oil & gas middle east - feb 2010

NEWS, DATA AND ANALYSIS FOR THE MIDDLE EAST’S ENERGY PROFESSIONALS February 2010 • Vol. 6 Issue 2

An ITP Business Publication

An ITP Business Publication, Licensed by Dubai Media City

PRIVATE POWERHOW TO GET IN ON THE ACT: OPPORTUNITIES ABOUND FOR MIDDLE EAST OIL & GAS COMPANIESDOING BUSINESS IN IRAQ - SPECIAL REPORT

Qatar and UAE demand is driving regional rig rate recovery

Qatar and UAE demand is drivingJACK UP MARKET APPRAISAL

Middle East drilling fi rms to see double digit growth in 2010

ddle East drilling fi rms to seedouble digit growth in 2010

DRILLING FOR SUCCESS

How Sharjah’s Dana Gas is transforming Egypt’s natural gas industry

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CONTENTS

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

FEBRUARY 2010

15 TOUGH TANKER TALKPer Wistoft, chief executive offi cer of Gulf Navigation tells Oil & Gas Middle East that he’ll be cancelling $174m of newbuild orders this year.

16 PROJECT PIPELINEPan-Emirates pipeline deal is just the start for ABB’s regional up-stream ambitions says ABB’s head of process automation, MENA.

18 PRIVATE POWEREXCLUSIVE: Oil & Gas Middle Eastmets Ahmed Al-Arbeed, chief executive offi cer of Dana Gas.

23 WFES EVENT REVIEWThe World Future Energy Summit delivered a roundtable discussion with real ministerial clout.

26

REGULARS2 WEB HIGHLIGHTS

4 COMMENT

7 REGIONAL NEWS

49 PROJECTS

55 PRODUCT FOCUS

23

26 OPEN FOR BUSINESSWhat’s the best way to capitalise on the opportunities in Iraq? Our fi rst ever Iraq Business Guide tack-les the facts you need to know.

32 DRILLING FOCUSThe region’s most dynamic home-grown oilfi eld service providers reveal where demand is strongest, and what 2010 has in store.

36 GENERATION GAMEPower generator providers on overcoming the challenges of re-mote oilfi eld electrical needs.

40 OFFSHORE REVIEWInsight and analysis from Dr Rina Samsudin, ODS Petrodata, on the 2010 Middle East Jack-Up market.

44 SOUR HOURSOGAT 2010 Preview: The world’s leading H2S and CO2

conference kicks off in March. Read all about it here fi rst.

56 FACE TO FACEJorge Machnizh, G4S director - global oil and gas solutions, on Iraq Security.

40

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2 Oil&Gas Middle East February 2010 www.arabianoilandgas.com

WEB HIGHLIGHTS

ONLINE SPECIAL REPORT

The online home of:

Online Exclusive: Jack-Up FocusWhen demand for oil started to decline in mid-2008, oilfield and marine services companies operating both on and offshore started to notice a dip in general activity across the Middle East. Dockyard across the region also noticed an upsurge in “warm stacking” – sending a jack-up rig back into port, but keeping the crew onboard and ready for work. Oil & Gas Middle East reporters speak to local heavyweights MIS, Lamprell, GMS, and DNV to gauge where the market is today. Read the feature only on ArabianOilandGas.com

A senior official from the Missan province in Iraq has said that the winning bidders for the develop-ment contract for the al-Halfaya oilfield will start work in February.ArabianOilandGas.com

Peter Warner, CEO, of Petrofac Emirates told an EIC gathering that the Mubadala joint venture company wants to expand from the current figure of 150 to around 400. ArabianOilandGas.com

The Nigerian subsidiary of Royal Dutch Shell has announced that it has sold its interest in three produc-tion licenses in Niger Delta to a consortium led by two Nigerian companies.ArabianOilandGas.com

HE Abdulla Al-Attiya, head of Qatar’s oil industry has said that the massive US$19 billion Pearl Gas to Liquids (GTL) project headed by Shell should be operational before year-end.ArabianOilandGas.com

BREAKING NEWS AND VIEWS FIRST

SHELL SELLS OFF ITS NIGERIAN ASSETS

PETROFAC EMIRATES: WE’RE HIRING

CNPC TO START WORK ON AL-HALFAYA IN FEB

QATAR PEARL TO START PRODUCTION IN 2010

1 Schlumberger rakes in $22.7 billion in tough 2009

2 PDO invites bids for oilfi eld expansion in Oman

3 Aramco awards $141m EPC contract to Sinopec

4 Kuwait to spend US$15 billion upgrading refi neries

5 ADGAS predicts extra LNG supplies from Das Island

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WHICH CONTRACTOR HAD THE BEST 2009?

DUBAI OILFIELD GET TOGETHER: WERE YOU THERE? The afternoon of January 28th was a cordial mix of business and pleasure. Check the gallery today! ArabianOilandGas.com

IN PICTURES


COMMENT

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T he statistics are mind-boggling. Some of the biggest oilfields known to man. A project pipeline tipped to top $250

billion over the course of the next 15 years. The third largest reserves on the planet. Could any oil and gas company possibly ignore the business that is opening up in Iraq?

Ignore it, no. But serious risks remain. For the time being the biggest business opportunities have been on the table for Big Business and Big Oil in particular. However, the opportunity landscape is growing for small and medium sized firms.

Finding a foothold in Iraq was an insur-mountable challenge two years ago. Not so anymore. Entering Middle Eastern markets has always required patience and partners on the ground. Finding those partners in Iraq is getting a whole lot easier.

In our first guide to operating in Iraq, (see pages 26 through 30) Oil & Gas Middle East discovers that the structural difficul-ties of doing business in Baghdad are large, but not prohibitive. It is by no means a market for the feint hearted - and that won’t be changing overnight.

Making Iraq workCan you afford to sit on the sidelines any longer?

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

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

Iraqi workers walk at the Halfaya oil fi eld near the southern city of Amara in December 2009.

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

However, the feedback from people on the ground in Baghdad and Erbil is one of optimism and opportunity. With office space to rent within the International Zone (formerly the militarized Green Zone) in Iraq available, and an oil sector about to go stratospheric - service, technology providers and oilfield equipment compa-nies need to get in on the act early.

It is likely that many important deci-sions regarding how the major field devel-opment packages will come together will be held back until after the March elec-tions. Hoping all goes well, work will have to begin very shortly afterwards. The IOC JVs which have been successful are contrac-tually obliged to begin major works within three months of signing their contracts.

The question for many managers will be how to get in on the act. There is no substi-tute for a local touch, so our advice is find a partner who can help you build a pres-ence there now. For those that wait, major opportunities will be missed.

Daniel Canty, EditorE-mail: [email protected]

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Petrofac JV nets $4bn orderPetrofac Emirates, an Abu Dhabi-based joint venture between the state-owned Mu-badala and Petrofac, is among the companies who have been awarded US$9.7 billion worth of development contracts for Turkmenistan’s largest natural gas deposit.

The company will be joined by CNPC of China as well as South Korea’s LG Interna-tional Corp and Hyundai Engi-neering Co in developing the South Iolotan deposit, which is expected to yield around 30 billion cubic metres of natural gas per annum when work is fully completed.

The scope of work at South Iolotan, which is believed to hold between 4 trillion and 14 trillion cubic metres of gas, includes drilling and the construction of gas processing facilities.

“Petrofac Emirates won $3.98 billion worth of contracts,” reported newswire Reuters without giving exact details.

“CNPC is obliged to produce up to 10 billion cubic metres (bcm) of gas a year and will get 3.13 bcm for itself,” the source added.

The two South Korean companies, LG International and Hyundai Engineering, have won work worth $1.48 billion

Turkmenistan, which produces about 70-80 bcm of gas annually, says its total reserves exceed 20 trillion cubic metres (tcm) -- much more than the 2.9 tcm estimated by BP in its annual statistical review.

UAE joint venture EPC firm has been awarded natural gas project in Turkmenistan

China has seen Turkmenistan as a potential supplier of gas for some time and recently completed a 1,833 km pipeline network connecting the two countries.

Last year, Petrofac LLC (headquartered in Sharjah, UAE) was been engaged by

Turkmengas, the state-owned national gas company of Turk-menistan, to provide services in relation to the development of the South Yoloten gas field, situated approximately 400 km south east of the capital Ashgabat.

The first phase of the contract, which was signed with Petrofac International (UAE) LLC, valued at approxi-mately US $100 million, will involve Petrofac completing a front end engineering and design study for the Project together with initial planning and set-up studies. After satis-factory conclusion of the first phase, the contract contem-plates moving into a second phase, which will include the engineering, procurement and commissioning work for a 10 billion cubic meters per annum (bcma) gas processing facility

Workers attend the opening of a refi nery in Turkmenistan’s vast Karakum desert.

Maroun Semaan, group COO, Petrofac LLC.

LEAD NEWS

along with the infrastructure and pipelines for the entire 20 bcma development.

Petrofac’s experience of designing and constructing facilities to handle and process sour gas was a factor in compa-ny’s selection for the project as the feed gas from the field contains around 6% H2S. The eventual scope for the South Yoloten development is likely to include: well pad facilities; gath-ering systems; gas processing and sweetening; sulphur handling, storage and export and condensate processing, storage and export facilities.

Speaking soon after the announcement Maroun Sem- aan, group chief operating officer said, “This is Petrofac’s first project award in Turk-menistan although we have been building our relations with Turkmengas for some time. The development of the South Yoloten field is a critical part of Turkmenistan’s plans to exploit their very signifi-cant hydrocarbon resources and we are honoured to have been given the opportunity to work on this important project at such a strategic stage of its evolution.”

12% Turkmenistan has 2.662 trillion m3 of recoverable natural gas, the twelfth largest natural gas deposits in the world.

Getty Images


REGIONAL NEWS

Koreans scoop Kuwait pipe deal SK Engineering awarded US$724m pipeline facilities and booster station contract

GS Engineering awarded Oman natural gas project by PDOPetroleum Development Oman (PDO) has announced that it has awarded an engineering, construction and procurement (EPC) contract for the Saih Ni-hayda gas compression project to South Korea’s GS Engineer-ing and Construction.

In a statement PDO said that the award also includes the de-bottlenecking of the Saih Nihayda gas processing plant. The value of the contract was not disclosed. “This is an important project which aims to ensure that the Saih Nihayda field produces gas at an optimum level for a maximum amount of time,” Abdulla al Lamki ,deputy MD, PDO said.

Workers at Petroleum Development Oman’s Qalhat Oman LNG project.

location of the project is 95 kilo-metres north of Kuwait City.

The project, which started in January, is expected to take 41 months to complete.

The company also said that the award takes the value of its overseas contracts to $4.8 billion in 2009.

Abu Dhabi Company for Onshore Operations (ADCO) awarded the company a $805 million contract to install gas compressor units at its Bab oilfield in Abu Dhabi. The Saudi Aramco Total Refining and Petro-chemical (Satorp) also awarded SK a $420 contract to construct the plant that will supply water and electricity to its Jubail Export Refinery.

The South Korean contractor SK Engineering and Construction has announced that it has been awarded a US$724 million con-tract to build crude oil pipeline facilities in Kuwait.

In a statement the company said that the scope of works on the project will include the construction of a booster station as well as laying pipelines connected to other facilities. The

Saih Nihayda was commis-sioned in 2005 and has been producing gas ever since. The gas is processed at treated at

102bnKuwait sits on top of 102 billion barrels of proven crude recoverable oil reserves, representing 9.9% of total OPEC reserves Source: OPEC

A Kuwait Oil Company worker inspects existing pipeline facilities at the Burgan Oilfi eld.

Getty Images

the Saih Nihayda Processing Plant. Located near the field in Central Oman. “Based on current demand patterns,

reservoir pressure is expected to start declining within the next six years. The installa-tion of the new compression facilities will enable PDO to maintain pressure for several years,” the statement said.

“The de-bottlenecking of the processing plant will increase capacity from the current level of 20 million cubic metres a day (m3/day) to 25mn m3/day,” it added.

The award follows a compet-itive bidding process in which seven international companies participated. PDO produces gas on behalf of the Govern-ment of Oman which owns the gas in PDO’s concession area.

REGIONAL NEWS


Sonatrach in disarrayMeziane suspended over contract irregularities - Ministry insiderThe head of Sonatrach has been suspended from his position and placed under judicial control after the discovery of contract irregularities at the state-owned Algerian energy company.

Media sources in Algeria have reported that Mohamed Meziane, who has been the CEO of Sonatrach since 2003, has been instructed to stay in Algeria until an investigation into the allega-tions has been completed.

Abdelhafid Feghouli, vice president for the oil and gas company’s downstream division, has been named interim CEO.

Sources in the North African state said that a total of 10 senior Sonatrach officials are under investigation and the charges stem from the discovery of a number of contract awards contractors that contain irregu-larities.

“The investigation has a rela-tion with the way of signing the

contracts, which should conform to clause M15 of the new hydro-carbon law,” a source at the Alge-rian Energy Ministry told Oil & Gas Middle East. “But they didn’t follow it,” he added.

