flow, Volume 03

Transcription

flow, Volume 03

FIND INSIDE
T a b l e
o f
C o n t e n t s
22
3 Editor’s Note
Keeping the pioneering spirit aflame
4 News Briefs
PETRONAS signs new LNG contracts
and other news from the industry
10 Growing with South Sudan
PETRONAS makes its mark on the
fast-growing country
SOUTH SUDAN SPECIAL
12 A Vision for the Future
South Sudan's Honourable
Undersecretary, Ministry of Petroleum
and Mining shares his views
14 Sowing for Harvests of Gold
14
29
The fascinating tale of operating
in the world's youngest country
20 Strength in Diversity
South Sudan's only oil producing
company features a unique
collaboration among its partners
22 A World of Opportunities
A South Sudanese UTP scholar
shares his experiences of working
in Malaysia
24 Up The Ante
South Sudanese workers in the oil
and gas sector get a boost
28 Future Ready
A rundown school in Juba gets a
second chance
COVER
We explore PETRONAS' efforts to
revitalise the country's oilfields
through groundbreaking offshore
Enhanced Oil Recovery (EOR)
methods in this month's cover
feature.
28
1
FIND INSIDE
T a b l e
o f
C o n t e n t s
COVER STORY: OFFSHORE EOR
32 A New Frontier
40
PETRONAS takes Enhanced Oil
Recovery techniques to new
heights
40 Turning the Tide at Tapis
Exxon Mobil and PETRONAS
pioneer new offshore EOR
applications at Tapis
44 A New Lease of Life
The 15-year old Angsi field gets
a boost in production
46 Business Unusual
PETRONAS and Shell think out
of the box to squeeze new life
into mature fields
MORE FEATURES
52 A Win-Win Partnership
Lundin Malaysia focuses on
value growth in Malaysia
through the PSC scheme
54 Turkmenistan:Policy of
Peace and Neutrality
Turkmenistan upkeeps peace
and harmony
58 First Oil Triumph
More oil flows from Turkmenistan
60 Developing Future Talent
Cordella Wong-Gillett shares her
thoughts on equipping petroleum
engineers with the right skills
46
STAY IN TOUCH WITH US
Get in with the flow
Petroliam Nasional Berhad
(PETRONAS)
PETRONAS
upstream.comm@petronas.com.my
2
AUG / SEP 2015
54
E DIT O R’S NO TE
KEEPING THE
PIONEERING SPIRIT
AFLAME
IT’S a challenging time in the global
oil and gas sector, as industry players
grapple with the twin threats of
sluggish demand and low prices.
Yet, at PETRONAS Upstream we have our sights set very
much on the long term. Such are pioneers – whose pursuit,
perseverance, purpose and passion persist in spite of challenges.
In spite of several periodic shutdowns between 2012 and
2013, PETRONAS and its partners remain committed to
building capabilities in South Sudan.
Despite the low price environment, we continue investing in
solutions such as Enhanced Oil Recovery (EOR), which seek
to boost production from Malaysia’s mature fields and others
around the world.
Why? Because we believe that we are A part of
the community where we operate, as much as
the community becomes A part of us.
In this third issue of flow, we explore PETRONAS’ EOR
journey. What started more than a decade ago crossed a
major marker recently with the completion and first gas
injection of possibly the world’s first large-scale offshore WAG
EOR project at the Tapis field located offshore Terengganu in
collaboration with ExxonMobil.
The costs and complexity of EOR projects have required new
thinking and technologies, especially as the economic viability
of such endeavours are challenged.
Nonetheless, we continue to blaze new trails through a
partnership with Shell Malaysia through the Enhanced Oil
Recovery Centre (EORC). The initiative which took flight in
2013 between PETRONAS and Shell will spearhead EOR
projects under two Production Sharing Contracts, with the
vision of furthering and rejuvenating the productivity of nine
fields in offshore East Malaysia.
We understand the importance of having a skilled and
competent workforce for the future of the country. Today,
70% of our workforce there are locals. Efforts are also in
place to train South Sudanese geologists, operators and
technicians, and we have been awarding engineering
scholarships to the locals to further their studies.
Indeed, identifying and developing talent remains a
cornerstone of our success. With the challenges, come
opportunities – and for this, flow speaks with the Society of
Petroleum Engineers on the trends for talent development.
I am confident that with the right mindset, strategies and
talent in place, PETRONAS will be able to weather the storm
and capitalise on the opportunities that emerge once this
season passes.
Resilience is the name of the game.
Dato Wee
In the spirit of nation building
In this issue, we speak to some of the people who live in a
country that was born out of civil war and continues to be
stricken with conflict.
Dato’ Wee Yiaw Hin
Executive Vice President & CEO PETRONAS Upstream
PETRONAS Upstream Magazine
3
briefs
News
LNG contracts
MLNG BREAKS NEW GROUND IN
JAPAN WITH HOKURIKU
ELECTRIC DEAL
PETRONAS’ LNG business has
expanded into a new territory in
Japan following Malaysia LNG’s
(MLNG) 10-year agreement to supply
Hokuriku Electric Power Company
from 2018.
Signed on 5 May 2015, the Heads of
Agreement (HOA) calls for up to 0.36
million tonnes per annum (mtpa)
of LNG to be supplied to Hokuriku
Electric from the PETRONAS LNG
Complex in Bintulu, Sarawak. The gas
will be transported to the Japanese
utility’s new receiving terminal that
is currently under construction in
Toyama.
Hokuriku Electric
will be the 17th utility
company to become
MLNG Group of
Companies’ term buyer
in Japan.
The delegation from Hokuriku Electric and PETRONAS
during the signing ceremony.
PETRONAS LNG REACHES NEW
MILESTONE WITH TOHO GAS
PETRONAS LNG signed a Heads
of Agreement (HOA) in March to
supply Toho Gas Co. for 10 years
starting in 2017.
Under this agreement, a total
LNG volume of up to 0.66 mtpa
will be supplied to Toho Gas,
from a portfolio of PETRONAS
supply sources. The LNG will be
transported to Toho Gas’ receiving
terminals Chita and Yokkaichi in
Japan by LNG vessels primarily
owned and operated by MISC
Berhad, a subsidiary of PETRONAS.
