Pipeline Magazine - InterviewsInterviews-RSS FeedSun, 24 May 2020 23:00:03 GMTWintershall Dea: well positioned to weather the corona-crisis https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/may/wintershall-dea-well-positioned-to-weather-the-corona-crisis/Wintershall Dea CEO Mario Mehren spoke with Pipeline Oil and Gas News about how the German gas and oil company is coping with the coronavirus crisis and why the merger a year ago with DEA came at the right moment2020-05-10https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/may/wintershall-dea-well-positioned-to-weather-the-corona-crisis/

Wintershall Dea Chairman of the Board and CEO Mario Mehren spoke exclusively with Pipeline Oil and Gas News’s Julian Walker about how the German gas and oil company is coping with the coronavirus crisis and why the merger a year ago with DEA came at the right moment

Pipeline  What does the crisis mean in practical terms for the business and for your day to day work?

We are currently – as we all notice in our everyday lives – in a state of emergency. As Wintershall Dea we are also in a state of emergency, but still able to act. We are in a kind of controlled state of emergency, and so we are acting and responding with careful consideration.

In the last month, almost all employees at our locations in 13 countries - Germany, the UAE and elsewhere - have been working from home. Clearly however that’s not always possible for everyone, in particular not for our onsite teams. I’m truly thankful to our people at production sites around the world who are working hard – and maintaining appropriate safety measures - to continue producing gas and oil.

Pipeline  As CEO, what does the situation mean for you personally, and how are you managing to engage with your team and your people? 

Certainly it has been a big change to working life. Since mid-March I’ve been working from home myself, and my wife and children are at home with me. All of our people have dispensed with business trips, nationally and internationally, and that goes for me too. Not making any business trips is a particularly noticeable change!

Apart from that, I’m making more phone calls than ever before, and using online tools constantly. I’m a big fan of talking in person, and I miss it! But in an internationally active company, video conferences are always part of everyday life. We’re therefore well versed in that and also very well equipped.

I’ve been running digital meetings with employees for over a year now, and since we all moved to remote working we’ve stepped that up so they are weekly. Once a week I share a video message from my home office to our 2,800 people worldwide. Any employee can then submit a question, and I and my management team do our best to answer them.  

I also use my internal blog to share some of my personal thoughts about working from home. It’s an unusual and often challenging situation for everyone, and I think it’s important for me as CEO to recognise that.

Pipeline  What protective measures has Wintershall Dea taken at its production sites?

We’re doing everything we can to stem the spread of the virus and ensure health and safety. At the same time, we need to keep our operations and our businesses running so that we can continue to produce and deliver the energy the world needs. We have implemented the necessary safety measures at production sites. Teams have been reduced to a minimal staff, so that they can maintain safety distances. Measures such as only allowing lifts on production platforms to be used by one person at a time have been put in place. 

Pipeline  Is production and the business suffering in any way from corona?

At the moment we’re managing to keep our production largely stable. Our advantage is that we produce a lot in extremely remote regions such as Siberia and Tierra del Fuego, or are relatively isolated with offshore platforms on the high seas. We also benefit from the fact that we’ve invested in digitalisation. A number of our production platforms in Norway and the Netherlands are operated unmanned, and are controlled remotely. More broadly, we established various programmes to make virtual working easier last year, shortly after the merger of Wintershall and DEA. Together, these digital investments have helped make our business more resilient at this difficult time.

Pipeline  To what extent is the corona crisis threatening your business? And has your merger last year helped to make you more robust?

We, too, are affected by these developments, but Wintershall Dea is well positioned – even in this crisis. We have an extremely robust portfolio, we produce in 13 countries and at production costs that are almost half the average of our competitors. Our diversified, well-balanced portfolio, which makes us highly crisis-proof, is proving its worth here.

And yes, our merger last year – between Wintershall and DEA – came at just the right moment! May 2020 sees the first anniversary of our merger and our new company, and we are now seeing the benefits. We now face this crisis situation as a single, forward looking company. Europe’s leading, independent gas and oil company. We are leaders in terms of our production and reserves, but also in terms of our production costs, which are significantly lower than those of our competitors.

Pipeline  But the oil price has plummeted dramatically. What level do you think is realistic by the end of the year?

This depends on many very different factors that are difficult to predict. But it seems evident that oil and gas prices will be significantly lower than in 2019.

Pipeline  Do you expect the current crisis to have a major impact on the oil and gas industry?

Our economic environment is extremely difficult at present. In many countries, the coronavirus is sending the economy into a tailspin to an extent that we have not experienced for many years. The price development represents an extreme challenge for our industry. Even if we keep our production largely stable, we are still dependent on global market prices.

Pipeline  Do you expect the corona crisis to affect your company’s sales and profits this year?

The corona crisis will have an impact on the entire global economy and also on our industry.

Pipeline  Can you maintain your growth and investment targets? Will you also need to reduce costs? And will there be an impact on your business in the UAE?

We are well positioned and optimistic. We have very low production costs and at the same time very high reserves. But we have already taken steps to adapt to the new challenges: together with our shareholders, we have decided to suspend the dividend until further notice. We will use this flexibility to shore up our balance sheet.

Our investments for 2020 will be well below our previous plans at between 1.2 to 1.5 billion euros, which is a 20 per cent reduction on what we had planned only recently, and compares to a 2019 spend of around 1.5 billion euros. Our exploration budget, which will range between 150 and 250 million euros, will also be significantly lower than in 2019. We will also continue to look for opportunities to streamline our portfolio. However, we will only do so where we see appropriate long-term value.

Here in the UAE, we are a committed partner for the Ghasha concession project, an important part of our growth plans. We are proud to be a partner to ADNOC, which is part of the DNA of the UAE’s economy. We understand that ADNOC – together with us and the other IOCs involved – has to react to the current situation, and we expect and believe the project to progress.

Pipeline  Wintershall Dea wants to go public. Given the stock market crash, is that still at all realistic?

It’s no secret that our shareholders want to take us public. But it’s also no secret that an IPO is always dependent on the market conditions.

This interview first appeared in the May issue of Pipeline Magazine

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Maximising value from digital twin in asset managementhttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/april/maximising-value-from-digital-twin-in-asset-management/Boston Consulting Group's managing director & partner Bjorn Ewers talks about maximising value from digital twin2020-04-21https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/april/maximising-value-from-digital-twin-in-asset-management/

By: Bjorn Ewers, managing director & partner at Boston Consulting Group (BCG) & Jean-Christophe Bernardini, partner & associate director at Boston Consulting Group (BCG)

How can digital twin technology create and capture more value in asset management?

Digital twin technology enables companies to optimise operating processes, improve capital investment in a virtual world before applying them in the real one, and create and capture more value by enhancing the effectiveness of an array of value drivers including capital expenditure reduction, time-to-first-oil acceleration, recovery rate increase, production acceleration, operating expense reduction, and health, safety, and environmental improvement.

The digital twin platform has, in one recent example, led to a significant reduction in manhours and maintenance. Longer-term projections show a 30 per cent reduction in maintenance work, a 70 per cent reduction in shutdowns, and a 40 per cent increase in pump availability.

Where do you see gaps where this technology can be used for better integration of the value chain?

Despite oil and gas companies creating digital twins more frequently, many are still failing in their efforts to capture and benefit from the potential value due to multiple reasons. For starters, they prioritise use cases for digital twins based on what the technology can do, rather than what generates the most value. Moreover, they do not structure sufficient buy-in and commitment from the end-users in their business and underestimate the extent of the changes to the ways people work that are necessary to realise value. There is no one correct approach for all companies with regard to implementing digital twin technology. Still, our experience demonstrates that sustainable companies steer clear of the aforementioned traits by implementing several essential steps while continually emphasising the importance of value.

What is driving the disruptive value creation from digital technologies?

Disruptive value creation from digital technologies continues to be driven by

two essential aspects. Firstly, oil and gas organisations are striving to become more competitive by devising business models based on innovation, with operators launching integrated or isolated operations centres and suppliers offering a higher percentage of production optimisation or maintenance as an outsourced service. The second key factor is organisations are benefiting from digital twin technology. They are in a position to make intelligent, decisive decisions as a result of replicating traditional processes or physical equipment through digital twins in a virtual environment. Ultimately, each digital twin of an asset or plant become more influential as a company’s digital twin use portfolio develops.

How can companies maximise the potential value capture from digital twins?

To start with, oil and gas companies would benefit from considering the following:

  1. Have a deep understanding of the business challenges and also opportunities where digital twins can deliver value. The analysis should consider end-to-end vital operational processes
  2. Identify and choose the right fit for purpose in digital solutions based on the target operating philosophy and business opportunities identified
  3. Implement a data-driven strategy and governance model, aligned with the prioritised use-cases identified and supported by a comprehensive IT architecture approach
  4. Adopt an operating philosophy and models to change how processes are operated, and again supported by change management program which drives the case for change

Through these four starting points, oil and gas companies can maximise the potential value capture from digital twins by gradually building a flexible IT and data infrastructure in line with evolving IT requirements, plan how to introduce a proven technology solution across an asset portfolio as effectively as possible, and evaluate how to utilise the resources available to them best to develop upcoming projects. This may entail adding functionality to existing use cases or starting new ones, and adequately preparing and devising the implementation sequence by analysing how to deliver the most value and which assets have similar work processes, stakeholders, and technology requirements are essential.

Identifying the human resources required for each asset and integrating them early so they can learn from minimum viable product development will ensure continuity between development and scaling teams. As organisations progress from scaling to daily operations, they should also ensure that the operating model and capabilities are in place to manage and maintain the digital twin as real-world conditions change.

Organisations are compelled to establish and track KPIs to monitor value creation, while sustainable governance mechanisms should be adopted to facilitate continuous development of successful digital twins and termination of ones that are not performing to expected levels. Furthermore, promoting success stories will also contribute to building momentum and support funding future digital twins.

What are the essential steps to succeed in developing digital twins?

To successfully develop high-value digital twins, there are several essential steps that companies are highly recommended to follow.

  • Identify a limited number of high-value use cases – assess value and feasibility before prioritising, concentrate on the most viable, and redirect resources from programs that are not meeting expectations to those more likely to succeed
  • Develop a proof of concept and agile approach– establish the value potential, devise a simple mockup in a sandbox testing environment, and rectify any technical issues with a detailed strategy to capture value
  • Creating a product team – having a team with a product owner from the business, with the capacity to take decisive and fast decisions
  • Build a minimum viable product – create an end-to-end solution using existing data, verify value to end-users during all stages, and anticipate obstacles involved in managing change
  • Build and create a robust change management program from launch day
  • Scale-up – unveil a digital twin based on asset and value similarities, expand it by adding functionality and work with asset entities to ensure prompt adoption Monitor and capture value – closely track value creation, ensure measures are taken for the development team to receive feedback, highlight accomplishments, and cancel programs that do not provide value

What are the main digital twin data challenges and how can these be resolved?

Data ingestion and governance can present digital twin data challenges, with legacy assets, engineering, and 3D data frequently having to be recreated from the beginning. For oil and gas companies, it’s important to prioritise essential data over available data to contain the amount of eff ort involved when scenarios such as these occur. New technologies such as laser scanning, drones, and point cloud solutions in geo referencing are all viable options as they can save companies time and reduce costs that occurred from data ingestion.

The main challenge for greenfield assets is embedding digital requirements in the process of engineering, procurement, and construction. Doing so will enable the exchange of information with structured data and metadata instead of unstructured data, and it is essential to have transparent governance and ownership regimes to guarantee that data is sufficiently maintained and updated.

Upstream oil and gas companies must develop or acquire new capabilities for digital twin solutions to be effective, with traditional IT departments often discovering areas for improvement in software development, cybersecurity, data science, user interface design, and test management. Developing capabilities internally, relying on external suppliers, and choosing off -the-shelf solutions are all possibilities, and the decision should be made after establishing strategic importance in relation to controlling such capabilities.

To achieve sustainability and success, every company should develop a flexible IT and data structure as part of a long-term vision, pursue a modular approach, establish clear architectural principles, and gradually build the infrastructure while identifying and applying solutions to challenges from concrete digital twin use cases.

This interview first appeared in the April issue of Pipeline Magazine

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Changing energy landscape results in new trendshttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/april/changing-energy-landscape-results-in-new-trends/Darren Grainger, managing director at NES Global Talent discusses key issues facing the oil and gas industry today when it comes to jobs, hiring and training...2020-04-12https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/april/changing-energy-landscape-results-in-new-trends/

Darren Grainger, managing director at NES Global Talent discusses key issues facing the oil and gas industry today when it comes to jobs, hiring and training 

 

As oil demand is affected by the COVID-19 pandemic, what its lasting impact on the industry going forward will be is the key question on everyone’s mind.