Sources also said that Chawki Rahal, Sonatrach’s vice presi-dent for marketing was also placed under judicial control, while Boumediene Belkacem,

Mohamed Meziane, CEO of Sonatrach since 2003 was suspended from duties in January.

Briefs Column

Delegates from the Italian super-major Eni have met with the gov-ernor of Basra in Iraq to discuss the possibility of providing up to 15,000 job opportunities for local men and woman in the province. “The meeting with the ENI delega-tion has tackled the company’s plan to develop al-Zubair oil-fi eld...,” Governor Shaltagh Ab-boud Mayyah is reported by Aswat al-Iraq news agency as saying. Eni won the development contract for the 5 billion barrel reserve al-Zubair fi eld after submitting a belated bid a few months after the fi rst oil licensing auction.

Overseas Shipholding Group, a provider of energy transportation services, announced in January that the FSO Asia, a 432,023 dwt Floating Storage and Offl oading (FSO) service vessel, was success-fully hooked-up at the Al Shaheen oil fi eld offshore Qatar and com-menced operations for Maersk Oil Qatar AS. The vessel is jointly owned by OSG and Euronav N.V. The vessel is thought to be part of the replacement package for the recently retired Knock Nevis FSO – once the world’s largest oil tanker.

Irish E&P company San Leon has entered into a joint venture with the Iraq-based Al Meinaa Oil Services that will see the compa-nies look for suitable oil projects to work on in the Gulf state.

vice president of Sonatrach’s upstream division, and Benamar Zenasni, vice president for trans-port and pipelines, have been jailed. Sonatrach and Meziane were unavailable for comment.

A pipeline expansion currently being carried at the Shaybah oilfield in the Empty Quarter of Saudi Arabia will be completed in the near future, sources have said. Work is being carried out for the state-owned hydrocar-bons giant Saudi Aramco which will facilitate the transport of crude produced at the field to an oil and gas separation facility, and a major crude pipeline that transports the oil to processing facilities at Abqaiq.

Massive Aramco pipeline is close to completionThe 217 kilometre-long pipe-

line is called the Shabab 2 and will run alongside the already operational 640 kilometre pipe-line, Shabab 1.

Aramco awarded the EPC contract for Shabab 2, to Russian company Stroytransgaz in 2007. According to the orig-inal contract, the project price exceeded US$100 million. Origi-nally PJSC Stroytransgaz said the pipeline from Sheiba field in Rub’ al Khali desert (near the The project broke ground back in 2007.

Associated gas being fl ared in Iraq.

border with United Arab Emir-ates) would take 18 months.

Read the interview withMohammed Meziane at:


REGIONAL NEWS

Hyundai nets ADGAS plant dealAbu Dhabi Gas Liquefaction Company signs $1bn gas plant deal with Hyundai HI

The CEO of Qatargas has said that two massive new liquefied natural gas (LNG) trains that are due to come on-stream in 2010 will keep Qatar’s massive LNG export expansion plans on track.

Faisal al Suwaidi told a news conference that the Qatargas trains 6 and 7 will boost LNG

Abu Dhabi Gas Liquefaction Company (ADGAS) and Hy-undai Heavy Industries Co have signed a US$1 billion deal for the construction of a gas processing plant on Das Island in the emirate.

The plant will process 1 billion cubic feet of gas per day from Umm Shaif, an offshore field, andwill form part of the massive Integrated Gas Devel-opment (IGD) Project.

“The project we signed today on behalf of ADNOC is a major milestone which reflects ADGAS new vision and commitment to participate in the country’s national energy strategy, within an integrated project that also involves ADMA-OPCO and GASCO,” Fahim Kazim, ADGAS GM, said at the signing ceremony.

“Due to the limited area on Das Island, we had to reclaim Total’s gas processing technology at Ras

capacity in the Gulf state by an extra 15.6 million tonnes. This should take Qatar’s LNG capacity to around 70 million tonnes per annum.

“This is a fast-growing sector, especially for the hot econo-mies of the world. China and India will have to import large quantities of gas,” Al Suwaidi

an additional 108,000 square metres of land for the project facilities and to build a 100 metre-long jetty for offloading of heavy 1,500-tonne modules,” he added.

The project is expected to take 49 months to complete. Adgas is a joint venture between the Abu Dhabi National Oil Company (ADNOC), Total, BP and Mitsui & Co.

Qatargas trains 6 and 7 on track for 2010 launch - Al Suwaiditold ArabianOilandGas.com in an interview last year.

“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 commitment, they will need to rely more on natural gas to reduce their emissions,” he added. Qatargas CEO says 2010 launch is on.

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REGIONAL NEWS


CGG nets Aramco deals18 month ocean bottom cable 3D seismic survey starts in June

7.4 million acres to be explored in Turkish Black Sea

Exxon Mobil and Petrobras confirmed in January a deal has been struck with the Turkish National Oil Company (TPAO) to explore for hydrocarbons in the deepwater Black Sea off-shore Turkey. Under the terms of the farm-in agreement, Exx-onMobil Exploration and Pro-duction Turkey B.V. will acquire a 25 percent interest in the Si-nop, Ayancik and Çarsamba sub-blocks of the AR/TPO/3922 exploration license. Petrobras will retain a 25% equity interest in the block and will remain the operator. TPAO holds the re-maining 50% interest.

“We look forward to utilizing the technologies and expertise of all three companies as we explore for potential commer-cial resources in the Black Sea,” said Mehmet Uysal, CEO of Turkey’s NOC.

This agreement covers approximately 7.4 million acres and is subject to approval by the Turkish Government.

CGGVeritas said in January that ARGAS, its Saudi Arabian joint venture owned 49% by CGGVer-itas and 51% by TAQA, has been awarded two major Ocean Bottom Cable (OBC) 3D data acquisition contracts by Saudi Aramco. The two contracts have a combined value of around $375 million.

The first project is scheduled to start in June 2010 and operate for a period of 18 months while the second is scheduled to run from October 2010 for a period of 24 months; each contract respec-tively has an 18- and 24-month optional extension period.

The projects will cover an initial 6,000 sq km over the next three years and require oper-ational expertise working in complex environments, such as producing oil fields and busy shipping lanes within the Saudi waters of the Gulf with depths ranging from 20 to 60 meters.

“We are very pleased that Saudi Aramco is continuing

its long-term relationship with CGGVeritas through this new award to our ARGAS joint venture with TAQA,” said Robert Brunck, Chairman and CEO of CGGVeritas. “These two major OBC surveys follow on from the successful completion by ARGAS of offshore projects for Saudi Aramco in 2009 which already covered close to 12,000 sq km in the Gulf. They also confirm the position of CGGVeritas as a

A fl eet of vessels with the latest CGG Veritas positioning systems will be deployed in June.

worldwide leader in OBC acqui-sition,” he added.

ARGAS will mobilize two fully independent OBC crews equipped with the latest Sercel SeaRay 4C equipment and recording systems. These fully offshore operations will be managed through a fleet of vessels equipped with CGGVer-itas deployment and positioning systems geared to operate in such environments.

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REGIONAL NEWS


Gulf Nav cancels fl eet orders The CEO of the Dubai-based tanker company Gulf Naviga-tion Holding (Gulf Nav) has said that the company is likely to cancel a US$174 million or-der it has with a South Korean shipbuilder SLS, due to the late delivery of the three chemical carriers.

Speaking at a round-table event at the company offices in Dubai, Per Wistoft said that the vessels, three 46,000 DWT IMO Type III chemical tankers worth $58 million each, are all close to the date that would allow Gulf Nav to trigger a cancellation clause in the contract.

“In contractual terms you can cancel after the ships have been delayed by 210 days,” Wistoft said.

“These ships will probably get cancelled by us, but that is a huge advantage because they were contracted by us when the market was high so if we cancel the ships we can probably go out and buy similar ships with a discount of 30-40%,” he added.However, Wistoft also said that Gulf Nav were not necessarily happy that SLS were so late in the delivery of the vessels.

“These are sophisticated chemical carriers and we are sad in principle that the yard was late. Had the yard been on time and could have benefited from the market and secured some lucrative contracts,” he said.

Wistoft also stressed that cancellation would put Gulf Nav in a strong financial position.

CEO says Korean yard SLS took on too many orders causing unacceptable delays

“If we do cancel it would put us in a strong cash position. When you contract ships you pay a lot of money in advance and we have paid about 50% of the construction costs already ($87 million),” he said.

“Once the ships have been cancelled that cash will be returned to us and that puts us in an even stronger cash posi-tion,” he added.

The Gulf Nav CEO also hinted that the company could even eventually end up buying the vessels.

“What if the market goes up? What if they close the Suez Canal closes tomorrow? The value of the ships would shoot up like a rocket,” he said.

“If we go ahead and cancel they will have to find another buyer for the ships. That could also still be us,” he added.

Wistoft believes that the reason SLS were so late in deliv-ering the vessels is because the Per Wistoft is CEO of Gulf Navigation.

South Korean yard took on too many orders without making enough improvements to its production line to handle the additional work.

“My personal opinion is that the yard had a normal delivery schedule of 12-15 ships per year but they took in so many orders they tried to improve that to 25 ships per year,” he said.

“They’ve been unsuccessful in doing that and as a result are only delivering about 16 ships per year.” SLS could not be contacted for comment.

For the full interview with Per Wistoft go to:

Gulf Navigation owns and operates ships in the fi eld of crude oil and petrochemicals. It has 11 subsidiaries and owns 15 tankers.


ADCOP FAST FACTS

ADCOP will enable the UAE to transport almost two-thirds of its crude oil directly to the Fujairah export terminal.

The pipeline will stretch over 400km from Habshan in Abu Dhabi to the oil terminal in Fujairah.

China Petroleum Engineering and Construction Corporation (CPECC), the main EPC contractor.

There will be more than 30 000 welds along the entire pipeline.

Germanischer Lloyd will deliver third party in-spection and certifi cation services for the 400 km crude oil pipeline.

60%400 km

EPC30,000

INSPECTION

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NEWS ANALYSIS

NEWS INTERVIEWUpstream market focusPan-Emirates pipeline deal is just the start for ABB’s regional oil and gas ambitions

ABB recently won a US$21 mil-lion deal to design and supply an integrated electrical system for the billion dollar Abu Dhabi Crude Oil Pipeline (ADCOP) project.

With a length of 400 km and 48 inches diameter the pipeline from Habshan in Abu Dhabi, where it links to the Abu Dhabi Company for onshore Oil oper-ation (ADCO), to Main Oil Terminal (MOT) in Fujairah, United Arab Emirates will trans-port 1.0 - 1.5 million barrels per day (bpd) of crude oil. The pipeline will develop a reliable export capability on the eastern seaboard of UAE which can accommodate larger vessels.

“For this project ABB is supplying the electrical equip-ment, control system and the

in the region and if you look at the key customers here like the ADNOC related companies there is a lot coming up. In the Emir-ates alone there are quite a lot of opportu-nities coming up that we are bidding for.”

Despite the finan-cial crisis which hit companies hard in 2009, Pedersen insists this was not the case for ABB. “This is like a special situation because you could expect in a downturn that all the intake is going down but we actually see

related engineering to get the equipment and control system working. Later on they are going to need support and service for the operation so that will be dealt with separately but we hope in the end we are going to provide that as well,” remarks Bjarte Pedersen, head of process auto-mation, MENA region, ABB.

The project includes the construction of 12 million barrel of storage tanks in the Main Oil Terminal facilities (MOT) in the Emirate of Fujairah for crude exports. Construction started earlier in 2008 and is sched-uled to be completed by August 2011.

Pedersen reveals this is not the only project which the company has biod for. “There are so many projects coming up

Bjarte Pedersen is ABB’s head of process automation for the Middle East and North Africa.


NEWS ANALYSIS

that it is going up, so even in this type of situation we are picking up quite some business at the moment. Activity in the oil and gas sector is still high but hope-fully ABB is doing a little better than last year as well,” Pedersen comments.

In 2010, Pedersen states that the company is looking to increase its business further and as well as take advantage of new projects which are coming up, also move into new sections of the industry. “ABB is also into new areas such as electrification of oil and gas platforms, this is maybe a smaller investment but it is important,” Pedersen says.

“Typically we see that customers have big constraints with the power supply on the platform and it is difficult to expand that supply with the

limited space and weight limita-tions. So it is very interesting for them to bring the power from the shore and ABB has the tech-nology to do this.”

Looking beyond this year, Pedersen also reveals that the Middle East is a key market for the firm with further upstream oil and gas infrastructure invest-ment expected.

“I think ME is one of the areas where still you see a high level of investment. Customers here have a long term view of the market and they keep investing despite low prices of oil. It is different than any other place where you see a bit of a slump at the moment, so this is putting MENA at the top of the pile and it is a very important region for ABB,” concludes Pedersen.

The pipeline will transport oil to the UAE’s eastern seaboard export terminal at Fujairah.


