


successful across the region in setting up new partnerships.”

Despite the expected recovery in the economy, there have been lessons to be learnt from 2009, as Restucci describes.

“You can only go so fast I guess. If you go beyond your means sooner or later you have to square up. You can’t go beyond your means for too long.

“I think companies have learnt that lesson, we have been in business for over 100 years we have had our ups and downs and various cycles but the reality is that we continue to be pretty confi-dent and we remain bullish about going forward.”

With a recovery in sight, Shell is hopeful of a good year ahead in 2010. Restucci says stability in the

market would be one of his hopes for 2010, as volatility has played a significant part in this year’s busi-ness. However, he believes a good year in 2010 will be carrying on in the same vane as previous ones.

There are challenges facing Shell. An increasing complexity of projects is one of the issues that Restucci believes the company will have to hurdle in the future.

Another is attracting and retaining the best people and in doing so, keeping the skills set of the company at the same level.

“But the real challenge is to continue to attract and develop local entities that are seen as local but can also leverage global exper-tise. I think that is the right mix and that is one of our success factors here,” Restucci concludes.

Oman and Qatar (pictured) are two of Shell’s major focus areas in the Middle East region, and the fi rm is actively involved in bidding in Iraq.


HEAVY LIFT

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

T he heavy lift industry is primarily associated with construction. Par-ticularly in the Middle

East, cranes are invariably linked to the build sector and were once the source of many urban legends surrounding the percentage of the world’s cranes located in Dubai.

But with the construction sector suffering from a slow-down over the past few months, heavy lift companies have focused more of their attention on oil and gas based business in the Middle East.


HEAVY LIFT

highest standards of safety intact and working well.

“Security is the big issue, you have to work hand in hand with the safety people. A lot of paper work has to be done. The cranes have to be equipped with emer-gency shutdown systems, spark arrestors,” says Beringer.

Hillerbrandt agrees that the main challenges revolve around safety, particularly when work-ing in the oil and gas sector. He reveals that special explosion proof specifications are required in order to suit various hazard-ous areas classifications.

Corrosion protection meas-ures are also needed to be put in place due to the marine envi-ronments that heavy lift equip-ment are sometimes needed to work in.

“The upstream oil and gas sector shows a trend of grad-ual development of the Middle East infrastructures. This has resulted in a potential growth in the market for boom cranes, as oil and gas and its related projects have proved to be more resilient through 2009 in the present scenario, due to the down trend of the construction sectors which are expected to take off again during the second quarter of 2010,” Mohammed Razzaqi, product manager of Darwish Bin Ahmed and Sons reveals.

Frank Hillerbrandt, manag-ing director of Stahl Crane Sys-tems also confirms that oil and gas has moved into the spotlight for heavy lift firms. “Our suc-cess in the oil and gas industry is growing reasonably in the year 2009 compared to the rest of the market,” he states.

This increase in business has been witnessed most in certain areas of the Middle East. “The United Arab Emirates, Qatar, Saudi Arabia have experienced the most dramatic growth. Saudi Arabia is the largest regional market and is followed by UAE, and Kuwait,” says Razzaqi.

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

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

the biggest market in the Mid-dle East, and adds Bahrain to the list also. The major use of cranes in the region for the energy sector is in erecting rigs, moving of rigs and shutdowns, according to Beringer.

“The biggest markets are Qatar, Saudi Arabia and the UAE(Abu Dhabi), Kuwait and Oman. But also remaining mar-ket leaders in KSA and UAE are still in the process of overhaul-ing their standards to EN and ISO and this will give us the chance to supply our products according to latest and most safe standards,” reports Hiller-brandt.

One of the major challenges which is affecting the heavy lift industry, and one which should not be ignored, is keeping the

big job,” states Hussein Ansar, deputy manager of Dubai based firm Fabexi Trading.

However some firms are now looking to actively exploit coun-tries such as Saudi Arabia, as Hillerbrandt explains. “In the past we have been much more concentrated of the market out-side of Saudi Arabia. We now want to extend our leading posi-tion which we are holding in the other Middle East areas to Saudi Arabia.”

Liebherr, a company involved in manufacturing the cranes used in the industry, also sees the benefits of being involved in oil and gas. “Oil and gas projects were less affected than construc-tion work. After the real estate collapse in October 2008 many huge projects were cancelled (e.g. Arabian Canal), this was not seen in the oil and gas sec-tor,” states Wolfgang Beringer, sales promotion, Liebherr.

The company offers a wide range of cranes, although not all of its range is used extensively in the Middle East. “Generally we offer our complete range of cranes, but mainly we sell in this area mobile cranes from 70 – 1200 tonne capacity, crawler

cranes from 280 – 750 tonne capacity and harbour mobile cranes in the range of 100 tonne capacity,” comments Beringer.

Beringer also states Saudi Arabia, the UAE and Qatar as the countries which make up

Heavy lift equipment is always in demand in the oil and gas sector.


HEAVY LIFT

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A.E.