Despite the industry running very proactive and responsive yet ever-changing HSE programmes and policies that implement, deliver and monitor compliance, the impact is very tangible, according to Grainger.

“The current travel restrictions have impacted several countries around the world, with visa cancellations from certain countries, quarantine rules and even lockdowns impacting worker movement. The geographical talent pool that companies usually tap into for searching and selecting new personnel have also been affected,” Grainger said.

In the current business environment for companies looking to hire, the main challenge will be the impact from travel restrictions as well as talent development. “The traditional demographic of nationalities in current roles in the region for expatriates is being severely challenged with new emerging talent evolving in new lesser-impacted COVID-19 affected countries,” Grainger said, adding that the talent pool within a country or in neighbouring countries is now a hugely attractive proposition for companies looking to hire.

Leverage the flexibility of technology

In this new environment of travel and personal contact restrictions, it may become challenging to recruit in the usual manner so NES is supporting its clients’ with video technology to connect them with candidates and delivering the capacity to interview anywhere through a mobile device, Grainger said.

As specialists become available over the coming weeks and months however, leveraging technology to conduct interviews and sourcing local talent will be key. “Questions can be pre-recorded for candidates to answer in their own time or clients can conduct a live interview. The link can be shared with other stakeholders, reducing the burden and overcoming current geographical constraints,” he said.

NES have over 4,000 contractors across the Middle East region, and many of these candidates are looking to stay in the region as their current assignments end, and secure another role without returning to their home country, he added.

“Given the current travel restrictions across the region, employers may be best served with focusing on candidates currently based in the region in order to keep project timelines on track,” Grainger said.

Meanwhile, clients have embraced working from home for non-essential field operations roles for expats and locals that are not on rotations. Some national operators have confirmed 28:28 rotators will remain in the country for their o‑ period and have provided accommodation given the travel re-entry restrictions, he added.

Skills Shortage

Skilled talent has been a challenge in recent years. Grainger said this is because during the last downturn graduate recruitment and apprenticeships were cut severely. Additionally, a new challenge now presents itself. “Technology skills are now in demand and conversely competition for engineering talent is now fierce with tech firms in particular that are going after the same students who would historically have chosen oil and gas,” he said.

Digitalisation impact on workforce

New disciplines and job roles have evolved in areas of data science, analytics and advanced materials development, Grainger said, adding that as the ecosystem of businesses change, that in turn impacts a more efficient supply chain. The IOC operating model for digitalising is broken down into several key functions; research and development, new approaches to fuels and products and end-to-end operations - including the supply chain. All functions can leverage new approaches to data collection and analytics and change significantly with the use of data for business improvement and to drive efficient process, Grainger said.

Separately, Grainger expects the national development vision of many Middle East countries will result in creating long-term strategy and therefore hotspots in areas of energy diversification, which will be focused in renewables and downstream. Additionally, as these countries continue to target increased production, the region itself remains a hotspot with emerging developments in East Africa.

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P&O Maritime Logistics embracing digitalisationhttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/po-maritime-logistics-embracing-digitalisation/Martin Helweg, chief operating officer, P&O Maritime Logistics talks about the impact of digitalisation in the massive sector and launching a new open maritime data system...2020-03-26https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/po-maritime-logistics-embracing-digitalisation/

Martin Helweg, chief operating officer, P&O Maritime Logistics spoke to Pipeline Oil and Gas News’ Julian Walker about the impact of digitalisation in the massive sector and launching a new open maritime data system

What is the new open maritime data system you are working on?

The open data system provides a single, open-source platform for vessel operators to share data and collaborate on solutions that actively improve the safety, sustainability, operational excellence and technical reliability of seafarers and vessels across the globe.

What is the reason for building the open data system?

In today’s digital age, information storage and data sharing have become a part of our lives. We exchange e-mails and messages with friends and colleagues daily irrespective of where they are located. Of course, we expect this to be true for our professional environment as well.   Following the example of other industries collaborating in specific areas for the greater good improve the maritime industry as a whole.

Are you working with any partners?

Yes, with regards to the new open maritime data system, we are planning to collaborate with other OSV operators.

What kind of data will you be covering?

As a starting point, we will be focusing on HSSE data and maintenance data such as defects, however our vision, is to expand the data capture to equipment data from IoT technology.

Why is it important to have a maritime data system?

Data is a crucial commodity to unlocking real value for our clients, however it should not be a chargeable commodity, historically OEM’s have seen this as a revenue stream, but ultimately this is our data. Data is like pieces in a puzzle if you work in silos, it takes longer to finish the puzzle, but if you collaborate, you can complete the puzzle quicker.

What is your outlook for the oil and gas maritime sector?

Our industry is constantly changing and evolving. On the energy sector as a whole, the world needs to realise that the offshore energy sector will be around for many decades to come – also servicing the hydrocarbon industry, as oil and gas will remain part of the energy mix for many years. We believe that we need to inspire an informed debate about exactly that – the energy mix. We certainly want to move towards renewable sources of energy, but at the same time we need to cater for a growing demand for energy around the world. In this balance, we need to move away from the most carbon intensive fossil fuels – for example coal – and move to cleaner sources such as gas, while the whole energy infrastructure of the world transforms and scales up for renewables.

Furthermore, customers now want a handful of select, trusted, suppliers who can provide much more than one single service. The key challenge for industry players has been the ability to offer our customers a wide portfolio of value-added marine services as our clients’ demands evolve and shift towards a need for a range of services and solutions. We realised, a long time ago, that the entire industry needed to change and started by changing our own perspectives. We needed to diversify investment into our own businesses, in order to stay relevant, and create value. And with the creation of P&O Maritime Logistics, we can focus on three strategic segments – offshore, port services and logistics – creating further value for our customers.

How important is digitalisation going to be for the maritime sector?

Our customer demands are increasingly shifting towards advanced services, and having realised that a long time ago, we began to digitise aspects of our service offering in response and built advanced algorithms to optimise the supply chains of our customers.

For example, by having real-time visibility of vessel locations and applying advanced routing systems, we are able to provide our clients with better, more reliable updates on delivery of cargo. This has optimised their supply chain by improving project scheduling, reducing downtime and the need for manpower and support services.

Additionally, we have worked with several of our key customers to integrate data into their systems, also allowing us to learn more about our customers, thereby enhancing our service offering to cater to even more aspects of their businesses.

Digital is disrupting companies from their service offering through to their operations and maintenance. From customer dashboards providing customers real-time insight into the state of their operations, to the use of Internet of Things to learn more about the state of our vessels, we see IT as a driver of both the topline and of cost reductions.

Disruption is one of the five pillars of our strategy and it is important that we continue to disrupt the status quo and innovate. We are consistently working towards digitalising our ships, through onboard IoT that measures a ship’s health certificate in real time, helping us manage our fleet maintenance in the most effective way. Digitalising our entire fleet is part of our disruption mindset and how we are embracing digitalisation- making us a true 21st-century company.

We have recently signed an agreement with American Bureau of Shipping (ABS), collaborating to deliver a condition-based class (CBS) regime for the platform supply vessel, DMS Courageous. This is an exciting and historic project for us, as the vessel will become the first to utilize ABS Nautical Systems as the computerised maintenance management system to transmit planned maintenance and condition- based maintenance activities to ABS. We aim to work together, cloud-to cloud, to facilitate a seamless flow of class data from the vessel into the ABS Decision Support Center (DSC).

Last year, we also teamed up with Baker Hughes to pioneer lube oil analysis in the marine space. This analysis can tell us a great deal about the condition of our ships – from detecting the presence of water and foreign particles, to changes in temperature, which can give insight into the likelihood of equipment failure in the motor, gearbox and propellers. While it previously could take up to six weeks to receive results from a lube oil analysis, with digitisation, this process can now take place in real time, enabling maintenance to become predictive, which in turn leads to a reduction in unscheduled downtime and repair work.

This interview appeared in the March issue of Pipeline

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Halliburton optimistic about Egypt’s long-term reserves viability https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/halliburton-optimistic-about-egypt-s-long-term-reserves-viability/Colby Fuser, vice president of Egypt and Libya at Halliburton speaks about the Egypt market and the company’s operations there...2020-03-22https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/halliburton-optimistic-about-egypt-s-long-term-reserves-viability/

Colby Fuser, vice president of Egypt and Libya at Halliburton speaks about the Egypt market and the company’s operations there

Which projects is Halliburton active in within Egypt?

Egypt is an important part of our portfolio, and we remain bullish about the prospects for oil and gas services and the fiscal improvements in the economy at large. Halliburton is involved in numerous projects across the country including in the deepwater Mediterranean, West Nile Delta, the Gulf of Suez and others. Halliburton has also been a key partner in several operators’ onshore exploration and development campaigns in the Western Desert and Sinai. In the Western Desert, we recently collaborated to help a customer drill the longest horizontal well in Egypt.

How have the recent Egypt exploration and production awards benefited the company?

The new awards will allow Halliburton to work closer with operators to deploy technologies that help increase production and lower costs per BOE. Halliburton’s value proposition is to collaborate and engineer solutions to maximise asset value for our customers.  When the countries we work in expand their exploration plans, we collaborate and seek to achieve zero HSE incidents, no non-productive time and high service quality.

How has your business outlook in the country changed in the last year?

Halliburton is optimistic about the long-term viability of Egypt’s reserves, and we remain committed to making a positive contribution to growing hydrocarbon resources. The addition of new IOC’s and other operators reaffirm that despite challenges, the market is resilient. We also see the business changing as it relates to HSE and service quality. 

Halliburton is leading the efforts to collaborate with customers and execute on best practices to help minimise risk and prevent injuries. The changes in HSE, along with the new blocks in the Mediterranean and Red Sea, provide a positive outlook for Egypt.

How is Halliburton planning to increase its oil and gas activities in Egypt?

Halliburton is involved in offshore and onshore projects to help operators increase production and lower costs per BOE.  For example, our fracturing technology and subsurface insight help operators unlock reservoirs that were not commercially produced in the past. Additionally, another important factor is providing customers with the right solutions and technologies to help ensure the development and production of Egypt’s reservoirs over the long-term.

There are many examples where Halliburton technology delivered superior results including for an operator in the Mediterranean Sea where we performed one of the deepest intervention and acid stimulations that increased production.

In the Western Desert, we doubled the daily production by executing a nitrogen foam frac combined with technology to mitigate proppant flow-back.  When we execute on our value proposition, our customers can accomplish more with their budgets, which creates new opportunities for Halliburton.

What is your view on the available workers resource in the country?

We are excited about the opportunity to accelerate and broaden the capabilities of Egypt’s already strong skilled workers. We focus on developing the local workforce through on-site training and enabling employees to gain experience outside of Egypt where they can eventually utilise this experience locally as the market grows.

Halliburton is investing in young and middle-management development programs to support the government’s plans. Can you share some details?

Human capital development is critical to the success of our business, and investing in our people will pay dividends by increasing the diversity and skill base of employees. The agreement we signed with the Egyptian Ministry of Petroleum & Mineral Resources offers new training opportunities to grow local talent. Halliburton introduced a customised development program for select participants to expand their capabilities and assist Egypt in its role as a leading regional oil and gas hub. The Modernization Project is an excellent step toward achieving sustainability.

We completed our phase one training, which consisted of 20 individuals who spent three months with Halliburton learning various skills.

Phase two of this training starts in March where we will select five of the 20 to travel to the U.S. for a three-month rotation. They will gain valuable experiences in leadership, operational execution, strong HSE culture and many other skills they can share with their teams upon returning to Egypt.

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Bilfinger takes new direction to maximise regional opportunities https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/bilfinger-takes-new-direction-to-maximise-regional-opportunities/President and CEO of Bilfinger Middle East, Jon Rokk, speaks about the way forward for the engineering and maintenance company.2020-03-17https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/bilfinger-takes-new-direction-to-maximise-regional-opportunities/

President and CEO of Bilfinger Middle East, Jon Rokk, speaks to Pipeline Oil and Gas News’ Nadia Saleem about the way forward for the engineering and maintenance company.

Jon Rokk, who has over 6 years’ experience in the region and over 20 years’ experience in Bilfinger’s core industries of oil & gas and chemicals & petrochemicals, took over as President and CEO of Bilfinger Middle East in the summer of 2019 and has since been working to streamline operations in the region to maximise potential opportunities.

