Pipeline Magazine - Interviews Interviews-RSS Feed Fri, 17 Nov 2017 22:50:28 GMT Defy the gravity of the industry https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/defy-the-gravity-of-the-industry/ Djamel Idri, GeoMarket manager, Eastern Middle East speaks exclusively to Pipeline Magazine about proving Schlumberger’s drilling technology and integration capabilities 2017-11-16 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/defy-the-gravity-of-the-industry/

Djamel Idri, GeoMarket manager, Eastern Middle East speaks exclusively to Pipeline Magazine’s Julian Walker about proving Schlumberger’s drilling technology and integration capabilities

What is your outlook for the oil and gas sector?

With OPEC cutting production and global demand continuing to strengthen, we had hoped an international recovery was in sight. However, the complexity of the supply side where there are different dynamics across various producers and regions has come into play. Unfortunately, this is creating further oil price instability and is resulting in a stagnating global business environment. Our goal is to defy the gravity of the industry.

How have you fared in 2017?

As with most years, 2017 has had both opportunities and challenges. In terms of opportunities, we are fortunate here in the Middle East–with an area of tremendous proven oil reserves coupled with the ambition of our host countries.

We have found plenty of ways to prove to our customers the value of our technology and integration capabilities. The challenge comes down to how to economically develop the needed oil and gas resources. We are working closely with our customers to develop business models that allow us to increase efficiency but still reduce the cost of service delivery, for example, through remote operations and multi-skilling.

How do you feel you have adapted to the new energy landscape?

We are fortunate to have deep and long-standing relationships with our customers. Across the region we are seeing a move towards higher levels of integration as customers recognise the benefits–including lower HSE exposure and significantly reduced well delivery times. For example, in Iraq, we have entered into multi-well, multi-year Lump Sum Turn Key contracts, which give our customers certainty on their well costs, while providing the opportunity to deploy our integrated solutions to deliver the wells.

How important is the Middle East’s drilling market to Schlumberger?

The Middle East forms a vital part of our overall business. We can trace our presence in the region back almost 80 years. In terms of drilling, the Middle East remains active–most countries have increased their rig count over the past two to three years, which is in stark contrast to what happened in other parts of the world. Our customers appreciate that we have always been receptive to new technologies. For example, with one of our customers in the GCC region, the PowerDrive vorteX Max* high-powered rotary steerable system, along with our cutting mud motor modelling technology, enabled us to increase ROP by 25 percent– the best performance to date for an integrated drilling service project.

Are you seeing the Middle East market picking up?

As mentioned previously, a number of Middle Eastern countries are increasing their drilling activity, driven primarily by conventional activity. In the region we are also seeing increased focus on unconventional activity and this will be a significant source of growth in the coming years.

What new technologies have you brought to the market? How much focus do you put on R&D?

In 2016, Schlumberger spent US$1 billion on R&D. In September, we launched the DELFI* cognitive E&P environment at the SIS Global Forum. The DELFI environment leverages digital technologies including security, analytics and machine learning, high performance computing (HPC),and Internet of Things (IoT) to improve operational efficiency and deliver optimised production at the lowest cost per barrel.

The DELFI environment will provide a new way of working for asset teams by strengthening integration between geophysics, geology, reservoir engineering, drilling, and production domains.

Minimising environmental impact and the risks associated with our operations is at the heart of all our R&D activities. For example, we have developed the HiWAY* flow-channel fracturing technique that can lower water usage by 25 per cent, and can reduce proppant requirements by 40 per cent, while delivering greater production for our customers.

What are the wider energy challenges that the Middle East is facing? How is Schlumberger helping meet these challenges?

Within the region there is a major push towards increasing gas production. We are working with our customers on a wide range of projects from deep offshore gas projects in high pressure, high temperature (HPHT) environments to sour gas projects with high hydrogen sulphide (H2S) and carbon dioxide levels. We can contribute significantly by providing drilling and reservoir characterisation technologies that can function in a multitude of environments. At the same time our domain experts are working closely with our customers to build reservoir models using complex geomechanics essential for exploring unconventional plays.

This year’s theme is “Forging Ties’ and ‘Driving Growth’ how much does this reflects your industry strategy?

Customer engagement is vital to driving growth. However, as well as forging ties externally, it’s important that we do the same within our organisation. Collaboration sparks innovation, enabling us to offer a multitude of services and integrated technologies, ultimately benefiting our customers.

How does ADIPEC help you maintain and build new strategic partnerships?

We are proud to have a longstanding association with ADIPEC dating back to the very first exhibition and conference. While we are continually engaging with our customers, conferences like ADIPEC help us, in a very concentrated format, to show our customers our latest and greatest. We can also highlight how our technology and integration capabilities can lower their cost per barrel and deliver hydrocarbons to the pipeline. ADIPEC is very successful at attracting the next generation of engineers and geophysicists to our industry. This provides an exciting opportunity for us to engage and inspire top talent and again this year we have been delighted to host the Young ADIPEC program at some of our key facilities.

What are you intending to showcase at ADIPEC this year?

We are excited to be bringing the new DELFI cognitive E&P environment to ADIPEC. Taking a look downhole, we will also be launching a new resistivity- and imaging-while-drilling service that provides 360-degrees electrical images and laterolog resistivity measurements in conductive mud environments.

*Mark of Schlumberger

This interview first appeared in the November issue of Pipeline Magazine

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Strategic interest in the MENA region https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/strategic-interest-in-the-mena-region/ 2017-11-16 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/strategic-interest-in-the-mena-region/

Guy Tennant, Area Vice President, Southern Gulf Region, Halliburton spoke exclusively to Pipeline Magazine about the strategic importance of the region and how it is differentiating itself

How important is the Middle East market to Halliburton?

Halliburton has established long-term relationships across the Middle East and North Africa

(MENA) region for more than 75 years. The Middle East is a strategic market that will produce hydrocarbons for many future generations and the region is critical to our success.

How is Halliburton adapting to the new lower priced energy landscape?

This is not the first time Halliburton has encountered dynamic shifts in market pricing and it most likely will not be the last. One of our strategic mainstays is “Listen and Respond,” an approach that ensures we understand and adapt to our customers’ needs. Halliburton’s core value proposition is to collaborate and engineer solutions to help our customers maximise their asset value and ultimately lower their cost per BOE.

The theme of ADIPEC this year is forging ties and driving growth – how is Halliburton helping to forge ties in the Gulf region?

We position ourselves strategically with customers and constantly work to find ways to help lower their costs and increase their production. This strategy has contributed to how we win contracts and grow our business lines throughout the region. Ultimately, our business comes down to execution and we have a demonstrated track record of earning our customers trust and delivering the right solution at the right time. How important is ADIEPC to Halliburton?

Halliburton was one of the original participating service companies since the inception of ADIPEC. Through the years it has proven to be one of the most significant events in the entire industry. For Halliburton it’s an important way to showcase the company’s technologies, how we interact with customers and how we view the Middle East market. As ADIPEC has grown over the years so has Halliburton’s presence in the MENA region and this is only underscored by ADIPEC’s theme – “forging ties and driving growth.”

How is Halliburton planning to drive growth in the Middle East?

In MENA, we have seen the business environment change as customers address new market challenges. With the NOC and IOC ever changing business models, Halliburton has differentiated itself through improved operational efficiencies, technology development and collaboration. The vehicle that delivers this differentiation is our #1 market position globally, and within the MENA region, in unconventionals and integrated project management (IPM).

In MENA, Halliburton is the preferred provider for IPM services and our business models can vary from lump sum turn-key to integrated drilling solutions. Within both models, we successfully deploy new technologies that help reduce non-productive time and optimise drilling performance.

Our unconventional focus is supported by proven North American technologies such as our CYPHER Seismic-to-Stimulation workflow. We have a strong track record where we’ve deployed this workflow that integrates geophysics and geology with drilling operations to help lower our customers’ cost per BOE.

How much emphasis do you put on collaboration?

Halliburton’s value proposition is to collaborate and engineer solutions to maximise asset value for customers, so it’s in our DNA. Each of our divisions and their product service lines has specific strategies for their area of expertise, operations and customer requirements. Halliburton aligns with our customer challenges to ensure we maximise efficiencies to enhance their return on investment.

Are you seeing increased competition with mergers and other industry players?

Previous downturns have seen consolidation in the market through mergers and acquisition, however we adapt quickly to these markets by remaining focused on our strategy.

Competition is healthy for our industry and consolidation may change the names of companies and how they operate, but it will not change how we execute and drive industry leading returns.

What is your outlook for the oil service sector in the region?

The Middle East is a very diverse market. We see NOCs and IOCs expanding into unconventional reservoirs across the region and trying to enhance the performance of existing mature fields. Both of these align well with Halliburton’s strengths which were built upon successful operations across North America. As mature fi elds account for more than 80 per cent of MENA reservoirs they present a great opportunity to drive further growth and for us to help lower the cost per BOE. Halliburton remains bullish and will continue to invest in long-term strategies throughout the region.

How much focus is Halliburton putting on innovation in technology?

Innovation is the key to sustainable success in the oil and gas industry. Our ability to access data and integrate it throughout Halliburton’s product lines and services to digitally transform our operations will result in greater efficiencies and productivity. One example is Halliburton’s Voice of the Oilfield and iEnergy platform that helps operators deploy digital transformation programs across exploration and production processes.

What do you intend to showcase at ADIPEC this year?

Halliburton will showcase several innovative technologies and our ability to access data faster through real-time digital platforms. We plan to introduce JetPulse, a new high-speed telemetry service that transmits downhole data to surface up to four times faster than conventional telemetry systems. This helps operators make faster decisions to optimise well placement and improve well control while increasing drilling efficiency. We are also showcasing SPECTRUM FUSION, a service that powers a variety of diagnostic tools without the need for a downhole battery and is deployed through hybrid and fibre electric cable conveyed by coiled tubing. This helps eliminate multiple trips and creates flexible complementary diagnostic services access with unprecedented data quality.

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Middle East to play a greater role in Wintershall’s portfolio https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/middle-east-to-play-a-greater-role-in-wintershall-s-portfolio/ Pipeline Magazine’s Julian Walker spoke exclusively with Wintershall CEO Mario Mehren on extending its engagement in the Middle East 2017-11-15 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/middle-east-to-play-a-greater-role-in-wintershall-s-portfolio/

Pipeline Magazine’s Julian Walker spoke exclusively with Wintershall CEO Mario Mehren on extending its engagement in the Middle East

How is Wintershall evolving its strategy to meet the new energy landscape of lower oil prices?

First of all, our investment decisions and activities are always based on a long term view of the oil and gas prices. In our industry it can take around ten years from the discovery of a reservoir until production starts. However, in today’s low-price environment, we evaluate our investment and exploration projects even more carefully. For us “operational excellence” means working better, more efficiently and more profitably. Our diversified portfolio is an important part of this approach: At Wintershall, we produce oil and gas that generates profits.

How important is the Middle East region to Wintershall’s upstream strategy?

About 50 per cent of the worldwide oil and gas reserves can be found in the Middle East region. That’s why Wintershall as Germany’s largest oil and gas producer is just at the right spot in Abu Dhabi. Being a mid-size company with more than 80 years of experience in exploration and production I’m confident that Wintershall will add value to Abu Dhabi’s energy strategy. We’re already engaged in successful local projects. And we’re planning to extend our engagement here. As CEO, I want the region to play an increasingly important role in our diversified upstream portfolio.

Are you looking to increase your involvement in the Middle East?

One thing is for sure: We want to be a long-term partner in the Middle East region. Therefore we always have the future and potential new projects set in our sights. It all started with opening our own office in Abu Dhabi in 2010. And it continued with the technical evaluation agreement we signed with ADNOC and OMV in 2012 to appraise the Shuwaihat field in the Western region. Regarding our current project in Shuwaihat we will now have to decide on further steps – together with our partners. We are prepared to invest in Abu Dhabi on an ongoing basis.

What is the latest status of the Shuwaihat field?

We are proud that the Shuwaihat-6 drilling has been successfully completed earlier this year. Following our experience with Shuwaihat-5, we learned a lot about the local geography. For Shuwaihat-6, our first offshore well in Abu Dhabi, we even built our own logistic support base in the local port of Mugharraq. In the first place we did that to save time and money during the operations but also to contribute modern infrastructure to the Western region. Having a great team of experts and having done detailed planning ahead, this way we exceeded our expectations. In the last couple of months we analysed the collected data and handed-in an evaluation report. Now it is up to our partner ADNOC how to proceed with the field. We’re looking forward to our future cooperation.

Can you provide any update on the MoU you signed with Iran? Do you see Iran as a potential big market for Wintershall?

As you correctly said, in 2016, we signed a memorandum of understanding with the National Iranian Oil Company about a potential future cooperation. All details of the memorandum of understanding are subject to confidentiality. I hope you understand that.

This year’s theme of ADIPEC is “forging ties, driving growth” – how is Wintershall forging ties in the region and driving growth?

Talking about growth, we have our feet firmly on the ground, but we also know what we are capable of. In Abu Dhabi we combine the assets of a medium sized and future-oriented E&P company with three qualities that are valuable for local partners: We score with decades of technological know-how, especially for reservoirs that are difficult to develop. For new solutions we can rely on our parent company BASF, one of the largest chemical companies in the world. Finally, everything we do incorporates the “made in Germany” seal of quality. Taking advantage of these capabilities we want to find smart solutions for the most challenging tasks in Abu Dhabi together with our partner ADNOC.

How important is ADIPEC for Wintershall? What will you be showcasing at ADIPEC this year?