Toho Gas, the third largest city
gas company in Japan, purchased
its first of LNG spot cargo from
4
AUG / SEP 2015
Toho Gas HOA signing ceremony
PETRONAS in 1991. It also has two
long-term contracts with MLNG Tiga.
The current total contracted volume is
around 1.0 mtpa, making PETRONAS
the biggest LNG supplier in Toho Gas’
supply portfolio.
NEWSBRIEFS
Energy Project
Bayan First Oil
First Oil / First Gas
ENERGY PROJECT ACHIEVES MANY
FIRSTS
An integrated gas delivery project
known as ENERGY in the North Malay
Basin area reached a significant
milestone in April when First Gas from
the Muda Production Platform at the
Malaysia–Thai Joint Development
Area (MTJDA) was successfully
introduced into the system. The gas
was then delivered to an onshore gas
processing plant in Terengganu via a
360 km pipeline in just seven hours.
Despite encountering various
challenges, the team managed to
complete the ENERGY project ahead
of schedule and in a record time of
1.5 years. The project also boasts a
number of firsts. For instance, its 360
km pipeline is the longest subsea
pipeline installed in Malaysian waters.
Gas is also directly delivered to the
Gas Processing Plant without going
through a receiving terminal.
Meanwhile, the installation of the 800
metres of 28” onshore pipelines using
the Horizontal Directional Drilling
(HDD) method was among the longest
done for oil and gas to date in Malaysia.
The project team will now focus on the
ENERGY Phase 2 - which involves the
construction of the Terengganu Gas
Terminal (TGAST) in a safe and timely
manner to meet the targeted first gas
date in the fourth quarter of 2016.
BAYAN OIL ACHIEVES FIRST OIL
AHEAD OF SCHEDULE
Several initiatives to accelerate the
production of oil from the PETRONAS
Carigali-operated Bayan Field has
resulted in First Oil being achieved
two months ahead of schedule in April
2015.
The field was developed by the Bayan
Alliance (BA) - a tie-up between
PETRONAS Carigali Sdn Bhd (PCSB)
Enhanced Oil Recovery
to tackle ageing fields see page 32 onwards
and Halliburton Bayan Petroleum
(HBP) - that aimed to develop the
highly complex faulted reservoir and
depleted oil field with ageing facilities
to maximise production.
Initiatives included an infill drilling
campaign and the fabrication of a
new deck extension for installation
by October 2014. This allowed the
drilling of four new wells that were
initially expected to deliver the first oil
by June 2015.
Bayan Field has a controlled average
production of 2,080 barrels of oil per
day (bopd), which is higher than the
1,200 bopd in the approved technical
proposal.
5
briefs
News
Fast track
BUKIT TUA SPEEDS TO FIRST OIL
PETRONAS Carigali Indonesia
(PCINO) has realised First Oil for its
Bukit Tua Field Development Project
four months ahead of schedule
on 17 May 2015. This marks the
maiden production of hydrocarbons
for PETRONAS’ upstream venture
in Indonesia in a block owned
and operated by the company.
PETRONAS Carigali fully operates
the Ketapang Block in Indonesia
through PC Ketapang II.
Bukit Tua Well Head Platform
HANDOVER OF YETAGUN
NORTH FACILITY TO MYANMAR
OPERATIONS
The Yetagun North Development
Project was successfully completed
and the facility was officially handed
over to Myanmar Operations ahead
of schedule on 27 April 2015. The
early completion of the project
provided an additional 70 mmscfd
of gas that was needed due to the
depletion of existing producing
reserve at the Yetagun field.
From left: Pui Thai Chong, Head of Myanmar
Operations, Abd Malik Jaffar, Head of P&E
Department and Noor Ilias M Ismail, Head of
Project International
6
AUG / SEP 2015
NEWSBRIEFS
Health, Safety & EnvironmenT
300,000 MANHOURS WITHOUT LTI AT
KINABALU
Commemorating 300,000 manhours without
LTI at the THHE yard
milestone in March by achieving
12 million manhours without any
Lost Time Injury (LTI) since the
project kicked off in March 2012.
A Health, Safety & Environment (HSE)
day celebration was held in March to
commemorate the achievement of
300,000 manhours without Lost Time
Injury (LTI) at the Sumandak/Kinabalu
Development Project.
Hosted by PETRONAS Carigali Sdn
Bhd (PCSB) and Tabung Haji Heavy
Engineering (THHE), the event was held
at the THHE yard at Pulau Indah, Klang
and attended by around 300 people.
PFLNG SATU SURPASSES 12 MILLION
HOURS WITHOUT LTI
Celebrating 12 million manhours without LTI at
Okpo, South Korea
PETRONAS’ first Floating LNG facility
(PFLNG 1) crossed another significant
To commemorate this
achievement, a Health, Safety
& Environment (HSE) Day was
held at the Daewoo Shipbuilding
& Marine Engineering (DSME)
shipyard in Okpo, South Korea,
on 7 April 2015, which also
aimed to intensify the safety
culture for individuals involved in
the project.
The PFLNG 1 will be moored in
Kanowit gas field, located 180
kilometres offshore Sarawak,
Malaysia and will produce 1.2
mtpa of LNG.
BINTULU INTEGRATED FACILITY
OPERATORSHIP TRANSFER
became the new operator of Bintulu
Integrated Facility (BIF) as well as the
newly appointed network integrator
for Sarawak gas supply and demand
on 1 April 2015.
In less than a year, a special taskforce
comprising of PETRONAS, PCSB and
Shell representatives worked together
to make the speedy BIF Operatorship
Transfer a success.
