OMV and Wintershall to appraise Shuwaihat sour gas and condensate field

The Abu Dhabi National Oil Company (ADNOC), signed a Technical Evaluation Agreement (TEA) with OMV Abu Dhabi E&P GmbH (OMV) and Wintershall Middle East GmbH – Abu Dhabi (Wintershall) to appraise the sulfur rich sour gas (H2S and CO2) and condensate field in Shuwaihat.

This Agreement is part of the strategy developed by Abu Dhabi to diversify its historically narrow pool of operators and stakeholders in the Emirate, mostly Shell, Total, ExxonMobil and few others.

On the last five years, we could see Abu Dhabi opening the doors to new participants and to award crude oil concessions and natural gas projects on a field-by-field basis, as for example to:

 – Occidental of a concession covering two onshore fields in 2008 (no ADNOC participation)

 – ConocoPhillips of the Shah sour gas contract in 2008, from which ConocoPhillips later withdrew and was replaced by Occidental in 2011 (ADNOC participation as 60% shareholder of the project)

 – Korea National Oil Corporation (KNOC) of a concession covering two onshore areas and one offshore area in January 2012 (ADNOC participation as 60% interestholder in the concession)

The award of Shuwaihat sour gas and condensate to OMV and Wintershall should be considered in that perspective.

Shuwaihat field would be an important development of a natural gas and condensate field in the Western region of Abu Dhabi.

The Shuwaihat field is located some 25 km to the West of Ruwais near Shuweihat Island in the Western Region of Abu Dhabi.

In the TEA agreement OMV and Wintershall will be equal partners while Wintershall will be the operator.

Wintershall and OMV has planning to drill up to three appraisal wells and acquiring 3D-seismic over the field.

In the case of a successful appraisal campaign, ADNOC will participate in the development and production phase of the Shuwaihat field.

Abu Dhabi IPIC holds 24,9% of OMV

Through its sovereign wealth investment found International Petroleum Investment Company (IPIC), Abu Dhabi is OMV‘s second largest shareholder.

IPIC has been OMV‘s shareholder since 1994.

Last October 2011, IPIC invested $410 million (€327 million) in capital expenditure to raise its share of OMV from 20.4% to 24.9%.

OMV and IPIC are co-owners of Borealis, an Austrian petrochemicals company.

To optimize the appraisal and future development of the Shuwaihat sour gas and condensate field, Wintershall and OMV will employ advanced technologies of the highest standards.

Both companies have a proven track record in Germany and Austria of more than forty years of safe development and production of sour gas (H2S and CO2) and crude oil fields.

A successful appraisal campaign will result in Shuwaihat being an important development of a sulfur-rich sour gas and condensate field contributing to cover the increasing hydrocarbon demand of the UAE and the country’s long-term export capability.

OMV has a long standing experience in the treatment of sour gas as it operates the Aderklaa sour gas treatment plant in Gänserndorf, Austria.

In this context a successful appraisal would provide Adu Dhabi with a double benefit.

First ADNOC could develop this challenging but rich Shuwaihat natural gas and condensate field.

Second IPIC would see in Shuwaihat a fruitful opportunity to leverage significantly the return of its capital expenditure in OMV. 

OMV in brief

OMV Aktiengesellschaft (OMV) is one of Austria’s largest listed industrial companies.

In 2011, OMV booked $42.5 billion sales with a workforce of 29,800 employees.

In exploration and production, OMV is active in two core countries Romania and Austria.

OMV had proven oil and gas reserves of approximately 1.13 billion barrel oil equivalent (boe) as of year-end 2011 and a production of around 288,000 boe/d in 2011.

In Refining and Marketing, OMV runs approximately 4,500 filling stations in 13 countries including Turkey.

In midstream, OMV operates a 2,000 km long natural gas pipeline network with a marketed capacity of around 101 billion cm in 2011.

OMV has opened an E&P office in Abu Dhabi in 2007.

This office serves for screening business opportunities and the coordination of existing activities in the Middle East region and to further strengthen the relationship with the United Arab Emirates.

The close co-operation with IPIC will support OMV‘s development in the region.

Wintershall in brief

Wintershall Middle East GmbH is a 100% affiliate of Wintershall Holding GmbH, based in Kassel, Germany.

Wintershall Holding GmbH is a wholly-owned subsidiary of BASF SE.

Wintershall has been active in the exploration and production of crude oil and natural gas for over 80 years.

Wintershall focuses on selected core regions, where the company has built up a high level of regional and technological expertise, such as Europe, North Africa, South America, as well as Russia and the Caspian Sea region.

In addition, these operations are complemented by growing exploration activities in the Arabian Gulf.

In 2010, Wintershall has opened an office in Abu Dhabi, the very first one of a German E+P company in the Emirate.

Wintershall’s involvement in the UAE already stretches back over several decades with activities in Dubai, Ras Al Khaima and Sharjah.

Now Wintershall wants to get more actively involved in long-term upstream projects in the Gulf Region.  

Today, Wintershall employs more than 2,000 staff worldwide from 40 nations and is now Germany’s largest crude oil and natural gas producer.

With the natural gas trading and transport subsidiaries it operates together with Russia’s Gazprom, the BASF’s subsidiary is also an important natural gas supplier on the European market.

ADNOC in brief

Abu Dhabi National Oil Company (ADNOC) is a National Oil Company (NOC) wholly owned by the Government of the Emirate of Abu Dhabi.

ADNOC was established in 1971 to operate in all areas of the oil and gas industry and is currently comprised of 15 specialist subsidiary and joint venture companies that encompass a comprehensive range of upstream and downstream activities.

Operating in the UAE and around the world, ADNOC produces over 2.7 million b/d of oil, with plans to increase production to over 3.5 million b/d over the next decade to help satisfy the ever-increasing global demand for oil and hydrocarbon products.

IPIC in brief

The International Petroleum Investment Company (IPIC), was formed by the Abu Dhabi government in 1984, and tasked with an ambitious mandate to invest capital expenditure in the energy and related sectors across the globe.

The implementation of this mandate has resulted in stakes in more than 15 leading companies across the hydrocarbon value chain, including exploration and production, shipping and pipelines, downstream retail and marketing, petrochemicals, power and utilities as well as industrial services for total assets valued at approximately $60 billion.

IPIC has adopted a flexible approach in terms of its preferred equity stake in investment companies.

The current portfolio comprises ownership interests ranging from 4% to wholly-owned, depending on factors such as size, synergistic potential and investment opportunity.

IPIC does not generally participate in the day to day management of the companies in which it holds a stake.

However, through active participation in their governing bodies, it helps set the strategic direction of its invested companies.

The synergy within IPIC‘s portfolio and the mutually beneficial relationships with business partners around the world are essential to the success and growth of the company.

Although the Shuwaihat sour gas and condensate field is among the most challenging wells in the region, ADNOC is mobilizing the required technology through OMV and Wintershall with a double profit for Abu Dhabi expected to be collected through IPIC.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Definition

 Concession is a form of contract in the oil and gas industry between a State and a company to explore and develop these resources.

Comments

Oil and gas concessions are very similar to mining concessions considering that in all countries, except USA, and few others the underground belongs to the State, not to the owner of the upper land.

In this general legal context, the State represented by its Government, or its legal Authority, grants the rights and obligations to an operating company to explore, develop and produce oil and gas resources as any mining company.

These concessions apply the same way for onshore or offshore development as long as located in the Continental Shelf of the State.

The area subjected to a concession is usually called a block with its own rights and obligations.

These concessions are long term agreements signed between the State of a producing country and the operating company, usually an International Oil Company (IOC), for at least 20 years.

Some concessions in Abu Dhabi with BP, ExxonMobil or Total may be 65 years old.

Again, as extrapolated from historical mining code in each country, the financial structure of an oil and gas concession is pretty simple as based on two phases, exploration and production.

The operating company, or a pool of them, shall buy a concession license for the exploration of a given block.

Then the operating company shall pay to the local State a fee per barrel produced in compensation of the production of oil and gas.

This concession fee will depend on the barrel price at the time of the signature of the concession, and also on the quantity and quality of the oil and gas produced such as estimated at the exploration phase.

Usually this concession fee per barrel, or per Barrel of Oil Equivalent (BOE), is fixed for the duration of the concession.

In practice it means that the State will receive this fee regardless of the capital expenditure, profits and losses of the operating company.

All the costs and risks are left to the operating company, but also all the profits exceeding the fee.

This last point created a lot of tensions between the producing countries and the operating companies when concessions were signed 15 to 20 years ago when the barrel price was fluctuating between $10 and $20 per barrel.