Bilfinger has two distinct service lines, engineering and maintenance, along with technologies that support both lines of business. Around 1,400 engineers are based in the region to power its engineering services, with the bulk being based out of Oman and the UAE. Bilfinger in the Middle East also provides maintenance for assets in the utilities, power, water as well as the oil and gas sectors.

Speaking on the sidelines of the Egypt Petroleum Show 2020 in Cairo, Rokk detailed the new direction the company will be taking to grow its business in the region.

“We’re seeing great demand for high-level expertise from an engineering perspective in petrochemicals, especially in Egypt. Our German origins are 150 years old, and we’ve been in the Middle East (Kuwait) since 1968 – we have that rich heritage level of expertise, which is also proven, so we can offer value added services that our customers need,” Rokk said, pointing at one obvious growth opportunity.

In addition, the company is looking to build its strength in size as well as to leverage offshore expertise from European experience. “In the UAE for example, we are yet to develop the scale a company like Bilfinger can offer, so we have unexplored opportunities to tap into, such as the Ruwais complex which will allow us to broaden our footprint,” Rokk explained.

Meanwhile, Bilfinger has been strong in the maintenance business in Kuwait and Saudi Arabia, but is looking to branch out into the oil and gas sector, which presents several opportunities.

“Because the installed base and facilities are growing up and getting older, this opens up many problems that Bilfinger can solve. This is where we come in to offer efficient and cost-effective solutions with our value-add services and technology,” Rokk said.  

Additionally, Bilfinger is looking to bring to the region its expertise in turnarounds and shutdowns. In Europe, the company is among the top to deliver on time and on cost. “Many of our clients are asking us directly, when Bilfinger is going to get into doing Turnarounds? This is exciting opportunity and tells me that great untapped potential and customers are beginning to see the real value in long term relationships and partnerships,” Rokk added.

Last year, Bilfinger won multiple engineering contracts from Abu Dhabi National Oil Company (ADNOC), which entail the provision of front-end engineering design (FEED) for onshore facilities. Serving as one example of the company’s recent success, Bilfinger has plans to grow the stream of contract awards.

“In recent years, we’ve always grown – now there is an opportunity to grow faster but in a controlled way. We can scale up more quickly than before because we are pushing the ‘One Bilfinger Way’. This is different from how the business worked in silos earlier. If you channel the energy to deliver a more-focused operation that will allow us to grow more successfully. Partly, it’s about tapping into the core skill set that we have – we bring ideas, skill set and technology from Europe.” Rokk said.

Bilfinger is operating in a market that is challenged by several factors, stretching from lower commodity prices, a greater push from clients for better performance yet at lower costs, as well as from rising competition in the area of digitalisation.

To address these challenges, Rokk said: “You have to keep innovating, because you can’t just deliver what your competitor is delivering. Our DNA encourages change and innovation and we welcome those ideas that make a difference.” That goes hand in hand with Bilfinger’s significant efforts in digitalisation solutions and that is one way to stay ahead of competition, according to Rokk.

“Digitalisation is a buzz word but it’s about making use of data in a way that can add value to the asset owner. We’re going to our clients and running pilots to show them what we can do because we have faith and proven successes with our technology and solutions. Clients will never stop wanting more for less, but we have to figure out how to deliver solutions faster and cheaper and in a better way,” he added.

“Implementing Bilfinger’s strategy for 2020+ in the Middle East, I’m going to make sure that I help all our people to drive growth and deliver success.  It’s a really exciting time for us,” he added.

This interview first appeared in the March issue

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Energising millennialshttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/energising-millennials/As the world pivots towards a lower carbon energy future, the oil and gas industry is looking to upskill and welcome a new generation of leaders, engineers and innovators to reshape and reinvigorate the sector.2020-03-12https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/energising-millennials/

By: Ben Oudman, director and regional manager, Region Continental Europe, Middle East, India and Africa, DNV GL – Oil & Gas

As the world pivots towards a lower carbon energy future, the oil and gas industry is looking to upskill and welcome a new generation of leaders, engineers and innovators to reshape and reinvigorate the sector.

In the short-term however, concerns over skills shortages and the ageing workforce impacting company prospects have risen in the Middle East and North Africa (MENA) according to new research published by DNV GL. A fifth of senior oil and gas professionals (20 per cent) cited this issue as one of the top five barriers to growth – up from 15 per cent last year. Conversely, such worries have lessened globally, down six percentage points to 15 per cent.

New Directions, Complex Choices: The outlook for the oil and gas industry in 2020 is based on a global survey of more than 1,000 people, the largest international sample in the report’s history. Now in its 10th year, the report assesses industry sentiment, confidence, and priorities, and provides expert analysis of the key challenges and opportunities for the year ahead.

An evolving workforce

Predictions and perspectives on recruitment and the needs of those considering a career in the oil and gas industry are investigated for the first time in the annual outlook report.

Unlike those questioned globally, a third of MENA respondents (33 per cent) expect their business to increase headcount for the year ahead. This opinion is comparatively unchanged from 2019 (32 per cent). In contrast, fewer people globally believe that headcount will rise, down from 34 per cent last year to 28 per cent.

The report asserts that staffing challenges now, and in the future, may be further compounded by the depth and pace of change in some parts of the sector. The impact of decarbonisation initiatives and the demands of digitalising operations are key examples, much discussed and debated by industry leaders. The report asserts that younger professionals and new entrants into the industry will likely spend much of their careers steering their organisations through this transformation.

Galvanising decarbonisation

Notably, DNV GL’s Industry Outlook survey revealed that more than half of respondents in the MENA region (55 per cent) expect their organisation to actively adapt to a less carbon-intensive energy mix in the year ahead. For instance, the study found there is a greater focus on maintaining or increasing investment in photovoltaic (PV) solar (71 per cent) and solar thermal (57 per cent) in 2020. The need for accelerated change is the most pertinent in MENA at 71 per cent compared to 25 per cent in North America.

It is anticipated that a developing renewable industry in MENA can also provide much needed diversification of local employment opportunities, viewed favourably by local governments. DNV GL is currently supporting several renewable energy projects in wind, solar and energy storage throughout the region.

While skills and experience from oil and gas are easily transferrable to alternative energy sources, operational, commercial and new practical know-how is required. Though the abilities of risk management professionals are most in demand by a quarter of global respondents (25 per cent), 10 per cent need environmental specialists.

Beyond the dawn of digitalisation

To support sustainability and improve productivity, the development and deployment of digital tools is rapidly establishing a foothold. Within 12 months, there has been an unprecedented jump in the number of those who view digitalisation as a priority, up from a third (34 per cent) in 2019 to more than half (54 per cent). Almost all respondents globally (92 per cent) expect to increase or maintain spending in this area in the year ahead.

A huge majority of MENA respondents (96 per cent versus 92 per cent globally) expect their organisation to increase or maintain spending on digitalisation in 2020. In particular, 63 per cent expect investment in cyber security to increase, up from 38 per cent a year ago.

Cyber security concerns have risen significantly in MENA with a much larger slice of spending forecast for the year ahead – more so than globally. Safely controlling and averting cyber incidents is a high priority for 35 per cent of those questioned, nearly quadrupling last year’s figure of 9 per cent. Embedding procedures and processes to counter the potential impact of an attack requires specific skills. No wonder that nearly a fifth (19 per cent) of those questioned need artificial intelligence and data specialists to join their organisation. This necessity for digital expertise is significantly higher globally at 28 per cent.

Enticing the next generation of decision-makers, engineers and innovators to lead and transform the sector is critical and complex. Just under half of MENA respondents (47 per cent) believe the industry as a whole is struggling to attract younger employees.

In summary, the survey revealed that those who believe their organisation is an industry leader in digitalisation are more confident in their company’s prospects, more resilient to volatility in the oil price, and are pursuing greater investment in the energy transition.

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Digitalisation taking off in the energy sectorhttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/digitalisation-taking-off-in-the-energy-sector/Craig Hayman CEO of AVEVA, speaks about why digital transformation is coming in a big way to the energy sector and how it can benefit companies and customers alike...2020-03-03https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/digitalisation-taking-off-in-the-energy-sector/

Craig Hayman Chief Executive Officer of AVEVA, the engineering and industrial software company, spoke exclusively to Julian Walker about why digital transformation is coming in a big way to the energy sector and how it can benefit companies and customers alike

 

AVEVA is a software company focused on the industrial sector for over 50 years. It started out of Cambridge University in the UK and it is proud of its academic heritage. “We employ over 70 people with PhDs and have over 4,000 employees,” said Hayman. The firm is listed on the London Stock Exchange. In the last two years, its business has tripled in size in terms of revenue and in the last 12 months, its market capitalisation has doubled. AVEVA’s revenue is about a billion dollars a year.

“I think our focus on our customers and the digitalisation of the industrial sector is one of the reasons for our success. We have a major shareholder in Schneider Electric who has a 60 per cent stake and they are also a business partner. We have benefited from this coming together,” he said. Hayman touched on the merger in March 2018 with Schneider Electric’s industrial software business.

“Together, Schneider Electric and AVEVA form a complete enterprise solution that goes beyond compatibility – there is a shared history and close relationship driving mutual innovation and product optimisation. Since combining with Schneider Electric nearly 24 months ago, AVEVA is positioned as the first company in the engineering and industrial software market to comprehensively address the end-to-end digital transformation imperatives with an integrated portfolio of solutions that deliver efficiency, unlock value and empower people across the lifecycle of capital assets and operational value chains.”

He added: “By joining Schneider Electric’s energy management and automation systems with AVEVA’s software, customers are able to benefit from solutions, which boosts visibility and control across the entire industrial lifecycle. Our integrated portfolio capability harnesses the power of technologies such as artificial intelligence, extended reality (XR), digital twin and cloud computing, coupled with the rich functionality of its industry leading applications. This capability enables companies to realise capital project efficiency, edge to enterprise visualisation, optimised value chains, safe and reliable operations, and a workforce empowered with actionable decision support.”

 Digital transformation

The energy industry is really starting to see digital transformation take place and Hayman believes this is long overdue. “The energy industry is one of the last industries to use digital technology at scale. So if you think about the major technology trends like AI, cloud computing, machine learning and big data, these trends allow the energy sector to transform themselves to be substantially digital now but other industries have been using these tools. Now it is the turn of the energy sector to embrace digitalisation,” he explained.

“Cloud computing helps reduce the cost of delivering technology to an all-time low. Digital trends such as AI and machine learning are impacting all of our lives. Now applying these technologies to the oil and gas sector is having a transformative effect on the industry. Two years ago many of our customers were just beginning to understand industry 4.0 and digital twin. Now most of our oil and gas customers have begun their own digital transformation journey.”

The digital transformation journey that many energy firms are now undertaking is a major reason why AVEVA has had a successful last few years. “Innovations within the energy sector is moving rapidly and our customers are looking for a partner to help them go through the transformational journey,” said Hayman. Focusing on digitalisation AVEVA is looking to provide innovative industrial software to transform the oil and gas industry.

“Our software solutions and platform enable the design and management of complex industrial assets deploying Industrial IoT (IIoT), Big Data and Artificial Intelligence to digitally transform industries. Our portfolio provides a digital thread across the capital asset lifecycle and operational value chains, providing real-time access to relevant and useable information at every stage and enabling customers to automate actions and make more informed decisions that help to create new ways to deliver cost savings or production efficiencies, reduce risk and to maximise margins. Through a combination of digital transformation and human insights, we help organisations manage and design assets more efficiently, increase output, reduce maintenance costs, increase safety and reach their sustainability goals.”

AVEVA is not just sitting on its laurels when it comes to talking about innovative technology. The UK firm spends a lot of time and resources on research and development. “We spend US$130 million a year on research and development. Most of this goes into new capabilities, new products. We have 150 teams of ten people and every 90 days we re-prioritise what the teams work on based on feedback from the customer. This allows us to deliver a lot of innovation,” explained Hayman.

Middle East Focus

AVEVA sees the Middle East as an important growth area and the UAE is one of the fastest growing parts of the business. “The Middle East is an exciting region to be in with visionary projects that are leading the way. They include companies such as ADNOC, Saudi Aramco and NPCC, which have incredible teams that are driving digital rapidly. They are being noticed globally for the aggressive stance in their digital approach,” said Hayman.

Digital investment priorities

AVEVA recently conducted a global survey to identify the key investment drivers for digital transformation. The survey was conducted with 1,240 decision makers in ten countries in EMEA, North America and APAC across nine industry verticals. “The focus was on what are the priorities around digital transformation because we are trying to understand how companies are thinking about it,” explained Hayman.