From left: Mohamad Johari Dasri, VP of
Production Malaysia, Bacho Pilong, Senior
General Manager, Petroleum Operations
Management of Malaysian Petroleum
Management, and Chok Chee Tsong, Senior
Manager of Sarawak Shell Berhad
7
briefs
News
MILESTONES
PETRONAS Recognises 23
Vendors
Hazli Sham Kassim
(right), General Manager
PETRONAS Carigali
Indonesia receiving
documents from IGN
Wiratmaja, Acting
Director General for
Oil and Gas, Ministry
of Energy and Natural
Resources, as a
winning bidder for
Indonesia Oil and Gas
Auction 2014.
PETRONAS WINS TWO BLOCKS IN INDONESIA
PETRONAS Carigali Indonesia (PCINO)
has won two blocks in the latest bidding
round for 16 Indonesian oil and gas
blocks. The Indonesian government
awarded PCINO the North Madura II,
offshore East Java, and Kualakurun,
onshore Central Kalimantan block
where PCINO has a joint venture with
PT Petcon Resources.
PCINO’s plans to invest US$68
million in the North Madura II Block
and US$2 million in Kualakurun
with PT Petcon. PETRONAS has a
total of three years to complete the
exploration in the blocks, which
covers geological and geophysical
work, 2D seismic survey and the
drilling of the two blocks.
presented Outstanding Vendor Awards
(OVA) to 23 local and international oil
and gas service companies for their
exceptional performance and delivery
for the year 2014.
The awards were presented by PCSB
President and PETRONAS’ Senior Vice
President of Upstream Malaysia, Datuk
Mohd Anuar Taib.
The OVA recognises excellence in 15
different categories with an emphasis
on exemplary performance, reliability,
responsiveness as well as a
commitment to implementing
high standards in Health, Safety &
Development (HSE).
The annual event, initiated in 2010, also
serves as an avenue for PETRONAS
to share its business expectations and
engage in dialogue with its contractors.
MAJOR MILESTONE ACHIEVED AT SSIOGP
The Sabah-Sarawak Integrated Oil & Gas
Project (SSIOGP) marked a major
Kebabangan Northern
milestone on 12 June 2015 as
Hub Project (KBB)
Malikai
six assets were handed over
to their respective owners.
Kimanis
Power Plant (KPP)
Dalak pipeline (DLKP)
The six assets: Sabah
SPR Power Plant
Generating Capacity: 100MW
Oil & Gas Terminal
Gumusut-Kakap (GK)
Sabah Oil Gas Terminal (SOGT)
(SOGT),
The centre of the overall development in SSIOGP
Kinabalu NAG (KNAG)
the SOGT
SABAH
Sabah Ammonia-Urea
Administration
(SAMUR) Project
Building Complex,
the Gumusut Oil
Sabah Sarawak Gas
Pipeline (SSGP)
Pipeline (GOP), the SabahSarawak Gas Pipeline (SSGP)
SARAWAK
and the SOGT’s Dry Gas
PETRONAS LNG
Complex Bintulu
Diverter Manifold (DGDM).
••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
PETRONAS announced the RM45
billion SSIOGP project, which
involves the development of
several upstream and downstream
projects over the course of five
years, in 2011.
The SOGT, the biggest integrated
oil and gas terminal in Malaysia, is
the first facility that integrates oil
and gas operations in one terminal.
It has the capacity to process
260,000 barrels of oil, 1,250 million
standard cubic feet of natural gas,
and 77,000 barrels of condensates
per day.
Legend
Gas Pipeline
Oil Pipeline
8
Sabah-Sarawak Integrated Oil & Gas Project SSIOGP)
AUG / SEP 2015
NEWSBRIEFS
DELIVERY OF FIRST HPHT
DEVELOPMENT WELL
On May 31 2015, PETRONAS delivered
its first High Pressure High Temperature
(HPHT) development well, the KN-B4
well in the Kinabalu Non-Associated
Gas (KNAG) Upper Ultra Deep field
offshore Sabah. The delivery of the
KN-B4 adds 70mmscfd of production
capacity, boosting the field’s total
production capacity to 365 mmscfd.
Planning for the KN-B4 HPHT
development began as early as 2011,
with the Collaborative Well Planning
(CWP) stage taking place at the
PETRONAS Real Time Visualisation
Centre (PRTVC).
in PCSB resulted in the well being
completed with zero recordable process
safety incidents throughout the duration
of simultaneous operations on site. The
experience gained from the project will
be used to improve delivery of future
HPHT development projects.
Right: HPHT Well_DD3 jack-up type drilling rig
at KNPG-B Central Processing Platform
Bottom: KNAG PMT Leadership Team Visit to
DD3 rig led by Head of KNAG & Sabah Projects,
Zaidi A Hamid
The drilling project was not without
its challenges, primarily from the
presence of hard formations, passing
through stacked reservoirs with
significantly varied pressure regimes
due to depletions.
Nevertheless, seamless integration
between all the relevant departments
Badra First Entitlement Crude Lifting
PETRONAS Carigali Iraq Holding
B.V. (PCIHBV) achieved another key
milestone by successfully lifting and
marketing Badra’s First Entitlement
Crude on 29 June 2015, marking
PCIHBV’s first lifting for the Badra
Project.
Through PETRONAS’ trading
arm PETCO, PCIHBV has now
successfully loaded Badra’s First
Entitlement Crude volume of approx.
477,557 bbls onto vessel Mt. Maran
Centaurus. The lifting commenced
on 26 June 2015 and completed
its loading on 29 June 2015. The
vessel has set sail from Basrah
Port and is en route for delivery to
end buyer(s) in the Far East. Badra
Operator Gazprom also successfully
loaded their first entitlement volume
in April 2015. Current production
from Badra is averaging over twenty
five thousand barrels of oil per day
(25,000 bb/d).
Badra field in Southern Iraq achieved
its First Oil and First Commercial
Production (FCP) on 20 August 2014
and 23 November 2014 respectively.
Badra DPSC consortium comprises
of Gazprom Neft Badra BV of Russia
(30%), KOGAS Badra B.V of South
Korea (22.5%), PCIHBV of Malaysia
(15%), TP Badra Ltd. of Turkey
(7.5%) and the Iraqi government,
as represented by Oil Exploration
Company (OEC), holds a 25%
participating interest. Badra field
is operated by Gazprom Neft and
is located in the Wasit province in
eastern Iraq, straddling the border
with Iran.