At that time the concession fees were a couple of USD per barrel, which then turned the concessions contracts totally unbalanced when the barrel prices started to rocket to $30, $50 and of course $100 per barrel.

So these last 10 years all the countries having such concession contracts investigated all the ways to renegotiate the compensation of the concession, either directly, either in introducing taxes.

Of course the operating companies were very reluctant to accept these changes, not just because it was reducing their growth margins, but also because they had no guaranty to revise these fees downward in the case the barrel price would come down again during the remaining period of the concession.

With the barrel price not only increasing significantly but more importantly fluctuating heavily depending on multiple factors including USD currency, the concession contract appeared less and less adapted to regulate the rights and obligations between States and International Oil Company (IOC) which now prefer to use production sharing contracts (PSC).

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Larsen & Toubro wins Oman PDO Saih Rawl phase 2

>On August 27th 2012, Petroleum Development Oman LLC (PDO) awarded to Larsen & Toubro from India the engineering, procurement and construction (EPC) contract for the Saih Rawl Depletion Compression Phase 2 (SRDC2) project.

Nine engineering companies were in competition to win this order of $235 million.

The Saih Rawl gas field is located in Center Oman where PDO started operations in 1991 with a large gas Central Processing Facility (CPF).

Then the natural gas is piped to the LNG Trains located at Qahlat for export and Sur Fertilizer plant.

After years of production the Saih Rawl gas field is maturing and losing a part of its natural pressure.

PDO invested $550 million in the Saih Rawl Depletion Compression phase 1 (SRDC1) project to boost Saih Rawl gas field in using the depletion compression process.

The depletion compression is reducing the back-pressure at the wellhead to boost the gas inlet pressure from 35 to 96 bar for export.

Anyway and despite the installation and commissioning of the Saih Rawl Depletion Compression phase 1 last year, the natural depletion of the Saih Rawl gas field continues so that the inlet pressure at the CPF should come down to 13 bar by 2015.

In that perspective PDO anticipates with Saih Rawl Depletion Compression phase 2 project.

In its EPC contract Larson & Toubro‘s scope of work includes:

 – 4 parallel compression trains of 76 MW for a total capacity of 30 million standard cubic meter per day (mmscmd) of gas

 – Modifications of the condensate handling system at the Saih Rawl CPF

 – Installation of a pair of inlet separators for a total capacity of 18 mmscmd

PDO and Larsen & Toubro are planning the completion of the Saih Rawl Depletion Compression phase 2 project in 2014.

Larsen & Toubro aims at Qatar Dolphin gas compression

Larsen & Toubro is one of the six engineering companies in competition for the Dolphin Energy Ltd (Dolphin) gas compression expansion project in Ras Laffan Indusrial City in Qatar.

Created in 1999, Dolphin is a joint venture based in Abu Dabi, UAE, between:

 – Mubadala, a wholly owned Abu Dhabi Government national oil company (NOC), 51%

 – Total from France 24.5%

 – Occidental Petroleum from USA 24.5%

If the Abu Dhabi Emirate is rich of oil, it is short of natural gas.

With a local natural gas demand increasing for power generation, gas injection and petrochemicals applications, Abu Dhabi created Dolphin Energy to treat and export natural gas from Qatar to the UAE.

In the agreement between Qatar and Abu Dhabi, the raw natural gas is processed in Ras Laffan Industrial City to produce:

 – Natural gas (methane) exported to the UAE

 – Ethane used as feedstock locally for the Ras Laffan petrochemical industry

 – other NGL such as propane and butane for international trading.

In 2007, JGC from Japan built up the first Dolphin gas compression facility with capacities of:

 – 110,000 b/d of condensate

 – 4,400 t/d of ethane

 – 2,800 t/d of propane

 – 1,800 t/d of butane

Now Dolphin is planning the expansion of the existing Ras Laffan gas central processing facility (CPF).

The expansion of Dolphin Ras Laffan gas CPF is supposed to include:

 – Gas compression facility of 1 billion cf/d additional capacity of natural gas

 – Upgrade Ras Laffan Dolphin utilities

 – Piping and hydraulic work

This expansion is to match with the available capacity of the 364 kilometer gas pipeline connecting Qatar to the UAE across the Arabian Gulf.

Designed and installed by Saipem in 2006 for a capacity of 3.2 billion cf/d of natural gas, the Dolphin gas pipeline is currently operated at 2 billion cf/d.

The Dolphin Ras Laffan gas compression project is to fill up the capacity of the Dolphin gas pipeline with this addition 1 billion cf/d expansion. 

With capital expenditure estimated around $250 million, Dolphin is planning the completion in 2015.

After winning the Lekhwair Gas Field Development project  and the Saih Rawl Depletion Compression phase 2 project, both from PDO, Larsen & Toubro is targeting the Dolphin gas compression expansion EPC contract against its main competitors Dodsal and Punj Llyod from India, GS engineering & Construction from South Korea, Saipem from Italy and Technip from France. 

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Abu Dhabi converts Fujairah into oil and gas hub

The Abu Dhabi investment funds International Petroleum Investment Company (IPIC) and Mubadala Development Company (Mubadala) are leading more than $10 billion capital expenditure into midstream and downstream projects in Fujairah.

With direct access to the Gulf of Oman, Fujairah occupies a strategic position for Abu Dhabi and the United Arab Emirates (UAE) in short-cutting the Strait of Hormuz and its potential risks of lockout.

IPIC made the first step with the Abu Dhabi Crude Oil  Pipeline (Adcop) to connect Abu Dhabi onshore oil fields in Habshan to Fujairah.

With 370 kilometers and for $3.3 billion capital expenditure, this crude oil pipeline was commissioned in July.

To supply the actual and future storage farms in Fujairah, the Adcop pipeline has a capacity of 1.5 million b/d allowing additional expansions in Fujairah.

While Abu Dhabi works to secure its oil export, the UAE strategy is also to increase their local added value on the crude oil.

In this context IPIC plans to build the Fujairah refinery and petrochemical complex.

This project will be developed in two phases where Fujairah:

 – Phase 1 includes only the refinery

 – Phase 2 will add an olefin plant

On the phase 1, IPIC is moving on with the Fujairah refinery to require $3.5 billion capital expenditure for 200,000 b/d of crude oil capacity.

The Shaw Group completed the  pre-front end engineering and design (feasibility study) on early 2012 and has been awarded the Project Management Consultancy (PMC) contract.

Then IPIC selected the French engineering company Technip to perfom the front end engineering and design (FEED).

With Technip due to complete this FEEDon first half 2013, IPIC is targeting the completion in 2016 in order to transform Fujairah into oil products export platform.

IPIC and Mubadala build Fujairah LNG import terminal

If Abud Dhabi is rich of oil, it is short of gas and the expansion of the Dolphin capacities in Qatar to supply Abu Dhabi is the first answer to the increasing needs of natural gas of the UAE.

In addition to secure the export of crude oil and derivatives products, IPIC and Mubadala are planning the infrastructures to guaranty the long term import of natural gas in UAE.

The population in UAE is growing and the profile of the industry is also evolving with the integration of aluminium and steel sectors boosting the power consumption.

In addition Abu Dhabi maturing oil fields request more assistance of gas injection leading the UAE to be more import dependent on gas supply.

In their joint venture, IPIC and Mubdala are planning an offshore liquefied natural gas (LNG) import terminal in Fujairah.

Designed with offshore storage capacities and regasification units, the Fujairah LNG import terminal will be built in two phases.

To proceed on fast track, IPIC and Mubadala have already initiated the first phase with a capacity of 4.5 million t/y (600 million cf/d) of  LNG.

The engineering company Poten & Partners completed the pre-FEED on first half 2012 so that the FEED could be tendered in following.

IPIC and Mubadala awarded the FEED contract to Technip in expecting to allocate the engineering, procurement and construction (EPC) contract in 2013 for the completion in 2015.

The second phase should follow closely to run into commercial operations by 2016.

With all the on going projects to increase storage capacity in Fujairah, IPIC and Mubadala will contribute to reduce the traffic of the tankers in the Strait of Hormuz in securing the Abu Dhabi export and import of oil and gas when the Fujairah refinery and offshore  LNG terminal will run into commercial operations in 2015.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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BP and CNPC ramped up oil production 10% per year 

In June 2009, the international oil company BP and the China National Petroleum Company (CNPC or PetroChina) were awarded the technical services contract (TSC) for the giant Rumaila oil field in the south of Iraq, closed to the Kuwait border.

BP discovered the Rumaila oil field in 1953, but had to drop it by the nationalization under Saddam Hussein’s reign.