INTERVIEW

PRIVATE POWER

Ahmed Al-Arbeed has unrivalled views out over Sharjah’s corniche waterfront. From the

11th floor elevation in Cres-cent Tower the chief executive officer of Dana Gas has an out-standing vista from which to reflect on a busy and hugely successful 2009. As much of the world’s private energy com-

panies succumbed to the double edged sword of deflated energy prices and a drying up of capi-tal, Dana Gas managed to buck prevailing trends and delivered a stellar performance.

“I think what was important was that we had built the right foundations and were engaged in the right projects before the financial crisis,” beams Al-Ar-

beed. The company is one of only a handful in the energy game that can say it will emerge from 2009 with a robust balance sheet and in a stronger position than a couple of years ago.

The figures at year-end 2009 show available cash of more than $190 million, plus available for sale assets valued at more than $272 million. The bulk

of the company’s revenue was generated from its operations in Egypt, with an additional con-tribution coming from its opera-tions in the Kurdistan Region of Iraq.

In the first nine months of last year, Dana Gas generated total revenues of $247.5 million. The full annual performance fig-ures will be out in February.

Egyptian business is paying real dividends for the Middle East’s first and largest private-sector natural gas company. Oil & Gas Middle East spoke with Ahmed Al Arbeed, CEO of Dana Gas to find what’s driving the gas bonanza

Ahmed Al-Arbeed, CEO of Dana Gas.


INTERVIEW

PROJECT FOCUSDana Gas is involved in excit-ing upstream projects in Egypt, Kurdistan, the United Arab Emirates and is soon hoping to bring to fruition a gas deal with Iran (currently in arbitration).

“The projects we are directly involved with have a huge amount of potential that will transform Dana Gas as a com-pany from where it is today to an even more effective gas com-pany throughout the MENASA region,” says Al-Arbeed.

“All of the projects are at a stage where we are developing, producing more and yielding new discoveries so it is a very exciting time for the company,” he adds.

The company’s operations in Egypt have garnered the lion’s share of media attention throughout last year, with fresh news of discoveries kicking off 2010 in the best possible way. “To double up your resource

base in one year is of course exceptional, and we are natu-rally delighted with that,” says the CEO.

Last year Dana Gas achieved average daily production of 34 750 barrels of oil equivalent per day (boepd), a 20% increase on the average for 2008 thanks largely to production from three of Dana Gas’ recent gas discoveries that were brought on stream without delay.

“Dana Gas Egypt is able to bring new fields on stream very quickly - just four months after discovery in late 2008 in the case of the El Basant, thanks to existing infrastructure in the Nile Delta area,” he says.

BREAKING NEWS – STRIKING OIL

As Oil & Gas Middle East went to press in Januray, Dana Gas confirmed the Al Baraka-4 well, drilled as an appraisal of the Al Baraka Field in the Komombo Concession in southern Egypt, has discovered a new pool in the Six Hills “E” reser-voir. The Al Baraka-4 well is currently on-stream producing at a rate more than 5 times the sustained flow rate from any previous well in the field.

The Al Baraka-4 well was spudded on December 5th,2009 and reached total depth of 1470 meters. It is located 470 meters to the southwest of Al Baraka-2 well. The well encountered 16 meters of net oil pay in the previously defined reservoirs in addition to 8 meters in the new Six Hills “E” layer. The new reservoir is proving to be more productive than the currently producing zones, having tested oil with natural flow to surface at a rate of 220 bopd. It is the first well on the Concession to flow oil to the surface through the natural energy of the reservoir, without requiring arti-ficial lift. The well was also tested with artificial lifting at a maximum rate of 1300 bopd. The volume of reserves discov-ered is under evaluation. Dana Gas had its most prolifi c year in 2009, a record the CEO is keen to build on.

Getty Images

DANA GAS: EGYPTIAN GAS DISCOVERIES IN 2009 Salma Delta-1 Sondos* Azhar-1* Tulip-1 Sharabas-1 Sama-1** Faraskur-1 Marzouk-2 Orchid-1

* Already on-stream** on stream Q1 2010

Last year, in Egypt alone, a total of 12 exploration wells were drilled, yielding eight dis-coveries. “This year work will progress to bring the remaining discoveries on stream with vari-ous development schedules and alternatives being studied to optimise production and profit-ability consistent with a prudent capital investment programme,” says Al-Arbeed.

Production this year is fore-cast to average just over 40 000 boepd rising to potentially 50 000 boepd in mid 2011 as new facili-ties are brought on stream.

When asked why, after many years of exploration, Egypt is yielding such a strong discovery

rate, Al-Arbeed sums the timing up in two words: “Technology and knowledge. Having spent many years in the oil industry this is what you come to expect, but crucially with these two fac-tors improving we can go and drill in areas which were once considered too challenging or

“To double up your resource base in one year is of course exceptional, and we are naturally delighted with that” Ahmed Al-Arbeed


INTERVIEW

in formations which were not well understood.”

The success rate in Egypt has been prolific, and Al_arbeed says with the accrued wisdom from last year, 2010 will be an even busier year for his drilling engi-neers. “We are now in a position to drill more – Essentially tak-ing more risks – because they are calculated risks. We have a lot of confidence that the areas where we have our concessions will yield even more gas than thought possible.”

KURDISTAN CALLINGDana Gas, through its 40% shareholding in Pearl Petro-leum Company, has become an important foreign investor in the oil and gas sector of the Kurdis-tan Region of Iraq. At the end of September 2009, the Dana Gas investment in the region was in excess of $272 million. Gas pro-duction from the Khor Mor field at a rate of 90 million standard cubic feet per day (“MM scfpd”) which was delivered to power stations at Erbil and Bazian, ensuring that families in a long-neglected region received a reliable source of energy. “Supplying this area and its people with a reliable electricity supply was one of the key rea-sons Pearl Petroleum got on board with this project,” explains Al-Arbeed.

Throughout last year work progressed on construction of the LPG plant at Khor Mor, which will enable production to increase to 300MM scfpd in 2010, with the increased conden-sate production and LPG that will be extracted from the gas stream considerably increas-ing revenue to PPCL. Studies continued throughout the year to evaluate the Khor Mor and Chemchemal reservoirs which

are highlighting the fact that these are two potentially world class gas fields.

In May 2009 the extent and value of these fields was dem-onstrated by the fact that OMV, the Austrian oil and gas com-pany, and the Hungarian oil and gas company, MOL, each pur-chased a 5% interest in PPCL from Dana Gas in exchange for $175 million in cash, and MOL shares to the value of $175 mil-lion respectively. This trans-action also brings a major stra-tegic advantage to Dana Gas because MOL and OMV, two major European energy com-panies, between them own one third of the proposed Nabucco pipeline which will provide an attractive potential export route for gas from the PPCL fields to Europe.

REGIONAL VISIONAl-Arbeed says that opportu-nities remain strong in other countries, stretching the reach of the Sharjah-based company across focus areas as diverse as Oman, Yemen, Egypt, Algeria and Syria.

“Wherever we feel there are countries in the MENASA region which fit with our strat-egy then we feel we are a good partner to optimise the benefit of the whole gas cycle, both for our shareholders and for the host nation.”

The chief executive says in that regards, the mission and vision of Dana Gas is unique in its field. “We explore and pro-duce gas, but we are equally interested in building an inte-grated gas infrastructure throughout the midstream and downstream. I think that is exactly what countries in this region want – to develop their wider economies.”

“All of the projects are at a stage where we are developing, producing more and yielding new discoveries so it is a very exciting time for the company” Ahmed Al-Arbeed

CEO PROFILE:In April 2009, Ahmed Al Arbeed was appointed CEO of Dana Gas, bringing with him more than three decades of regional oil and gas experience, including being Managing Director of Kuwait Oil Company and Kuwait Foreign Petroleum Exploration Company (KUFPEC) within Kuwait. He has been with Dana Gas since 2005 as a founder board member.

On Management: “My abilities best lie in managing people. More than anything else in business this is crucial. I have been successful in building a team which can make things happen. The company has stepped up a gear in the last couple of years and we now have the right people in place to take the company to another level. I support empowering my people – I find this the best and most rewarding way to operate”

Oil & Gas Middle East met Ahmed Al-Arbeed at his Sharjah HQ.

February 2010 Oil&Gas Middle East 21

INTERVIEW

A team of engineers inspect the Dana Gas processing plant in Egypt.

HOME FRONTCloser to home, Al-Arbeed con-firms that work is continuing on the 1000km2 offshore conces-sion in Sharjah, which includes the Zora gas field, discovered in 1979. Development costs of the field are estimated at around $150 million. “The Zora Field can produce between 40 – 55 million scfpd. That will be an important asset to Sharjah and we hope we can get gas flowing as quickly as possible.”

Part of the field actually sits in Ajman, (a neighbouring Emirate). “We look forward to being an important strate-gic partner to both Emirates. It’s also great to be involved in an importnat project on our home turf,” he adds. The CEO is hopeful that the project will lead to more work in the UAE.

“Once we bring this online we hope we will be involved in bigger projects too, because the United Arab Emirates has a lot of fields, and a lot of poten-tial, and we are building this company to help the residents of countries in this region take the maximum benefit from their reserves.”

Reflecting on past successes does not occupy much of Al-Ar-beed’s time. He remains reso-lutely focused on what is yet to come. “Ultimately we see host governments, our share-holders and the companies we form alliances with all as our partners and stakeholders. We are working for all of them and I am completely focused on making Dana Gas a company everyone wants to align with,” he concludes.

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NEWS REVIEW

THERE IS NO QUICK FIX – WE NEED OIL AND GAS

January saw an impres-sive gathering of global dignitaries and energy companies convene

in Abu Dhabi for the third in-stalment of the World Future Energy Summit. Let me start by stressing that I think it is, of course, commendable that

Even government ministers can lose sight of rationality when eco-talk reigns. Daniel Canty reports from The World Future Energy Summit in Abu Dhabi

Abu Dhabi recently became the official home of the Inter-national Renewable Energy Agency, and much important work is to be done in this field if the world is to meet its en-ergy requirements in the com-ing decades. It was with a little disappointment, however, that

I left the forum roundtable dis-cussion between energy min-isters (from no less than eight countries), gathered together on day one of the conference.

A lot of urgency was stressed. Familiar, if still impassioned rhetoric was, of course going to be the order of the day. “We have

no alternative. The time is now. Copenhagen was a disaster. We need results not talk,” we were all reminded. Again. A smatter-ing of mutual admiration (and self congratulation) for renew-able and alternative invest-ments to date was inevitable and forthcoming.

Abdulla Al-Attiyah, Deputy Premier and Minister of

Energy, Qatar, shakes hands with Dr Farooq Abdullah,

Minister of New and Renew-able Energy, India. Mohamed Bin Dhaen Al-Hamli, Minister

of Energy, UAE is centre.


NEWS REVIEW

HH General Sheikh Mohammed bin Zayed bin Sultan Al Nahyan (c) Crown Prince of Abu Dhabi and Deputy Supreme Commander of UAE Armed Forces.

Panel guests included ministers from Ghana, China, Korea and Japan.

However, as one would expect, a great deal of it amounted to nothing more than hot air. What a warming world needs like a fish needs a bicycle.

Energy diversification is now more achievable to the coun-tries of the Middle East and Asia, and represents an emi-nently sensible path to follow and promote. Investing in solar power, geothermal technologies and nuclear power production are all sensible alternatives to burning fossil fuels for energy in the Middle East. If nothing else, this will free up more oil and gas to be sold to energy starved nations of the world.

The development of a peace-ful nuclear energy industry in

particular paves the way for lower greenhouse gas emissions and better air quality across the region. All good stuff.

However, what was disap-pointing from the roundtable discussion was the black brush that was being swept across the oil and gas industries – still the lifeblood of economic develop-ment throughout the GCC and for the many other countries blessed with such resources. Not to mention all their terribly willing customers.

The language had turned a vitriolic green and thankfully before the pressing issue of energy security was forgotten completely in favour of a call to eco-warrior arms, HE Abdullah

bin Hamad Al Attiyah, Qatar’s Deputy Premier, Minister of Energy & Industry took the microphone and delivered some home truths.

“The debate, not just today’s, but for a long time in the media, paints oil and gas producers as the enemy of the environmental movement. This is not true and not helpful. Today we face a situ-ation where all of the energy we can produce, from all sources is needed urgently. We need to dial down the rhetoric and stop mak-ing oil and gas the scapegoat for all the world’s problems.”

Quite right. The frustrated Al Attiyah added that it would be far more productive to have a meaningful conversation

where ‘bad’ and ‘good’ were not pinned to the essential energy resources we have.

Let’s not forget that grow-ing crops for biofuels diverts that resource away from hun-gry people’s stomachs and into petrol tanks. There is no single button we can press that solves all the world’s ills. By burning natural gas instead of coal many major economies are already making the green switch, and one which requires a consider-able infrastructure investment.

“We can’t phase fossil fuels out – we all have to play together to meet the energy challenge,” said Al Attiyah. With this it is hard to argue. It’s a crime today that in a world of iPods and air

Abdulla Al-Attiyah, Deputy Premier and Minister of Energy & Industry, Qatar.