ADIPEC has a special flair. Being the most important meeting point in the region, my team and I are looking forward to meeting business partners and friends.

Personally, I have the pleasure to take part in ADIPEC for the third time this year and for the second time in the international CEO-panel discussions. I am looking forward to that. But even more, I like the mentality in Abu Dhabi: having a coffee with partners, friends and high ranking decision makers right in the middle of the hotspot of the oil and gas world. That’s a special and unique experience one should not leave out.

What do you hope to achieve at this year’s show?

This year we will focus on Wintershall’s offshore expertise at the exhibition. At our stand in Hall 6 we offer a unique insight into our latest offshore solutions and we will let visitors travel “underwater”. By sharing our worldwide experience, we will show how we managed to develop cutting edge underwater technology at Wintershall to handle today’s challenges.

This interview appeared in the November issue of Pipeline Magazine

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LUKOIL sees the Middle East as an area for expansion https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/lukoil-sees-the-middle-east-as-an-area-for-expansion/ LUKOIL’s President Vagit Alekperov talks exclusively to Pipeline Magazine’s Julian Walker about the latest update on its projects in Iraq and why the market has now stabilised. 2017-11-15 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/lukoil-sees-the-middle-east-as-an-area-for-expansion/

LUKOIL’s President Vagit Alekperov talks exclusively to Pipeline Magazine’s Julian Walker about the latest update on its projects in Iraq and why the market has now stabilised.

Last year the company celebrated its 25th anniversary. What were its original goals and how far have they been achieved?

In 1991, after consolidation of the three oil-producing companies in Western Siberia, we could hardly predict what LUKOIL would be like in 25 years. Though even at that time, we already had an idea of establishing a strong, publicly traded international company that will honourably represent Russia on the global energy market.

Today LUKOIL operates in more than 30 countries on four continents. We control 1 per cent of proven oil reserves and 2 per cent of oil production in the world. Of course, there is a lot of work ahead. We plan to create value for our shareholders by enhancing operations efficiency, strengthening our expertise, developing existing projects and diversifying both geography and types of our business.

How important is the Middle East to LUKOIL’s operations?

More than half of the global hydrocarbons reserves are in the Middle East and in the next decade this region will not only keep its role as a major supplier of oil and gas, but will also become an important energy consumer. We all see how quickly refi ning and petrochemical industries are growing here. The same is with the renewables. Middle East is becoming a global hub where energy and technology meet. LUKOIL, as many other companies, considers Middle East as a major region for expansion.

We are already one of the largest investors in Iraq, where we have been working since 1997. LUKOIL is developing one of the largest oil fi elds in the world – West Qurna-2, with daily production of about 400 thousand barrels. ‘Block 10’ is another important project in Iraq. In 2017 after testing the fi rst exploration well (Eridu-1), we evaluated the reserves of this block as significant. According to preliminary estimates, it’s the biggest oil discovery in Iraq in the last 20 years.

What is the latest developments at West Qurna-2?

Two months ago the Iraqi delegation, headed by the Minister of Oil HH Jabbar Ali Al-Luaibi, visited LUKOIL’s Head Office in Moscow. We discussed possible renegotiation of the service contract for development of West Qurna-2. LUKOIL and Ministry of Oil agreed to revise the production plateau at WQ-2 to 0.8 million barrels of oil per day. Negotiations are still under way. As soon as we have a final decision, LUKOIL will proceed with the further project development.

What is the company hoping to achieve with its presence at ADIPEC?

LUKOIL is the biggest Russian private company participating in ADIPEC. We want to share our experience of implementing unique projects in the Caspian region, West Siberia, Central Asia and the Middle East. We also plan to discuss the current market situation and prospects of cooperation between investors and governments in different parts of the world.

What will you be speaking about during the panel discussion?

I will participate in the Global Business Leaders session, where we will discuss the issues of international partnership, investments strategies of state-run and private oil and gas companies, prospects of sustainable growth after two years of restructuring portfolios and CAPEX reduction. I am looking forward to sharing my ideas with other panelists and the audience.

What does LUKOIL feel is the immediate prospects for the industry?

The market is quite stable now. This is the result of recent agreements between OPEC, Russia and other oil producers regarding the production cuts. We are satisfied with this stability, which isan important factor of sustainable industry development in the future.

What areas would the company like to expand into?

LUKOIL will continue developing its business within the vertically integrated model, including international operations. However, the Russian market will remain our priority, as projects inside the country appear less influenced by high oil market volatility.

How important is ADIPEC to the oil and gas business?

ADIPEC is a major event in the oil and gas industry, where all market players come together to share their experience, meet existing and new partners and get the latest updates on the market development. It helps a lot in developing business and creating values for shareholders.

This interview first appeared in the November issue of Pipeline Magazine

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OMV shines a spotlight on the opportunities emerging in UAE https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/omv-shines-a-spotlight-on-the-opportunities-emerging-in-uae/ In the Middle East, OMV’s operations are supported by its close connection with the Abu Dhabi-based Mubadala Investment Company (formerly IPIC), OMV’s second largest shareholder. 2017-11-14 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/omv-shines-a-spotlight-on-the-opportunities-emerging-in-uae/

In the Middle East, OMV’s operations are supported by its close connection with the Abu Dhabi-based Mubadala Investment Company (formerly IPIC), OMV’s second largest shareholder.

Mubadala has been a shareholder of OMV AG since 1994 and holds 24.9 per cent of shares.

“Our long-term partnership with Mubadala is an essential part of the fabric of our company, while the close collaboration with ADNOC on a range of projects from Upstream to Downstream including petrochemicals is a key factor in our Middle East strategy. Building up mutual trust and respect, exchanging experience and technologies, and working together for future growth opportunities – this is one of the most satisfying aspects of our business,” says OMV CEO Rainer Seele

 

Shuwaihat – applying expertise in sour gas fields

OMV’s first upstream venture in UAE was secured in 2012. A previous gas discovery around Shuwaihat Island is being appraised by OMV as a 50 per cent equal partner together with Wintershall. Both companies have a proven track record of sour gas field developments and operations with more than 40 years of safe production from sour gas fields (which have high levels of H2S and CO2). The first well was drilled in 2015; for the second appraisal well drilling commenced in 2016 and included an extended horizontal side-track. Production testing was performed on the side-track and the initial vertical pilot hole. The next steps are to evaluate the well results and establish potential development concepts.

Pioneering exploration in Abu Dhabi

In 2013 OMV signed an agreement with ADNOC to jointly explore the eastern onshore region of Abu Dhabi towards Oman. As an operator, OMV is in a pioneering role, as this is the first pure exploration contract in Abu Dhabi since the mid-1960s. A 3D and 2D seismic acquisition programme was successfully completed in 2015, with the 3D-survey covering about 3,000 km2 in predominantly desert environment. Drilling started on the first OMV-operated exploration well in December 2016, reaching a depth of 4,880m in March. A well-testing programme for gas is currently underway.

International collaboration to drive up domestic gas production: North West offshore

To manage UAE’s increasing domestic gas demand and to reach production targets, ADNOC is exploring new developments for additional oil and gas production. Together with Occidental, OMV is involved in evaluating a number of undeveloped gas, gas/condensate and oil fields in the North West offshore region of Abu Dhabi including the Ghasha and Hail areas, which contain the UAE’s largest undeveloped offshore reserves.

A Technical Evaluation Agreement was signed in March 2016 for conducting a four-year work programme with seismic and drilling operations and engineering work to plan for potential field developments and establish a new regional gas infrastructure. OMV’s contribution involves nine seconded personnel and providing technical expertise for the evaluation activities. OMV is also involved in procuring project management consultant services and front end engineering design studies for the planned Ghasha and Hail development, which is the main part of the overall project.

Downstream integration

A Memorandum of Understanding between ADNOC and OMV signed in May 2017 is a key step in expanding OMV’s downstream business in the Middle East. The agreement explores potential opportunities to work together to support ADNOC’s downstream business and the company’s smart growth strategy. This offers the opportunity to expand the cooperation across the entire value chain– from upstream to downstream, including petrochemicals. OMV holds a share of 36 per cent in Borealis which is engaged in the petrochemicals joint venture Borouge, owned by Borealis and ADNOC.

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Embrace the power of integration and diversification in a time of industry volatility https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/embrace-the-power-of-integration-and-diversification-in-a-time-of-industry-volatility/ Musabbeh Al Kaabi, CEO, Petroleum & Petrochemicals Mubadala Investment Company writes an exclusive op-ed for Pipeline Magazine talking about the power of integration and the need for diversification 2017-11-14 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/embrace-the-power-of-integration-and-diversification-in-a-time-of-industry-volatility/

By: Musabbeh Al Kaabi, CEO, Petroleum & Petrochemicals Mubadala Investment Company

Earlier this year hedge fund manager, Pierre Andurand, forecast that oil would return to US$100 a barrel. The prediction caught the attention of the market but ran against the conventional wisdom that to survive, the petroleum industry must prepare for prices to remain at half that level. It is a call that positions the French-born trader against some of the biggest trends that have come to dominate the oil market outlook, from the US shale oil revolution to the rise of electric cars, which has led most investors and analysts to believe oil prices will be capped between $55-$60 for the foreseeable future.

I am not going to get drawn into predicting where oil prices will end up. Inevitably, our projections of the future are rarely accurate and we will most likely see things evolve in a completely different direction.

A different indicator of the health of the industry is the level of investment and M&A activity. The first eight months of2017 almost set a new record, with over 600 deals worth a total of $195 billion. This was led by the US, where 250 transactions worth $114 billion were agreed upon. There has also been significant activity in Europe where Total bought Maersk Oil and Gas A/s for $7.45 billion. The volume and value of these transactions indicates a more realistic view from sellers about the valuation of their assets, something that was missing in the immediate aftermath of the price fall, when owners were maintaining prices in anticipation of a more rapid turn-around.

The past year has been full of discussion on the energy price, the impact of technology on the market and scenarios about the future.

When we consider peak oil, the consensus has changed over the last four years with institutions and companies such as the IEA, OPEC, Shell and Statoil predicting that demand will peak somewhere between 2030 and 2040. If true, it is not that far away!

Discussions about peak oil are important and interesting, but perhaps we spend too much time looking at these topics and we ignore the positive changes that technology and diversification can bring in a volatile market. We need to embrace the evolution and understand the new possibilities they bring to the market both today and in the future.

For example, from 2007 to 2017, 212 new petrochemicals producers entered the industry. This is an increase of 20 percent, which is surprisingly high given the barriers to entry in this capital-intensive market. In the next five years, based on capacity announcements, that number is expected to increase by around a further 50 companies. In recent years, the growth in demand for petrochemicals has been about 1.33 times that of GDP. We are also seeing the Middle East quickly becoming a leading hub for petrochemicals, especially focused on the growth markets of Asia, and driven by technology and NOCs embracing diversification. These are developments we find very exciting.

Elsewhere, one very interesting deal saw Shell buying one of Europe’s biggest electric vehicle charging companies, New Motion.

It is fascinating to see one of the world’s oldest and most enduring energy companies diversifying away from oil. I remember fifteen years ago when oil and gas companies started moving into renewables, many people said it would not work and it would not be profitable.

Yet only last month DONG, the Danish oil and gas company, completed the divestment of its upstream oil and gas business to INEOS to focus on renewables. This is real strategic change being driven by technology, which is creating a new energy landscape. The truth is that many companies have gained a competitive edge for being brave enough to embrace these technological changes and for diversifying their portfolio.

While renewables still face the challenge of intermittency and integration into our power delivery networks, a lot of money is being invested in research into storage and load management solution - who knows what progress can be made? The growth in diversification and the increasing success in using new technologies demand that we keep an open mind when looking for investment opportunities.

I believe we are at a very interesting point for the sector where we are seeing the integration of technology delivering significant change in the energy mix. Here in the Middle-East, energy demand is predicted to increase by 8 per cent year-on-year, so we need a diversified mix of energy sources to meet our growing needs. In addition, these changes will support countries in the region in their efforts to increase efficiency while decreasing energy intensity.

Of course, we must not forget the innovation that is happening in the electric vehicle industry. Companies like Tesla are bringing real change and revolutionising a100-year-old industry. The large manufacturers are following suit and China has announced its commitment to EVs and the phasing out of the combustion engine. Yet there are still challenges to be overcome, including the current limitations of the world’s power generation and distribution infrastructure. At present in the United States electric cars represent about 1 per cent of vehicles sold which amounts to 0.2 per cent of the total automobile fleet. They are not yet putting pressure on the electrical grid, but as adoption of EVs increases, careful management of power grids and significant additional charging infrastructure will be required.

Even with an acceleration in EV sales, transformation of the global vehicle will take time and, as a result, I believe the internal combustion engine will be with us for some time to come. Add to this that 27 per cent of the world’s electricity is currently generated from oil and gas (IEA 2017), I expect our industry will remain an important part of the global energy for several decades into the future.

At the same time, technology and innovation are having a significant place in our “traditional” industry. Big Data and Artificial Intelligence are driving efficiency and have a growing role in providing petroleum companies with a competitive edge. The reality remains that while oil and gas are the commodities, it is the technology that enables us to find and extract hydrocarbons more efficiently, and process them into products that the market desires.

The inertia of global energy systems can be very long. It is debatable when it will be feasible to phase out oil, but we are witnessing a transformation of the energy system. We need to embrace evolution and understand what is happening, and seek out the possibilities this offers to the market.

We need to take advantage of technology and data science, which is driving the changes in the energy mix. This is where the investment opportunities are today, which can maintain our leading position in the global energy market tomorrow.