With estimated reserves in place of 17 billion barrels and covering 80 kilometers long by 20 kilometers wide, the giant Rumaila represents 12% of Iraq total reserves and ranks as the fourth largest crude oil field in the world.

After the war, when the Iraq Government organized the licenses rounds, BP and PetroChina won the technical services contract with a remuneration fees of $3.99 per barrel.

But after further negotiations with Iraq Government, the TSC was signed on a base of $2 per barrel remuneration fees.

At that time the Rumaila oil field production was just exceeding 1 million b/d.

From this reference of 1.066 million b/d, BP and PetroChina were given two targets:

 – Increase production by 10% the first year to trigger the payment of the $2 remuneration fees

 – Reach the plateau production of 2.8 million b/d within the next six years

To support this plan, the capital expenditure to develop Rumaila was estimated to $15 billion where the partners involved share working interests such as:

 – BP 38% is the operator

 – CNPC 37%

 – State Oil Marketing Organization (SOMO) 25%

BP to adjust production to Iraq infrastructure capacities

BP and CNPC awarded the front end engineering and design (FEED)contract and the project management services (PMS) contract to WorleyParsons mobilizing its offices in London, UAE and Iraq for execution.

In 2010, BP and CNPC awarded a $500 million contract to a consortium made of Weatherford, Schlumberger, Drilling Co. and Daqing Oil field Company Limited to proceed to a drilling campaign.

In 2012, BP and CNPC are confident to reach 1.35 million production on yearly base and to maintain a capacity of 1.4 million b/d capacity of production.

From this experience, BP and PetroChina consider to be able to increase production with additional 100,000 b/d every year on the next three years to reach 1.7 million b/d.

But this volume of 1.7 million b/d production appears to BP and PetroChina as the maximum possible within the limits of the actual infrastructures capacities to export the oil.

In this context any further capital expenditure from BP and PetroChina to reach the targeted level of 2.8 million b/d must be considered not in respect with the limits of the Rumaila project itself but according to the capabilities of the future export infrastructures to accept additional production capacities.

To move forward, BP and CNPC are working on multi-stages scenarios of Rumaila full-field development to set a new target for plateau production between 1.7 million b/d and 2.8 million b/d.

BP and CNPC will submit these scenarios to the Oil Ministry and the South Oil Company in charge of the assets in the South of Iraq in order to evaluate the consecutive investments to be made in infrastructures to be able to export the proposed production from Rumaila oil field.

From the SPE conference which took place during ADIPEC last week in Abu Dhabi, the figure of 2 million b/d was reported as a reasonable target for BP and CNPC while affordable by Iraq Authorities to finance infrastructures capital expenditure.

Once the new target approved, BP and CNPC will be able to adjust their capital expenditure to ramp up production accordingly in beginning with the replacement of the oil and gas processing facilities. 

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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ADCO receives bids on Bab Gas Compression Phase 2

Abu Dhabi Company for Onshore Oil Operations (ADCO) is receiving the technical and commercial offers of the engineering companies in competition for the engineering, procurement and construction (EPC) contract of the Bab Gas Compression Project phase 2.

ADCO is the Abu Dhabi National Oil Company (ADNOC) subsidiary in charge of the onshore oil fields exploration and production.

In that respect ADCO is mandated to increase the natural gas production by all means considering the gas shortage in Abu Dhabi to meet the continuously growing consumption.

The Bab field is one of the largest onshore oil and gas field in the UAE, delivering 25% of ADCO crude oil production and 75% of its natural gas production.

Located 150 kilometers southwest Abu Dhabi City, Bad is a complex reservoir made of many different oil and gas accumulations.

Spread over approximately 1,200 square kilometers, some Bab field pockets contain only oil or gas and some other oil rims covered by gas caps.

Therefore ADCO produces crude oil, associated gas and non associated gas out of Bab field.

Because of the large variety of the oil and gas accumulations ADCO is implementing Bab field development step by step with dedicated techniques to fit with the characteristics of each oil or gas pocket.

In 2009, ADCO initiated the Bab Gas Compression Project and awarded the EPC contract for the phase 1 to SK Engineering and Construction (SKEC) from South Korea with the compressors sanctioned to Mann-Turbo from Germany.

Comprising  three compression stations, this project was the first EPC contract signed by ADCO with a South Korean contractor. 

With the Bab Gas Compression Project (BGCP) phase 1 completed, ADCO is producing 1.8 billion cubic feet per day (cf/d) of natural gas.

SKEC completed FEED for ADCO Bab compression 2

From this achievement, ADCO is willing to gear up the natural gas production up to 2.5 billion cf/d with the Bab Gas Compression Project phase 2.

As SKEC performed successfully the phase 1, ADCO awarded it the conceptual study and the front end engineering and design  (FEED) work for the phase 2.

From the FEED work conclusions submitted by SKEC to ADCO, the Bab Gas Compression Project Phase 2 includes a:

 – Fourth gas Compression Station (CS4)

 – Additional natural gas gathering system to cover 32 new production wells

 – Offsites and Utilities

The new compression station CS4 should run with three gas compressors.

These compressors will maintain the pressure in the gas pipeline connecting ADCO gas gathering system to the Habshan gas central processing facility (CPF) 

SKEC completed the FEED work on early 2012, so that ADCO could organize the call for tender of the EPC contract in following.

From the pre-qualified companies, four submitted a technical offer:

 – Intecsa from Spain

 – Petrofac from UK

 – Samsung Engineering from South Korea

 – SK Engineering and Construction from South Korea

 These companies are currently submitting the commercial offers an estimated budget of $500 million capital expenditure.

ADCO is planning to award the EPC contract for the Bab Gas Compression Project Phase 2 on first quarter 2013 in order to begin operations on early 2015.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Abu Dhabi Company for Onshore Oil  Operations

The Abu Dhabi Company for Onshore Oil Operations (ADCO) was established on 2nd December 1971 in Abu Dhabi, the largest Emirates from the United Arab Emirates (UAE).

ADCO was created by the Abu Dhabi National Oil Company (ADNOC) to explore and operate the onshore and shallow coastal water of the Emirate of Abu Dhabi.

ADNOC is the national oil company held by the Abu Dhabi Government to manage all the oil and gas assets of the Emirate, upstream, midstream and downstream.

First oil and gas concessions were signed in Abu Dhabi in 1939 with Petroleum Development (Trucial Coast) Ltd, but the exploration started only in 1950 with the first discovery made in the actual Bab field.

ADCO was incorporated as a joint venture on 1978 and has been responsible, since February 1979, for onshore Abu Dhabi operations in the concession area covering more than 21,000 square kilometers.

In ADCO, ADNOC is leading the joint venture where the working interests are shared between:

 – ADNOC 60% is the operator

 – BP 9.5%

 – ExxonMobil 9.5%

 – Shell 9.5%

 – Total 9.5%

 – Partex 2%

With its onshore oil and gas fields mandate, ADCO explores and develops six oil and associated gas fields such as Asab, Bab, Buhasa, Sahil, Shah, North-East Bab (NEB) with Dabbiya, Rumaitha and Shanayel, 

With these six fields, ADCO  delivers 65% of the UAE total crude oil production of 2.5 million barrel of oil equivalent (boe) per day.

Under the govern of its stakeholders, ADCO defines its mission to explore, develop and produce hydrocarbons within its concession with the:

 – Maximum efficiency and safety

 – Optimum cost

 – Minimum impact on the environment

 – Continuous improvement

 – Highest standards of honesty and integrity.

ADCO Key Figures

As a national oil company ADCO does not published results.

In 2012, ADCO produces 1.4 million barrel of oil equivalent (boe) per day.

ADCO Projects and Business Highlights

Among the key projects ADCO is working on:

 – NEB Full Field Development including the deployment of CO2 injection techniques tested on the Rumaitha pilot case to reach 230,000 b/d production in 2016.

 – Nitrogen Gas Injection (NGI) in Thamana F

 – Bab Gas Compression Project phase 2 to boost production from the Bab field to 2.5 billion cf/d of natural gas

  – Asab Full Field Development to increase production from 290,000b/d to 340,000 b/d of crude oil.

 With the support of its actual partners BP, ExxonMobil, Partex, Shell, Total or potential new ones, OMV, Statoil and Wintershall, ADCO will have to invest massively to overcome two challenges: increase crude oil production to meet OPEC quotas, and find gas wherever possible to secure Abu Dhabi independence. 

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Resources and Energy

With Headoffice in Sydney, New South Wales, Australia, WorleyParsons was established in 2004 from the acquisition of the Californian engineering company Parsons E&C by the Australian Worley.