The research showed that there is a strong demand across both industries and markets to implement advanced technologies such as Artificial Intelligence (AI) and data visualisation to make sense of vast data streams in real time, with 75 per cent of respondents globally prioritising investment in AI and analytics. Hayman talked about how the survey identified three key global investment priorities for companies when it comes to embarking upon the digital transformation journey.

The first priority focused around making sense of data, AI and real time data visualisation. “Our survey found that there is a lot more focus on data visualisation here in the UAE, while the rest of the world put AI as more important. In fact, Middle East organisations put 3D visualisation at double the importance compared to the rest of the world. They also put IoT/Edge at double the level of importance versus the rest of the world,” noted Hayman.

The second focus was around fostering collaboration in advanced process and engineering design. For example, advanced process and engineering design was the second most important technology (74 per cent) and was in the top three technology priorities across all industries globally, scoring highest among engineering, procurement and construction professionals.

“I think the digital data between the design of a facility and the handover/ operations has been siloed in the past. What we are seeing now is that operators want not just the physical handover but the digital as well. We can see the digital transformation help break silos,” he said. The third focus was on setting up cyber security and safety capabilities. Hayman mentioned that the survey showed improving safety and security through technology investment was a priority across all regions, with the Middle East (68 per cent), Australia (63 per cent) and India (60 per cent) particularly highlighting this issue.

Energy outlook

The oil and gas sector is the largest contributor to AVEVA’s revenue, according to Hayman. “Out of the 45 per cent revenue generated from this sector, 10 per cent is generated from Capex linked to manufacturing of plants and refineries, and 35 per cent is generated from OPEX linked to operational improvements.”

What Hayman is seeing in the energy sector though is that globally the turnover of the oil and gas industry has been steadily declining due to macroeconomic conditions. “A few years ago, the total capital spending on projects by this market segment was $450 billion per annum. Since then it has fallen to $250 billion, but remains steady at $250 billion.

There is huge growth potential for our services as currently the amount of digital penetration in this industry is small and oil and gas companies are definitely investing in accelerating their digital transformation initiatives,” Hayman said.

Hayman did end by saying that AVEVA was getting better at operating as a business and the numbers reflect that.

“We have said that over the medium term (three years) we are going to grow our top line revenue above the market. We are growing our margins by 30 per cent. Subscriptions/reoccurring revenues make up about 16 per cent of our revenue. We said we would grow our reoccurring revenue in three years and we have achieved our 16 per cent goal two years early. I think this is a sign that companies want to have access to data.”

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Energy sector a prime target for cyber attackshttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/energy-sector-a-prime-target-for-cyber-attacks/Ashraf Koheil, regional director, MEA – FireEye talked about the type of cyberattacks the energy sector can face and what companies should look to do...2020-02-25https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/energy-sector-a-prime-target-for-cyber-attacks/

Ashraf Koheil, regional director, MEA – FireEye talked to Pipeline Magazine about the type of cyber-attacks the energy sector can face and what companies should look to do

 

What is FireEye’s cyber security strategy going forward?

At FireEye, our mission is to relentlessly protect our customers with the technology and expertise acquired from being on the frontlines of cyber-attacks. We know technology alone is not enough to combat the current threat landscape, so we deliver a complete suite of detection, protection, response capabilities and intelligence consulting to protect organisations against the most advanced threats.

 

What are your customers’ top priorities when it comes to cyber security?

Our customers look to us to ensure they are protected against cyber-attacks from every angle. With FireEye staff spending more than 1 million hours per year on the front line of attacks, customers trust and depend on our real-time knowledge of the threat landscape. They look for partners that can deliver not only on technology, but the context and threat intelligence to back it up.

 

How are cyber security attacks on the oil and gas sector evolving?

The oil and gas industry is a prime target for all types of cyber-attacks. Nation-state actors, rogue terrorists, criminals and hacktivists have varying motives, including sabotage, espionage, financial gain, or political causes. The energy industry will likely continue to be a high priority target, particularly given its importance to national and economic security. We expect the following situations may further contribute to threat activity towards the industry:

  • The continued drop in oil prices may influence cyber criminals to attack pilfered oil or gas drilling technology in light of profitability concerns.
  • Continued innovations in fossil fuel development and alternative energy production will probably also lead to increased cyber espionage as groups try to obtain intellectual property and proprietary data for the benefit of state-owned companies.
  • Growing global demand for energy and dwindling natural resources will likely result in increased cyber espionage against the sector as nation states seek intelligence that would afford them a competitive advantage when vying for energy security.
  • Observed espionage by suspected Russian-based threat groups may target industrial control systems (ICS) and supervisory control and data acquisition (SCADA) systems.
  • Conflict between countries could also result in increased threats as state-sponsored threat actors may try to increase pressure by disrupting the energy supplies.
  • Environmental issues and other controversies related to energy production may also result in increased activity from hacktivists seeking to call attention to the issues and embarrass organisations that they view as responsible.

What are the major hurdles companies face when looking to implement a cyber security strategy?

We recently issued our Cyber Trendscape Report which surveyed over 800 IT executives across the globe to help organisations benchmark their cyber security initiatives. Part of the report looked at challenges that companies face with their cyber strategy. The report showed that many factors impact the maturity of an organisation’s cyber security programme and its ability to be resilient against cyber threats. According to our findings, organisations reported that the main challenges they faced when it comes to implementing cyber security strategies were primarily IT and security technology maturity (over 80 per cent) followed by IT and security process maturity (80 per cent) and then visibility into threats (70 per cent). A majority of organisations (63 per cent) also indicated that it was a challenge to balance cyber security and day-to-day IT operational requirements. Looking at these results, it’s clear to us that organisations need a trusted cyber security partner who can help alleviate some of these pain points.

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ABB integrates solutions amid an energy industry transition https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/abb-integrates-solutions-amid-an-energy-industry-transition/ABB Energy Industries Christian Cravedi and Ronan O’Sullivan speak about strategies that are supporting the energy world’s shift...2020-02-20https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/abb-integrates-solutions-amid-an-energy-industry-transition/

ABB Energy Industries’ India, Middle East & Africa senior vice president – hub manager Christian Cravedi and vice president, hub business line digital manager Ronan O’Sullivan speak to Pipeline Magazine’s Nadia Saleem about strategies that are supporting the energy world’s shift towards a sustainable, digital future

 

How is ABB supporting a step change in the development and delivery of the global energy system?

 

Cravedi: Our approach is through a strong value chain with a value proposition, which is digital as well as sustainable. 

We are very much focused on the technology part of the full chain with the latest solutions and services across the chain. At ABB, we are in front of the challenge of integrating all these different technologies into a single platform to be digitally enabled. As we enter a digital environment, we focus on the 3S – to be much safer, smarter in our solutions, and more sustainable.

Our sustainable solutions are very much driven by the digital value proposition and long-term partnerships.

Usually, sustainability is about the environment, but when we talk about this region, we enter discussions about in-country-value (ICV) development.

The ICV sustainability process means to supply as much as we can from the country for the country and making sustainable the national’s employment.

Through the value chain of ABB, which is very much focused on long-term partnership, ABB has a different approach compared to that of a typical technology provider. Whatever we do in terms of adding value, it is to make it sustainable. While EPC developers come in, develop and move on to the next job – this is not going to create sustainable Emiratisation environment.

 

O’Sullivan: As we transition into a digital perspective on how we are addressing sustainability globally: it is necessity from the customer first and foremost. This poses the question of how can we extend the lifecycle of their existing equipment and what we can do from a digital prescriptive and enhance how their equipment is running.

We’re really applying newer technology now in order to have the whole value chain from supply to demand as well as long-term sustainability as well as reliability. This is how we see digital fitting into our industry, which is oil, gas, chemical, power and water.

 

What strategy do you use to capture regional growth and secure your position in the years ahead?

 

Cravedi: ABB always has a global strategy but there is also local strategy - ABB is a global company, acting very much into local environment. This is the reason why we have been in the UAE for 30 years, acting locally.

In the UAE, where ADNOC wants to drive the market, this is aligned with ABB’s value proposition as well as the execution model. We are very much about digital - doing more with less but do it even better and more sustainably.

Being local is extremely embedded into our DNA and localisation is what markets in this region are asking for. The demands of the market have been matching our value proposition and our execution, because that is how we established our business here. ICV for us doesn’t generate new contribution but a confirmation that our model is fit for this.

 

How is the energy transition and digital transformation playing out for ABB?

 

Cravedi: ABB is always a moving company and we are readjusting and tuning our organisation to support the market demand. We created a new business line 10 years ago called Energy Industries – this is matching the current demand in terms of the energy revolution within oil, gas, chemicals, power and water.

We are going to move into something more sustainable in terms of energy, which doesn’t mean there will be no hydrocarbon but it’s going to be much more fluid energy with integration between oil, gas, and power sector. This is going to be a full chain of value, and ABB has had that approach from the very beginning.

Historically, ABB was a pioneer in technology, but also in seeing how the trend of the market is going in order to be aligned with it.

Our customers are basically stretching their own value chain, we’ve seen this in Saudi Arabia, where from a typical refinery, the project plans evolved into a multi-product refining complex. So all the flexibility of logistics has to be built in so your resources are utilised in the best way.

Today, we can fully showcase the ABB-enabled solutions in Sadara, the biggest petrochemical complex ever built in one single shot. The next step is to make it digital.

 

O’Sullivan: From a technology standpoint, we’ve been pioneers and innovators of technology for many centuries now. Where we’re focused now is on supporting companies that were traditionally oil and gas but are now becoming energy companies and even buyers of electricity.

With the growth of solar and wind in the mix of renewable energy into the whole value chain, we look at how we take our technology and give visibility over that entire value chain of supply and demand.

As the energy mix grows, we will be able to supply the right technology right when it’s needed. We’re currently having small pilots of these technologies.

Because companies are evolving in their energy sources as well, this is what we’re seeing as our new ABB ability, which is our overall platform, our hardware and software connectivity. So when the time comes for this added connectivity source, we will be ready to service our customers.

 

You briefly mentioned Sadara – can you also speak about your new models where solutions are integrated and how this plays a role in the shift towards digitalisation?

 

O’Sullivan: What we find is demand from our customers around five pillars. Safety and cyber security is the primary and most focus-on pillar of all – this is where we have developed solutions that take into account the overall safety of the facility as well as multiple facilities from a human safety aspect as well as human safety aspect.

Then we move into sustainability and reliability, where asset performance management comes into play. There is a big demand from the market and all of our users on how to extend the lifecycle on all existing equipment and how to reduce cost from unplanned shutdowns for example.

Us being able to provide them technology which give insight into their equipment, plan for the right outages as well as suggest the right repair measures around types of equipment.

Energy management is another big pillar for us – now there is renewable energy coming into the mix of traditional energy markets - we look at how we can manage the supply and demand from an energy perspective.

Then we get into simulation and digital twin as another pillar. This is really enabling knowledge from the retiring workforce into the new workforce. There was a major gap for engineering students wanting to go down that path, which is being bridged by the transferring of knowledge and training through the digital twin and simulation.

Lastly, we have operational management, where we giving insight into how companies are running their operations and connecting IT with OT environment, being able to integrate the running facilities as well as any type demand coming in from ERP systems, being able to generate KPI and looking at ways to optimise their entire processes – not only on running facilities but also how they are managing supply and demand to their customers, so trying to give them an advantage with our technology.

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Egypt’s offshore prospects are even greater with the right technologies https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/egypt-s-offshore-prospects-are-even-greater-with-the-right-technologies/Siva Krishnan, Head of Siemens Oil & Gas, MENA, discusses how Egypt’s golden gas age hinges on the technology it selects that will optimise production while minimising the environmental impact...2020-02-13https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/egypt-s-offshore-prospects-are-even-greater-with-the-right-technologies/

By: Siva Krishnan, Head of Siemens Oil & Gas in the Middle East and North Africa

Egypt is on the verge of transitioning from a net importer of gas into a regional gas hub, thanks to massive offshore discoveries in the Eastern Mediterranean. But abundance is only part of the equation – Egypt’s golden gas age hinges on the technology it selects that will optimise production while minimising the environmental impact.  

The Arab world’s most populous country has enjoyed political stability and an economic revival in recent years which has spurred investments, especially in the energy industry. This optimism is a reversal of several years of rising domestic gas consumption and dwindling production that forced the temporary closure of Egypt’s two liquefied natural gas export facilities and all but halted investment in the sector.   

A major find in 2015, about 200km off Egypt’s coast in the Eastern Mediterranean, was the turning point. The giant offshore Zohr field, with an estimated 30 trillion cubic feet of natural gas reserves, has transformed Egypt’s prospects, provided the country additional clout in the energy market and presented opportunities for further offshore development.

