oil review middle east 1 2013

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Delivering mega projects in the region Insecurity rises on supply league shift Will Kuwait’s ambitious plans be scuppered by politics? Gas - Mediterranean reserves attract interest Improving reliability with essential asset monitoring The hunt for ‘black gold’ goes deeper Centralizing in the under ream “MEOS makes a concerted effort to showcase the latest in research and technology. The current focus of the industry is on unconventional resources.” Abdulaziz Al Abdulkarim MEOS Executive Committee Chairman Saudi Aramco See page 60 Bapco expansion underway UK £10, USA $16.50 16 Serving the regional oil & gas sector since 1997 years 18th Middle East Oil & Gas Show and Conference Society of Petroleum Engineers 2013 see us at the show stand no. 130 Vol 16 Issue One 2013 ww.oilreview.me

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Page 1: Oil Review Middle East 1 2013

Delivering mega projects in the region

Insecurity rises on supplyleague shift

Will Kuwait’s ambitious plansbe scuppered by politics?

Gas - Mediterranean reservesattract interest

Improving reliability withessential asset monitoring

The hunt for ‘black gold’ goes deeper

Centralizing in the under ream

“MEOS makes a concerted effort to showcase thelatest in research and technology. The current focusof the industry is on unconventional resources.”Abdulaziz Al AbdulkarimMEOS Executive Committee ChairmanSaudi AramcoSee page 60

Bapcoexpansionunderway

UK £10, USA $16.50

16Se

rving

the r

egion

al

oil &

gas s

ecto

r

since

199

7

year

s

18th Middle East Oil & Gas Show and Conference

Society of Petroleum Engineers

2013

see us at the show stand no. 130

Vol 16Issue One 2013

ww.oilreview.me

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Oil Review Middle East Issue One 2013 3

Editor’s noteSURROUNDED BY THE likes of Saudi Arabia, it’s easy to forget theimportance of Bahrain in the region’s oil history. It may now be theGulf’s smallest producer but it was here, many years ago, that theworld’s richest oil producing region took its first tentative productionsteps. And that has meant a pioneering role for national oil champion,Bahrain Petroleum Company (Bapco), established in 1929 by StandardOil Company of California. It was the first to discover oil in the Arabianpeninsula way back in 1932, just three years after formation, at Jabalal-Dukhan. Within two years of that initial discovery, the company wasexporting Bahrain’s oil and, by 1936, had commenced refiningoperations. That’s the sort of determination and accomplishment thatdrillers of today still aspire to. And all eyes will be on Bahrain shortlywhen the Middle East Oil Show (MEOS) opens its doors. The bi-annualMEOS Conference of which this is the latest edition has evolved intowhat is probably the largest and best attended technical event of itskind now held anywhere regularly in the Gulf. This year’s Technicalprogramme - always the heart of the four-day event - consists of morethan 200 simultaneous high-quality presentations in six differentadjacent conference rooms. MEOS provides an excellent opportunity fornetworking as it’s a meeting point for industry players directly involvedwith the oil and gas sector.

ColumnsIndustry news and executives’ calendar 4

AnalysisGlobal Supply 10That the world now is forced to rely more on Iraq than on Iran at a time of stillrelatively low OPEC spare capacity is in itself something of a problem, whichinevitably is being quantified by the crude markets and resulting in a higherunderlying and permanent risk premium.

Iraq 16Samuel Ciszuk sees tensions, uncertainty and brinkmanship continuing in Iraqthis year.

Kuwait 20Will Kuwait’s ambitious plans be scuppered by political infighting?Ex

Exploration & ProductionInterview 24Nabil Aouad, COO-Subsea at Technip Middle East, outlines his plans for thecompany’s newly-formed subsea division.

Developments 26The latest exploration and production contract news from around the region.

GasAnalysis 30Gas discoveries in the Eastern Mediterranean have in the past few years raisedthe spectre of a new large-scale play opening up on Europe’s doorstep.

Developments 36The latest news from the region’s gas sector.

PetrochemicalsAnalysis 40Booz & Company examines the need for GCC states to better tackle feedstockdisruptions across the petrochemicals industry.

ProfileBahrain 46Why Bahrain Petroleum Company is at the forefront of developments in Bahrain.

Conferences and ExhibitionsMiddle East Oil Show 50The 18th MEOS takes place in Bahrain in March. What can visitors expect tosee?

Technical FocusInnovations 64Introducing some of the latest technology for the oil and gas sector.

Downhole Technology 72Why centralizer failure or poor spacing can lead to a multitude of downholeproblems.

Compressors 76What should you consider when factoring spare parts provision for yourcompressor? Gardner Denver’s James Cutting gives some tips.

Why Bapco is the driving forcebehind Bahrain’s economy. Seepage 48. Cover image courtesy of Bapco.

Delivering mega projects in

the region

Insecurity rises on supply

league shift

Will Kuwait’s ambitious plans

be scuppered by politics?

Gas - Mediterranean reserves

attract interest

Improving reliability with

essential asset monitoring

The hunt for ‘black gold’

goes deeper

Centralizing in the under ream

“MEOS makes a concerted effort to showcase the

latest in research and technology. The current focus

of the industry is on unconventional resources.”

Abdulaziz Al Abdulkarim

MEOS Executive Committee Chairman

Saudi Aramco

See page 60

Bapcoexpansionunderway

UK £10, USA $16.50

16Se

rvin

g th

e re

gion

al

oil &

gas

sec

tor

sinc

e 19

97

year

s

18th Middle East Oil & Gas Show and Conference

Society of Petroleum Engineers

2013

see us at the show stand no. 130

Vol 16Issue One 2013

ww.oilreview.meContents

Managing Editor: David Clancy

Editorial and Design team: Bob Adams, Lizzie Carroll, Andrew Croft, Ranganath GS, Kasturi Gupta,Prashant AP, Rhonita Patnaik, Genaro Santos, Zsa Tebbit, Nicky Valsamakis, Julian Walker and Ben Watts

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Asset Monitoring 80How improvements in plant reliability reduce the risk of catastrophic events andlower maintenance costs.

Offshore Technology 82Deeper wells and renewed safety concerns pose new challenges for the offshoreoil and gas industry. Providing solutions offers both opportunities and rewards.

Arabic SectionDevelopments 4Analysis 10

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4

UK-BASED WELLTON ENERGY Ltd, anew company, is looking to helpcompanies that operate in theenergy industry to launch, developand expand their business in Europe,South East Asia, the Middle East andAfrica.Wellton aims to help companies inthe Middle East export their productsand services to other markets,especially the very lucrativeEuropean region. Wellton providesthe people, resources and contactsfor business development programsthat make it possible to enter newmarkets quickly and profitably, without incurring the costs, risks anddelays associated with opening a new office.The Middle East is not simply a giant reservoir of oil and gas. It isalso home to thousands of energy-related businesses eager to offertheir products to the wider world. Yet marketing those productsposes problems. This is especially true for the region’s Small andMedium Enterprises (SME), who often cannot afford to employ skilledmarketers familiar with every region the firm wants to penetrate. Wellton is the brainchild of Jason Brighton and Andy McDowell. Asa result of their long experience in the oil and gas industry, theycame to realise that a gap existed in the market for independentsales and marketing support, especially for SMEs. “We offer companies in the Middle East the opportunity to free uptheir skilled employees to do the work they were trained to do byletting us do the sales and marketing,” Brighton explained.

TECHNIP HAS APPOINTED Vaseem Khan as senior vice president ofTechnip in the Middle East and managing director of Technip inAbu Dhabi, UAE in mid January this year. He has succeeded ArturoGrimaldi, who has taken on a corporate position in Paris.

He will beresponsible forgrowing andf u r t h e re s t a b l i s h i n gT e c h n i p ’ sposition in theregion.K h a ncommented, "Iam very excitedto take on thisleading role asTechnip in theMiddle East hasa diversifieds u b s e a ,offshore ando n s h o r ep r o j e c t sportfolio. With apresence in AbuDhabi for the

past thirty years, Technip has participated in a number ofprestigious UAE oil and gas awards. We will continue to deliverhigh-quality and safe-executed projects to all our clients to answertheir business objectives."Khan joined Technip’s operating centre in Abu Dhabi in 2003where he was responsible for a number of offshore and onshoreprojects before being appointed chief operating officer in 2009,with the creation of Technip’s Middle East Region.

Technip appoints new MD in Abu Dhabi

Jason Brighton

OIL REVIEW MIDDLE East sat down with AzfarShaukat, director oil and gas Mott MacDonaldto discuss the misconceptions about workingon oil and gas mega projects in the region andthe wide experience Mott MacDonald hasgathered in the field over many years.Shaukat explained that the usual definition of amega project is one that costs more thanUS$1bn, which in practical terms means thateven modest projects in the region come underthis category."Mott MacDonald has been working on megaprojects for decades, across numerous sectorsall over the world" he noted.Shaukat feels that Mott MacDonald can offerlearnings from this enormous pool ofexperience to show how such projects could beexecuted more effectively in the Middle East.There are a lot of misunderstandings aboutmega projects, according to Shaukat whoargued that, “the simplest is where a megaproject is considered just a larger version of abig project, so all you have to do is scale upwhat you do. That is a recipe for disaster." He added, "Most if not all major projects

currently going on in the UAE are going to be,almost by definition - world leaders. This meansthat they will be pushing state-of-the-arttechnology and revolutionary designs." “One key success factor is to have a singlepoint of contact, an individual who is achampion for that particular project. Thestakeholders in the project will look to thatindividual to galvanise them and help push theproject through," Shaukat remarked.He elaborated on this point by saying that fromthe off, these kind of projects are going to behuge but a lot of the enablers for the projectwill not exist at the start of the project, whichis why it is so important to keep the mainstakeholders involved right from the beginning.He provided the example of a typical areawhere no frameworks will exist, namely firstLNG re-gas terminals. In many places thesekind of projects are being proposed it will befor the first time and most countries will nothave a gas industry or natural gas pipelines, aswell as probably no experience of any kind ofmega project. A major issue when it comes to mega projects

is with project definition and there is atemptation to go ahead with a project withouthaving adequate defintion. This can provedisastrous since some 90 per cent of a project’ssuccess or failure is decided during the first 10per cent of the work.Shaukat said that the Middle East was a goodregion to work on mega projects and that "theleadership in the region is very progressive andvery supportive of mega projects. Theirpersonal drive makes the climate conducive topushing technical boundaries, fostering a ‘can-do’ attitude across the project delivery chain."Mega projects need to happen in the region forthe oil and gas industry to develop. Vastinvestments are required to maintainproduction into the future and at increasinglycompetitive rates, so innovation will remain akey pre-requisite.In conclusion, he stated, “As projects becomelarger and more technically complex thedemand for our mega projects expertise willremain strong and we will continue to serve itfrom our extensive multi-disciplinary presencein the region.”

Oil Review Middle East Issue One 2013

Delivering mega projects in the region

Helping regional SME’s penetrate new markets

Vaseem Khan

New

s

www.oilreview.me

S01 ORME 1 2013 Start_Layout 1 25/02/2013 14:59 Page 4

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S02 ORME 1 2013 News & Calendar_Layout 1 25/02/2013 15:09 Page 6

Page 7: Oil Review Middle East 1 2013

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Eliminate uncertainty, reduce your risk with DeltaV SIS. Emerson’s smart safety instrumented system provides an integrated, intuitive set of engineering tools and software that enables your team to handle configuration, alarms and device health monitoring – while maintaining the systems separation required by IEC 61511 and 61508 standards. The DeltaV SIS system reduces your training and lifecycle costs by eliminating complex data-mapping and multiple databases while helping to ensure that you’re meeting safety compliance. Learn more about safety processes and best practices by downloading the Safety Lifecycle Workbook at: www.DeltaVSIS.com/workbook/mea or e-mail [email protected]

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Oil Review Middle East Issue One 2013

New

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ale

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E x e c u t i v e s C a l e n d a r 2 0 1 3

MARCH 2013

3-6 Saudi Safety and Security DHAHRAN www.sss-arabia.com

5-7 SPE-IADC Drilling Conference & Expo AMSTERDAM www.spe.org/events/dc/2013

6-8 Offshore Asia KUALA LUMPUR www.offshoreasiaevent.com

10-13 Middle East Oil Show (MEOS) MANAMA www.meos2013.com

20-22 Offshore Mediterranean (OMC) RAVENNA www.omc.it

24-27 Middle East Downstream Week ABU DHABI www.wraconferences.com

26-28 IPTC 2013 BEIJING www.iptcnet.org/2013

31-4 April Digital Oilfields World Summit ABU DHABI www.digitaloilfieldsme.com

APRIL 2013

15-17 SPE North Africa Technical Conference CAIRO www.spe.org/events/natc/2013

16-19 LNG 17 HOUSTON www.lng17.org

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6-9 OTC HOUSTON www.otcnet.org/2013

16-18 POGEE KARACHI www.pogeepakistan.com

JUNE 2013

5-7 Oil & Gas Asia KUALA LUMPUR www.oilandgas-asia.com

10-13 EAGE Conference & Expo LONDON www.eage.org/events

11-13 Gas & Oil Expo CALGARY www.gasandoilexpo.com

SEPTEMBER 2013

2-5 Erbil Oil & Gas ERBIL www.erbiloilgas.com

3-6 Offshore Europe ABERDEEN www.offshore-europe.co.uk

29-2 Oct MEPEC 2013 MANAMA www.mepec.org

Readers should verify dates and location with sponsoring organisations, as this information is sometimes subject to change.

THE MIDDLE EAST Process EngineeringConference and Exhibition (MEPEC) is set toreturn in 2013, bringing together a largenumber of leading chemical, petrochemical andpetroleum engineers and professionals fromacross the region.

Organised by the Saudi Arabian Section ofthe American Institute of Chemical Engineer(SAS-AIChE), the second edition of MEPECwill take place from 29 September to 2October 2013.

The event, set to be held at BahrainInternational Exhibition Centre in Manama, willinclude a number of workshops and discussionsoffering delegates practical experience in allaspects of process engineering, with topicsrelevant to both upstream and downstream

activities within the region's oil, gas andpetrochemical industries.

Dubai-based Middle East Energy Events(ME3) has been selected by the Saudi ArabianSection of American Institute of ChemicalEngineers (SAS-AIChE) to project manage andcoordinate the next edition of MEPEC followingthe success of the first edition of theconference and exhibition in October 2011.

Frederic Malgoire, commercial director ofME3, said, "MEPEC 2011 was a tremendoussuccess and its organisers must also becongratulated for their achievements. Ourmission is to turn MEPEC into a trulyinternational and leading conference andexhibition for the process engineering industry."

According to ME3, the four-day event show

is likely to attract more than 150 exhibitors, aminimum of 1,400 delegates, and more than200 speakers and presenters.

MEPEC 2013 has been endorsed by the WorldPetroleum Council (WPC), with the organisation'spresident Dr Renato Bertani having agreed tojoin the MEPEC Advisory Committee, which willbe headed by the governor of the Saudi ArabianGeneral Investment Authority (SAGIA) and formersenior vice-president of Saudi Aramco, AbdulatifAl-Othman.

Dr Pierce Riemer, director general for theWPC, said, "Process engineers are amongst themost important stakeholders in our industry tohelp tackle key technical, social, environmentaland management issues in order to contributetowards seeking solutions to those issues."

Process engineering industry to gather at MEPEC in 2013

www.oilreview.me

S02 ORME 1 2013 News & Calendar_Layout 1 25/02/2013 15:09 Page 8

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S03 ORME 1 2013 Analysis_Layout 1 25/02/2013 15:31 Page 9

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Oil Review Middle East Issue One 2013

DDURING JUNE AND July 2012 afundamental shift took place in theglobal crude supply tables, with Iraqsurpassing Iran as OPEC’s second

largest producer. The change did not create many visible

ripples on the oil market and had beenexpected since late last year, as internationalsanctions on Iran’s energy exports, including avital EU oil embargo, started being realised.

The change is not only caused by Iran’sshut-in exports and production, but also due toIraq’s southern megaprojects, which havestarted to deliver their first large incrementssince late 2011, helping to alleviate whatotherwise would have risked to be a far tootightening supply situation.

The shift in the OPEC league table ishowever more fundamentally dramatic than itfirst might appear and is also likely not to bereversed as easily as some US and EUlegislators might think. Iranian crude supplymight well struggle to recover from itsdramatically low levels after decades ofunderinvestment in a very mature asset base.

In the meantime, the world is forced to

increasingly rely on Iraq, which over the long-term has been one of the least reliableproducers in OPEC when it comes to stability ofproduction, a sphere in which the Iranians,perhaps somewhat ironically, in comparison canhardly be faulted.

Iraq remains torn by internal politicalconflict and paralysis, with the increasedinstability in neighbouring Syria since mid-2011again demonstrating how easy neighbouringproblems tend to spill over into tension withinIraq itself.

While its oil production growth is so far asuccess story and promises significant furthervolumes to come, its lack of long-term stabilityand predictability from a political andoperational point of view means that it theworld’s increasing reliance on its output at atimes of relatively low OPEC spare capacityseems less like a success story in itself.

In fact, amid the Iraqi upstream progress, itis a cause for a fundamental rise in oil price riskpremiums -one which likely will stay with usover the long-term.

Sanctions on Iran’s oil exports have beenvery successful in slashing the IslamicRepublic’s exports almost by half, lowering itsproduction by more than one million barrels perday. As a consequence of political action on thesell-side, it is viewed by many as a temporarymeasure which should have little or no impacton Iran’s fundamental production capacity whensanctions at some point are lifted.

There are two reasons why theconsequences might be more long-lasting andnegative however.

Firstly, Iran has been faced by graduallyincreasing international sanctions for years if

Iraq has been slowly increasing its production capacity

Sanctions on Iran arehowever not looking near

to being lifted

An

aly

sis

10

Independent oil analyst, Samuel Ciszuk, explains why a continued lackof stability in parts of the region remain a cause for concern, in spiteof increasing production levels.

Insecurity rises on supply

league shift

www.oilreview.me

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S03 ORME 1 2013 Analysis_Layout 1 25/02/2013 15:31 Page 11

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not decades, from the US, the EU, other OECDcountries, as well as from the UN. This meansthat there is by now a complex set of lawspassed in a wide array of jurisdictions whichwill have to be repelled before business canproperly resume again. While this in theoryshould be no more complicated than passingthe laws and statutes in the first place, historycautions that this process is anything butsimple and quick.

It is also heavily complicated by theinternational sanctions targeting many aspectsand sectors of the Iranian businessenvironment, meaning that even if oilpurchases were to suddenly be allowed incountries where they are now barred, a widearray of financial sanctions targeting shippinginsurance and financial transactions would alsohave to be repealed for most private and publicinstitutions to again dare to engage with Iraniancounterparties.

The recent example of Libya sheds light onthis point, with the US in particular strugglingto repel sanctions legislation for years followingthe 2004 decision by Libya’s then-leaderMuammar Khadaffi to give up his country’snuclear weapons programme in exchange for areturn back from international isolation.

Having been promised sanctions would belifted quickly as a quid-pro-quo, the slow andcumbersome process of rewriting US laws intowhich sanctions had been embedded for years,became a bone of contention in US-Libyanrelations and frustrated the pace of thecountry’s hoped-for economic recovery.

Indeed, some of the last remainingsanctions had not yet been repelled by the timeof the 2011 popular uprising against theKhadaffi regime, when new sanctions againstarted being put back onto the crumblingregime (and again, some of them are still to belifted).

Secondly, Iran’s oil industry has suffereddecades of underinvestment, despite itsgenerally mature main oilfields sufferingincreasingly high rates of decline. The lack oftechnology due to decades of US sanctions hasbecome much deeper since internationalsanctions started being tightened in the lastfive years, while the nucleus of emergingforeign upstream investment at the same timehas dried up.

Not having been able to arrest maturedecline rates widely seen to be in the 10 percent range annually in the past few years, Iranis in a bad position to handle the shut-in ofproduction at some of its largest and oldestfields, many of which are dependent onartificially kept reservoir pressures.

Iran’s high domestic gas demandcomplicates this issue further, as much of itsgas is associated and the country therefore willhave to prioritise which fields to continue toproduce from, not by looking at the possiblereservoir consequences of lengthy shut-ins, butfrom where they can source the highest amountof associated gas production.

Iranian domestic technical know-how isgenerally regarded as high, so given the ampletime which it has had to mothball oilfields, thisissue might not immediately be the mostradical threat to long-term production.

Sanctions on Iran are however not lookingnear to being lifted and the longer such a largepart of Iran’s fields remain shut-in the larger theinvestments that will be required to bring themback onstream –funds which Iran will be evenshorter of at the eventual end to internationalsanctions.

Again, history serves a somewhat depressingprecedent, with Iran’s oil production capacity

never being able to recover to anywhere nearits former levels following the disruption causedby the 1979 revolution and the damagesubsequently caused by the 1980-1988 Iran-Iraq war. While it would be alarmist to expectIran to be unable to restart most of the morethan one million bpd of production capacityshut through sanctions, Iran might struggle toreach levels much over 3.0-3.2 mn bpd shouldthe sanctions regime remain in place past thefirst half of this year, compared to productionrates around 3.5 mn bpd in late-2011.

In Iraq, the oil industry is currently in theprogress of delivering a historically successfulgrowth programme. While the developmentpace is nowhere near the over-optimistic officialtargets calling for a 12 mn bpd productioncapacity by 2016, the lifting of productioncapacity from 2.4-2.5 mn bpd in 2010 and 2.7mn bpd as late as at the start of 2012 to 3.3mn bpd by the start of 2013 should be regardedan impressive achievement.

Even better, there is today no technical oreconomic reason to expect the growth not tocontinue through the year, as projects nearcompletion make an end-2013 production rate

Oil Review Middle East Issue One 2013

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Iran’s oil and gas sector is in desperate need of new technology

In fact, amid the Iraqiupstream progress, it is acause for a fundamental

rise in oil price riskpremiums -one which likelywill stay with us over the

long term

www.oilreview.me

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just shy of 3.7 mn bpd look very likely.Iraqi uncertainty comes from the

unpredictability and uncertainty regarding thecountry’s political and security situation. WhilePrime Minister Nuri al-Maliki has managed toconsolidate his position, this has come at thecost of continued political paralysis and a nearstandstill of legislative activity.

With the Iraqi population demandingprogress on the rebuilding of the country andits infrastructure, the situation is at its coreunsustainable. Likewise, Iraq continues to be aplaying field for its neighbours’ powerprojections and risks being drawn into increasedinstability as a cause of the deepening Saudi-Iranian animosity, as well as more directly fromthe crumbling Syrian security situation acrossits porous western border. Both are connected,but the latter has very immediate implicationson its disenfranchised Sunni minority as well asits autonomous Kurdish population. The recentspike in al-Qaida-claimed violence in Iraq isalso tied to the growing traffic of Islamicmilitants and arms throughout the Iraqi andSyrian border regions.

Oil projects have proven resilient so far andhave to some extent even benefitted from thepolitical malaise, giving the oil companiesinvolved some freedom of operations.

Project decision-making and clearanceissuing by the authorities has been a hurdlehowever, delaying progress and raising costsacross the board.

The unpredictability of the Iraqi situation ishowever amplified by the need to renegotiatethe contracts, as the unrealistic productionplateau targets are being slashed.

Oil companies are paid per barrel producedand will therefore require compensation for the

lower targets and the negotiations are neverstraightforward in Iraq’s highly resourcenationalistic environment, even if thelegislative paralysis should ease.

Despite Iran widely having been blamed forbeing a destabilising force in the Middle Eastover the past years, it has been a stable

supplier of crude to the global markets over thelong term. Save the disruption around therevolution and Iraq’s subsequent invasion,targeting some of its most oil-rich areas, it isIraq which from an oil perspective has causedmost disruption and uncertainty.

Iraq instigated the eight-year war with Iranand then invaded Kuwait in 1990 causing large-scale disruption and damage to the emirate anddrawing upon itself heavy damages and a longpunitive sanctions regime in the wake ofKuwait’s liberation.

Following the 2003 US-led invasion of Iraq,production again fell to historical lows andcontinued to fluctuate significantly below itshistoric capacity levels for almost all of thesubsequent decade. It’s stability outlook hasnot changed radically, although on the otherhand there also no particular reason to be moregloomy now than before the last parliamentaryelections in 2010.

The greater uncertainty for global suppliesinstead comes from the comparison betweenIraq and Iran’s historic domestic stability levelsand the projections going forward.

The institutionally developed Iranian statehas, despite its democratic deficiencies, provedto have a high level of domestic stability froman industrial perspective, even at times like theaftermath of the contested 2009 presidentialelections.

Iraq, with its weak institutional frameworkand multitude of militant groups and areasoutside of direct government control could onthe other hand quickly degenerate back to thelevels of violence seen between 2005-2007,making most large-scale project workunfeasible.

That the world now is forced to rely more onIraq than on Iran at a time of still relatively lowOPEC spare capacity is therefore in itselfsomething of a problem, which inevitably isbeing quantified by the crude markets andresulting in a higher underlying and permanentrisk premium. ■

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Oil projects in Iraq have proven resilient so far

Iran’s oil industry has suffereddecades of under investment

OPEC - low spare capacity

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Oil Review Middle East Issue One 2013

LLAST YEAR, IRAQ started delivering on itslarge oil output capacity growthpromises, as several of its key oil projectsin the south were able to raise production

on an impressive scale.From producing just about 2.7 mn bpd in

January 2012, Iraq produced just under 3.3 mn bpdin December 2012, playing a large part in theworld‘s ability to handle toughened sanctions onIran’s oil exports. In fact, with Iranian exports fallingfrom around 2.2 million bpd in early 2012, to justabout one million bpd around the beginning of2013, it is clear that Iraq alone – through its crudeproduction increases – carried half the burden ofthe falling Iranian supplies.

With Libyan production also recovering from thelows of 2011 and non-OPEC production growinghealthily, the situation did not become as criticalfor Saudi Arabia – OPEC’s swing producer – tomanage as markets feared in the first half of 2012.

There are complications however. For Iraq, theIran sanctions in reality presented the country’sState Oil Marketing Organisation (SOMO) with agolden opportunity to increase market share at atime when Iran was unable to maintain itsposition. As global markets in retrospect weresufficiently supplied throughout the year – despitesome tightness - particularly Q1 2012 - there wasan inventory build in each quarter – Iraq wouldprobably have struggled to place all its risingexport volumes with buyers, had the Iraniansupplies not have been receding, withoutsignificantly weakening crude prices. However, thisshift places Iraq in a much more central positionvis-a-vis Iran as a global supplier, at a time whenrisks in Iraq – political and project – seem again tobe increasing.

In fact, some of the largest oil production shut-ins during 2012 (not counting the sanctions onIran) came from Iraq, where storms in the Gulfsucceeded in shutting loadings off completely orlowering southern exports to below one million bpdon several occasions.