Parsons E&C had a long history since 1944 in the downstream sector, refining, petrochemicals and power.

Worley was established under the actual form in 1987 from the Australian branch of an American company well recognized in the offshore oil and gas engineering services.

Because of the solid reputation of both companies in their respective and upstream – downstream complementary areas, the decision was made to merge both brands into WorleyParsons.

Since then, WorleyParsons continued to grow steadily organically and by acquisitions.

Over the years WorleyParsons expanded its competence to cover more industrial segments and geographically in becoming a global company with 40,800 employees working in 163 offices across 41 countries.

Today, WorleyParsons defines its core business around Resources and Energy where industries are operated by complex processes.

Compared with other engineering companies, WorleyParsons is providing its services along the full life cycle of the assets, from the early design to the construction, operations services, revamping and upgrade.

From this approach, WorleyParsons, uses the brownfield business to position itself on  greenfield opportunities and extends the greenfield successes into brownfield services contracts.

Since 2011, WorleyParsons implements its BP Global Service Agreement for onshore facilities with engineering and project management services.

For some years WorleyParsons put a special focus on Canada and Middle-East.

Since 2011, WorleyParsons booked the engineering, procurement and construction (EPC) contract for

 – Syncrude Canada’s Aurora Mine

 – MEG Energy‘s Christina Lake steam assisted gravity drainage project.

 – ExxonMobil Hebron Topsides

 – BP and PetroChina Iraq Rumailla oil field

 – Oman Oil Block 60

Beside its oil and gas and petrochemical activities, WorleyParsons is developing a comprehensive engineering and services offering to the energy sector dedicated to the reduction of the CO2 emissions for utilities, metal and mining, energy infrastructures.

Worley Parsons Key Figures

  – 2011 Revenues: $5,68 billion

 – 2010 Revenues: $5,09 billion

 – 2009 Revenues: $5,8 billion

 – 2011 Earnings: $0,49 billion

 – 2010 Earnings: $0,39 billion

 – 2009 Earnings: $0,56 billion

Worley Parsons Projects and Business Highlights

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Effectively produce hydrocarbons from offshore areas

Firstly established as Abu Dhabi Marine Areas Limited (ADMA) to explore and produce offshore Abu Dhabi oil and gas,  Abu Dhabi Marine Operating Company (ADMA-OPCO) exported the first tanker of crude from Das Island to Japan in July 1962.

Named British tanker, this first export vessel was celebrating the successful development of the Umm Shaif field in the Trucial Coast by British team who came in as early as 1950 and drilled the first well in 1958.

In 1972, Japanese partners stepped in ADMA with Japan Oil Development Corporation (JODCO) buying 45% of BP‘s shares in ADMA.

Then in 1974, the Abu Dhabi Authorities were creating theAbu Dhabi National Oil Company (ADNOC) to manage the oil and gas assets in the Emirate.

Through the General Agreement on Participation, ADNOC took over 60% of the interests in ADMA and became the reference shareholder.

Few years later, in 1972, ADMA made the last step in becoming the operator of the joint venture and was renamed Abu Dhabi Marine Operating Company (ADMA-OPCO).

Today, the interests in ADMA-OPCO are shared between the partners such as:

 – ADNOC 60% is the operator

 – BP 14.66%

 – Total 13.33%

 – JODCO 12%

Since 1962, ADMA-OPCO main assets rely on the tow giant offshore oil and gas fields of Umm Shaif and Zakum.

These fields are producing crude oil for 50 years and still offer recoverable reserves for major developments.

Umm Shaif is located 150 kilometers offshore north from Abu Dhabi, but only 36  kilometers from Das Island to allow the crude oil to be exported from the production platforms to Das Island by pipeline for processing and shipment.

Zakum, or Lower Zakum, contains more oil and gas reserves than Umm Shaif, but saw the first well drilled in 1963, 63 kilometers from Abu Dhabi and 81 kilometers from Das Island.

Despite the longer distance, Zakum crude oil production is also exported to Das Island for treatment and shipping.

Located 160 kilometers from Abu Dhabi, Das Island is ADMA-OPCO main operating center. 

ADMA-OPCO Key Figures

As national oil company, ADMA-OPCO does not publish revenues and earnings.

2010 Crude oil production 481,000 b/d

2010 Natural gas production 1,8844 million cf/d

from which

 – 1,115 million cf/d were sold

 –  664 million cf/d were reinjected

 – 65 millioncf/d were consumed or flared

Adma-Opco Projects and Business Highlights

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Abu Dhabi to decide now in order to meet OPEC quotas

Abu Dhabi National Oil Company (ADNOC) and its partners, ExxonMobil and Japan Oil Development Company Ltd. (Jodco), are on the point to award the second engineering, procurement and construction contract (EPC-2) for ZADCO Upper Zakum 750 project.

ZADCO stands as the Zakum Development Company (ZADCO), a joint venture created in 1977 which currently is shared between:

 – ADNOC 60%, the operator

 – ExxonMobil Abu Dhabi Offshore Petroleum Company Ltd. (EMAD) 28% 

 – Japan Oil Development Company Ltd. (Jodco) 12%.

Through ZADCO, ADNOC, ExxonMobil and JODCO are willing to move ahead with the selection of the winning consortium for Upper Zakum 750 (UZ750)  project EPC-2 despite the significant excess of all the offers submitted by the bidding companies.

Originally estimated around $2 billion capital expenditure, this Upper Kakum EPC-2 package is actually ending around $4 billion from the actual offers on ZADCO table.

Three consortium in competition are very close to each other around this number:

 – Hyundai Heavy Industries with KBR

 – Technip with NPCC

 – Samsung Engineering

Then two other teams are much further with no chance any longer.

From this situation ADCO has the choice between three options:

 – Organize new bids on the same scope

 – Review the scope of work to reduce costs

 – Select one bidder now and go ahead

The first option is the easiest to organize and could be implemented in a short period of time, but since the three bidders are very close to each other, no major discount might be expected. 

In addition if one of the three bidders which has already invested a lot of money on this offer was withdrawing from the competition, the result may be worst than the actual situation.

ADNOC, ExxonMobil and JODCO to meet deadline

The second option would carry significant savings, but at the scale of the project any decent re-work of the engineering would cost anyway money and take one year.

This delay would have a cascade of consequences because this UZ 750 EPC-2 project is a critical package between the Upper Zakum 750 EPC-1 project for the oil and gas production and the Zirku Island Expansion project for the oil and gas central processing facilities and export.

The Upper Zakum EPC-1 project is the upstream part of Upper Zakum development project, it has been already awarded to Technip and NPCC on first half 2012 for $800 million capital expenditure.

For the Zirku Island Expansion, Foster Wheelercompleted the pre-front end engineering and design (pre-FEED) and ZADCO is planning to award the FEED contract on first quarter 2013 in targeting to sign the EPC contract on early 2015 for completion in 2017.

This deadline for the whole Upper Zakum development project involving the three projects UZ750 EPC-1, UZ750 EPC-2 and Zirku Island Expansion is critical for Abu Dhabi to meet its OPEC quotas given for 2018.

Revised several times from 2006 to 2011 and finally to 2018, Abu Dhabi is committed to reach 3.5 million b/d production by then instead of the actual 2.8 million b/d.

In consequence Abu Dhabi must increase production capacities by 700,000 b/d.

With 250,000 b/d additional production, the Upper Zakum field is carrying most of the efforts to meet this 2018 target that cannot suffer from any delay.

In this context the third option to make a decision now and go ahead for Upper Zakum EPC-2 seems to be the most likely solution so that a letter of intend should be issued soon.

In this scenario where the three bidders are at the same level, the logic would recommend ADNOC and its ZADCO partners, ExxonMobil and JODCO, to chose the engineering company offering the less risks.   

 For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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together WE achieve

Based in Abu Dhabi within the United Arab Emirates (UAE), the Abu Dhabi National Company (ChemaWeYaat) was established recently in 2008 as the spearhead of the petrochemical industry in the UAE.

In order to create immediately a regional champion and develop synergies, the stakeholders transferred their respective petrochemical assets into their purposely formed ChemaWeYaat subsidiary.

As a result ChemaWeYaat is currently owned by:

 – Abu Dhabi National Oil Company (ADNOC) 20%

 – International Petroleum Investment Company (IPIC) 40%

 – Abu Dhabi Investment Council (ADIC) 40% 

As a result of the consolidation exercise in ChemaWEEyaat of their respective petrochemical assets, the owners transferred:

 – ADNOC Abu Dhabi Polymers Company (Borouge) located in Ruwais

 – ADNOC Borouge Marketing PTE in Singapore

 – Ruwais Fertilizers Industries (Fertil)

 – Overseas IPIC petrochemical activities. 