Egypt’s natural gas reserves doubled in the past two decades to 2.1 trillion cubic meters, according to the latest BP Statistical Review of World Energy. Gas output grew at the second-fastest rate in the world in 2018, and with new concessions awarded and continued exploration activity, most forecasts predict significant increases in both production and reserves.

The technology needed to extract gas from under the Mediterranean, process and transport it, is well established. But given the constraints that “lower for longer” oil and gas price forecasts have on energy companies, and the urgent need to tackle the challenges of climate change and massively reduce CO2 and other emissions, the industry is increasingly turning to technology that lowers lifecycle costs, optimises output and protects the planet.

Offshore oil and gas developers are taking advantage of technological advances and going for deeper and more complex fields, whether it’s by platforms or floating production storage and offloading (FPSO) vessels. This has presented many technical challenges with regards to topsides development, which has become more complex in recent years. Equipment must be small and light, but still robust enough to meet project requirements for processing, production, transportation, serviceability and reliability.

Siemens has taken strategic steps to help the industry overcome these challenges by developing power and compression solutions that conserve weight and space, while providing the necessary power to exploit deep-water reserves.

A recent project in the Barents Sea included a 41 MW Siemens SGT-750 gas turbine that drives two high-efficiency Siemens DATUM compressors operating in a tandem arrangement. The turbine features a unique design that eliminates the need for a speed-increasing gearbox, which reduces the weight and footprint of the package. It has extended maintenance intervals – designed for 17 days in 17 years – ensuring production uptime and profitability, and lowering operating expense as well.

In the Eastern Mediterranean, we will supply the full electrical scope, together with four Siemens SGT-400 gas turbines, waste heat recovery units, a flash gas compressor, and two sales gas compressors for an FPSO that’s expected to be commissioned next year. The equipment will produce both electricity and heat to extract and process the production at sea, as well as export the gas to shore.

Unique to this FPSO is the first ever full-scale deployment of Topsides 4.0, which is Siemens’ holistic digital lifecycle approach to rotating equipment and electrical and automation systems.

Topsides 4.0 begins during the conceptual and design phase of a project. The approach reduces capital and operating expenses, shortens project development cycles, minimises interfacing risk and decreases offshore manpower requirements. This is achieved by digital project management and manufacturing, virtual testing and commissioning, and delivery of an intelligent “digital twin” of the facility, which can be used by operators for lifecycle decision-making and asset optimisation.

With the digital twin, engineers have continuous access to as-is asset data and can plan maintenance campaigns based on condition monitoring analytics. An integrated control and safety system solution is designed for remote control and monitoring, which improves safety and reduces costs by shifting labour resources from offshore to onshore. Combined, these benefits can reduce operating expenditures by 10 per cent to 15 per cent each year.

Siemens has a long track record in Egypt and has participated in one of the country’s most transformative projects. Along with our partners, we built three of the world’s biggest gas-fired, combined cycle power plants, delivering an additional 14.4 gigawatts to the electric grid in just 27.5 months. The H-class turbines at Beni Suef, Burullus and New Capital are among the world’s most efficient, contributing to $1 billion a year in fuel savings and a significant reduction in CO2 emissions.

Siemens also has a role in Egypt’s offshore developments. The company supplied six model SGT-400 industrial gas turbines and associated electrical generators to Petrobel, the joint venture between Italy’s Eni and Egypt’s General Petroleum, which is developing the Zohr field. This turbine-generator system provides about 20 per cent more power than comparable equipment.

Egypt isn’t limiting its potential to the Zohr windfall. Further development of Eastern Mediterranean gas is underway, and a pipeline network linking supplies from Israel and potentially Cyprus can convert the fuel into LNG for export at the Idku and Damietta plants. This cross-border economic cooperation has been formalised in a new organization, the Eastern Mediterranean Gas Forum, which will be based in Cairo and currently comprises Egypt, Cyprus, Greece, Israel, Italy and Jordan.

The prospects in the Eastern Mediterranean are undeniable. With Egypt’s recent track record of building some of the world’s most-efficient power plants, it’s clear that its energy industry is serious about reducing fuel and lifecycle costs and cutting emissions. Siemens portfolio is well suited to the task of helping Egypt improve the overall economics and environmental footprint of its offshore natural gas industry, and ultimately, enter its golden gas age.

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Drexel Egypt looking to expand its presence in Egypt https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/drexel-egypt-looking-to-expand-its-presence-in-egypt/Drexel Vice President Eng. Ahmed Shalash speaks to Pipeline Magazine about how the company is looking to evolve to meet the challenges of a new energy landscape…2020-02-13https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/drexel-egypt-looking-to-expand-its-presence-in-egypt/

Drexel Vice President Eng. Ahmed Shalash speaks to Pipeline Magazine about how the company is looking to evolve to meet the challenges of a new energy landscape…

 

How important is Egypt to your growth strategy? 

A growth strategy usually starts by identifying and accessing opportunities within the market. Egypt has become one of the very high potential countries in the Middle East. Our growth strategy is based on how Drexel is going to evolve to meet the challenges of today and in the future, to ensure keeping us working towards goals that go beyond what’s happening in the market today. We keep shareholders leaders and employees focused and aligned, to make decisions not based on today, but for an emerging tomorrow. This growth strategy is being carried out by continuous coordination among a cross-functional group of stakeholders in the Egypt market. Drexel has been building partners with Egyptian customers and delivering a distinctive and integrated customer experience.

 

What areas are you focusing on in Egypt? 

We are focusing on new oil and gas projects and expansions, in addition to petrochemicals and fertilisers. A well-trained workforce, advanced equipment, and state of the art facilities earned Drexel Oilfield our solid reputation delivering client- focused services for multi nationals in the business. 

 

Are you looking to expand your business in Egypt?

Yes… as previously mentioned, Egypt is booming and becoming the oil and gas hub in the region. This encourages us to increase our investment in assets and personnel to serve the local market with the best up to date services and technologies.

 

How has the business landscape changed in Egypt over the last few years? 

The business landscape for Drexel has changed over the last few years from only acting as principals to major reputable companies, to being a very specialised service provider. We have established downstream and upstream business units, in addition to safety and specialised supplies units. In a nutshell, we go where the business is. So we have diverted from only serving production companies, now we cover refineries, petrochemicals, gas, fertilisers and even new industrial construction projects. 

 

What is your outlook for Egypt’s oil and gas industry? 

We are serving both organically and inorganic, we are developing the business within each of our companies. We’re growing the upstream and the downstream businesses. Within upstream, we are currently pushing through our safety division within Drexel, which provides safety service to around 30 per cent of the market in Egypt. At the same time we are looking into new accusations. Within downstream, we are also working very hard, not just for oil and gas companies, but also by providing services to petrochemicals and fertilizers companies. We’re aiming to be one of the top safety providers in training, PPE (Personal Protective Equipment), H2S, drilling operations and so on. We’re providing these services across the whole industry, not just for oil and gas.

 

Do you see an opportunity in Egypt’s downstream sector?

We have invested in our downstream business unit to ensure we are covering the full integrated services. This covers catalyst handling services, PPS services, and specialised mechanical services in addition to specialised safety solutions. Our portfolio covers services required during pre-commissioning of new projects and also specialised services during shutdowns and turnarounds. We have invested in new up to date nitrogen pumping units, vaporizers, tanks, flange management and hot tapping equipment in addition to leak sealing services. We have also invested in our safety related services equipment and gas monitoring tools. Our eyes are focused on working with new refining and petrochemical companies for new upgrading projects; we worked at Zohr Project in the downstream part of the gas plant.

We have just successfully completed works with Methanex Shutdown, completing catalyst change out scope, mechanical works and heat exchangers hydro jetting works. Also, we completed a new catalyst loading for GS/ERC refining and BP West Nile Delta Giza Fayoum and Raven plants including the full safety service for all the activities. This is in addition to nitrogen purging service to GUPCO Shutdowns and Sokhna NCIC Second Ammonia Tank.

 

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Wintershall Dea in Egypt: long tradition, bright future https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/wintershall-dea-in-egypt-long-tradition-bright-future/Sameh Sabry managing director in Egypt for Wintershall Dea writes about the outlook for the oil and gas sector in Egypt for Wintershall Dea...2020-02-12https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/wintershall-dea-in-egypt-long-tradition-bright-future/

By: Sameh Sabry, Managing Director, Egypt, Wintershall Dea

The start of a new year is always a time to reflect on past achievements and on goals for the future. The start of a new decade, even more so. So, as we gear up for the first EGYPS of the 2020s, it’s appropriate to take stock of the outlook for the sector in Egypt, and for Wintershall Dea.

Wintershall Dea itself is still a new company, formed in 2019 from the merger of Wintershall and DEA, two companies with a long tradition of German engineering and E&P excellence. So, we are a young company, with a long heritage behind us.

And that heritage includes over 40 years of being active in Egypt. Since the 1980s we’ve produced gas and oil in stable and effective partnership with EGAS and the Egyptian General Petroleum Corporation. Today, we are producing gas and oil from brownfields in the Gulf of Suez, gas at Disouq in the onshore Nile Delta, and gas from the offshore West Nile Delta project, with our partner and operator BP.

And in the last three years we have actively increased efforts in our Egyptian assets with the goal of boosting local production. That hard work is yielding results. For our mature assets in the Gulf of Suez, for example, we’ve conducted technical workovers on existing wells and pipelines, and invested in maintaining asset integrity. These measures have achieved our targeted rise in production, while also improving safety and contributing to overall asset life.

Economic reforms and the Egyptian oil and gas sector’s modernisation programme are paying off

So, Egypt plays an important role within Wintershall Dea’s global portfolio, today and in the future. But our investment is only possible because of the significantly improved business environment in the country. As a proud Egyptian myself, I’ve seen first-hand how the sector and investment conditions here have improved in recent years, to the point where Egypt can credibly claim to be forging a new future at the heart of an East Mediterranean Gas Hub.

Important steps have been taken to build investor confidence. Ambitious economic reform, and a modernisation programme for the sector overall have given a clear signal to the world. That Egypt welcomes international investment and is serious about building an effective and attractive environment to operate in.

It’s also promising that the Ministry of Petroleum, the state companies, and all industry parties have shown a desire to work effectively together. One example is improving brownfield performance. While major new discoveries are driving the excitement around Egypt’s energy sector at the moment, extracting maximum value from mature assets is just as important. In particular, as the majority of Egypt’s crude oil production is produced from mature brownfields. So, a joint industry project, run in support of the Ministry of Petroleum’s modernisation programme, has been looking at improving brownfield performance. This sharing of ideas and experience is a reassuring sign of cooperation and a maturing sector in Egypt.

An East Mediterranean Hub with a bright future

Having been a net importer of gas just a few years ago, Egypt can face the 2020s with confidence and excitement. Discoveries of recent years and subsequent production, such as in the West Nile Delta Project, put the country in an excellent position. So, it’s no coincidence that Egypt is progressing towards becoming an East Mediterranean Energy Hub. Egypt has of course a number of important factors that make it ideal as a hub; including its ideal geographical position and strong infrastructure, including the Suez-Mediterranean Pipeline and its LNG export terminals.

At Wintershall Dea we fully support Egypt’s efforts to create a hub. We intend to actively contribute to its development, and we are pleased to now be a member of the East Med Gas Forum’s Advisory Committee.

Set on growth

And while we continue to invest in our existing assets, we will also look into further opportunities in Egypt. That’s in line with our global ambition for growth. Wintershall Dea currently produces around 590,000 barrels of oil equivalent per day. And we intend to increase that to up to 750,000 barrels by 2023. We’ll do so primarily by finding new opportunities in our core regions, of which Egypt is one. 

It can be hard to accurately forecast the future in the energy industry. But what we can say, looking ahead, is that all the key ingredients for a successful future in Egypt are there-undeveloped resources, an improving business environment, driven by a modernising, liberalising regulatory regime, an unrivalled geographical location supported by effective infrastructure and an experienced, skilled industry. Those of us involved in building this future have a shared responsibility to grasp this opportunity. Wintershall Dea will play its part.

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Energean looking at a bright sustainable futurehttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/energean-looking-at-a-bright-sustainable-future-in-the-mediterranean/Mathios Rigas, Energean’s Chief Executive Officer, speaks about the company’s commitment to Egypt and the Edison E&P acquisition…2020-02-12https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/energean-looking-at-a-bright-sustainable-future-in-the-mediterranean/

Mathios Rigas, Energean’s Chief Executive Officer, speaks to Pipeline Magazine’s Julian Walker about the company’s commitment to Egypt and the Edison E&P acquisition

 

How important is the Egyptian market to Energean’s growth strategy?