The world’s largest boom telescopic mobile crane, a Liebherr LTM11200-9.1, was used for moving parts in the fabrication of a self-propelled rig known as a ‘Seajack’ at Lamprell’s UAE yard, through the first week of August. Specialist ‘builder’ Lamprell needed to lift and place the top two segments on the rig – fittingly named Leviathan.

The four legs, each totaling a height of 86.46m, incorporate eight segments. For the 7th and 8th segments, each weighing 52 tonnes , the crane was positioned alongside the Seajack to provide a 26m radius and capitalise on the cranes telescopic boom – capable of reaching up to 100m – to ensure fast lifts and speedier erection times for each of the legs.

The Al Faris Rental crane was configured with 202 tonne counterweights and an 88.30m boom length.

Additionally, in a twin lift with a Liebherr LTM1500-8.1 500t capacity mobile crane, the cranes were used to lift and position a Huisman marine

crane at the stern of the seajack for permanent installation.

The LTM11200 was configured with a 53.3m boom and superlift and the LTM1500 with a 31.7m boom to lift the 138t Heisman in a ‘top and tail’ operation.

The Seajack ‘Leviathan’ is a self propelled, self elevating lift boat intended for harsh environment conditions and was commissioned to install wind turbines in the North Sea.

Equipped with the latest Class 2 dynamic posi-tioning technology the vessel is fitted with high standard accommodation for up to 90 people.

The alternative option for Lamprell was to use Al Faris’s 500t Liebherr’s in a tandem lift operation with both cranes being rigged on luffing jib configuration.

This was ruled out as the cranes would have had to be repositioned for each of the four legs; taking more time to complete the job and adding a further expense to the client.

CASE STUDY: WORLD’S STRONGEST CRANE“The industry needs to

develop more health and safety processes and instruction man-uals. Extended Quality proce-dures. (e.g. factory shop test) and an adherence to high level of quality management is needed and strong cooperation between supplier and customer and/or contractor is vital,” states Hiller-brandt.

“The cranes have to be in top condition and they are inspected by the owners of the plants or third parties.”

Another challenge is the amount of competition and the increasingly higher standards demanded from customers. “Our challenge is the competi-tion with other companies which are operating in this market. Some of them are older than us in the UAE market so it is our


HEAVY LIFT

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challenge to offer services at competitive prices and standard of quality for this field,” com-ments Ansar.

“Customers are difficult these days with higher stand-ards than even two years ago. Accordingly we have upgraded our standards to be accepted by the customers. This is the main challenge for us,” he adds.

The six 80 tonne overhead trav-elling cranes with explosion protected hoists are used for maintenance work in a gas lique-faction plant.

The most important require-ment, and part of the order, was for the cranes to be load tested before erection and commission on the customers site. In order to minimise expensive testing periods, and thus downtimes, all the cranes were to be load tested and be accepted by the customer on STAHL CraneSystems premises.

The firm therefore built an unique test rig specifically for this purpose, with which cranes

with an S.W.L up to 150t can be tested. This test rig offers all our customers the advantage of being supplied by fully tested cranes. The project was also completed ahead of schedule. QatarGas scheduled approximately 17 months for manufacturing and erecting the six cranes and refurbishing and modernising the existing cranes in another LNG plant.

To the gratification of Qatar Gas, Stahl managed to complete the whole volume of the order within 14 months. The success of this project had a big impact as Stahl recently received an order for replacing four existing hoists.

SAFETY STUDY: STAHL CRANES QATARGAS ORDER

Companies in the heavy lift sector have had to find alterna-tive forms of business following the construction slowdown, and for the many firms with a vested interest in oil and gas, the solu-tion was obvious.

With the industry now look-ing like it is rebounding there can now be a lighter outlook for heavy lifting.

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ASK THE EXPERT

Mechanical seals are employed in many items of rotating equipment in many

industries throughout the world. Reliability engineers in the oil and gas industry com-monly understand that me-chanical seal life longevity is a function of the seal environ-ment. i.e. the best seal technol-ogy in the world will not per-form to its maximum potential if it is installed in a poor seal environment.

STANDARDSOver the last two decades the Centrifugal Pump Specification;

Question: How can I extend my exploration rotating equipment life?

Expert: Alan Roddis, B.Eng, MDip, AESSEAL plc Engineering Director

Ask the

Expert

If you have a question you want answered, or a topic discussed, please send it to [email protected]

Alan Roddis, AESSEAL

API610 Editions 6 to 10 has recog-nized the fact that a good seal envi-ronment improves seal life. As such over the last two decades, API610 has increased the “stuffing box bore” or “seal chamber” size defined in the specification.

The standard has changed the cross sectional area between the rotating shaft and pump housing from 0.500” (12mm) to 1.375” (35mm) over the various specifica-tion Editions, as shown in Figure 1 (see below).

The underlying principle of this change is that more fluid around the mechanical seal faces improves heat dissipation and cooler seals last longer.

