Exploration & Production

MENA region to see almost US$1 trillion in energy investment over the next five years - APICORP

apicorpforecastThe Arab Petroleum Investments Corporation (APICORP) forecasts total energy investment (committed and planned) of US$919bn for the MENA region over the next five years in its newly released annual MENA Energy Investment Outlook

The report forecasts that the MENA region will see a number of critical energy projects pushed through over the next five years, despite the uncertain geopolitical backdrop. Around $345bn has been committed to projects under execution while an additional $574bn worth of development is planned, with the private sector accounting for the bulk of planned investments.

Saudi Arabia and the UAE represent 38 per cent of planned investments, with US$149bn and US $72bn respectively, over the outlook period, as both countries look to boost their upstream oil and gas sectors. For Egypt, the main focus is ramping-up of gas production and meeting rising power demand. Planned investments in the country are $72bn, with the power sector making up over 50 per cent of the total.

Elsewhere planned projects in Kuwait stand at $59bn over the same period, with more than 50 per cent in the oil sector, as the country looks to increase oil output to four million bpd within the next few years. Similarly, in Algeria planned projects stand at around US$58bn with the Hassi Messaoud Peripheral Field Development accounting for a significant portion of investments in upstream oil. The country will seek to invest in upstream oil and gas to meet its target of increasing production by 20 per cent. However, low fiscal buffers and competing pressures on revenue may impact Algeria’s efforts to execute its ambitious capacity expansion plans. 

Other major investment in the oil and gas sector will be made in Iran, with an estimated US$67bn in planned projects in the coming period, and Iraq, at US$47bn. Oil investments account for US$27bn with the ENI-led Zubair and the PetroChina-led Halfaya, two of the largest upstream development projects in the country. However, the outlook for those countries is much less certain, with a significantly higher degree of political risk.

The report highlights three main challenges that could potentially hinder the growth of investment in the region.  The first is that the global investments in the oil and gas sector are closely interlinked with oil prices, and though the situation as a whole is improving, prices are not expected to return to the high levels seen prior to the sharp drop in 2014. 

Another challenge to growth is the rising cost of capital, as some governments will find it harder to attract foreign investment. 

Finally, the regional geopolitical environment remains fragile, and persistent conflicts in the region are creating instability that causes investors to become cautious in investing in the entire region. 

“2017 certainly saw improvements and rebalance in the region,” the report comments. “The period of weakest economic growth and oil prices seems to have passed, but the recovery phase will take longer and is not without its challenges. GCC governments have announced expansionary budgets following a few years of tightening expenditures because of lower oil revenues, and will prioritise critical investments in their energy sectors.”

Further information can be found at: www.apicorp-arabia.com

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Exclusive interview: PDO pushes ahead with EOR

PDOwebIn an exclusive interview with Oil Review, Junaid Ghulam, field development manager, Petroleum Development Oman (PDO) and Rifaat Al Mjeni, EOR portfolio leader, PDO discuss the oil and gas company’s EOR activities in the run-up to Oil & Gas West Asia (OGWA)

What is the importance of EOR to Oman’s oil and gas sector and its contribution to achieving production goals?

Despite the challenging economic environment, PDO is continuing its journey in growing the future EOR contribution to oil production with focus on cost. It is anticipated that by 2025 more than 23 per cent of PDO’s production will come from EOR projects. PDO is currently operating a range of commercial-scale EOR projects including chemical EOR, miscible gas injection (MGI) and thermal applications. Concurrently, PDO is continuing to identify novel EOR technologies that have the potential to unlock difficult hydrocarbon resources. This is being done through a series of dedicated laboratory and field testing programmes.

What do you think are PDO’s most significant advances and achievements in EOR? 

PDO is the leading company in the region, if not the world, in which four different EOR recovery processes are being implemented on a full field commercial scale.. These projects are a testament to PDO’s ability to successfully implement several complex recovery processes with various challenges in a short time span. The Amal West steam injection project warrants a special mention as it is the first in the world where a renewable energy source (solar energy) is harnessed to assist in steam generation for injection.

 What have been some of the main challenges in implementing EOR projects, and how have you overcome them?

There are two main challenges encountered in EOR. The first is related to the scarcity of the specialised skill sets required for EOR throughout the EOR value stream. To address this, PDO created an EOR department and staffed it with Omani and international experts who together are working towards developing technologies that will unlock hydrocarbons in the future. In addition, PDO entered into a number of strategic alliances and joint industry projects with various institutes worldwide in which we are able to access the niche skills that we need. 

The second challenge relates to the commercial environment and ensuring that we persist with EOR during the downturn with a cost focus. We have divided the heavy oil portfolio into three segments. The first segment consists of fields which lend themselves to easy replication of some of the proven EOR recovery processes in full field implementation, such as steam floods, thermal-assisted GOGD, and polymer floods. This allows Oman to progress with projects in a phased manner which minimises exposure, accelerates cash flow and increases production. Segment two, are the fields that seem to be a small step out of the proven EOR technologies, such as heavier oils for polymer floods or lower permeability reservoirs. These require a small pilot but are still within the assets under the EOR recovery process, and have standard surface facilities systems which do not require major upgrade or enhancement of the surface injection/production system. Segment three are reservoirs which do not have any proven EOR processes associated with them and still remain within the research domain. These fields can either be offered to companies where we could collaborate to unlock the reserves using novel recovery ideas and/or perform laboratory experiments in which various technologies are tested on a laboratory scale to define new recovery mechanisms where it is recognised that a long lead time is needed before the technology is matured.

See the latest edition of Oil Review Middle East for the full version of the interview. http://www.oilreviewmiddleeast.com/current-issue. OGWA takes place from 25-28 March in Muscat. See www.ogwaexpo.com 

 

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Petrofac signs second contract within a month in India

Visakhapatnam oil refinaryOilfield services company Petrofac Ltd said it was awarded an engineering contract worth about US$200mn as part of upgrades to the Visakh Refinery in the southern part of India

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ADNOC signs offshore concessions with China’s CNPC

ADNOC CNPCThe China National Petroleum Corporation (CNPC), the world’s third-largest oil company, has been awarded stakes in two of Abu Dhabi’s offshore concession areas following the signing of agreements with Abu Dhabi National Oil Company (ADNOC)

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John Wood Group shares fall on FY core earnings dip

North Sea OilJohn Wood Group Plc reported a fall in full-year core earnings due to challenging conditions in its core oil and gas markets and said it expects only a modest growth in core earnings for the full year

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