Luckily, these shut-ins were quickly over, unlikethe more publicised problems in the North Sea orthe large shut-ins following cyclones off Australia inQ1 2012 and following hurricane Isaac in the USGulf of Mexico.

One-to-two day fluctuations of more than onemillion bpd in well over a handful occasions in ayear demonstrates a certain unreliability of supply,especially compared to nearby ports in Kuwait andIran, where the downtime was negligible incomparison.

Iraq’s outdated export infrastructure hashistorically been to blame for these disruptions, buteven with the installation in the past year of newsingle-point mooring (SPM) buoys, the overallinfrastructure was still found wanting.

In the north, security and operational problemswith the Kirkuk-Ceyhan pipeline to the TurkishMediterranean coast were also a significant factorand this year the recurring problems of pipelinebombings were exacerbated by output plunging atthe giant northern Kirkuk oilfield.

Together with a deepening of the disputebetween Baghdad and autonomous Iraqi Kurdistan,this caused a queue build-up of up to 20 tankers bymid-2012 due to deferred cargoes, which took overone month to clear.

The chief risks with Iraq are however notnecessarily on the operational reliability level. Iraqis still suffering from very high levels of politicalrisk and despite the past years’ success in raisinginvestment and production, last year was a year ofbacksliding. Relations between Prime MinisterNouri al-Maliki’s Shi’a dominated government andthe country’s Sunni and Kurdish minorities souredfurther, although an impeachment challengeagainst him originating from groups within the twomain minorities failed to have success.

At the start of 2013, gthere is nothing tosuggest that the situation is improving. The conflictbetween Baghdad and the autonomous KurdistanRegional Government (KRG) has deepened and the

Iraq is still suffering from very high levels of political risk

This uncertainty on so manylevels is likely to result in

investment levels starting tofall in the coming year

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Iraq has worked hard to increase its oil production capacity, but, as independent oilanalyst Samuel Ciszuk explains, the country’s problems are far from over.

Tensions and uncertainty to

continue this year

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threat of escalation seems to remain acute. Late2012 saw shootouts and an armed stand-off acrossthe border held by the KRG – which is notrecognised as the autonomous region’s rightfulborder by Baghdad – and although such incidentshave happened before, the widespread sense sinceis that only a minimal de-escalation took place inthe aftermath.

While Baghdad and the KRG will continue toargue their cases with regards to KRG oil rights anddirect oil company investment in the region, aswell as the KRG’s recent decision to officiallyexport crude by truck to Turkey (there has beenconsiderable smuggling of crude previously), theKRG will likely step up its efforts to challenge theIraqi government in Baghdad itself. It needs to doso, in order to raise the direct political costs for al-Maliki’s government for keeping development inthe region at bay. This means that the Kurdishfactions will continue their efforts to build anti-Maliki alliances with mainly the Iraqi Parliament’sSunni MPs, drawing on the ever growing feeling ofalienation which the large Sunni minority is feeling.

Bridging the Kurdish-Sunni gap has so far notbeen easy however. This process was visible alreadyahead of the 2010 elections, however the yearningfor far-reaching autonomy intrinsic in the Kurdishmovement has traditionally not sat well with theSunni’s vision of a centralised state.

In the post-Saddam Hussein era, the Sunniinterest in centralisation has further beenstrengthened by a fear that a complete Iraqifragmentation would result in the Sunnis beingshut-out of both the Shi’a-dominated oil rich southand south east, as well as the Kurdish-dominatedoil-rich north, leaving the Sunni population evenmore deprived.

Since 2010, the feeling of deprivation hasnevertheless been growing as Sunni’s complainincreasingly of discrimination and marginalisation –opening a potential window of opportunity for theKurds to build a new alliance, could they justmuster and gain acceptance for, extendingsufficient safe guards to the Sunnis that theyultimately do not seek full independence.

So what does all this mean for the oil sector inIraq? Recent increases in violence, have continuedto omit the oil producing areas (save Kirkuk) andthe tighter grip on power and the nation’s securityforces by al-Maliki over the past years hascontinued to improve the direct security situation insouthern Iraq, where oil companies are invested, atleast from a anti-terrorist perspective.

On the other hand, the government’s track-record on fighting the intertwined high corruptionand organised crime rate in the south is howeverfar from being similarly convincing.

Perhaps the main threat to operations nowhowever stems from the large but more indirectthreat of renewed fragmentation in Iraq, as well asthe direct threat to project speed and investmentposed by the political deadlock. The dramatic needfor red tape-cuts apparent over the past two-threeyears, as projects physically got underway, has,apart from a few high-level exceptions, largely goneunaddressed. This is not because of completegovernment lethargy however. There exists a

political deadlock situation, where parliament isable to pass preciously few laws, there is only somuch which can be done.

Large-scale upstream investors and contractorsneed to keep this aspect in mind: The result of thepolitical deadlock is a widespread and growingpopular Iraqi dissatisfaction with its elected officialsand could well lead to large changes being broughtfollowing the next set of elections, making longer-term planning unpredictable.

The current government coalition – and to asignificant degree also the main opposition parties– have benefitted from being seen by thepopulation as guardians against a renewed slideinto sectarian violence, allowing the parties somelenience when their political achievements havebeen judged.

Although a fear of violence will continue to be astrong motivator for the population in elections fora long time to come, it will be a graduallyweakening force compared to the rising frustrationover political inaction – that is, unless the fear ofviolence is stoked continuously.

With most of Iraq’s political groups lookingdisposed towards brinkmanship these days, giventhe overall rising level of tensions, this could easilycreate a situation where some of Iraq’s newpolitical elite feels even less restrained than before,further raising the risk of one side miscalculating infuture standoffs.

For the oil industry this means that the outlookfor radically improved fiscal terms and operatingconditions looks almost impossible to attain, savewhat can be squeezed out from the negotiationsover cutting the overambitious oilfield productiontargets of 2016-2017 agreed at the time of thelicence auctions.

Also, it means that the current political actors inIraq seem to be running out of steam, paving theway for either some more confrontational behaviourbetween the main groups, to dislodge each otherand in such a way break the deadlock, or a radicalchange of the actors being the result of electionswhen they next are called.

A third option is that the current governmentunder al-Maliki tries to hold on to power andpostpone elections, a course of action whichhowever would be likely to provoke an outrightchallenge from all opposition factors, potentiallyhelping them unite.

This uncertainty on so many levels is likely toresult in investment levels starting to fall in thecoming year, lowering Iraq’s projected oilproduction capacity growth in the 2014-2015timeframe as a result.

How happy oil companies will be with thedeals secured in the production targetrenegotiations and what progress – if any –ultimately can be achieved between Baghdad andIraqi Kurdistan in the first half of the year will bethe two most important signposts to watch for theupstream investment climate.

Overall violence levels and the potential rise ofa unified Sunni-Kurdish parliamentarian challengeagainst the government will be the two otherthings to look out for, but for them to produce goodenough news to hope for radical changes to Iraq’scurrent situation is to expect too much.

Politico-economically, the best case scenario forIraq over the coming two years remains scrapingthrough and not being dragged back down into theabyss of sectarian bloodshed.

For really good news, that will more likely beweather-related. News in January that Iraq hadcompleted construction of four new storage tanksin the south with a combined one million barrelcapacity and was building more in order to lift totalsouthern storage capacity from 5.5 million barrelsto 8.5 million barrels before end-2013, should atleast mean that with the new single-point mooringterminals offshore installed in 2011 and 2012, lessweather-related loading disruptions and delaysshould be on the cards. ■

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Al-Maliki - will he postpone elections and try to hold on to power?

The chief risks with Iraq are however not necessarily

on the operational reliability level

www.oilreview.me

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Oil Review Middle East Issue One 2013

TTHESE ARE POTENTIALLY very excitingtimes for Kuwait, with oil and gasproduction capacity growth plans anddownstream investments high on the

agenda. But any regular watchers of this tiny Gulf state

will remain cautious about whether any newpromises and projections relating to the country’sprized energy sector will come through in the end.

That’s the voice of experience after majorproject initiatives from the past, such as theflagship Project Kuwait to tap the nation’snorthern oilfields with the help of foreigninvestors, came to nothing.

Political differences inside Kuwait have longunravelled many a good idea in this corner of theGulf.

Still, the nation’s state-owned oil companies aredoing a fine job in maintaining and gently lifting oiloutput, with Kuwait’s production now either at, orabout, 30-year highs.

Earlier this year, the oil minister Sheikh Ahmad

al-Abdullah al-Sabah said the nation’s productionhad breached the three million barrels per day (bpd)mark.

That’s even more impressive when you considerthe country’s oil infrastructure was practicallyannihilated by Iraq a little over 20 years ago duringthe invasion.

It means Kuwait is currently operating withplenty of spare capacity, with its OPEC quotarestricted to 2.2 mn bpd.

More is to come, it seems, with Kuwait focusedon boosting oil capacity to four million bpd by2030, a date that appears to have been pushedback a little, from an earlier 2020 target.

Kuwait Petroleum Corporation (KPC),established in 1980, is the entity that bringstogether all of the nation’s multiple state owned-oilcompanies under one roof.

It’s various subsidiaries, operating units andjoint ventures, control virtually every aspect of thenation’s oil and gas sector, both upstream anddownstream, from discovering new reservoirs to

delivering clean motor fuels.It also includes leading Kuwait’s growing

portfolio of energy investments overseas.Upstream, the wholly-owned Kuwait Foreign

Petroleum Exploration (Kufpec) subsidiary, recentlyacquired additional exploration interests off westernAustralia, reflecting the increasingly global natureof KPC’s portfolio.

Downstream, another two operating units,Kuwait Petroleum International (KPI) andPetrochemicals Industries Company (PIC), this yearteamed up with Total of France to progress a hugenew 300,000 bpd refinery and petrochemicalscomplex in China, in partnership with Sinopec.

China, and other emerging Asian states, havebecome key buyers for Kuwait’s oil in recent yearsto feed soaring economic growth.

Back at home, it is another KPC unit, Kuwait OilCompany (KOC), that is taking the lead role inexploiting the nation’s upstream oil and gas wealth,which includes the world’s second largest oil field,Greater Burgan.

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Kuwait’s state-owned oil and gas companieshave plenty on their plate as the Gulf statetargets rapid production growth.

Will Kuwait’s ambitious plans be scuppered by

political differences?

www.oilreview.me

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This company’s history dates back to 1934when it was established by the Anglo-Persian OilCompany, now known as BP, and Gulf OilCorporation, now Chevron.

KOC is charged with maintaining and raisingKuwait’s production capacity from the mightyBurgan field and others, as well as pushingexploration and reserves growth.

Despite the group’s recent track record in liftingoutput this will be quite a challenge.

Kuwait’s intention is to reach 3.5 mn bpd bybetween 2015 2020, climbing to four million bpdin 2030.

For KOC, this means the spending will comethick and fast in new projects, creating plenty ofwork opportunity for contractors and servicecompanies.

The government has lined up a five-year growthplan worth a massive US$100 bn, much of it in thehands of KOC.

During this year, KOC is planning energy andinfrastructure investments worth up to KD10 bn(US$35.5 bn), the company’s deputy boardchairman and deputy managing director Mazen al-Sardi said recently.

Current plans include the building of threecrude collection centres in northern Kuwait with adaily capacity of 100,000 barrels each; there isalso a pipeline linking oilfields to a new refinery

in the making.While the bulk of oil production will

continue to come from the larger, establishedfields, such as Burgan, additional incrementsmay be sourced elsewhere.

Kuwait’s new oil production is likely to

comprise both crude and heavy oil output, withenhanced oil recovery (EOR) techniques expectedto add an extra 180,000 bpd and heavy oil toincrease by 220,000 bpd, KOC chairman andmanaging director Sami al-Rushaid told anindustry event recently.

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Oil Review Middle East Issue One 2013

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KOC is charged with maintaining andrasing Kuwait’s production capacity

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Kuwait’s long history as a producer of some scale means KOC must alsocarefully manage the country’s mature fields, which means a more prominentrole for EOR extraction technology.

KOC is looking to move ahead with the commercial development of itsfirst heavy oilfield in early 2013, called Lower Fars, after successfully carryingout pilot projects.

The onshore acreage, located in the north and close to the Iraqi border, isestimated to hold some 13 bn barrels of reserves.

The field was initially to be developed by a KOC joint venture withExxonMobil but the US super-giant pulled out after objections from membersof Kuwait’s National Assembly (parliament) who insisted on the Gulf stateretain sovereign rights over all reserves.

KOC now plans to spend US$7 bn to develop the field, aiming to produce60,000 bpd by 2017 and subsequently ramping up capacity to 270,000 bpdby 2030.

Offshore focusAl-Rushaid said gas would also play a more prominent role in Kuwait’s energymix with production of non-associated gas set to increase ten-fold to around1.5 bn cubic feet by 2030.

Rising domestic demand has meant Kuwait has had to rely on gas importsin recent years to fill a widening shortfall.

And KOC’s production growth will also hinge critically on booking more oiland gas reserves, and ultimately output, through new exploration, includingdeposits offshore.

In 2013, the company is expected to start drilling the first few explorationwells in Kuwait Bay.

This work will start around Bubiyan Island in the north and then move southalong the bay.

KOC has acquired 3D seismic over a total area of around 10,000 SqKmin advance of the drilling programme, which will include at least six wells.

KNPC downstream One of the biggest tests Kuwait faces, however, is in the downstreamsector, namely in pushing through the long-delayed new refinery project atAl-Zour.

In early December, the Kuwait National Petroleum Company (KNPC)awarded a US$528 mn project management contract to UK-based AMECfor the new facility, resurrecting a project that has twice collapsed becauseof political wrangling.

If the scheme progresses smoothly this time it could give Kuwait theMiddle East’s largest new refinery, with a capacity of 615,000 bpd.

The al-Zour project forms a key part of Kuwait’s long term energystrategy, producing cleaner fuels to meet local electrical power generationgrowth and demand while adhering to the latest environmental standards.

The hope this time is that the refinery will be up and running in 2018.That’s five years away, not unreasonable for a large investment project

of this kind, but in Kuwait, with its history of political in-fighting disruptingbig business, time can sometimes slip away. ■

Oil Review Middle East Issue One 2013 23

Kuwait’s new oil production output is likely to comprise both crude and heavy oiloutput

www.oilreview.me

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Oil Review Middle East Issue One 2013

TTECHNIP IN THE Middle East formed itssubsea division only last year and securedits first project in the region when it wasawarded an engineering, procurement,

installation and commissioning (EPIC) contract fromDubai Petroleum for the South West Fatah and Falahfields, located 90km offshore Dubai, at a water depthup to 55 meters.

"I was thrilled that we managed to get a projectin the Middle East, just a few months after wecreated the subsea division," Aouad said.

The EPIC contract encompasses the replacementof six 18” water injection pipelines, one 12” gaspipeline, and one multiphase 30” pipeline .

"The project is a fast track project awarded inJune 2012 for a delivery of its major pipelaying partin 2012," he explained

Technip’s operating centre in Abu Dhabi willexecute the contract and Aouad said he wasdelighted to have been asked to become director forthe new division and help form the Subsea division.

Aouad claimed that, "This contract is aconfirmation that there is a place for new generationDP vessels in the shallow waters of the Middle East,and that based on its speed of action in transit andsetting up in various locations of a brown fieldwithout anchors, has proven to be very efficient onsmall lines as well."

The pipelaying was carried out by Technip’sflagship S-Lay installation vessel, the G1201. Inaddition the diving works associated to this project

were carried out by a dynamic positioning divingsupport vessel from Technip fleet.

The G1201 docked in Sharjah in early Decemberlast year and is the company's largest vessel everbrought to the region. Its arrival in Sharjah port for ashort visit was the first time the G1201 has left theAsia Pacific, where it was conceived and deliveredlast year in Singapore.

The G1201 is the latest generation of derricklaying self-propelled vessels, which can work inshallow water, but also without strings attached (noanchors) in a dynamic positioning mode.

"It is this latest feature that proves to be of greatvalue as we are installing pipelines over a verycongested area of existing pipelines, without takingany risk of dragging an anchor on the seabed or beobliged to run anchorlines under a bridge or througha platform," added Aouad.

He touched on one of the main challengesassociated with the subsea project for DubaiPetroleum, which is the shutdown that is associatedto the 12-inch pipeline replacement, as 25 per centof the overall DPE production was at stake duringthis shutdown, which was carried out successfullyahead of its intended duration.

The other challenge was the 30” multiphase

pipeline which crosses so many pipelines and cables,that the decision was made to lay it fully withouttouching the seabed, totally suspended on supportsno wider than 6m. The G1201 laid it whilemonitoring the touch town of the pipeline on thesesupports in less than 3 days

Aouad feels that the Middle East market is wideand the competition is very hard and more so in thesubsea market where Technip are just starting.

"The road may be bumpy, and the biggest subseaprospects are in other regions with deeper waterswhere our vessels have a much higher value addedthan what the competition has here," he pointed out.

Aouad believes that the biggest challengeTechnip faces is being a newcomer to the subseabusiness in the region also the fact that most of theclients know the firm as Engineering or a PMCContractor, and have never seen its work with itsown assets as it the case in other areas.

“Overcoming this hurdle involves communicatingto Oil and Gas companies details of our worldwideleadership on subsea activities, and how Technipuses its own vessels and is deeply involved in otherimportant facets of the industry such as rigidpipelaying, flexible pipelaying, heavy lifts in deepand shallow waters,” he added.

“The Dubai Petroleum project is a greatshowcase for Technip bringing in a top class vesselfrom outer sea for a small magnitude project wherehigh value is needed, and to deliver a qualityproduct.”

Aouad remains realistic about the outlook for thesubsea market "as no matter how good our vesselsand our teams are, it takes time for local Oil and Gascompanies to notice positive change brought by thenew built and multi purpose vessels." ■

Technip’s S-Lay installation vessel the G1201

The EPIC contractencompasses the replacement

of six 18” water injectionpipelines, one 12” gas

pipeline, and one multiphase30” pipeline.

E&

P

24

Oil Review Middle East spoke to Nabil Aouad, COO - Subsea at Technip Middle Eastabout the latest developments at the company's first Middle East subsea project andhis outlook for the newly-formed subsea division.

Subsea growth in the

Middle East

Nabil Aouad

www.oilreview.me

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A KUWAIT ENERGY-LED consortium and the Iraqi Ministry of Oilsigned the final service contract for the exploration, developmentand production of Basra’s block 9.The block covers an area of over 866 sq-km area in the Basraprovince and was awarded to the consortium during Iraq’s fourthbidding round in May 2012.Kuwait Energy will be the operator of the block with a 70 per centworking interest, while Dubai-based Dragon Oil will hold theremainder 30 per cent.In the case of a discovery, the Consortium will be automaticallyeligible for 20-year development and production phases, extendableby an additional five years.Block 9 is the third block awarded so far to Kuwait Energy in Iraq.

GULFSANDS PETROLEUM HAS completed its acquisition of CabreMaroc Limited (Cabre Maroc), a subsidiary of British independentCaithness Petroleum, that gives it access to oil and gas concessionscovering an area of 13,352 sq-km in northern Morocco. The London-based firm said in a statement that the deal which wasagreed in December was now secured following cash paymentstotalling US$19mn.In addition to the payment, Gulfsands has made a financial guaranteeof US$5mn to Morocco’s state oil regulator ONHYM. This will,however, be refunded upon fulfilment of the work commitments asplanned in the second half of this year."The purchase of Cabre Maroc delivers to Gulfsands a large,contiguous and highly prospective acreage position in an area withproven petroleum systems, revenues from near term production, andmultiple drilling targets," the company stated.Gulfsands believes that there is meaningful near term value potentialcontained within the proven conventional and shallow depth gas playin the Rharb Centre permit, together with significant explorationupside related to the fold and thrust belt structures identified in theadjacent Rharb Sud, Fes and Taounate permits.The firm said that it was now set to generate cash flows from gasproduction as soon as the third quarter of this year.With completion of the acquisition Gulfsands and ONHYM havebecome co-venturers in the Rharb Centre and Rharb Sud permits, withGulfsands the operator of the joint venture.

WESTERNZAGROS RESOURCES HAS awarded a contract for two 2,000 horse-power (HP) drilling rigs to a North American company, to drill on its GarmianBlock in the Kurdistan Region of Iraq.

The two rigs will drill the Hasira-1well, the Baram-1 well and subsequentwells on the Garmian Block in theKurdistan Region of Iraq, the companysaid in a statement.

The drilling services contract wasawarded for a two year term with anoption to extend for an additional twoyears. The deal also includes a provisionfor a third 2,000 HP rig if required.

"We are pleased to have reachedarrangements to bring two rigs from anew entrant to the Kurdistan Region. Thiscontract supports our objectives in theGarmian Block," stated Simon Hatfieldchief executive officer of WesternZagros.

Drilling design and site constructionare underway for both the Hasira-1 andBaram-1 wells and long lead items have

been ordered in anticipation of the spud dates in June and August, 2013,respectively, WesternZagros noted.

The firm said it was actively assessing future drilling prospects, theselection of which will be influenced by its 3D seismic programs and drillingresults on the Garmian Block and neighbouring blocks.

Drilling contracts in Kurdistan awarded

HERITAGE OIL ANNOUNCED that it has completed the disposal of theremaining 49 per cent interest in the Miran Block in the KurdistanRegion of Iraq to Genel Energy.The deal which was announced last year has resulted in Genel holding100 per cent of the participating interest in the block (and 75 per centof the working interest) and has become the sole operator.Heritage Oil confirmed that the decision to relinquish the asset wascarried out in order to repay a US$294mn loan made by Genel toHeritage in August 2012.Heritage CEO Tony Buckingham commented in the statement, "Weare delighted to have received final approval for the disposal whichmeans we have monetised the asset at an attractive valuation. Thisbrings the total disposal proceeds generated by Heritage from assetsales to over US$2bn.”

Gulfsands Petroleum acquires more oil andgas concessions in Morocco

Genel becomes sole operator of Miran BlockExploration of block 9 in Basra is set to start

The Kurdamir block

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AUSTRALIA-LISTED OIL SEARCH has completed the sale of its 40 percent interest in Block 3 (Gardan), onshore Yemen, to oil giant Totalfor US$44mn. Total will become the sole operator of the block.

Peter Botten, Oil Search's managing director commented on thesale, “The completion of the sale of Oil Search’s interest in Block 3,Yemen is in line with our strategy to optimise our internationalacreageportfolio in theMiddle Eastand NorthAfrica, with afocus onlicences withmaterialupside.Drilling iscurrentlyunderway on alarge prospectin theKurdistanRegion of Iraq,withencouragingpreliminaryindications,and a high potential well in Tunisia is due to commence drilling inearly 2013.”

Oil Search's remaining asset in Yemen is its 34 per cent interestand operatorship of Block 7 (Al Barqa), also onshore Yemen, whichcontains the Al Meashar oil field discovered in 2010.

The firm added that it was planning to acquire a 2D seismicprogramme over prospective areas of the Block in 2013, subject to astable and safe operating environment prevailing in this area.”

FRONTIER RESOURCES (OMAN) Ltd has provided an update on Block 38 inOman. It signed an exploration and production sharing agreement (EPSA) withthe government of Oman for a 100 per cent interest at the end of Novemberlast year.

The six-year EPSA agreement comprises two three-year phases. The block,also known as the Mudayy Block, covers an area of 17,425 sq km and is locatedin the Dhofar region of southwest Oman, south of the Rub Al Khali Basin.

Jack Keyes, chief executive officer of Frontier stated, "The CPR gives Block38 an estimated original oil in place (OOIP) of 10,865 mn barrels of oilequivalent (MMboe) and we believe that Block 38 contains an untested saltbasin analogous to the other proven salt basin of Oman."

Block 38 has had only three wells drilled but and is considered a goodprospective for oil and gas, where recent findings based on the evaluation ofvintage seismic suggest that the block contains an untested salt basinpotentially analogous to the other proven salt basins of Oman.

Frontier will conduct geophysical and geological studies during the firstphase of the agreement to determine the range of drilling opportunities. Thefirm would then design a 3D seismic survey, the results of which will lead to thedrilling of a well if suitable.

The company said in a statement that "Block 38 Permit represents anopportunity to develop an onshore oil and gas play similar to PDO's successfulHarweel Cluster of fields where production commenced in 2004."

Frontier noted that development costs for Block 38, including full scaleenhanced oil recovery (EOR), will be high but that they can be supported bythe oil volumes which are of sufficient scale based on the analogous HarweelCluster of fields.

CHEVRON MOROCCO EXPLORATION has entered into agreements withMorocco's Office National Des Hydrocarbures Et Des Mines (ONHYM) for threeoffshore areas.

The three deep-waterareas extend over 29,200 sq-km in water depths of 100-4,500 meters.

George Kirkland, vicechairman, ChevronCorporation commented, "Welook forward to participatingin exploration activities inMorocco, which providesChevron an opportunity toadvance our growth strategyin frontier basins."

Chevron will acquire seismic data and conduct studies in deepwater areasknown as Cap Rhir Deep, Cap Cantin Deep and Cap Walidia Deep locatedbetween 100 to 200 km west and northwest of Agadir, Morocco.

Ali Moshiri, president, Chevron Africa and Latin America Exploration andProduction Company noted, "This is an opportunity for Chevron to expand itsalready strong presence in the region and allows us to acquire furtherknowledge about promising geology in an emerging area."

Chevron Morocco Exploration is a subsidiary of Chevron Corp and it willhave a 75 per cent working interest in the three areas, with ONHYM holdingthe remaining 25 per cent.

Chevron enters blocks offshore Morocco

Total’s presence in Yemen

WESTERNZAGROS RESOURCES HAS reported a fourfold increase inthe company's contingent resource estimates at the giant oildiscovery on the Kurdamir Block in the Kurdistan Region of Iraq.According to a report by Sproule International the total meanestimate of gross unrisked contingent resources (Mean ContingentResources) at Kurdamir has increased to 590mn barrels of oil(MMbbl) in the Oligocene and Eocene reservoirs. When gas andcondensate are included the Mean Contingent Resources exceedonebn barrels of oil equivalent, the company said in a statement.Simon Hatfield, WesternZagros's chief executive officercommented, "The Kurdamir structure has the potential to be thelargest light oil field discovered in Kurdistan, with the possibilitythat it extends on to our neighbouring Garmian Block. We'retherefore highly motivated to drill the Kurdamir-3 well on theKurdamir Block and the Baram-1 well on the Garmian Block thisyear to further delineate this giant discovery."WesternZagros noted that this was the fourth successiveindependently audited upward revision of contingent resourcessince the Kurdamir Discovery was announced in November 2009.In the Oligocene reservoir, mean contingent resources increased to435mn barrels of oil from 147mn barrels previously. This equates to786mn boe when gas and condensate are included. The latest resource estimate also recognised contingent resourcesin the Eocene reservoir on the Kurdamir Block for the first time.Mean contingent resources for Eocene stand at 155mn barrels ofoil, or 226mn barrels of oil equivalent when gas and condensate areincluded.Based on reservoir data obtained from the Kurdamir testingprogram and independent engineering assessments, WesternZagrospredicts "that sustainable production rates" of 7,000 to 11,000boepd are possible for individual wells in the Oligocene reservoirutilizing horizontal drilling and completions technology.