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

API682 is the premier mechan-ical seal specification for the Oil and Gas industry. The standard describes the principles of mechan-ical seal life longevity and it widely promotes cartridge seals with multiple springs which urge the two counter rotational seal faces together.

Unfortunately the API682 standard does not define the posi-tion of the multiple springs in rela-tion to the process media. Given the multiple springs are typically very small, around 4mm in diam-eter, their position within the seal is important.

In an attempt to conform to the API682 standard, many mechanical

seal manufacturers have deployed “component seal technology” fitted onto thick cartridge seal sleeves for their API682 qualification tested product offerings, as shown in Figure 2 (above right).

The means that the small 4mm diameter springs and setscrews holding the inboard rotary seal holder onto the cartridge sleeve, are mounted directly in the process media. It also means that the majority of the equipment seal chamber cross section is now filled with metallic seal components and not cooling and lubricating process fluid, thereby negating the best practice intentions of API610 seal chamber cross sectional changes.

ASK THE EXPERT


THE EXPLORATION INDUSTRY IS CHANGINGThe offshore and onshore explo-ration industry has changed in the last decade. Today, as oil fields deplete, increasing amounts of sand is being pulled up with the crude oil. This sand slurry enters the process stream and creates havoc to the process equipment.

As sand contaminates the mechanical seal chamber, it clogs the exposed process-side multiple springs, leading to premature seal failure, as shown in Figure 3.

If the seals multiple springs become clogged and seized, they become ineffective in their intended duty. This clearly affects the rotating equipment life. If seal faces are not adequately cooled

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

Fig 4: API682 seal with the multiple springs located out of the process media. Fig 3: API682 seal failure where the multiple springs have clogged.

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

OPTIONSIf you do nothing except specify and select an API682 compliant mechanical seal with multiple springs and setscrews positioned out of the process media you will increase the probability of equip-ment longevity. Furthermore, if you specify and select a mechan-ical seal which has an idealized seal environment around the seal faces, you will again increase the probability of equipment longevity.

Figure 3 shows a cartridge mechanical seal design that meets this “common sense” criteria. Such designs are highly suitable for today’s oil extraction environment and thereby “future-proof” rotating equipment assets as engineers search and pursue oil extraction from further afield.

4 AESSEAL is the world’s fourth largest supplier of mechani-cal seals.

PROJECTS


Ongoing and upcoming projectsInformation is supplied by Ventures Middle East. Tel: +971 2 622 2455. URL: www.ventures-uk.comBAHRAINProject Title Client Consultant EPC Contractor Budget ($M) Status

Redevelopment of the Refi nery in Bahrain Bapco Chevron Lummus Global (US) Not Appointed 100 FEED

Redevelopment of Awali Onshore Oil Field Bapco / National Oil and Gas Authority (NOGA) / Occidental Petroleum Corporation (US)

Not Appointed 1000 Study

Lube Base Oil Project Bapco / Nestle Jacobs Engineering Samsung Engineering Company 430 Execution

Offshore Field Development Bapco Fugro Robertson Limited (UK) Occidental Petroleum Corporation / PTT Exploration and Production (PTTEP)

2000 Execution

KUWAITPtitle Client Consultant EPC Contractor Budget ($M) Status

Project Kuwait Scheme KPC / KOC Sproule Associates Limited (Canada) Not Appointed 7000 FEED

Gas Pipeline From BS-131 to Mina Al Ahmadi KOC AMEC Petrofac International 544 Execution

Crude Oil Manifold at GC 27 KOC Not Appointed 30 EPC Bid

Gathering Center 16 in West Kuwait KOC Fluor Corporation Not Appointed 750 EPC Bid

Gathering Centre 24 at Sabriya KOC AMEC SK Engineering & Construction 621 Execution

Repair and Replacement of Pipelines in Southeast Kuwait KOC Arabi Enertech 17 Execution

Replacement of Oily & Effl uent Water Lines at GC 23 and GC 25 KOC Instruments Installation and Maintenance Co. (ImCo)

4 Execution

Effl uent Water Injection Phase I & Sea Water Injection Phase II KOC AMEC, Kuwait Not Appointed 750 FEED

Transit Line from Abdali Main Point to Abdali Mid-Point Manifold KOC Not Appointed 30 EPC Bid

Crude Oil Flow Pipelines in North Kuwait KOC Not Appointed 110 EPC Bid

Gas Compressor at GC 16 & Gas Reinjection at Minagish KOC Safwan Petroleum Technologies 67 Execution

Gas Pipeline between Booster Station 140 & GCMB Manifold KOC United Gulf Construction Company (UGCC)

7 Execution

LPG Filling Plant at Umm Alaish KOTC Not Appointed 100 FEED

Mina Al Ahmadi Refi nery Upgrade - Phase 1 KPC Fluor Corporation Almeer Techical Services Company/ Flour Corporation

140 Execution

Upgrade of South Ghudair Gathering Centre KOC / SAT Arabi Enertech 27 Execution

Flowlines Upgradation & General Support Services Saudi Arabian Texaco/ KGOC Mushrif Trading 23 Execution