In Abu Dhabi, the main ChemaWeYaat petrochemical assets are located in:

 – Madeenat Al Gharbia

 – Al Taweelah

In setting up this regional champion, ADNOC and its partners aim at building ChemaWeYaat market leadership on reliability, quality, cutting-edge technology and competitive feedstock.

In order to develop synergies and share good practice without delay, ChemaWeYaat is active member of the Gulf Petrochemicals & Chemicals Association (GPCA).

ChemaWeYaat is also partnering with international chemical operators, engineering companies and licensors such as ADNOC, Borealis, Neste Jacobs, or WorleyParsons to develop the most advance expertise in the hydrocarbon transformation.

ChemaWEyaat Key Figures

As national company, ChemaWeYaat is not listed and does not publish figures

ChemaWEyaat Projects and Business Highlights

As a young company made of production units coming from different horizons, the priority for ChemaWeYaat is to implement an integrated business model as its closest competitors in the Gulf.

Benchmarking Ras Laffan Indusrial City in Qatar or Al-Jubail Industrial City in Saudi Arabia, Abu Dhabi wants to build the Chemical City for ChemaWeYaat.

In December 2010, the Abu Dhabi Government made the choice of the location and approved the master plan of the future petrochemical complex to be erected there.

This master plan is designed around the sites of Madeenat ChemaWeYaat Al Gharbia, as well as the other production site in Al Taweelah.

Located on the Western Region of Abu Dhabi, Al-Gharbia benefit from 70 square kilometers next to Ruwais industrial complex.

On the model of Ras Laffan, Al-Gharbia include an export terminal, facilities to take in seawater, and a cooling system for the industrial city.

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We Refine Right

The Abu Dhabi Oil Refining Company, so called TAKREER, is the operational entity of the Abu Dhabi National Oil Company (ADNOC) in charge of the refining business.

Until 1999, the downstream activities were left as a branch within ADNOC, but with the development of this sector in Abu Dhabi and major projects to be launched in the years 2000s, ADNOC decided to separate it and establish a dedicated entity to handle it.

Under TAKREER umbrella, ADNOC transfered all the activities related to:

– Crude oil refining

 – Condensate transformation

 – Supply of petroleum products

 – Sulfur treatment and granulation for export

TAKREER key assets rely on the Abu Dhabi Refinery and the Ruwais refinery.

As the first refinery in the United Arab Emirates (UAE), the Abu Dhabi Refinery started operations in 1976 with a capacity of 15,000 b/d and a capital expenditure of $45 million.

In 1982, ADNOC proceeded to a first expansion to 60,000 b/d capacity.

In 1990, the Umm al Nar salt and chlorine plant was merged with the Abu Dhabi Refinery to become the ADNOC Abu Dhabi Refinery and Chlorine Division.

In 1992, ADNOC decided a new expansion to 85,000 b/d and the upgrade of the process with desulfurization and sulfur handling units.

The Abu Dhabi Refinery holds 500,000 cubic meter storage capacities connected to a marine terminal for loading and unloading tankers.

The Ruwais refinery was commissioned few years later in 1982 in the western region of the Emirate, 240 kilometers west of Abu Dhabi City with a capacity of 120,000 b/d.

The purpose was to create the Ruwais Industrial complex around this refinery.

In 1985, ADNOC invested in a first expansion of 27,000 b/d, and in 1986 the refinery was merged with the Ruwais General Utilities Plant for the supply of power and water.

In 1991, ADNOC added the sulfur handling and granulation units to become one of the largest in the world.

In 2002, TAKREER commissioned two condensate processing trains of 140,000 b/d, also among the largest in the world.

Today, the Ruwais Refinery manages a farm of 91 tanks with a storage capacity of 3 million cubic meters linked to a marine terminal.

Now integrated in the refinery, the Ruwais utilities run a 650 MW gas-fired power plant and a 60,000 cubic meters per day desalination facility.

Today, the Abu Dhabi Refinery and the Ruwais Refinery have a capacity of 460,000 b/d (23 million t/y) of crude oil and condensate.

TAKREER Key Figures

As part of a national oil and non-listed company, TAKREER does not publish figures.

TAKREER Projects and Business Highlights

Abu Dhabi is targeting to increase its crude oil production to meet its OPEC quotas 2018.

In the same time Abu Dhabi strategy is defined to reduce its reliance on this crude oil market in developing the downstream activities.

In parallel, Abu Dhabi is running short of natural gas meaning that the development of the downstream activities including the petrochemical sector will be mainly based on crude oil.

In this context, TAKREER will take a leading role in ADNOC strategy for growth, value creation and employement.

As a first step of its development, TAKREER awarded in June 2012 a $2.5 billion engineering, procurement and construction (EPC) contract to Samsung Engineering from South Korea for the construction of a carbon black delayed coker (CBDC) at the Ruwais Industrial Complex.

The purpose of this new plant is to produce higher value added products such as synthetic rubber and resins from the crude oil refining and heavy residual oil recycling.

This project will include 12 processing units and 23 infrastructure offsites and utilities.

Planned to start operations in 2015, this carbon black delayed coker project reflects the $10 billion refinery expansion planned in Ruwais Industrial City.

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UAE Key Projects and Business Highlights

In the United Arab Emirates, 2012 is some kind of a transition year with the development of midstream projects in Fujairah and the bid preparation of large projects upstream and downstream.

With the completion of Habshan – Fujairah export pipeline, Abu Dhabi Company for Onshore Oil Operations (Adco) will be able to roughly half its total production directly on the Gulf of Oman to shunt the Strait of Hormuz.

This pipeline opens the way to a wave of capital expenditure in new projects to build giant storage capacities in Fujairah and a $3 billion refinery.

Abu Dhabi is planning to increase crude oil production from the actual 2.8 million b/d to 3.5 million b/d in 2018 and therefore needs to find to routes to secure its export.

To support this production growth, the Abu Dhabi National Oil Company (ADNOC) is planning major initiatives:

 –  Zakum Development Company (ZADCO) to spend $4.8 billion in the Upper Zakum project (UZ750)

 – Abu Dhabi Marine Operating Company (Adma-Opco) is working on the $2 billion Umm al Lulu and Sarb project

 – ADNOC selected OMV and Wintershall to appraise Shuwaihat sour gas and condensate field.

The UAE are running short of gas, as many countries in the Gulf and is prepared to import it through the Fujairah terminal if necessary.

In the meantime, ADNOC is investigating all ways to gathering flared gas and boost actual production such as in Bab field.

In cooperating with new comers such as Statoil, OMV and Wintershall, ADNOC is sending the signal to its actual partners BP, ExxonMobil, Partex, Shell, Total, that the selection of the international companies to be invited to bid on the renewal of the concessions in 2014 for the onshore fields and in 2018 for the offshore licenses will be decided in respect with the new technologies to be developed in the UAE.

In addition to maintain the gas production, ADNOC is targeting to improve its recovery rate from the actual fields in operations.

Through all these investments, the UAE and Abu Dhabi especially, will continue to invest in the coming years to secure their market share on the crude oil global market and to reduce their reliance on crude oil price in developing an integrated upstream–downstream business model to benefit from the whole hydrocarbon value chain.

ADNOC to boost upstream projects over downstream

With the Ruwais Carbon black and delayed coker (CBDC) facilities, Abu Dhabi Refining Company (Takreer) awarded the only giant project in the UAE during the first half 2012.

This downstream project came after a long period without major capital expenditure in the UAE since the Borealis and Abu Dhabi Polymers Company $3 billion Borouge expansion in 2010.

Takreer awarded:

 – In June 2012, the Engineering, procurement and construction (EPC) contract for the Ruwais refinery carbon black and delayed coker toSamsung Engineering from South Korea for $2.47 billion

>>> More information

ZADCO to award soon Upper Zakum 750 EPC-2 project

Abu Dhabi National Oil Company (ADNOC) and its partners, ExxonMobil and Japan Oil Development Company Ltd. (Jodco), are on the point to award the second engineering, procurement and construction contract (EPC-2) for ZADCO Upper Zakum 750 project.

ZADCO stands as the Zakum Development Company (ZADCO), a joint venture created in 1977 which currently is shared between:

>>> More information

Abu Dhabi prepares oil and gas concessions renewal

With the onshore concessions expiring in 2014 and the offshore ones coming up in2018, Abu Dhabi, in the UAE,  is to rewrite the terms of its producing fields and offer up fresh prospects.

