Hydrates, an ice-like deposit formed by natural gas under extreme pressure, has been named as a cause of the explosion and sinking of the BP Deepwater Horizon rig two weeks ago. But it may also be an important future source of fossil fuels, writes Tamsin Carlisle
A type of ice-like gas deposit is emerging as a major safety concern for deepwater drilling as it hampers BP's struggle to shut down an oil leak from a stricken well in the Gulf of Mexico.
Natural gas hydrates, which occur mostly in sediments at the bottom of the ocean, have been implicated in the April 20 well blowout and explosion that sank the Deepwater Horizon drilling platform.
There are two main dangers: heat destabilises hydrates, sometimes with explosive results; and the high pressure found deep underwater is likely to lead to ruptured pipes and valve malfunctions, allowing plugs of hydrates to clog up the works.
"There was concern at this location for gas hydrates," says Robert Bea, an offshore risk assessment expert and professor at the University of California, Berkeley, who suspects hydrates were the root cause of the blowout at BP's Macondo well off the coast of Louisiana.
"The deeper the water, the greater the pressure, which when high enough can keep hydrates stable below the sea floor."
Hydrates clogging the pores in sediments below the ocean floor can form seals that trap conventional gas and oil in underlying rock layers over geological time. That can make the deepwater zones where hydrates form especially tempting targets for drilling, as oil companies move their search into deeper waters.
On Friday, another deepwater drilling platform sank, this time off the coast of Venezuela where an international consortium is developing the country's biggest gas discovery. The cause of that accident is not known.
Prof Bea, who has extensive access to BP documents on the US incident, says drillers encountered an unexpected "kick" of gas pressure a month before the blowout, suggesting that hot fluids from deep underground had released gas from hydrate crystals in the well bore. The gas kick was powerful enough to temporarily suspend drilling as a precaution.
Hydrates later stymied BP's efforts to use a 100-tonne steel and concrete box to trap the estimated 5,000 barrels of oil a day that was leaking from the Macondo well.
The problem was the formation of "jelly-like" hydrate crystals near the top of the container, which blocked the pipe through which the oil would have been pumped to the surface.
Now BP is using a fleet of 12 mini robot submarines to try to thread a pipe directly into the wellhead under 1,500 metres of water. The juncture would need to be perfectly sealed to prevent water from entering the pipe and allowing more hydrate crystals to form as the oil is pumped to a tanker at the surface.
"It's never been done before in water that deep," Doug Suttles, the chief operating officer for BP, said on Friday.
As a back-up, the company is preparing a smaller container known as a "top hat" for lowering over the wellhead. In theory, the smaller structure could be kept free of hydrates by injecting methanol to act as antifreeze.
Halliburton, the oilfield services firm that was responsible for cementing the Macondo well to help convert it from exploration to oil production, last year gave a presentation highlighting the risks from hydrates for deepwater jobs.
"Gas flow may occur after a cement job in the deepwater environment that contains major hydrate zones," Halliburton said. "Destabilisation of hydrates after the cement job is confirmed by downhole cameras."
But the sheer concentrations of gas trapped in hydrates, which leads to their explosive behaviour when the crystals fall apart, also means they could be an important future source of fossil fuel.
BP is investigating the possibility at a project in Alaska, where temperatures are low enough for hydrates to form onshore in the permafrost beneath the Arctic tundra.
Japan and India, which both lack sufficient conventional oil and gas resources to fuel their large economies, are also assessing prospects for gas production from hydrates in their offshore waters, as are established northern gas exporters such as Russia and Canada.
The recent Gulf of Mexico tragedy may seem very far away from the Middle East, which still has the biggest concentration of the world's conventional oil and gas resources.
Yet the planet's biggest gas hydrate deposits may lie deep in the Arabian Sea, according to recent joint Indian and US government field studies.
@Email:tcarlisle@thenational.ae
The specs: 2019 BMW X4
Price, base / as tested: Dh276,675 / Dh346,800
Engine: 3.0-litre turbocharged in-line six-cylinder
Transmission: Eight-speed automatic
Power: 354hp @ 5,500rpm
Torque: 500Nm @ 1,550rpm
Fuel economy, combined: 9.0L / 100km
Race card
1.30pm: Handicap (PA) Dh 50,000 (Dirt) 1,400m
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COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
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Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
- Stay invested: Time in the market, not timing the market, is critical to long-term gains.
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- Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Sri Lanka's T20I squad
Thisara Perera (captain), Dilshan Munaweera, Danushka Gunathilaka, Sadeera Samarawickrama, Ashan Priyanjan, Mahela Udawatte, Dasun Shanaka, Sachith Pathirana, Vikum Sanjaya, Lahiru Gamage, Seekkuge Prasanna, Vishwa Fernando, Isuru Udana, Jeffrey Vandersay and Chathuranga de Silva.
PAKISTAN v SRI LANKA
Twenty20 International series
Thu Oct 26, 1st T20I, Abu Dhabi
Fri Oct 27, 2nd T20I, Abu Dhabi
Sun Oct 29, 3rd T20I, Lahore
Tickets are available at www.q-tickets.com
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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.”
MATCH INFO
Uefa Nations League
League A, Group 4
Spain v England, 10.45pm (UAE)
Scoreline
Australia 2-1 Thailand
Australia: Juric 69', Leckie 86'
Thailand: Pokklaw 82'
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Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
The biog
Favourite food: Tabbouleh, greek salad and sushi
Favourite TV show: That 70s Show
Favourite animal: Ferrets, they are smart, sensitive, playful and loving
Favourite holiday destination: Seychelles, my resolution for 2020 is to visit as many spiritual retreats and animal shelters across the world as I can
Name of first pet: Eddy, a Persian cat that showed up at our home
Favourite dog breed: I love them all - if I had to pick Yorkshire terrier for small dogs and St Bernard's for big
yallacompare profile
Date of launch: 2014
Founder: Jon Richards, founder and chief executive; Samer Chebab, co-founder and chief operating officer, and Jonathan Rawlings, co-founder and chief financial officer
Based: Media City, Dubai
Sector: Financial services
Size: 120 employees
Investors: 2014: $500,000 in a seed round led by Mulverhill Associates; 2015: $3m in Series A funding led by STC Ventures (managed by Iris Capital), Wamda and Dubai Silicon Oasis Authority; 2019: $8m in Series B funding with the same investors as Series A along with Precinct Partners, Saned and Argo Ventures (the VC arm of multinational insurer Argo Group)
'Brazen'
Director: Monika Mitchell
Starring: Alyssa Milano, Sam Page, Colleen Wheeler
Rating: 3/5
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months