Maintenance Services for KOC KOC Petrofac, Kuwait 125 Execution

Mina al Ahmadi - Doha West Pipeline Ministry of Energy (Electricity & Water) Penspen International (UK) Heavy Engineering Industries & Shipbuilding Company (Heisco)

128 Execution

Gas Booster Station 160 KOC AMEC, Kuwait Snamprogetti Kuwait 649 Execution

Maintenance of Mina Abdullah Refi nery in the South Kuwait National Petroleum Company (KNPC)

Kharafi National, Kuwait 111 Execution

Jurassic Early Production Facility (EPF) KOC Not Appointed 400 EPC Bid

Booster Station 132 KOC Not Appointed 800 EPC Bid

Drilling Service in Kuwait - Contract 4 KOC Weatherford Oil Tools Middle East 80 Execution

Al Zour North Project - Pipeline Packages Ministry of Energy NJS Consulting/Al Dowailah Not Appointed 136 EPC Bid

New Base Oil Plant at Shuaiba KNLOC Not Appointed 400 Study

Dry Crude Storage Tank at Gathering Centre 1 KOC Bridge and Roof Company 9 Execution

Gathering Center 14 in the South East KOC Almeer Technical Services 45 Execution

OMANProject Title Client Consultant EPC Contractor Budget ($M) Status

Sohar Bitumen Refi nery Sohar Industrial Port Company (SIPC) Mashael Group of Companies 200 Execution

Nimr C Full Field Water Injection Project PDO Al Hassan Engineering 65 Execution

Harweel Cluster Phase - 2 Petroleum Development Oman (PDO) AMEC, Abu Dhabi Petrofac International, Oman; Galfar Engineering & Contracting, Oman;

960 Execution


PROJECTS

Project Title Client Consultant EPC Contractor Budget ($M) Status

Crude Oil Stabilisation Unit at Mukhaizna Occidental Mukhaizna Not Appointed 55 EPC Bid

Mabrouk Field Project PDO Galfar/Integrated Engg. & Construction Co;

1500 Execution

Asphalt Plant at the Sohar Refi nery Complex Sohar Refi nery Company Engineers India Ltd. Not Appointed 80 FEED

Gas Compressor Station at the Nimr fi eld Oman Gas Company Tecnicas Reunidas / Worley Parsons Galfar Engineering & Contracting, Oman 36 Execution

Octal Petrochemical Project at Salalah Free Zone Octal Holding Uhde National Construction & Trading Co. LLC (NCTC)

700 Execution

Kauther Gas Compression Project PDO Petrofac International, Oman 350 Execution

Aromatics Complex in Sohar AOL Jacobs Engineering LG International / GS Engineering & Construction

1200 Execution

Two New Gas Pipelines in the South of the Sultante PDO Not Appointed 101 - 250 EPC Bid

Depletion-Compression Project at Saih Nihayda Petroleum Development Oman (PDO) Not Appointed 350 EPC Bid

Pipeline Between the Nimr Field and the Port City of Salalah Oman Gas Company Not Appointed 51 EPC Bid

Marmul Central Development - Phase 3 Petroleum Development Oman (PDO) Gulf Petrochemicals Services, Oman 61 Execution

Qarn Alam EOR Project - Off-plot Package PDO Galfar Engg. & Cont. 139 Execution

Qarn Alam EOR Project - On-plot Package PDO MEG WorleyParsons Dodsal 450 Execution

Methanol Plant in Salalah Oman Oil Company (OCC) / UK GTL Resources / Mubadala Development Company, Oman / Vitol

Jacobs Engineering GS Engineering & Construction 910 Execution

Oil & Gas Pipeline in Musandum Oman Oil Company (OCC) Not Appointed 500 EPC Bid

Saih Rawl Gas Depletion Project PDO Tecnicas Reunidas, Oman Bahwan Engineering Company (BEC) 545 Execution

QATARProject Title Client Consultant EPC Contractor Budget ($M) Status

Petrochemical Complex at Ras Laffan QP/Total Not Appointed Not Appointed 3000 Concept

Low-Sulphur Condensate Storage Facility at Ras Laffan Dolphin Energy Limited, Qatar Qatar Engineering & Construction Company

212 Execution

Al-Shaheen Oil Refi nery Qatar Petroleum Axens France Not Appointed 5000 EPC Bid

Block 4 North Qatar Petroleum/Anadarko Not Appointed Wintershall, Germany 150 Execution

Acid Gas Removal Pant in Dukhan Qatar Petroleum (QP) Technip, Qatar Not Appointed 350 EPC Bid

Melamine Project at Mesaieed Qatar Melamine Co. Eurotecnica/Urea Casale QECC 250 Execution

Petrochemical Complex at Ras Laffan QP /ExxonMobil Corporation Not Appointed Not Appointed 3000 FEED Bid

Subsea Pipelines Pkg. for Qatar Gas 3 & Qatar Gas 4 Qatar Petroleum (QP) J Ray McDermott, Dubai 100 Execution