Oil Review Middle East Issue One 2013

Frontier provides update on Oman block 38

WesternZagros increases contingentresources estimates at Kurdamir block

Oil Search sells Yemen block to Total

The awarded offshore areas

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MENA HYDROCARBONS HAS re-commenced drilling activities in its Lagia oilfield in Egypt and a new progressive cavity pump (PCP) has been installed inwell nine, which has produced 90 bpd over a 12 day period in January.

MENA also completed installation of required production facilities in thefield with three oil storage tanks, a water tank, and a 500 barrel fuel tank, andhas connected all producing wells with flow lines, a press release from the

firm stated.Lagia

wells 8 and10, whichwere drilledin 2012 anddesigned forsteaminjection,will beplaced onproductionfollowing aninitial steaminjectioncycle that

began in February. The company has signed an agreement with Middle Eaststeam operator Steamtech and Co to provide steam injection equipment andpersonnel for the project. It is expected that production volumes from thewells will be significantly improved as the quality of sandstone reservoir andoil gravity is good, said the release.

The two remaining production wells in the field, Lagia 6 and 7, were drilledby a previous operator and were not completed with thermal casing, however,their flow rates are expected to increase from their current 22 bpd with steaminjection into the other nearby wells.

MENA is also aiming to drill a 1,524 metres exploration well in 2013 toidentify the source of API oil that was recovered in the Lagia concession.

MENA Hydrocarbons re-commences drilling in Egypt

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TETHYS OIL AB,through itswholly-ownedsubsidiary TethysOil Block 3 and 4Ltd, produced456,762 barrelsof oil inDecember 2012,corresponding to14,734 bopdwhich was aslight fall fromthe new recordset in Novemberof 14,981 bopd.The total production in 2012 from the blocks amounted to 4.49mnbarrels of oil, corresponding to 12,257 barrels of oil per day, a pressrelease stated, adding that Tethys' share of the production is 30 percent of the total, or 137,029 barrels last year.The firm owns 30 per cent interest in the two blocks onshore theSultanate of Oman.

The total production in 2012 was 4.49mn barrels of oil inthe two blocks

Tethys' Oman production fell in December

Nukhul FormationCaption

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DDEEPWATER GAS DISCOVERIES offshorethe Gaza strip some years ago seemedinitially to be greeted with a relativelydisinterested yawn by the wider

industry, apart from in the Palestinian Authorityitself, of course, as well as in the very immediatesurrounding area.

The discovery was probably seen as a notentirely unexpected extension of the prolific NileDelta basin, off neighbouring Egypt. In any case,the discoveries were only ever likely to supplytheir domestic markets, displacing some of theircurrent imports, but not changing any globalbalances in any larger way.

The 2010 discovery of the Leviathan gas fieldhowever, estimated to hold 17-20 tcf of gas,changed that perception. Subsequently, thediscovery of a 7 tcf gas field offshore Cyprus byNoble Inc. –which has been responsible forseveral of the discoveries in the EasternMediterranean so far, including Leviathan- provedthat a large basin extends between the waters of

Israel, the Palestinian Gaza Strip and Cyprus andquite likely also into Lebanese waters. Furtherextensions to Syrian and Turkish waters do notlook unfeasible either at this stage.

Diversified baseThe scale of the Leviathan find –together withthe preceding 9 tcf Tamar discovery in 2009-quickly made it clear that at least for the region’scountries, this was a game-changing discovery,allowing the prospect of gas importindependence and –for the most successful –

even the development of future export capacity.Leviathan on its own could for instance power itshome country for decades at today’s gas demandlevels.

Given the region’s need for a balanced anddiversified base for its own energy securitystrategy, none of the countries there are in anycase likely to make themselves entirelydependent on natural gas, raising the chancesthat a healthy portion of the discovered reserveswill be exported.

The new gas-rich neighbourhood is howevernot known for its geopolitical stability. Asrecently as in 2006, Israel and the Hezbollahmovement in Lebanon fought an outright war,culminating in a partial invasion by Israeli forcesof Lebanon. Looking slightly beyond the Israeli-Palestinian conflict in particular and the Israeli-Arab conflict in general, Cyprus continues to bepartitioned between two governments claimingsovereignty over each other, as well as upholdingoverlapping claims to the waters surrounding the

The new gas-rich neighbourhood

Initially, a more complex issuemight be how to solve theexport issue, physically, aswell as in the context of

markets

Gas

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Gas discoveries in the Eastern Mediterranean have in the past few years raised thespectre of a new large-scale play opening up on Europe’s doorstep –indeed potentiallyeven within the EU’s common market- but, asks independent oil analyst, Samuel Ciszuk,,are we actually looking at a game-changer, or just another source of diversification?

Mediterranean gas reserves attract interest but

increase tension

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island. Looking even further north, the delineationof maritime borders between Cyprus and Turkeyraises serious questions, as well as betweenGreece and Turkey, should the basin prove toextend to the north of Cyprus.

Moreover, the recently deteriorating situationin Syria is complicating the region further, alreadyshowing signs of sucking in Turkey and Lebanon.

ExportsNevertheless, the Levantine Basin is located onthe threshold to Europe, at a time when Egyptiangas exports look likely to decline over the longterm, Libyan gas development remains nearstalled –and in the past decade blighted by a setof disappointing exploration results- whileAlgerian growth seems somewhat tepid. Shouldenough reserves be firmed up for sizeableexports from Cyprus, the EU would in fact have anew gas producer within its common market.That said, on a global basis the Levantine Basinstill has a lot to prove and the legal ambiguitieswith regards to maritime borders andgovernment authority could well slow downprogress, not least on the Cypriot side.

So far the geopolitical and political signs havebeen good, however. The first discoveries almost

immediately set off knee-jerk reactions bylawmakers to raise government take and tightenthe contract frameworks -according to therecognisable pattern of countries with newlydiscovered resources- there seems to have beenefforts to try to keep international conflict overthe resources to a minimum. Long-existing claimsto maritime borders in the region were also againdusted off.

AgreementsLebanon, one of the countries involved inmaritime border disputes, has however tried toset an encouraging example through moving theissues to international arbitration, whileencouraging exploration work to begin in non-

disputed waters –as to minimise the overallimpact on business sentiment.

Where possible, some of the countries,including Cyprus, also quickly reachedagreements on the delineation of their respectivemaritime borders, although in some cases theseare yet to be ratified. Lebanon in particular mademoves suggesting a will to ‘ring-fence’ themaritime border issue not to allow it to affectprogress elsewhere in its waters.

For Cyprus it is not that easy given its dividednature and the Turkish backing for the northernCypriot government when it restated maritimeclaims in late-2011. The result was a naval showof strength around the rig drilling whichsubsequently became Cyprus’ first deepwater gas

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The Levantine Basin is located on the threshold of Europe

Moreover, the deterioratingsituation in Syria is

complicating the regionfurther

Investors seem undeterred by regional politics

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discovery in late 2011. The discovery’s location tothe south east of the island, far from the landarea controlled by the northern Cypriotgovernment, likely helped to defuse the situationthis time, but if discoveries creep northwards inthe waters east of Cyprus, this conflict willresurface in strength.

Nevertheless, investor interest seemsundeterred. Even in the infected Cypriot setting,there is a feeling in industry circles that bothsides - as well as Turkey - might want to ringfence the issue for now and concentrate ofgetting exploration going in less charged ordisputed areas, given the clear benefit all sidescould derive from potentially being able toexploit their own gas resources in the relativelynear future.

ConundrumInitially, a more complex issue might be how tosolve the export issue, physically, as well as inthe context of markets. Gas could be exported tothe growing Asian markets (where prices aredecidedly higher), but there are some physicalproblems with this.

Shipping LNG from the Mediterranean to Asiawould also mean a very long journey aroundAfrica, as the size of tankers required to makesuch a long journey profitable likely would be toolarge for the Suez Canal.

More generally, the NIMBY (not in mybackyard) issue is one of particular relevance inseveral of these countries, where relatively highpopulation density and the relative importance onthe tourist industry, means that the availability oflarge tracts of waterfront property for heavyindustrial development is very limited.

Another conundrum for the budding EastMediterranean gas industry is the need for

liquefaction technology and experience, whichtoday almost exclusively resides with thesupermajors and a few of the largest servicecompanies.

These companies are largely the ones whichare the most reluctant to wade into unresolvedconflicts involving so many different MiddleEastern and European countries andconsequentially, they have yet to farm-in to thediscoveries still held largely by independents.This however could serve to speak in favour ofjoint international LNG export projects, couldsuch be agreed. Large international contractorscould then be used to provide the technology offthe shelf. Cyprus has been identified as apotential host for an LNG export venture sourcingpart of its gas feedstock from the country’seastern neighbours. Potential land has beenprovisionally allocated in the south of Cyprus, inan area previously set aside for heavy industrialand petrochemical development, hopefully alsodisarming the NIMBY opposition.

Domestic demandPipeline connections are naturally also beingstudied, but so far, the maritime disputes to thenorth and northwest of Cyprus are proving asignificant complication.

Such multilateral subsea pipeline projectsrequire multilateral state-level treaties clarifyingmaritime boundaries. Attaining such agreementsin at least the medium term between Greece,Turkey and the two Cypriot sides, does perhapslook a bit too optimistic.

The depth a pipeline directly to Greece wouldhave to lay at is also providing a very serioustechnical challenge. Other alternatives for theregion would be exports to Egypt and Jordan,which however also looks unlikely to happen in

the medium-term for political reasons, despitethe long-term demand being there.

The question of demand is another irony, asthe most gas-starved economies in thesurrounding region are the Arab statesneighbouring the young gas region.

Despite Egypt’s gas exports to Israel havingstopped, domestic demand keeps growing at astrong pace and Egypt’s LNG ventures haveproduced well under their nameplate capacity foryears.

Similarly, Jordan is starved for gas, to theextent that it hopes to build a nuclear powerplant (as is Egypt), although apart from thechallenge of accessing the technology, finance forsuch an undertaking remains a problem. Lebanontoo remains starved for gas, at least until the dayit might discover its own deepwater reserves andSyria, already an importer, is unlikely to everbecome self-sufficient in gas again.

Of course, given the current level of conflict,as well as internal political instability, suchexports do not look likely at a time when gascompanies are trying to firm up long-term clients,making a historic opportunity for all involvedsides likely to be lost.

For Europe, the Eastern Mediterranean gasboom no doubt provides a very interesting andencouraging sign, promising some furtherdiversification of its portfolios and, in essence, asomewhat limited reliance on Russia.

However, the reserves discovered so far are noway near a game-changer for the continent –orfor the EU members for that matter. Incomparison, Russia exports around 5.3 tcf peryear of gas to Europe, meaning that the fullEastern Mediterranean reserves discovered so farof under 30 tcf only would cover Europe’s needsfor half a dozen years. ■

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A more complex political problem might be how tosolve the export issue

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THE NATIONAL IRANIAN Gas Company's(NIGC) processing plants have processedmore than 136bn cubic metres of gassince 20 March 2012, which is a rise ofper cent the same period last year, thecompany has claimed.

Hasan Montazer Torbati dispatchingdepartment manager at NIGC stated,"Thevolume has been transferred toconsumption destinations across the country through 35,000 km of high-pressure gas grid and 70 boosting gas pressure stations."

NIGC delivers gas to 938 cities across the country through 210,000 km ofgas pipeline infrastructures.

Torbati added that 18mn cubic metres of CNG were being delivered tostations daily.

TURKEY WILL RENEW its current LNG import contract with Algeria whichends in 2014. The new deal will last for 10 years with Algeria set todeliver four billion cubic metres of gas annually to Turkey.Turkey's Energy Minister Youcef Yousfi was reported as saying by APSnews agency that Algeria's Sonatrach and Turkey's Botas have "alreadydecided on the conditions and terms of the new agreement."There is a real possibility that Turkey will increase the volume of gasimported to six billion cubic meters/year (Bcm)."We have said we wish to increase our imports to six billion cubic metresa year. Everything will depend on Algeria's export capacity," Yildizadded.Algeria and Turkey signed a 20-year agreement in 1988 on the sale andpurchase of four Bcm of gas annually, and which came into effect in1994.Botas has already reached an agreement with Algeria to import up to 2.5Bcm/year of spot LNG in addition to its ongoing contractBotas imports LNG through its own Marmara Eregli import terminal, andthe Aliaga terminal owned and operated by Turkey's Egegaz, which alsoimports LNG.Gas demand in Turkey is rising rapidly and is forecast to reach 50Bcm/year in 2013, close to its total import portfolio of 51.8 Bcm/yearand local production of less than 1 Bcm/year.

DANA GAS HAS provided anoperational update on its EgyptianBahrain Gas Derivatives Company(EBGDCo) Natural Gas Liquids(NGL) extraction plant at RasShukheir, Egypt.The EBGDCo is a Natural Gas Liquid(NGL) extraction plant based in RasShukheir, Egypt. Its main activitiesare gas processing and marketingof liquid propane and butane tolocal and international markets. In the plant’s first 3 months ofoperation (it started commercialoperation in October last year,) ithas processed a combined 12,340metric tonnes of Propane (10,500)and Butane (1,840). The averagegas flow-rate for the quarter was75 million standard cubic feet perday (mmscfd) with recovery rates of98.9 per cent and 99.9 per centrespectively.Rashid Al Jarwan, executivedirector and acting CEO of DanaGas, said, “We are pleased with the

results to date and are lookingahead to 2013 as the project shiftstowards a more fully operationalplant and our flow-rate increasesfrom nearby gas fields."The NGLs, which Dana Gas extractsfrom the main gas flow, provide anadditional revenue stream. Totaladditional revenue from NGL salesto date is US$7.7 mn of whichDana Gas has used US$2.8 mn torepay the first instalment of theproject’s development financing. All the NGLs extracted from RasShukheir is exportedinternationally.Dana Gas has 26.4 per centinterest in EBGDCo. The interest isheld through Dana Gas’ 66 percent ownership of DanagazBahrain. Other shareholders includeEgyptian Natural Gas HoldingCompany (EGAS) with 40 per centshareholding and Arab PetroleumInvestments Corporation(APICORP), with 20 per cent.

NGL extraction plant in Egypt helps Dana Gas

AUSTRALIAN SERVICE PROVIDER WorleyParsons has won a projectmanagement support and services contract for Shell Gas Iraq BV.The work will focus on the rehabilitation of gas facilities andinfrastructure that is part of the scope of Basrah Gas Company (BGC) tohelp increase the country's gas resources.This joint venture is designed to capture, treat and monetise associatedgas currently being flared from three southern oilfields, wasting morethan 10mn dollars per day of the country’s natural resources.WorleyParsons will provide project management, technical andconstruction supervision personnel to support BGC in rehabilitationinspection, and EPC activities.Andrew Wood WorleyParsons chief executive officer, said; "We arepleased to continue our involvement in the development of Iraq’s gasinfrastructure as well as being part of this project that will significantlycontribute to the sustainability of the Iraqi economy and environment." The contract will be executed from WorleyParsons’ offices in Iraq andthe UAE.BGC is a 25-year joint venture with state-run South Gas Companyholding a 51 per cent stake, while Shell and Mitsubishi hold a 44 percent and five per cent interest respectively.

36

Gas

NIGC processed more gas last year

Algeria and Turkey to renew gas agreement

WorleyParsons grabs Iraq gas deal

Iran has a vast gas pipeline network

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essential.

www.marellimotori.com

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UK-BASED OIL AND gas service provider Petrofachas been awarded a services contract in Algeria bythe In Salah and In Amenas joint ventures whichcomprise of BP, Statoil and Sonatrach.

The three-year contract will see Petrofac'sEngineering & Consulting Services businessprovide a range of multi-discipline consultancy,design and procurement services which willsupport the efforts of the JVs to develop andexpand hydrocarbon production on both the assets.

Craig Muir Petrofac Engineering & ConsultingServices managing director commented, “This

award is strategically important to Petrofac. Itexpands our presence in Algeria where the Group’strack record extends over the last 15 years."

The services are intended to support the jointventures’ development programme to increasegas production on both the In Salah and InAmenas assets.

The contract can be extended further withtwo additional one-year options. The firm notedthat a significant proportion of the services isexpected to be delivered from Petrofac'sengineering centre in the city of Algiers.

Muir added, "We will continue to develop ourcapability in Algeria, to establish a localengineering centre with strength and depth,supporting our longer-term sustainability in-country."

The recent hostage crisis at the In Amenasproject has increased fears about the firm’sexposure to Algeria even though Petrofac had nodirect exposure to the crisis. The group alreadyoperates Algeria’s US$2.2bn El Merk gasprocessing plant, where first production is dueshortly.

DANA GAS HAS said that it has made twonew onshore gas discoveries, known asAlyam-1 and Balsam-1, in the Nile DeltaBasin of Egypt. Initial estimates indicate that togetherthese finds should increase the company'scommercial reserves by between 17 (proved)and 95 (proved and probable) million barrelsof oil equivalent (mmboe).Both discoveries were made in the West ElManzala Concession, which is operated byDana Gas. The company has already filed adeclaration of commerciality anddevelopment plans for the two discoveries.Patrick Allman-Ward, Dana Gas Egyptgeneral manager commented, “These twonew wells mark an excellent result to 2012drilling in the Nile Delta. We still have toconduct appraisal drilling to confirm the fullextent of the new fields, but as they arenear existing infrastructure, we plan toaccelerate their development and maintainthe long-term growth of our production inEgypt.”The Balsam-1 well encountered 51 metersof net pay in a good-quality sandstonereservoir of the Qawasim formation at highpressure, indicating high deliverability fromthe field. Production testing yielded 10million standard cubic feet per day of gason a 20/64-inch choke and more than 1,000bpd of liquid condensate, Dana Gasreported.The estimated reserves for Balsam-1 arebetween 76 to 436 billion cubic feet (bcf) ofgas with between 2.5 and 9.4 million barrelsof condensate (mmbo). The estimatedreserves for the Alyam-1 discovery arebetween 8 and 66 BCF and between 0.2 and1.3 MMBO.Dana Gas aded, “that the two new fieldshave the highest liquid yield of any gas fielddiscovered in the area so far.”The Balsam-1 and Alyam-1 wells areadjacent to the El Basant Field and itsassociated pipeline network, operated byDana Gas, and the plan would be to connectboth the new fields to the nearby pipelines.

Dana Gas makes newonshore gas findsMETS

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Petrofac awarded gas service contract in Algeria

Gas

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Oil Review Middle East Issue One 2013

WWITH SHORTER GAS supply in GCC,and new feedstock developmentselsewhere, e.g, shale gas in theUS, conventional gas in Iraq, the

global petrochemicals industry has recentlyexperienced significant disruptions. This isespecially evident in the supply and pricing of keychemicals– ethylene, propylene, butadiene, andbenzene – due to the changing mix of feedstockused in petrochemicals production. While thequantity of ethylene has surged, supplies ofpropylene, butadiene, and benzene have declined.In line with this, a study by managementconsulting firm Booz & Company found that ‘on-purpose’ or alternative production technologies forpropylene and benzene could correct these supplyimbalances, as well as reduce prices. The analysisalso highlights how these feedstock developmentsaffect the different players in the chemicals valuechain. These include Gulf Cooperation Council(GCC) producers, global producers and consumers.

The emergence of new feedstock sources The global petrochemicals industry relies on a fewbasic chemicals to create its end products. Crackersproduce these as a by-product of certain rawmaterials (feedstock), such as “light” natural gasand “heavy” liquid naphtha.

“In recent years, the emergence of potentialnew sources of light feedstock has significantlychanged the availability of the four chemicalbuilding blocks – as light feedstock sources arereplacing heavier ones,” said Andrew Horncastle, aPartner with Booz & Company. “This is due to thefact that light feedstocks are mostly used to makeethylene, whereas heavy feedstocks producepropylene, butadiene, and benzene. These changingsupplies – a result of developments in the MiddleEast, North America and China – have led tosupply-demand imbalances and pricing distortionsacross global petrochemicals markets.”

Gas developments in the Middle EastWhereas North America is awash with natural gas,the GCC finds itself in precisely the opposite position.Gas production – currently associated with oil – isincreasing modestly in line with oil extraction; and,most of the anticipated supply is already committedto existing and new projects. National oil companiesin the Middle East are responding to the shortage ofnatural gas by exploring non-associated gas,

unconventional gas, and shale gas, while variouspetrochemicals companies have shifted to crackingmore liquid feedstocks.

Outside the GCC, Iraq has an abundant gassupply in the form of associated gas – which is richin Natural Gas Liquids (NGLs) content. The countryhas established an oil production target of 13 mnbarrels per day by 2017 and, such growth is also setto increase gas production.

Middle East propylene margins are thin

Outside the GCC, Iraq has an abundant

gas supply in the form of associated gas –

which is rich in Natural Gas Liquids (NGLs)

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Booz & Company examines the need for GCC states to develop ‘on-purpose’ productiontechnologies in order to better tackle feedstock disruptions across the petrochemicalsindustry, write Andrew Horncastle and Asheesh Sastry*.

Rebalancing global petrochemicals

markets

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Shale gas developments in North AmericaThe US chemicals industry is booming thanks tothe wealth of shale gas resources that has createdabundant and cheap natural gas and ethanesupplies. This is reshaping the globalpetrochemicals playing field by giving US-basedplayers a significant cost advantage compared toEuropean and Asian players.

The abundance of cheap shale gas-derived NGLshas displaced naphtha at many existing steamcrackers. Although plans for about a dozen newcrackers have been announced, producers arehesitant to add new capacity due to concerns aboutthe future supply and price stability of feedstock.

Shale gas developments in ChinaIn the long term, China could have a significantimpact on global feedstock supply. The nation hasthe largest shale gas reserves in the world; and,although there is currently no shale gasproduction in China, the government’s five-yearplan calls for 6.5 bn cubic meters of domesticproduction by 2015.

Shifts in the supply of key chemicalsThe North American shale gas boom is changingthe petrochemicals landscape. “And, with theMiddle East stepping up exploration and Chinaabout to tap huge reserves, more supply andchanges are on the way,” explained Asheesh Sastry,a Principal with Booz & Company. “Simply put, theglobal petrochemicals industry is headed toward aglut of ethylene supply.”

Crackers that can tap into these light feedstocksources will have a notable competitive advantageas they will be able to produce more ethylene at asignificantly lower cost than many existing mixedfeed crackers. As new capacity comes on stream toproduce ethylene, margin will compress and priceswill decline further – putting even more pressureon marginal producers.

“The downward trend in prices could mean thatby 2025, 10 to 20 per cent of existing crackercapacity may come under threat and some mayeven be forced to close. This could seriously disruptthe production of other critical petrochemicalbuilding blocks,” added Horncastle.

These supply shortages and price distortions forpropylene, butadiene, and benzene are creatingopportunities for ‘on-purpose’ and alternativeproduction technologies that were once marginal oruneconomical.

GCC players must approach ‘on-purpose’cautiously

Over the last few decades, petrochemicalcompanies in GCC have built significant capabilitiesbased on the “cracker + 1” model of producing keypetrochemical building blocks – and thenconverting them into basic chemicals. Furthermore,current feedstocks are sufficient to meet thecapacity of the region’s producers.

“Going forward, however, looming gas supplyshortages could challenge growth. GCC producerscould therefore be tempted to adopt ‘on-purpose’technologies in the region and internationally,” saidSastry. “Increasing ‘on-purpose’ production, however,

will require that companies in the region develop oracquire more technology-centric capabilities.”

‘On-Purpose’ technology optionsThree ‘on-purpose’ technologies currently supplythe propylene market – propane dehydrogenation(PDH), methanol to propylene (MTP), and olefinmetathesis. While ‘on-purpose’ production ofpropylene via PDH in the Middle East seemscompetitive , it could become marginal if PDHcapacity in the US and CTP capacity in China wereto grow as planned, as both of these have bettereconomics than ME based PDH (at market prices ofpropane). Further, declining availability of propanein the region could constrain the growth of PDHtechnology. However, if ethylene and 2-butene areavailable at advantageous prices, the metathesistechnology for propylene production could also becompetitive. Nonetheless, if it is based on marketprices, metathesis will remain a marginaltechnology. Economics of MTP in the Middle Eastmight, at first, seem attractive. However, withpropylene margins at about US$600 per tonne, MTPdoes not adequately compensate for the potentialmethanol margins.

On the aromatics/benzene side, GCC producersshould consider the coal to BTX route – referring tomixtures of benzene, toluene, and xylenes, all ofwhich are aromatic hydrocarbons. This is especiallyadvantageous given the positive outlook forconstruction in the Middle East and in Asiancountries such as India and South Korea.

GCC players considering investments in ‘on-purpose’ technologies also need to take intoaccount higher capital costs, logistics costs, anddestination markets. Capital costs and logisticscosts in the region tend to be higher than in NorthAmerica, which increases the total cost ofproduction. However, investing into on-purpose

technologies outside the Middle East, wherefeedstock is available at advantageous prices, couldbe an attractive option.

To conclude, feedstock developments haveimplications that resonate across thepetrochemical industry. Today, producers havesignificant growth opportunities in regions such asthe US and China, where feedstock is available for‘on-purpose’ production. Producers globally havemostly invested in process technology, but now,they must reconsider product technology, theirresearch and development strategy, and even theways to play in this market. GCC companies willneed to recognise that ‘on-purpose’ production inthe region would be less attractive or marginalwithout the availability of advantageously pricedfeedstock. They also need analyse their valuechains and protect their margins against rawmaterial price fluctuations e.g. they could considerbackward integration or margin managementacross the entire value chain. Finally they shouldaugment their existing capabilities and seek newgeographies where feedstock is available. ■

*Asheesh Sastry is a Principal with Booz &Company and a member of the firm’s energy,chemicals and utilities practice. He has over 11years of strategy and energy industry experienceacross the Middle East and Europe. He specialisesin strategy and transformation issues in theUpstream and Downstream Oil & Gas andChemicals sectors.

Andrew Horncastle is a Partner with Booz &Company and a member of the firm’s energy,chemicals, and utilities practice. He has over 13years of consulting experience in chemicals. Hisfunctional expertise covers the fields of mergersand acquisitions, strategy, organisation andintegration, and cost reduction.

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Middle East on-purpose propylene production has challenging economics

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Oil Review Middle East Issue One 2013

SAUDI KAYAN, SADARA Chemical and Saudi Acrylic Acid Company (SAAC) haveestabished a new company that will build the first butanol plant in the MiddleEast and will be located in Jubail Industrial City.

The Saudi Butanol Company, which will produce butanol to support thegrowth of the paints and coatings industry in Saudi Arabia, will be locatedat Tasnee Petrochemicals Complex in Jubail Industrial City and operatedby Tasnee.