The first oil concessions covering all the Abu Dhabi territory were awarded in 1939 to the Trucial Coast Development Company in which the majors BP, ExxonMobil, Shell and Total were part of.

>>> More information

Fujairah targets 13.3 m cubic meters oil storage in 2015

The Strait of Hormuz is channelizing35% of the global oil maritime traffic.

In a context of increasing tension with the neighboring Iran, Fujairah in the UAE is developing one of the biggest oil storage

>>> More information

$3 billion Fujairah refinery, IPIC calls for bid on FEED

International Petroleum Investment Company (IPIC) is moving ahead with the crude oil refinery project to be located at Fujairah, UAE.

The Fujairah refinery, should have a capacity of 10.0 million t/y or 200,000 b/d.

>>> More information

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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CH2M Hill is working on Adnoc Bab sour gas pre-FEED

BP, ExxonMobil, Korean National Oil Company (KNOC), Shell and Total are the happy few pre-qualified international oil companies to submit offer for the $10 billion development of the Bab sour gas project in joint venture with Abu Dhabi National Oil Company (Adnoc) in the United Arab Emirates (UAE).

Postponed since 2007, the selection of Adnoc‘s partner in this project takes a special dimension as it comes a year ahead a much bigger game with the renewal of the actual allocated concessions for the onshore exploration and production of the Abu Dhabi oil and gas fields for the next 30 years.

The offshore concessions will come for renewal in the same way in 2018.

Bab is part of these sour gas fields in Abu Dhabi with Shah and Hail to contain a high percentage of hydrogen sulphide and carbon dioxide (CO2).

To be developed originally together with Shah, the escalation of the project costs and technical challenges convinced Adnoc to proceed step by step.

In 2008, Adnoc awarded the Shah gas development project to ConocoPhillips.

But in 2010, ConocoPhillips withdrew from the project and was replaced by Occidental Petroleum (Oxy) in 2011.

Shah gas development was already a challenging project with 27% CO2, but Bab sour gas comes now with 50%, about twice more.

In addition, Bab gas field is given to contain less valuable condensate in quantity and in quality that could help the profitability of the investment.

For this reason, Adnoc is looking for partners such as BP, ExxonMobil, Shell or Total with a proven expertise in handling such a complex project with costs well under control.

After UK and South Korea, France courts Abu Dhabi

The engineering company CH2M Hill is currently working on the pre-front end engineering and design (Pre-FEED).

At this Pre-FEED stage, Adnoc is working on two scenario of development, one based on 500 million cubic feet per day (cf/d), one to reach 1 billion cf/d of sour gas.

From the actual estimation, Bab sour gas project should also require $10 billion capital expenditure.

The selected company should form a joint venture with Adnoc where the national oil company should hold 60% stakes while leaving 40% to the winning bidder.

Anticipating on the rules to be enforced with the concessions renewals, the nominated Adnoc‘s partner will be the operator of the concession to develop the Bab sour gas project on the next 30 years supported by a production sharing agreement.

With the nearing deadline, the competition between the companies intensifies involving the Governments of the most motivated countries.

On November 5th 2012, UK Prime Minister David Cameron visited Abu Dhabi with several objectifs including to add BP on the list of the invited companies to participate to the concessions renewal and of course to be considered carefully for Bab Sour gas in respect with BP experience in challenging fields. 

Only two weeks later, on November 21st 2012, a delegation of the South Korean Government paid a visit to Abu Dhabi with the support of the national oil company KNOC to position itself on new fields to be developed and secure minimum crude oil supply.

Following this visit Adnoc announced to re-tender the $4 billion Upper Zakum EPC2 package that might have escaped to South Korean contractors at that time.

In January 15th 2013, French President François Hollande attended the World Future Energy Summit in Abu Dhabi to promote Total as the most reliable partner for the onshore concessions and provider of technology for Bab sour gas.

With 9.5% shares in Abu Dhabi Company for Onshore Operations (Adco) Total benefits from a long standing experience in Abu Dhabi with additional shares in Abu Dhabi Marine Operation Company (Adma-Opco) and Abu Dhabi Gas Industries (Gasco).

So far the development of the gas fields, especially sour gas, in the UAE was not a priority but with the economical growth calling for more gas-fired power plants, gas injection to boost oil production and the development of the petrochemical sector, gas has become a critical resource in Abu Dhabi giving Gasco a leading role in the UAE.

In this context, the competition between BP, ExxonMobil, KNOC, Shell and Total should intensify on Bab sour gas until Adnoc makes the decision on first half 2013.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Adma-Opco to select contrators for key packages

On the last weeks Abu Dhabi Marine Operating Company (Adma-Opco) published the results of the commercial bids submitted by the engineering companies for the engineering, procurement and construction (EPC) contracts of the main packages related to the giant Umm al-Lulu and Satah Al-Razboot (Sarb) projects.

Acting as Abu Dhabi National Oil Company (ADNOC) operator for the offshore oil and gas fields in the United Arab Emirates (UAE), Adma-Opco is also partly owned by key stakeholders among the international oil companies (IOCs).

In Adma-Opco the interests are shared between:

 – ADNOC 60% is the operator

 – BP 14.66%

 – Total 13.33%

 – JODCO 12%

In respect with the sizes and complexity of the Umm al-Lulu and Sarb Full Field Development projects all the shareholders want to have their word in the final selection of the engineering companies to be awarded for these key packages.

UK Prime Minister David Cameron and France President François Hollande visited Abu Dhabi in a row earlier this year, and Japan, through a pool of banks just decided to allocate $3 billion loan to ADNOC

Made of the Japan Bank of International Cooperation (JBIC), Mitsubishi UFJ, Sumitomo Mitsui Banking Corp. and Mizuho Corporate Bank, this pool is willing to support ADNOC in boosting its upstream activities onshore and offshore in the perspective of the licenses renewal planned to start in 2014.

This context shows how much ADNOCs’ partners, BP, Total and JODCO,  are willing to proceed without any delay for the full field development of Umm al-Lulu and Sarb oil and gas fields as they should contribute to an incremental 200,000 barrels of oil equivalent (boe).

Adma-Opco awards Sarb EPC-3 to Petrofac 

As a first step, Petrofac, from UK, has been awarded the EPC contract for third package of Satah Al-Razboot (Sarb EPC-3) for $515 million.

This package covers the offshore part of the project with the connections to the central processing facility with:

 – 4 risers platforms with connecting bridges and facilities

 – 190 kilometers export pipeline to Zirku Island

 – 4 flares

This Sarb EPC-3 package will supply crude oil, raw natural gas and condensate to the fourth package of Satah Al-Razboot (Sarb EPC-4) for processing and export.

To be located onshore at the Zirku Island, the Sarb EPC-4 package is the master piece of the project as it includes all the oil and gas processing facilities to treat the oil and gas and liquids before being exported.

It also comprised the construction of the artificial islands Sarb1 and Sarb2 to support the drilling operations.

With a capacity of 100,000 boe/d, the Sarb EPC-4 package has been quoted by the engineering companies around $2 billion capital expenditure.

Actually Hyundai Engineering is given the lowest bidder at $1.88 billion.

The decision should come soon, closely followed up by the award of the second Satah Al-Razboot package (Sarb EPC-2) for the accommodation, office building and administrative facilities.

Satah Al-Razboot project counts also the package 1 (Sarb EPC-1) related to the site preparation and to be awarded around $200 million.

Regarding Umm al-Lulu the situation is also moving close to decision.

The local National Petroleum Construction Company (NPCC) submitted the lowest commercial offer for the first package (Umm al-Lulu EPC-1) at $800 million.

This Umm al Lulu EPC-1 package includes the upstream part of the project with six wellhead towers and the infield subsea pipeline.

Four engineering companies were in competition

 – McDermott from USA

 – National Petroleum Construction Company (NPCC)

 – Petrofac from UK

 – A partnership of Fluor and Leighton

The largest package is about the Umm al-Lulu EPC-2 which covers the oil and gas processing facilities and the living quarter.

With a capacity of 100,000 boe/d of oil and gas, the Umm al-lulu EPC-2 package was estimated to $650 million, but the commercial offers returned by the five teams in competition are much higher and with significant gap between the competitors.

Saipem is the lowest bidder with $1.5 billion, followed by Samsung Engineering with $1.8 billion, Technip just above $1.8 billion and Hyundai Heavy Industries close to $2 billion while Daewoo Shipbuilding Marine & Engineering (DSME) exceeds the $2 billion. 

The gap between Saipem and the following bidders rises questions that Adma-Opco and its patners BP, Total and JODCO are currently clarifying to make the final decision on Umm al-Lulu in parallel of the remaining Satah Al-Razboot (Sarb) packages. 