9
FEATURE F OCUS: S OU TH S U DA N
Future
Focus
flow gets an EXCLUSIVE interview with the Honourable
Stephen Dhieu Dau, Minister, Ministry of Petroleum &
Mining South Sudan, who shares his thoughts on taking
the industry forward …
The Honourable Stephen Dhieu Dau
Minister,
Ministry of Petroleum
and Mining of South Sudan
12
AUG / SEP 2015
F E AT URE F O C US : S O UT H SU DAN
1. Can Your Honourable briefly describe the
Ministry’s vision to develop South Sudan’s
petroleum industry?
Our Vision hinges on Petroleum Act 2012 and focuses
on a number of things, including managing the
petroleum sector in an efficient manner, developing
competent national workforce for the petroleum
sector and creating a conducive atmosphere for the
foreign partners, operators and other investors in the
oil sector.
On capability building, PETRONAS has been instrumental
in offering various training and development programs for
NILEPET, MPM and Joint Operating Companies’ (JOCs)
national staff to enhance their skills. There is more that
needs to be done in order to bring technical staff up to
speed in order to address industry needs and challenges.
In future, we hope to get on-job-attachment
opportunities for MPM staff in PETRONAS’ HQ and
other subsidiaries in Malaysia in order to expose them to
PETRONAS’ way of doing business.
2. What have been the industry challenges
in realizing this vision and how have these
been overcome?
4. How has PETRONAS’ capability building
initiatives helped accelerate the
development of the industry and the
country?
We are currently faced with several issues including
the lack of capable workforce. This is across all
departments in the industry and we are actively
looking for opportunities to upskill our people.
There are also logistics challenges in supporting
petroleum operations – for example, getting materials
supplied to operating fields in a timely and costefficient manner given our vast geography.
We also want our industry to be world-class. As
such, we must emulate good Health, Safety and
Environment (HSE) best practices in our operations.
Creating this safety culture will be an on-going effort.
On the technical front, we need to deal with improving
our data management in order to preserve our technical
data to a high quality so it can be used as industry
reference.
3. What role do partners like PETRONAS play in
this realising this vision?
We believe that PETRONAS brings a wealth of
experience and technical capacity that benefit the
local industry – whether it’s for unexplored blocks or
ageing assets. Technology transfer, for example, in the
area of Enhanced Oil Recovery, is one example of a
long term collaboration. (Editor’s Note: PETRONAS is
currently piloting two EOR projects in South Sudan)
PETRONAS can also assist MPM with data
management and storage based on its experience as a
national oil company.
The Minister and his delegates receive a warm welcome in Malaysia
PETRONAS scholarships have laid a solid foundation for
South Sudanese engineers in the oil and gas sector and
we look forward to its continuation.
PETRONAS distinguishes itself by offering scholarships
to deserving South Sudanese to study in Malaysia.
With this, we are building a better pool of technical
personnel for long term growth as the scholars return
to South Sudan upon completion of their studies.
PETRONAS is also party to the socio-economic
progress of South Sudan. Through its Corporate Social
Responsibility initiatives, we are pleased to see buildings
and schools in Juba restored for the benefit of the
community.
5. What are Your Honourable’s plans for the
development of the industry?
There are two areas of focus. Firstly, producing blocks.
MPM is working on a comprehensive strategic plan to
realise its vision. This will entail working with our foreign
partners on production enhancement, develop our local
workforce and carry out studies on the potential of
existing fields.
Our other area of focus are exploration blocks. As the
security situation improves in South Sudan, we will
embark on an aggressive tender process for new blocks
and subsequently invite capable companies to join our
oil sector. This, we hope, will accelerate our drive to find
new fields and maintain good production in the future.
The South Sudan delegation at the PETRONAS Tower Bridge
13
14
AUG / SEP 2015
F e at ure F o c us : S o ut h Su dan
When the African nation
of South Sudan gained
its independence in
2011 after two decades
of dispute between
the northern and
southern states, many
oil and gas operators,
including PETRONAS
and their partners found
themselves caught in the
middle.
SOWING FOR
HARVESTS OF GOLD
The country head of PETRONAS in
South Sudan tells the fascinating
journey of operating in the
youngest country in the world.
While around three-quarters of the
oil reserves were located south of
the border, many offices were in the
capital of Khartoum in the north.
Despite having been in Sudan since
the 90s - making PETRONAS one of
the country’s earliest foreign investors
- the company had to start many of
their operations in South Sudan from
scratch as a result of the secession.
By Francis Kan
“When the country separated, some
of our areas of operations were split in
two. So we had to start all over again
in some cases, right from setting
up the office and finding capable
manpower,” recalled Azman A. Aziz,
PETRONAS’ South Sudan Country
Chairman.
Apart from having to establish new
entities in the south, PETRONAS
also had to negotiate and formalise
separate agreements with the
Sudan and South Sudan regarding
their operations in both nations.
Significantly, these included the terms
15
Feature F ocus: S ou th S u da n
“I think the outlook for our investment in South Sudan
is positive. There is a lot of potential in the country
and a lot more reserves can be developed.”
Azman A. Aziz
PETRONAS South Sudan Country Chairman
PETRONAS IN SOUTH SUDAN: THE JOURNEY
Apr /May
2013
Exploration
extension for
all blocks
Feb 2012
Shutdown
due
to conflict
Feb 2011
Establishment
of PSSO office
2011 PRE INDEPENDENCE
Nov 2011
PSSO new
headquarters
POST INDEPENDENCE
Jul 2011
South Sudan
Declaration of
Independence
Country Event
Business Event
of the movement of oil between
the two countries. While the oil
was being produced in the south, it
needed to travel through the north to
reach the port for export to the rest
of the world.