The new plant is scheduled to go on-stream in the first quarter of 2015. Itwill be designed to have a capacity of 330,000 metric tonnes per annum of n-

butanol and 11,000metric tonnes per annumof iso-butanol.

Under the agreement,the three partners willhave equal stake in theproduction quantities fordownstream use or forsales in the local andoverseas markets.

Foster Wheeler AG said its global engineering and construction group haswon a US$500mn project management and consultancy (PMC) servicescontract for a clean fuels project at the Mina Al-Ahmadi and Mina Abdullahrefineries in Kuwait.

Kuwait National Petroleum Company (KNPC), which awarded the contract,is implementing a multi-billion upgrade and expansion of the refineries toincrease their combined throughput by 264,000 barrels per stream day to800,000 barrels per stream day.

The Clean Fuels Project is expected to be completed during the secondquarter of 2018.

Fahed Salem Al Ajmi, KNPC’s chairman and managing director, said, “TheClean Fuels Project is a critical mega project that will shape the future ofKuwait’s refining capability."

The aim is to increase conversion of fuel oil to higher value products inorder to meet expected market demand and tighter specifications (onepercent) for the sulfur content of transportation fuels.

Foster Wheeler said its scope of work includes the provision of projectmanagement services during the tendering phase for the main EPC contracts, andmanagement of the contractors through to completion of performance testing.

KBR HAVE SIGNED a seven-year contract to provide refinery maintenanceservices for the Saudi Aramco Total Refining and Petrochemical Company(Satorp) at the new 400,000 bpd refinery in Jubail, Saudi Arabia. The value of the contract ranges between US$140mn and US$170mn,depending on services. Production is set to start in 2013. KBR, through a joint venture with Jubail-based AYTB, will deliver full-servicemaintenance services at Satorp. The contract includes site management andfield supervision of a craft workforce covering all mechanical, electrical andinstrumentation disciplines.KBR and AYTB will also provide detailed planning and schedulingservices, execution of preventive and predictive maintenanceprogrammes, management of subcontractor activities and procurement oftools and equipment. "This is a milestone project for KBR as it represents a major step forward forour Services Business Group, taking on its first long-term maintenance contractin Saudi Arabia," said Ivor Harrington, KBR Service group president.Under terms of the contract, the joint venture between KBR and AYTB willwork in partnership with Satorp to demonstrate a model for delivering services. Abdulmohsen Al-Ogaili, AYTB CEO argued, "This GMS contract could redefinehow plant maintenance will be performed in the future."

KBR and AYTB agree maintenance contractfor Satorp refinery

Kuwait Petroleum International (KPI), a subsidiary of KuwaitPetroleum Corp (KPC), and its joint venture partners has awarded aninternational consortium the engineering, procurement andconstruction (EPC) contract for the US$9bn refinery and petrochemicalcomplex in northern Vietnam.Nghi Son Petrochemical Refinery Complex, to be built 180km south ofthe Vietnamese capital Hanoi. The first phase of the state-of-the-art

refinery will have anoil processingcapacity of 200,000barrels per day (bpd)when operational in2017.The joint venture willpossibly double thevolume to 400,000bpd after the projectis expanded in thesecond phase.

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Jubail will be home to the region’s first butanol plant

Jubail to be home to the first butanolplant in the region

Foster Wheeler wins contracts for twoKNPC refineries

Kuwait awards EPC contract for refineryin Vietnam

The refinery complex will go on stream in 2017

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Updated 12 December

Silver SponsorsGold Sponsors

Supporting Organizations

Diamond SponsorPrime Sponsor

The 2nd Middle East Process Engineering Conference & Exhibition

The Premier Process Engineering Event for the Middle East

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29 Sept – 02 Oct 2013Bahrain International Exhibition and Convention Centre

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Oil Review Middle East Issue One 2013

IIT MAY NOW be the GCC region’s smallestproducer but it was in Bahrain, many yearsearlier, that the world’s richest oil producingregion first kicked into gear. And that has

meant a pioneering role for national oil champion,Bahrain Petroleum Company (Bapco), established in1929 by Standard Oil Company of California.

It was the first to discover oil in the Arabianpeninsula way back in 1932, just three years afterformation, at Jabal al-Dukhan.

Within two years of that initial discovery, thecompany was exporting Bahrain’s oil and, by 1936,had commenced refining operations.

That’s the sort of determination andaccomplishment that drillers of today still aspire to.

Since those early years, Bapco, now wholly-owned by the government, has helped shapemodern day Bahrain, not just through theproduction of oil wealth, but also through thedevelopment of the nation’s manpower.

Bahrain’s 2013-2014 budget forecasts outputfrom its own wells to reach 47,500 barrels per day(bpd) in 2013, rising slightly to 51,000 bpd in 2014.

The country’s large Bahrain field, which coversup to 80 per cent of the island, dominates domesticproduction figures.

But the government also relies heavily onoutput from Saudi Arabia's Abu Safa oil field foraround 70 per cent of its budget revenue.

This field is currently producing at a level justbelow 300,000 bpd, of which Bahrain receivesabout half.

The government’s forward budget counts on itsoutput from this field staying at 150,000 bpd thisyear and in 2014.

Much of this additional Saudi production is sentto Bahrain’s export refinery, one of the largest andoldest in the region.

And, in true pioneering spirit, Bapco continuesto push the boundaries, adding greater value to itsoil production with the completion of the refinery’sUS$725 million low sulphur diesel plant.

It means the company now exports ultra lowsulphur diesel to countries with even the moststringent environmental standards.

Next up is a massive expansion project, worthup to US$10bn, that could raise capacity at the siteby a further 100,000 bpd, to a total 360,000 bpd.

Financial arrangements to bankroll the scheme,one of Bahrain’s single biggest investment projects,are now being put in place, with Bapco expected toissue the next wave of tenders in the second half ofthis year.

It has already appointed some contractors forthe vast scheme, including GE, which is to supply asystem for dealing with waste water from theexpanded refinery. The full expansion project isexpected to be completed in 2017.

What Bahrain may never escape, however, isthe reserve constraints that, somewhat unfairly, donot seem to apply in the same way to many other

Gulf states. Compare Bahrain’s 124 million barrelsof reserves, for instance, to Saudi Arabia’s 260bnbarrels.

However, Bapco is not operating alone, workingin conjunction with other state-owned entitiesunder the National Oil and Gas Authority (Noga)umbrella.

The more recently-formed Oil and Gas HoldingCompany (nogaholding) - Noga’s business andinvestment arm - oversees the government’sinvestments in Bapco, plus a host of other statecompanies working across the energy spectrum.

These include the Bahrain National GasCompany (Banagas), the Bahrain National GasExpansion Company (BNGEC), the Bahrain AviationFuelling Company (Bafco), the Bahrain Lube BaseOil Company, and the Gulf Petrochemical IndustryCompany (GPIC).

On the upstream side, nogaholdings’ flagshipventure is Tatweer Petroleum, a relatively newpartnership with foreign investors, OccidentalPetroleum (Oxy) of the US, and MubadalaDevelopment Company of the UAE.

It is charged with leading the ongoing re-development and expansion of the strategicBahrain field - also known as the Awali field - overthe next 20 years.

Working closely with Bapco, Oxy says the planis to continue growing gross non-associated gasproduction capacity at the field to over 2.3bn cubicfeet per day and gross oil production to over 75,000bpd.

Innovative techniques such as water floodingand steam flooding are to be used to boostproduction from the legacy field’s ageing reservoirs.

In a further bid to liftproduction and stimulate

reserves, the government isalso pushing upstream

exploration

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Surrounded by the likes of Saudi Arabia, it’s easy to forget theimportance of Bahrain in the region’s oil history.

Bapco at the forefront of

developments

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In 2012, Tatweer Petroleum inaugurated itsthird phase of gas compression work, near Hafeera.

The Compression Phase 3 project handlesapproximately 100 mmscfd of additional associatedgas, which will contribute to lifting oil production.

The compressors re-inject the gas for reservoirpressure maintenance, effectively storing the gasfor future production.

This project now has 33 compressors in threestations, bringing Tatweer’s total installedcompression capacity to over 230 mmscfd.

Other gas initiatives, led by Banagas, will alsoratchet up the nation’s production.

Last year, Banagas brought in JGC GulfInternational for the debottlenecking of bothprocessing units at Bahrain’s central gas plant.

This US$15 million project is designed tofacilitate an increased feed gas rate up to 18mmscfd from the Bahrain refinery and maximiseliquids recovery by 4,500 bpd. Commissioning andstart-up is scheduled for May 2014.

BNGEC, operated by Banagas, is also engaged inhelping to meet the country’s growing demand forassociated gas, both to enhance oil production fromthe Bahrain field and to make more energyavailable for local users.

BNGEC was incorporated in 2008 when the

Banagas expansion project processing train wasconverted into an independent company.

In a further bid to lift production and stimulatereserves, the government is also pushing upstreamexploration with the offshore area in Bahraindivided into four blocks.

Noga has awarded Blocks 1, 3 and 4 toestablished partner Oxy, with Block 2 going toThailand’s PTTEP.

Oxy has now initiated work with Bapco andNoga to explore its various offshore blocks.

In February 2011, a further agreement wassigned between Noga and the California-basedcompany to work on the exploration and productionof deep gas from the Bahrain field, in a bid to driveup reserves and output.

In a January presentation at a Goldman Sachsinvestor conference, Oxy executives lumped Bahrainin with Iraq as two notable areas where it seesstrong upside potential.

The company’s own production figures for 2012

already indicate a gentle uptick from its Bahrainioperations.

For the nine months of 2012, oil production netto the company edged up to 5,000 bpd from 4,000bpd in the same period a year earlier.

Net daily natural gas output also jumped duringthe same timeframe to 229 mmcf, up from 171mmcf a year before.

But Bapco and Bahrain’s other state-owned oil andgas companies are also working against the clock.

With popular protests still playing out on thestreets of Manama, the government isunderstandably keen to deliver more services to itspeople as soon as possible.

And that hinges critically on developments inthe all-important energy sector.

While Saudi Arabia, which supports Bahrain’sSunni rulers politically, is unlikely to cut the amountof oil from the Abu Safa field, especially if Manama'sbudget runs into trouble, it is not an impossibility.

This makes strategic projects such as therevitalisation of the famous Bahrain field and theexpansion of the national refinery all the moresignificant.

Once again, Bapco - and all other keygovernment stakeholders - will be at the forefrontof these critical developments. ■

Next up is a massiveexpansion project, worth up

to US$10 billion

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STATE-OWNED BAHRAIN PETROLEUM Co., or Bapco, is seekingfinancing between US$4.8 billion and US$5.5 billion to partly funda large-scale expansion.Bapco is expected to receive the financing’sfirst tranche, amounting to US$1 billion, bymid-2014, a company spokesman said. Theplan to develop the country’s only oilrefinery is made up of five phases and thethird phase to complete by mid-2013 and inthis phase it will select the technology forthe project and start awarding the deals. Meanwhile, Bapco refinery's crude run lastyear exceeded its annual business plan by1.83 million barrels a year, havingachieved a 262,400 barrels per dayproduction record.This was reached in spite of the planned

shutdown of two crude units in October for major maintenanceand inspection and slowdown of various crude units for essential

repairs during the year. This demonstrates the reliability of therefinery process units and the high level ofdedication, professionalism andperformance of the Bapco workforce, whichensured that the refinery processed safelythe maximum possible crude rate."We take pride in this achievement whichreflects the dedication of our employeesand contractors," said a Bapco spokesman."We fully realise the importance of theBapco refinery to the national economy,and will continue to strive for excellence inmeeting our targets and maximisingrevenues for Bahrain," he added.www.bapco.net

Bapco seeks funding for expansion

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Conference: 10 -13 March 2013Exhibition: 11-13 March 2013

Bahrain International Exhibition and Convention Centre

www.meos2013.com

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18th Middle East Oil & Gas Show and Conference

Organisers

[email protected]

Conference Organisers

[email protected]

Conference

programme and

registration

available now at

meos2013.com

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UUNDER THE PATRONAGE of Bahrain’sPrime Minister the 2013 edition ofSPE’s 18th Middle East Oil & GasConference runs from 10-13th March.

Conference chairman will be Abdulaziz AlAbdulkarim of Saudi Aramco.

The exhibition within the same complex, theBahrain International Exhibition and ConventionCentre, opens on the 11th.

Once again the international Society ofPetroleum Engineers, working together with stafffrom their Dubai office, have put together abalanced and comprehensive selection of technicalpapers and opinions, offered in various updatedformats.

SPE is the leading not-for-profit professionalassociation whose 104,000-plus members all overthe world are engaged in most aspects of energyresources development and production.

Unrivalled experienceThe biannual MEOS Conference, of which this is thelatest edition, has evolved into what is probably thelargest and best attended technical event of itskind now held anywhere regularly in the Gulf.

"By providing high quality presentationsfocused on Middle East issues,” says arepresentative from its busy local office in the UAE,“the quality of delegates is exceptional andunique.”

SPE has unrivalled experience in organisingpetroleum conferences such as this around theworld. Here at MEOS their global skills are onceagain being matched with unequivocal supportfrom the immediate region’s key local and nationaloil businesses.

“This support, in tandem with participation fromsuppliers of products and services to the region[brought together by AEM2] has maintained MEOS’position as the best petroleum conference in theregion.”

Last time there were more than 1,840 of thesedelegates, comprised mainly of geologists andgeophysicists, senior production companyrepresentatives, petroleum and reservoir engineers,drill rig managers and engineers, pipeline andprocessing specialists, and representatives from allthe civil, electrical and mechanical engineeringprofessions.

This year’s technical programme – always theheart of the four-day event - consists of more than200 simultaneous high-quality presentations in sixdifferent adjacent conference rooms. We could notdetect any recognisable “tracks” on the detailed

programme published, so close inspection of thefull schedule and preparedness to move smartlybetween locations is recommended to obtain fullbenefit from this prestigious event. Each individualtechnical topic – more than 30 in all although

Transforming the region’s

energy future

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Another major technical conference is being staged in Bahrain next month, organised as usual by the Society of PetroleumEngineers (SPE) and its Dubai-based staff. A comprehensive exhibition of complementary products and services - organised againby Arabian Exhibition Management - is being held alongside.

18th Middle East Oil & Gas Show and Conference

Society of Petroleum Engineers

2013

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some are two-session units – is covered by fourseparate speakers with a matching number ofcomplementary posters and alternates.

Follow the link on the website under ‘TechnicalProgramme’ for full timetabled details, with thespeakers booked and the organisation theyrepresent:6 The interspersed panel, plenary and other all-to-

gether sessions are described as:6 Transforming the energy future (Sunday pm, an

executive plenary)6 The gas challenge (Monday am)6 Talent development and knowledge sharing

(Monday am)6 Technologies required to unlock conventional

resources (Tuesday am)6 ‘Greener petroleum’ – Collaboration for sustain-

ability (Tuesday am)6 Developing local content (Wednesday am)

In addition a special combined industrybreakfast session on ‘Financing the change’ isbeing staged on Tuesday 12th between 08.00-10.00hrs. Addressed by H.E. Abdullatif A Al-Othman,Governor/Chairman of the Saudi Arabian GeneralInvestment Authority, this extended session willaddress such issues as: What are the main changesexpected over the coming decade? Who willdevelop the required strategies, and drive theirexecution? How best can these changes bemanaged and financed? The question of issuesarising from the North American shale-gasrevolution seem very likely to come up.

VisitorsThe full text for each paper presented at MEOS2013, together with technical diagrams and otheressential illustrations, will be provided to eachConference attendee. Non-members will be able to

obtain additional copies for US$300 at the Society’sprominent stand within the exhibition hall.

The associated trade show has been assembledby AEM, a very experienced member of the AllworldExhibitions group which also organises GEO andMiddle East Petrotech (Bahrain), and the Kuwait Oil& Gas Show.

Last time there were 300 exhibitingcompanies whose products and services wereseen by more than 5,300 individual visitors,nearly nine out of ten of which came fromsomewhere in the Middle East (70 per cent fromBahrain and Saudi Arabia alone). ■

1 +971 4 457 5800 ([email protected]) 2 +973 17550033 ([email protected])For all information including the very detailedconference programme visitwww.meos2013.com

Oil Review Middle East Issue One 201352

18th Middle East Oil & Gas Show and Conference

Society of Petroleum Engineers

2013

THE SOCIETY’S POPULAR series of training coursesfor industry professionals anywhere is beingcontinued at this year’s MEOS. All three eventslisted here are being offered on the 10th March,each one running from 08.00-16.30 hrs withsuitable break periods. Two have a Canadianflavour in tune with the increased attention that isnow being given to oil sands development there.

The first two are traditional SPE technical fare.Dr Safdar Khan of the Canadian office ofSchlumberger will be presenting an intensive onthe mechanical properties of rocks.“Geomechanics for effective shale gasexploitation” is the title he offers this year.

And nearby in the Bahrain Convention CentreProf Hemanta K Sarma of Abu Dhabi’s PetroleumInstitute is running a combined course on EOR andIOR techniques. “Enhanced and improved oil

recovery methods” is the topic he has chosen, anevergreen if ever there was one in today’sstraitened circumstances.

And now for something completely different.With an eye to the developing manpower crisis,not just here but throughout the whole world ofpetroleum, the SPE has gone for Dr Abdullah Al-Mulhim of the Canadian Institute of Stress’s VitalWork Centre. “How to charge your body cellphone” is the intriguing title of this consultantpsychiatrist’s 2013 course. A new direction indeedfor an industry that features more humanbreakdowns than most …

And finally a separate series of TrainingWorkshops on “Talent and retention” and“Issues facing science teachers” is beingorganised by the SPE; timing details are on theConference programme.

High praise for MEOS 2011ADNOC:As one of the world’s most significant oiland gas events, with the industry’s keyplayers and decision-makers, this four-dayevent delivered significant businessopportunities and networking at thehighest level

BAPCO:A fantastic event to meet keyprofessionals and enhance businessdevelopment

KPC:MEOS 2011 provided an excellentopportunity for business engagement as itprovided a meeting point with industryplayers directly involved with oil and gasactivities

Saudi Aramco:The best oil industry conference I haveattended in 2011 …… The best show for anyone who wants todo business with upstream Saudi Aramco

Schlumberger:MEOS has been a great event forSchlumberger … Every year we haveparticipated in the show we havebenefited through new or expandedcontracts in the oil and gas industry

Simtronics Plant Leadership:An outstanding opportunity to meet seniorofficials and learn about regional trends

Training too

HALLIBURTON’S NEWEST STIMULATION servicevessel is in the Arabian Gulf working with SaudiAramco for the Manifa Field stimulationcampaign. Built for dedicated use by SaudiAramco, the Stim Star Arabian Gulf vessel willserve as a high performance platform fordelivering technology and stimulation treatmentsin the most efficient manner.

The vessel employs the latest safety andenvironmental systems with advanced safetyfeatures, and is designed to meet or exceedrequirements of SOLAS, IMO, IEC, and MARPOLregulations.

Although initially developed for primarilyacidizing treatments on both producing andinjection wells in the Manifa Field, the vessel isadaptable to handle all phases of productionstimulation, including fracturing, sand controland conformance solutions for the regionaloffshore market.

Unique technologies featured on the vessel areits acid-on-the-fly (AOF) capability and the ability toreconfigure using Halliburton’s Vessel ModularSolution (VMS) system.

Halliburton’s AOF system provides real-timecontrol of the acid blend. The VMS system providesa level of flexibility and options not available withstandard vessels. It is also designed to enable easilyadding future expansions and upgrades, increasingthe capabilities of the vessel when needed.

The Stim Star Arabian Gulf vessel is 234 feetlong (71.32 meters), 56 feet wide (17.07 meters),and 18 feet deep (5.49 meters) and can provide upto 14,000 hydraulic horsepower for stimulationtreatments. It has the newest control-roomtechnology, with safety as a primary focus. Thevessel is equipped with features such as a high-pressure pump over pressure kick-out system, and adedicated fire-suppression system to help ensurethat operations are safe at all times.

Halliburton vessel operating in Manifa Field

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SHIPPING IS AN efficient wayto transport goods. But withglobal demand for liquefiednatural gas rising fast and theworld’s tanker fleet growing,Shell now has a sleek newmodel on the drawing boarddesigned to burn less fuel andproduce fewer emissions.Ocean-going tanker buildersdon’t stage glittering publicshows like car makers, but ifthey did Shell’s design for anew liquefied natural gas(LNG) tanker might drawadmiring crowds. The shipdesign – currently at theconcept stage – owes itshead-turning lines to the quest for greater fuelefficiency, which leads to lower emissions.It’s an evolution in the design of LNG carriers,of which Shell is one of the world’s largestoperators. The design philosophy adoptedenables the ship to carry as much LNG as the

largest vessels available today withpotentially 20 per cent greater efficiency.Current ships are efficient when fully loadedin relatively calm seas. But seas often aren’tcalm and ships spend half their lives unloadedon a return run, with tanks full of sea water

ballast for stability. Moving allthat water burns a lot of fuel.Shell designers decided tostart afresh to achieve thegreatest efficiency for thewhole round trip.Computer simulations helpeddesigners sculpt hulls to bettercut through waves, relocatetanks and crew quarters to aidstreamlining, and designpropulsion systems to performin various conditions. Engineers are also exploringother possible ways to boostefficiency, including waste-heat recovery, novellightweight materials, fuel

cells and renewable technologies.Shell is not planning to build this conceptbut the ideas, technologies and designmethods used in creating it are alreadyshaping the company’s approach in considering future charters.

53

Shell’s new design for an LNG carrier is at the concept stage

Shell - sailing into the future

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2013

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Oil Review Middle East Issue One 2013

SILIXA LTD. HAS developed the world’s most advanced distributedacoustic sensor, iDASTM (intelligent Distributed Acoustic Sensor), thatoffers unsurpassed abilities in measuring true acoustics with betterresolution, range, and sensitivity than any other sensor.

The iDAS measures the full acoustic field along unmodified opticalfiber up to tens of kilometres in length with a spatial resolution down toone meter, capturing the full amplitude and phase of the incident waveon the sensing optical fiber up to frequencies >100 kHz with a widedynamic range (›120dB).

The sensor technology can be combined with the company’s industryleading distributed temperature sensor, the Ultima DTS.

Working with Chevron, Statoil, Saudi Aramco, and other companies,Silixa has demonstrated the benefits of its high performance monitoringsystems both in flow and seismic imaging. A wide range of installationmethods for in-well surveillance applications have also been developed.Having successfully completed a multiple logging operation in hightemperature deviated gas wells using its bespoke micro-coil tubing fibreoptic sensor, the company is currently working on enhanced cabledesign for permanent installations.

Silixa’s applications include seismic appraisal at the borehole,monitoring fracturing treatments, fracture analysis, flow profiling, wellintegrity evaluation, and gas lift and electrical-submersible-pumpoptimization.

Silixa has developed several advanced embedded data-handling andvisualization tools to process the high volume of data generated byiDAS. Acoustic-array processing allows the speed of sound in thematerial surrounding the fiber to be determined accurately. In

multiphase-flow measurements the speed of sound can be used toprofile the fluid composition. This can be used to profile the fluidcomposition, or in enhanced oil recovery, to monitor the flow ofinjection fluids (such as steam) entering the production wells.

Also, the fluid velocity can be mapped by measuring the differencein speeds of sound caused by the Doppler shift introduced in the movingfluid.

Established in 2007, Silixa has been rapidly growing and expandingits business in the energy, security and other industrial sectors. Silixaprovides sensing solutions based on its pioneering distributed sensingtechnology. Silixa works closely with customers and can offer fullintegrated solutions bringing a continuum of benefits at different stagesof the project.

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Intelligent acoustic sensor

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2013

www.silixa.com

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THE NEW 2 1/8” CT WELL TRACTOR®

ENHANCINGPRODUCTIVITY

ENHANCED PULL FORCE

Welltec® re-introduces the smallest coiled tubing (CT)

tractor in the market; the 2 1/8” Coiled Tubing Well

Tractor®, now available in a tandem version. This new

tool offers significantly improved pull force on CT to

increase the accessible depth.

This small but powerful tool has been developed on

demand by a client in the Middle East and successfully

applied to increase their abilities to get deeper with CT

in wells with restrictions.

HIGHER PRODUCTIVITY INDEX

By being able to reach total depth before stimulating,

the new 2 1/8” Coiled Tubing Well Tractor® enables

operators around the world to realize the full produc-

tion potential of their wells.

Please visit us during the MEOS taking place 10-13

March in Bahrain to hear more about our capabilities.

You will find Welltec® at stand #2331 in Hall 2 or online

at www.welltec.com.

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S10 ORME 1 2013 MEOS_Layout 1 25/02/2013 18:21 Page 55

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56

BAHRAIN PETROLEUM COMPANY (Bapco) hasalways put a strong emphasis on safety andsecurity at its facilities. Oil Review MiddleEast recently spoke to Ebrahim Talib, DeputyChief Executive, Refining and Marketingabout the company’s achievements andaspirations.

Would you say Bapco is a regional leader in plantsafety and security?

Yes, indeed we are. Not only regionally butbeyond. This is clearly evident by the numberof internationally recognized Health & Safetyawards we have won over the years. Anexample is the US National Safety CouncilRobert W. Campbell Award which we won in2007. Bapco was the first oil company world-wide to win this award and first outsideNorth America. This did not happen bychance but was the result of decades of workin establishing a strong safety culture andprocess at Bapco. In addition, we are therecipients of the British Safety Council 5staraward, and several others. Our philosophy inmanaging health & safety has always beennot only to comply with the Kingdom’slegislations but to go beyond and compareourself to the best in the industry.

In recent years, Bapco has outlined someambitious safety targets, such as 12mn hourswithout incident. Can you pick some highlightsfrom recent years?

Personal safety is clearly a major corporateobjective. We must ensure that all our staffand contractors return home safely every day.We strive for an incident and injury freeworkplace. In 2012 we were able to achieveeight million manhours worked without alost time injury. This is a tremendousachievement and in essence meant that weworked for over a year without a significantinjury. Our Refining Division, which is thelargest division and is involved in high riskcategory work, has now worked over twoyears without a lost time injury. This doesnot come by chance, but rather is the resultof instilling a strong safety belief and culturein our organization. One recent initiativeBapco has adopted is Operational ExcellenceManagement System (OEMS). This system isadopted from Chevron and is acomprehensive, proven means for systematicmanagement of process safety, personalsafety & health, the environment, reliabilityand efficiency. Another initiative isBehavioural Based Safety (BBS) whichaddresses human behavior in carrying out

day-to-day activities. BBS helps us identifycritical behaviours of both employees andcontractors that may cause injuries andsubsequently put adequate control measuresin place to eliminate and in many casescontrol such behaviours. Health & SafetyStand-down is also an initiative introducedrecently by Bapco executive management.The purpose of this procedure is to reflect ona serious incident or mishap in theorganization or outside to prevent it or learnfrom it, or to improve safety readiness beforemajor events. This process reflects our verystrong safety culture as we in essence stopALL work in the organization for 20 to 30minutes to talk about safety related issues.The whole organization is focused on onekey issue. The objectives are to increaseoperational readiness, evaluate safety andhealth risks, correct deficiencies andemphasize awareness of good environmentalhealth and safety (EHS) practices for allBapco and Contractor employees.