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Taking advantage of disruptive change https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/taking-advantage-of-disruptive-change/ Lorenzo Simonelli, Chairman and CEO of Baker Hughes, a GE company spoke to Pipeline Magazine in the lead up to ADIPEC about bringing the new merged company for the first time to ADIPEC and why in its new form it can take advantage of the disruptive change facing the industry. 2017-11-13 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/taking-advantage-of-disruptive-change/

Lorenzo Simonelli, Chairman and CEO of Baker Hughes, a GE company spoke to Pipeline Magazine in the lead up to ADIPEC about bringing the new merged company for the first time to ADIPEC and why in its new form it can take advantage of the disruptive change facing the industry.

What does the merger of Baker Hughes Inc. and GE Oil & Gas mean for the industry as a whole?

The merger of Baker Hughes and GE Oil & Gas is the blending of two leading companies to create a fullstream company that covers the entire value chain of the oil and gas sector. Disruptive change is the oil and gas industry’s new normal. We saw an opportunity in the market for a fullstream company and the combination of two historic and innovative companies could be a truly differentiated offering; one that enables us to weather industry cycles and volatility even better. We believe this can help us to also better partner with customers – helping to accelerate innovation together, partner on integrated projects, bring digital capabilities and ultimately to help enhance productivity.

What are your personal goals in your new role?

Our main focus is on integrating products, services and processes quickly and seamlessly so we can improve productivity and project economics for our customers and start building long-term value for our shareholders. Merging companies takes time, but we are moving with speed. It is also important to ensure we support a strong company culture and maintain our world-recognised commitments to integrity, invention, global growth, simplification and diversity.

In your role of Chairman and CEO what innovations will you be bringing to the company?

We already have a rich history of leading innovations, software solutions and leading equipment and technology. BHGE brings advanced technologies that are relevant to our customers and we are working with them to co-create solutions that best meet their requirements. We are harnessing the power of data and analytics to optimise operations and streamline processes for real-time decision-making and asset management. For example, capturing data while drilling provides a clearer picture of the subsurface to more accurately drill and place the well. It also helps us make more informed decisions around the overall completion and production strategy. These things are driving efficiencies and productivity gains for our customers.

We also leverage innovation from our sister companies across GE – such as 3-D printing and additive materials as well as innovations from Power and Aviation’s monitoring and bring it all into the oil and gas space. We are breaking down institutional barriers to facilitate and empower collaboration across work streams. We have over 15 ongoing long-term research and development projects that address fullstream industry challenges in Saudi Arabia, and our multi-stage pumping technology has been instrumental for the execution of the first CO2 reservoir injection application for enhanced oil recovery in the Middle East. We continue to mark breakthrough successes with our regional partners. We recently announced a great success story on how BHGE’s TerrAdapt™ adaptive drill bit has achieved the highest rate of penetration (ROP) ever achieved in Kuwait’s North field. Our TransCoil™ rigless deployed electrical submersible pump system is being installed in the region for the first time. Developed in partnership with Saudi Aramco, this next-generation, coiled tubing-deployed electrical submersible pump (ESP) system eliminates the need for a rig to install and retrieve ESPs–dramatically reducing intervention costs and downtime.

Your company is currently emphasising smart technology. How can this improve operational efficiency and benefit clients?

Digital industrial solutions are a game changer for the industry, and we deliver cloud-based digital technologies that break down silos to reduce risk, increase uptime and enhance productivity. By combining our industry expertise with software innovation, we optimise production improving top-line performance for the oil and gas industry. Big Data can drive big outcomes. One percent reduced NPT is equivalent to tens of millions of dollars in some cases. And yet, even today, less than 5 percent of oil and gas equipment is actually digitally connected and used to make key operational decisions.

This is an astounding amount of unused but potentially essential information – and we are working to put that data to work. An example, we can monitor the performance of our electrical submersible pumps, and we combine that with the information from the reservoir. We’ve been able to increase the recovery rates and increase production by five to six percent in some fields in the Middle East.

Which areas of the world are you concentrating on and where do you see the greatest potential for growth?

As a fullstream organisation, we see potential across the value chain around the world. We have a large global network and operate in more than 120 countries globally, so we are able to stay diverse and compete for projects all over.

The Middle East has great projects we are excited about – in a wide range of countries.

There has been a lot of talk about the US of course. And we’re optimistic seeing some increased attention in the North Sea. We have also seen Asia-Pacific successes.

For instance, our recently announced agreement with Twinza Oil Limited. This first fullstream agreement covers the development of a gas condensate field in offshore Papua New Guinea. The merger gives us more power on a global level, and allows us to give a dedicated, local level of care to these types of operations while being a single-source provider.

The key is to be nimble and be able to bring together the right integrated offerings. BHGE was just awarded a contract for the engineering, fabrication and construction of a subsea production system in offshore Egypt. The Zohr Gas Field is one of world’s largest gas discoveries, and will guarantee Egypt’s energy independence for years to come. The project perfectly demonstrates how we can leverage our global scale with local capabilities. Equipment will be manufactured in Alexandria in Egypt, supporting local employment in North Africa, as well as the UK, Norway and Italy. Project management services will also be supported in Egypt from Cairo and Alexandria, and from the UK.

You once said “disruptive change is the new normal for oil and gas”. How can companies turn this to their advantage?

Digital industrial is the ultimate game changer for our industry. And this is not uncommon in other industries. Yet today the oil and gas industry is still two to three times more inefficient than other industries. Our customers need partners who can help bring down the cost per barrel – which means we must find efficiencies and bring new technologies to bear that will help do that. By interconnecting operations and collaborating with customers upfront, we can provide tailored, outcome-based solutions. We believe that through greater collaboration we can help drive and partner to advance this change and enhance productivity.

How important is ADIPEC to the industry, both regionally and worldwide?

 

ADIPEC is a strategic global platform that brings together industry stake holders from across the world to one of the most dynamic oil and gas regions. From my visits to ADIPEC, I have seen the significant focus on innovation and collaboration, and how the event is at the forefront in showcasing the latest technologies and solutions. I always enjoy participating in ADIPEC.

What are you hoping for at this year’s event?

This is our first participation at ADIPEC as the merged company - BHGE, and we are excited to help continue to share more about our new company toour customers and partners. We have over 125 years of talent and experience in the industry and this allows us the opportunity to show our great history of innovation but also the great advances and opportunities ahead. We are very active in both the strategic and technical aspects of the conference, and introducing our full suite of technologies at our booth including our Virtual Reality Customer Training simulation. We have also been shortlisted in two award categories at this years’ ADIPEC Awards; The first is in “Technological Innovation and Research of the Year” for the Cable Deployed Electric Submersible Pump (TransCoil™)with Saudi Aramco, and the second in “Young ADIPEC Engineer” for Design and Manufacturing Validation through Virtual Reality Technology. We’re looking forward to participate in the various sessions and contribute to the discussion with our industry peers.

How do you see the short, medium and long-term future of oil and gas?

The oil and gas industry still plays a critical role in powering the world’s economy and its collective livelihood. Recent data shows fossil fuels still account for more than three-quarters of world energy consumption through 2040, and natural gas is the fastest growing fossil fuel in the outlook. But we must continue to leverage new technologies and develop new ones to improve unit drilling and completion costs, increase recovery efficiencies, lower operating costs, reduce environmental footprint and total risk. As more diverse energy sources improve their economics, increased efficiencies and sustainable offerings will be critical.

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OPEC dedicated to stable global oil market https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/opec-dedicated-to-stable-global-oil-market/ His Excellency Mohammad Sanusi Barkindo, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), recently spoke with Julian Walker of Pipeline Magazine about OPEC’s ongoing efforts to bring lasting stability to the global oil market 2017-11-12 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/opec-dedicated-to-stable-global-oil-market/

His Excellency Mohammad Sanusi Barkindo, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), recently spoke with Julian Walker of Pipeline Magazine about OPEC’s ongoing efforts to bring lasting stability to the global oil market

How is OPEC helping drive growth within the industry?

First of all, let me point out that healthy industry growth can only be pursued in the context of a stable oil market. And stability goes to the core of what OPEC’s mission has been since it was founded in 1960.

Today, more than ever, OPEC is dedicated to helping re-establish a balanced and stable global oil market. Since the beginning of 2017, we have embarked on an unprecedented, historic cooperation with non-OPEC countries in an effort to rescue the oil market, which had experienced one of the worst downturns in the history of the industry due to an oversupplied market that sent the OPEC Reference Basket price plummeting by nearly 80 per cent to US$22 per barrel by January of 2016. This event had a severe impact on the industry, resulting in hundreds of thousands of lost jobs, deferred or cancelled investments and discontinued research and development projects.

In the wake of this crisis, OPEC realised it had to respond. And it did, by conducting extensive consultations during the second half of 2016, not only among OPEC Member Countries, but also between OPEC and non-OPEC producing nations, as well as with consumers and the wider international community. These discussions, both formal and informal, and across various global capitals, were unprecedented in scope and scale in the history of OPEC. They centered on the urgency of restoring a lasting stability to global oil market and getting investment back on track.

These efforts have been effective in helping to get the oil industry back on its feet again. I am certain that without the determined efforts of OPEC and its non-OPEC partners, the oil market would be in worse shape today than if no action had been taken.

Do you feel that OPEC’s decision to extend the production adjustments for a further nine months is contributing to the market rebalancing?

Yes, the decision made at the 2nd Joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting in May of this year to extend the voluntary production adjustments set out in the Declaration of Cooperation by an additional nine months has proven to be successful thus far in the process, and we are witnessing positive developments in the market.

Global stocks are down, world oil demand is increasing and the global economic outlook is positive going forward. Though this process may be taking longer than originally anticipated, rebalancing a global oil market, with all of its inherent complexity, simply cannot happen overnight — it was bound to taketime, along with a lot of hard work and perseverance.

But, the steadfast commitment of the 24 OPEC and non-OPEC producing countries participating in Declaration of Cooperation is evident in conformity levels that have surpassed 100 per cent recently.

What has been the impact on global crude inventory levels?

We continue to see commercial stocks, both onshore and offshore, come down at an accelerated pace in the OECD.

At the beginning of 2017, the OECD stock overhang was at 338 million barrels (mb) above the five-year average. This level steadily decreased in the first four months of this year to just below 300 mb. Then, from May to September, it fell by over 140mb to stand at 159 mb above the fi ve-year average in September.

Of the total, crude oil accounts for 132 mb while products make up 27 mb. This means that product inventories are close to converging with the five-year average.

Crude in floating storage is also lower by an estimated 50 mb since June, with support from a narrowing contango and Brent flipping into backwardation for the first time since the second half of 2014. So, clearly, the market is heading in the right direction, but there is still work to be done to eliminate the stock overhang.

What more can be done to combat volatility in the market, either by nations or the oil companies themselves?

To keep volatility at bay, we will need to see the combined efforts of all stakeholders in the global oil and gas industry —producers, consumers, international oil companies and investors. They all have a part to play to ensure the necessary transparency to help reinstate a lasting stability in the market.

Some analysts maintain that the current price cycle is one of the worst in history. Itis also interesting to note that the recent cycle has seen oil suffer worse declines than other commodities. It was a different story during oil price crash of 1985-1986 when virtually all commodity groups experience deep declines.

One thing we have learned from this cycle and all previous price cycle challenges is that extreme prices lead to boom and  bust market conditions. These, in turn, having introduced high levels of volatility to the market. And this is simply bad news for producers and it is bad news for consumers.

I should point out that there are also non fundamental factors that have come into play in recent times, including the influential role of financial activities that have had an impact on oil prices, at times increasing the level of volatility in the oil market. Thus, we must seek the middle ground and stay away from extremities — this is the only way to ensure a stable and sustainable future for the global oil market.

Through dialogue and cooperation, we can hinder boom and bust cycles brought on by high volatility. This volatility not only contributes to instability in the market, it can jeopardise future investment.

How is your cooperation framework between producers and consumers going?

In an increasingly globalised, complex and interdependent industry, dialogue is essential for any stakeholder to accomplish its goals. In today’s market, no one can go the distance and reach the fi nish line alone. OPEC has been at the forefront of international dialogue since the early 1990s, when it joined forces with the International Energy Agency to begin a platform for producer-consumer dialogue through the establishment of the International Energy Forum (IEF).

Since it was founded in 1991, the IEF has gone on to become the world’s preeminent venue for dialogue between global oil and gas producing and consuming countries.

Today, its 72 Member Countries, representing all six continents, encompass nearly 90 per cent of global supply and demand for oil and gas. OPEC continues to play a leading role in the IEF’s biennial Ministerial Meetings, which host the world’s largest gathering of energy ministers, and participates in other joint activities.

Over the years, OPEC has steadily expanded its portfolio of dialogue activities to include platforms with the European Union, the Russian Federation, and more recently, Japan, India, China and the United States.

Additionally, since 2016, enhanced dialogue between OPEC and non-OPEC producing countries culminated in the landmark Declaration of Cooperation, in which 24 oil producers joined together in a concerted effort to help restore the oil market from one of the worst downturns in history.

These programmes underpin OPEC’s ongoing efforts to reinstate a sustainable stability to the global oil market and will be instrumental in the years ahead for it to achieve its goals.

What will be the major issues highlighted at the forthcoming OPEC meeting in November?

The 173rd Meeting of the OPEC Conference will take place on 30 November in Vienna. The Heads of Delegation will discuss the current global oil market outlook and review the report of the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC), which is overseeing the implementation process of the ongoing Declaration of Cooperation.