Shutdown Shock
However, getting their South Sudan
operations off the ground proved
only to be the start of many episodes
16
Jan 2012
Signing of
Transition
Agreement
AUG / SEP 2015
2012
Jan 2012
Conflict
between
South Sudan
and Sudan
Mar 2012
Formation of
DPOC, GPOC
and SPOC in
South Sudan
TOTAL SHUTDOWN PERIOD
Sep 2012
Cooperation
Agreement
signed
between
South Sudan
and Sudan
May 2013
Production
resumes after
15 months
2013
June 2013
First lifting
since
resumption
PRODUCTION RESUMPTION PERIOD
Mar 2013
Implementation
Matrix signed
between
South Sudan
and Sudan
Shutdown
PETRONAS and their partners
encountered. In February 2012 the
consortiums established between
PETRONAS, NILEPET (the national oil
company) and several partners were
forced to shut down 2 out of 3 fields
operations as a result of renewed
oil-related disputes between north
and south. The shutdown lasted
for 15 months, and posed one of
the biggest threats to PETRONAS’
operations in the country.
“Our facilities and the nature
of our crude was not designed
for shutdown, it is meant for
continuous flow. So undertaking
the shutdown was a big challenge
that required a lot of planning and
teamwork,” said Azman.
“Thankfully, both sides recognised
that this was a priceless asset and
it was not in either side’s interest to
damage the facility.”
Dec 2013
Conflict
escalated
shutdown at
GPOC and
SPOC.
Phased staff
evacuation
Jan/Feb
2014
Phased
redeployment
of PETRONAS
staff to South
Sudan
Jan 2014
Business
continuity at
PETRONAS
Twin Towers
KL
2014
June 2014
Development
Extension for
Block 1B
and 3B
PARTIAL
SHUTDOWN
PERIOD
Jan 2014
Signing of
secession of
Hostility
Agreement
Jan 2014
Ceasefire
agreement
between
government of
South Sudan
and the
opposition
2015
ONWARDS
CONTINUOUS
PARTIAL
SHUTDOWN PERIOD
Jan 2015
Agreement on
the Unification
of the SPLM
June 2014
Agreement to
form
Transitional
Government
With support from their
headquarters and partners, as
well as the co-operation from
both sides of the government,
PETRONAS was eventually able to
get their facilities up and running
by the start of 2013.
Today, South Sudan is one of the
bigger contributors in PETRONAS’
international portfolio, producing
160,000 barrels of crude a day.
Mar 2015
Extensions of
President’s
term
Feb 2015
Signing of
areas of
Agreement on
TGONU
A Focus on Locals: The
Bedrock for Growth
Despite the ongoing turmoil,
PETRONAS was focussed from
the start on the task of building
capabilities in South Sudan. Prior
to the secession, most of the
company’s workers had come
from the north, and once they
returned home following the split,
there was a talent vacuum that
needed to be filled. The company
had to rely on expatriates to keep
the oil flowing.
“We knew we couldn’t depend on
expats for too long. Any country
would want business operating in
its domain to benefit the locals.
So there was a lot of focus at
PETRONAS on building capability
and capacity in the country,”
said Azman.
17
Faculty of Mechanical trainees at INSTEP,
November 2012
Driven by a desire to nurture local
talents, PETRONAS has provided
various forms of training to the locals
- from business and undergraduate
engineering to technical programmes.
“Our approach to capability building is
multi-layered and holistic in that
regard,” explained Azman. “We focus on
developing core competencies and at
the grassroots. Many South Sudanese
were deprived of education opportunities
before the secession,” he continued.
In the past 2 years, 111 South Sudanese
trainee production operators and
technicians, with the support of
the country’s Ministry of Petroleum
and Mining and oil partners have
undergone training at Institut Teknologi
Petroleum PETRONAS (INSTEP)
facility in Malaysia. The modules cover
project management, oil and gas
technical training including production,
instrumentation, mechanical and others.
Today, the first batch of South Sudanese
trainees are undergoing Industrial
Training Attachment (ITA) at Dar
Petroleum Operating Co Ltd. (DPOC).
Additionally, more than two dozen
workshops have been organised with
ministry officials, in order to develop
technical and management best
practices. (See story on page 24)
18
AUG / SEP 2015
78
scholarships to South
Sudanese to pursue their
undergraduate studies at
Universiti Teknologi
PETRONAS.
111
South Sudanese
trained at Institut
Teknologi Petroleum
PETRONAS (INSTEP), Malaysia.
70%
of 2,000
operations personnel
are South Sudanese.
PETRONAS has also given out 78
scholarships to South Sudanese to
pursue their undergraduate studies
in engineering at Universiti Teknologi
PETRONAS – currently ranked
amongst the top 200 universities in
the world. About half of the recipients
have graduated and are back working
in their home country. (See story on
page 22)
As an extension to its capability
building efforts, PETRONAS has
embarked on refurbishing some
schools, providing learning aids
equipment to the visually impaired
and education tools to a number of
recipients. (See story on page 28)
Looking Ahead
Azman is optimistic that, at some
point, the two sides of the conflict will
reach a peaceful agreement with the
help of international mediators. Most
immediately, he will be looking to
resume production at the two facilities
that have been shut down and, further
down the line, bring production back
to pre-crisis levels of around 200,000250,000 barrels a day in South Sudan.
“There is a lot of potential in the
country and more reserves can be
developed,” he says.
PETRONAS’ operations in South Sudan
Port Sudan
Red
Sea
1956 boundry
between N & S Sudan
Oil producing block
Khartoum
SUDAN
Oil pipeline
Kassala
Oil refinery
Oil tanker terminal
El Obeid
4
ABYEI
7
2
1
3
5A
SOUTH SUDAN
JUBA
5A – SPOC
1, 2 & 4 – GPOC
3 & 7 – DPOC
Empowering lives in South Sudan
Reaching communities in South Sudan with more than 30 community relations programs from 2011 to 2015
20
Community
Development
Projects
10
Community
Outreach
Programs
4
Facilities
Improvement
Programs (Signature)
19
PE
TR
ON
A
S
DPOC is one of three entities owned by PETRONAS and its
partners that were set up to develop South Sudan’s petroleum
resources following its secession from Sudan in 2011.
It is currently producing 160,000 barrels of oil per day (bpd)
from two blocks located north-east of the country.