As Bapco continues to expand and breakproduction and refining records, so the risk of anincident is heightened. How can you continue tomaintain a good safety record under thesecircumstances?

We do not believe that the risk of an incidentincreases. Contrary, we believe that reliableoperation results in a safer workplace asthere are less number of abnormal conditionsor transient operations. Hence, we breakrecords through improving reliability, andhence our safety performance is expected to

improve as well. The key here is not the highrisks we deal with on a daily basis, it is howeffective we are in identifying and ensuringthat control measures are in place for suchrisks. There are many comprehensive toolsavailable to help eliminate or control risks(both process and human related risks). Thesetools are validated at a regular interval toensure they continue working effectively andefficiently. In line with pacesetter refineriesand organisations, Bapco aspires to provideworld class performance in project execution.We have therefore adapted a projectdevelopment and execution process which isbased on identifying and assessingopportunities, generating and selectingalternatives, developing the preferredalternatives, execution and operation andevaluation. This process provides a gooddefinition of decision makers, deliverables,work team, focus items, resources, matrixand roles and responsibilities. The issue ofreliability and efficiency is embedded at theearly stages of design phase to ensure thatthe final outcome is a reliably and efficientlyrun facility. The emphasis on reliability alsorelates very strongly to the safety of thefacility in its compliance with theenvironment and the provision of a healthyenvironment to the employees.

Do you undertake all of your safetytraining/education in house too?

With 80 years of experience in the oil & gasindustry, Bapco’s name has always beensynonymous with safety whether in the

Bapco places a strong emphasis on safety and security at its sites

Oil Review Middle East Issue One 2013

Safety first at Bapco

18th Middle East Oil & Gas Show and Conference

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Oil Well Cement (OWC) produced by Oman Cement Company (S.A.O.G) under accurate temperatures is an obvious choice for oil well cementing worldwide and now it is ready to face the challenges of highly specialized arctic and horizontal cementing:

• Conforms to the American Petroleum Institute (API) specification – 10A Class-G- (HSR), Class-B- (HSR) and Class-A- (O) grades.

• Tested by worldwide cementing companies

• Easy to disperse resulting in considerable cost savings

• Used by major oilfield companies such as: Petroleum Development of Oman (PDO), Schlumberger, Halliburton & Occidental

• Exported to GC Countries, Iraq, Yemen, Libya, Sudan, Tanzania, Turkmenistan, Pakistan, India and Syria.

Oman Cement manufacturing facility operates on world class quality management system ISO 9001 and environmental management system ISO 14001. Quality control is online and laboratory automation systems consist of online x-ray spectrometers and robotic samplers, linked to process controllers and a raw mill proportioning system.

OCC has an enduring commitment to customer satisfaction, continual improvement and a stronger foundation for tomorrow.

Winner of His Majesty’s Cup for the Best Five Factories in the Sultanate of Oman for the 10th time.

Oman Cement Company (S.A.O.G) Corporate Office:PO Box 560, Ruwi, PC 112, Sultanate of Oman. Tel: +968 24437070, Fax: +968 24437799Email: [email protected]: www.omancement.com

ISO 9001 : 2008 CERTIFIED CO CER NO: IND10.7100

ISO 14001 : 2004 CERTIFIED CO CER NO: IND10.7570

American Petrolium Ins�tuteCer�fied Company

Linces No. 10A-0059

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58 Oil Review Middle East Issue One 2013

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Kingdom of Bahrain, regionally or globally.As such we have the knowledge and theresources to develop and deliver the majorityof our training whether compliance orspecific related. We also utilise someexternal agencies in augmenting thedevelopment of specific competencies suchas crisis and emergency responsibilities, oilspill etc. Bapco also plays an important rolein providing fire and safety training forthousands of contractor employees and somegovernment agencies as part of its corporatesocial responsibility.

How do you benchmark yourselves within theindustry and what are your plans to achieve andsustain world class performance in safety andsecurity?

Bapco has established various approaches toenable the Company to be comparable withother similar and non-similar activitycompanies. The first evaluation of health andsafety performance was established with theintroduction of OHSAS 18001 (the Britishstandard of Occupational Health and SafetyAssessment Series) in addition to that Bapcofollows the ANZI 16.4 (American NationalStandards Institute) standard in classifyingits Lost Time Injuries (LTI’s) and Non-LostTime Injuries (NLTI’s) and first aid injuries.The annual information is usually shared withother companies in the region and an annualreport is produced ranking Bapco againstothers performance. Not only concentrationon lagging indicators, Bapco has focused on

the application of health and safety leadingindicators within the company that areestablished in line with API RP 754(American Petroleum Institute) standard thatsets the requirements to measure ProcessSafety Management (PSM) performance.These are used to benchmark Bapco healthand safety performance internationallythrough the joint venture with Chevron.Furthermore, Bapco’s implementation ofOperational Excellence (OE) has generatedthe introduction of a dashboard & KeyPerformance Indicators (KPI) system withinthe company, that is very transparent andprovide a very comprehensive illustration ofwhere the company health and safetyperformance stands. This system isestablished to provide better focus ofproblematic areas and resolve these issues.It also serves as a window that Bapco usesto benchmark its performance with othercompanies as all the detailed information ofhealth and safety performances are availablein one resource. We in Bapco believe that we have achieved aworld class safety performance however, it’sa challenging task to maintain it. One toolwe utilize to help us maintain suchperformance is always seeking continualimprovement through internal and externalaudits, researches and engaging indiscussions with our peers. Our vision is Striving for Excellence, and weintend to achieve this in all aspects of ourbusiness.

Has the security of Bapco’s oil and gas facilitiesevolved over recent years?

We have completed our new high securityperimeter fencing at our operational areasand we are looking forward to bettering ouroverall security with the completion of thesecurity enhancement project. Security ingeneral for all oil and gas facilities hasbecome more sophisticated due to theregional security climate, and we at Bapcobelieve that we have adapted to this climateand will surpass this with the completion ofour security enhancement project.

Can you elaborate on current and future plans toenhance security arrangements of the oil and gasfacilities at Bapco?

Bapco is currently working on its SecurityEnhancement Project, which will provide thenecessary coverage of all the company’sfacilities. This project will address thesecurity requirements at the refinery, SitraTank Farm, Marketing Terminal, Wharf, andother critical infrastructure. Physicalsecurity, training, electronic surveillance,command & control, and close co-ordinationwith counterparts and local authorities willbe a part of this endeavour. Additionally,more effort is being placed at our wharf inorder to further secure the facility, includingan increased emphasis on waterside security,standard operating procedures, entry controlpoint screening, and co-operation with othercompanies and industries sharing the portfacility.

Bapco’s crude run milestoneBAPCO'S REFINERY ACHIEVED a record monthlycrude run in January.

The refinery achieved the highest averagemonthly record of 271,800 barrels per day (bpd) ofcrude run, surpassing its previous highest record of271,300 bpd in November 2011.

This is a major achievement considering therefinery's average capacity of 262,000 bpd.

"This major achievement is a culmination of thehigh performance in operation and the highavailability of process units, resulting from regularreliability checks and ongoing maintenanceprogrammes leading to highest possible plantavailabilities," said a Bapco spokesman.

"This new record is a tremendous tribute to thededication of our entire workforce," he added.

"Through a focus on safety, the environment,clear communication, visible leadership and supplychain management, we continue to deliver superiorresults.

"Our focus on the strategic plan has enabled usto concentrate on the things that matter, andallows us to demonstrate that we are a truepacesetter in the industry," he added.

REDLINE COMMUNICATIONS WILL be at MEOSthis year. You can find the company at boothno.1130.

Mr. Ali Al-Lawati, Senior Business DevelopmentManager of Redline Communications, will bespeaking in the conference on Wednesday, March13 at 9:45 on the topic Terrestrial WirelessBroadband Enables Smart Drilling.

Read a blog post about Redline presenting thenetworking challenges of the digital oilfield at arecent trade show in Basra, Iraq.(www.rdlcom.com/en/blog/2013/01/discussing-network-challenges-for-digital-oilfields-in-basra).

If you would like to book an appointment to meetat MEOS, please contact [email protected].

Redline to discuss smart drilling

Lithicon to present joint paper with ADCOLITHICON, FORMED BY the merger between Numerical Rocks and Digitalcore, will be present asexhibitors at MEOS. Visitors can find the company at booth no. 2001 in Exhibition Hall 2.

Lithicon will also be presenting a joint paper on Digital Rock Analysis of Carbonates with ADCO. Thepaper is titled (Validation of Digital Rock Physics Based Water-Oil Capillary Pressure and SaturationExponents in Super Giant Carbonate Reservoirs) and will be presented by Zubair Kalam of ADCO onWednesday 13th of March at 8.30am in Session 33.

The integration of the two companies, which was originally announced in March 2012, bringstogether Digitalcore’s leading core imaging and processing expertise with Numerical Rocks’ advancedmulti-phase flow modelling capabilities, positioning the new company at the forefront of the digital rockanalysis revolution. Digital rock analysis is rapidly supplementing conventional laboratory methods.Computer models of the rock structure are built from a combination of high-resolution 2D and 3Dimages and used to determine both static and dynamic properties: digital-RCA and digital-SCAL.

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Oil Review Middle East Issue One 2013

The 18th Middle East Oil & Gas Show and Conference (MEOS) will takeplace from 10–13 March 2013 at the Bahrain International Exhibitionand Convention Centre under the patronage of His Royal Highness thePrime Minister of Bahrain Prince Khalifa bin Salman Al Khalifa.Organised by the Society of Petroleum Engineers (SPE) and ArabianExhibition Management (AEM), MEOS continues to be one of the largestand best attended technical events of its kind in the region. Oil ReviewMiddle East spoke with Abdulaziz Al Abdulkarim, MEOS ExecutiveCommittee Chairman, about the reasons behind the continued successof the event.

This year’s event will be the 18th in the series. Such longevity for ashow is almost unheard of in the region. Why has MEOS been sosuccessful?

MEOS is by far the number one oil industry conference and exhibition inthe region. It has a very good brand image and identity. Being one of thefirst conferences established by the SPE in the region, it has grown asthe oil industry has grown in the region. Its spectacular success can beattributed to several factors including great support from the MiddleEast oil industry, its technical edge, its focused conference programme,motivated and passionate people on the steering committees, seniorindustry panellists and high ranking keynote speakers, and the quality ofdelegates from all over the world. Another important factor is theexhibition. For example this year over 300 exhibitors from 30 countriesincluding NOCs in the region will be present including Saudi Aramco,ADNOC, Bapco, Kuwait Petroleum Corporation, Petroleum DevelopmentOman, Qatar Petroleum, and other industry stalwarts like Baker Hughes,Chevron, ExxonMobil, Halliburton, Oxy, Schlumberger, Shell andWeatherford, in addition to smaller specialist suppliers, distributors andnumerous new entries to the Middle East market.Moreover, the quality of papers presented at the MEOS conference focusalways on current challenges and issues facing the industry, and itpresents solutions through the technical papers presented during theevent. I think this is one of the main reasons why MEOS has been sosuccessful.

The MEOS conference has an enviable reputation as a technical eventof quality, are there any specific topics we should look out for thisyear at MEOS 2013?

MEOS makes a concerted effort to showcase the latest in research andtechnology. The current focus of the industry is on unconventionalresources. There will be a lot of buzz on this topic during MEOS. Theevent will highlight the latest technology used to develop theseresources, and how to better manage the resources, as well as the latestfindings related to the enhanced oil recovery (EOR), reservoirmanagement and drilling techniques. Other topics and areas that willbe highlighted include the gas challenge, greener petroleum, talentdevelopment and knowledge sharing, and developing local content,besides the suite of conventional topics.This year the theme for MEOS 2013 is “Transforming the Energy Future”,and it will be the foundation for the multidisciplinary technicalprogramme which includes over 140 presentations during 36 technicalsessions, as well as over 50 poster presentations.

It’s rare for an oil and gas event in the GCC to attract the support ofall six NOCs. How has MEOS managed to unify the NOCs when manyother events have failed to do so?

MEOS showcases the latest technology. The application of thesetechnologies makes a real impact on the NOCs bottom line...profitability.MEOS also has the critical mass and this attracts everyone in the region.If there is one conference or exhibition that people would want to go toin the region, it is MEOS. The oil and gas show is also an event whereeveryone wants to be seen and heard. Service companies also make a

great effort to showcase their products and technologies. Everyonewants to go this bazaar of oil and gas technology! The support from theNOCs, in tandem with participation from suppliers of products andservices to the region, has maintained MEOS’ position as the bestpetroleum event in the region.

Can MEOS continue to be successful in its present form? How canfurther value additions be made to the event?

Without doubt, and like everything else in life, MEOS has to beinnovative and inventive. It has to adapt to change...rather embracechange. Some of the innovations we are looking at include livebroadcasting of sessions, virtual panellists, TED-type lectures, interactivetechnologies and complete immersion. Advanced technical courses andworkshops in conjunction with the oil show is another avenue we areexploring.In addition, the MEOS conference is organised by SPE, which is a non-profit organisation aimed to develop knowledge among oil and gasprofessionals, and also spread best practice among the industry. Thereare almost 13,000 SPE members from the Middle East out of 100,000worldwide. These members are employed by major regional NOCs andIOCs and they know the quality of the events organised by SPE. Also,the event offers an excellent opportunity for networking with industrypeers from all over the world.Finally, we always have been very successful in having MEOS in Bahrain,and the last MEOS (in 2011) attracted more than 7,000 participants forboth the conference and the exhibition and just recently SPE hasorganised the Artificial Lift Conference which turned out to be verysuccessful event. We are looking forward to even greater success atMEOS 2013.

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Abdulaziz Al Abdulkarim, MEOS ExecutiveCommittee Chairman, Saudi Aramco

A show of strength - why MEOS has earned an enviable reputation for quality

18th Middle East Oil & Gas Show and Conference

Society of Petroleum Engineers

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CGG ANNOUNCED RECENTLY that the mainagreements needed to close the acquisition ofFugro’s Geoscience Division had been signed. Theeffective date of the closing was January 31st,2013, with the exception of the airborne activityand certain minor assets which will becontributed later, once all operating licenses andadministrative authorizations have beenreceived.The Group has now simplified its brand namefrom CGGVeritas to CGG and is now organizedaround three Divisions: Equipment, Acquisitionand Geology, Geophysics & Reservoirs (GGR).With this transformative acquisition, CGGbelieves it establishes a leading position in thehigh-tech integrated geology & geophysics andreservoir characterization market whilestrengthening and extending its existing businesses. CGG becomes a fullyintegrated geoscience group, with a less cyclical but low capital intensivebusinesses. The agreement also includes strategic partnerships:The creation of a Joint-Venture, Seabed Geosolutions, a focused globalleader in the rapidly growing seabed acquisition market, which is 60 percent-owned by Fugro and 40 per cent by CGG.A marketing and selling multi-client agreement for CGG to sell Fugro’sexisting 3D data, which remains owned by Fugro.A global strategic technical and commercial mutual preferred supplieragreement.

Jean-Georges Malcor, Chief Executive Officer ofCGG said: “The acquisition of Fugro’s Geosciencedivision was completed by January 31, 2013 andI would warmly welcome our 2,500 new talentedcolleagues into the Group. We have astrengthened asset base, increased resources andenhanced capabilities. The addition of Fugro’sactivities and technologies, including Jason andRobertson, significantly enhance our integratedgeoscience capabilities. It also strengthens ourcore activities in equipment, imaging, andacquisition, particularly in marine with theaddition of four high-end 3D vessels. Moreover,we expand into new markets such as airbornegeophysics, marine gravity, electromagnetic and

Data Management Services.We are creating an exciting new Group to better

serve our clients. Our three new Divisions (Equipment - Acquisition – Geology, Geophysics& Reservoir) cover better the exploration to production value chain. Thispresents us with many opportunities to create value for our shareholders,our clients, our colleagues and our partners. As we are entering a new era,the brand name of the Group is changing and is simplified to CGG. Thisnew brand identity enables us to capitalize on our historic roots while alsoleading the way to the future. We now have a group of nearly 10,000people from all around the world, who are passionate about geoscienceand working together to deliver the best solutions to our clients. It willhelp us create a stronger and more sustainable business for the future. “

A new identity for CGG

62

www.cgg.com

Oil Review Middle East Issue One 2013

THE FIRST SAUDI Aramco DownstreamTechnology Quest was held recently in Paris.Potential partners gathered at the invitation-only event to discuss downstreamtechnologies that address key challenges inimplementing Saudi Aramco’s strategy toexpand its existing fuel technology andpetrochemical research capabilities.Hosted by Aramco Overseas Company (AOC)B.V. on behalf of Saudi Aramco’s Researchand Development Center, the two-daysymposium focused on exploring solutionsand establishing future partnerships withcompanies and institutions that can offerviable and innovative solutions totechnological challenges Saudi Aramco facesin the downstream domain.Seven challenges within two researchdomains were pre-communicated on theTechQuest website to potential partners suchas petrochemical companies, car engine andfuel designers, universities, researchinstitutes and small to medium enterprisesallowing them to develop and submitproposals for future collaborations.Seventeen distinguished members ofacademia and technology providers fromEurope, North America and the Asia Pacificregion were invited to attend the event.

Nabil Aldabal, managing director of AOC,welcomed the guests and opened the event."I am particularly proud to be speaking to youtoday as we are, for the first time, holding aDownstream TechQuest, which is essentiallya forum to discuss and encourage innovativetechnology contributions, in addition tofostering long-term, fruitful partnerships forSaudi Aramco." Ashraf Al-Ghazzawi, acting manager for theResearch and Development Center of SaudiAramco, said: "The R&D Center’s vision is tobecome a leading global center for oil andgas research and technology. The center

conducts pioneering research and introducesnew technology to create value for thecompany. In doing so, we continue searchingfor new ways to address industry challenges.Events like TechQuest help us gather subjectmatter expertise from all around the world tocollaborate and find innovative solutions tosome of these challenges."Over the two-day symposium, delegates weregiven 90 minutes for their one-on-onemeeting to present their solutions accordingto the respective challenges and discussresearch proposals with Saudi Aramco R&Dmembers, providing them an opportunity todiscuss their ideas for collaboration in detail."Overall, the event was successful inenabling Saudi Aramco to identify somepromising innovative approaches that mayhelp accelerate the advancement of ourselect downstream technologies," saidIbrahim Abba, chief technologist of ChemicalsResearch at Saudi Aramco.This year’s event was Saudi Aramco’s secondEuropean Technology Quest, with the first onefocused on Upstream Technology and held inAberdeen, Scotland. Saudi Aramco haspreviously had two upstream TechQuestevents, both of which were hosted inHouston, Texas, by Aramco Services Co.

www.saudiaramco.com

Aramco’s technology quest

18th Middle East Oil & Gas Show and Conference

Society of Petroleum Engineers

2013

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CONDUCTOR INSTALLATION SERVICES (CIS), an Acteon company, has been awarded a multi-milliondollar contract via an agreement with Al-Shaheen Weatherford to provide conductor-driving andcold-cutting services for approximately 55 wells located offshore Qatar on behalf of a major operatorin the region.The three-year contract, which features two one-year options to renew, will be carried out by CISpersonnel from its base of operations in Qatar. The first installation operation will take place at the end of Q1 2013, the company said in a statement.CIS will use 90kJ hydraulic hammers to drive the 20-inch conductors that will create part of thefoundations of the new wells. CIS will supply a complete set of 90kJ hydraulic hammers, as well as abackup set and buffer set, in the event that two separate operations must be carried out simultaneously.Since 2008, CIS has been supplying major operators with conductor installation services in Qatar.CIS recently completed series of operations on a number of wells operated by this particularoperator in Qatar, which saw the conductor installation specialist drive 29 conductor piles duringthe past three years. Al-Shaheen Weatherford is a joint venture between Al-Shaheen Holding (a subsidiary of QatarPetroleum) and Weatherford Holding BVI (a subsidiary of Weatherford International).

MOTT MACDONALD HAS acquiredProcyon Oil & Gas Limited that willexpand the global firm's upstreamoffering in both offshore and onshorelocations.

Procyon offers specialised processand facilities services across allphases of upstream design,engineering, construction andoperation. The firm’s work includesM&A support, due diligence,debottlenecking analysis, facilitiesdefinition, FEED and PMT.

Mott MacDonald chairman KeithHowells commented, "BringingProcyon into the Group willstrengthen our ability to provide allphases of upstream design, processengineering, constructionmanagement and operation for ourclients operating both in the offshoreand onshore arena."

Procyon work is divided 50/50between offshore and onshoredevelopment projects.

John Gridley, director of Procyonremarked, "Procyon's work will beenhanced by having access to MottMacDonald’s global network,resources and capability. We considerthis will enable us to offer ourcustomers a more comprehensiveservice, leading to greater collectiveopportunities.”

Howells said in a statement thatwith this added resource andexpertise Mott MacDonald will beable to target additional opportunitiesin the Middle East where thecompany already has a strong base.

DETECTOR ELECTRONICS (DET-TRONICS) X3302 MultispectrumInfrared Hydrogen Flame Detector hasbeen certified as Safety Integrity Level2 (SIL 2) capable by exida.

With the SIL 2 capability, theX3302 flame detector can be used inextreme hazard applications that posea high risk of hydrogen fire, includingrefineries, chemical loading,compressor areas, and gas plants. Thedetector also meets each requirementof IEC 61508.

“SIL 2 compliance indicates highreliability in extreme hazardenvironments,” said Charles Hoff,product manager of Det-Tronics.

Engineers and system designers

can incorporate X3302 Hydrogen FlameDetectors into their SIL 2 system designto protect people and property againstfire hazards.

In addition to SIL 2 compliance, Det-Tronics introduced additional sensitivitymodes on the X3302 Hydrogen FlameDetector. These sensitivity modes willhelp optimise the X3302 HydrogenFlame Detector for specific applicationsbased on fire size and distance to ensurereliable hydrogen flame detection.

“The X3302 Hydrogen FlameDetector is fit for protectingenvironments that may pose high risk topersonnel and where fire may cause alarge amount of property damage,” Hoffadded.

Det-Tronics flame detector gains extra certification

CIS will use hydraulic hammers to driveconductors that will create part of thefoundations of new wells offshore Qatar

HONEYWELL HAS BROUGHT to market HPS High Pressure Switches with a two million life cycle rating, IP67environmental sealing, and multiple port and termination options, which the company claims helps improveequipment uptime, simplify rapid design and assembly, and reduce total production costs.The HPS Series are durable, reliable electromechanical gauge pressure on/off switches that are available witheither single pole single throw (SPST) or single pole double throw (SPDT) circuitry. The switches are suited for use in rugged industrial and transportation applications. The new two million lifecycle means that the application has a long life.The switches are very durable and are compatible with a variety of media including petroleum-basedhydraulic fluids (engine oil, gasoline, diesel, and transmission fluid),pressurised air, water, mineral oil-based brakefluid, and more enhance durability intough environments.The HPS Series switches feature aswitching point accuracy of up to ±2per cent which provides efficientoperation of equipment. They alsooperate in temperature ranges from-40 °C to 120 °C which means it canbe used in a variety ofenvironments.

Oil Review Middle East Issue One 2013

Mott MacDonaldexpands upstreamoffering

Honeywell introduces new HPS high pressure switch

Conductor Installation Services wins well services contract in Qatar

The X3302 multispectrum infraredhydrogen flame detector

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SCHOELLER-BLECKMANN UKEUROPEAN BUSINESS PARK, TAYLORS LANE

OLDBURY, WEST MIDLANDS, B69 2BNTel: +44 (0)121 552 1535 Fax: +44 (0) 121 627 9282Email:[email protected]

Web:www.schoeller-bleckmann.co.uk

Schoeller-Bleckmann UK (SBUK) is amajor stockholder in Duplex, Super Duplex,6 Moly, Nickel Alloys and Stainless Tube,Pipe and other components. Via our parentcompany Bohler-Uddeholm (UK) Limitedwe have access to Wire, Rod, Round Bars, Plates and Forgings in the full range of corrosion resistant alloys.

Our particular strengths lie in thesupply of STAINLESS STEELSand EXOTIC GRADESDuplex (UNS S31803),Super Duplex(UNS S32760 / UNS S32750),6 Moly (UNS S31254)and Nickel Alloys (625/825).

Our Duplex materials areproduced to a high specificationand conform to the latestNORSOK / SHELL / ARAMCO /PDO requirements.Our UK stockholdingoperation has ISO 9001, 14001and 18001 accreditations.

Sales Office and Warehouse in Jebel Ali, DubaiSales Office in Kuala Lumpur, Malaysia

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TRICAN WELL SERVICE has completed the acquisition of Norwegian i-TEC WellSolutions that expands the Canadian-based company capabilities into thecompletion systems and downhole tools market.

i-TEC has developed a field-proven portfolio of completion systems andintervention tools and the acquisition gives Trican a comprehensive portfolio offield proven advanced completion and intervention technologies which can beused in cemented as well as open hole installations.

i-TEC's patented i-FRAC valve system allows for valve clusters to be placedin prolific portions of the reservoir so that customers can optimize production

regardless of whether the completion is cemented or open hole. The i-FRACtechnology maximises the number of fracture initiation sites with up to 400valves in a single completion activated by only 20 balls.

Trican said in a statement that it believes that this technology is a gamechanger and should convert plug and perf users to sliding sleeves and allow itscustomers to perform more cemented sliding sleeve completions with confidence.

With the acquisition, i-TEC is expected to leverage Trican's geographicreach, which includes Kazakhstan and North Africa, and will provide it withdeeper sales penetration into these markets.

GE OIL & Gas has introduced its first single-stageICL, designed for low-pressure ratio applicationssuch as pipeline compression. It features 20 percent more operating range flexibility and greaterefficiency.The single-stage ICL has a simplified design withonly two magnetic bearings and no split parts andoffers full access to critical components. With itsvery simple and robust architecture, the productcosts about the same as a conventional BCL/PCLcompressor, but has lower operating costs. The new product is the first in the industry withonly one impeller. This design enables highperformance in applications where the requested

design pressure ratio is very low (1.1-1.4), such aspipeline gas compression stations.The single-stage ICL is designed for gas boosting ina pipeline application (Due to the length of thepipe, the gas pressure drops. In order to keep thegas transportation effective, after a certain distancethe gas needs to be recompressed until the nextstation or its final destination). The single-stage ICLhas been optimised for this operation by minimisingthe electric power consumption. The use of state-of-the-art technology enables a very simple designusing only one impeller, removing half of thebearings compared to a multi-stage ICL andimproving both reliability and maintenance.