Later that day, the 3rd OPEC-Non-OPEC Producing Countries Ministerial Meeting will convene to assess the progress being made with the Declaration of Cooperation.  These key deliberations will, among others, be focused on optimising the path to a lasting stability in the global oil market.

Which nations are growing markets for the oil industry and what predictions can be made as to demand levels?

We expect to see developing countries lead demand growth in the long term.  According to our latest World Oil Outlook 2017, these countries will see significant growth of 24 million barrels per day (bpd) to reach an estimated 67 million bpd by 2040. This growth will come mainly from the transportation, petrochemical and aviation sectors and is a reflection of the higher economic growth forecast for these countries, in addition to rapid population growth, an expanding middle class and rising urbanisation.

A remarkable 70 per cent of the overall demand growth is forecast to come from emerging and developing economies in Asia.

The two major population growth centres in Asia will be India, which is expected to reach 1.6 billion people by 2040 and China, which will be at 1.4 billion. This amounts to18 per cent and 16 per cent, respectively, of the entire world population.

Expansion at these levels will require supplies from all producing regions, and OPEC Member Countries will continue to play an important part in helping meet these increasing needs.

Has the oil industry the infrastructure in place to meet large-scale increased demand?

Yes, I believe, overall, the industry is well equipped to meet the rising demand forecast for the years ahead, however we need to ensure that robust, longer term investment in the industry returns to adequate levels that were in place before the oil market crisis hit in 2014.

While investments are expected to pick up slightly both this year and next, the levels are far below previous levels, and we are seeing more evidence of investment in short-cycle, rather than long-cycle projects. We need to see more long-term investment to ensure  the future development of the industry and tohelp avoid supply gaps in the medium term.

The issue of potential shortfalls in investment continues to be at the top of the industry agenda and is a thematic element at most industry events I have attended of late.

With future world oil demand expected to surpass 111 million barrels a day by 2040,an increase of 16 million barrels a day, every effort should be made to avoid a potential supply gap that could present a serious challenge to the industry.

Thus, it is paramount that we clearly understand the critical relationship between long-term security of supply and short-term conditions — in other words, the need for timely and adequate levels of investments in the face of larger uncertainties stemming from a multitude of economic, technological, and policy-driven factors.

How important are the joint research efforts in which you engage?

These efforts are very important for OPEC.

Most of our joint research efforts are conducted within the framework of our ongoing international dialogue efforts, but also increasingly through synergies and networks among our Member Countries and other oil producing nations.

These initiatives have proven to be very effective in providing a common platform for increased understanding and collaboration through the sharing of our respective energy outlooks and viewpoints on the industry.

Joint studies typically cover pertinent themes of mutual interest. Some of these include the impacts of energy policies, the role of technology both on the supply and demand sides, environmental and sustainable development concerns, as well as speculation and the role of financial markets. The findings are often presented and discussed in various forums, including roundtable discussions.

These efforts have proven to be both informative and insightful, creating a win win for all involved stakeholders. We look forward to further enhancing these efforts in the years ahead.

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Future of gas and LNG https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/future-of-gas-and-lng/ Pipeline Magazine speaks to Philip Olivier, CEO of ENGIE Global LNG, exclusively about what the future holds for gas and LNG and the efforts by the French firm to find new outlets 2017-11-09 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/future-of-gas-and-lng/

Pipeline Magazine speaks to Philip Olivier, CEO of ENGIE Global LNG, exclusively about what the future holds for gas and LNG and the efforts by the French firm to find new outlets

 

What further advances can we expect from ENGIE in the next 5 years in delivering LNG as a marine fuel? And in your opinion, how important is LNG bunkering to the industry?

ENGIE, together with Mitsubishi Corporation and NYK Line launched in September 2016 Gas4Sea, a new brand to market jointly LNG as a marine fuel around the world. ENGIE Zeebrugge, the world’s first purpose built liquefied natural gas bunkering vessel (LBV) arrived in April 2017 in Zeebrugge, to supply LNG as a marine fuel to ships in Northern Europe. Since then, it is performing regular ship-to-ship bunkering services in the Belgium port. The next step will consist in adapting ENGIE Zeebrugge business model to other parts of the world, as we are discussing with interested counterparts to develop new markets outside Europe especially in Asia and America. A sign of the growing need of LNG bunkering and the success of our Gas4Sea brand, is the signature of a new deal with Statoil, to supply four dual fuel vessels expected to come into service in early 2020 in Rotterdam.

Today’s global bunker demand is estimated to be about 300 million metric tons of LNG equivalent. LNG bunkering development that depends on emissions regulations, should benefit from the enforcement of a sulphur cap globally starting in 2020. Consequently, to meet the environmental restrictions, shipping companies could use LNG instead of HFO, as SOx and NOx emissions are significantly lower. As such, ENGIE expects that LNG bunkering will have a 10 percent market share of global bunker demand by 2030. This shows the importance of these new LNG usages for our industry, as it will increase demand, which is always a good perspective in an oversupplied market.

 

In the long-term, what role can gas play in delivering cleaner, more efficient and cost-effective fuel to both established and emerging customers?

Environmental concerns and energy transition are at the heart of international debates both in developed and developing countries. Developed countries are more concerned by climate changes caused by carbon emissions, which is a long-term phenomena; while air quality and pollution generated by nanoparticles and SOx/NOx emissions, is a critical short-term issue for many developing countries. To cope with demand fluctuations (seasonality of energy needs that can vary as much as four times between summer and winter) and renewables intermittency, the energy system will need a component providing agility and robustness. As natural gas is the cleanest and most efficient fuel to complete renewable energies intermittency, it can play this role. In this framework, LNG provides more flexibility than pipeline gas to manage demand fluctuations. It can (i) easily meet decentralisation needs, (ii) respond to temporary demand increase (FSRUs, etc), and is a source of gas supply diversification. Energy transition can’t be achieved without strong regulatory measures that accelerates coal-to-gas and oil-to-gas switching for power production. Many countries have already implemented carbon pricing, through Emission Trading Systems or carbon taxes. Broadening and reinforcing these schemes is key.

In your opinion, how are companies advocating the increased use and need for gas and LNG?

Gas and LNG advocacy levers depend on market cycles. In a sellers’ market, where gas/LNG are scarce, the industry needs to guarantee to customers the access to the molecule and thus invest upstream (Exploration & Production and liquefaction), as it was the case at the beginning of this decade. In a buyers’ market like today, developing new downstream markets and new gas/LNG usages becomes the priority.

ENGIE’s recent partnership with AES to market LNG in the Caribbean and Central America and the launching of Gas4Sea brand are good illustrations of our efforts to find new outlets. Anyhow, the best way to advocate gas and LNG is to always find solutions to answer customers’ needs and build trustful and sustainable relationships.

 

Can you tell us a bit more about the importance of the partnership with AES and how it will benefit LNG supply to the Caribbean?

ENGIE’s long-term partnership with AES is a three-step build-up. The binding Memorandum of Understanding signed in March 2016 was the first step. Under this agreement, ENGIE will supply up to 0.4 mtpa LNG from 2018 on a 10-year period at Costa Norte LNG terminal in Panama. In December 2016, a 12-year agreement was signed, to jointly market 0.7 mtpa of LNG in the Caribbean. This year, in May, the LNG partnership has been extended to Central America.

This partnership constitutes a real opportunity to share skills and know-hows to foster the development of natural gas in the Caribbean and Central America. It also underlines ENGIE’s willingness to build progressive, sustainable and truthful relationships. This new partnership is an opportunity to trigger oil-to-gas switching, as the Caribbean and Central America rely heavily on oil for power generation (respectively 64 percent and 34 percent of the generation mix in 2014).

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KOC to share achievements, strategy at ADIPEC https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/koc-to-share-achievements-strategy-at-adipec/ Jamal Jaafar, CEO of Kuwait Oil Company speaks to Pipeline Magazine about the company’s plans to ramp up production, reduce cost and its presence at ADIPEC. 2017-11-09 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/koc-to-share-achievements-strategy-at-adipec/

 

Jamal Jaafar, CEO of Kuwait Oil Company speaks to Pipeline Magazine about the company’s plans to ramp up production, reduce cost and its presence at ADIPEC 

 

 

What is your headline strategy for the coming years in terms of production and capacity?

KOC recently achieved 3.15 million barrels per day of production capacity, and we are committed to continue building its production capacity to reach 3.65 million bpd by 2020 through a solid capital expenditure plan. We are currently evaluating market perspectives and our capabilities to continue implementing our production growth strategy. Actual production will certainly depend on market conditions and commitments within OPEC.

 

 

What steps are you taking to boost revenues?

We are making a strong emphasis on project cost optimisation and production efficiency, in order to maximise the revenues for the State of Kuwait. On project cost optimisation we have processes in place such as Project Gate System, which ensures that feasibility of the projects are conceptualised and developed with high quality standards, and also ensures that an intense interaction takes place between KOC and the engineering and construction companies to deliver those projects on time and within costs. Resource optimisation is also done through well delivery and integrated asset plans processes, which are designed to ensure that rigs mobilisation and use are optimised, and no idle time occurs for any rig. On production efficiency, we are implementing advanced technologies on reservoir characterisation, drilling and smart fields in order to ensure optimal allocation of wells and maximum productivity in each producing reservoir. Such implementation of advanced technologies are providing better subsurface information, and also helping on surface optimisation, all together supporting a better efficiency on our oil and gas production. 

What do you think of ADIPEC’s ability to serve KOC?

ADIPEC is one of the most important oil and gas exhibition in the region and in the world. It is always a great place to communicate our achievements, to stay updated on latest developments within the oil and gas business and to continue developing a network of colleagues. There is always a large number of KOC representatives attending ADIPEC every year, and we will continue to be there this year too.

What are your aims at this year’s ADIPEC?

We expect to continue communicating our achievements through presentations and technical papers, showing our colleagues the intense efforts that KOC is continuously developing to enhance our operations and to implement our strategy and reaching out to the world.

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Total looking to the future https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/total-looking-to-the-future/ Total’s Chairman and CEO Patrick Pouyanné in a wide ranging exclusive interview talks about how the oil major is planning for the future by looking at new energies as well as betting on gas as the fossil fuel of the future. The French IOC will push for profitable growth by remaining disciplined and ambitious at the same time 2017-11-08 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/total-looking-to-the-future/

Total’s Chairman and CEO Patrick Pouyanné in a wide ranging exclusive interview with Pipeline Magazine’s Julian Walker talks about how the oil major is planning for the future by looking at new energies as well as betting on gas as the fossil fuel of the future. The French IOC will push for profitable growth by remaining disciplined and ambitious at the same time

Total has strong ties with ADNOC. How do you see this relationship evolving in the future?

Our partnership with ADNOC has quite a special place in Total’s history. Renewing the ADCO (now called ADNOC Onshore) concession in early 2015 was a key step for us and for our partnership with ADNOC. The oil business in Abu Dhabi fits well with Total’s overall strategy. Indeed, one of the pillars of our strategy is to have access to low-cost oil, with low breakeven, whether it is onshore or offshore. In addition, I would say that Total was born in the Middle East in 1924 and that we came to Abu Dhabi in 1939 for a 75 year concession. So in a certain sense, Abu Dhabi is part of the DNA of our company. It’s not a question of being “emotional,” but loyalty to a country that matters.

You have been very active recently in the Middle-East, against a backdrop of geopolitical tensions. How do you manage working in the region?

Again, the answer lies in the identity of our company. Total is a diverse multinational company, a mosaic of more than 100 nationalities that does business in an open economy. And our job is to do the best for each country in which we operate. Since 1924, when La Compagnie Française des Pétroles first produced oil in Iraq, a “pioneer spirit” has always propelled Total beyond its domestic borders. This pioneer spirit is now part of our values. Total has strong legacy positions in all the Middle East countries and our first duty is to be excellent in each of them so as to honour their trust. That’s our philosophy. The role of a company like Total, which is a commercial company, is to build bridges and not walls.

How do you see the oil market at the moment, in terms of supply/ demand balance? Is the OPEC/non-OPEC deal working?

The market is still volatile even if it is rebalancing month after month. First, because demand is strong, supported by the low prices: +5 million bpd in 3 years! On the supply side, the OPEC/non-OPEC deal is working.

The coordinated move by Saudi Arabia and Russia last year was a historic one. It was the first time in the history of the oil industry that Russia accepted to consider cutting its production. Saudi Arabia and Russia are aligned on the strategy on the oil price and the market. I think it’s a strong alliance. Pairing the 11 million bpd of Saudi Arabia and the 11 million bpd of Russia represents 25 percent of the market. So the market is rebalancing slowly and it’s helped by the OPEC policies. But as far as Total is concerned, our job is not to bet on the oil price, our job is to make our company profitable whatever the price is. So for us, the best answer is lowering the break-even of the company.

What does the takeover of Maersk Oil mean for Total?

This deal demonstrates that we do what we say and that you can be at the same time disciplined and ambitious. We’d been saying that we would look to benefit from the low cycle conditions in order to prepare our future growth. This US$7.45 billion move, funded in shares and debt, is just that. Secondly, we said that our future growth will give priority to play to our strengths rather than to fill some gaps. And from that perspective, Maersk Oil is a perfect fit: a wide production base in the North Sea, offering synergies to lower break-even (lower than $30) and an area in conventional offshore we know very well, that will allow us to become the second largest operator in the zone.

With all the talk of new energies, you remain convinced that fossil fuels have a future?

Without a doubt. Have a look at the International Energy Agency’s scenario limiting climate change to 2°C. It anticipates that the energy mix will become less carbon intensive, but oil and gas will continue to play an important role, accounting for more than 40 percent of the mix, compared to60 percent today. Total will still be an Oil & Gas major in 30 years’ time. Without Oil & Gas, rising energy demand cannot be met.