Energean’s vision is to become the leading independent E&P company in the Mediterranean, so Egypt has always been a key country for us. We are strongly committed to Egypt, we started operating in the country in 2010, and we have drilled exploration wells in areas such as West Kom Ombo and East Magawish. Even though this activity did not result in a discovery, it helped us understand further the geology, made us familiar with the particularities of the country, and helped as build a fruitful relationship with Egypt’s authorities.

 

How did buying Edison change your position in Egypt?

Assuming the completion of the acquisition of Edison E&P, Egypt’s portfolio will bring to Energean a significant amount of daily production as well as a very important commercial agreement with EGPC, which buys the gas produced from the Abu Qir field. Abu Qir is one of Egypt’s biggest producing assets and also will contribute substantially to Energean’s plans to reduce its environmental footprint and positively participate in the energy transition.  Energean started as a 100 per cent oil producer and, inclusive of the acquisition of the Edison E&P assets, it has now evolved as an E&P company with 80 per cent of its reserves and production from natural gas. Indeed, our commitment to the environment was underlined by Energean being one of the first E&P companies to commit to become a net zero emitter by 2050 and to run a very ambitious but realistic plan to reduce our net CO2 emissions by more than 70 per cent in just three years from now.

 

What are the main opportunities (offshore or onshore) do you see in Egypt since you agreed to buy Edison?

Apart from Abu Qir, the NEA concession will be a 100 per cent owned and operated gas and condensate field located offshore of the Western Nile Delta in Egypt and next to Abu Qir. The asset’s two fields Python and Yazzi are expected to be developed across, and produced through, the existing Abu Qir gas infrastructure, generating significant synergies and cost savings versus a standalone development. Beyond these two fields, there is further upside from the North Idku development, which is located adjacent to NEA and is expected to be tied-back to NEA infrastructure. In addition, there is exploration gas potential in North Thekah via an extension of the Tamar sand play into Egypt. Energean is also evaluating any other investing opportunities the country offers, always applying the company’s core principles: ESG Stewardship – Risk Mitigation – Operational Excellence – Effective Project Execution – Disciplined Capital Allocation

 

How important are gas and LNG to the future of the world’s energy mix?

The transition to a renewable energy world will take some decades.  The basic scenarios of all organisations regarding primary energy consumption in the next couple of decades conclude that renewable energy is the fastest growing source of energy, accounting for around half of the increase in energy and that natural gas grows much faster than either oil or coal. So, gas will be the main fossil fuel that will lead the energy transition era towards an ideal of a 100 per cent renewable consuming planet. Following Zohr and the discoveries in Israel and Cyprus, the East Mediterranean has emerged as the next big thing in gas but what I would like to emphasise here is the importance of the infrastructure needed to transport gas from the producing assets to consumers. Egypt is already playing a major role as a gas hub due to infrastructure such as the LNG terminals in the Med. Energean is building its own infrastructure, namely the ‘Energean Power’ which will be the first FPSO ever to operate in the East Mediterranean aiming at supplying the markets of the region with gas with a capacity of 8BCM per year. Energean is also active in the EastMed Pipeline Project which aims at supplying Europe from the region’s gas fields, starting from the development of the Karish field which will come on stream in 2021.

 

How are you supporting EGYPS this year?

We are silver sponsors and exhibitors. We consider EGYPS as a landmark event that is crucial in promoting industry cooperation and this is why, apart from myself, several of Energean’s top level officials and members of the Technical Team are participating in panel discussions. So, we are looking forward to meeting you at our booth to introduce you further to Energean’s strategy for the sustainable development of the natural resources in the Mediterranean.

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Air Products looking to invest further in Egypthttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/air-products-looking-to-invest-further-in-egypt/Seifi Ghasemi, Chairman, President and CEO, Air Products spoke about the growth opportunities in Egypt and the importance of hydrogen fuelling plants in the future2020-02-11https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/air-products-looking-to-invest-further-in-egypt/

Seifi Ghasemi, Chairman, President and CEO, Air Products spoke to Pipeline Magazine’s Julian Walker about the growth opportunities in Egypt and the importance of hydrogen fuelling plants in the future

This is your first time speaking at EGYPS, can you tell us, how important is the Egyptian oil and gas sector for Air Products?

We at Air Products see ourselves at the heart of one of the greatest global challenges today: meeting the world’s need for clean, sustainable energy…energy that protects our environment and moves us all towards a better future. We are driven to innovate alongside our customers and help make them more sustainable.

As the Egyptian oil and gas sector embarks on some of its Clean Fuels and Bottom of the Barrel projects, we are keen to leverage our investment appetite and technical expertise in the production and supply of industrial gases which are essential components for the success of these projects.

Generally speaking, there is tremendous growth potential across the oil and gas sector in Egypt and throughout the Middle East. As a global company, we are well positioned to support that growth, because our core competency at Air Products is our ability to develop, engineer, build, own and operate complex industrial gas facilities that transform the resources available to our customers into engines of economic growth and social development.

Air Products has earmarked the Middle East as a key global growth market. As such, Egypt being an important economy in the region, Air Products is keen to invest in the local economy in the next 3 to 5 years by supporting on-going downstream oil and gas projects.

What is the future for hydrogen fuelling plants looking like?

Our world needs a sustainable system to address environmental challenges while also meeting growing energy demand. Hydrogen and fuel cell technologies are well positioned to be part of the solution.

We have prioritised hydrogen for mobility and energy transition as a significant, sustainable growth area. Air Products is a leading global hydrogen provider, involved with 250+ fuelling projects in 20 countries. Our SmartFuel technologies fuel cars, trucks, vans, buses,  forklifts, locomotives, planes, cell towers and material handling equipment. This past year, in partnership with Saudi Aramco, we launched the first-ever hydrogen fuelling station in the Middle East and look forward to building on that success.

Where do you see innovation and digitalisation creating possibilities for new technology advancements?

With respect to digitalisation, the innovative uses of data and digital technologies are fundamental to our long-term competitiveness. Within the Middle East, we continue to demonstrate our commitment to advancing digitalisation, recently establishing a new Process Intelligence Centre at our world-class Technology Centre in Saudi Arabia. The Process Intelligence Centre is the only location in the Middle East to provide mentored operations and dynamic simulations for operator training as well as other advanced technologies such as Industrial Internet of Things (IIOT), Digital Twin and high-performance computing for advanced modeling. Engineers in this center will be able to remotely monitor plants and equipment performance, allowing for quick diagnosis and enable real-time solutions.

Where are Air Products principle areas of expansion in the Middle East?

Air Products has had a presence in the Middle East for over 50 years, and a presence in Egypt since 2009 through our wholly owned Air Products Gases S.A.E, with an office in Cairo and production site in Sadat City. Over the years, we have become a trusted supplier for specialty gases to the refinery and chemical industries and have provided several equipment solutions to Egyptian companies.

Over the last decade, we have made several investments in our merchant gases business, and recently, we have grown through large projects and initiatives: completing the world’s largest ASU complex at Jazan, Saudi Arabia; announcing plans to form an integrated gasification combined cycle (IGCC) joint venture at Jazan; building our core competencies in the region through our world-class technology center in the Dhahran Techno Valley; and signing an MoU between the Royal Commission for Jubail and Yanbu and Air Products Qudra to establish world-class industrial gas production facilities and distribution networks.

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Dragon Oil looks at new growth for Egypthttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/dragon-oil-looks-at-new-growth-for-egypt/UAE’s Dragon Oil CEO Ali Al Jarwan speaks about the company’s operations and plans for Egypt in an exclusive interview with Pipeline Magazine...2020-02-11https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/dragon-oil-looks-at-new-growth-for-egypt/

In an exclusive interview with Pipeline Magazine’s Nadia Saleem, UAE’s Dragon Oil CEO Ali Al Jarwan speaks about the company’s operations and plans for Egypt

 

Dragon Oil just acquired shares in Egypt’s Gulf of Suez Petroleum Company’s concession. What plans do you have to boost production there?

The strategy to enhance production from the concession underpins improving delivery from existing wells, drilling of new wells and improving the overall on-stream processes. Dragon Oil is mobilising a sufficient number of capable rigs to fulfil its work-programme. For improving the success factor of new wells, we have launched the acquisition of 3D seismic data and its analysis. Major machinery overhauls are also being expedited and integrity maintenance programs are being enhanced to ensure a very high level of safety and smooth operation. In addition to the above, Dragon Oil plans to drill exploration wells in new areas, where we hope to add production from.

 

How does this fit in with the company’s Egypt strategy?

Our entry into the Egypt’s energy sector was in 2014 with the acquisition of East Zeit Bay exploration block. Now, we want to partner with Egyptian General Petroleum Corporation (EGPC) in their quest to sustain and increase the domestic production of hydrocarbons. So the acquisition of Gulf of Suez assets fits in very well with strategic growth objectives of Dragon Oil in Egypt. Additionally, we are delighted to work with GUPCO (Gulf of Suez Petroleum Company) to achieve improved recovery from mature fields.

 

What plans do you have to further your footprint and investment in Egypt?

We will continue to explore opportunities to further enhance our partnerships and footprint in Egypt. We shall focus on acquiring working interest in producing fields and in promising prospects for exploration.

 

What is your market outlook for the country?

The current crude production is fully consumed locally due to the country’s needs. The demand remains high for the country and the government is supporting additional investments to increase production and satisfy local market needs.

 

How do you think Dragon Oil can help Egypt’s ambitions for becoming a regional energy hub/reaching self-sufficiency in petrochemical sector?

Dragon Oil’s ambitions are very much aligned with Egypt’s – that is to grow production for satisfying domestic demand and eventually becoming a net exporter following self-sufficiency.

 

Are you looking at new partnerships or taking part in concession awards?

Dragon Oil is open to exploring all opportunities and we track the bids offered by the government and we are willing to have partners as long as Dragon Oil can hold operatorship.

 

What is your business outlook for Egypt’s energy sector?

Egypt has become a hub in Africa as it develops its oil and gas reserves -this provides new project opportunities for oil and gas companies to tap into. That’s why companies are looking to invest and develop these projects to further expand their portfolios and market position. This is evident from the successful annual Egypt Petroleum Show (EGYPS) where ENOC and Dragon Oil participate – this helps us stay connected with the country and the existing investor to share experiences and knowledge from Egypt’s energy sector.

 

What challenges do you think need to be addressed to help Egypt’s growth in the energy sector?

Egypt has a significant upside potential when it comes to energy sector development opportunities. However, there are some key issues, which if resolved or improved, will be able to help propel Egypt’s growth swiftly.

One of the key issue is that the country still has fuel subsidies, which pose pressure on pricing and profitability of producers. Additionally, there is much room for improvement in available financing for energy projects. Also, new players coming into the Egypt market need facilitation so they can take advantage of the many opportunities present in order to boost the country’s competitiveness.

 

How important is the country for your regional growth plans?

UAE has a long-standing relationship with Egypt, which has geo-political stability and a proven history of working well with international partners. So it is very natural for us to assign very high priority to Egypt in our ambition to increase our regional production portfolio.

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Egypt oil and gas sector grows by leaps and bounds https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/egypt-oil-and-gas-sector-grows-by-leaps-and-bounds/H.E. Eng. Tarek El Molla, Minister of Petroleum and Mineral Resources, discusses the latest developments in Egypt’s oil and gas sector...2020-02-02https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/february/egypt-oil-and-gas-sector-grows-by-leaps-and-bounds/

 

H.E. Eng. Tarek El Molla, Minister of Petroleum and Mineral Resources, discusses the latest developments in Egypt’s oil and gas sector and why 2019 was such a strong year for growth in the energy sector

 

What were the most important developments for Egypt’s oil and gas industry in the last 12 months?

In 2019, the oil and gas industry witnessed great leaps in its whole value chain from upstream to downstream, along with the services provided to citizens through availing the petroleum products and the national programme to convey natural gas to residential units.

The petroleum sector succeeded in achieving outstanding outcomes, on top of which are; realising unprecedented natural gas production reaching 7.2 BCFD (billion cubic feet per day), achieving gas production self-sufficiency and resuming exports. In addition, crude oil production reached 630,000 barrels per day, contributing to achieve the highest record of petroleum wealth in August 2019, e.g. about 1.9 million barrels of oil equivalent, condensates and natural gas per day.

The sector also succeeded in reducing the IOC’s accumulative arrears in the past years to reach $900 million by June 2019 that is considered the lowest rate since 2010, which confirms the present credibility and commitment of the Egyptian Government, particularly with the expansion in developing natural gas.  Last year, investments exceeded $10 billion, when Zohr gas field project reached its optimum production rate and the second phase of West Delta and North Alexandria projects started production.