 For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Fluor completed FEED work on Al-Nasr Phase two

The Abu Dhabi Marine Operating Company (Adma-Opco) is currently preparing the evaluation of the technical bids to be submitted on Q2 2013 for the engineering, procurement and construction (EPC) packages of the Al-Nasr Full Field Development project offshore Abu Dhabi.

Adma-Opco is a joint venture between the local Abu Dhabi National Oil Company (ADNOC) and the international oil companies (IOCs) that contribute to the development of the offshore oil and gas resources in the Abu Dhabi Emirates since 1950’s.

In the Adma-Opco joint venture, ADNOC and its partners share the working interests such as:

 –  ADNOC 60% is the operator

 – BP from UK 14 2/3 %

 – Total from France 13 1/3 %

 – JODCO from Japan 12%.

Through the exploration and development of giant fields such as Umm Shaif and Zakum, Adma-Opco is expected to be a major contributor to the production increase planned by Abu Dhabi.

The Al-Nasr oil and gas field lies approximately 30 kilometers northeast Umm Shaif, at the limit of UAE territorial water within the Persian – Arabic Gulf.

In order to meet its quota of 3.5 million barrel per day (b/d) in 2018 as defined jointly with the OPEC in 2011, Abu Dhabi needs to ramp-up its crude oil production by additional 800,000 b/d not including the compensation of the depleting fields.

In that 2018 perspective Adma-Opco is expected to reach 1.75 million b/d of crude oil offshore production by then.

In its business plan presented in 2011, Adma-Opco  included the Al-Nasr oil and gas field, as well as Umm al-Lulu, Satah Al-Razboot (Sarb) and Upper Zakum.

In this business plan Adma-Opco is targeting to produce additional 100,000 b/d of crude oil from Al-Nasr, in the same way as for Umm Al-Lulu and Sarb respectively.

Al-Nasr field has a structure much more complex than Umm Al-Lulu, therefore Adma-Opco decided to develop it separately.

After a pre-front end engineering and design (pre-FEED) compledet by Technip, Adma-Opco decided to develop the Al-Nasr in two phases:

 – Phase 1 has been called Early Production Scheme as to produce 25,000 b/d to test the field

 – Phase 2 is the master piece of the project as the Full Field development in order to add at least 65,000 b/d of crude oil

In July 2011, the Al-Nasr Early Production Scheme was awarded to the Indian contractor Larsen & Toubro and is currently under execution for completion planned in 2015.

For a costs of $500 million capital expenditure, this Al-Nasr phase 1 includes to drill 33 wells and install infrastructure to support the wellheads together with the pumping units and flowlines.

In March 2012, Adma-Opco contracted AMEC from UK to provide project management consultancy services on Al-Nasr Phase-1.

In the meantime, regarding Al-Nasr Phase 2, Adma-Opco selected in October 2011 the Texas-based Fluor Corporation (Fluor) to perform the front end engineering and design (FEED) on the Al-Nasr Full Field Development.

Fluor completed its FEED work in April 2012 from its Houston, Texas, and Abu Dhabi offices.

Eight competitors for two Al-Nasr EPC packages

From this FEED, the Al-Nasr Phase 2 project is designed as a complex of 7 platforms and 210 kilometers of pipelines to support:

 – 132 wells with their corresponding wellheads

 – Crude oil pumping units

 – Oil separation facilities

 – Gas lift dehydration and compression

 – Multi-phases metering systems

 – Water treatment

 – Water disposal facilities

 – Oil and water trunkline

 – Infield subsea pipeline

 – Export pipeline to Das Island

 – Utilities platform

 – Living quarter platforms

 – Power generation facilities

 – Flare system

 – Offsites facilities

Adma-Opco estimates Al-Nasr Full Field Development to require $1 billion capital expenditure.

From the FEED conclusions, this Al-Nasr phase 2 has been prepared for the EPC contracts in two packages covering both platforms and pipelines.

Adma-Opco received expression of interests of eight bidders for these two packages of Al-Nasr Phase 2:

 – Dodsal from the UAE

 – GS Engineering and Construction from South Korea

 – Hyundai Heavy Industries from South Korea

 – Larsen & Toubro from India

 – National Petroleum Construction Company (NPCC) from UAE

 – PunjLloyd from India

 – SK Engineering and Construction from South Korea

 – Technip from France

Al-Nasr Full Field Development is estimated to cost $1 billion capital expenditure.

Adma-Opco is expecting to receive the technical bids at the end of Q2 2013 in order to award the EPC contracts at the end of the year or on early 2014.

Considering the actual different time frame between Umm Al-Lulu, Sarb to be awarded soon for EPC execution, Adma-Opco is planning the completion of Al-Nasr Full Field Development in 2017.

 For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Shell won Bab Sour Gas project on sulfur monetization

The Abu Dhabi National Oil Company (ADNOC) selected the super major company Shell to form a joint venture and develop the challenging Bab Sour Gas field in the southwest of the Emirates.

Pending since 2007, this decision comes at a critical time as it may figure out ADNOC  process of decision to renew the actual oil and gas onshore concessions in 2014 for the next 30 years.

The offshore concessions of the Emirate will come for renewal in the same way in 2018.

In this context, the choice of Shell amid BP, ExxonMobil, Korean National Oil Company (KNOC) and Total to develop and operate the Bab Sour Gas Project over the next 30 years appears as a school case for the allocation of the concessions next year by ADNOC.

In the Bab Sour Gas joint venture, the partners agreed on sharing the working interest during 30 years whereas:

 – Shell 40% is the operator

 – ADNOC 60%

Abu Dhabi is running short of gas to supply it consumption for electrical power generation and the feedstock for its petrochemical industry.

In such a context, ADNOC could not continue to postpone the development of the Bab Sour Gas project any longer despite its technical challenges.

Located 150 kilometers southwest of Abu Dhabi City, Bab is one of the largest non-associated gas in the Emirates, unfortunately it contains 15% of hydrogen sulfide.

Considering that ADNOC is planning to produce between 500 and 1 billion cubic feet per day (mmcf/d), the development of the Bab Sour Gas project will generate tonnes of sulfur to be treated in one way or another.

At the final stage of the bidding process, Shell and Total were in the lead with different concepts regarding this sulfur issue.

Total was proposing to re-inject the extracted sulfur into the reservoir, while Shell suggested to export and monetize it.

For this reason, ADNOC preferred Shell solution which in addition is expected to favor the natural gas recovery rate from the reservoir along the 30 years of operations. 

CH2M-Hill to complete Bad Sour Gas project pre-FEED

In the meantime, ADNOC awarded the pre-front end engineering and design (Pre-FEED) contract to the engineering company CH2M-Hill in Abu Dhabi.

Through this pre-FEED, CH2M-Hill evaluates two options for the Bab Sour Gas treatment:

 – 500 million cf/d,

 – 1 billion cf/d

In respect with these scenarios, the Bad Sour Gas project should include a:

 – Gas gathering system

 – Gas central processing facility

 – Gas treatment plant

 – Sulfur recovery unit

 – Sulfur handling facilities

 – Storage facilities

 – Offsites and utilities

Regardless the development phases of the Bab Sour Gas project, the facilities should be designed to handle 1 billion cf/d of sour gas.

In this competition, Shell took advantage of it 60 years experience in Sour gas and of the overall focus of its strategy on gas fields development on the last 10 years.

Having submitted to the most attractive technical and commercial offer, Shell is planning to invest jointly to invest $10 billion capital expenditure in Bab Sour Gas.

With Shell and ADNOC to finalize their agreement, the Bad Sour gas project should come on stream in 2020.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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UAE to shunt Hormuz Strait with Fujairah Terminal

Mubadala Petroleum and the International Petroleum Investment Company (IPIC), both from Abu Dhabi in the United Arab Emirates, are preparing the engineering, procurement and construction (EPC) phase for their Emirates LNG project in Fujairah.

Established in 2002 by the State of Abu Dhabi, the Mubadala Development Company (Mubadala), is the flagship of the Emirate to diversify the national economy in investing in strategic projects in the UAE and overseas.

After ADNOC and Shell signing the development of the Bab Sour Gas project, the United Arab Emirates (UAE) continue to deploy their strategic plans to secure the supply of the UAE with natural gas.

For some years the UAE have anticipated to run short of gas because of its growing consumption for:

 – Gas injection to maintain the plateau production on maturing crude oil fields 

 – Electrical power generation

 – Water desalination

 – Petrochemical industry

 – Metal industry

Since 2007, the Dolphin Energy pipeline, currently under capacity expansion, is providing the UAE with external source of supply in natural gas coming from Qatar in the north.