NEWS REVIEW

conditioning, over 2 billion peo-ple remain without electricity (a number that in spite of many wondrous advances in green technology will only grow in step with Asia’s ballooning pop-ulation), and it is simply wrong to suggest a few billion more dollars in solar panels will ever meet these needs. As India and China’s people move into cities, for the time being anyway, fos-sil fuels will be what keeps their lights on, and ovens warm.

Dr Farooq Abdullah, Minister of New and Renewable Energy, India conceded that the needs in his home country were indeed great and urgent. We are a growing population with a grow-ing energy demand. 60 years on from Independence, 40% of India’s population is still without electricity.” This shortfall will

not, by any stretch be met with-out considerable increases in oil and gas imports.

Reflecting on the Middle East’s immediate needs H.E. Mohamed Bin Dhaen Al- Hamli, Minister of Energy of UAE weighed in and agreed that alternative energy solutions were just part of a much needed diversified energy mix. “All of us know the world economy is going to grow, and fossil fuels will not be enough. There is room for nuclear energy, fossil fuels, and renewable energy.”

The proceedings ended with Qatar’s energy minister remind-ing the audience (and one feels some of the panel) that four of Qatargas’ best customers were assembled on stage with him. “We have 62 million tonnes of LNG production per year on

H.E. Abdulla Bin Hamad Al-Attiyah, Deputy Premier and Minister of

Energy & Industry, Qatar

H.E. Mohamed Bin Dhaen Al- Hamli, Minister of Energy of UAE

H.E. Dr. Hasan Younes, Minister of Electricity and Energy, Egypt

H.E. Dr Farooq Abdullah, Minister of New and Renewable Energy, India

Hon. Hanny Sherry Ayittey, Minister of Environment, Science and Tech-

nology, Ghana

Hon. Wang Xue Xian, Ambassador to the United Nations, China

H.E. Tadahiro Matsushita, Senior Vice Minister of Economy, Trade and

Industry, Japan

H.E. Young Hak Kim, Vice Minister, Ministry of Knowledge Economy,

Republic of Korea

ENERGY MINISTER’S PANEL

stream today, and we will be increasing that by 15 million tonnes this year to meet the demand from our customers on three continents. Everywhere you need us we will be there.”

It’s easy to get swept up

in one side of a debate, but it is important that common sense and rationality do not become the first victims of the green revolution. Daniel Canty is the Editor of Oil & Gas Middle East.

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IRAQ TODAYIraq has abundant human and natural resources: a population of 30 million, the world’s third-largest oil reserves, consider-able gas reserves, and ample water resources. It attained the status of a middle-income country in the 1970s, develop-ing good infrastructure and well-performing education and healthcare systems. However, over the past 25 years, dicta-torship, wars, and international sanctions have undermined the country’s institutions and crip-pled its economy.

OPEN FOR BUSINESSDoors of opportunity have been flung open on Iraq’s collossal upstream developments

The oil sector still domi-nates Iraq’s economy, account-ing for two-thirds of GDP and over 98 percent of exports and government’s own revenues. Between 2004 and end 2007, oil production averaged at about 2 million barrels per day (mbpd), below government targets and below the pre-2003 levels. Oil production and export volumes have picked up as well during 2008, reach-ing record highs since 2004 of 2.4 mbpd and 1.9 mbpd respec-tively. This is mostly due to the recent security gains in Iraq.

Iraq has also undergone rapid political transition. A con-stitution was approved through public referendum in October 2005, followed by parliamentary elections in December 2005, and a constitutional government was appointed in May 2006. The current government – in power since 2006 – has moved to get key reforms back on track, and is working flat out to encour-age much needed foreign direct investment.

The highly insecure environ-ment of the years 2005 – 2008, and the transitional nature of

Iraq as a state and an economy have impeded reconstruction efforts, and the delivery of basic services. Iraq’s abundant hydro-

EXPORT BOOSTIraq’s Oil Ministry announced that revenues from oil sales increased by US$300 million in December, 2009. Local news-paper Aswat al-Iraq reported that revenues were up to $4.499 billion in December after sales of 61.3 million barrels of oil at $73.39 per barrel.

IRAQ COUNTRY PROFILE



must also be factored in if the oil produced can successfully find its way to market, according to Samuel Ciszuk, IHS Global Insight’s Energy Analyst for the Middle East and North Africa.

“Iraq has a huge problem with infrastructure bottlenecks. The pipeline system in Iraq is a shambles. In some places dilapidated, in other completely destroyed. On top of that the export facilities are in a bad state, and simply do not have the extra capacity to handle the millions of extra barrels of oil each day that the country has targeted for production in a relatively short timeframe,” he says.

The Iraqi Oil Ministry has demanded, as part of the con-tract agreements that work progresses quickly. “Large incremental increases in output, initially from the southern fields such as Rumalia, West Qurna 1 will come within the next 36 months. Getting that extra oil to market is a massive challenge. If they are to come close we would need to see pipeline and terminal improvement contracts awarded this year,” observes Ciszuk.

On top of the physical export infrastructure work, many mil-lions, possibly billions of dol-lars will also need to be spent on basic civil infrastructures such as housing, roads and power and water projects to support the hoards of workers needed to facilitate these massive projects.

The current planned invest-ment figure is sufficient to dwarf what else will be going on throughout the region for the next ten years. However, the work outlined above may be just the tip of the iceberg for EPC firms and oilfield service provid-ers. Much of the outlay we can safely expect in the coming dec-

ade is based on Iraq’s estimated oil reserves today - but these may prove far short of the real resource wealth that is in place.

“Exploration is Iraq hasn’t really been going on in any meaningful way for the last 30 years. Deeper horizons haven’t been investigated,” says Cis-zuk. Indeed, where superma-

carbon and human resource base could be the engine for a remarkable economic diversifi-cation and revival if conditions in Iraq are conducive.

OPPORTUNITY KNOCKSAlthough the first field devel-opment bid round was widely reported as a failure, the allo-cation of the super giant Ruma-lia Field, west of Basra was in itself a massive achievement. The Iraq Oil Ministry’s award to BP and CNPC is of genuine global significance, and could see the Rumaila super-giant oil field become the second highest producer in the world, after the Ghawar field in Saudi Arabia.

“BP and CNPC have targeted a production plateau of 2.85 mil-lion barrels per day (mmb/d) over the next six years - a level of growth from a single field which is almost unparalleled in the history of the oil industry,” says Colin Lothian, Middle East upstream research analyst for Wood Mackenzie.

Indeed, the largest fields, including West Qurna 2 (12.9 billion barrels), and Majnoon (12.58 billion barrels) have been awarded. If output targets from these two fields are achieved, they alone will bring an extra 2.6 million barrels of oil each day to the surface.

The BP led partnership on Rumalia is expected to invest over $20 billion alone over the course of its contract. If other supermajors are to achieve their production targets (the ramping up of production will be prolific over the coming three years), then foreign direct investment in the upstream business alone is likely to see that figure bal-loon by a factor of ten.

However, much work beyond upstream field development

thsayupW

incbil(1awth

jors have done work in Kuwait (where geophysical similarities are high), it has been proved there is a huge potential for even greater reserves in deeper terrain. “The general feeling is one of optimism regarding the fields being greater rather than smaller then currently thought,” he adds.

An Iraqi engineer walks along the Zubair oil fi eld in southern Iraq in January.

Getty Images

“BP and CNPC have targeted a production plateau of 2.85 million barrels per day over the next six years - a level of growth from a single fi eld which is almost unparalleled in the history of the oil industry” Colin Lothian, Wood Mackenzie

BUSINESSGUIDEOPERATING IN IRAQThe overwhelming potential that work in Iraq holds for the majors embarking on their mammoth tasks will deliver an immense opportunity for hun-dreds of Middle East based oil-field service companies, EPC contractors and niche technol-ogy providers. If the work is to be done in the timeframes sug-gested, domestic knowledge and skills will be nowhere near enough.

However, doing business in Iraq can be a costly, frustrating and difficult business. For the first time in many years, how-ever, the opportunity is so great that it easily outweighs the pit-

falls, as many first-movers from the international and Gulf region are finding.

To open the lid on the busi-ness environment in Iraq, Oil & Gas Middle East tracked down Baghdad residents John Desro-cher, minister counselor for eco-nomic coordination, US State Department, and Gary Soper, first secretary, head of UK Trade and Investment, Iraq.

“The Iraqi message is very much one of investment. They are very keen to see more com-panies establish operations there, but also to broaden that whole dialogue to include trade as well,” explains Soper.

However, getting your invest-ments off the ground in Iraq will be an uphill task. “It is clear that in some ways this is a challeng-ing place to do business. This is a country which is essentially rejoining the world economy for the first time in decades,” out-lines Desrocher.

$3.5bnBasra’s oil exports of 47.6 million barrels worth $3.5 billion in Decem-ber 2009, while Kirkuk’s 13.7 million barrels brought in $993 million. Source: Iraq Oil Ministry

For small and medium size enterprises Iraq remains a small but grow-ing opportunity landscape. For the time being the big-gest rewards are there for the multi-national compa-nies which carry the clout of global support with them.

Breaking into to Iraqi mar-kets also represents chal-lenges quite beyond those of the rest of the region. “It’s

www.arabianoilandgas.com28 Oil&Gas Middle East February 2010

Gary Soper, fi rst secre-tary, head of UK Trade & Investment in Iraq.


important to bear in mind that the private sector is still small in Iraq. Over 43% of the work-ing population is employed by the government or state owned enterprises, so there isn’t the same dynamism in private hands that you find elsewhere,” explains Soper.

“However, it’s still early days and there is a very steep learn-ing curve under way. You can see from the difference in the way the first and second oil bid rounds were undertaken that the improvements are being made swiftly.”

A further consideration is that a great deal of international work is predominantly handled by the ministries. SME’s might not have the level of finan-cial backing required to stay in for the long haul currently required.

In terms of getting started, both Desrocher and Soper agree that your home country’s embassy or trade mission is the best place to start. Following that step, the National Invest-ment Commission, which was established in 2006, is the next port of call. The NIC, led by its Chairman Dr. Sami Al-Araji, is the face of private investment in Iraq, with a mission to serve as promoter, facilitator, moni-tor and policy advisor for firms looking to invest in Iraq.

“The NIC is one of the first places we would direct people and can help companies clear all the hurdles and challenges which are out there. They are really very dedicated and they work very hard promoting investment, as well as being good people to work with,” says Desrocher.

Whilst a number of agen-cies have sprung up focused on specific industries, in theory to

streamline processes and proce-dures, but it is not always clear where the lines of demarcation between them lie, and vested interests still have a habit of coming to the fore. Clearly not a market for the feint hearted, but things are improving.

Government ministries don’t have the pedigree of mak-ing important decisions. The ingrained system is that eve-rything goes up to the high-est level. “There have been instances of $40,000 projects which aren’t signed off because trade and development con-tracts do not have a frame-work in place. There is a natu-ral tendency to send everything towards the presidential office for authorisation,” says Soper.

For companies looking to set up in Iraq and finding office space in the International Zone (formerly the Green Zone) the consensus is be prepared to progress slowly. “There are companies on the ground in the International Zone which have facilities for rent – either for fly-ing visits, kitted out as a stand-ard board room, as well as tem-porary and medium term office units,” explains Soper.

For long-term partnerships the model appears to be that once companies have the confi-dence to set up a local joint ven-ture that will facilitate moving out of the International Zone.

The market is clearly not one for the feint hearted, and much ground work must be laid before embarking on your busi-ness plan. Rich pickings won’t come quickly, and finding a suit-able JV partner looks to be the best vehicle for medium-term penetration. For the firms that successfully crack the major projects, the rewards are unpar-alleled in the coming decade. John Desrocher, minister counselor for economic coordination, US State Dept.

The heavily guarded International Zone remains the safest base in Baghdad.

“It is clear that in some ways this is a challenging place to do business. This is a country which is essentially rejoining the world economy for the fi rst time in decades” John Desrocher - minister counselor, US State Department



www.arabianoilandgas.com30 Oil&Gas Middle East February 2010


F IAFI Group has been operating in Iraq since 2004 when it was initially involved in logistics, se-

curity, maintenance and train-ing. On the back of increased demand from customers, the company has expanded its service offering to include con-struction and life support. The company is offering solutions across environmental, pipeline and manpower services. Up-stream customers are looking for integrated infrastructure solutions to support their en-try into Iraq, explains Ragdan El-Akabi, CEO, FIAFI Group.

IAFI Group has been

GROUND SUPPORT How are you placed to

handle the expected influx of oil related business in Iraq?I believe there will be a signifi-cant increase in demand for our services from the upstream oil sector and my company has been ramping up its operations during the last year to increase our operational capacity. This included a period of re-invest-ment to expand our logistics fleet. We have undertaken large-scale infrastructure services programs within tight mobilisa-tion timeframes to date and so I feel that our preparation and experience puts us in a position of strength.