This puts DPOC in a strong position to deliver additional
value to the development of the country – including building
capabilities in South Sudan’s oil and gas sector, explained the
company’s president Datuk Joseph Podtung.
DEVELOPING HUMAN CAPITAL
“Many locals want to be part of the oil industry and our role is to
ensure the right people are employed and developed to bring
20
AUG / SEP 2015
TR
N CEAIE
5 RG N
% Y
CNPC 41%
As the only company in South Sudan
producing oil - an industry that
contributes around 98 per cent to the
country’s gross domestic product Dar Petroleum Operating Company
(DPOC) is playing a major part in the
development of the nation.
%
40
Datuk Joseph Podtung
President
Dar Petroleum
NILEPET
8%
EC
OP
SIN %
6
O
E
the oil industry to the next level and for it to be sustainable in the
long-term,” he said.
DPOC is looking to give locals more responsibility within the
organisation as they gain more experience and skills. To achieve
this, the management has identified positions that could be held
by South Sudanese and the individuals that could potentially fill
them. This includes DPOC’s vice-president role, currently filled by
Mohamed Lino Benjamin, a South Sudanese from the country’s
national oil company, Nile Petroleum Corporation (NILEPET).
A majority of the Manager and Section Head positions, especially
non-technical positions, are occupied by local staff. There are
569 permanent employees at DPOC, of which 75% are locals.
Additionally, DPOC employs 1,400 national contract workers to
support the activities in the oil field.
STRENGTH
IN DIVERSITY
As South Sudan’s only oil producing company,
Dar Petroleum is well placed, with its partners,
to build capabilities in the country’s
petroleum sector.
By Francis Kan
A Unique Partnership:
Navigating the Tripartite
Each partner brings their unique
strengths to the table. While
the CNPC representative leads
the exploration and production
aspect of DPOC, the PETRONAS
representative is tasked with the
finance and service functions including procurement, human
resources and administrative roles
- of the joint venture.
PETRONAS owns a 40% stake in
DPOC, while China’s CNPC holds
41%. The remainder is held by
NILEPET (8%), Sinopec (6%) and
Tri-Ocean Energy (5%).
To ensure the smooth running
of an entity made up of people
from different countries and
cultures, the presidency of DPOC
is rotated between its two major
shareholders.
DAR Petroleum’s Field Processing Facilities in Paloch,
Upper Nile State which processes crude oil before export
“The presidency of the company
changes hands between PETRONAS and CNPC every
three years. We also established a management committee
representing all the shareholders which makes major decisions
through a process of consensus. With this arrangement,
operations are not affected when a new president takes over,”
explained Datuk Joseph, who took up the presidency in 2013.
The company is also driven by a vision, mission and strategic
direction that ensure all partners and DPOC staff are aligned
to the goals, he added.
These roles leverage on PETRONAS’
expertise in implementing work
processes and governance that has
been demonstrated in its projects
around the world.
“I see this as an opportunity. The uniqueness of this
operation means that there a lot of challenges to
overcome, so we need this sort of strength to work things
out together.”
The three-way partnership has augured well for the
country, as business operations remain tight in spite of
several challenges. “This spirit of common solidarity has
brought us through, and I believe will be what it takes to
take us into the future,” he concludes.
21
A WORLD OF
OPPORTUNITIES
South Sudan’s James Makuach Makeny, a Universiti
Teknologi PETRONAS scholar shares his experience
working as a reservoir engineer for PETRONAS in
Sarawak for the past two years.
THE MOST INTERESTING PART OF YOUR
JOB?
I deal with a lot of uncertainties and many
variables in the field. I face new learning
experiences by solving a new case every
day, facing different people from different
backgrounds, and using different ways
to solve problems. I have to adapt to
changing conditions quickly and become
an open-minded person.
As a reservoir engineer, my core role is to
maximise the recovery of hydrocarbons
at optimal cost. It is very exciting to work
in a team comprising various disciplines
such as process engineers, production
technologists, and geologists. This
collaborative culture is one part of what
makes PETRONAS a great place to work.
It is very large and offers many training
and career opportunities.
WHY DID YOU CHOOSE TO WORK WITH
PETRONAS AFTER GRADUATING?
James Makuach, currenly resides in Malaysia with his family
22
AUG / SEP 2015
When I joined PETRONAS as a fresh
graduate engineer my objectives were
to give back to PETRONAS as I was a
scholarship beneficiary. I also aimed for
career development and progression,
personal development, opportunities,
networking and global exposure in the
oil and gas industry. So far most of these
78 South Sudanese students have pursued their
studies at University Teknologi PETRONAS
UTP
Scholars From
South Sudan
Undergraduates at UTP, Malaysia PETRONAS
Education Sponsorship Programme
Paul Adong
objectives have been achieved and there
are still opportunities ahead to become a
fully well-rounded reservoir engineer.
PETRONAS is a model for many national
oil companies around the world. The
company is well managed and run on
sound economic principles and expand
internationally. One of PETRONAS’
greatest strengths is the diversity of its
workforce, with men and women of
many nationalities and backgrounds
working together and sharing common
objectives and shared values.
The company’s philosophy is that
high-quality training is fundamental
to both the success of both the staff
and the business. It also offers many
opportunities in terms of career
progression and it has many fields and
projects located in various parts of the
world.
WHAT ARE SOME OF THE OTHER UTP
SCHOLARS FROM SOUTH SUDAN
DOING TODAY?
Most of them are doing well and work
for various government ministries and
departments, applying their technical
knowledge and experience in supporting
and contributing to the development of
our young nation.
Past Managing Director
and CEO of Nile
Petroleum Corporation,
South Sudan’s national
oil company
David
Rufas
Drilling Engineer,
GPOC
Atem
Maluak
Ayuel
Drilling Supervisor,
DPOC
Michael
Arop
Founder & Owner,
Matku Engineering &
Construction Company
Irene
Abalo
Engineer
SIPET oil & gas
services company
Some noticeable success stories
include Paul Adong, who was
previously managing director and
CEO of Nile Petroleum Corporation
(NILEPET), South Sudan’s national
oil company. Others such as Irene
Abalo and other engineers who
are supporting and contributing to
PETRONAS’ operations in South
Sudan through its jointly-operated
companies.