"Adding the single-stage ICL to the product linegives our customers an even broader range oftechnology options for their compressor applications.It reflects GE’s ongoing commitment to reliableinnovation and advanced technology solutions thattackle our customers’ toughest challenges,” saidRiccardo Procacci, general manager Gas Turbines &Compressors for GE Oil & Gas.The single-stage ICL offers a power range of 2-15mw design inlet pressure of 20-80 bar, dischargepressure up to 120 bar and maximum speed of18,000 rpm. The new product is available globally,with the first commercial applications expected inthe 2014-2015 time frame.

GE Oil & Gas expands its integrated compressor line

POWER DISTRIBUTIONENCLOSURES CLIMATE CONTROL IT INFRASTRUCTUREA SOFTWARE & SERVICES

Enclosuresfrom the smallest to the largest.

Climate controlfrom the largestto the smallest.

Rittal Middle East FZE, PO Box 17599, Jebel Ali, Dubai, UAEPhone: + 971 (4) 3416855 Fax: +971 (4) 341 6856Email: [email protected], Web: www. rittal-middle-east.com

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FLEXSTEEL PIPELINETECHNOLOGIES has released anew larger-diameter FlexSteelpipe, which is now 8-inchdiameter up to 1,500 psi. Thisoffers up to 125 per centincreased flow rate compared toFlexSteel 6-inch pipe.

The 8-inch diameterFlexSteel was developed withthe same helically wound steel core as existing FlexSteel pipes for failure-freeperformance with the durability of steel and the installation, performance andcost benefits of flexible pipe products.

"The new 8-inch FlexSteel was developed in response to customer requestsfor a spoolable pipe solution with greater flow capacity," said Brian Anderson,vice president of strategy and marketing for FlexSteel Pipeline Technologies.

Developed with corrosion-resistant technology, FlexSteel pipe performsunder gruelling cyclic loading environments and installs up to five times fasterthan traditional steel line pipe to provide the lowest total cost of ownershipcompared to steel. Additionally, the 8-inch pipe has 93 per cent fewerconnections per mile vs. steel.

FlexSteel can be installed easily and quickly in all types of terrain withminimal disruption to land. It does not require special bedding or handling.FlexSteel's time-tested swaged fittings make for fast, reliable connections thatare not sensitive to cleanliness or ambient temperature.

FlexSteel spooled pipe is used in various applications including oil and gasand CO2 transportation.

Larger flexible line pipe introduced

67

UNIQUE WELLUBE FZC, a Unique Maritime Group Company, hassuccessful completed Qty 3 off 28” Class 150 RF Hot Tap on 58”ASTM A358-304L pipeline for Madina Group and Chiyoda AlmanaEngineering (CAEL). The project was for Ras Gas.The First Tap was a mock up performed in Madina's Doha Workshop

in August 2012 by GregHunter & Mario Abobo. TheSecond and Third HotTapping was performed on alive Gas Line inside Ras Gaspremises in Ras LaffanIndustrial City in Septemberlast year by Mario Abobo &Michael Easthope. Train 5was performed onSeptember 12th and Train 4on September 13th, 2012.The Qty 3 off 58” x 28” x58” Class 150 RF stainlesssteel extruded hot tapfittings for Ras Gas wasmanufactured by the firmsUS manufacturer as perASME 31.3 standards.The stainless steel hot tap fittings

Unique Wellube completes project for Ras Gas

The FlexSteel pipe

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PROVIDER OF INNOVATIVE DRILLING & COMPLETIONS PRODUCTS FOR THE GLOBAL ENERGY INDUSTRY

WWW.MCCOYGLOBAL.COM

EDMONTON, AB [email protected]

BROUSSARD, LA [email protected]

PDT, BROUSSARD, LA [email protected]

www.oilreview.me

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ABERDEEN-BASED ENOVATE SystemsLimited, a technology company withinsubsea well control equipment waspurchased by Aker Solutions for anundisclosed sum.Enovate has developed a wide range ofpatented components and products foruse in open water workover systems, in

riser workover systems, riglessintervention systems and drilling safetysystems."Enovate has developed and qualifiedunique technology for safe and efficientwell control. Components from Enovateare also important building blocks forsystems within workover and well-

intervention services for high pressureand ultra-deep water fields worldwide,"noted Åsmund Bøe, chief technologyofficer of Aker Solutions.Aker Solutions said it was committed toinvest in increased capacity and furtherdevelopment of the product range in closecollaboration with current customers.

WEATHERFORD SHOWCASED ITS latest artificial lift technology in Abu Dhabi asthe global oil services company hosted a seminar explaining their keyadvantages for taking a solutions approach to optimising producing wells.

The method for oil companies to overcome production challenges viavarious artificial lift systems was also demonstrated.

Oil Review sat down with both Rafael Bastardo, regional business unitmanager production system – MENA and Ahmed Shoukry, director RRL and HL,to learn why demand for higher production is changing what operators arelooking for and how Weatherford is offering solutions to these problems.

The company displayed various lift systems for gas lift, plunger lift, hydrauliclift, reciprocating rod lift, progressing cavity pumping, electric submersiblepumping, capillary technologies and production enhancement services.

The UAE based event was part of a larger running Middle East based seminarprogramme with similar events taking place in Egypt, Kuwait and Oman.

"We tailored all our events and training days to the specific country needs.In Oman and Kuwait we focused on heavy oil and in the UAE we focused on gaslift," said Shoukry.

"We wanted to promote open discussion and share what concerns thereare in the market as dialogue with clients is of the up-most importance,"Bastardo explained.

Weatherford had qualified experts on hand to talk about the solutions forevery form of artificial lift.

"The importance of artificial lift for Middle East countries stems from thetrend of more wells needing artificial lift to produce. That is why our main focusfor here in this region is new artificial lit technology. Our customers need tohave continuous production," added Shoukry.

One of the key messages that Weatherford presented at the event was thatthe company provides a one-stop shop for artificial lift production requirements.The firm supplies open solutions which can work with an operator’s legacysystems and mirror the strategy on which they are embarking.

"We offer the best hardware, electronics, and software for whatever kind ofartificial lift you need. We are the only oil and gas supplier offering acompletely integrated solution," argued Shoukry.

Bastardo elaborated: "The seminars are also about where we think operatorsare going which will increasingly be focused on digital oilfields that will see theintegration of all the solutions into one bundle. This will help us work withcustomers on the workflow side and to optimise their fields in a better way."

One other reason for these Middle East focused technical seminars, accordingto Bastardo, is to deliver the message that Weatherford has changed to be more ofa solution provider than just a mere equipment manufacturer and provider.

Operator demandsBastardo stated: "We feel there is a change in how operators are seeing whatthe next step is going to be and they are looking at how to maximise theirproduction with less cost through intelligent investments.

"The two main challenges facing companies are the need to reduce costsand lower capex without negatively affecting production," he added.

One way to reduce costs Weatherford found was to introduce a rental sideto the business and the company introduced it to the Kuwaiti market in 2012and the service will be extended to Oman this year. The company is indiscussions with PDO on what kind of model they would follow.

"The first year of offering rental equipment has proved popular and we wona five-year contract with KOC for all rental equipment," Shoukry said.

Market demandShoukry pointed out that Weatherford‘s biggest market for artificial lift is inOman, closely followed by Kuwait. 55 per cent of Weatherford‘s Middle Eastbusiness is in these countries. The reason for this is because there is a shift toheavy oil and focusing on deeper exploration.

That is why Weatherford's hydraulic lift pumps can go deeper, reaching4,878 meters, and can produce more as they are capable of higher productionrates. This new hydraulic lift technology is important in Kuwait and Oman,according to Shoukry.

"We have nearly all of the PCP market in Kuwait, and in Oman we havenearly all the reciprocating rod lift market," remarked Bastardo.

"The UAE is one of the countries that we feel has a lot of potential to grow,and we feel we can almost double or triple our size there in the next three tofive years," he added.

Oman and Kuwait are focusing on heavy oil and they are trying to getproduction from other reservoirs previously not touched. But with heavy oil,one must consider steam injection and modifying facilities with moreartificial equipment.

A big challenge for artificial lift systems is high temperatures, andWeatherford is developing equipment that can cope with it specifically.

With the move to increased production, the need to explore deeper andimprove recovery factors has increased. This means that different types ofapplications are being used, which bring extra challenges in terms of choosing thebest technology based on the knowledge acquired through years of experience.

That is the focal point for Weatherford, which is looking at how that vitalknowledge element can be transferred in an optimal way.

"We want to provide this to the customers so the operators can takeadvantage of us. That is why these seminars are more of a knowledge transferexercise than a selling exercise," Bastardo explained.

Oil Review Middle East Issue One 2013

New innovations in artificial lift technology

Aker Solutions purchases Enovate

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Ron Schmidt with Weatherforddiscusses the DVX gas lifttechnology with seminar attendees

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MSA Middle East • Phone: +971-4-299-6741 • Email: [email protected]

MSA Safety Solutions for Industry

www.MSAsafety.com

V-Gard® Accessory System Kits

EVOTECH® Full Body Harnesses

ALTAIR® 4X Multigas Detector

ALTAIR® 5X Multigas Detector

UltraSonic™ EX-5 Gas Leak Detector

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CASING AND COMPLETION technology specialist, Deep Casing Toolshas completed its first operation in the North Sea, with a verysuccessful 21 hour reaming run. Two conventional attempts to run a

7” liner to total depth (TD) had beenunsuccessful in the Statoil operatedGullfaks’ satellite well, resulting in theliner hanging up hundreds of metresfrom TD.

Full details can be found atwww.oilreview.me

TRELLEBORG MARINE SYSTEMS, part of Trelleborg business area Offshoreand Construction, has acquired Sea Systems Technology Ltd. (SeaTechnik), aglobal market-leader in the design and manufacture of systems forsafeguarding the transfer of LNG between liquefied natural gas (LNG)carriers and shore terminals.

Full details can be found at www.oilreview.me

CROWCON’S TETRA:3 (T3) portable, multi-gasdetector complies with relevant national/regionalsafety regulations and individual companyrequirements.The device feeds the T3’s sensors a knownconcentration of gas, a process known as ‘bumping’,to ensure the sensors are working correctly. The wayit works is simple: when a T3 is inserted into theGas Tester, the T3 automatically switches into‘bump’ mode and either passes or fails.

Full details can be found at www.oilreview.me

Gas tester ensures compliance

View of a rig floor

FOUR J D Neuhaus EH 60 air operated monorail hoists supplied foroffshore BOP handling have completed 12 months satisfactoryoperation to customer requirements and have also successfully passedtheir first annual inspection.

Full details can be found at www.oilreview.me

Trelleborg strengthens LNG offering

User satisfaction with BOP handling

Turbocaser clears the way The T3 gas tester

KONGSBERG OIL & GasTechnologies (KOGT), awholly-owned subsidiary ofKONGSBERG, announcedthe latest release ofLedaFlow®, the newtransient multiphase flowsimulator. The releasefocuses on ways to reducefield development costsand the operating costs forwells and pipelines, byimproving the accuracy ofthe underlying models.

Full details can be found at www.oilreview.me

Improving flow and reducing costs

OPENFIELD, A NEW France-based startup specialised inthe conception, productionand commercialisation ofwireless micro-sensors for theoil and gas industry recentlyannounced the launch of itsnew pressure and temperaturemicro-recorder for hydraulic fracturing.

Full details can be found atwww.oilreview.me

NORGREN, AN INTERNATIONAL market leader in pneumatic motion and fluidcontrol technologies, has unveiled a comprehensive guide to its highlyinnovative Redundant Valve Manifold (RVM) system for process control in theoil, gas and chemical sectors.

Full details can be found at www.oilreview.me

Energy sector innovation from Norgren Superior data downhole metrology

HALLIBURTON, APACHECORPORATION and Caterpillarhave developed innovative dual-fuel technology capable of safelyand efficiently powering thepumping equipment used forfracturing treatments with amixture of natural gas and diesel.This is one of the largest-scaledual-fuel projects ever conductedin the oil and gas industry.

Full details can be found atwww.oilreview.me

Dual-fuel technology offers benefits

EXPANDING ITS PORTFOLIO of hydraulic actuators for the surfacedrilling sector, GE Oil & Gas recently launched the CHA HydraulicActuator Series. The new series offers improved safety features andtwo large-diameter (1/2”) LP actuator ports.

Full details can be found at www.oilreview.me

Hydraulic actuator range offers improvedsafety features

Web selection - Innovations from www.oilreview.me

A selection of recent products and service developments for the oil and gas sector. Full information can be found on www oilreview.me

www.oilreview.me

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Oil Review Middle East Issue One 2013

CCORRECT CENTRALIZATION OF tubularcasings is crucial to the success of awell, as incorrect centralization canresult in, amongst other things,

channelling and poor cementation. Centralizerfailures can lead to rig downtime, pulled casing,stuck pipe, fluid migration, side-tracks and evenloss of wells.

The great majority of centralizer failures are dueto choosing an incorrect unit for the job. Everydaysomeone, somewhere, is pulling casing and leavingdebris in the hole for the simple reason that thewrong type of centralizer, for job specificapplications, was used.

Before choosing a centralizer considerationneeds to be given to the well geometry, stand-offrequired, zonal isolation, formation pressure andwell friction factors as all this will directly affectperformance. It must be clear what the customeractually wants and to fully understand this.

BenefitCentralizer failure or poor spacing can lead to amultitude of downhole problems, all at greatexpense and rig downtime. In getting to final depth,the centralizers must counteract the often verypowerful radial forces exerted by the tubular due towell geometry, and centralize within the boreholeto allow optimum passage of annular fluids andcorrect cement displacement.

Achieving proper centralization is especiallydifficult in under-reamed wells. Under-reaming is awidely used drilling technique for enlarging thediameter of a borehole. Under reamed sections arebecoming more popular as results showimprovements, yet for a centralizer, these sectionspose the greatest difficulty in getting to final depth.

A further benefit of under-reaming is it improvesthe flow and pressure of the annular fluids, but insome cases, by increasing the fluid flow you mayrun the risk of eroding the surrounding formation.You are also often limited to how central you canget the pipe, which naturally depends on the choiceof centralizer, small units in large holes tend not tobe the optimum solution, but also the wellgeometry is an important fact to consider. If you

can increase the diameter of the annulus youimprove the potential for good well clean out, but ifunits are lying on the low side then fluid will takethe easiest route and the low side of the casing willshow little benefit from the clean-out.

A basic problem with under-reamed wells isgetting effective casing centralization in the under-reamed section. Ordinary bowspring centralizerscan be damaged when passing through previously

set casing. Some suppliers make them oversize soas to improve stand-off down hole, but this makesthe centralizers tight in the casing and requires alarge insertion force which causes drag problems. Inaddition, conventional bowspring centralizers of asuitable outside diameter to fit the under-reamedsection accurately and with sufficient standoff, oftenget so compressed that they lose their elasticitywhen passing though the narrower casings.

Centek S2 centralizer

Major regional operatorshave adopted Centek

centralizers because of theirrobustness

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Centralizer failure or poor spacing can lead to a multitude ofdownhole problems, as Cliff Berry* of Centek explains.

Centralizing in the

under ream

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Well cleaningAnother approach is the solid or rigid centralizer,which while axially strong has a fixed diameter andcannot expand to fit the under-reamed hole, so thatin horizontal wells it will lie along the bottom ofthe borehole increasing the risk of badcentralization and a poor cement bond.

Centek centralizers are manufactured from asingle piece of steel which is fully heat-treated togive a hardened surface that results in greatlyreduced torque and drag losses, so abrasive wearcaused by running to depth and rotating the tubularis virtually eliminated.

These centralizers offer exceptionally highfatigue strength for axial forces and radial sideloads on bows during tubular rotation.

Despite being fully compressed during passagethrough the casings, the centralizer offersexceptional restoring force with a very high stand-offratio once in the open hole. As a low profile unit ittakes up less annular space, so its ECD (EquivalentCirculating Density) signature is low allowing theoperator if required to pump at a slightly higher rate.This improves well cleaning, and the low torque aidspart rotation and minimises stall-out all of whichcontribute to improved cementation.

Unequalled flexibilityCentek’s Under Reamed range includes the CentekTUR and UROS centralizers that will compress andthen expand to fit the largest hole, within reason,that the customer requires. Under-reamedcentralizers are not manufactured to API standardsas there is currently no API standard for under-reamed applications. However testing of the units isnaturally to API procedures

Centek products have been used successfully in

thousands of applications worldwide without asingle centralizer being left downhole when casinghas been pulled.

Centek can justifiably claim to have reinventedthe bowspring centralizer with unequalled flexibilityand strength. In an under-reamed hole, the CentekTUR is the Industry leader and now otherestablished companies are trying to produce verysimilar units because of its success.

Centek has introduced a radical innovation incentralizer design which provides quantifiablereductions in drag and torque.

Centek’s UROS, or Under-Reamed Off-Setcentralizer, answers the need to reduce dragforces on run-in-hole through previously setcasing before continuing into an under-reamedwell section. The UROS significantly reduces initialinsertion forces, a characteristic of bow typecentralizers, and additionally delivers a substantialreduction in running forces when passing throughpreviously set casings.

Once through the compressed stage, the UROSreverts to normal centralizer operation in the openhole with the bows regaining their nominal outerdiameter to maximise standoff. The UROS achievesthis reduction in drag by its unique, patented bowdesign. This produces a significant reduction in dragforce without reducing the strength of the unit orits capacity to centralize the casing once in theopen hole.

Advanced simulation“This revolutionary design offers the best solution forunder-reamed sections of virtually any well geometry,providing reduced insertion and drag forces, to ensurea problem free run through tight previously setcasing, and once clear of all restrictions, the UROSexpands every time to the designed OH size tooptimise cementing operations in under-reamedwells,” said Cliff Berry, Vice President, Global BusinessDevelopment at Centek Group.

“Once in the OH the UROS’s characteristics arethose of a gauge hole centralizer so maximisingstand-off.”

Berry stresses the importance of understandinginsertion, running and accumulative restart forcesbecause all three apply as bow springs arecompressed when passing through the previouslyset casing. Insertion force occurs once, each time aunit is run into the well and it should be measured.Running force, or drag, is also measurable and theaccumulative restart force, again measurable,relates to the forces that must be overcome as anew joint of pipe is added to the string.

Centek, as market leaders, are familiar withthese issues and using its advanced simulation andmodelling software it produces dynamic calculationswhich are used to design customised centralizersbased on the characteristics of each well.

The UROS is available in 7” x 9.1/2”, 7” x 9.7/8”and 10.3/4” x 13.1/2” sizes, with additional sizesbeing continuously developed to meet demand.

Centek Group opened a US manufacturingsubsidiary in September 2012 based in OklahomaCity, Oklahoma, USA. The 80,000 square feet plantis fully self-sufficient in all aspects of centralizermanufacture with its own heat treatment and lasercutting equipment. Initially manufacturing willconcentrate on the widely used Centek S2 bow-spring centralizer.

Centek has been operating in the Middle Eastsince 2004, in countries like Abu Dhabi, Oman,Saudi Arabia, Kuwait and Qatar. A major problem insome of these areas is the Nahr Umr reactive shaleformation which can cause serious run-in-holedifficulties, such as getting stuck, damagedcentralizers, fishing trips, poor cement jobs and notgetting to TD.

Cross section of a pulled casing where bad centralizationhas inhibited cement flow on the narrow side of theannulus leading to channelling and a poor cement bond.

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Cliff Berry

Achieving propercentralization is especiallydifficult in under-reamed

wells

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Optimized Performance

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Reactive shale can respond badly to mechanicalinterference, typically by swelling which reducesthe diameter of the wellbore and can damage lessrobust centralizers. The effects of swelling can alsobe made worse by friction in horizontal wells.

GuaranteeMajor regional operators have adopted Centekcentralizers because of their robustness whencompressed on passing through shale sections orother restrictions. Traditionally a mixture of latch orpinned centralizers and solid body units has beenused, but the engineering and operationaldifficulties these caused have led many operatorsto use Centek units.

Most oilfield service providers want peace ofmind and the virtual guarantee that the drill

string will get to bottom, and should it be pulleddue to well conditions then all centralizers willbe safely returned to the surface with no unitsbeing lost down hole.

Centek centralizers can be used with all typesof well geometry but are designed primarily forlong horizontal well sections with high buildsections. It is here that the Centek benefitsbecome apparent with no drag, digging in, ordifficulties from being either under or oversized tothe bore hole, so meeting the operational criteriafor running casing successfully.

Al Shoumoukh Group is Centek’s distributor inAbu Dhabi and will be displaying Centek productsat ADIPEC 2012. Richard Berry Centek’s TechnicalSales Engineer for the Middle East and North Africawill be the Centek representative on the stand.

Richard has over seven years’ experience in theIndustry and his offshore and technical backgroundmade him an ideal candidate for this role.

Other areas of interest to Centek within MENAare Saudi Arabia where SFAX are now usingCentek units and Oman, where the nationaloperator uses Centek products.

Al Shoumoukh have been representing Centeksince 2004 and has started to gain a majorfoothold in the region. Other areas also of keeninterest to Centek are Kuwait and Qatar. ■

BiographyCliff Berry’s oilfield career started in 1977 withHalliburton in Brunei, Malaysia and Sarawak as acementer and tool operator. He also workedoffshore in the North Sea and Persian Gulf withHalliburton. He then worked for Diamond B (UK)Limited, a leading centralizer manufacturer in themid 1980’s. Cliff joined BJ Tubular Services asEuropean Operations Manager working from theGerman office and successfully introduced BJTubular Services into Denmark, Hungary, andHolland in addition to growth in Germany. Hejoined Centek in 2001 as Sales and MarketingManager responsible for worldwide sales and wasappointed VP Global Business Development atCentek Group in June 2012. He can be reached [email protected].

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Side view of Centek Uros centralizer

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IIT IS WIDELY accepted that using non-genuine manufacturers’ parts can bedetrimental to compressor performance andcan have a negative impact on a machine’s

efficiency and energy consumption.For operators in the oil and gas industry in

particular, where in recent years the market hasseen an influx of cheaper, third party spares,particular care needs to be taken to ensure thatroutine parts’ replacement is not adversely affectingcompressor performance.

The Broomwade range of piston compressorsare the preferred choice in a host of oil and gasapplications, with many units having been inoperation for decades. The slow-speed, water-cooled, piston design with pressures up to 20.5bar g offers the ideal combination of robust andreliable performance in the harshest ofenvironments.

However, customers may not be aware that theBroomwade range of machines, also called the V-major or V-compact are still being manufacturedtoday by Gardner Denver, with the complete rangeof spare parts available for purchase, or as part ofroutine service and maintenance contracts.

As a result, this particular range of compressorsserves as a good example of the dangers ofchoosing cheaper alternatives to genuinemanufacturers’ spares; as customers are eitherunknowingly accepting pirate parts from a thirdparty or selecting cheaper imports and puttingcompressor performance at risk.

It is a fact that even small non-genuine partssuch as piston rings and guide rings have resultedin catastrophic failures to Broomwade pistoncompressors. Broomwade spare parts, along withall other CompAir-branded product components arereadily available from Gardner Denver and itsauthorised dealer network and can make thedifference between optimum efficiency andunwanted downtime.

Here’s a short guide that define some of theareas to consider when selecting compressor parts:

Spend a little?Non-genuine spares and lubricants are generally acheaper alternative to the manufacturer’s originalparts and, when cost is an issue, can appear to be asound investment.

As well as a shorter operational life and theassociated issues of compressor downtime, thewrong spare part can in some cases, cause realdamage to the compressor, ultimately meaning themachine can fail completely. This won’t just result

in an expensive repair bill, but will affectproductivity with unscheduled machine downtime.

Replacement is necessaryAny compressor, whether brand new or one that hasbeen performing well for many years will, in thenormal course of operation, require components tobe periodically replaced. These can include itemssuch as filters, valves, seals and oil.

Unless a genuine, like-for-like replacement partis used, there can be no guarantee that the originalperformance will be maintained. Non-genuineparts are not manufactured to the samespecification as the manufacturers’ original. Byvirtue of the fact that they are engineered to costless, they will typically incorporate inferiorcomponents that cannot offer the same levels ofenergy efficiency or performance reliability.

In contrast, genuine parts have beenmanufactured to meet the same standards as thecompressor they are intended for. This means thatthey have passed the same stringentmanufacturers’ testing regimes, in a quality-controlled environment, to offer the repeatable,dependable operation that operator’s need to keepproduction costs down.

OilAs well as the physical component parts, thequality of oil used to lubricate and seal acompressor can have a major impact onfiltration capabilities.

Genuine lubricants are formulated withadditives to improve performance and are

optimised to work with all of the machine’scomponent parts. This ensures that the correctlubrication, cooling and anti-wear qualities aremaintained.

Compressor oils can operate quite aggressivelyand, if specified incorrectly, they can placeadditional demands on the filter element, whichcan result in dust and other particles coming in tocontact with internal components.

In addition, the right oil and oil filtercombination can help to extend oil change intervals.This not only reduces the cost and frequency of oilchanges, but also helps to reduce the environmentalimpact associated with oil disposal.

This combination of the right oil with the rightfilter assembly can help to improve temperaturestability, which results in lower energyconsumption as the compressor can run at astable, predictable level.

FiltersThe role of a filter is to ensure that dust andparticles cannot enter the compressor system,helping to protect components from corrosion andunnecessary wear. This encompasses everythingfrom the compressor itself to the pipe work that

www.compair.com

In contrast, genuine partshave been manufactured tomeet the same standards as

the compressor they areintended for

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James Cutting, aftermarket sales manager from Gardner Denver FZE, manufacturer ofthe CompAir range of compressors and the established Broomwade brand, which isinstalled in hundreds of applications in the Middle East, outlines the areas to considerwhen factoring spare parts’ provision.

The genuine

article

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CompAir is a brand of Gardner Denver Your Ultimate Source for Vacuum and Pressure

Genuine parts & lubricants help to reduce running costs

Regular servicing ensures ultimate efficiency & peace of mind

Non-genuine parts & lubricants can lead to expensive breakdowns

Just because it fits, doesn’t mean it’s rightNon-genuine parts and lubricants can damage your compressorand your bottom line

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carries air around the plant to the equipment at thepoint of use.

Non-genuine filters are more likely to have lowdust and dirt holding capacity meaning that morecontaminants can enter the system. This results inthe inevitable downtime when equipment fails andincreased maintenance costs to rectify the problem.

Such filters can contribute to higher pressuredrops, meaning that the compressor has to workharder to produce the same level of compressed airat the point of use. And of course, the harder acompressor is working to produce compressed air,the more energy it is consuming unnecessarily andthe more costs escalate.