Which sectors have

dominated your workload so far? Our logistics and camp services have to date been dominated by providing support on US Mil-itary contracts and the various contractors operating in Iraq.

However, this is now geared to move towards supporting the oil and gas sector, although it has to be said there are huge construction contracts pending outside the upstream sector that

will also require very similar services.

What housing is suitable for remote oilfield sites?The preferred choice of housing for our clients is usually prefab units which come in flat packs and are erected on site. In areas where security is an issue, some clients prefer containers which are converted into living accom-modation, the steel structure offer more durability. We have also erected large dining facili-ties from prefab housing.

What role do you play

once a site is built?Naturally, building the camp is just the beginning. What counts after that is the life support serv-ices coupled with operations and maintenance. This ranges from catering and laundry through to power, water and sewage. Our life support department has a history of life support services sometimes in remote locations in Iraq.

Upstream projects fre-

quently require heavy lift equip-ment for its projects. How does this work in Iraq? We do have the capability to deal with outsize cargo and heavy lift operations. FIAFI Group is ever

An engineer and security guards walking in the Barjisiya oil fi leds in Zubair One, 550km from Baghdad.

Getty Images

Logistics and manpower services are a top priority for oilfield service companiesincreasing its capabilities and what we do not currently have, we either source locally for the purpose of the task at hand or purchase and import specifically to cover any capability shortfalls. Availability of specialist equip-ment is dependant upon supply and demand in the market at any given time, but it is possi-ble to cover most requirements. We also provide cross border logistics and full customs clear-ing solutions, though problems in that regards are less common today.

Do remote sites cause additional security concerns? Remote sites need not cause additional security concerns as much depends on where in Iraq it is located and the measures taken to protect the site. Effec-tive management and a sym-pathetic approach to the local population can pay dividends with the micro security situation surrounding the site. Engaging with the local people and provid-ing employment brings untold rewards. Hearts and minds are the way forward - everyone needs to be able to provide for their families.

Ragdan El-Akabi is CEO of FIAFI Group.

FIAFI Group is committed to the development of Iraq through education, economic growth and social tolerance.As a trusted business partner with many years’ experience, FIAFI Group supports customers as they operate in

remote and sometimes hostile environments. The company provides a broad range of secureand professional infrastructure services to international standards allowing customers

to concentrate on growing their own successful businesses.

INFRASTRUCTURE SERVICES

W W W . F I A F I G R O U P . C O M


DRILLING SERVICES

“With all the information we have, I think the MENA drilling industry can probably expect growth of 5 to 10% over the course of the coming year” Faroohar Farzadnia

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DRILLING FOCUS

D rilling service provid-ers had to tackle a hostile environment in 2009. From reduced

exploration work and a tight cost-control mindset from the National Oil Companies across the region, the sector picked up again in Q4 2009. With hopes pinned on a busier year across the region, Oil & Gas Middle East met two of the region’s fastest growing providers to sound out where demand is expected to be strongest.

QATAR FOCUSMohammad Yacob Al-Sayed, Al-Shaheen Well Services CEO, says that an oil price that has sta-bilised could see activity in the region pick up, though demand increases are likely to be slug-gish as OPEC members curtail their production ambitions.

“The price range of $70 to $80 is suitable for GCC countries to reactivate drilling activity. How-ever, since GCC countries are proportionately bigger suppli-ers of oil globally, I think they are looking for more stabilisa-tion in the price in order to go back to the drilling activities.”

Cautious optimism is the order of the day for Qatar and the UAE’s most dynamic drilling service providers

Al-Sayed adds that whilst a return to the boom period seen two to three years ago is unlikely, this year could see an upswing in projects advancing.

“2010 will be a slow year due to supply exceeding the demand for oil in global markets, which will cause the slow down of the drilling and well services activ-ity. However, by the third quar-ter of 2010 there is the expec-tation that demand for oil will increase. This will be due to the start up of hundreds of energy production facilities and refin-eries which were planned and built around the globe during the boom times.”

A focus on its home turf in Qatar has insulated Al Shaheen from the steepest of activ-ity declines, and will remain a robust market, says the CEO. “The state of Qatar was less affected than other markets, both in the region and particu-larly worldwide. The growth rate in Qatar is much higher than elsewhere, which has helped to offset the worst of the recession-ary down turn.”

The most resilient service line from the Al Shaheen sta-

ble has been directional drilling packages, notably directional drilling surveys and logging while drilling. “We have been expanding our offering in this market thanks to a strong prod-uct line of technologies avail-able to support these services. Deploying these services can solve many problems for end-users and allow operators to improve their success in com-plicated reservoir areas - which was impossible just a few years back,” notes Al-Sayed.

UAE AND BEYONDFaroohar Farzadnia is cor-porate business devel-opment and marketing director at the UAE’s largest homegrown oil-field service company, AlMansoori Specialized Engineering. “The firm has played a leading role in bringing new technolo-gies and cutting edge serv-ices to the Middle East, and has recently renewed its

efforts to go global. The com-pany today has over 1300 employees working in 19 coun-tries providing a variety of oil-field services and producing specialised products for the upstream industry,” he says.

In 2008, the company dis-sected into two independent stand-alone holding companies to streamline the management of the businesses of the com-pany. These are: AlMansoori Petro- leum Services

(AMPS) for

Faroohar Farzadnia, marketing director, AlMansoori Special-

ized Engineering.


DRILLING SERVICES

managing the business units of the oilfield services group and AlMansoori Petroleum Indus-tries (AMPI) for managing the business units of the manufac-turing/fabrication group.

“While our area of operations has traditionally been in the Middle East, we are currently expanding our operations into North Africa, the Far East and South East Asia as well,” com-ments Farzandnia.

Locally the early signs of recovery are becoming more evident, he adds. “In the GCC rigs that went idle in 2009 are coming back into service and some of the projects that were suspended will come back into play this year. With all the infor-mation we have, I think the MENA drilling industry can probably expect growth of 5

-10% over the course of the com-ing year.”

Important lessons have been learned during the crunch last year, and Farzadnia says that offering clients more than a portfolio of services will be the key to unlocking the potential of the recovering sector.

“From discussions across the board with upstream project managers and oil companies, the thing we will be focusing on is being an integrated energy solution provider to the sector.

“Most companies want their services and equipment provi-sion to be bundled; essentially delivering a one-stop shop solu-tion so they have one point of contact. This is easier for them to manage and it’s a more cost-effective solution too,” he con-cluded. Mohammed Yacob Al-Sayed, CEO, Al Shaheen Well Services.

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DRILLING SERVICES

WELL INTEGRITY – EXPERT VIEWExpert: Salim Taoutaou, business development manager, Middle East & Asia, Schlumberger

design, coating and inhibitors and cathodic protection. The second stage is monitoring of well integrity during the life of the well, locating possible leaks and/or loss of metal. The last stage is how to manage and con-trol any well integrity issues, using specialised products and services. Schlumberger has a full portfolio of unique cement-ing technologies that can be used during the design and construction of the well for primary and remedial cement-ing. In addition, we have a full suite of logging tools namely ultrasonic cement and casing evaluation tools, electromag-netic metal thickness tools and mechanical calipers that will help during the pipe integrity monitoring and inspection of the well. With our logging tools we can identify internal and external wall loss, holes and pits and total metal loss in addi-tion to cement evaluation.

What are the advantag-es of using this technology? Using these technologies will primarily ensure the long term well integrity, which will increase the longevity of the well. This provides more production, less workover and finally big savings to our clients. In addi-tion, for wells that suffer from integrity problems, we can help find the problem using our log-ging tools before catastrophic failure occurs and if possible, correct it.

What would be your top tips for 2010? Well integrity is a serious busi-ness and needs collaboration between service companies and operators to ensure the long term zonal isolation at the design stage and also to find out the root cause of the loss of the well integrity and how to remedy it.

importantly isolating permea-ble zones at different pressure regimes in order to prevent hydraulic communication.

It has been estimated that 1% of the total operating costs of the petroleum industry could be saved by the correct applica-tion of existing corrosion pro-tection technology.

By predicting problem areas, prevention budgets may be spent wisely. It is worthwhile to monitor for weak points since corrosion or damage preven-tion is cheaper than repair. Finally, precise identification of failure can be used to minimise repair expense.

How should I approach my well integrity programme? Well integrity management is looked at in three distinct stages. The first stage is dur-ing the well design which includes material selection, engineering design, cement

Salim Taoutaou, Schlumberger.

Cement placement is a criti-cal component of well archi-tecture for ensuring casing mechanical support, protection from fluid corrosion, and most

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©2008 | Rental Solutions & Services

Rental Solutions & Services (RSS) is aof power

services

our

Y

Power generation companies in the Middle East are seeing oil and gas as an increasingly important sector

Aggreko’s temporary power solutions sit alongside an FPSO undergoing maintanence.

www.arabianoilandgas.com

POWER GENERATION

Supplying power to the oil and gas industry can be fraught with difficul-ties, remote locations

and difficult access offer chal-lenges that perhaps no other sector can. However with the

market currently performing admirably, it’s a challenge they are more than willing to take up.

Aggreko provides tempo-rary power and temperature control solutions to both the upstream and downstream sectors in the Gulf. “The serv-

ices that we offer are not just about power generation; they

are to do with a total power supply solution for every

stage of oil and gas production,” states

Phil Burns, managing director of Aggreko Middle East.

The first of the applications which Burns mentions is power rental during the construction phase of oil and gas facilities, which can power anything from the cranes on site to the work camps.

“Early production is another application of rental power due to the enormous commercial pressure to produce oil as early as possible to maximize cash flow for projects. To facilitate this, the conversion of existing vessels and refurbishment of production facilities is a practice which is common,” adds Burns.

“Temporary power systems are well suited to power these applications, both during the

fabrication and refurbishment phases as well as providing power for the facility when it is fully operational.”

The firm also offers rental power on an emergency basis, providing support to oil and gas companies which experience unexpected power shortages. “One such case occurred at a large oil refinery, when torren-tial rain and flash floods caused severe damage to much of the power infrastructure at the facility. Within a matter of days Aggreko was able to provide a 12 MW power package which enabled the refinery to continue operations during the clean-up operations,” explains Burns.

The Middle East now offers power generation firms a fertile,

Power generation companies in the Middle East areseeing oil and gas as an increasingly important sector

POWER HOUSE

Phil Burns, managing director, Aggreko Middle East.

36 Oil&Gas Middle East February 2010


POWER GENERATION

if differing, market. “The last six years the GCC has enjoyed tre-mendous growth with the enor-mous volume of construction underway,” comments Michael Sagermann, regional manager, portable division, Atlas Copco.

“Very few sites operated without a generator. Our expec-tation for the GCC is very posi-tive despite the economy not fully recovered from the cri-sis effect. Country to country there are wide gaps in expecta-tions, however specific markets (like Saudi Arabia and Iraq) show enormous potential. The current demand for power still overshadows supply, feeding the need for temporary portable power solutions,” he adds.

“Logistics, transportation and sometimes, security are a great challenge in remote locations” Robert Bagatsing, RSS

The challenges presented to these firms in supplying power are clear. “Logistics, transpor-tation and sometimes, security are a great challenge in remote locations. Each country, prov-ince and district has different rules, terrain, weather and secu-rity conditions,” reveals Robert Bagatsing, sales and marketing manager of RSS.

“That is why RSS thoroughly assess the project and plan its installations to avoid mistakes. A proactive approach has been an integral part of our process. So no matter how difficult the challenges are, we always find a way, or make one,” he adds.

When supplying a power generation service to the oil and

gas sector, there are a number of factors which can make one company’s services stand out from the rest.

“Customers should request their own tailored power pack-age to ensure that it is right for the situation. Being able to work in remote and difficult environ-ments is key, as is the flexibility to have power supplied quickly and for the time period neces-sary,” Burns explains.

“At Aggreko, we do not sim-ply rent out the power package and expect our customers to know how to do the rest. Pro-viding an optimum power sup-ply can be a very complex task, so we ensure that our teams are highly skilled and trained to install, commission and run

Dr Mostafa Al Guezeri GM of ABB’s Power systems divi-sion also believes the market is looking positive. “If you look at the new ambitious oil and gas projects rolled out in the UAE, the market is going to be buoy-ant and plenty of tenders are expected. The basic drivers do not change much.

“We have seen some move-ment in the direction of the grid providing power to oil and gas plants. This means there won’t be large captive power plants in oil and gas industries. Stabil-ity of grid and having enough reserve capacity of production is going to be the focus. This means the quality of power pro-duced by the IWPPs is going to be under the scanner.”

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POWER GENERATION

the equipment to optimum effi-ciency,” he adds.

“There are a number of important aspects in portable generators, since oil and gas is a very specific and demand-ing market sector. Is the scope of supply suitable for oil and gas applications? Is the prod-uct safe? What are the lifecycle costs, such as fuel use, service costs, residual value? There are plenty of low cost generators in the market, but is that low price then offset by much higher operational costs?” questions Sagermann.