DO YOU SEE YOURSELF GOING BACK
TO SOUTH SUDAN IN THE FUTURE?
IF SO, WHAT WILL YOU BE DOING
WHEN YOU RETURN?
Yes, I would really love to go back
to South Sudan in the near future in
order to give back to my country and
to support PETRONAS operations to
the best of my competency and ability.
South Sudan’s oil and gas industry is
young and it faces many challenges.
With my technical knowledge,
global experiences and exposure,
I shall replicate best practices and
technology to improve and develop
South Sudan’s oil and gas industry. I
shall share my technical knowledge
and experiences with my compatriots
who are keen to work in the oil and
gas industry but did not have the
opportunities I enjoyed.
23
Up The Ante
More South Sudanese in the
petroleum sector are getting
hands-on training through
workshops and programs
run by PETRONAS. Read on
to find out more….
PETRONAS’ South Sudan
Operations has been helping
sharpen the skills of South
Sudanese workers in the oil
and gas industry since 2011,
when it signed a capability
building Memorandum of
Understanding (MoU) with
the then Ministry of Energy
and Mining (now known
as Ministry of Petroleum
and Mining). This involved
PETRONAS conducting
more than 10 technical
training modules.
24
AUG / SEP 2015
PETRONAS has since built on
that initial effort with subsequent
programmes, including an upstream
training collaboration with Nile
Petroleum Corporation (NILEPET)
that ran from September 2013 to
March 2015.
Under this programme, PETRONAS
subject matter experts delivered six
training modules at the Nilepet
Training and Development Centre
in Juba. Participants came from the
Ministry of Petroleum and Mining,
Nilepet and Joint Operating
Companies.
Following an MOU between INSTEP
and NILEPET in February 2015,
technical trainings have been linked
up. It is expected that more than 150
South Sudanese in the petroleum
sector will attend the programme to
be conducted by instep in Juba.
MODULES COVERED
The cllaboration between
PETRONAS South Sudan and
NILEPET has since seen the delivery
of these modules.
•
•
•
•
•
•
Upstream Petroleum Legal
Regime Framework (7 modules)
Petroleum Drilling
Oil and Gas Accounting
Petroleum Economics
Petroleum Reservoir Training
Surface Production Operation
Training
Makui Jacob Deng, Mechanical
Engineering Undergraduate in
UTP, recipient of the PETRONAS
Education Sponsorship Programme
25
“PETRONAS is an institution that believes in capacity
building. Why? Because it is where our success lies.
Without qualified personnel in the game, we cannot
get very far.”
Francis Khamis Bali
Planner at GPOC
Mr Gabriel Matut Maliah Gatdet,
participant of the reservoir training
module at the Nilepet Training and
Development Centre, believes that the
training would enable South Sudanese
geoscientists and engineers in the oil
and gas sector deliver their jobs with a
higher degree of professionalism.
“Most of the South Sudanese
geoscientists and engineers who
had graduated in various Sudanese
universities, lack the necessary skills and
knowledge of the oil and gas sector
as they were not exposed to intensive
training, be it practical or theory, as
part of their career development,” said
Mr Gatdet, 35, who is a petro physicist
at the Greater Pioneer Operating
Company (GPOC).
The training helped him tackle
Reservoir Engineering as an integrated
discipline that covers reservoir
management right from discovery
to abandonment with the aim of
26
AUG / SEP 2015
Gabriel Matut Maliah
Petrophysist at GPOC
Francis Khamis Bali
Planner at GPOC
managing a depleting reservoir
efficiently and economically. It widened
his knowledge in the topics of reservoir
geology, reservoir pressure and
temperature, rock properties, reservoir
fluids, reservoir drive mechanisms
and reserves estimating and reservoir
management.
Meanwhile, fellow participant Francis
Khamis Bali, a planner at GPOC,
believes that PETRONAS is pursuing
the correct strategy in helping to build
capabilities in his home country.
He said: “PETRONAS is an institution
that believes in capacity building.
Why? Because it is where our success
lies. Without qualified personnel in the
game we cannot get very far.”
Victoria Jakuru Cosmas,
Geologist at NILEPET
Victoria Jakuru Cosmas, a geologist,
agreed that the training offered by
PETRONAS enhanced her knowledge
and helped improve her skills and
performance for career development.
27
28
AUG / SEP 2015
Future Ready
Children, teachers and alumni
from East Atlabara Primary School
have a renewed passion for
learning. Here’s why…
When Dr Cosmas Pitia
Kujjo returned to his old
primary school in Juba,
South Sudan, he was
disturbed. Following
decades of conflict, the
buildings at Atlabara
East Primary School had
deteriorated badly.
“It was horrible and unbearable for me
to pass through the school and look
at it in that condition,” said Dr Kujjo,
who is Director General, Directorate of
Mineral Development at South Sudan’s
Ministry of Petroleum and Mining. It
was not a suitable place for learning.
Students at Atlabara East Primary School thrilled with the new facilities.
29
Feature F ocus : S ou th S u da n
Madam Drucilla,
School’s Head Teacher
“The experience of
working with PETRONAS
for this programme
has been very good.
The teachers and the
community at large
appreciate PETRONAS’
contribution to our
school.”
From left: Titus Adam,
John Wani and Angelo Abdalla
School teachers
Mr John Wani
Betty Conasiba Bada,
Primary six student
Madam Asunta Idris Alwan
Augustino, Assistant
Inspector at the Ministry of
Health in South Sudan
His view changed drastically last year
after a major Facilities Improvement
Programme (FIP) was sponsored by
PETRONAS.
The school’s teachers were equally
impressed by the changes and were
confident that the students’ learning
experience would be boosted by the
improvements.
The four-month initiative involved
the refurbishment and reconstruction
of various areas at the Atlabara East
Primary School, aimed at providing a
more conducive learning environment
for students.
“The school is today considered the most
beautiful government school in Juba City
with good facilities,” said the school’s
head teacher, Madam Drucilla, 60.