But we need to concentrate on low cost resources in order to be able to face markets’ evolution. Because low cost resources will be produced! This is why, in the past years, we have been investing to add 4 billion barrels of low-cost reserves to our portfolio. With ADCO (now ADNOC Onshore) at the beginning of 2015, and since then with Al-Shaheen, South Pars 11 in Iran, in Brazil, in the North Sea, etc. And Maersk Oil’s production, combined with our organic growth of 5 percent over the next five years, will allow Total to join the “3 million barrels club”.

It doesn’t worry you that oil and gas is a declining market?

Oil consumption will peak sometime, that’s a fact. What it means, is that the most expensive oil will not be produced. Therefore, it is important to focus on producing the “low break even” oil, in other words the competitive oil. Strengthening the competitiveness of the oil we produce is what we have done lately. Typically, by investing in the Middle East, where the barrels are very competitive.

And also by pairing Total’s and Maersk Oil’s businesses in the North Sea: we drive down our breakeven, to lower than $30 per barrel, and create the North Sea’s second operator. And bear in mind that on the other hand, gas is a rising market.

Is that why Total has been aggressively developing its LNG and gas strategy?

Exactly. There is a rising demand for gas, stimulated by the increasing flexibility of the LNG market. Gas is the fossil fuel of the future. It is flexible and an ideal partner for renewable energy, which is intermittent, and will remain so until the industry finds a workable solution to store the energy produced by renewables. Promoting gas is a must. But to be effective in this market, you must be an integrated player. Producing gas is not enough, you must be able to open new markets. Hence our drive to be able to quickly and flexibly answer new demand, for instance by building FSRUs, as we did in Pakistan and Ivory Coast lately.

Yet a couple of weeks after the Maersk Oil deal, you bought into Eren RE, in a move that seems to indicate you are diversifying your portfolio?

Yes, because our ambition is to remain an energy major in 20 years and we think we need to position ourselves today on these new energies which will offer high growth. Total is not a new comer in new energies. Total has been a pioneer in the low-carbon sector, through SunPower, which made us a world leader in solar and through Saft, a world-class battery maker and storage specialist. And now Eren RE, which will be renamed “Total Eren”, will develop wind and solar power capacity and target 3 GW in 5 years.

How quickly do you intend to diversify in these new businesses?

When we went to face our investors in September, I got the feeling that they understood the bottom-line: our ambition is to become the responsible energy major, and to prepare Total for the future. We are a 100 year-old company and intend to still be around in the future. This is why the company has developed its 20-year vision, around our motto which is to deliver energy that is affordable, reliable and clean. Total is anticipating the changes in the energy mix, which we welcome as an opportunity to grow. Our vision implies that low carbon energies will account for 20 percent of our portfolio in 20 years. But we only invest where we see a business case and with exactly the same capital discipline as for the rest of our assets. We aim for profitable growth.

You recently signed up, alongside Statoil and Shell, to join a CCS scheme in Norway. How significant is this for Total?

Carbon capture, use and storage has until now been limited to experimental and small scale project. Total has been a pioneer with its own pilot in Lacq, in the south of France, which helped ascertain the validity of this technology. This Norwegian project is exciting, as it is the first of its kind on a commercial scale. It is very important for Total, a company that integrates the climate challenge into its strategy, to be part of it. The aim of the project is to develop a viable and reproducible commercial CCUs model, in view of carrying out other major projects around the world. We’re glad to be partnering with top companies like Statoil and Shell. CCUS is critical to help reach the goal of limiting the rise of temperatures to +2°C, it is at the heart of our drive to become the responsible energy major.

How much emphasis is Total putting on R&D?

Last year, at Group level, our R&D budget was $1.2 billion, of which $500 million was spent by our subsidiaries Hutchinson, Sunpower and Saft and new energies. If I take oil and gas, our core sectors, it was about $700 million and 10 percent should be dedicated to CCUS. Technology is absolutely key, and we are maintaining our R&D investments, despite the drop in crude oil prices that started in 2014. Our spending has even increased by an average of 5 percent per annum over the 2015-2017 period. But it will come as no surprise to you if I tell you that the drive for innovation is not just about spending money, it’s about spending it right. Innovation is made of technological breaks that require you to spend money, and of a number small things, that can be cost less.

So in your mind, there’s more to innovation than just R&D?

Innovation and R&D go hand in hand, but are not exactly synonymous. Innovation is not just about products. It is also about the right frame of mind, having an open attitude towards the new challenges that come our way, new work methods and more. This is why I think innovation involves everyone, and everyone is a potential innovator. Total’s history goes back almost a century, and the fact that we are still here is testament to our ability to develop new concepts and reinvent ourselves.

How do you approach digitalisation?

I like to joke that you can’t digitise oil or gas. They are hard commodities. But what we see happening is that a lot of services related to this business can be digitalised. For instance, we are launching a gas and power distribution service in France that will be available through an online platform. It’s easy, because customers now expect this type of service to be easy. Being digital-based, the service will be very competitive. It’s a great example of how digitalisation can make energy more affordable. In the solar business, we are seeing more and more customers being drawn to distributed systems, where a solar panel on their roof is paired with intelligent software, helping them manage their consumption. Digitalisation is spreading as our customers are getting more familiar with it. They are starting to expect us to be able to deliver in digital form. So it is really a topic that we are taking seriously. I don’t see it as a threat; I see it as a field offering opportunities.

Are you betting on artificial intelligence?

Artificial intelligence is a tool, a means to an end. At Total, we need to acquire and process all kinds of data — from seismic acquisition or about our customers or the way our plants operate. Processing data is slow and complex, even for Total, which has the industry’s most powerful computer, Pangea. So I believe artificial intelligence, big data management, machine learning, etc., have a role to play there. They are productivity enhancers, that’s for sure. Machines can replicate, accelerate processes. But at Total, a company of scientists and engineers through and through, we will always need the creativity and insights of the human mind.

The theme of ADIPEC this year is forging ties and driving growth. How does that relate to Totals’ business?

In this industry, your competitors are also your partners. Primarily, we work together, not against each other, because we need a collective drive to face the challenges that lie ahead. I’ve mentioned our partnership with Statoil and Shell on CCUS and I’ve mentioned our long cooperation with ADNOC. I could mention many more. This industry is all about forging ties, sharing experiences and coming out stronger together. This is why I value the opportunity to attend ADIPEC so much. You get to meet your peers, exchange ideas and insights, listen to inspiring talks about the industry’s challenges. I always look forward to the event, and always leave full of ideas and energy, and very optimistic about our industry’s future.

This interview first appeared in the November issue of Pipeline Magazine

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The road to success for Foresight Group International https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/the-road-to-success-for-foresight-group-international/ Foresight Group International is in the midst of building a strong foothold in the Middle East and India regions for the shipping, offshore oil exploration and drilling sectors. 2017-11-07 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/the-road-to-success-for-foresight-group-international/

Foresight Group International is in the midst of building a strong foothold in the Middle East and India regions for the shipping, offshore oil exploration and drilling sectors.

The diversified group, set up in London in 1984 by Dr. Ravi Kumar Mehrotra, CBE, currently boasts two large crude vessels and six jack-up rigs and has set Dubai as the group’s global operations base.

Its businesses include shipping, drilling, training, branded retail and fi ne dining. Dr. Mehrotra, founder, and chairman of the Foresight Group International speaks to Pipeline Magazine’s Nadia Saleem about the driving strength of the group and the way forward.

You’ve come a long way from a one-man start-up to a diversified group. Where would you like to see Foresight Group International in the next decades?

I had a close call in 2006, and I started thinking about how I will close the story of my story - it was either to sell out or to hand it over to the next generation. I don’t have an attraction for money but more importantly, the power of money so I didn’t want to sell the group.

I also didn’t want to give a blank cheque to my children - as it is, they’ve grown up wanting for nothing, and they have less of an urge to develop and grow the business. I used to work 14-hours a day and still do 12 hours - after all, without pushing forward, what else does a person have?

Our current aim is to become the best offshore drilling company in Asia and the Middle East with our superior service, but I began to develop a strategy for the group that will see it reach centennial in 2084. I took four-five years to develop this strategy. The senior managers initially took the idea with a pinch of salt, as everyone does. As I have moved forward, it has become an internal force within me. Now, they are all talking about how to run the business for the next 100 years, and I’m pleased they’ve taken it more seriously than me.

Are there new business lines you envision for the group?

If I say the group will be doing shipping or drilling in the future, I would be telling the story of Kodak - which became obsolete because it decided to stay in print and not move with the future of digital. I cannot say what the group should do in the future to survive. I can just say that it has to be relevant to the society because I can’t tell what will change in the future.

What’s the sustainability strategy for the group?

To be sustainable, you have to learn and be alert at all time so that one country’s taxation doesn’t finish us, for example. That’s why we set up our new offices in Dubai instead of Europe or America where taxation is high. We know that the fourth industrial revolution will stop and the peak for consumption is over. We have to be resilient - we have to be in a place which is the most tax efficient.

One of the reasons for diversification is down-cycles in the market.  What are your views on the current state of affairs in the oil and maritime market?

The oil and drilling industry will be needed for years to come, but people have to get over the situation that there is no huge upside - it’s about the survival of the fittest. This is now going to pay the dividend for the Foresight Group.

It doesn’t worry me but makes me happy because we’re the new boys on the block. I’m not carrying the baggage of my ancestors - so we don’t have a problem to adapt and remain lean and thin.

Humans can adapt to anything as long as there are no mental blockages.

What values and principles would you say have driven Foresight Group and which will continue to drive it forward in the future?

My dedicated team. We have a special team, and I have helped them because my dream has infected them as well. The way of the success of an entrepreneur is to draw his goals on a canvas and let others weave their corners to it. My small goal which became larger was to run a highly technical and global business from Asia. My canvass was enlarged so that all my senior team added their extension. Therein lies my success - my team is as committed to me, and some are even more dedicated than me.

What do you want to leave as your most prized legacy?

Our group is medium sized, but our reputation is larger than the largest organisation - that is the most important thing to us. Our fleet has an efficiency rate of 99.7 percent, which is higher than the world’s largest operator. Reputation is all that matters because money and size many people can create. In the end, reputation is the only thing that governs.

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Emerson on hand to help develop automation strategies https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/emerson-on-hand-to-help-develop-automation-strategies/ Pipeline Magazine heard exclusively from Andrew Dennant, Oil & Gas Director, MEA about Emerson’s focus on emerging technology and aims for ADIPEC 2017 2017-11-06 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/emerson-on-hand-to-help-develop-automation-strategies/

Pipeline Magazine heard exclusively from Andrew Dennant, Oil & Gas Director, MEA about Emerson’s focus on emerging technology and aims for ADIPEC 2017

How is Emerson focusing on new emerging technologies in the oil and gas industry?

We have seen that, while there is huge interest in the industry in the Industrial Internet of Things, many projects are delayed or cancelled because the return on investment is not clear. We have a scalable suite of IIoT technologies and applications that deliver defined benefits with clear rewards. These could be as small and simple as applications to monitor the condition of selected assets within a plant or infrastructure, or as large as an enterprise wide consulting-led study to optimise equipment health, equipment efficiency, or energy intensity across the enterprise. Our approach to the IIoT is evolution, not revolution. We do not advocate throwing out what has already been invested in but, instead, building upon it to deliver tangible and measurable business benefits.

How is Emerson helping meet the challenges of today’s energy world?

Although it is a cliché, we see that our customers need to do more with less. Less capital outlay, fewer people, shorter turnaround times and lower oil prices reducing the return on any investment.

We are helping our customers to achieve this by providing technologies and expertise to enable them to make better decisions more quickly. We can cost-effectively provide devices that give more data, connected securely so that operating and asset information flows across the enterprise, enabling analytics to improve decision support and also to give access to remote expertise. A technology example is mobility applications that put the information that people need to make better decisions in the palm of their hands, wherever they are. This enables changes in workflow that provide personnel real-time secure access to the information they need to make their operations safer, more productive, and more reliable.

ADIPEC’s 2017 theme is forging ties, driving growth- how is Emerson forging ties in the region and driving growth?

Emerson is continuing to invest locally across the Middle East as we have done for the last several years. Emerson’s facility in Dhahran Techno Valley, which is scheduled to be completed in October 2017, is designed to add research and development capabilities to Emerson’s existing footprint in the Kingdom and to support the delivery of support and services to the oil and gas, mining and other process industries in Saudi Arabia. Investing a total of US$25 million in the facility, it will be equipped with first class resources and facilities to support Emerson’s collaboration with local Small to Medium Enterprises (SMEs), universities and industrial organisations to develop new solutions to tackle some of the most complex technical industrial challenges.

Supporting Emerson’s investment in local talent development, the facility will also incorporate training and education facilities. We are very proud that we already employ over 170 graduate engineers in Saudi alone, with a Saudisation level of over 55 per cent. This is just one example of how we are forging ties and driving growth in the Middle East. Another is our “Quick-Ship” Control Valve Centre in Ruwais, opened earlier this year. Here we will undertake most types of valve maintenance and repairs in association with our partners, ADOS.

What do you hope to get out of ADIPEC?

ADIPEC is the region’s most influential oil and gas conference and we make sure to participate every year. We take advantage of this platform to engage with our customers, increase our reach, and showcase our engineering and technology expertise in oil and gas automation. At our stand, Emerson will showcase oil and gas automation opportunities critical to our customers’ operations, with a focus on how application of the Industrial Internet of Things can yield rapid return on investment in real-world applications. We will present ways through which they can use automation to execute projects with great efficiency, reduce operational costs, and optimise the performance of their facilities, from onshore and offshore fields, through processing facilities and pipelines, and to tank farms and terminals. We hope that our customers, by interacting with Emerson’s oil and gas experts, will learn new ways to develop automation strategies that better address their operational challenges.