We signed eight oil and gas exploration agreements, with total investments of $179 million, in addition to 17 new on-going agreements that were approved by the parliament with total investments exceeding $1 billion. The EGPC and EGAS bid rounds announced their results last February; offering 11 blocks with total signing bonuses of about $104.5 million, and total investments of $744.5 million, to drill 50 wells. In March 2019, Ganope also offered an international bid round for oil and gas exploration in 10 blocks at the Red sea area and the IOC’s offers are, currently, being evaluated.

The Egyptian Refining Company’s (ERC) project in Mostorod is considered the largest and most recent refining project that contributes to securing part of the petroleum products locally. Meanwhile, transporting natural gas to residential units, witnessed unprecedented boom represented in the continuous doubling of rates to reach one million and 250,000 residential units annually at a rate of 100,000 units per month, which led to an increase in the number of housing units that were connected with gas to exceed 10.6 million. The number of vehicles converted to being fuelled by natural gas increased in 2019, to exceed 43,000 vehicles bringing the total number of converted vehicles since the start-up of activity in 1996 to 300,000 vehicles.

What new partnerships are underway to develop resources and support the country’s growth aspirations?

It is well known that tangible success cannot be achieved apart from successful partnerships that benefit all parties.  Our IOC partners, operating in Egypt, play a significant role that cannot be denied in contributing to the success stories achieved during the past years. We have already held new partnerships recently, with major international companies working in Egypt for the first time, in the upstream domains such as American companies, Exxon Mobil and Chevron. Moreover, we’ve expanded our partnership with Shell International, as it was awarded five new blocks in 2019, to invest in the upstream field.

The East Mediterranean Gas Forum is also a distinguished partnership at the level of the countries in the region, bringing together Egypt and six Mediterranean countries with the goal of cooperation in monetising gas discoveries and distinctive infrastructure, for the benefit of the countries and their people. 

Egypt also launched strategic partnerships in the domain of energy, with both the United States and the European Union, contributing to Egypt’s benefit from the support, potentials and expertise of both parties to contribute to transforming Egypt into a regional energy hub.

How has Egypt’s energy sector become a more attractive destination for foreign investment?

With regard to foreign investments, we have to consider what our partners say about their investment success stories in the Egyptian oil and gas sector at conferences in Egypt and abroad.  They praise the Egyptian model in oil and gas industry development and how Egypt created an attractive climate for investment and success, which resulted in achieving distinctive business outcomes, so that everyone agrees that the current period is the most convenient, for directing their investment to Egypt, in the field of oil and gas industry. Moreover, the State has taken into account the reforms and incentives that were taken to achieve balance and benefit the State as well as the investor. In addition, it has provided a unique experience, concerning its obligations to pay the previous years’ arrears, along with fulfilling its new commitments, as the Egyptian oil and gas industry has witnessed positive changes recently that led the sector to become one of the most significant investment destinations for the major oil companies.

 Actually, the indicators are quite clear, as Egypt has awarded 28 new blocks for oil and gas exploration to international companies through six bid rounds over the past five years, and has signed 103 agreements with international companies for oil and gas exploration and development, since November 2013, with total minimum investments of about $17 billion and signing bonuses of $1.2 billion, for the drilling of 431 wells. In fact, these results are strong indications of the success of reform plans, particularly with the entry of new major companies in upstream domain in Egypt for the first time, which is an attracting factor for other companies to invest in Egypt. This contributes to increasing the flow of investments, in addition to the fact that the companies currently operating in Egypt are expanding their investments and activities in the upstream domain.

Furthermore, it is planned to continue signing the 17 new upstream agreements, approved by the Parliament last year.

Additionally, we shall offer new international bid rounds in 2020 to explore for oil and gas in the Western Desert, Gulf of Suez and East Mediterranean and the frontier areas in particular, within the forthcoming period.

Undoubtedly, the demarcation of the maritime borders with the Kingdom of Saudi Arabia, has allowed Egypt to launch its first International bid for oil and gas exploration in the untapped area of Red Sea, which represents promising opportunities for IOCs to pump new investments in that region.

As one of the main axes in our plans, we will work on intensifying our activities in the existing crude oil production areas to offset the natural decrease in production and achieve new discoveries to put them on production as soon as possible.

How are the plans for establishing Egypt as a regional energy hub going?

The Egyptian State has a specific vision and goal represented in the project of transforming Egypt into a regional hub for oil and gas trade, which will have a very significant return on Egypt and its national economy. The project will help Egypt restore its pioneering role in the region and monetise the natural gas infrastructure, attract more investments and secure energy resources to meet the country’s requirements, provide job opportunities, as well as foreign currency.

 For its part, the Ministry of Petroleum embarked on a work program within the Modernisation Project to develop the sector to work according to specific strategies. The programme includes 3 major axes, in which the Ministry moving forward; whether at the internal, the political, or at the technical and commercial levels. These axes include the implementation of new infrastructure projects and achieving the optimal exploitation of the existing infrastructure together with the issuance of legislations that support investment in oil and gas domain, where a law was issued to regulate gas market activities and the establishment of an independent gas regulatory which gives an opportunity for the private sector to enter and compete in the whole chain of gas industry. Furthermore, Egypt has all the qualifications to play this role, in light of its excellent strategic location, having the necessary infrastructure and facilities, e.g. power generating stations, gas liquefaction plants, re-gasification unit, refineries, storage tanks & warehouses, port docks along with oil and gas pipelines networks.

In fact, Egypt has been keen to take active steps to establish a wide board regional cooperation with gas producing countries in the Eastern Mediterranean region and establish a partnership with the European Union in the field of energy to serve the Egyptian perspective to transform into a regional energy Hub.  Egypt has the keys to the future of gas in the Eastern Mediterranean and seeks to monetise all the current potentials in that region. In addition, we take into consideration the ambitions of the countries of the Eastern Mediterranean region to achieve the maximum benefit of the discovered natural gas resources and the future ones. Therefore, we worked on establishing the first forum that gathered gas producing countries in this region, under a joint Egyptian initiative within the framework of a cooperation mechanism with both Cyprus and Greece during the Crete Summit that took place last October. President Sisi agreed with the leaders of Cyprus and Greece on the idea of establishing the forum.  To realise this agreement on the ground, Egypt initiated an invitation to the energy ministers of the Eastern Mediterranean countries and representatives of the European Union and the U.S. Energy Minister for two meetings to activate the initiative to establish the forum along with the coordination to invest in gas discoveries and infrastructure in the eastern Mediterranean for the benefit of countries and their peoples.

How important is Egypt’s burgeoning downstream sector?

The current expansion in refining and petrochemicals domain represent a new added value to Egypt from its petroleum resources and assets. We have a work programme, currently being implemented in the refining industry to achieve self-sufficiency of fuel by the fiscal year 2022/2023, through the Egyptian refineries’ throughput. The programme includes six new projects, currently being implemented in Alexandria, Suez and Assiut, with investments of about $7.1 billion, aimed at increasing domestic production of petroleum products with high economic value, such as gasoline, gas oil, and LPG, as well as providing petroleum products with the highest quality standards, in accordance with the international standards. It is planned to implement these projects successively; including producing high-octane gasoline project in Assiut, Midor refinery expansions project in Alexandria, ANOPC complex project for gasoline, gas oil and LPG production in Assiut, which is considered the largest refining project in Upper Egypt. These are in addition to the Red Sea Refining and Petrochemicals Complex in Suez, as well as the LPG and asphalt production units in Suez. Besides these projects, we have completed this year the largest project in the refining domain, which is the Egyptian refining project in Mostorod, with investments of about $4.3 billion, applying the latest advanced technologies. It is considered a successful partnership between the government and the private sector. This project is currently operating experimentally, paving the way for regular operation. Moreover, we are planning to establish a huge complex for refining and petrochemicals in the new El Alamein region, with investments of about $8.5 billion.

In the petrochemicals domain, we are implementing four new projects, with investments of about $2 billion to add new production capacities to this industry, as well as increasing and diversifying the products provided. We have the project of Formaldehyde Production of Suez Company for Methanol Derivatives, in Damietta Port, poly butadiene production project in Ethydco Complex in Alexandria and Sidpec Expansions Project in Alexandria for Propylene and Polypropylene Production, as well as Medium-Density Fiberboard (MDF) Production Project.

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Capturing data on the journey towards oil and gas 4.0https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/january/capturing-data-on-the-journey-towards-oil-and-gas-40/Dick Larkin, global strategic advisor at Bentley Systems speaks about game-changing technology aimed for oil and gas 4.0...2020-01-14https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/january/capturing-data-on-the-journey-towards-oil-and-gas-40/

Dick Larkin, global strategic advisor for Oil, Gas and Process industries at Bentley Systems speaks to Pipeline Magazine’s Nadia Saleem about game-changing technology aimed for oil and gas 4.0

 

Can you tell me what you’ve been working on recently at Bentley Systems?

We’re working on relationships with Siemens predominantly and Microsoft in the oil and gas area. With Siemens, we identified 5 years ago a lot of common ground between us on Internet of Things, artificial intelligence and a common goal of bringing operational expertise into an area of technology.

We spent the last three years developing an application with Siemens called ‘PlantSight’ which integrates into our project delivery, data environment and also into Siemens’s (COMOS) environment to deliver operational digital twin and therefore performance digital twin as a result of that downstream in operations.

It predominantly provides solutions to be able to capture existing assets – one of the challenges the operations has especially in this region is there is an awful lot of information that exists but is not digital and the barrier of the digital transformation journey is how you can capture that and convert it into a digital environment.

 

How do solutions such as the digital twin play a role in the fourth industrial revolution?

When it comes to the industrial revolution 4.0, a lot of people talk about disruption. I believe that the transition into 4.0 should not be quite as disruptive as some people think but make it easier to create an environment to be able to build information in. So our approach has been to use our open source environment called ‘iModelHub’, which allows you to bring information into a situation that can be used by anybody.

It’s not proprietary, it’s not large, it’s flexible and it stays connected. So once you create a repository, you can maintain that information up-to-date on a daily basis instead of having to reload information all the time. So it’s always looking for changes in the information model it’s got and only using that small delta change to keep it up to date.

A lot of people in project delivery have proprietary 3D modelling systems and data management systems that’s difficult to integrate into other engineering type systems whether its instrumentation, electrical simulation of process information for example.

So with Bentley’s iModelHub, we allow people to bring that into a central environment using an oil and gas schema and that’s the whole purpose behind the plant technology that we developed with Siemens, and then staying connected and synchronising on a scheduled basis.

 

What challenge does this application address?

One of the challenges over years in the transition from project delivery into operations has always resulted in serious dumb-down of data. So you create all the information for the project in intelligent systems containing attribution of many, many types and when that handover takes place, it’s dumbed down into Excel spreadsheets etc. and then the operator has to build up value in that information to make it work for them in operations.

What we’re doing is actually taking all that information out, leaving the proprietary system behind and taking the intelligence by building a schema that contains all the attribute information, which is the important stuff that the operator can link into to their operational systems.

We believe the iModelHub is going to be a game changer – it gives access to data that currently, nobody can access, because it’s not in the system that it comes with.

What is Bentley Systems doing different from other companies looking to cash in on the digitalisation trend?

We’ve taken the route of the iModelHub and we’ve made that valuable as an open source application and the fact that its available on the cloud as well as on premise, allows the user to make the decision and plan for that transition, which is an important one, whether they feel comfortable using the cloud or investing in building that information model up in a deployed fashion so later it can be pushed to the cloud.

 

What is your sense of a take-up of technologies such as these in this region?

One of the barrier in IT adoption has been this disruption within the IT organisation to not want to adopt change and the CEOs have been aware of the industry 4.0 and they’re pushing their IT people to make changes in terms of possible disruption but they need to do that in a secure way without invalidating all information again and again. Because when these changes are done, you begin to lose the integrity of information that you’re trying to bring in. We’ve already been demonstrating some use cases of the technology and the outcomes are substantial in terms of reducing risk and creating a return on investment. The proof is in the pudding – if you can provide a system that demonstrates value and reduces risk, which everyone wants to do, in a timely fashion and in an open system, people are going to want it.

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New direction for Proserv Controlshttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/january/new-direction-for-proserv-controls/Davis Larssen, the newly appointed CEO of Proserv Controls, talks exclusively about the strategic direction the company will be taking after the recent restructuring...2020-01-07https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/january/new-direction-for-proserv-controls/

Davis Larssen, the newly appointed CEO of Proserv Controls and Michael Purkiss VP, Services talk exclusively about the strategic direction the company will be taking after the recent restructuring. Plus we learn more about the service offering in the UAE that the firm hopes can be a blueprint to launch in other regions.