Oryx GTL - Phase 2 QP/Sasol/Chevron Not Appointed 1400 Study

Gas Pipeline Network within Ras Laffan Industrial City Qatar Petroleum Mott MacDonald Qatar Larsen & Toubro, Qatar 123 Execution

Olefi ns Complex QP/ Shell Not Appointed Not Appointed 2500 Study

PROJECTS



dry gas mechanical seals & repair •engineered mechanical seal support systems •

advanced air coolers •bearing protection •mechanical seals •

reliability focused engineering

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solutions extending equipment life

Condensate Refi nery at Ras Laffan Laffan Refi nery Company Technip, Qatar Daewoo Engineering & Construction, Qatar; GS Engineering & Construction, Qatar;

602 Execution

Pearl GTL Project - Pipelines Package QP/Royal Dutch/Shell JGC Corporation/Halliburton J Ray McDermott 150 Execution

Q-Chem 2 Q-Chem Aker Kvaerner Daewoo Engineering & Construction, Qatar

700 Execution

Pearl GTL Project - Package C8 QP/Royal Dutch/Shell JGC Corporation/Halliburton Veolia/Saipem/Al Jaber 101 - 250 Execution

Pearl GTL Project - Storage Tanks Package QP/Royal Dutch/Shell JGC Corporation/Halliburton CB&I 400 Execution

QVC Expansion Project QVC Not Appointed Not Appointed 31 -100 Study

Ras Laffan-Mesaieed Ethylene Pipeline Q Chem ll / Ras Laffan Olefi ns Co. Punj Lloyd 45 Execution

Methanol Capacity Expansion at Mesaieed Qafac Mustang Tampa Not Appointed 501 - 750 FEED

Gas to Liquids Project-3 (Pearl GTL) QP/Royal Dutch/Shell JGC Corporation/Halliburton Consolidated Contractors International Company (CCC)

16000 Execution

Low Density Polyethylene Unit at Mesaieed Qapco Uhde Uhde/Tefken 549 Execution

Al Shaheen Project - Packages 17 & 18 Maersk Oil Qatar NPCC 600 Execution

HFO Bunkering Project Qatar Petroleum Maritime Industrial Services 60 Execution

Condensate Refi nery at Ras Laffan - Phase 2 Laffan Refi nery Company Not Appointed 800 Study

Al Khaleej Gas Development Phase 2 - Onshore Package Exxon Mobil/ Ras Gas Chiyoda Chiyoda/Technip 1600 Execution

Plateau Maintenance Project Qatargas Technip, Qatar Not Appointed 1200 EPC Bid

Al Shaheen Project - Package 13 Maersk Oil Qatar J Ray McDermott 185 Execution

Two New Glycol Regeneration Trains in Dukhan Qatar Petroleum Worley Parsons Qatar Kentz 101 - 250 Execution

Ras Gas 3 - Trains 6 & 7 Rasgas 3 Chiyoda Foster Wheeler Chiyoda/Technip 13000 Execution

Qafco V Qafco Not Appointed Saipem/ Hyundai Engineering & Construction Co

3200 Execution

Al Shaheen Project - Package 12 Maersk Oil Qatar Qatar Engineering & Construction Company

100 Execution


PROJECTS


Headworks for Muaither RPS and Associated Pipelines Qatar General Electricity & Water Corporation (Kahramaa)

Al Waha Contracting 109 Execution

Ethane Cracker cum Aromatics Complex at Mesaieed QP/Honam Foster Wheeler Not Appointed 3500 EPC Bid

Common Sulphur Project DEL Washington Group International Not Appointed 101 - 250 FEED

Pearl GTL Project - Wellhead Platforms Package QP/Royal Dutch/Shell JGC Corporation/Halliburton J Ray McDermott 300 Execution

Al Khaleej Gas Development Phase 2 - Offshore Package ExxonMobil Corporation/ RasGas Company limited (Ras Laffan Liquefi ed Natural Gas Company );

Chiyoda Corporation, Qatar J Ray McDermott, Qatar 300 Execution

Gas Sweetening Facilities Integrated Project at Mesaieed Qatar Petroleum Worley Parsons Not Appointed 350 EPC Bid

Doha Urban Pipeline Relocation Project Qatar Petroleum Tebodin Punj Lloyd 181 Execution

Pearl GTL Project - Package C2 QP/Royal Dutch/Shell JGC Corporation/Halliburton Linde 900 Execution

SAUDI ARABIA Project Title Client Consultant EPC Contractor Budget ($M) Status

Marjan, Zuluf and Safaniya Oil Fields Upgrade Saudi Aramco WorleyParsons J Ray McDermott 250 Execution

South Rub Al Khali Gas Development SRAK KCA Deutag Drilling 2000 Execution

5 Sulfur Recovery Units in Uthmaniyah & Shedgum Saudi Aramco Imad Company for Trading & Contracting 150 Execution

Shbab-1 Oil Pipeline Project Saudi Aramco Stroytransgaz 200 Execution

Sasref Refi nery - Ultra-low Sulphur Diesel Complex Sasref ABB Lummus Global ABB Lummus Global 350 Execution