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McDermott transformative digital platform https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/mcdermott-transformative-digital-platform/ Vaseem Khan, Vice President of Global Engineering at McDermott spoke exclusively to Pipeline Magazine’s Julian Walker about the FEED and EPCI firm’s new transformative digital project delivery solution that will create waves across the oil and gas industry 2017-11-05 https://www.pipelineme.com/interviewsfeatures/interviews/2017/november/mcdermott-transformative-digital-platform/

Vaseem Khan, Vice President of Global Engineering at McDermott spoke exclusively to Pipeline Magazine’s Julian Walker about the FEED and EPCI firm’s new transformative digital project delivery solution that will create waves across the oil and gas industry

McDermott International is pushing the boundaries of what traditional EPCI companies have done in the past with digital technology and is working on providing an integrated software platform that can deliver best in industry EPCI solutions for project lifecycle.

Vaseem Khan is the man leading McDermott’s charge into the digital future and helping to put the international EPCI company at the forefront of transforming the oil and gas industry’s digital footprint. At its core McDermott is looking to introduce a new cutting-edge integrated

digital platform, based on Dassault Systèmes 3DEXPERIENCE platform, which will improve efficiency and productivity through the lifecycle of an engineering, procurement, construction and installation

(EPCI) project. The new integrated platform will cover all aspects of a project from inception to decommissioning for life of field services. Khan added: “It is an industry first. We feel we are ahead of the curve in terms of the industry and digital project delivery.” Khan touched on why McDermott felt it needed to step up to the challenge facing the oil and gas industry in terms of embracing the digital world. “We have not come as far enough along as other industries like the automotive or aviation industries and this proves to be a challenge. What we need to do as an industry is to take advantage of digital technologies which are available today and to use them to help us advance.” he said. A reason for the slow uptake has to do with the conservative nature of the oil and gas industry. But as Khan said: “The only constant is change. What McDermott wants is that we are always ahead of the curve.

We see ourselves as transformation agents in the industry.” It is clear that the directive for changing the dynamics of how an energy firm should implement project delivery in a new way comes from the top and Khan is excited to be leading McDermott’s plans to truly digitise the process. “This is a vision. Our vision is to introduce a platform that transforms how we work and the transparency these tools bring is what the industry is calling for,” he added.

NEW THINKING

Right now, according to Khan, the way the industry deals with engineering, fabrication and commissioning is all document based and McDermott feels it is time to move project delivery into the digital space. “An aspect of engineering that hasn’t changed over the last 30 years is engineering by documents. What is really important now is the transfer of data. We hope to transform this by developing a project management system that removes the silos between different businesses and functions and help transfer information not by documents but by data,” said Khan. He went on to explain: “We are taking all the existing engineering authoring tools, such as AVEVA Plant, Intergraph Plant 3D and interfacing all of these tools within our powerful project lifecycle management system. Effectively we are putting it all on one platform and our Dassault platform is the backbone of it.”

ROLL OUT

McDermott has been working on building the new system for a number of years and Khan said that the aim is to roll it out in December this year. “We are currently in the user acceptance testing (UAT) phase. We are in phase 1a, which is the engineering part. We intend to roll it out to all of our EPCI projects from December onwards and all our new projects will be done under this new digital project execution platform. The next phase, 1b, will then interface with the construction and commissioning side and should be complete and ready for roll out in the 4th quarter of 2018,” said Khan. As part of the testing phase McDermott is checking the system internally and they are also prototyping it on one of their ongoing projects alongside the old system to see how the new system copes. Khan said: “Once it goes live in December we hope to have removed all of the bugs. We know that whenever a new product goes live there will inevitably be issues. We have set up a support team in all of our main offices, which will be able to handle queries on a fast basis. We are also talking to AVEVA and Intergraph to ensure their authoring tools are fully compatible with our platform.”

As ADIPEC takes place a month before McDermott intends to go live the event will play an important part in showcasing the new digital platform for the first time. “At ADIPEC we will be showing some results from the prototype project we have been running that will demonstrate its potential value. At ADIPEC we will be displaying the new platform in real time to demonstrate its potential as an industry game changer. We are very excited about this,” said Khan.

MCDERMOTT’S DIGITAL MANTRA

McDermott set out with defined goals of what they wanted to achieve with the creation of a new digital project delivery system.  Khan explained: “One of the main purposes of building a new platform was to change the way the industry works. We need to find better ways of executing projects. One of the keys elements of this is transparency. The platform we are developing is not only for us. What we are telling our clients is that they will see the same data we see, they will see the same problems we do. So our project execution model is to have full transparency with the operator.” Most importantly, McDermott’s new system will drive change control, transparency and repeatability, according to Khan. “The industry has a habit of doing everything bespoke. Every platform and wellhead we build is bespoke but if you delve further it becomes apparent not everything is bespoke. What our digital solution does is bring about standardisation. This way the operator community can reduce their CAPEX. What we are trying to do through our delivery model is to bring about certainty,” said Khan.

VALUE ADDED SERVICES

For phase two of the platform, Khan said they are looking at a number of ideas and speaking to various Industrial Internet of Things (IIOT) companies. “We want to see how we can use that platform to provide value added services. Once we hand over a facility we would very much like the operator to continue to use our platform. We aim to introduce a platform that offers value added services to our clients and operators post handover. We can bring certainty to operations and to facility operations and maintenance,” noted Khan.

As Khan put it: “A number of operators have versions of this platform. All of them are looking at the same lines. We want to be ahead of all of this. We want to be the leader of the pack.”

LEADER IN THE MIDDLE EAST

McDermott in the Middle East has been a leader for a long time, which Khan says is an important factor when attempting to introduce a new digital project platform. “In the Middle East we have been the leading EPCI contractor for a number of years. We have delivered successfully and safely over 50 jackets and topsides. We have done around 100,000 tons of fabrication. We are a leader in the field we are in. What we are trying to do is change the industry. Bring the costs down and bring certainty to our clients.”

Khan concluded: “By transforming how we work and the transparency these tools bring I think we are doing what the industry is calling out for. I see this not only as a transformation of engineering but a transformation of how we deliver projects.”

 

Biography

Vaseem Khan was appointed Vice President, Global Engineering in August 2015, where he was responsible for McDermott’s seven engineering offices along with Epsom based Centre for Innovation and Research. Based in McDermott’s corporate Headquarters in Houston Vaseem has almost 30 years’ experience on the energy industry. Vaseem holds Bachelor and Master’s degrees in mechanical engineering and a post graduate diploma in international management.

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Digital industry transformation underway in Saudi Arabia https://www.pipelineme.com/interviewsfeatures/interviews/2017/october/digital-industry-transformation-underway-in-saudi-arabia/ Nick Nawfal, Geo-Market vice president for Saudi Arabia and Bahrain at Baker Hughes, a GE company speaks exclusively about the how the company will support Saudi Vision 2030 2017-10-29 https://www.pipelineme.com/interviewsfeatures/interviews/2017/october/digital-industry-transformation-underway-in-saudi-arabia/

Nick Nawfal, Geo-Market vice president for Saudi Arabia and Bahrain at Baker Hughes, a GE company speaks exclusively to Pipeline Magazine’s Nadia Saleem about the how the company will support Saudi Vision 2030 with knowledge sharing in technology and drive operational efficiency with a digital industry transformation

What aspects of Saudi oil and gas development will BHGE play a role in and how?

Baker Hughes, a GE company (BHGE) marks the integration of two powerhouses that have had a historic presence in the Kingdom supporting the oil and gas industry. In addition to building on our strong footprint and over 80 years of presence in the Kingdom, we continue to leverage our position as a full-stream company that works across the upstream, midstream and downstream segments. The combination of GE Oil & Gas and Baker Hughes to form BHGE in fact complements the vision of Saudi Arabia, underlined by Saudi Vision 2030, as we work to achieve transformational growth through increased productivity, operational efficiency and asset use optimisation. From innovating new technology to improving efficiency in every step – from the reservoir to the refinery – we can support our partners in Saudi Arabia to achieve unprecedented levels of efficiency and productivity. We have over 2,600 employees working across oilfield services, oilfield equipment, turbomachinery & process solutions and digital solutions, and continue to expand our manufacturing footprint that is supporting localised innovation, talent development and the growth of SME’s.

How will BHGE support Saudi Aramco operations to increase productivity?

This is the era of digital, and we believe that digital industrial transformation is a real and tangible opportunity to achieve unprecedented levels of operational efficiency, productivity, and asset optimisation.

It covers the entire value chain, and the value-add that our partners and customers can derive out of it, is tremendous. Saudi Aramco is a long-term partner of BHGE, and the differential that we bring in increasing productivity is our full-stream capability and the integration of our equipment, services and digital strengths.

We are helping our partners not just in new fields but also in brownfield ventures, monitoring wells, ensuring faster drilling and completion of wells, as well as the use of chemical solutions for better flow. Further, through advanced data analytics, we can help increase production and operational efficiency, while reducing downtime.

What knowledge sharing will take place for Saudi sustainability?

BHGE continues to invest in addressing the industry’s toughest challenges, which means investing heavily in research and innovation, strengthening its local workforce to develop skilled talent and contributing to the efficient-use and long-term sustainability of Saudi’s natural resources.

We currently have over 15 ongoing long-term research and development projects that address industry challenges in Saudi Arabia as well as a team of experts working with King Fahd University of Petroleum and Minerals and Saudi Aramco that are developing solutions for the Kingdom and the rest of the world. BHGE is also collaborating with Saudi Aramco to undertake the digital transformation of Aramco’s operations with the goal of generating productivity improvements across assets.

To enable this transformation, GE will provide a private Predix Industrial IoT cloud, GE’s pioneering APM and industry-specific applications, and staff a Digital Transformation Office up to with local industrial engineers, process experts, and technologists.

The DTO is expected to generate 250 high-tech Saudi jobs and stimulate local economic demand for an additional 500 digital industrial careers. We will be working within the Saudi Vision 2030 framework to create a STEM educational curriculum for high schools and universities to develop Saudi Digital Industrial talent to meet future demand for software developers and data scientists. Similarly, we have contributed over US$15 million of technical software to King Abdullah University of Science and Technology (KAUST) to develop the next generation of innovators.

Our JewelSuite reservoir modelling software will enhance teaching, learning and research at the university. This technology simplifies modelling and allows students to quickly build accurate 3D models, regardless of the reservoir’s structural complexity. Students and faculty can obtain a clearer picture of the subsurface and predict how much oil or gas might exist in a given location. They can also create complex 3D models of underground oil reservoirs and integrate those models into engineering solutions.

The software also lets users analyse subsurface data and provides refined tools to see the impact of different types of completions and stimulation techniques, such as hydraulic fracturing, on models they have created to determine the most productive zones for fracture treatments.

What operations will BHGE undertake to support building a local supply chain?

We have a strong localised presence, highlighted by our advanced manufacturing facilities that are creating jobs, promoting research and economic growth.

For instance, our Drill Bit Manufacturing Plant makes the bits entirely in the Kingdom from powder and these drill bits are exported to over 40 countries. Our Pressure Control Facility has tripled in size to meet local demand requirements, and in the past year we have delivered 12 locally manufactured aero-derivative gas turbines from the GE Manufacturing & Technology Center, which has been nurturing Saudi SMEs that supply parts.

We are proud of our local capacities, which also include a Chemical Blending Plant, four service workshops, and a dedicated research centre in Dhahran Techno Valley. Our contributions have also been recognised by Saudi Aramco during the first anniversary of the launch of the In-Kingdom Total Value Add (IKTVA) Excellence Awards when we were awarded the honour of ‘Best in Supplier Development’.

Further, we have announced an exciting new initiative, partnering with Saudi Aramco and Cividale SpA to build the MENA region’s first-of-its-kind, world-class Forging & Casting Manufacturing Facility, which will supply the Kingdom and global markets with forged and cast materials serving the Marine and Energy industries. With a total investment of $400 million, the facility will be operational by 2020 and create over 2,000 new local jobs.

With such long-term initiatives in place, BHGE is committed to the development and growth of the Saudi supply chain ecosystem.

What BHGE technologies will play a key role for Saudi Aramco?

The GCC region is an early adopter of the latest technologies, and Saudi Arabia is no exception. Everything we have in our portfolio, from products to services is readily available and is fully implemented in the Kingdom.

We collaborate with our partners on projects that boost productivity through the deployment of advanced solutions. For instance, BHGE installed the first TransCoil rigless-deployed electrical submersible pump system in the Khurais Field in Saudi Arabia, a technology that was developed in partnership with Saudi Aramco. This next-generation, coiled tubing-deployed electrical submersible pump (ESP) system eliminates the need for a rig to install and retrieve ESPs–dramatically reducing intervention costs and downtime.

We are also pioneering our first Asset Performance Management (APM) solution to reside on Saudi Aramco’s business network for the Aramco Jazan Complex Integrated Manufacturing Operations Management System. This will be deployed on industrial assets, and will support the reliability and integrity of the assets, providing tools for analysis and strategy development, and assuring greater operational excellence.

Today, only 3-5 per cent of oil and gas equipment is connected. There is so much opportunity to do more, and better. We will therefore also focus on leveraging our digital industrial solutions for strengthening the operational efficiency and productivity of assets. Our leading technology and access to the “GE Store” of knowledge, experience and research mean that we can bring new solutions to market faster.