The oil and gas division is the main driver of business in the region. Steady and sustainable growth of this industry is essen-tial not only for the region, but also for other parts of the world, where it supplies much needed

power in remote locations, sup-plying temporary maintenance power, or supplementing any activities needing portable elec-tricity,” says Saggermann.

With the market perform-ing well, the power generation sector, is looking at oil and gas as one if it’s prime sectors and hopes for the year ahead are high. “Despite some market instability in 2009, the oil and gas industry has been one that has continued to grow for us, as a result of

fuel. When we talk about this field, what comes first to my mind is the reliability,” reveals Al Guezeri.

“There are many inter-linked processes, which can-not be shutdown without going through a pre-defined step or procedure. An interruption of power can cause major safety risks and damage of equipments in addition to the obvious loss of production,” he adds.

With the market performing well, certain regions within the Middle East are showing huge potential. “Thus far our biggest growth market has been Saudi Arabia, Qatar and Iraq. Saudi and Qatar are very active in upstream activity in oil and gas. There’s any number of applica-tions where a generator needs to be used, whether in providing

upgrades and rig maintenance as well as new investment,” con-cludes Burns.

Dr Mostafa Al Guezeri GM of ABB’s Power systems division

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MIDDLE EAST JACKUP MARKET REVIEW

FINDING THEIR FEETA

s in other parts of the world, last year the off-shore drilling rig mar-ket in the Middle East

witnessed a dramatic decline in rig utilisation and hire day rates as a result of the global financial crisis.

Working utilisation (based on total regional supply) in the Middle East region, which is predominantly a jack-up market, fell from around 84 per cent in January 2009 to approximately

Drilling rig owners can expect a better year on stronger day rates.

67 per cent at time of publica-tion. This change is signifi-cant given that utilisation in the region has not dropped below 80 per cent since around mid-2001. At present, more than 30 of the 120 jack-up rigs located in the Middle East are idle without any future contracts.

Due to a large amount of availability and thus fierce com-petition for drilling contracts, daily rig hire rates have also sof-tened considerably. For exam-

ple, in the Persian Gulf, day rates for independent-leg, cantilever-type jack-up rigs rated for water depths of up to 91 msw (300 fsw) were around US$130,000 in the earlier part of 2009, but the year concluded with a contract at a rate of just $54,000 per day. Again, this drop signals a signifi-cant downturn in the market.

The past year has been a challenging one for most rig owners, and ODS-Petrodata’s forecasts for 2010 suggest that

Dr Rina Samsudin, senior analyst, ODS-Petrodata

says modest demand increases

can be expected from UAE, Omani

and Iranian waters in 2010

global jack-up rig supplies will continue to outstrip demand – which means continued strong competition for work and low day rates in most places. Some drilling contractors are cold-stacking units to help tighten up the active fleet, but more rigs will need to be mothballed to offset the large numbers of new-builds to be delivered by ship-yards in the coming years.

This year (and perhaps for some time yet) the Middle East

MIDDLE EAST JACKUP MARKET REVIEW


is expected to maintain its posi-tion as the world’s largest mar-ket for jack-up rigs, having more than twice as many marketed units as its nearest competi-tor, the US Gulf of Mexico. And unlike areas such as Northwest Europe, Latin America and the Indian Ocean where jack-up rig demand is forecast to shrink in 2010 from 2009, the Middle East is predicted to see demand growth this year thanks to the South Pars and other Iranian projects, coupled with antici-pated modest increases in the UAE, Oman and Bahrain.

However, the region’s top two jack-up rig users – Saudi Arabia and Qatar – could dis-appoint this year. After scaling back drilling programmes and releasing a substantial number of rigs in 2009, it remains to be seen if/when Saudi Aramco, the region’s largest jack-up rig oper-ator, might restore its offshore fleet to previous levels. (The operator recently tendered for the provision of several jack-up rigs – an encouraging sign for drilling contractors.) Mean-while, rig activity offshore Qatar, after a decade of growth, has begun to taper off as various

ODS-Petrodata Ltd is a world leader in providing offshore market news, data and research to the oil and gas industry. It is an international company with offices in Aberdeen, Houston, Oslo, Dubai and Singapore.

projects reach completion; the country has put a freeze on fur-ther development of the enor-mous North Field and the mor-atorium is not likely to be lifted before 2014. These two coun-tries have the capacity to greatly influence the market.

Drilling budgets will to some extent depend on commodity prices. Fewer offshore E&P projects are likely to be sanc-tioned with oil prices below $50/barrel. Some of the region’s influential figures have indicated that a price range of $70-80/bar-rel would be sufficient to sus-tain E&P activity. Rig utilisa-tion data seems to support this; in the Middle East, jack-up uti-lisation started to drop in late 2008 when oil prices fell below $70/barrel but stabilised again during the second half of 2009 when prices rose above $70/barrel.

Dr Rina Samsudin, senior analyst, ODS-Petrodata.

The Middle East continues to be the single largest jack-up market worldwide.

“The Middle East is predicted to see demand growth this year thanks to the South Pars and other Iranian projects, coupled with anticipated modest increases in the UAE, Oman and Bahrain” Dr Rina Samsudin, ODS-Petrodata


ASK THE EXPERT

Traditionally off/onshore production platforms in-stalled on new fields proc-essed clean, relatively sol-

id-free, hydrocarbon liquids.Therefore many of the older

platforms were furnished with traditional centrifugal pumps, which run typically at minimum speeds of 3000rpm. This kept the pumps small and compact which was important given the space and weight constraints offshore.

The mechanical seals furnished with equipment such as the Main Oils Line Pump (MOL), Sea Water Injection (SWI), Closed Drains, Test Separators and Flare Drums were nearly always single seals with single helical coil springs or multiple spring designs.

Single mechanical seals were often favoured by operators as the supporting system, pipework, instrumentation and operation of them is far less complicated than that of dual seals.

However, single seals rely on the process fluid to lubricate the seal faces. Increasingly sand contami-nants are being extracted with the oil. Sand is unfortunately not a good lubricant and seal and equipment longevity is reduced.

SEPARATOR ISSUESIn an attempt to improve the sealing conditions at the single seal faces of such applications, cyclone separa-tors have traditionally been recom-mended.

Cyclone separators, used in Plan 31 arrangements, shown in Figure 1, are designed to separate solids from the process fluid. The sepa-rated clean fluid is then used as the flush medium over the mechanical seal faces. However, cyclone sepa-rators have drawbacks, specifically

their inability to operate success-fully if the particles being filtered are lighter than the mother liquor or where a constant pressure drop is not maintained across the unit. This means there will always be a degree of carry-over of abra-sive particles, which are injected into the sealing chamber causing further damage and impairing equipment longevity.

A major concern for plant engi-neers using cyclone separators in Plan 31 arrangements is internal

wear on the separator body given that the failure mode of the unit is catastrophic once the wall thick-ness of the separator is no longer sufficient to withstand the internal operating pressure of the system.

Since cyclone separators are treated as part of the flush recircu-lation pipework, there has been no way for an operator to detect how much wear has taken place. This compromises platform safety and reliability-focused owner-users try to avoid them.

Question: Which seal management systems both reduce ini-tial capital expenditure cost and increase equipment reliability?

Expert: Alan Roddis, B.Eng, M.Dip, AESSEAL plc Engineer-ing Director.

Ask the

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

Alan Roddis,AESSEAL.

Figure 1 – Single Seal in Plan 31 System.

ASK THE EXPERT


What options do I have to replace single seals?Dual seals work differently to single seals as the inboard seal faces mostly operate in a pressurized clean barrier fluid environment (Plan 53) and are therefore lubri-cated and cooled by the barrier fluid rather than the abrasive process fluid.

This dramatically improves the reliability of the equipment as the seal face conditions are now much more favourable. In addition to the clear reliability advantages, many modern thinking exploration oper-ations install dual mechanical seals in their operations because of the emission reduction advantages. However, while the cost difference between a dual and single seal may not be that great, the cost of the supporting dual seal system

can be. Dual seals essentially need an independent pressure system connected to a pressure source.

This not only increases initial capital equipment costs, it dictates the need for increased physical space and space is a premium in confined applications as found in offshore platforms.Plant operators are therefore faced with a commer-cial and physical dilemma when looking to upgrade single seals to dual seals and systems on offshore platforms.

I want a Dual seal but what is the best solution?There are many API Plans that have been designed for various appli-cations. Clearly the Plan selected needs to consider a whole host of issues, from reliability to mainte-nance, but most importantly the

In 2004, four AESSEAL CAPI Type A dual cartridge seals were installed in CPC vertical inline API 610 process pumps (Figure 3), sealing natural gas liquid on an offshore platform in Alaska, USA.

Before the AESSEAL installation, the equipment had a Mean Time Between Failure of 6 weeks.

The four CAPI dual seals were supplied by a single innovative stand mounted support system – the AESSEAL Compact 107.

The Compact 107 is a hybrid Plan 53/54 system with a small foot-print, (0.7m x 1.0m), therefore ideal for restricted offshore space, with an installed cost of $40,000.

By 2007 the seals had successfully operated for over three years without failure. The customer was clearly delighted with the seal and system performance and subsequently ordered an additional Compact 107 system for a similar application.

To date, the systems are still performing excellently and the savings for this one application are over $350,000 based on repair costs, prior to the AESSEAL installation. This represents a payback period of less than 15 months based on cost savings alone and an Internal Rate of Return (IRR) of 38.7%.

This benefit excludes the significant gains from production improve-ments while using the AESSEAL solution.

If this solution was offered with a traditional Plan 53B system and dual seal arrangement, the initial capital cost would be more than 30% greater than with the Compact 107 Solution.

CASE STUDY

safety of the operators and plant. Unfortunately there is no one magic system or plan solution for all applications. However, whenever a pressurized barrier fluid system is selected, a modern system favoured in many off/onshore platforms is a hybrid Plan 53/54 system. This

system, marketed by AESSEAL as the Compact 107 and shown in Figure 2, offers all the benefits of Plan 53 and Plan 54 systems, yet saves significant space and capital equipment costs. It also increases the reliability of the operations, as highlighted above.

Figure 2 – Hybrid Plan 53/54 System

Figure 3 – CAPI Dual Seal installed on a CPC vertical inline API610 pump

SOGAT PREVIEW

Getty Images


The huge sour gas Shah Field in Abu Dhabi will soon begin

its development phase.

February 2010 Oil&Gas Middle East 45

SOGAT PREVIEW

UNLOCKING SOUR POWERAbu Dhabi’s $10 billion Shah Gas development project will kick off this year. Ahead of the world’s leading sour O&G conference, SOGAT 2010, we delve into the issues that are dominating the Middle East’s hottest gas project

The ink has dried on the landmark joint venture contract between AD-NOC and ConocoPhil-

lips, and this year will see bat-tle really commence for the major EPC and technology contracts to bring the region’s most ambitious, and techni-cally challenging sour gas field

mistic of predictions, the press-ing need to fuel that growth has become the prime motivator for tackling the challenges head-on. Simply put, the gas locked in the sour Shah and Bab Fields is the key to unlocking Abu Dhabi’s economic vision.

However, the field comes with many challenges, chief amongst them the issue of safety, or more broadly, HSE when dealing with H2S. Equally pressing are the technical issues that come with recovering and processing gas so corrosive.

Tackling these issues head on is the region’s leading technical conference targeted right at addressing those core challenges.

This year’s Sour Oil & Gas Advanced Technology confer-ence and exhibition kicks off on March 28th and runs through April 1st. Given the timely

nature of such a dominant issue the

event has been inundated with interest from the world’s lead-ing innovators of sour hydro-carbons and sulphur handling says conference director, Nick Coles. “The interest in this year’s SOGAT event is evident from the fact that we received over 50 offers of papers from which the Advisory Committee have selected the programmes for the 6th International SOGAT Conference and the 4th Interna-tional CO2 Forum.”

Additionally, there will be four workshops covering Amine Treating, Acid Gas Injection, Sulphur Recovery, Process-ing & Handling and the criti-cal issues surrounding Contin-gency Planning for Major H2S Emergencies.

“To date we have 23 exhibi-tors coming to Abu Dhabi from all corners of the globe. The workshops, conference and exhibition elements combined will make this year’s SOGAT the biggest yet,” reveals Coles.

The Contingency Plan-ning workshop will be led by David Jackson of Scott Health & Safety’s regional headquar-ters, based in Abu Dhabi.

Event: Sour Oil and Gas Advanced Technology Location: Hilton Hotel, Abu Dhabi (Corniche)Workshops: 28th – 29th MarchConferences: 30th March – 1st AprilWeb: www.sogat.org

SOGAT 2010

on stream. With billions of dol-lars worth of business up for grabs, Abu Dhabi’s natural gas projects, including the broader Integrated Gas Development (IGD) project has made the Emirate the hottest ticket for up-stream firms in the Middle East. Indeed, as the sun sets on the largest of Qatar’s colossal gas undertakings, so it rises over Abu Dhabi’s.