SealsThe quality of seals is another area to consider.Designed to handle compressor oil, hightemperatures over prolonged periods and varyingpressure levels, they provide protection against theingress of dirt and other contaminants and shouldbe selected carefully to ensure optimum efficiencyis maintained. n

For further information about spare parts for yourBroomwade or CompAir compressor, please contactJames Cutting, Gardner Denver FZE on 00971 48811744 or [email protected]

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KAESER’S NEW ESD series rotary screw compressors combine impressive air delivery andavailability with maximum efficiency and compact design. With motor powers of 200 kW and250 kW respectively, the ESD 352 and ESD 442 cover free air deliveries from 36.1 to 42.1m³/min (at 8 bar) and - just like all Kaeser rotary screw compressors - are designed forpressures up to 15 bar.Their exceptional efficiency and performance is the result of Kaeser’s meticulous engineeringand design. The new ESD models save energy in four key ways: Operating at low speeds of 1500 rpm, the airend in every unit features refined flow-optimised‘Sigma Profile’ rotors for superior efficiency - the ESD 442 is equipped with a specifically-developed airend. In combination with additional optimisation measures, such as theminimisation of internal pressure losses, Kaeser’s energy-efficient design has enabled specificpower to be reduced by up to five per cent compared with previous models. Kaeser rotary screw airends are powered by IE3 drive motors for maximum performance andreliability. These motors will become obligatory in the EU from 01.01.2015, but users canalready enjoy the benefits that these premium efficiency motors have to offer by choosingKaeser compressors. Kaeser’s highly efficient 1:1 drive design eliminates the transmission losses associated withgear or V-belt driven systems, as the motor directly drives the airend. With five pre-programmed control modes, the newly developed PC-based ‘Sigma Control 2’compressor controller enables compressor performance to be precisely matched to actual airdemand thereby allowing additional energy savings.Kaeser’s new Sigma Control 2 controller also offers added advantages: This advanced systemprovides greater flexibility through its numerous interfaces and innovative plug-incommunication modules. Therefore, connection to energy-saving master control systems,computer networks and/or remote diagnostics and monitoring systems, such as Kaeser'sTeleservice facility, couldn’t be easier.

Saving space and energy

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“ R“ R ELIABILITY” IN THE controlprocess industries can bedefined as the ability of asystem to perform and

maintain its functions in routine circumstances, aswell as in hostile or unexpected circumstances.Unexpected circumstances in an operating facilitycan easily lead to catastrophic events.Improvements in plant reliability reduce the risk andoccurrence of these events and lower maintenancecosts. Improving plant reliability means ensuringprocess equipment is properly maintained andavailable for continuous operation. According toSolomon Associates, a world-class performer is acompany whose maintenance costs are below 1.4per cent plant replacement value, with mechanicalavailability greater than 96.7 per cent. Becoming aworld-class performer requires implementation of aneffective asset management strategy.

Real-time monitoring (and protection) ofcritical process equipment, such as largecompressors or turbines, is standard practice atmost facilities. However, monitoring of second-tierequipment has traditionally been deemed cost-prohibitive or too difficult. Second-tier equipment,

also referred to as “essential assets,” includessuch things as pumps, heat exchangers, blowers,small compressors, pipes/vessels, cooling towersand air-cooled heat exchangers (“fin fans”). Whilethese unmonitored assets may not have beenoriginally classified as “critical,” an outage orfailure can cause a serious process disturbance orshutdown, resulting in lost production, injuries,fines and adverse impact to the environment.

According to Doug White, a refining industryexpert with over 30 years of experience, “We haveperformed a large number of studies for variousrefineries around the world. Our analysis of this datacompiled from multiple industry sources shows that,in a typical refinery, about 25 per cent of unplannedoutages are related to equipment failure. Ourconsolidated data is presented in Figure 1 whichshows the main root causes of unplannedshutdowns and slowdowns and the unit availabilityloss associated with each. According to our studies,just seven asset classes account for the majority ofthe loss: valves, pumps, vessels, compressors,piping, exchangers and fired equipment."

With regards to the maintenance spending onthese assets, Dr. White adds, “Based on our industry

analysis, maintenance of these same seven assetclasses consumes about 70 per cent of the totalmaintenance budget at a typical refinery. Figure 2shows the approximate percentage of themaintenance budget associated with each of theseven asset classes that we have found in ourstudies. We have found maintenance cost to beclosely correlated with the asset managementstrategy employed. Choosing the right strategy canreduce costs and increase asset reliability andprocess availability. While it may be tempting tofocus only on cutting costs, that practice can leadto reduced reliability over the long run.Maintenance and reliability cannot be decoupled.The focus should be on increasing reliability, whichwill, in turn, lower the total cost of ownership.”

Common strategiesSelecting the right asset management strategy is abalancing act between implementation cost andexpected reliability. Reactive maintenancerepresents the most costly and least reliablemaintenance program. For example, some essentialassets may have a spare as part of a reactivemaintenance program. A common practice is to run

Figure 1, Causes of unplanned shutdowns and slowdowns

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Improvements in plant reliability reduce the risk of catastrophic events and lowermaintenance costs, says Nikki Bishop* of Emerson Process Management.

Improve reliability with essential

asset monitoring

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equipment to failure and then switch to the sparewhen needed. But it may not be possible to bringthe spare online in time to avoid processdisturbances or a shutdown. Even with the spareasset online, maintenance personnel are faced withrepairing the failed asset. For equipment without aspare, shutdowns are necessary to repair failedassets. On average, repair cost for a failed asset istypically 50 per cent higher than if the problem hadbeen addressed prior to failure.

Alternatively, some sites employ a preventivemaintenance program that calls for schedule-basedasset servicing, whether maintenance is necessaryor not. While this approach may offer greaterreliability than a run-to-failure method, it has itsown drawbacks. Valuable time and resources arewasted servicing assets that may not require repair.The personnel busy unnecessarily servicing assetscould easily be doing other productive workinstead. And if the assets being serviced do nothave a spare, the process is unnecessarily disrupted,costing valuable production time.

Predictive maintenance is another option as anasset management strategy. In this approach,essential assets may be monitored manually withspot-checks in the field. These “clipboard rounds”may occur once per shift, but can occur asinfrequently as once per quarter or longer. Periodichandheld vibration or performance audits may beconducted on selected assets on an annual ormonthly basis. This method of predictivemaintenance based on periodic—possiblyinfrequent—data acquisition fails to give real-timeinsight into asset health. Thus, equipment may failduring the interim of data acquisition, causingprocess disruption and a more costly repair than awell-maintained asset. Resources are wasted sendingskilled personnel for data collection into the field,which might also be a hazardous environment.Additionally, analysis and interpretation of thecollected data requires the skills of a trainedreliability engineer or equipment specialist. Theproblem is compounded as experienced personnelretire and take their vast stores of knowledge withthem. Periodic monitoring leaves operators andmaintenance personnel without sufficient insightinto the health of their equipment.

When faced with selecting an assetmanagement strategy, the ideal approach forincreased reliability and minimal maintenancecosts is an automated monitoring strategy—onethat provides online indication of an asset’s health.Automated monitoring can detect processconditions that may be unintentionally andunknowingly inducing a fault on equipment. Armedwith the knowledge of adverse process conditions,operators can make adjustments so that processrelated equipment faults can be avoided altogether.In the event of impending failure, online indicationof asset health provides advanced warning of healthdegradation that allows enough time for spareequipment to be safely brought online, eliminatingprocess upsets, off-spec product and safetyincidents that result from an unexpected trip.Advanced warning gives maintenance staff theinformation they need to determine when servicing

is necessary to prevent a failure, even on assetsthat do not have spares. An automated monitoringstrategy can bring asset management into thecontrol room and eliminate unnecessary trips to thefield to collect data. Centralised, online assetmonitoring also eliminates the need to sendpersonnel into hazardous areas for data acquisition.

SurveyThe heart of any early warning system is online fieldsignals. Historically, process plants have been builtwith only the minimum amount of instrumentationnecessary to safely operate the unit. This may bedue to budgetary constraints, or it may be that thenecessary measurement technology was notavailable at the time of design, such as vibration oracoustic transmitters. An effort to improve reliabilityand reduce maintenance costs should start with asurvey of what measurements currently exist andwhat measurements are missing. Traditionally,adding missing measurements was a daunting taskthat was expensive, time consuming and, at times,impractical due to the location.

The advent of wireless technology hasconsiderably lowered cost barriers to implementation,making it easy to monitor the condition or “health” ofprocess equipment—be it a pump, heat exchanger,control valve, steam trap, pressure relief valve orother essential assets. Wireless devices can beinstalled in hard-to-reach places and in locationsdeemed cost-prohibitive by conventional means.Wireless devices typically take two hours to install,compared to two days to install a wired device.Setting up a wireless network allows for easy futureexpansion by seamlessly adding devices to theexisting network, while simultaneously strengtheningthe network robustness and resilience. Wired devicescan also be adapted to communicate wirelessly,

allowing stranded local measurements to becomepart of the wireless network.

While wireless technology provides an easy andcost-effective means of adding measurements, datacollection alone will not prevent equipment failureor improve plant reliability.

Data aggregation and analysis is necessary togenerate meaningful alerts from the informationgathered. Combining asset data, process data, andstatistical process control techniques creates apowerful trifecta for detecting equipment faults.Monitoring process data, such as pressure,temperature or flow, along with asset data, such asvibration or bearing temperature, identifies specificprocess conditions that may cause asset healthdegradation. Adverse process conditions can bedetected and adjustments made to prevent furtherasset damage. Statistical process control methodsapplied to aggregated process and asset dataprovide meaningful alerts to plant staff andeliminate nuisance alarms. Alerts that clearlyindicate actionable issues enable problems to bediagnosed and resolved quickly and effectively.Applying smart analysis to generate meaningfulalerts also reduces the demand on trainedreliability engineers or equipment specialists, asless experienced personnel can respond whenmeaningful alerts clearly indicate problems.

BenefitsDowntime of essential assets causes processslowdowns or shutdowns, which lead to lostproduction and, ultimately, decreased profit. Anautomated monitoring program reducesunplanned shutdowns or slowdowns, providing thehighest reliability and lowest maintenance costs.Wireless technology, coupled with pre-engineeredintegrated solutions, breaks through cost barriersto provide an easy and cost-effective means ofessential asset monitoring. n

*Nikki Bishop, PE, is a Senior Application Consultantat Emerson Process Management. With over 10years of experience in the process control industry,her experience includes projects in industrialenergy, pharmaceuticals, power generation, pulpand paper and refining.

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Figure 2, Essential assets maintenance cost

On average, repair cost for afailed asset is typically 50 per

cent higher than if theproblem had been addressed

prior to failure

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DDESPITE MOVES TOWARD greaterenergy efficiency and a turbulenteconomic climate, global demand foroil and gas shows no sign of letting

up. Consumption in the developed world may beflatlining, but China will more than double its oilconsumption from 2000 to 2015, while in Indiademand will increase by about 75 per cent.

Debate continues about when ‘peak oil’ will bereached, but the fact remains that a huge amountof oil is still in the ground – enough to last severaldecades by most estimates. The problem is thatmuch of the “easy” oil has been found, anddemand for energy is taking exploration andproduction to ever-tougher extremes of geographyand climate.

The deepwater (more than 500 meters or 1,600feet) and ultra-deepwater (more than 1,500 metersor about 5,000 feet) energy sector represents one ofthe major growth areas for the oil and gas industry,but exploiting these reserves presents toughtechnical challenges.

Risks“This is a very onerous environment,” says JohnDrury, Business Group Director for Trelleborg’sbusiness that focuses on the offshore industry. “Therisks multiply exponentially with depth, andoperators are looking for fail-safe solutions.”

One issue with ever-deeper wells is that the hotoil cools and thickens on its way to the surface,slowing the flow and potentially causing blockages.One of Trelleborg’s many product lines for the oiland gas industry is thermal insulation material toprevent this cooling.

“Our materials are engineered to cope withenvironments at extreme depth plus temperatureswell in excess of 100°C [212°F],” says Drury.

Safety has long been a priority for the offshoreoil and gas industry, but the Deepwater Horizonexplosion in the Gulf of Mexico, which resulted in11 deaths and the largest accidental oil spill inhistory, thrust the issue into the spotlight.

“Operators are introducing increased risk-mitigation strategies to avoid these sorts ofincidents in the future,” says Drury. “There shouldbe further opportunities for our safety-relatedproducts as legislation is introduced.”

Among Trelleborg’s wide range of safetysystems for the offshore oil and gas industry are theElastopipe deluge system for fire protection,microspheres for smothering fires and flexible fire-retardant coatings.

Trelleborg is also working on innovative

buoyancy solutions that improve safety by reducingthe load on the long pipes bringing oil up morethan a kilometer (3,000 feet) from the seabed.

The industry, which accounts for about 10percent of Trelleborg’s total sales, has witnessedincreased globalisation in recent years as newdeepwater fields are exploited, such as off the coastof Vietnam, Brazil and West Africa.

Opportunities“In Brazil there is heavy investment to enable theconstruction of ships in the country, whereashistorically they might have been built in Korea,”says Drury. “Similarly in Southeast Asia there is ashift toward deeper waters, and at the same timecountries in the region are looking to develop morelocally based supply chains.”

To capture these opportunities, suppliersincluding Trelleborg are setting up production inthese new markets.

But while the opportunities are plentiful, thecompetition is tougher than ever.

“There are a lot of building projects ongoing,but people are being very aggressive to win andeveryone is very conscious about margins,” saysThor Hegg Eriksen, Business Unit President forTrelleborg’s business that focuses on the offshoreindustry. “This seems a bit of an anomaly for abusiness that is making so much money on theoperator side. But there is not really a directcompetitor that is able to offer such a broadproduct portfolio from as many locations asTrelleborg.”

Industry observers see an intriguing periodahead, with expected regulatory changes on safety,national oil companies becoming more outwardlooking, the rise of Asia as a supplier and consumer,and increased investment in deepwater drilling.

“There are changes going on, and it is aninteresting environment,” says Eriksen. “But withour core competencies, our ability to work on aglobal scale and our extensive innovation work,Trelleborg is well positioned to see what happensand to jump on the opportunities as they arise.”

On the riseWith the deepwater discoveries off its Atlanticcoast representing a third of all worldwide oildiscoveries in the past five years, Brazil is widely

Exploiting deepwater reserves presents tough technical challenges

One issue with ever-deeperwells is that the hot oil coolsand thickens on its way to

the surface

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Deeper wells and renewed safety concerns pose new challenges for the offshore oiland gas industry. Providing solutions offers both opportunities and rewards.

The hunt for black gold

goes deeper

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touted as the next oil giant. Petrobras, which hasgrown to become the world’s third-largest oil andgas company by market capitalisation, will beinvesting some US$224 billion by 2014, much of itin platforms, rigs and other infrastructure.

To supply this booming market, Trelleborg isinvesting heavily in Brazil, acquiring an existingfactory and building another on a greenfield site.“Brazil is becoming hugely important,” says BrianMcSharry, President of Trelleborg’s U.S. businessthat focuses on the offshore industry. “We havestudied the market conditions and recognized thesignificant potential, and as a result we haveestablished a major presence there.”

The new facility, located in Brazil’s oil capital,Macaé, will manufacture a wide range of polymer-based solutions for offshore topside and subsea oiland gas exploration.

“There is no other manufacturing on this scalein the country,” says McSharry. “We will be able toreach near capacity relatively quickly, and the sizeof the facility is such that if we need to expand, wecan.”

The second factory, at Santana de Parnaiba, wasacquired in April 2011, together with a nipple hosetechnology for transferring oil from floatingproduction, storage and offloading vessels andterminals.

“This product completes our product andsolution portfolio,” says Managing Director Xavier-Alexandre Delineau. Another line at the factory willproduce printing blankets to cater to the growingLatin American printing market.

Explosive decompressionPetrobras has set aggressive objectives on localcontent for its projects, so the factories areimportant for Trelleborg to access Brazil’s oil andgas market. “One of our goals is to have two world-class factories serving the global offshore andmarine offloading business, and we have a plan inplace to sustain and develop our leadershipposition,” Delineau says.

When engineers specify a seal material for an

application, they have to consider such things asworking temperatures, pressure and compatibilitywith chemicals. In oil and gas applications thereare other critical criteria that must be considered,such as explosive decompression.

Inherently, elastomer seals contain voids. Gas orgas mixtures in contact with elastomer surfacesduring oil and gas processing are absorbed andsaturate elastomer seals. At high pressure thisabsorbed gas is in a compressed state. Whenexternal system pressure is reduced, either rapidlyor over a relatively short period of time, thecompressed gas nucleates, inflating at the voidswithin the elastomer. Depending on the strengthand hardness of the elastomer, this can cause theelastomer to break or crack.

No elastomer can be completely ED resistant.However, Trelleborg has engineered the XploR™range of sealing materials that demonstratesunrivalled ED resistance for each elastomer type.

Innovative systemTrelleborg has developed a new stackable versionof its innovative RiserGuard® system that provides asolution for rigs with limited storage space whileoffering the same high protection as the originalsystem.

“We originally developed our RiserGuardproduct to help protect bare riser joints as theywere handled and run on the rig,” says AlanMcBride, Vice President of Drilling at Trelleborg’sbusiness that focuses on the offshore industry. “Inaddition, the product would enable the riser to berun and pulled quicker, saving valuable rig time.”

The new joints can be stacked alongsidebuoyant riser joints in the same deck storage area,

thanks to strategically placed protective sectionsspaced within the RiserGuard that transfer loadsbetween the joints and the deck.

“Always keen to meet the changing wants andneeds of our customers, we recognized the need tobe able to stack the riser joints and decided todevelop a stackable version of the product,”McBride says.

Gushing upThe starting point of today’s mega-billion-dollar oilindustry came in the 1850s when Polish pharmacistIgnacy Lukasiewicz distilled clear kerosene fromseep oil.

For centuries in North America in what is nowthe U.S. state of Texas, Native Americans used tarfrom oil seeps to treat ailments. In more recenthistory, reservoirs were unearthed when settlersdrilled deep for water. Initially, oil was considered anuisance until its potential was realized.

Because the reservoirs in the region were underseveral hundred feet of sand, the oil was difficult toextract. Flow was slow, and the drill holes wereprone to cave-ins.

At the turn of the past century, engineers at theSpindletop oilfield in Beaumont, Texas, triedpumping mud into the drill hole instead of water toflush out drill cuttings. The mud stuck to the sidesof the hole and kept it from caving in.

The result was historic. On January 10, 1901,following a noise like a cannon shot, mud, naturalgas and then oil came shooting out of the groundin a gusher that rose to a height of more than150 feet. Lucas 1, as the well was dubbed,initially flowed at a rate of nearly 100,000 barrelsa day, more than all the other producing wells inthe U.S. combined. n

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An onerous environment

Industry observers see anintriguing period ahead, withexpected regulatory changes

on safety

A new safety standardA NEW STANDARD in offshore safety which aimsto advance the critical role of elected safetyrepresentatives (ESRs) in minimising the risk ofaccidents and improving safety is to be trialled inthe North Sea.

Offshore workers are elected under the SafetyRepresentatives and Safety CommitteesRegulations 1989. Independent of management,their functions and powers include investigatingpotential hazards, dangerous occurrences,complaints and the causes of accidents as wellas the inspection of installations.

While a basic introductory course alreadyexists, this new advanced standard aims tosupport more effective workforce involvement bygiving ESRs access to training that helps themdevelop their effectiveness and confidence.

Four, two-day pilot courses will be deliveredin Aberdeen by risk management company DNVin February and March 2013. Volunteer delegateswill get the chance to trial the latestdevelopment in safety training for the North Seaworkforce. Upon successful approval of thestandard, the courses will then be rolled outacross the industry and will be available to over2000 ESR’s.

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Oil Review Middle East Issue One 2013

Cegelec Oil & Gas Services, a VINCI Energies GSS company, has justbeen awarded two commissioning* contracts on the Ichthys*production and exploitation of natural liquefied gas project (NLG) offthe coast of Western Australia.The Ichtys project, estimated at approximately US$35 billion, hasbeen touted as one of Australia’s most expensive Energy Projects. Thescheme will see gas from the Ichthys Field undergo preliminaryprocessing at the offshore central processing facility (CPF). Thiscondensate will be pumped to a floating production, storage andoffloading (FPSO) facility anchored nearby. The gas will be transportedfrom the CPF through a subsea pipeline more than 885 Km to theonshore LNG processing plant.The Ichthys project will have an initial production capacity of 8.4million tonnes of NLG (Natural Liquefied Gas) a year and 1.6 milliontonnes liquefied petroleum gas (LPG) a year, as well as approximately100,000 barrels of condensates a day at the peak of production.Production is scheduled to start at the end of 2016.The three-year contracts will see Cegelec perform Pre-commissioningand Commissioning Engineering of both the CPF and the FPSO, aswell as the Commissioning Execution for each unit, out of therespective Korean Yards. During the Execution Phase - Cegelec willwork in Integrated teams with each EPCC contractor - providingrelevant Commissioning expertise to their existing knowledge –therefore combining strengths to reach a common objective of

successful delivery of both projects. This attribution not only recognises Cegelec Oil & Gas Services’international expertise but also its leading position in thecommissioning sector.

85

www.cegelec.com

Ichtys contracts emphasise Cegelec’s expertise

Tech

nica

l Focu

s

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LABORATORY INFORMATIONMANAGEMENT Systems (LIMS)have an ever increasingimportance in today’s laboratoryinfrastructure, dealing withsample tracking, data storageand data reporting. KOC-Waterhandling North Kuwait facilityhas been using a customizeddatabase system that has beendeveloped and installed in eachof the laboratories. Several LIMSfeatures such as auditing,electronic approvals, SOP,calibration, stock management,ad hoc reporting, instrumentinterface etc were not being metby our existing database system.The collection of quality datatherefore became a very complextask when corporatemanagement requiresconsolidated reporting resultsfrom various laboratories. Thesolution had to address theneeds of each of the laboratoriesand had to be accomplished witha single common database. Thesystem also needed to have theability to automatically schedulethe collection of samples atregular intervals. Seamless datacollection from the processcontrol instrumentation wasextremely important, and the

ability to interface with otherdatabases was required. Inaddition, we were lookingforward to having an easy-to-usereporting solution to supportmanagement’s informationsharing demands.

ResultsBy identifying and addressingfunctionality gaps that have to bemet to improve the operationalefficiency of KOC-north Kuwaitwater handling facility, anenterprise LIMS framework hasbeen developed and deployed

based on an off-the-shelfLabvantage’s LIMS system. Thesystem is capable of supportingmultiple laboratories withmultiple workflows and providessystem-wide sampleidentification and traceability.Furthermore, the system enablesKOC’s asset level data sharingand reviewing while adhering todata accessibility rules. Lab-specific configuration supportstests, interfaces, and ad-hoc dataand functionality.

ConclusionWe have been able to deployLabvantage LIMS very quickly.LABVANTAGE uses workflows forcollecting samples, auditing thefacility, changing sample statusautomatically as the samples areprocessed, and auto-emailingbased on calendar dates. Thishelps lab officials to makedecisions quickly and confidentlyfrom the test data, which isdisplayed in a graphical, time-based format. Furthermore, thesystem would help us complywith GLP, ISO and otherregulatory and environmentaldirectives without compromisingon our ‘GO Green’ paperlessinitiative.

Ahmed Abdulnabi Al-Hashemi

Written by Mr. Ahmed Abdulnabi Al-Hashemi, Chief Chemist Water, Handling North Kuwait

North Kuwait water handling facility implements

LIMS system

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FDI Libya conference will bring together the visions of the corporate world and the new authorities in Libya. FDI Libya will host a spectrum

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)001GE¤ 002cº( ZôÜ hT°ªÉ∫ ZôÜ GCZÉOjô HÉŸ¨ôÜ.

hb˘˘É∫ Y˘˘∏˘» eû°Ò…, QF˘«ù¢ T°˘ôc˘á T°˘«˘Ø˘ôh¿ d˘∏˘à˘æ˘≤˘«Ö hG’Ef˘à˘Éê ‘ GCa˘ôj˘≤˘«˘É

hGCe˘˘ôj˘˘μ˘˘É Gd˘˘ÓJ˘˘«˘˘æ˘˘«˘˘á: {g˘˘ò√ GŸù°˘˘ÉM˘á J†°˘º e˘É j˘≤˘ôÜ e˘ø 00311e˘«˘π e˘ôH™

)00292c˘º e˘ôH˘™( e˘™ e˘à˘ƒS°˘§ Y˘ª˘≥ e˘«É√ jÎGhì HÚ 033b˘óe˘É h 00741

b˘óΩm )001e˘˘Î GE¤ 0054eÎ( . hg˘ò√ J˘©˘ó a˘ôU°˘á L˘«˘óI H˘Édæù°Ñá dû°ôcá

T°«Øôh¿ dàƒS°«™ JƒGLógÉ Gdò… jo©àÑnô bƒjÉ HÉdØ©π ‘ G’Eb∏«º. cªÉ JàÉì dæÉ

GdØôU°á dμù°Ö GŸõjó eø GŸ©ôaá Mƒ∫ J∏∂ Gd£Ñ«©á G÷«ƒdƒL«á GdƒGYóI Gdà»

–¶≈ H¡É gò√ GŸæ£≤á Gdü°ÉYóIz.

h“à˘∏∂ T°˘ôc˘á T°˘«˘Ø˘ôh¿ GŸ¨˘ôÜ d∏àæ≤«Ö GÙóhOI 57‘ GŸÉF˘á e˘ø Mü°˘á

Gd˘˘©˘˘ª˘˘π ‘ GŸæ˘˘ÉW˘˘≥ Gd˘˘ã˘˘Óç, H˘˘«˘æ˘ª˘É Áà˘∏∂ GŸμ˘àÖ Gd˘ƒW˘æ˘» d˘∏˘¡˘«˘óQhc˘ôH˘ƒf˘Éä

hGŸ©ÉO¿ G◊ü°á GdÑÉb«á eàªã∏ák ‘ 52‘ GŸÉFá.