The origins of Proserv go back roughly 50 years as a controls company but 2019 proved to be quite a seminal year for the company. After over a year of restructuring, a new streamlined business emerged in October last year. Proserv has now evolved into two global divisions – Gilmore, a Proserv Company and Proserv Controls.

Davis Larssen who has been at Proserv for nearly a decade played a key role in coming up with the new strategy after the restructuring started in 2018.

“We did restructuring and re-capitalisation of the business in May 2018. Then in 2019 I was challenged by the new board to conduct an in-depth strategic review of the whole Proserv Group at the time. I presented this updated strategy in March of this year and as part of the execution of this strategy, we sold off some divisions we deemed to be non-core and essentially went through a re-structuring exercise to turn ourselves into the two clear, almost standalone divisions” Larssen said.

Gilmore is headquartered in Houston and Proserv Controls is headquartered in Aberdeen. Larssen became the CEO for the Proserv Controls in October last year, after having been the CFO for 5 years and then 3 years as COO.

“Proserv Controls is a globally diverse company with a clear controls and technology focus. We have over 700 employees, with a sizeable presence in the Middle East, in particular,” said Larssen.

He added: “We want to be seen as defining and leading the controls technology market. Ultimately this involves helping our customers improve the reliability, the integrity and productivity of their critical infrastructure whether that is topside control systems or subsea control systems.”

Controls focused

Larssen made it clear that Proserv Controls will be very much a focused controls technology company in the global arena.

“We currently serve most of the major operators and national oil companies around the world. We are very heavily involved in subsea and topside controls and we have unique offering for brownfield and tiebacks,” Larssen said.

He added: “We have a huge installed base in different parts of the world but we also have a huge knowledge base around the wider controls technology space. Our sweet spot is around brownfields and upgrades to fields. We are not about chasing after the big greenfield opportunities. We are all about improving productivity of existing infrastructure. We feel this is much more economical for the operator and for the environment.”

Unique offering

An area that Proserv Controls really excels in, according to Larssen, is offering assurances that its equipment and services will never become obsolete and will remain active throughout the whole life of an asset.

“One of the key aspects of our offerings is that we guarantee that our subsea control systems will never become obsolete. This is a major difference compared to other offerings in the market. Our ability to communicate subsea is also enhanced. We can do a retrofit on a structure and install broadband style communication. This allows us to extract information and data on what is happening in the subsea arena and let the operator make a better and more informed decision to improve productivity.”

For Larssen, the subsea side is also about the adaptability of the company’s offering and the commitment that its technology can coexist with any original equipment manufacturer’s installed subsea system, again enhancing production and value of an asset.

“It has been designed that way and through this promise we can become the life of field controls partner. We understand that our customers expect us to work for the full life of the field.”

On the topside side of the business, Larssen explained that the company works on a global basis but its origins for this side of the business started in the Middle East.  

Aligned with its topside business Proserv offers service capabilities where they partner with customers to become their life partner for the controls.

“This life of field partner on the topside of the business is a key area for us. This is critical infrastructure and our controls ensure platforms and towers are adequately maintained in the event of an emergency shutdown. Topside controls also let you make productivity decisions in terms of improving the performance and reliability.”

This is what Michael Purkiss, VP, Services, has been focusing on over the last few years in Abu Dhabi to push this services angle.

As Larssen explained: “The service model that Purkiss has been leading in Abu Dhabi over the last 3-4 years is leading edge and as part of it we have implemented a software solution that we call AEGIS. This really allows an operator to remain vigilant around their maintenance needs and we become a partner in this. Essentially, we go offshore and we maintain the controls on the infrastructure on their behalf to ensure their productivity is maintained.”

AEGIS is a real focus for Proserv. The software name stands for Asset Enhancement Global Intelligence Solution. Larssen sees it as a major technical solution that sees Proserv using leading edge controls technology to improve topside infrastructure.

As Proserv Controls’ global footprint extends, Larssen sees engineering service support as a critical component moving forwards.

“In the last two to three years, we opened an engineering centre in Chennai, India that we anticipate will go through significant growth in the next 18 months. This centre supports the engineering back office for the whole global business. We have around 40 people there now and we expect this to grow to 60 in the next 12-18 months.”

Larssen also touched briefly on the firm’s sampling business which allows Proserv to go in and take live samples of what has been produced from a well and do a measurement from that and allow customers to make a better and more informed decision. They can then decide on what to do with that well.

Abu Dhabi leads the way

Larssen said that: “The Middle East is seen as a key region and we are opening up a new facility in Abu Dhabi in Q1 this year. The Abu Dhabi model has to be the blue print for everywhere else.”

Purkiss talked a bit more in-depth about the service offering the company has been working on in the UAE.

“Our goal for the Middle East is to add value for the operator, so this is what we are doing with ADNOC and are looking to do for Saudi Aramco. We have been working with the ADNOC Group on their topside assets and we really want to be a life partner. It is not just a token gesture and we have seen our relationship grow and we want to replicate this model in other markets.”

He added: “We feel this offering is very timely for the Middle East now as only a few years ago, everything was greenfield. Work was all about new fields and infrastructure. We feel that the landscape has changed and we are positioned well to step in. The key part of the strategy is that we can apply simple operation solutions to brownfields onshore or offshore.”

Purkiss believes that globally Proserv can bring the skills they have honed in the Middle East in terms of service offering.

“We have made sure we work in conjunction with ADNOC and Aramco and really understand what they want and what we can help with. Technology is a major part of it but also there is our agility and innovation in operation, driven by proper planning and preparation .”

Market conditions

The current energy landscape actually works for Proserv’s new laser focused strategy.

“Ultimately reducing downtime and improving the productivity and performance, whether it is subsea or topside, is a main driver for the industry,” said Larssen

He added: “The last 3-5 years have been very tough and we have seen an increase in demand to reduce CAPEX significantly. Operators focus is now on operational expenditure and improved reliability. We have seen a huge impact in terms of our ability to reduce CAPEX and obviously operators are delighted that we can do this and partner with them to improve production for minimal implemental cost.”

Technology lead

Proserv can bring new technologies into ageing infrastructure to extend the life of the field and improve productivity. Technology is a core part of Proserv’s new direction and strategy.

“We already had a technology centre in Trondheim in Norway and as part of the restructuring we have put in place a chief technology officer, Tore Erntsen. He now leads our global technology portfolio across all of Proserv Controls,” noted Larssen.

“As part of this new direction we put in place a technology roadmap laying out over the next five years the direction we want to go in terms of technology. This is part of our long term strategic review and takes each part of the business and sees where we are today and what our competitor advantage is and how we can maintain this advantage in the future,” he added.

What Proserv has done is involve customers in the technology conversations and they have worked with 5-8 customers to help form a strategy.

“We have also put in place technical authorities, which are technical experts in the various domains within Proserv who sit around the world and are all linked back to this new CTO function we have created to ensure we have a global view.”

One positive result of bringing customers into the process is Proserv taking an active role in the renewable sector.

“What has been really beneficial for us that has come out of this process is that some of our customers have really started pulling us into the renewable markets, particularly offshore wind. Where we can take existing controls, products and services and essentially deploy them into the growing offshore wind environment,” said Larssen.

He stated: “We see huge gains for us going forward in the renewable space which is very different to oil and gas with its own set of drivers. As it is a very new industry we have found a real willingness to embrace new technologies and new ways of doing things.”

Digitalisation push

In addition to the new technology drive, Proserv is taking digitalisation very seriously.

“We just created a new digital role at Proserv in December when Stuart Harvey was appointed as Digital Innovation Manager and he will sit under Tore at Trondheim,” revealed Larssen.

“We are increasingly having conversations with customers around data analytics, machine learning and digital twins. We are already on that path in some respects with the way our control systems work as our underlying software is open source.”

Larssen added: “What we have challenged Stuart with is to map out the strategy from a digital innovation perspective, including advancing the development of our AEGIS solution. Stuart will work with Purkiss and other key technology players in our business today to put that whole platform in place so we can then become a true ‘life of’ partner.”

Outlook

Larssen ended on a very positive note, excited for the future.

“We just had a board meeting at the end of last year and we are looking at roughly 15-20 per cent year-on-year revenue growth in 2020 versus 2019. Despite all the restructuring we went through in 2019 and selling off some business units, we still grew about 16 per cent in 2019 over 2018. We are getting the full support of our investors and I am very excited about what 2020 holds for us globally and in the Middle East in particularly. I think we have an opportunity to replicate what we are currently doing in the UAE market with ADNOC in other specific target markets throughout the world.”

This interview first appeared in the January issue of Pipeline Magazine

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Technological innovation to extract maximum value from crudehttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/january/technological-innovation-to-extract-maximum-value-from-crude/Thomas Gangl, OMV Executive Board member speaks about how technological innovation can help to extract maximum value from crude...2020-01-05https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/january/technological-innovation-to-extract-maximum-value-from-crude/

Thomas Gangl, OMV Executive Board member responsible for Refining & Petrochemical Operations, on how technological innovation can help to extract maximum value from crude and how the company’s existing facilities are undergoing a transformation

Downstream Oil refines and markets fuel products and petrochemicals in CEE and has recently expanded its refining business to the Middle East. It currently operates three inland refineries in Austria, Germany, and Romania. OMV is strongly integrated into petrochemicals and holds 36 per cent of Borealis, a leading polyolefin producer.

What do you see as the greatest challenges facing the oil and gas sector today?

We are embarking on an era in which our industry will need a complete readjustment: demand for oil and gas is stagnating in Europe while strong growth in Asia continues unabated.

Today it’s hard to guess which drive form will emerge victorious in the mobility sector, but it’s safe to assume there will be a broader mix coupled with a decline in conventional fuel consumption. Another decisive factor is the growing climate change, to which policymakers, society, and we ourselves must find the right answers quickly.

As long as there are no substitutes or new technologies capable of coming close to meeting the world’s growing energy demand, we will simply not be able to do without oil. That’s why the crucial thing is to use it as carefully and responsibly as possible. At OMV we call this “Oil & Gas at its best”.

But what does that actually mean?

Basically, we have to refine more oil and burn less. This is why OMV processes crude into feedstock for the plastics industry to produce the medicines and everyday items on which we all rely. And this adds value – for OMV, for our customers and for the environment.

With this in mind, OMV downstream has adopted a three-pronged agenda to transform our existing facilities. The first priority is strengthening our focus on petrochemicals and jet fuel, the second is expanding beyond Europe, and the third is reducing the CO2 footprint of our refineries. The latter is not just about cutting emissions, but also reducing the footprint of our actual products.

How does your ADNOC deal fit in with this approach?

The 15 per cent stake we acquired this year in ADNOC Refining and thereby in one of the world’s largest refinery hubs with petrochemicals has given us a powerful footing in our industry’s largest growth region. This gives us the opportunity to further internationalise our tried-and-tested refinery model, along with our expertise, quality standards, and approach to life-long learning. Our know-how was a key factor in securing this deal and reflects the importance of further education and professional development.

Another promising area is Indonesia, where we have signed an MoU with Mubadala and Chanda Asri to explore opportunities for collaboration in the petrochemical sector. However, changing backdrops cannot only be countered by improving our existing approaches. They also call for new ideas and innovations.

Such as?

ReOil for example. In addition to growing our refining capacity by 40 per cent and our olefin capacity by 10 per cent under our deal with ADNOC Refining, we have also signed a joint MoU related to this patented process and the feasibility of opening a ReOil plant in the UAE.

With projects such as ReOil, Co-Processing and our ISO C4 plant, we are already showing what tomorrow’s solutions could look like. Additional innovations must and will follow.

 

OMV downstream innovations:

The ultimate circular economy: OMV’s ReOil process has been attracting interest from across the world. It recycles post-consumer plastics waste into synthetic crude before processing it either into feedstock for the plastics industry or fuel. The unit produces one litre of synthetic crude for every one kilogram of plastic waste.

Developed in collaboration with BASF, OMV is building an ISO C4 plant for the direct production of high-purity isobutene using a brand new technology for which BASF and OMV have filed a global patent. The new unit will be integrated into the existing metathesis plant at the OMV Burghausen Refinery.

In its Co-Processing project, OMV produces more sustainable fuel without any reduction in quality

by including biogenic oils in processing in its refineries. Co-processing makes a significant contribution to increasing the share of renewable energy in the transport sector.

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