Chief amongst these devel-opments is the upcoming Shah Field development plan. With gas so rich in H2S and CO2, the field was once deemed both too difficult and too costly to ever be a viable energy project, especially in a land awash with oil. However, as the economic

development of the UAE has outstripped all but the most

opti-

DON’T MISS:The conference session on day one, March 28th, begins with three major presentations by leading expert from Saudi Arabia, Qatar, and the UAE.


46 Oil&Gas Middle East February 2010

SOGAT PREVIEW


“I’m very excited about SOGAT because it is an opportunity for us to meet face to face with the guys who will be working right on the edge and engaging with upstream sour gas projects. It’s an area of safety that is so criti-cal to get right because quite simply if you don’t, people die,.” says Jackson.

The words may be strong, but not without warrant. Although relatively few in number, deaths in recent years that have hit the oil and gas industry across the Middle East, with the exception of helicopter transport disas-ters, have nearly all been linked to H2S safety issues.

H2S is particularly dangerous to work around, because even a small leak can prove fatal. When inhaled, if the concentration is sufficient, then that’s essentially game over. “At Scott Health & Safety we place education, train-ing and re-education at the top of our priority list for the region, because in many instances you have to ask why? We aren’t talking about rook-ies; these are often people who have been working with sour gas for decades. Is it complacency? If it is it must be addressed because with H2S there are no sec-ond chances. You can even have all the best equipment in the world in place, but without ade-quate and regular

training there will be accidents,” says Jackson.

Scott has worked closely with its industry partners to ensure its units are able to handle H2S conditions. “As manufacturers we have to be attuned to what an H2S rich environment demands of equipment. The gas is cor-rosive, as well as being quite a sticky gas, so we have to make sure the composites which we manufacture our units out of do not corrode under H2S expo-sure. Maintaining that equip-ment after it has been used in a hazardous environment is criti-cal too, and that’s an issue we cover extensively in training.”

TOP PICKS – MARCH 30TH

WASIT GAS PLANT: New sour gas developments in Saudi ArabiaSaudi Aramco has identified the development of Arabiyah and Hasbah non-associated gas fields as the most economic alterna-tive to meet the additional sales gas demand required from 2014 onward. This new Wasit Gas Plant (WGP) project will provide grass roots facilities for gas sweetening, dehydration, acid gas enrichment, sulphur recovery, sulphur handling and storage, sales gas delivery, electrical and non electrical utilities, and industrial support facilities to process 2 500 MMSCFD of non-associated sour gas.

Processing Arabiyah and Hasbah gas is expected to produce 1 700 MMSCFD of sales gas and 4 200 MTD of sulphur. This paper will present different process options considered during prelimi-nary process selection phase and discuss the most economical process configuration selected with emphasis on sulphur plant recovery efficiency optimization.

Presented by: Ismail A. Alami, Saudi Aramco, Saudi Arabia

LESSONS LEARNED DURING COMMISSIONING AND STARTUP OF AGR & SRU IN QG II TRAINS 4 & 5During 2009 Qatargas started up the two largest LNG trains in the world, each having a capacity of 7.8 MTPA. This paper will provide an overview of the start-up experience and key lessons learned such as modifying the degreasing procedure for cleaning the AGR, AGE, and Selexol solvent systems, modifying the tube bundles of the AGR & AGE regenerator overhead condensers, change in trim air purge’s flow logic to process air nozzle in Claus burner to avoid sulphur fire, increasing the recycle gas flow to the Claus tail gas line to prevent overheating the Claus tail gas burner nozzle, change in ignition logic for pilot burners in SRU’s Incinerator to enable successful firing of the pilots and modification of the sulphur trap sight port vents to prevent H2S leakage.

Presented by: Rajesh Shetty, Qatargas, Qatar

SHAH SULPHUR PIPELINE DEVELOPMENT: Challenges and choicesThe Shah Gas Development Project faces the challenge of trans-porting 10 000 tonnes of elemental sulphur per day from the Main Plant in the large dunes 140 km southeast of Abu Dhabi City to a new sulphur terminal in Ruwais. Presented in this paper is the unique combination of engineering design, material selection and construction methodology that will lead to a successful Shah liquid sulphur transportation project using a hot water jacketed pipeline.

Presented by: Nick Lenstra, WorleyParsons, Canada and, Ken Lunsford, Abu Dhabi Gas Development Co. UAE

DON’T MISS:TUESDAY MARCH 30TH

Official Opening - Saif Ahmed Al Ghafli, Chief Executive Officer, ADNOC-ConocoPhillips JV.

Nick Coles, conference director, says SOGAT 2010 has attracted a record number of

offers for technical papers.


SOGAT PREVIEW

Jackson is confident the strong project pipeline com-ing through Abu Dhabi, as well as ongoing work and contract awards from Saudi Arabia will see the oil and gas service com-panies reap a better year in the region after a painful contrac-tion in 2009.

“I think that a lot of the storms that hit the industry in the last year have been painful, but also delivered some important les-sons that have been learnt from. I would imagine that a lot of the spending that was held off in 2009 will come back on in 2010. Also, a lot of the smaller firms which sprang up to capitalise on the booming market have prob-ably gone now and it’s the estab-lished players who are around and ready to serve the industry again.” SOGAT 2010’s contingency planning workshop will be led by Dave Jackson, Scott Health & Safety’s regional director.

Introducing the boom truck crane concept combining American and German technology

DARWISH BIN AHMED & SONS PO Box 28883Abu DhabiUnited Arab EmiratesTel: +971 2 5584800Fax: +971 2 5582242e-mail: [email protected]: www.dbasons.com

DARWISH BIN AHMED & SONS PO Box 1728Al AinUnited Arab EmiratesTel: +971 3 721 3256Fax: +971 3 721 2984e-mail: [email protected]: www.dbasons.com

UNITED MOTORS & HEAVY EQUIPMENT CO. LLCPO Box 22804DubaiUnited Arab EmiratesTel: +971 4 282 9080Fax: +971 4 282 7740e-mail: [email protected]: www.utdmotors.com

& SONS UNITED MOTORS & HEAVY EQUIPMENT CO. LLCPO Box 22804DubaiUnited Arab Emirates

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

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

Water Flowlines on GC 24 KOC Not Appointed 141 EPC Bid

Crude Oil Transit Line KOC Not Appointed 280 EPC Bid

Booster Station 171 KOC Not Appointed 800 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

Water Flowlines on GC 18 KOC Not Appointed 151 EPC Bid

Pilot Water Injection Plant at Dharif Marrat Oil Field in West Kuwait KOC Not Appointed 14 EPC Bid

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

Pipeline between GC-7 and manifold TB-1 at Burgan Field KOC Heavy Engineering Industries & Shipbuilding Company (Heisco)

20 Execution

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

Sulphur Handling Facilities at Mina al-Ahmadi KNPC Thyssenkrupp (Germany) Not Appointed 132 FEED

Crude Oil Export Pipelines at Gathering Center 16 and Water Flowlines at Minagish

KOC Combined Group Contracting Company 52 Execution

LPG Filling Plant at Umm Alaish KOTC Not Appointed 100 EPC Bid

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

140 Execution

KOC Facilities at Kuwait's Key Oil Fields KOC National Petroleum Services Company (Napesco); Halliburton (US);

206 Execution

Maintenance & Repair of Pipelines KOC O & G General Engineering & Contracting 72 Execution

Mechanical Maintenance Works for Shuaiba Refi nery KNPC Not Appointed 150 EPC Bid

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

Pipeline from Shuaiba North to Mina Abdulla Ministry of Energy Not Appointed 55 FEED

Jurassic Early Production Facility (EPF) KOC Not Appointed 1500 EPC Bid

Booster Station 132 KOC SK Engineering & Construction, Kuwait 724 EPC Bid

Fourth Gas and Condensate Train at Mina al-Ahmadi Refi nery KNPC Not Appointed 679 EPC Bid

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

Maintenance of Oil Production Facilities in West Kuwait KOC Not Appointed 150 EPC Bid

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

Fuel tank at Mina Al Fahal Refi nery ORPC Daewoo Engineering & Construction,Oman

17.1 Execution

Propane Recovery Unit at Mina Al-Fahal Refi nery ORPC Not Appointed 50 EPC Bid

Upgradation of Refi nery at Mina al-Fahl ORPC Not Appointed 60 EPC Bid

Sea Water Supply at Sohar Refi nery ORPC Not Appointed 20 EPC Bid

Duqm Refi nery & Petrochemical Complex ORPC Not appointed Not Appointed 7000 Study

Oil Exploration in Blocks 3 & 4 CCED /Tethys Oil (Oman) Ltd CCED 100 Execution

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

Marmul Polymer Flooding Project Petroleum Development Oman (PDO) Mott MacDonald, Oman Bahwan Engineering Company (BEC) 150 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) GS Engineering & Construction, Dubai 350 Execution

Storage Tanks and Terminals at Sohar Oiltanking Odfjell Terminals & Company Oiltanking (India); Larsen & Toubro, Oman;

80 Execution

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

Gas Recovery Project at Ras Laffan Qatargas Fluor Corporation, Abu Dhabi Not Appointed 800 EPC Bid

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

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


PROJECTS

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

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 Concept

Oily Water Effl uent Pipeline in Dukhan Field Qatar Petroleum (QP) Galfar Al Misnad Engineering & Contracting

11 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 117 Execution

Q-Chem 2 Qatar Chemical Company (Q-Chem) Aker Kvaerner,Qatar Daewoo Engineering & Construction, Qatar

700 Execution

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

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

Barzan North Field Development ExxonMobil Corporation/Qatar Petroleum (QP)

Chiyoda Corporation/J Ray McDermott Not Appointed 8000 FEED

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

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

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

Oxygen & Nitrogen Production Unit at Ras Laffan Gasal Air Liquide Engineering 70 Execution

Nitrogen Pipeline Network at Ras Laffan Gasal Black Cat Engineering & Construction 12 Execution

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 - LDPE 3 Qapco Uhde Uhde/Tefken 549 Execution

Polyacetal Resins Plant at MIC National Qatar Industries; LG Chem; Tasnee;

Not Appointed 137 FEED

Qafco VI Qatar Fertilizer Company (Qafco) Saipem / Hyundai Engineering & Construction Company

610 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 300 Exectution

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

Maintenance on Platforms at Measieed Refi nery Qatar Petroleum (QP) Not Appointed 50 EPC Bid

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

Al Waha Contracting 109 Execution

Receiving & Loading Facility at Ras Laffan Qatargas Qatar Kentz 100 Execution

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

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

Safaniya, Marjan, Berri & Zuluf Oil Fields Upgrade Saudi Aramco J Ray McDermott/ National Petroleum Construction Company (NPCC)

400 Execution

Jubail - 2 Export Refi nery - Interconnection between Refi nery Units and Plant Utilities

Saudi Aramco / Total Technip, Saudi Arabia Technip/ China Technical Consultants Incorporate(CTCI)

700 Execution

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

Shabab-2 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

Yanbu Export Refi nery - Crude Unit Package Saudi Aramco / ConocoPhilips Kellogg Brown & Root (KBR), Saudi Arabia Not Appointed 970 EPC Bid

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

Gas Oil Separation Plant at Hout Field in Divided Zone Al Khafji Joint Operations (KJO) Toyo Engineering Company Consolidated Contractors International Company (CCC)

400 Execution

DILLINGER MIDDLE EAST FZESales & Marketing Office of DILLINGER HÜTTE GTS,for direct Mill supply of all grades of STEEL PLATES & FABRICATED PRODUCTS, Eg. Dished Heads & Shells

Specialist STOCKIST of extensively specified Plates at Jebel Ali - Dubai■ Boiler & Pressure Vessel Grade Plates to SA 516 grade 60 / 65 & 70■ Alloy steel grade plates in SA 387-12-2/13CrMO4-5 & SA 387-11-2■ Structural Plates to Grade S355K2G3 / EH36■ Offshore Grade Plates to BS 7191 355EMZ / AP12H50 / S355G8+N

Middle East Office:

DILLINGER MIDDLE EAST FZERoad 1241, Between Junction 12 & 13Postfach: 17592, Jebel Ali,Dubai, United Arab EmiratesPhone: +971 4 8 83 38 94Fax: +971 4 8 83 38 [email protected]@[email protected]

Iran Branch OfficeOffice 1301, Sarve Saeii TowerValiasr St., Tehran, IranPhone: +98 21 887 282 90 / +98 21 887 013 26Fax: +98 21 887 279 [email protected]

Head Office:

DILLINGER HÜTTE GTSP.O. Box 158066748 DillingenGermanyPhone: +49 6831 47-3453Fax: +49 6831 [email protected] • www.dillinger.de


PROJECTS


Sasref Refi nery - Jubail Sulphur Treatment Unit Saudi Aramco Shell Refi nery Company (Sasref)

CBI Lummus in Middle East Not Appointed 350 EPC Bid

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

Kayan Petrochemicals Complex at Jubail - PP Package Saudi Basic Industries Corporation (Sabic)/Saudi Kayan Petrochemical Company

Fluor Arabia Ltd., Saudi Arabia Samsung Saudi Arabia Ltd. 400 Execution

Yanbu Export Refi nery-Offsites & Utilities-Package 8 Saudi Aramco/ ConocoPhilips Kellogg Brown & Root (KBR), Saudi Arabia Not Appointed 125 EPC Bid

Wasea Bulk Plant Saudi Aramco Not Appointed 250 EPC Bid

Kayan Petrochemicals Complex at Jubail - Amines Package Saudi Basic Industries Corporation (Sabic) Saudi Kayan Petrochemical Company

Fluor Arabia Ltd., Saudi Arabia Not Appointed 300 EPC Bid

Dammam 7 - Petrochemicals Complex Dammam 7 Petrochemicals Not Appointed 400 FEED

Ethyl Vinyl Acetate Plant Saudi International petrochemical Company (SIPC)/ Hanwha International Private Ltd.