Jubail-2 Export Refi nery - Pipeline and Offsite Package Saudi Aramco/Total Technip Gulf Consolidated Contractors (GCC) 300 Execution

Onshore Maintenance Potential Project Saudi Aramco RHM/CAT/Suedrohrbau 300 Execution

Sasref Refi nery - Control Systems Upgrade Sasref Petrocon Arabia / Yokogawa Middle East 100 Execution

Biaxially Oriented Polypropylene Plant (BOPP) in Dammam Rowad National Plastics Co. DMT Technology Holding 53 Execution

Yanbu Gas Plant Expansion Saudi Aramco Jacobs Engineering Inc. Enppi 180 Execution

Jubail-2 Export Refi nery - Distillation and Hydrotreating Saudi Aramco / Total Tecnicas Reunidas (TR) 1200 Execution

Petrochemical Complex - Polyolefi ns Package SCP Parsons E&C Daelim Industrial Company 1200 Execution

Ras Tanura Refi nery Saudi Aramco WorleyParsons Not Appointed 8000 Feed

Ras Abu Ali Upgrade Saudi Aramco Zuhair Fayez Partnership Consultants Bonatti S.p.A 160 Execution

Hawiyah Plant Expansion Saudi Aramco Jacobs Engineering Inc. Tecnicas Reunidas 400 Execution

Shedgum - Yanbu NGL Line Expansion - Phase 2 Saudi Aramco Suedrohrbau 200 Execution

Ras Tanura Refi nery - DHT Unit Saudi Aramco Foster Wheeler Samsung Saudi Arabia Ltd. 500 Execution

Refi ning & Integrated Petrochemicals Complex Nama Not Appointed 1500 Study

Ebgaig - Al Khobar Natural Gas Pipeline SWCC Not Appointed 100 FEED

Ethylene Amines Project At Jubail Arabian Amines Company Jacobs Engineering / Burns & McDonnell Engineering

Hyundai E&CC / Hanwha E & C 300 Execution

Jubail - 2 Export Refi nery - Aromatics Plant Saudi Aramco / Total Axens Samsung Saudi Arabia Ltd. 650 Execution

Jubail-2 Export Refi nery - Coker Unit Package Saudi Aramco / Total Foster Wheeler Samsung Saudi Arabia Ltd / Chiyoda Corporation

850 Execution

Karan Field Exploration - Platforms Package Saudi Aramco J Ray McDermott 500 Execution

New Domestic Refi nery in Jubail Saudi Aramco Not Appointed 5000 EPC Bid

Jubail Petrochemical Complex - Phase 3 Sipchem Not Appointed 8000 EPC Bid

Petrochemicals Complex in Yanbu Saudi Aramco / Sabic Not Appointed Not Appointed 3000 Study

Karan Field Exploration - Onshore Elements Package - Gas Facilities Saudi Aramco Foster Wheeler /A. Al Saihati , A. Fattani & Al Othman Consulting Engineering Company (Sofcon)

Hyundai Engineering & Construction Company (HDEC)/ Petrofac

600 Execution

Rabigh Refi nery Expansion - Phase 2 Petro-Rabigh / Saudi Aramco / Sumitomo Corporation

JGC Corporation Not Appointed 4000 FEED

Ammonia Plant In Jubail Sipchem Haldor Topsoe Not Appointed 10 FEED

Khurais Field Development - Gas-Oil Separation Plants (GOSPs) Package Saudi Aramco Jacobs Engineering Group Inc. Snamprogetti / Imad Company for Trading & Contracting

1300 Execution

Yanbu Export Refi nery - Hydrocracker Package Saudi Aramco/ConocoPhilips Kellogg Brown & Root (KBR) Not Appointed 1200 EPC Bid

Jubail-2 Export Refi nery - Storage Tank Package Saudi Aramco / Total Technip, Saudi Arabia Punj LIoyd Ltd / Petro Steel 1000 Execution

Karan Field Exploration - Offshore Elements Package Saudi Aramco Petrocon Arabia, Saudi Arabia J Ray McDermott 1000 Execution

Fertiliser Complex Expansion at Jubail - Urea & Ammonia Plant Saudi Arabian Fertilizer Company (Safco) Not Appointed 150 EPC Bid

PROJECTS



PROJECTS

Wafra Steam Injection - Phase 2 Chevron / Saudi Aramco Saudi Arabian Texaco INC 500 Execution

Jubail - 2 Export Refi nery - Plant Utilities Package Saudi Aramco / Total Technip SK Engineering & Construction 150 Execution

Manifa Oil Field Redevelopment - Onshore Package Saudi Aramco Foster Wheeler JGC Corporation / TR / Snamprogetti 2500 Execution

Manifa Oil Field Redevelopment - Platforms Package Saudi Aramco J Ray McDermott, Saudi Arabia 800 Execution