Possessing capabilities across the full value chain of oil and gas activities—from upstream to midstream to downstream, BHGE will support Saudi Aramco in further driving productivity, while minimising costs and risks.

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Knowledge transfer at the heart of Honeywell’s Saudi Partnership https://www.pipelineme.com/interviewsfeatures/interviews/2017/october/knowledge-transfer-at-the-heart-of-honeywell-s-saudi-partnership/ Norm Gilsdorf, Honeywell's regional president speaks to in an exclusive about the company’s new contract with Saudi Aramco 2017-10-22 https://www.pipelineme.com/interviewsfeatures/interviews/2017/october/knowledge-transfer-at-the-heart-of-honeywell-s-saudi-partnership/

Norm Gilsdorf, president for Middle East, Russia, Turkey & Central Asia at Honeywell speaks to Pipeline Magazine’s Nadia Saleem in an exclusive about the company’s new contract with Saudi Aramco and what role this will play in Saudi IKTVA programme

Honeywell and Saudi Aramco signed an agreement earlier this year to advances Saudi Arabia’s In-Kingdom Total Value Add (IKTVA) Programme. The programme is designed to drive domestic value creation, maximise long term economic growth and diversification of the country’s economy from oil and gas dependency. Honeywell’s commitment revolves around localisation of content through supporting Saudi Aramco in creating a competitive energy sector driven by a highly trained and productive Saudi workforce. It will also help advance the development and diversification of Saudi Arabia’s oil and gas sector.

What local content will be created through Honeywell’s new deal with Saudi Aramco?

As part of the agreement, Honeywell and Saudi Aramco will jointly explore the potential for new engineering capabilities and systems that support the IKTVA Programme’s objectives of increased investment, economic diversification, job creation, and workforce development within the Kingdom. Honeywell has a Saudi-led workforce and is committed to encouraging and contributing to local skills development. We have a fast-growing portfolio of innovative technology being installed across the nation, opening up highly technical career opportunities for the country’s workforce.

As an example of this, Honeywell UOP and King Fahd University of Petroleum & Minerals (KFUPM) have jointly developed pioneering catalytic processes for domestic petrochemicals production. Our scientists have been working with professors and researchers from KFUPM in Dhahran since 2011 on new catalytic processes for producing paraxylene, an aromatic compound used in making textiles, packaging material and containers. The new processes allow refiners and aromatics producers to efficiently use a wider range of available feedstocks while increasing paraxylene production. The work is being done at a state-of-the-art Honeywell UOP research and development (R&D) laboratory at KFUPM that includes a catalyst testing and screening pilot plant.

Honeywell will work closely with Saudi Aramco to help drive the IKTVA Programme and further nurture a culture of innovation and expertise.

Will there be knowledge transfer? Which Saudi industries will benefit?

Knowledge transfer is a key component of the IKTVA programme, and will help transform Saudi Arabia into a knowledge-based economy.

As a result of this agreement, Honeywell will continue to play a major role in the development of Saudi Arabia’s industries and local talent.

The oil and gas sector will benefit significantly from the partnership in general. Honeywell will help accelerate the benefits of the Industrial Internet of Things (IIoT) within Saudi Aramco’s operations.

An example of this in action in Saudi Arabia is Honeywell’s IIoT based Connected Performance Services (CPS) offering at Al Waha Petrochemicals Company. Al Waha uses a tool within CPS called Process Reliability Advisor at its plant in Jubail, Saudi Arabia, to continuously analyse the operation of its Oleflex unit, quickly detecting and resolving problems to ensure the plant operates at its peak capability.

Projects like these are helping to transfer knowledge, experience and expertise to Saudi engineers who will help drive industrial development in the country for generations to come.

What is the value and importance of this agreement for Honeywell?

This is a very important agreement for Honeywell as we’re a long-standing partner for Saudi Aramco, and have worked closely with them for many years to help drive economic growth. Honeywell has a proud history in Saudi Arabia, and our ongoing and committed partnership with Saudi Aramco has been a key enabler of our continuous success in the Kingdom. From delivering the latest technologies to Saudi Arabia’s industries, to providing distinct training and professional development opportunities for the local workforce, our ambitions are closely aligned with the long-term development plans of the IKTVA Programme and Saudi Vision 2030.

These agreements offer a new platform to further enhance this partnership and expand Honeywell’s presence in the Kingdom. The new partnership will also allow Saudi Aramco to enhance operational performance across its network of facilities while presenting significant opportunities for Honeywell to advance the adoption of the latest software industrial solutions.

What Honeywell technologies will play a large role in this partnership?

 Honeywell Connected Plant (HCP) will play a large role in the partnership between Honeywell and Saudi Aramco. HCP combines Honeywell’s unmatched industrial expertise, software, and cloud technologies to enable its customers’ operations to be more reliable, profitable, and secure than ever before.

Much of Saudi Arabia’s gasoline, jet fuel, and diesel fuel, as well as detergents, pass through Honeywell UOP catalyst and adsorbent technology on its journey from crude oil to the end user. Through leap-ahead advancements in refining, Honeywell makes it possible for Saudi Arabia to extract more value from its crude oil by directly participating in end markets, and to achieve higher margins from every barrel of oil.

Our technologies help industrial manufacturers and producers of raw materials improve their safety, reliability, and efficiency. Many of the facilities across Saudi Arabia, from Saudi Aramco gas plants and refineries to Sabic petrochemical facilities, are controlled, optimised, and protected by our automation, control, and safety solutions.

How will Honeywell’s commitment translate to job creation in Saudi Arabia?

Through a combination of increasing localised production, investment in cutting-edge engineering technologies, and developments in logistics infrastructure, Saudi Arabia’s industrial future is very promising. Creating jobs will be an essential part of that growth and through investments and innovation, Honeywell is supporting Saudi Arabia to realise its ambitions and goals.

Honeywell recognises that human capital is a crucial factor in the success of any substantial project. Through our established Automation College, we train young Saudi professionals, helping them to develop skills that will fuel growth in the Kingdom.

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BHGE to showcase full spectrum technologies at ADIPEC https://www.pipelineme.com/interviewsfeatures/interviews/2017/october/bhge-to-showcase-full-spectrum-technologies-at-adipec/ Rami Qasem, President for the MENA, Turkey and India region at BakerHughes, a GE company speaks exclusively to Pipeline Magazine about what the newly merged entity will offer regional customers at ADIPEC to increase production, operational efficiency and reduce downtime 2017-10-09 https://www.pipelineme.com/interviewsfeatures/interviews/2017/october/bhge-to-showcase-full-spectrum-technologies-at-adipec/

Rami Qasem, President for the MENA, Turkey and India region at Baker Hughes, a GE company speaks exclusively to Pipeline Magazine about what the newly merged entity will offer regional customers at ADIPEC to increase production, operational efficiency and reduce downtime

What are your aims at this year’s ADIPEC?

We are taking part in ADIPEC for the first time this year as Baker Hughes, a GE company (BHGE), which brings forth the combined competencies of GE’s oil and gas business and Baker Hughes. Listed on the New York Stock Exchange, BHGE is the first and only company to bring together industry-leadinge quipment, services and digital solutions across the entire spectrum of oil and gas development.

Together, we bring over 125 years of experienced talent in the industry with a mindset of continuous improvement to serve customers in over 120 countries.

Tell us about your stand; are you launching any new products or services? Is it of specific interest to the Middle East?

We plan to showcase our strength as a full-stream company that brings an innovative suite of technologies that help in production optimisation and greater operational efficiency. Our technologies not only help our partners in new fields but also in brownfield ventures and monitoring wells, and enabling them to achieve higher levels of productivity.

Furthermore, through advanced data analytics, we can help our partners increase production and operational efficiency while reducing downtime.

On projects specific to the region, we are introducing new innovations in Artificial Lift production. For instance, we will be showcasing the TransCoil rigless-deployed electrical submersible pump system which is the first installation of its kind globally, and executed for the first time in the Middle East. Developed in partnership with Saudi Aramco, this next generation, coiled tubing-deployed electrical submersible pump (ESP)system eliminates the need for a rig to install and retrieve ESPs– dramatically reducing intervention costs and downtime.

Another innovative solution is IntelliStream, an enterprise software that delivers a step change in upstream productivity across reservoir, wells, network, facilities and people. Purpose built on Predix and Asset Performance Management (APM), IntelliStream enables digital transformation across onshore operations. It comprehensively addresses non productive time and production optimisation across the oil and gas industry in a single pane of glass, delivers enhanced productivity and reduces operational complexity. This game-changing cloud technology removes silos and delivers complete onshore integration and visibility connecting data from assets, reservoir, operations and maintenance sources.

What do you think of ADIPEC?

ADIPEC is a significant global platform for the energy sector that showcases the latest advances in technology and offers a key platform for all stakeholders to familiarise with the newest solutions, share knowledge on industry trends, strengthen partnerships and work towards securing the energy future. For the Middle East, specifically, the event is of great importance in bringing together all the industry partners to discuss and evaluate the shifting energy landscape and to work towards innovative solutions.

Where are your key projects in the region?

We bring a heritage of over 80 years of presence in the Middle East, North Africa, Turkey and India. We are helping our customers acquire, transport and refi ne hydrocarbons more efficiently, productively and safely, with a smaller environmental footprint and at a lower cost per barrel.

Across the region, we have strong partnerships with the oil and gas industry majors, and we are committed to investing in advancing our local manufacturing footprint through projects such as  our Pressure Control Advanced Manufacturing Facility and DrillBit Manufacturing Plant in Saudi  Arabia. We are also committed to developing the competencies required to secure the future of our industry and have established the MENA region’s first-of-its-kind Customer Solution Center (CSC) located here in the UAE. The CSC familiarises young professionals and the wider industry with the latest digital oil and gas solutions in addition to providing them with hands-on training.

How are you manoeuvring the industry’s challenges with the new oil price landscape?

With oil and gas commodities continuing to be in demand, it is a macro-economic need to drive the productivity and efficiency of the sector, and our commitment is to help the industry unlock its true potential. That requires expertise to translate data into insights and insights into outcomes. We will also focus on reducing risk and improving productivity in BHGE and customer operations. By achieving improved productivity, and reducing the cost per barrel, we can contribute positively to the industry.

This interview first appeared in the ADIEPC Show Preview 2017

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Pakistan’s road to energy sustainability https://www.pipelineme.com/interviewsfeatures/interviews/2017/october/pakistan-s-road-to-energy-sustainability/ Zahid Muzaffar, chairman of Pakistan’s Oil & Gas Development Company (OGDC), speaks in an exclusive interview with Pipeline Magazine’s Nadia Saleem about new oil and gas projects planned and the role China-Pakistan Economic Corridor will play in serving energy needs 2017-10-08 https://www.pipelineme.com/interviewsfeatures/interviews/2017/october/pakistan-s-road-to-energy-sustainability/

Zahid Muzaffar, chairman of Pakistan’s Oil & Gas Development Company (OGDC), speaks in an exclusive interview with Pipeline Magazine’s Nadia Saleem about new oil and gas projects planned and the role China-Pakistan Economic Corridor will play in serving energy needs

Pakistan stands at one end of the China-Pakistan Economic Corridor, where it is poised to benefit from US$46 billion in new roads, bridges, wind farms and other China-backed infrastructure projects such as Balochistan’s Gwadar port which links to China’s Westerns region of restive Xinjiang.


Q: Can you give an overview of Pakistan’s energy needs and what options are you looking at to serve these?

Pakistan is a country which is growing very fast – the population is now over 200 million. The energy demand is growing at a very fast pace because of the economic development within the country.

Primarily a gas-consuming country, we discovered gas about 50 years ago and we have a brilliant infrastructure for clean fuels.
We are producing about 4 billion cubic feet of gas and we are at the moment facing unconstrained demand. The country’s gas requirement is twice as much as its production.  

As a way forward, we are pressing ahead on exploration to increase the production of gas and secondly, we are looking at importing natural gas in the form of LNG.

We have been very successful in this so far– we developed the first LNG terminal over a year ago and the second LNG terminal will be coming online in November this year. Additionally, we’ve given approvals to private entrepreneurs to bring two-three more terminals.

What role will the China Silk Road play in serving Pakistan’s energy needs? What opportunity does the route through Pakistan present for regional energy players?
There is a massive demand for energy in Pakistan and with the China-Pakistan Economic Corridor, there is a great opportunity for the Middle East suppliers.

There is also a serious demand for energy from China, who imports a large chunk of oil and gas from Middle East. With the new route or economic corridor created between China and Pakistan, there is a great opportunity for Middle East producers to supply their crude oil and gas through this corridor, which will reduce the transport cost and time and make the energy demand grow much faster in China and within Pakistan.

China is starving for energy and Pakistan is in development mode and will be requiring a lot of energy in the next couple of decades.
This relationship, between China and Pakistan, is going to be very significant for Pakistan and also for the Chinese because they will be able to bring products through this route and it will also be much easier and quicker to deliver the refined products to the Middle East and Africa regions.

Pakistan, being a country with a lot of land and manpower which can be used in developing industrial zones along the infrastructure being built between Pakistan and China, will provide a lot of opportunities for investors in the Middle East and even Europe to capitalise on these investment opportunities which, will be made available in due course because of this strategic partnership between China and Pakistan.

Is there a pipeline being considered to support the Silk Route through Pakistan to Gwadar port?
We are definitely looking into various options on how we can develop an integrated network. At the moment, we’ve got the road and rail infrastructure - but the pipeline is also being seriously considered by both the countries. This will be a great opportunity for Middle East investors and various hedge funds to put their capital and have constant returns.