Not Appointed 800 FEED

Rabigh Refi nery Expansion & Petrochemical Complex - Phase 2 Rabigh Refi ning & Petrochemical Company (Petro-Rabigh)/Sumitomo Corporation

JGC Corporation Not Appointed 4000 Study

Polysilicon Plant in Jubail First Energy Bank/ Cosmos Industrial Investment Corporation/PMD

Not Appointed 1200 Concept

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 Clough-Zuhair Fayez Partnership J Ray McDermott 500 Execution

Yanbu Export Refi nery - Gasoline Unit Package Saudi Aramco / ConocoPhilips Kellogg Brown & Root (KBR), Saudi Arabia Not Appointed 2300 EPC Bid

Kayan Petrochemicals Complex at Jubail - LDPE Package Saudi Kayan Petrochemical Company / Saudi Basic Industries Corporation (Sabic)

Fluor Arabia Ltd., Saudi Arabia Daelim Industrial Company,Saudi Arabia 400 Execution

Petrochemical Complex - Ethylene Cracker Package Saudi Chevron Phillips Petrochemical Company (SCP)/ Saudi Polyolefi ns Company (SPC)

Parsons Engineering Corp. JGC Corporation,SaudiArabia 1200 Execution

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

Jazan Economic City Export Refi nery Ministry of Petroleum and Mineral Resources

Not Appointed 12000 EPC Bid

Petrochemical Complex - Polymer Package Saudi Chevron Phillips Petrochemical Company (SCP)/ Saudi Polyolefi ns Company (SPC)

Parsons Engineering Corp. Daelim Industrial Company/JGC Corporation

5000 Execution

Al Khafji Oil Processing Facilities Expansion Al Khafji Joint Operations (KJO) Not Appointed 400 FEED

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

Dammam Oil Field Development Saudi Aramco Not Appointed 1000 Concept

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 2360 Execution

Kayan Petrochemicals Complex at Jubail - EO/EG Package Saudi Basic Industries Corporation (Sabic)/ Saudi Kayan Petrochemical Company

Fluor Arabia Ltd., Saudi Arabia China Technical Consultants Incorporate(CTCI)

500 Execution

Pipeline from Ras Tanura to Riyadh Saudi Aramco Nacap-Suedrohrbau, Saudi Arabia 350 Execution

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

Yanbu Export Refi nery - Tank Farm - Package 5 Saudi Aramco/ ConocoPhilips Kellogg Brown & Root (KBR), Saudi Arabia Not Appointed 900 EPC Bid

Yanbu Export Refi nery - Battery Limits and Solids Handling - Package 6 Saudi Aramco / ConocoPhilips Kellogg Brown & Root (KBR), Saudi Arabia Not Appointed 450 EPC Bid

Kayan Petrochemicals Complex at Jubail - HDPE Package Sabic / Saudi Kayan Petrochemical Company

Huanqiu Contracting & Engineering Corporation (HQCEC)

600 Execution

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 3 - Offsites & Utilities Package Abu Dhabi Polymers Co. (Borouge) Tecnimont SpA, Abu Dhabi Not Appointed 500 EPC Bid

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

Base Oil Plant in Abu Dhabi Abu Dhabi Oil Refi nery Company (Takreer); Neste Oil (Finland);

Neste Jacobs / Technip Not Appointed 1000 FEED

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

Crude Oil Storage Tanks at Umm Al-Nar Refi nery Abu Dhabi Oil Refi nery Company (Takreer)

Engineers India Limited (EIL), Abu Dhabi Al Husam General Contracting 33 Execution

Gas Pipeline from Nitrogen Plant to Habshan Oil Field Abu Dhabi Gas Industries Company (Gasco)

Dodsal, Abu Dhabi 85 Execution

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 Samsung / Uhde 1200 Execution

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

National Petroleum Construction Company

1800 Execution

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PROJECTS


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

Asab Gas Development (AGD) Modifi cations - Package 1 GASCO Veco Engineering Technip 408 Execution

Inter Refi neries Pipeline Project at Ruwais â “ 2nd Stage Abu Dhabi Oil Refi nery Company (Takreer)

Technip, Abu Dhabi Not Appointed 300 FEED

Borouge Complex Expansion - Phase 3 - LDPE Plant Abu Dhabi Polymers Co. (Borouge) Tecnimont SpA, Abu Dhabi Not Appointed 500 EPC Bid

Interconnecting Pipelines in Fujairah Oil Terminal 2 Port of Fujairah Nico International 100 Execution

Sour Gas Development - Sulphur Pipeline Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;

Fluor Corporation, Abu Dhabi Not Appointed 125 FEED

Expansion of Ruwais Refi nery - Package 3 Abu Dhabi Oil Refi nery Company (Takreer)

Foster Wheeler, Abu Dhabi Samsung Engineering 2700 Execution

Demothballing Project Abu Dhabi Marine Operating Company (Adma-Opco)

Technip, Abu Dhabi Not Appointed 400 EPC Bid

Borouge Complex Expansion - Third Polyolefi n Plastics Project Abu Dhabi Polymers Co. (Borouge) Tecnimont SpA, Abu Dhabi; Jacobs Engineering, Abu Dhabi;

3000 FEED

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

3290 Execution

Expansion of Ruwais Refi nery - Package 4 Abu Dhabi Oil Refi nery Company (Takreer)

Foster Wheeler, Abu Dhabi Not Appointed 400 EPC Bid

Sour Gas Development - Gas Processing Plant Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;

Fluor Corporation, Abu Dhabi Not Appointed 800 EPC Bid

Sour Gas Development - Sulphur Recovery Unit Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;


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

Sour Gas Development - Offsites & Utilities Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;


Sour Gas Development - Sulphur Handling Terminal Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;


Expansion of Ruwais Refi nery - Package 1 Takreer Bechtel SK Engineering & Construction Company 2100 Execution

Expansion of Ruwais Refi nery - Package 2 Takreer Bechtel GS Engineering & Construction 3100 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 12 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 5000 Study

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

advanced air coolers •bearing protection •mechanical seals •

reliability focused engineering

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PRODUCT FOCUS

www.arabianoilandgas.com February 2010 Oil&Gas Middle East 55

A drilling tool that uses polycrystalline diamond compact (PDC) cutters to shear rock with a con-

tinuous scraping motion is better known as a PDC bit. These cut-ters are synthetic diamond disks about 1/8-in. thick and about 1/2 to 1 inches in diameter. PDC bits are effective at drilling shale for-mations, especially when used in combination with oil-base muds.

Mohammad Swadi, district manager at Baker Hughes spoke to Oil & Gas Middle East about the latest advances in both develop-ment and field performance of its range of drill bits.

Where is drill bit research being focused today? Over the last decade R&D has largely focused on highly stable PDC bit designs that are capable of mitigating torsional and lateral vibrations, combined with advance-ments in polycrystalline diamond cutters.

Do you have any regional examples? When Baker Hughes introduced the EZSteer PDC bit technology (2002) in Abu Dhabi, we trans-formed steerable motor drilling capabilities. During the first year after the introduction of EZSteer, we were able to double the rate of penetration and triple the penetra-tion rate compared with earlier-generation bit technology. This has allowed us to make fewer trips, which minimized non-productive time and maximized efficiency.

Drill Bits: Diamonds in the rough

Middle East, for the most part, is carbonates. The geology can be challenging in terms of steerability, which affects drilling efficiency and durability of the bits. Inter-bedded formations (different rock strengths within a small interval) can lead to steerability and dura-bility issues when using conven-tional PDC bits (non-EZS-teer tech-nology). Drill bit

“We have designed roller-cone (tricone) bits especially for Middle East carbonate drilling to mitigate heat check (heat damage) of the tungsten carbide inserts”Mohammad Swadi, district manager at Baker Hughes

Baker Hughes has set a new benchmark in Oman with the introduction of a Quantec PDC bit design; this bit drilled hard and abrasive rocks found in the Al Khlata, Gharif, and Khuff forma-tions with improved rates of pene-tration, which was not possible just two years ago.

In another recent example, we achieved record runs in Iraq. The Quantec QD506X allowed the operator to drill the entire 8½-in. section in 23 hours compared with one week 10 years ago.

Which materials are best suited to the Middle East?What we drill in the

instability is another contributing factor which adversely affects the penetration rate.

Additionally, we have designed roller-cone (tricone) bits especially for Middle East carbonate drilling to mitigate heat check (heat damage) of the tungsten carbide inserts, which can lead to premature insert damage and,

consequently, affect pene-tration rate.

PDC drill bits from Baker Hughes.

Mohammad Swadi, district manager at Baker Hughes says R&D in PDC drill bits is delivering longer running steerable drilling tools which can slash operational costs


FACE TO FACE

Why the new push behind the oil and gas sector? G4S recognised that the upstream industry represents a growing and important market. Security is going to be a key consideration for the industry as it expands its footprint to produce new oil and gas. Today that focus is Iraq as the government opens its doors to international firms and consor-tiums to develop its reserve base, which will require a significant security component.

How extensive is your role in Iraq? We have an operational presence in both North and South Iraq. We have developed local capabilities on the ground which oil and gas companies can utilise. We provide intelligence and security infor-mation which is tailored to the needs of companies looking to do business in Iraq. Educating our customers from their home base so that they are prepared and have some background training before they arrive in Iraq is useful too.

What do you mean by local capability? When we talk of local capabilities one of the key elements of that is recruiting and training Iraqi’s and equipping them with appropriate skills, tools and the G4S ethos.

The governing factor here is the availability of getting high-calibre local resources. The company in general has developed a culture of hiring, training and promoting local individuals to management and supervisory roles. That’s had a good track record for us for both language and cultural under-standing issues.

What oilfield work is needed at this stage? We support several of the supply convoys in Iraq, many of which include vital logistics supply lines for construction and recon-struction projects. In addition, we provide coverage for some of the oilfields which may still have mines and other ordnance which need clearing. As condi-tions in some places improve, the focus is moving away from armed support. There are areas within Iraq that offer a bigger security challenges, but that’s not just governed by location. Some activi-ties are targeted more than others.

Now that Iraq is entering a new phase of development we will see how that impacts the specific secu-rity targets. We see an emergence of National Oil Companies that have become partners in Iraq, such as Sonangol, CNPC, Gazprom and LukOil – So we see a combination of different players going in there, not just the supermajors.

Is this a steep learning curve for security firms?The industry has always been involved in dealing with the chal-lenge that the infrastructure for major oilfield developments entails. These projects can be spread out over a large area in often remote sites. Today, there are a lot of technologies that enable oil to be produced in a less distributed manner than in years gone by. For example, today from a single drilling location, wells can be drilled to 20 or 30 different parts of the reservoir through horizontal or directional drilling techniques. There are also technologies, such

as radar or infra red sensors which can monitor infrastructure, such as pipelines, over a very wide area. What is important in this situation is to have a process in place to react quickly to that information, so that environmental impact is contained and kept to a minimum by dealing with the situation promptly.

In which areas do you anticipate work to start soon?The oil and gas industry will, for the most part, have their HQs in the more heavily protected areas in Baghdad, such as the Interna-tional Zone, but the oilfields are all over the countryside. We are developing a plan today to have support bases distributed around Iraq, which will be capable of supporting the various different activities, such as construction, seismic surveys, drilling activities etc.. This will evolve one step at a time, and will begin with the low hanging fruit for the industry.

Are you optimistic about the coming year in Iraq?If we can help the oil industry produce these important resources we will be helping the Iraqi govern-ment generate the funding to run their economy in a much more effi-cient manner. Oil and gas represents the best opportunity for Iraq to come out of the situation they are in today.

Security solutions for oil companies in Iraq

FACE TOFACE Jorge Machnizh,G4S director - global oil and gas solutions

“We are planning to have support bases distributed around Iraq which will be capable of supporting various different upstream activities” Jorge Machnizh

Established in 2008, Al-Shaheen Well Services Company (ASWSC) is a joint venture between

Al-Shaheen Energy Services (ASES) and Weatherford International Ltd. (NYSE:WFT). Our

primary purpose is to maximize the value of our clients’ oil and gas assets in Qatar. Drawing

on the strengths of both stakeholders, we are well positioned to help operators meet critical

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To learn more about our offerings in Qatar, contact us on P.O. Box 31774, Doha; or +974

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