برغملا هايم يف يرحبلا بيقنتلل ىعست نورفيش

jù°˘à˘©˘ó e˘ƒD“ô he˘©˘ôV¢ Gdû°˘ô¥ G’ChS°˘§ d˘¡æóS°á GŸ©É÷á)����(

d˘˘∏˘˘©˘˘ƒOI GE¤ Gd˘Ñ˘ë˘ôj˘ø ‘ 3102, M˘˘«å j˘˘é˘˘ª˘˘™ HÚ K˘˘æ˘˘Éj˘˘É√ Y˘óOG c˘ÑÒG e˘ø

GŸ¡æóS°Ú hGŸàîü°ü°Ú GdôGFójø ‘ ›É’ä Gd쫪«ÉA hGdÑÎhc«ªÉhjÉä

hGd˘˘ÑÎh∫ e˘˘ø L˘˘ª˘˘«˘˘™ GCf˘˘ë˘˘ÉA G’Eb˘˘∏˘˘«˘˘º. hJ˘˘æ˘˘©˘˘≤˘ó Gd˘óhQI Gd˘ã˘Éf˘«˘á e˘ø e˘ƒD“ô

he˘˘˘˘©````ôV¢ Gdû°``ô¥ G’ChS°˘˘˘§ d˘˘˘¡˘˘˘æ˘˘˘óS°˘˘˘á GŸ©˘˘˘É÷á, hGd˘˘˘ò… j˘˘˘æ˘˘˘¶˘˘˘ª`````¬ a````ô´

GŸª˘˘˘˘∏˘˘˘˘μ`````á Gd˘˘˘©˘˘˘ôH˘˘˘«˘˘˘á Gdù°`````©˘˘˘ƒOj````á d˘˘˘∏˘˘˘ª˘˘˘©˘˘˘¡`````ó G’Ce˘˘˘ôj˘˘˘μ˘˘˘» d˘˘˘∏˘˘˘ª˘˘˘¡˘˘˘æ˘˘˘óS°``````Ú

Gd쫪«ÉF«Ú)���������(, ‘ Gd˘˘˘˘˘˘˘˘ØÎI e˘˘˘˘˘˘˘˘ø 92S°˘˘Ñ˘˘à˘˘ªÈ/GCj˘∏˘ƒ∫ GE¤ 2

GCcàƒHô/Jû°ôjø G’Ch∫ 3102.

hS°˘˘«û°˘˘à˘˘ª˘˘π G◊óç, Gd˘˘ò… J˘˘≤˘˘ôQ Gf˘˘©˘˘≤˘˘ÉO√ ‘ GŸôc˘˘õ Gd˘˘óh‹ d˘˘∏˘˘ª˘©˘ÉQV¢

HÉŸæÉeá, Y∏≈ YóO eø hQT¢ Gd©ªπ hGŸæÉbû°Éä J¡ó± GE¤ J≤óË NÈGä

Yª∏«á d∏ƒaƒO GŸoû°ÉQpcá ‘ Lª«™ ›É’ä gæóS°á GŸ©É÷á, e™ Wôì H©†¢

GŸƒV°ƒYÉä Gdà» Jà©∏≥ HÉCfû°£á Gdàæ≤«Ö hG’EfàÉê, hcòd∂ Gdàμôjô hGdàù°ƒj≥

Y˘˘˘˘∏˘˘˘˘≈ M˘˘˘˘ó S°˘˘˘˘ƒGA V°˘˘˘˘ª˘˘˘˘ø ›É’ä Gd˘˘˘˘æ˘˘˘˘Ø˘˘˘˘§ hGd˘˘˘˘¨˘˘˘˘ÉR Gd˘˘˘˘£˘˘˘˘Ñ˘˘˘˘«˘˘˘˘©˘˘˘˘» hU°˘˘˘æ˘˘˘ÉY˘˘˘Éä

GdÑÎhc«ªÉhjÉä ‘ G’Eb∏«º.

hd≤ó Mü°π eƒD“ô he©ôV¢ Gdû°ô¥ G’ChS°§ d¡æóS°á GŸ©É÷á 3102Y∏≈

GY˘˘˘˘à˘˘˘ª˘˘˘ÉO ›∏ù¢ Gd˘˘˘ÑÎh∫ Gd˘˘˘©˘˘˘ÉŸ»)� (, e˘˘˘™ e˘˘˘ƒGa˘˘˘≤˘˘˘á Gd˘˘˘óc˘˘˘à˘˘ƒQ Qj˘˘æ˘˘ÉJ˘˘ƒ

HÒJ˘˘ÉÊ, QF˘˘«ù¢ GÛ∏ù¢, Y˘˘∏˘˘≈ G’f†°˘˘ª˘˘ÉΩ GE¤ Gd˘∏˘é˘æ˘á G’S°˘àû°˘ÉQj˘á ŸƒD“ô

he©ôV¢ Gdû°ô¥ G’ChS°§ d¡æóS°á GŸ©É÷á , hGdà» S°ÒGCS°¡É YÑó Gd∏£«∞

Gd˘˘˘˘˘©˘˘˘˘˘ã˘˘˘˘˘ª˘˘˘˘˘É¿, fiÉa˘˘˘˘˘ß Gd˘˘˘˘˘¡˘˘˘˘˘«˘˘˘˘˘Ä˘˘˘˘˘á Gd˘˘˘˘˘©˘˘˘˘Ée˘˘˘˘á d˘˘˘˘ÓS°˘˘˘˘à˘˘˘˘ã˘˘˘˘ª˘˘˘˘ÉQ H˘˘˘˘ÉŸª˘˘˘˘∏˘˘˘˘μ˘˘˘˘á Gd˘˘˘˘©˘˘˘˘ôH˘˘˘˘«˘˘˘˘á

Gdù°©ƒOjá)�����( hGdæÉFÖ Gdù°ÉH≥ dôF«ù¢ T°ôcá GCQGeμƒ Gdù°©ƒOjá.

hb˘ó GChV°˘í S°˘©˘«˘ó Gd˘õg˘ôGÊ , GCM˘ó c˘Ñ˘ÉQ GŸój˘ôj˘ø Gd˘à˘æ˘Ø˘«˘òjÚ Hû°˘ôcá

GCQGeμƒ Gdù°©ƒOjá hY†°ƒ ›∏ù¢ GEOGQI aô´ GŸª∏μá Gd©ôH«á Gdù°©ƒOjá d∏ª©¡ó

G’Ce˘ôj˘μ˘» d˘∏˘ª˘¡˘æ˘óS°Ú Gd쫪«ÉF«Ú hY†°ƒ Gd∏éæá GŸæ¶ªá ŸƒD“ô he©ôV¢

Gdû°ô¥ G’ChS°§ d¡æóS°á GŸ©É÷á, H≤ƒd¬: {jàªãπ GdóhQ G’CS°ÉS°» Gdò… J≤ƒΩ

H˘˘¬ Gd˘˘∏˘˘é˘˘æ˘˘á G’S°˘˘àû°˘˘ÉQj˘˘á ‘ b˘˘«˘˘ÉΩ G’CY†°˘˘ÉA Hü°˘˘«˘˘ÉZ˘˘á Gd˘˘à˘˘ƒU°˘˘«˘˘Éä hJ˘≤˘óË

G’S°˘˘˘àû°˘˘˘ÉQGä d†°˘˘˘ª˘˘˘É¿ ‚Éì e˘˘˘ƒD“ô he˘˘˘©˘˘˘ôV¢ Gdû°˘˘˘ô¥ G’ChS°˘˘˘§ d˘˘˘¡˘˘˘æ˘˘˘óS°˘˘á

GŸ©É÷á ‘ JæÉh∫ Gd≤†°ÉjÉ Gdü°ë«ëá, hJ≤óË e©∏ƒeÉä PGä b«ªá YÉd«á

dμπ GŸû°ÉQcÚz.

hhb™ GNà«ÉQ aô´ GŸª∏μá Gd©ôH«á Gdù°©ƒOjá d∏ª©¡ó G’Ceôjμ» d∏ª¡æóS°Ú

Gd˘˘˘μ˘˘˘«˘˘˘ª˘˘˘«˘˘˘ÉF˘˘˘«Ú Y˘˘˘∏˘˘˘≈ T°˘˘˘ôc˘˘˘á GEfÒL˘˘˘» Gdû°˘˘˘ô¥ G’ChS°˘˘˘§ d˘˘˘à˘˘˘æ˘˘˘¶˘˘˘«˘˘˘º a˘˘˘©˘˘Éd˘˘«˘˘Éä

Gd£Ébá)��( Gd˘à˘» e˘≤˘ôg˘É OH˘», d˘∏˘≤˘«˘ÉΩ HÉEOGQI hJæù°«≥ GdóhQI Gd≤ÉOeá

ŸƒD“ô he©ôV¢ Gdû°ô¥ G’ChS°§ d¡æóS°á GŸ©É÷á H©ó ‚Éì GdóhQI G’Ch¤

d∏ªƒD“ô hGŸ©ôV¢ ‘ GCcàƒHô/Jû°ôjø G’Ch∫ 1102.

hb˘˘˘É∫ a˘˘˘ôj˘˘˘ój˘˘˘ô∑ e˘˘˘É÷ƒj˘˘˘ô, GŸój˘˘˘ô Gd˘˘˘à˘˘˘é˘˘˘ÉQ… dû°˘˘˘ôc˘˘˘á GEfÒL˘˘˘» Gdû°˘˘ô¥

G’ChS°˘§: {c˘º jù°˘©˘óf˘É GC¿ j˘≤˘™ GN˘à˘«˘ÉQ G’CY†°˘ÉA Gd˘à˘æ˘Ø˘«˘òjÚ H˘Øô´ GŸª∏μá

Gd˘©˘ôH˘«˘á Gdù°˘©˘ƒOj˘á d˘∏ª©¡ó G’Ceôjμ» d∏ª¡æóS°Ú Gd쫪«ÉF«Ú Y∏≈ T°ôcàæÉ

dà涫º a©Éd«Éä eƒD“ô he©ôV¢ Gdû°ô¥ G’ChS°§ d¡æóS°á GŸ©É÷á 3102.

hfëø Y∏≈ j≤Úm eø GC¿ bóQJæÉ hNÈJæÉ GŸ©ôhaá ‘ ›É∫ J涫º a©Éd«Éä

Gd£Ébá Gd©ÉŸ«á ‘ Gd©ójó eø Oh∫ Gd©É⁄ NÓ∫ Gÿªù°á Yû°ôYÉeÉ GŸÉV°«á

S°à†°«∞ b«ªák GE¤ ‰ƒ eƒD“ô he©ôV¢ Gdû°ô¥ G’ChS°§ d¡æóS°á GŸ©É÷á.

hbó T°¡ó eƒD“ô he©ôV¢ Gdû°ô¥ G’ChS°§ d¡æóS°á GŸ©É÷á 1102‚ÉMÉ

g˘ÉF˘Ó hj˘éÖ J˘≤˘óË Gd˘à˘¡˘æ˘Ä˘á Ÿæ˘¶ª«¬ Y∏≈ GE‚ÉRGJ¡º. hJàªãπ e¡ªàæÉ ‘

–ƒj˘˘˘˘π e˘˘˘˘ƒD“ô he˘˘˘˘©˘˘˘˘ôV¢ Gdû°˘˘˘˘ô¥ G’ChS°˘˘˘˘§ d˘˘˘¡˘˘˘æ˘˘˘óS°˘˘˘á GŸ©˘˘˘É÷á GE¤ e˘˘˘ƒD“ôm

he©ôV¢m YÉŸ»m hQGFó ‘ ›É∫ gæóS°á GŸ©É÷áz.

hHëù°Ö eÉ U°ôMâ H¬ GEjÔL» Gdû°ô¥ G’ChS°§ dà涫º a©Éd«Éä Gd£Ébá,

ZÉdÑÉ eÉ S°«æéí Pd∂ G◊óç Gd¡ÉFπ, Gdò… S°«ù°àªô dãÓKá GCjÉΩm, ‘ LòÜ

GCcÌ e˘˘˘ø 051Y˘˘ÉQV°˘˘É hGCcÌ e˘ø 0041ha˘˘ó Y˘˘∏˘˘≈ G’Cb˘˘π, hGCcÌ e˘ø 002

e˘à˘ë˘óç QS°˘ª˘»m heo˘≤˘óuΩ Y˘ôhV¢. hb˘É∫ Gd˘óc˘àƒQ HÒS¢ QÁô, GŸójô Gd©ÉΩ

Û∏ù¢ Gd˘˘˘ÑÎh∫ Gd˘˘˘©˘˘˘ÉŸ»: {jo˘˘©˘˘˘à˘˘˘Ñn˘˘˘ô e˘˘˘¡˘˘˘æ˘˘˘óS°˘˘˘ƒ GŸ©˘˘˘É÷á e˘˘ø HÚ GCcÈ hGCg˘˘º

GŸù°˘Ég˘ªÚ hGd˘óY˘ÉF˘º Gd˘à˘» J˘≤˘ƒΩ Y˘∏˘«¡É U°æÉYàæÉ d∏ªù°ÉYóI ‘ Gdà©Éeπ e™

G÷ƒGfÖ hGŸƒV°˘ƒY˘Éä Gd˘à˘≤˘æ˘«˘á hG’LàªÉY«á hGdÑ«Ä«á hG’EOGQjá GdôF«ù°«á,

hPd∂ H¡ó± Gdù°©» GE¤ GEjéÉO M∏ƒ∫ d¡ò√ GŸû°μÓäz.

نيرحبلا ىلإ دوعي ةجلاعملا ةسدنهل طسو-ا قرشلا ضرعمو رمتؤم

www.oilreview.me

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رابخأ

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J˘˘æ˘˘ƒ… T°˘˘ôc˘˘á GCQGe˘μ˘ƒ Gdù°˘©˘ƒOj˘á GS°˘à˘î˘óGΩ Qb˘º

b«ÉS°» eø GCHôGê G◊Øô gòG Gd©ÉΩ, GCcÌ eø 071,

hPd∂ d˘˘˘∏˘˘˘à˘˘˘æ˘˘˘≤˘˘˘«Ö Y˘˘˘ø Gd˘˘˘¨˘˘ÉR ZÒ Gd˘˘à˘˘≤˘˘∏˘˘«˘˘ó… GCK˘˘æ˘˘ÉA

Gdàæ≤«Ö Yø Gdæا Gdò… jo©àÑnô V°ôhQjÉ d∏ªëÉa¶á

Y˘˘˘∏˘˘˘≈ GCcÈ e˘˘˘à˘˘˘μ˘˘˘ÉBä Gd˘˘˘©˘˘˘É⁄ G’M˘˘˘à˘˘˘«˘˘˘ÉW˘˘˘«˘˘˘á, H˘˘ëù°Ö

Jü°˘˘˘˘ôj˘˘˘˘í GCM˘˘˘˘ó GŸü°˘˘˘ÉOQ ‘ g˘˘˘òG GÛÉ∫ H˘˘˘ÉŸª˘˘˘∏˘˘˘μ˘˘˘á

Gd©ôH«á Gdù°©ƒOjá. hS°à≤ƒΩ GCcÈ eæàé» Gdæا

‘ Gd©É⁄ Hæû°ô 03HôLÉ GEV°Éa«É gòG Gd©ÉΩ, d«ü°π

GELªÉ‹ GCHôGê Gdàæ≤«Ö Yø Gdæا GŸoù°àîóeá GE¤

GCcÌ eø 071HôLÉ, Hëù°Ö GŸü°óQ PGJ¬, hPd∂

H˘¡˘ó± Gd˘Ñ˘ëå Y˘ø Gd˘¨˘ÉR Gd˘£˘Ñ˘«˘©» eø GCLπ J∏Ñ«á

Gd£∏Ö GdóGN∏» GŸàõGjó, e™ GÙÉa¶á Y∏≈ Gd≤óQI

G’Ef˘˘à˘˘ÉL˘˘«˘˘á d˘˘∏˘˘æ˘˘Ø˘§ d˘¡˘É Y˘æ˘ó 5^21e˘∏˘«˘ƒ¿ H˘ôe«π

j˘˘˘ƒe˘˘˘«˘˘˘É, M˘˘«å H˘˘óGC Gd˘˘à˘˘óa˘˘≥ j˘˘≤˘˘π ‘ H˘˘©†¢ G◊≤˘˘ƒ∫

Gd≤óÁá.

hb˘˘˘˘˘˘˘ó U°˘˘˘˘˘˘˘ôsì GCM˘˘˘˘˘˘˘ó GŸü°˘˘˘˘˘˘ÉOQ ‘ ›É∫ Gd˘˘˘˘˘˘æ˘˘˘˘˘˘Ø˘˘˘˘˘˘§

HÉŸª∏μá Gd©ôH«á Gdù°©ƒOjá bÉFÓ: {S°«àº Jîü°«ü¢

GCHôGê G◊Øô G÷ójóI d∏àæ≤«Ö Yø Gd¨ÉR Gd£Ñ«©»

hJ£ƒjô√ HÉ’EV°Éaá GE¤ J£ƒjô Gdæاz.

hjü°ôì GŸù°ƒDhdƒ¿ Gdù°©ƒOjƒ¿ ‘ b£É´ Gdæا

GCf¡º ’ jôh¿ MÉLák GE¤ Qa™ Méº GEfàÉê GŸª∏μá eø

Gd˘˘æ˘˘Ø˘˘§ GCcÌ e˘˘ø Gd˘˘μ˘˘ª˘˘«˘á G◊Éd˘«˘á Gd˘à˘» Jü°˘π GE¤

5^21e˘∏˘«˘ƒ¿ H˘ôe˘«`````π j˘ƒe«É, ’Cf¡```º ⁄ jîàÈhG

jƒeÉ J∏∂ GŸù°àƒjÉä Yø cãÖ, hjôh¿ GEfàÉê Gdæا

jôJØ™ ‘ cπ eμÉ¿m GBNô. hS°`«àº fû°ô e©¶º GCHôGê

G◊Øô G’EV°Éa«á ‘ GŸæÉW≥ Gdû°`ªÉd«á Gd¨ôH«á eø

GŸª∏μá.

رفحلا جاربأ نم ديزملا رشنل دعتست وكمارأS°àù°àîóΩ GCQGeμƒ YóOG gÉFÓ eø GCHôGê G◊Øô GERGA GS°àªôGQ GdÑëå Yø Gd¨ÉR ZÒ Gdà≤∏«ó…

‚ëâ T°ôcá GCHƒXÑ» GdƒWæ«á d∏£Ébá )WÉbá(

‘ GEc˘˘ª˘˘É∫ T°˘˘ôGA Mü°˘˘á Jû°˘˘¨˘«˘π ÃÑ˘∏˘≠ 006e∏«ƒ¿

Oh’Q GCe˘˘˘˘ôj˘˘˘˘μ˘˘˘˘», hg˘˘˘» “ã˘˘˘π 2^35‘ GŸÉF˘˘˘˘˘á e˘˘˘˘ø

›ª˘˘ƒY˘˘á GCJ˘˘ôhT¢ d˘˘∏˘˘à˘˘æ˘˘≤˘˘«Ö Y˘˘ø Gd˘˘æ˘˘Ø˘˘§ ‘ GEb˘∏˘«˘º

c˘ôOS°˘à˘É¿ Gd˘©˘ôG¥. hU°˘ôsì e˘à˘ë˘óçl QS°˘ª˘»l H˘ÉS°º

T°ôcá WÉbá HÉC¿ Gdû°ôcá bó GC“â GŸ©Ée∏á HÉdØ©π

‘ 13Ojù°˘˘˘ªÈ/c˘˘Éf˘˘ƒ¿ G’Ch∫ 2102, hc˘˘˘˘Éfâ b˘˘˘ó

GCY˘˘˘˘∏˘˘˘˘æâ Y˘˘˘˘ø Gdü°˘˘˘˘Ø˘˘˘˘≤˘˘˘˘á ’Ch∫ e˘˘˘ôI ‘ H˘˘˘óGj˘˘˘á T°˘˘˘¡˘˘˘ô

Ojù°˘˘˘˘ªÈ/c˘˘˘˘Éf˘˘˘˘ƒ¿ G’Ch∫. hb˘˘˘˘Éeâ T°˘˘˘˘ôc˘˘˘˘á Gd˘˘˘˘æ˘˘˘˘Ø˘˘˘˘§

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c˘ôOS°˘à˘É¿ e˘ø {T°˘ôc˘ÉA Gd˘à˘æ˘≤«Ö Gd©ÉΩz ‘ U°Ø≤á

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ÛªƒYá V°îªá eø GCU°ƒ∫ Gdæا hGd¨ÉR Gd£Ñ«©».

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Gd˘˘˘˘˘©˘˘˘˘˘ôH˘˘˘˘˘«˘˘˘˘˘á GŸà˘˘˘˘ë˘˘˘˘óI e˘˘˘˘™ Gdû°˘˘˘˘ô¥ G’ChS°˘˘˘˘§ hT°˘˘˘˘ª˘˘˘˘É∫

GCaôj≤«Éz. Y∏ªÉ HÉCf¬ eø GŸæà¶ô GC¿ JÑóGC Yª∏«Éä

G’Ef˘˘˘à˘˘˘Éê ‘ ›ª˘˘˘ƒY˘˘á GS°˘˘à˘˘μû°˘˘É± GCJ˘˘ôhT¢ ‘ hbâ

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GEMói GŸæû°ÉCä GdæØ£«á ‘ côOS°àÉ¿ Gd©ôG¥

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Y∏≈ Gd¨ÉR S°«õOGO Hæù°Ñá 6^1‘ GŸÉFá ‘ Gdû°ô¥ G’ChS°§, hHæù°Ñá 2^2‘GŸÉFá ‘ cπ eø GCaôj≤«É hGCeôjμÉ GdÓJ«æ«á.cªÉ Jƒb™ Gdæ≤» GC¿ jü°π MéºGd£∏Ö Gd©ÉŸ» Y∏≈ Gd¨ÉR Gd£Ñ«©» GE¤ 846^1e∏«ÉQ eÎ eμ©Ö Hë∏ƒ∫ YÉΩ

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2102, hPd∂ Mù°Ö eÉ U°ôì H¬ GCMó GŸù°ƒDhdÚ Gdù°©ƒOjÚ.

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Gd£Ñ«©», éó∫ GS°à¡Ó∑ b«ÉS°» ” JãѫଠYæó eÉj˘˘≤˘ôÜ e˘ø 4e˘∏˘«˘ÉQGä b˘óΩ e˘μ˘©Ö j˘ƒe˘«˘É. hJG’Ee˘ÉQGä Gd˘©˘ôH˘«˘á GŸà˘ë˘óI d˘ôa˘™ M˘éº GEfàÉL¡É eøGd˘˘˘æ˘˘˘Ø˘˘§ GE¤ 3e˘˘ÓjÚ H˘˘ôe˘˘«˘˘π j˘˘ƒe˘˘«˘É, GQJ˘Ø˘ÉY˘É Y˘ø

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‘ Gdù°æƒGä G’CNÒI ‘ J£ƒjô hGEfàÉê cª«Éä cÉa«áe˘ø Gd˘¨˘ÉR Gd˘£˘Ñ˘«˘©» dà∏Ñ«á GMà«ÉLÉJ¡É GŸàõGjóI eøGd˘˘μ˘˘¡˘˘ôH˘˘ÉA, hH˘˘î˘˘ÉU°˘˘á N˘˘Ó∫ aü°˘˘π Gdü°˘˘«˘∞ M˘«˘æ˘ª˘Éjü°π GS°àîóGΩ GCL¡õI Jμ««∞ Gd¡ƒGA GE¤ PQhJ¬.

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d˘˘˘∏˘˘˘£˘˘˘Éb˘˘˘á - d˘˘˘æü°˘˘˘«Ö Gd˘˘˘Ø˘˘˘ôO - ‘ GC¿ J˘˘˘μ˘˘˘ƒ¿ Gd˘˘˘£˘˘Éb˘˘áGdæƒhjá g» jó Gd©ƒ¿ Gdà» Jù°à©Ú H¡É dà∏Ñ«á 52‘GŸÉFá eø GS°à¡Óc¡É, Mà≈ e™ GdàƒS°™ Gdò… jû°¡ó√Gd≤£É´ G’bàü°ÉO…. h‘ Gdƒbâ G◊É‹, jຠJƒd«ó08‘ GŸÉF˘á e˘ø GM˘à˘«˘ÉL˘Éä Gd˘óhd˘á eø Gd£Ébá eøGd¨ÉR Gd£Ñ«©», H«æªÉ jຠG◊ü°ƒ∫ Y∏≈ GdÑÉb» eøGdæا, hGdò… –àÉL¬ Gdóhdá cÉMà«ÉW» d∏ü°ÉOQGäGÿÉΩ.

ايونس ديازتي ةقاطلا ىلع يملاعلا بلطلا

يعيبطلا زاغلل ادروتسم حبصت دق تارامIا

e£∏ƒÜ GŸõjó eø Gdæا dà∏Ñ«á Gd£∏Ö Y∏≈ Gd£Ébá

hRjô GdÑÎh∫ G’EeÉQGJ» fiªó Hø XÉYø Gd¡Ée∏»

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يبرعلا مسقلا

GCNÑÉQ ................................................................................................................................................................................. 4

–∏«Óä ......................................................................................................................................................................... 31

يزيلجنإلا مسقلا تايوتحم صخلم

J≤ÉQjô NÉU°á: GdÑëôjø, J≤ôjô HÉHμƒ, GS°à£ÓYÉä, Gdàæ≤«Ö hG’EfàÉê, Gdù°Óeá hG’Ceø, J≤ôjô S°ƒ¥ GCHôGê

G◊Øô.

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eù°ÉFπ J≤æ«á: G◊Ø`````ô hG’E“````ÉΩ, –≤˘˘«˘˘≥ G◊``````ó G’Cbü°˘˘≈ d˘˘ÓEf˘˘à˘˘Éê, GŸμ˘˘ã˘Ø˘Éä, N˘óe`````Éä G’Chaû°˘ƒQ,

Gdàëμº ‘ G’BHÉQ.

......................................................................................................................................................................................................

G’Jü°É’ä hJμæƒdƒL«É GŸ©∏ƒeÉä: Jîõjø GdÑ«ÉfÉä, GJü°É’ä GŸæÉW≥ Gÿ£ôI.

......................................................................................................................................................................................................

e©ÉQV¢:e©ôV¢ fا Gdû°ô¥ G’ChS°§, e©ôV¢ G’EeÉQGä dà≤æ«Éä eμÉaëá GdàÉBcπ, GŸ©ôV¢ Gdù°©ƒO…

d∏ù°Óeá hG’Ceø.

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Cansco Dubai LLC..............................................................22

CARBO Ceramics................................................................21

Castolin Eutectic Messer Switzerland S.A. ................75

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CompAir Middle East........................................................77

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Schoeller - Bleckmann UK..............................................65

Shell Overseas Services ..................................................51

Shree Steel Overseas FZCO............................................26

Silixa Ltd...............................................................................53

Societa' Italiana Elicotteri S.r.l.......................................85

Society of Petroleum Engineers....................................43

Suraj Limited ......................................................................63

TMK, OAO..........................................................................103

Top Oil Field Industries Ltd. FZC ..................................73

Trans Asia Pipeline Services FZC..................................44

VF Imagewear ....................................................................63

Welltec AS ..........................................................................55

ADVERTISERS INDEX

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„Some conditions leave noroom for choice…”

TMK PF and ULTRA QX PremiumConnections have been successfully testedfor conformance with the international SO13679 standard, level CAL V*

*CAL– Connection Application LevelCAL IV is the highest level

Trade House TMK40, bld. 2a, Pokrovka StreetMoscow, 105062, Russia

TMK Premium Service20, bld. 1, Podsosensky Lane,Moscow, 105062, Russia

10120 Houston Oaks Dr.Houston, TX 77064 USATel.: +1 281 949-10-23Fax: +1 281 445-40-40

Visit us at Nigeria Oil & Gas18-21 February 2013Booth K10

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