Ras Tanura Petrochemicals Complex Saudi Aramco / Dow Kellogg Brown & Root Not Appointed 17000 FEED

ASU at Jubail National Industrial Gas Company (GAS) Samsung Saudi Arabia Ltd. 300 Execution

Petrokemya - 4 in Jubail Petrokemya Technip / Aker Kvaerner Not Appointed 10 FEED

Upgrade of the Oil Refi nery at Yanbu Saudi Aramco Mobil Refi nery Company Ltd. (Samref)

Worley Parsons, Saudi Arabia Worley Parsons, Saudi Arabia 2000 Execution

Sasref Refi nery Expansion Sasref ABB Lummus Global Not Appointed 275 FEED

UNITED ARAB EMIRATESProject Title Client Consultant EPC Contractor Budget ($M) Status

Replacement of Oil & Water Pipelines Adma - Opco Technip / Worley Parsons, Abu Dhabi Costain 900 Execution

Adnoc Storage Facility in Hamriyah Free Zone Takreer Not Appointed 150 EPC Bid

Borouge Complex Expansion - Phase 2: Offsites and Utililies AUH Polymers Company Foster Wheeler Technicas Reunidas 1230 Execution

Hail Field Development ADCO / Gasco Not Appointed Not Appointed 749 Study

Crude Oil Pipeline Replacement Zadco Not Appointed 300 EPC Bid

OGD-3/ AGD-2 - Pack 2 GASCO Bechtel Bechtel 1460 Execution

OGD-3/ AGD-2 - Pack 4 GASCO Bechtel Snamprogetti 1420 Execution

Green Diesel Project in Ruwais Takreer Wood Group Mustang GS Engineering & Construction 350 Execution

Umm Shaif Gas Injection Facilities Adma - Opco WorleyParsons Hyundai Heavy Industries 1597 Execution

Modifi cations to 41 Well Head Towers Adma - Opco WorleyParsons Not Appointed 150 EPC Bid


PROJECTS


Zakum West Gas Processing Facilities Project Adma - Opco Technip Technip / NPCC 300 Execution

Asab Full Field Development ADCO Foster Wheeler Petrofac 1000 Execution

Bab Oil fi eld Development - Phase 2 ADCO Technip SK Engineering & Construction Company 805 Execution

Gas Processing Facility in UAQ Gulf Energy Company Technip/Kvaerner Not Appointed 120 EPC Bid

Umm al Dalkh Full Field Development Zadco Not Appointed Not Appointed 650 Study

Sahil Phase-2 Development ADCO Foster Wheeler Tecnicas Reunidas / CCC 250 Execution

Onshore and offshore Sour Gas Development ADNOC / ConocoPhilips Fluor Corporation Not Appointed 10000 EPC Bid

IGD - Gas Processing Platform - Pack 6 Adnoc / Adma-Opco Fluor Corporation Abu Dhabi NPCC 405 Execution

Borouge Complex Expansion - Phase 2: Olefi ns Conversion Unit AUH Polymers Company ABB Lummus Global, Abu Dhabi Samsung Corporation, Dubai 300 Execution

Fertil Plant Expansion Fertil Jacobs Engineering Not Appointed 450 EPC Bid

OAG Network-Das Island Compression Facilities Adgas Fluor Corporation Technip 610 Execution

OAG Network-Pack 2 - Das Island to Ras Al Qila Pipeline Gasco Fluor Corporation NPCC 241 Execution

OAG Network-Pack 3 - Ras Al Qila to Habshan Pipeline Gasco Fluor Corporation CCC 400 Execution

OGD-3/ AGD-2 Pack 3 GASCO Bechtel Bechtel 1241 Execution

Borouge Complex Expansion - Phase 2: Ethane Cracker AUH Polymers Company Linde 1100 Execution

Development of Qusahwira & Bida Al-Qemzan Fields ADCO Washington Group International / Veco Engineering

Not Appointed 1800 EPC Bid

Taweelah-Qidfa Gas Pipeline DEL Stroytransgaz, Abu Dhabi 418 Execution

Asab Gas Development (AGD) Modifi cations - Package 1 GASCO Veco Engineering Not Appointed 500 EPC Bid

Jebel Dhanna Crude Oil Storage Tanks Adco ILF Consulting Not Appointed 100 EPC Bid

LNG Storage Hub in Techno Park, Dubai DMCC / Techno Park / LNG Impel Not Appointed 2000 FEED

Umm Al Lulu Oil Field Development Zadco Tebodin Middle East, Abu Dhabi Not Appointed 1500 EPC Bid

New Refi nery in Fujairah AGOL Mott MacDonald Not Appointed 1000 Study

Borouge Complex Expansion - Phase 3: PDH & Phenolics Complex AUH Polymers Company Not Appointed Not Appointed 1000 Study

Abu Dhabi Gas Grid ADNOC Distribution Not Appointed Not Appointed 1000 Pre FEED Bid

Zirku Production Facilities Debottlenecking Zadco Technip, Abu Dhabi Not Appointed 450 EPC Bid

