International Petroleum Investments Company's $4.2 billion Adcop pipeline demonstrates innovation even at the highest strategic level. Duncan Chard / Bloomberg
International Petroleum Investments Company's $4.2 billion Adcop pipeline demonstrates innovation even at the highest strategic level. Duncan Chard / Bloomberg

Adipec 2015: Oil technology competition heats up



Technological advances in the oil and gas world have always been important but they have taken on an added significance since the oil price crash last year.
Companies are under pressure from host governments and shareholders to make deep cost savings while also maintaining or improving performance.
The competition to win the innovation awards at this year's Adipec oil gathering, which opens tomorrow in Abu Dhabi under a banner of Innovation and Sustainability, has therefore been intense and garnered considerable industry attention as oil companies look to leverage their technological prowess to win big deals in an increasingly competitive environment.
"Innovation is a bloodline of our oil and gas industry," said Rafi Baghdjian, chief operating officer at Shell Abu Dhabi. "It helps us cut costs, allowing us to become more competitive in this economic environment."
There were a record number of entries from private and state-owned companies for the categories, where companies make a case both for their technological innovation and what that means in terms of money saved or major project goals achieved.
Nationally important projects - not least those in Abu Dhabi - have set extremely demanding operational and strategic goals for oil and gas projects, requiring companies to emphasise their focus on technology development to gain a competitive edge.
"Traditionally, R&D spending in international and national oil companies has been very low [0.2 to 0.5 per cent of sales], as compared to oilfield services and other industries," says Louis Besland, the head of Middle East oil, gas and chemicals at Alix Partners, a consulting firm.
"In this environment, they need to regain technology control to differentiate themselves."
Winnowing the final 10 entries down to a shortlist of just three for this year's innovation categories was extremely difficult, said Mr Baghdjian, who was a judge for both the "surface" and "subsurface" categories of best oil and gas innovation or technology.
International Petroleum Investment Company's US$4.2 billion Adcop pipeline - shortlisted in the headline "mega projects" category - demonstrates innovation even at the highest strategic level.
The pipeline, which started operation three years ago, allows onshore Abu Dhabi crude to bypass the Straits of Hormuz and load in Fujairah for export to world markets, and "changes radically the way the UAE transports its crude oil production", according to Ipic.
"The pipeline, terminal and loading facilities also provide capacity to support the planned growth of the UAE's future oil production," said Energy Minister and Ipic managing director Suhail Al ­Mazrouei.
As well as enhanced security, Adcop means an average saving of two to three days in the cost of chartering and insuring tankers that previously had to sail from the Indian Ocean into the enclosed Arabian Gulf to reach Abu Dhabi before loading.
Private sector companies dominate the two innovation categories, particularly the oilfield services company Schlumberger.
The technology involved can sound a little dense, but the innovations' benefits to the projects usually are pretty clear.
In the subsurface category, Schlumberger's "ZEiTECS Shuttle" is a new way to maintain crucially important pumps that are used in about half the world's oilfields. Maintenance of these subsurface pumps often causes production delays and adds costs. But the new technology "avoids the need to deploy rigs and hoists that could otherwise be used for more profitable oil-generating activities and keeps drilling programmes on schedule", explained Neil Griffiths, a manager in Schlumberger technologies unit.
Schlumberger's other subsurface shortlisted entry is the system it developed with Saudi Aramco to manage the Manara oilfield reservoir.
The bottom line for the Manara innovation is that "workflows that normally take three to six months can be performed in one day", said Stephen Dyer, manager for "intelligent completions" at Schlumberger. Also, as the company told shareholders in July, it means a significantly higher percentage of oil can be recovered from the reservoir and is a "game changer" for the industry.
The final shortlisted subsurface innovation - BP's development of the giant Khazzan gasfield in Oman - also ultimately is about saving time and "hundreds of millions of dollars", said David Spain, senior adviser for unconventional upstream technology at BP.
Khazzan is a hydraulic fracturing or fracking operation that requires blasting along the drilling route to free up gas trapped in the rocks.
"The specific innovation is a toolkit of mathematical algorithms and workflows which we combine into a graphical display format," Mr Spain explained. "It is like reading and diagnosing an EKG," the heart monitor used in hospitals. It allows BP to pick the optimal parts to blast, "otherwise, we are just blasting blindly at the rock and the rock is very different along the wellbore".
As with many of the projects that made it to the shortlist, Khazzan is of crucial strategic importance to its owner, in this case Oman.
amcauley@thenational.ae
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Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal

Rating: 2/5

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

UAE currency: the story behind the money in your pockets
THE BIO

Ms Davison came to Dubai from Kerala after her marriage in 1996 when she was 21-years-old

Since 2001, Ms Davison has worked at many affordable schools such as Our Own English High School in Sharjah, and The Apple International School and Amled School in Dubai

Favourite Book: The Alchemist

Favourite quote: Failing to prepare is preparing to fail

Favourite place to Travel to: Vienna

Favourite cuisine: Italian food

Favourite Movie : Scent of a Woman

 

 

If you go

The flights

The closest international airport for those travelling from the UAE is Denver, Colorado. British Airways (www.ba.com) flies from the UAE via London from Dh3,700 return, including taxes. From there, transfers can be arranged to the ranch or it’s a seven-hour drive. Alternatively, take an internal flight to the counties of Cody, Casper, or Billings

The stay

Red Reflet offers a series of packages, with prices varying depending on season. All meals and activities are included, with prices starting from US$2,218 (Dh7,150) per person for a minimum stay of three nights, including taxes. For more information, visit red-reflet-ranch.net.

 

Tank warfare

Lt Gen Erik Petersen, deputy chief of programs, US Army, has argued it took a+“three decade holiday” on modernising tanks. 

“There clearly remains a significant armoured heavy ground manoeuvre threat in this world and maintaining a world class armoured force is absolutely vital,” the general said in London last week.

“We are developing next generation capabilities to compete with and deter adversaries to prevent opportunism or miscalculation, and, if necessary, defeat any foe decisively.”

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

Sly Cooper and the Thievius Raccoonus

Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
Rating: 5/5

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

FULL FIGHT CARD

Featherweight Bout: Abdullah Al Qahtani v Taha Bendaoud
Bantamweight Bout: Ali Taleb v Nawras Abzakh
Bantamweight Bout: Xavier Alaoui v Rachid El Hazoume
Featherweight Bout: Islam Reda v Adam Meskini
Bantamweight Bout: Tariq Ismail v Jalal Al Daaja
Bantamweight Bout: Elias Boudegzdame v Hassan Mandour
Amateur Female Atomweight Bout: Hattan Al Saif v Nada Faheem
Featherweight Bout: Maraoune Bellagouit v Motaz Askar
Featherweight Bout: Ahmed Tarek v Abdelrahman Alhyasat
Showcase Featherweight Bout: Mido Mohamed v Yazeed Hasanain
Showcase Flyweight Bout: Malik Basahel v Harsh Pandya

Company Profile

Name: Raha
Started: 2022
Based: Kuwait/Saudi
Industry: Tech Logistics
Funding: $14 million
Investors: Soor Capital, eWTP Arabia Capital, Aujan Enterprises, Nox Management, Cedar Mundi Ventures
Number of employees: 166

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part one: how cars came to the UAE

 

The years Ramadan fell in May

1987

1954

1921

1888

COMPANY PROFILE

Company name: OneOrder
Started: March 2022
Founders: Tamer Amer and Karim Maurice
Based: Cairo
Number of staff: 82
Investment stage: Series A

Ant-Man and the Wasp

Director: Peyton Reed

Starring: Paul Rudd, Evangeline Lilly, Michael Douglas

Three stars

Director: Nag Ashwin

Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana

Rating: ★★★★

How to wear a kandura

Dos

  • Wear the right fabric for the right season and occasion 
  • Always ask for the dress code if you don’t know
  • Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work 
  • Wear 100 per cent cotton under the kandura as most fabrics are polyester

Don’ts 

  • Wear hamdania for work, always wear a ghutra and agal 
  • Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

5. Zakat 

Saturday's schedule at the Abu Dhabi Grand Prix

GP3 race, 12:30pm

Formula 1 final practice, 2pm

Formula 1 qualifying, 5pm

Formula 2 race, 6:40pm

Performance: Sam Smith

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.