Projects like Bab Sour Gas should help the local production of natural gas but have no chance to meet the domestic market consumption.

In this context, the UAE decided to build a receiving terminal for the import of liquefied natural gas (LNG) and regasification.

In selecting Fujairah to build such Emirates LNG terminal, the UAE will increase costs as it may require additional pipelines system for the distribution across the UAE but it secures the transportation in shunting the Strait of Hormuz.

In order to adjust the supply of this natural gas to the growing needs in the UAE, the Emirates LNG project should be developed in two phases:

 – First phase should be offshore and is expected to receive the first shipments in 2015

 – Second phase should be onshore and should start operations in 2016.

In 2010, the US broker and energy transportation advisor Poten and Partners performed a feasibility study of this Fujairah LNG terminal and regasification project and confirmed the economic and strategic interest of such location and investment.

Technip completed FEED on Emirates LNG Terminal

In 2012, Mubadala and IPIC awarded the front end engineering and design (FEED) to the engineering company Technip from France, together with the Fujairah Refinery project.

Based on this FEED work, the first phase of the Emirates LNG terminal and regasification project has been designed as a floating vessel to be moored offshore the Fujairah Emirate, along the northern coast.

The Emirates LNG terminal offshore installations should have a capacity of downloading and regasify 4.5 million t/y of LNG.

In April, Mubadala and IPIC released the call for tender for this first phase to the six engineering companies pre-qualified for this EPC contract:

 – Chiyoda from Japan

 – Hyundai Engineering and Construction from South Korea

 – Saipem from Italy

 – Samsung Engineering from South Korea

 – Samsung Construction and Trading from South Korea

 – Techint from Italy

These companies were due to submit their technical offers for the first phase of Fujairah LNG terminal project to Mubadala and IPIC on May 19th and the commercial bids on June 1st in order to make a final investment decision on the second half of 2013.

The second phase of the Emirates LNG project should be tendered separately as to be constructed onshore closed to the gas-fired Fujairah I and Fujairah II combined power generation and desalinization facilities.

In plugging the Emirates LNG Terminal and Regasification project to Fujairah utilities, Mubadala and IPIC secure their gas supply as well as their power and water supply to the UAE.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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Adma-Opco call for technical bid on Al-Nasr Full Field

Abu Dhabi Marine Operating Company (Adma-Opco) published the deadlines for the engineering companies to submit their technical offers for the Al-Nasr Full Field Development project offshore Abu Dhabi in the United Arab Emirates (UAE).

As Al-Nasr Full Field Development project, Adma-Opco intents to proceed to the second phase of the Al-Nasr project currently under completion.

After pre-qualification round on second quarter this year, Adma-Opco has invited the selected engineering companies to tender on the main packages for the engineering, procurement and construction (EPC) contracts of the Al-Nasr Phase-2 project.

Since 1950s, Adma-Opco operates as a joint venture between:

 – Abu Dhabi National Company (ADNOC) with 60% as operator

 – BP 14 2/3%

 – Total 13 1/3%

 – JODCO 12%

Al-Nasr Phase-2 is part of the projects identified by Abu Dhabi to increase the crude oil production of the UAE.

In 2011, the OPEC set the targets for 2018 in order to ensure all the crude oil producing countries members of the OPEC to weight at least 40% of the global production.

In this perspective, ADNOC is planning to produce 3.5 million barrels per day (b/d) by 2018 out of which Adma-Opco is expected to contribute for half of it at 1.75 million b/d of crude oil.

Located 30 kilometers northeast of the Umm Shaif field, the Al-Nasr oil and gas field stands along the UAE territorial water of the Persian-Arabic Gulf.

When Technip completed the pre front end engineering and design (pre-FEED) of Al-Nasr, Adma-Opco decided to ramp up the production by 100,000 addition b/d of crude oil in two phases because of the complexity of the field.

Al-Nasr Phase-1 was called Early  Production Scheme and was awarded in 2011 to Larsen & Toubro with the goal to produce 25,000 b/d by 2015. 

Al-Nasr Phase-2 has been named Full Field Development as to bring additional 65,000 b/d up to speed in production in 2018.

Adma-Opco split Al-Nasr-2 in two main EPC packages

Because of the size of the project with 7 platforms and 210 kilometers pipelines, Al-Nasr Full Field Development has been divided in two main EPC packages.

The package-1 is concentrating all the pipelines and related facilities:

 – Oil and water trunkline

 – Infield subsea pipeline

 – Export pipelines to Das Island

With an estimated value of $500 capital expenditure, Al-Nasr Phase-2 Package-1 is attracting competition from:

 – McDermott from USA

 – NPCC from Abu Dhabi

 – Petrofac from UK

 – Saipem from Italy

 – Samsung Engineering from South Korea

These bidders must return their technical offers for the Package-1 by December 17th 2013.

Al-Nasr Package-2 concentrates production facilities  

The Package-2 refers to the production and processing units with:

 – Wellhead platforms

 – Crude oil pumping units

 – Oil separation units

 – Gas lift dehydration and compression

 – Multiphases metering systems

 – Flaring system

 – Water treatment unit

 – Power generation facilities

 – Utilities and offsites platform

 – Living quarter platform

To cost around $1 billion capital expenditure, Al-Nasr Phase-2 Package-1 should see technical offers before December 24th 2013 from:

 – Daewoo Shipbuilding and Marine Engineering (DSME) from South Korea

 – Fluor and McDermott from USA

 – Hyundai Engineering and Construction from South Korea

 – Saipem from Italy

 – Samsung Engineering from South Korea

After the submission of technical bids, Adma-Opco  and AMEC will released the call for commercial tender on the two main packages of the Al-Nasr Full Field Development project on first half 2014.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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IPIC qualified bidders for Fujairah Refinery Phase-1

The Abu Dhabi-based International Petroleum Investment Company (IPIC) is preparing the call for tender for the engineering, procurement and construction (EPC) contract of the Fujairah Refinery Phase-1 in the United Arab Emirates (UAE).

Established in 1984 by Abu Dhabi Government , IPIC has the mission to support energy projects outside of the Abu Dhabi Emirate.

The goal is to provide the Abu Dhabi Emirate with reliable accesses to market abroad and with profitable return on capital invested.

In that respect IPIC is focusing on upstream, midstream and downstream projects that can generate synergies with Abu Dhabi Energy sector.

With the Fujairah Refinery, Abu Dhabi will get direct access to the Gulf of Oman, shunting the critical Strait of Hormuz.

With the Fujairah Refinery project, Abu Dhabi will meet a double target, to secure its export of crude oil as well as increasing the added value of its export is selling high added value hydrocarbons instead of crude oil.

In addition Fujairah will generate about 400 permanent jobs for UAE Nationals.

For these  reasons Abu Dhabi Government selected, through IPIC, Fujairah to build this large refinery and petrochemical complex.

Fujairah occupies a strategic position with its access to the Oman Gulf and because it benefits from the crude oil supply through the crude pipeline supplying the UAE Main Oil Terminal.

Technip completed Fujairah Refinery project FEED

The contracts for the project management consultancy (PMC) and front end engineering and design (FEED) of the Fujairah Refinery had been awarded to Stone and Webster in 2011, belonging to the Shaw Group at that time.

Since then Stone and Webster was acquired by Technip from France while the rest of Shaw Group activities were taken over by CB&I from USA.

In 2012, Stone and Webster– Technip completed the FEED work for the Fujairah Refinery.

From the FEED work the Fujairah Refinery should have a capacity of:

 – 200,000 barrels per day (b/d) of crude oil

 – 1.2 million tonnes per year (t/y) of polypropylene 

In addition and because of the geographical situation and power needs of the Fujairah Emirates, the Fujairah Refinery project will also include a power plant.

This power plant will supply the Fujairah Refinery and Petrochemical complex as well as the local electrical power grid.

Requiring $3.5 billion capital expenditure, IPIC is planning to implement the Fujairah Refinery project in two phases:

 – Phase-1 : Refinery and Power plant

 – Phase-2: Petrochemical complex

 Then IPIC and Stone and Webster – Technip have decided to organize the call for tender of the Fujairah Refinery in two packages:

 – EPC-1 will include the process units

 – EPC-2 will cover the infrastructures, offsites and utilities.

Six engineering companies have been qualified by IPIC for EPC contract of the Fujairah Refinery Phase-1.

They should submit the technical offer at the end of 2013 with the commercial offer to follow in first quarter 2014.

In targeting a final investment decision (FID) on second half 2014, IPIC is planning the first production of the Fujairah Refinery in 2017.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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