Upper Zakum - Fujairah Oil Pipeline IPIC/Conoco Phillips WorleyParsons China Petroleum Construction Corporation

3290 Execution

Flowlines & Wellhead Installations to ADCO Abu Dhabi Company for Onshore Oil Operations (ADCO)

Mott MacDonald Al Husam General Contracting 100 Execution

Tank Terminals in Fujairah Emarat Penspen International Not Appointed 22 EPC Bid

Khubai-Margham Gas Pipeline Margham Dubai Est. Parsons Brinkerhoff Not Appointed 30 FEED

Integrity Enhancement of Fire Protection System at Umm Al Nar Refi nery Takreer Not Appointed Not Appointed 15 EPC Bid

Integrated Gas Development (IGD) - Das Island Process & Utilities Package Adnoc / Adgas Fluor Corporation Hyundai Heavy Industries(HHI),Abu Dhabi 1000 Execution

Satah Full Field Development Zadco Tebodin Middle East, Abu Dhabi Not Appointed 250 FEED

Expansion of Sulphur Handling Facility in Ruwais Takreer Washington Group Int'l Dodsal 272 Execution

Cathodic Protection on Wellhead Casing in Bab and Ruwais Fields ADCO ILF Consulting Engineers, Abu Dhabi EMDAD LLC, Abu Dhabi/ Alsa Engineering 27 Execution

Gas Exploration Facilities - Kahaif, Moveyid and Sajaa BP Exploration Operating Co Ltd(BP Sharjah)

AMEC, Abu Dhabi Not Appointed 500 FEED

Expansion of Ruwais Refi nery - Package 1 Takreer Bechtel Not Appointed 400 EPC Bid

Crude Oil Storage Tanks at Umm al-Nar Refi nery Takreer Engineers India Ltd Al Hussam General Contracting 33 Execution

New SCADA System at Umm Shaif and Lower Zakum Adma - Opco WorleyParsons Telvent 50 Execution

Integrated Gas Development (IGD) - Ruwais Storage Tanks Package Gasco / Adnoc Fluor Corporation Chicago Bridge & Iron (CB&I), Dubai 533 Execution

NGL Pipeline from Asab to Ruwais Gasco VECO Dodsal 153 Execution

Gas Injection Topsides at Upper Zakum Zadco Technip Not Appointed 400 FEED

Shah Full Field Development Adco Foster Wheeler CCC / Tecnicas Reunidas 250 Execution

Integrated Gas Development (IGD) - Ruwais 4th NGL Train Package ADNOC / Gasco Fluor Corporation, Abu Dhabi Petrofac International / GS Engineering & Construction

2100 Execution

Refi nery in Fujairah IPIC Foster Wheeler Not Appointed 12000 Concept

December 2009 Oil&Gas Middle East 71www.arabianbusiness.com/energy

CLASSIFIEDS

SWISS

CE

RTIFICATION

ISO 9001:2000ISO 14001:2004



FACE TO FACE

What role does the SPE play today?SPE provides a worldwide forum for sharing technology, knowledge and the latest solutions for over-coming the technical challenges of finding and producing more oil and gas reserves.

SPE also helps address crit-ical issues of the future such as sustainability and carbon capture. SPE members can access this global body of knowledge through SPE conferences and exhibitions, online resources including access to more than 80 000 technical papers, magazines, peer-reviewed journals, books, short courses and local section meetings.

A vital part of SPE’s mission is maintaining high professional standards by offering members continuing education options globally. SPE Petroleum Engi-neering Professional Certification offers an international creden-tial recognising petroleum engi-neering expertise.

Has 2009 been a difficult year for the SPE?Over the past year, SPE has responded to the global economic crisis that has significantly impacted the upstream oil and

SPE enjoying global growth FACE TO FACE Waleed Refaay,

managing director, Society of Petroleum Engineers

Middle East, North Africa and India

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

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

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

natural gas industry. In the midst of this downturn, members have been relying more than ever on SPE for global access to tech-nical knowledge from world-class experts, networking opportuni-ties and professional resources that help them solve problems and improve performance.

In 2009, SPE took many actions to mitigate the impact of the poor economy, while keeping the quality of our programmes high. These include moving events to major oil centres to reduce travel costs in response to company travel cutbacks. We added new online technical resources, and addressed the language and culture needs of members worldwide with locally specific solutions.

What are your hopes and expectations for 2010?SPE continues to grow and add new members globally. We remain financially strong. Our focus is on providing the highest quality tech-nical content and access to the latest technology that our members need in order to carry out their jobs better, wherever they are located, through the conferences, publications and online resources that we offer.

programmes help to accelerate the transition of these young members into careers by offering profes-sional and technical skill develop-ment through workshops, publica-tions, section networking groups and online mentoring. We are also working to attract more young people to our profession through scholarships and other similar programmes.

Waleed Refaay, managing director, SPE Middle East

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

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

ntributing to our future

Our energy is your energy

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oil & gas middle east - dec 2009

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