Shipping products from the Middle East to China takes about 35 days. If we have a pipeline connecting China through Pakistan’s new port at Gawader, the transport time could be cut back to a handful of days.

The process of supplying will be far quicker and also far more cost effective because it takes a lot of both to ship crude and gas to China.

What’s the latest update on the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline? Is there a completion-date envisioned?
TAPI pipeline is good to go – the exploration has already started on the Turkmenistan-side and the TAPI Co has already been established with all the stakeholders and the headquarters will be in based out of Dubai, to make it easier for all stakeholders to meet and discuss the way forward.

The Turkmenistan government has taken a major leap forward by bringing in major capital investment for the exploration and production of gas – this was a distant reality, but now I think this is a close reality as the investment on this pipeline has already commenced from Turkmenistan side. Other stakeholders are also very keen because energy is a great requirement for Afghanistan and Pakistan and India. It will happen and surely take place in due course.

Pakistan has a commitment to the project and we will be able to build the pipeline from the Afghan border up to Pakistan mid-country. Likewise, the Afghans and the Indians will also be building theirs.

This is something which is extremely important for all stakeholders and they are very keen to push it through. And I think this could develop into a peace pipeline between Afghanistan, Pakistan and India so this is politically and economically very important for the stakeholders.
On completion date, there have been estimates which have been put forward to the joint working group but we expect it to take between three to four years of time.

What projects is OGDC working on for developing the country’s hydrocarbon resources?
At OGDC, which is the flagship company of Pakistan, we have a very aggressive exploration programme. In the last couple of years, we have exceeded our target of geological and geophysical (G&G) surveys work. We’ve tripled our effort on the seismic survey and now the delineation of the structures is in the process and we expect to drill about 25 exploration wells in the next financial year. We will be entering into new geological areas of Pakistan which have not been explored in the past and have tremendous potential for hydrocarbons and these are Khyber Pakhtunkhwa and Baluchistan. OGDC and PakPetro Serve, along with international oil exploration companies like ENI, MOL, and United Energy will be taking the lead forward in the exploration in these areas.

Since the last three years, there have been a lot of discoveries but these haven’t been significant in terms of reserves – they’ve been small discoveries and we expect to go and drill where there are large structures, which can only be determined once we’ve carried out a detailed seismic survey.

Large structure are of between 1 Tcf (trillion cubic feet) to 2 Tcf gas reserves - we had a discovery many years back, which was between 3.5 to 5 Tcf so those are large structures in relative terms in Pakistan.

These are our targets and we have a cohesive program for them. We expect in the next few years to drill one of these structures and hopefully find a significant gas discovery, which will be of great help to the economic development of Pakistan.

The geological and geophysical survey work has already commenced and after the delineation of those structures, we expect drilling to start.
The seismic surveys have already been done and we expect to drill about 70-80 exploration wells next year. We hope these result in discoveries and give us further confidence to explore more areas in the country.

Are there sufficient finances available or arranged for the G&G work and exploration wells?
All funds are very much available within the budget programme of the national oil companies and obviously international exploration companies have their own respective budgets allocated for these exploration works within the country. So there’s no special funding that needs to be brought in for this especially as there are enough funds available with the producers within the country.

How is Pakistan addressing the regional ports competition as Gwadar becomes operationally ready?
I think Gwadar will compliment other ports in the vicinity. There is no competition as such because of the strategic advantages of each of these particular locations and we can capitalise on that and the synergies by working together.

 

 

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Forging ties, driving growth; stability through cooperation https://www.pipelineme.com/interviewsfeatures/interviews/2017/september/forging-ties-driving-growth-stability-through-cooperation/ By: HE Mohammad Sanusi Barkindo, Secretary General of OPEC As government leaders, hydrocarbon experts, analysts and decision makers descend on Abu Dhabi to attend ADIPEC 2017, all of us involved with the oil and gas industry are afforded the opportunity to take stock of developments that have transpired over the last 12 months and discuss what the future has in store. 2017-09-27 https://www.pipelineme.com/interviewsfeatures/interviews/2017/september/forging-ties-driving-growth-stability-through-cooperation/

By: HE Mohammad Sanusi Barkindo, Secretary General of OPEC

As government leaders, hydrocarbon experts, analysts and decision makers descend on Abu Dhabi to attend ADIPEC 2017, all of us involved with the oil and gas industry are afforded the opportunity to take stock of developments that have transpired over the last 12 months and discuss what the future has in store.

Undoubtedly, the previous year has not been without its share of challenges; however, it has also been notable for milestone achievements and several new courses chartered. For these reasons, the theme of this year’s ADIPEC, ‘Forging ties, driving growth,’ is particularly pertinent, not only in characterising the year that has just passed but also offering a framework for how we can confront, together as an industry, the challenges that we will inevitably face over the coming months and years.

‘Forging ties’ and enhancing cooperation with a broad range of stakeholders have been themes resonating across OPEC’s work over the last year. OPEC was, and remains, extremely cognisant of the fact that overcoming the challenging market conditions created by an oversupplied market that led to high levels of stocks requires a collective and concerted effort across the industry. No single player acting alone can achieve the stability in the market or restore the much needed confidence that we all seek.

In the second half of 2016, OPEC embarked on far-reaching consultations among OPEC Member Countries and between OPEC and non-OPEC producing nations, as well as with consumers and the broader international community, about the urgency of restoring sustainable oil market stability in a collective manner. These extensive consultations, both formal and informal, across various global capitals, were unparalleled in scope and scale in the history of OPEC.

At last year’s ADIPEC, there was a great deal of interest in the landmark decision taken at the 170th (Extraordinary) Meeting of the OPEC Conference in Algiers, on September 28, 2016. Subsequently, this has been complemented by the decision of the 171st Ministerial Conference in Vienna on November 30, 2016 and the Declaration of Cooperation between OPEC and non-OPEC producers of December 10, 2016. These decisions meant that, for the first time in the history of the industry, 13 OPEC nations and 11 non-OPEC participating countries came together as strategic stakeholders, to seek to stabilise the global oil industry.

The Declaration of Cooperation extended the hand of unity to participating non-OPEC oil producing nations to broaden the platform of voluntary production adjustments. In May of this year, the signatories of the Declaration agreed to extend the production adjustments for a further nine months from July 1, 2017.

The success of the Declaration of Cooperation is paving the way towards a new framework for the permanent and longstanding forging of ties among oil producing countries in the interests of both producers and consumers, including the regular practice of joint research activities. Such a framework of sustained cooperation between all participating nations is vital given the industry’s growing complexity and inter-connected nature.

While the Declaration of Cooperation has been the most concrete manifestation of OPEC’s desire to collaborate with other global energy stakeholders, this has long been an integral aspiration of the organisation. The most recent version of our LongTerm Strategy states, “OPEC will continue to expand and strengthen its dialogue with all producing and consuming countries, as well as regional groups, UN institutions and other energy-related international organisations.”

The value of such cooperation has been seen in the regular, successful Energy Dialogues which OPEC has with key partners. These aim to encourage an exchange of views on energy issues between oil producers and consumers. Energy Dialogues have been established between OPEC and the EU, China, Russia and India. Such dialogues are an important highlight in OPEC’s annual calendar of activities.

Therefore, for OPEC, ADIPEC 2017’s theme of ‘forging ties, driving growth’ is not a hollow concept but rather a practical means of achieving our common goals. We all share the same, clear objective: market stability. We now have the framework and guide for working together: the Declaration of Cooperation. This, combined with the spirit of collective unity which I have encountered across the industry over the last year, fills me with confidence and optimism about what 2018 has in store. I would like to conclude by recalling the words of Henry Ford: “If everyone is moving forward together, then success takes care of itself.”

HE Mohammad Sanusi Barkindo of Nigeria began his tenure as Secretary General of the OPEC on 1 August 2016. He has previously been Nigeria’s National Representative, as well as its Governor to OPEC, and in 2006, he was Acting OPEC Secretary General. From 2009 to 2010, he was Group Managing Director and CEO of the Nigerian National Petroleum Corporation (NNPC). Earlier in his career, he was Special Assistant to former Minister of Petroleum Resources and OPEC Secretary General, HE Dr Rilwanu Lukman KBE. Barkindo has also been leader of Nigeria’s technical delegation to the UN climate change negotiations since 1991. He served as Chair of the Group of 77 and China at the UNFCCC and he was elected to serve three terms as Vice President of the Conference of the Parties.

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SAP recommends short IIOT projects for ROI checks https://www.pipelineme.com/interviewsfeatures/interviews/2017/september/sap-recommends-short-iiot-projects-for-roi-checks/ Hichem Maya, head of Industries at SAP MENA speaks to Pipeline Magazine’s Nadia Saleem about the state of readiness of the regional IIoT industry and how SAP is playing a role in it 2017-09-24 https://www.pipelineme.com/interviewsfeatures/interviews/2017/september/sap-recommends-short-iiot-projects-for-roi-checks/

Hichem Maya, head of Industries at SAP MENA speaks to Pipeline Magazine’s Nadia Saleem about the state of readiness of the regional IIoT industry and how SAP is playing a role in it

How do you see the future of IIoT in the Middle East oil and gas industry?

The Middle East’s oil and gas industry is rapidly adopting IIoT solutions, and reimagining business models, processes, and ways of working by driving interconnected digital oilfields for business visibility and real-time decision-making.

Showing the strong potential for adoption of IIoT in the Middle East, energy innovation is a foundational stone of many of the Middle East’s nationwide digital transformation agendas, such as UAE Vision 2021, Saudi Vision 2030, and the New Kuwait 2035 Strategy.

What role does SAP play in this?

As one of the world’s leading digital transformation enablers, SAP’s Leonardo digital innovation system can provide the secure Internet of Things platform on the cloud in order to support next-generation applications that can scale up quickly and easily. The platform is augmented with artificial intelligence, machine learning, analytics and blockchain capabilities. These real-time business applications will be vital for delivering innovation across every business process – including exploration, production, and refining; human resources and talent development; and finance, procurement, and supply chain management.

In the Middle East, SAP is already co-innovating and exchanging best practices with the leading and most innovative oil and gas firms, including the Abu Dhabi National Oil Company (ADNOC), Saudi Aramco, and the Saudi Aramco Shell Refinery Company (SASREF).

On a global level, SAP is exchanging best practices from global IoT partnerships such as by joining the Industrial Internet Consortium and with Bosch, announced global investment of 2 billion euros over five years to accelerate IoT innovations, and further driving innovations with the acquisition of the enterprise-grade IoT provider PLAT.ONE.

How can the industry measure the ROI of IIoT adoption?

The Industrial Internet of Things’ biggest impact in the oil and gas sector will come from reimagining work – the transformation from a traditional, vertically-integrated oil and gas company into a digital energy network.

Middle East oil and gas firms that replace manual work with digital processes and real-time analytics, and connect assets and people for the right data on the right device can drive new levels of business competitiveness. With real-time data analytics from digital oilfield sensors, self-learning systems can predict maintenance, while innovative technologies such as augmented reality and drones can enhance safety and productivity.

Measuring the ROI of IIoT projects is vital. It’s important for CIOs to start with short and quick IIoT projects that can deliver quick ROI, and if they fail, are easier to determine what went wrong and quickly re-ploy a new solution. In discussions with customers, one of the quickest ways to find massive cost savings is with predictive maintenance.

 What research is being done to develop IIoT technology? What might we see coming up in terms of IIoT technology in the near future?

In the coming years, the Middle East’s oil and gas sector has strong opportunity to adopt IIoT innovations such as drones, robotics, 3D printing, and wearables to reimagine business models. In the near future, the IIoT ecosystem will be greatly enhanced with emerging technologies such as artificial intelligence, blockchain, and machine learning to solve business problems, accelerate transactions, and enhance security.

In the Middle East, SAP is driving research and development in IIoT technology with our recently-launched Co-Innovation Lab in the UAE. The lab, the 15th in a global network of Co-Innovation Labs, is facilitating project-based co-innovation with customers and partners, with a particular emphasis on driving Internet of Things innovations with the SAP Leonardo digital innovation system.

What are the risks of greater cloud connectivity and what measures can mitigate these risks?

While increasing automation in the IIoT era is making oil and gas workplaces safer, the greater connectivity with smart devices and collaborative robots is extending the network and potential for cyber-threats.

Cybersecurity needs to be a vital part of a wider digital transformation agenda, and should move into the boardroom with the risk of downtime and brand reputation. Increasingly, Middle East oil and gas firms are having a chief data officer or chief innovation officer take the lead in integrating digital processes to enhance cybersecurity, by educating staff, setting up a cybersecurity task force, and developing a robust cybersecurity risk-management strategy.

What would you say is the ideal system, and why? What are the key factors of this system?

The ideal IIoT system should be practical, useful, affordable, and secure. However, most Middle East organisations do not currently have the digital core needed for the Internet of Things solutions that will stream in massive amounts of new and different types of data from sensors, machines, devices, and social media. With a digital core running on an open cloud platform that is running real-time data analytics, oil and gas fi rms will be ready to experiment with IIoT.

As the costs of sensors, robots, and wearables continue to decrease, it may be tempting for oil and gas executives to develop all-new IIoT innovations from scratch. But the biggest cost benefi t may not be from digital disruption, but rather enhancing existing the supply chain. One recent study estimates that there is $65 billion worth of legacy IT systems in place. Instead of reinventing the oil rig, energy fi rms can easily add real-time sensors and new connectivity, along with accounting, data processing, and analytics. Firms need to meld existing and new IIoT technology. 

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