Works included the repair, painting
and expansion of two blocks of
classrooms, the construction of a new
teachers room, a multi-purpose court
for sports and new toilets. A new
headmistress office and library was
also built.
Added teacher Mr John Wani: “ The FIP
has improved the school’s ability to carry
out its mission of improving education
performance and we see a higher
number of students. This is due to the
enhancement of school ambience with
better facilities such as classrooms, staff
offices, store room, and a multi-purpose
court for sports.”
“During the school tour, I was so
impressed by the remodelling of the
classes and the offices,” said Dr Kujjo.
30
AUG / SEP 2015
The changes have also seen many
parents wanting to send their children
to the school, resulting in a jump in
the student population from 207 to
320 students – as there are more
classrooms to accommodate more
students. One such parent is former
student Madam Asunta Idris Alwan
Augustino 42, Assistant Inspector at
the Ministry of Health in South Sudan.
“Parents of students including myself
are now willing to send their children to
the school due to the good condition
and facilities of the school,” she said.
Most importantly, students such as
Betty Conasiba Bada are reaping
the biggest benefits from the FIP.
“These days, we enjoy going to
school because we love the learning
environment. After school session
ends, we can now have our sport
activities at the multi-purpose court,”
remarked the primary six student.
“The experience of working with
PETRONAS for this programme has
been very good. The teachers and
the community at large appreciate
PETRONAS’ contribution to our school,”
Wani said.
PETRONAS’ involvement with this Atlabara
school started in 2010 when it was
selected as one of the recipients of the
PETRONAS Mobile Library Programme.
“We have 320 students at present and
with great hope some of these students
will be the leaders of this nation in the
future,” said Atlabara East Primary School
head teacher, Madam Drucilla.
Atlabara East Primary School Facilities
Results of the FIP
Improvement ProgramME
Quantitative Results
No.
1
2
Dr Cosmas Pitia Kujjo studied in
this school when many residents
of Juba town were displaced. By
then it was a single classroom
school (Khalwa). However, it
became a proper primary school
after the Addis Ababa Agreement.
I would like to express my
sincere thanks and gratitude
to PETRONAS, for their great
contribution to South Sudan
in general and in the field of
Education in particular. It’s
worth mentioning that such
contributions and cooperation
promotes and strengthens
bilateral relation between our
beloved nations.
After FIP
No. of
classrooms: 4
No. of
classrooms: 6
Student population:
approx. 220
Student population:
approx. 320
Remarks
Additional 2
classrooms
allows more school
children to receive
formal education
Quantitative Results
No.
Dr Cosmas Pitia Kujjo, Director General
in the Ministry of Petroleum and Mining
Republic of South Sudan, and Atlabara
East Primary School alumni
Before FIP
Before FIP
After FIP
Remarks
1
Uncomfortable
learning
environment
Conducive
learning
environment
Equipped with
classroom facilities i.e.
lighting system, desks,
fans,chairs, benches
2
Limited sport
activities
Students are more
involved in sports
programs and
activities
New multi-purpose
court constructed for
the school
The Atlabara East Primary School was built by a merchant named Mohamed
Ahmed Ali in 1972. It had two humble classrooms and a small office which
could hold three tables and a very small store. Classrooms were made
of local construction materials such as clay, soil, rocks and wood. The
condition of the school buildings deteriorated during the 21 years of war.
Atlabara East Primary School
Before
After
31
FEATURE F OCUS: OF F S H ORE EOR
32
AUG / SEP 2015
F E AT URE F O C US : O F F S H O RE E O R
They say the journey of
a thousand miles begins
with a single step. For
PETRONAS, its Enhanced
Oil Recovery (EOR)
journey began some three
decades ago, and like
many journeys, it began
on paper.
A NEW
FRONTIER
PETRONAS is positioning itself as a
pioneer in offshore Enhanced Oil
Recovery in the region, and knows
that its success lies in technology
and technical know-how, strong
partnerships and capability building.
The first EOR study for Malaysian oilfields
began in 1986, and it was a decade later
that the first EOR evaluation took place
at the Dulang field offshore Terengganu.
However it wasn’t until 2002 when a
PETRONAS corporate strategic study
identified EOR as one of the national oil
corporation’s strategic projects that EOR
really rose in prominence. The initiative
receiving the much-needed direction and
funding, eventually culminating in the
realisation of Malaysia’s first-ever largescale EOR project, Tapis, in 2014.
The Tapis EOR project, undertaken
jointly between PETRONAS Carigali Sdn
Bhd and ExxonMobil Exploration and
Production Malaysia Inc, is the largest
offshore EOR project in Southeast Asia
as well as one of the world’s largest
water alternating gas (WAG) EOR projects
implemented offshore. It is one of several
upstream investments under Malaysia’s
Economic Transformation Programme representing a US$2.5 billion investment
by ExxonMobil and PETRONAS
Carigali - to help ensure reliable and
33
Watch PETRONAS’ efforts in
EOR - a 4 minute video on the
PETRONAS YouTube Channel
Enhanced Oil Recovery (EOR) Extending Field Life, Improving Oil Recovery
Enhanced Oil Recovery (EOR) Extending Field Life, Improving Oil Recovery
Information presented in this article is accurate as at 31 December 2014
34
AUG / SEP 2015
“EOR projects are not cheap, they are cost intensive so we have to ensure that we derisk the project to a proper level and that
we know what are the results at the end of
the day.”
Dr Nasir Darman
Head, Technology, PETRONAS Upstream
sustainable energy supply for Malaysia.
(ExxonMobil and PETRONAS Carigali
each hold a 50% participating stake in
the project.)
Fully designed and built in Malaysia by
local contractors, fabrication activities
for the Tapis EOR project commenced
in November 2011, and comprise
among others a new riser platform
(Tapis Q) and a new central processing
platform (Tapis R). (See page 39 for
facts on Tapis)
WAG injection from the Tapis R central
processing platform into targeted
wells on the existing Tapis A platform
commenced in September 2014, and
with WAG EOR, the Tapis field life is
expected to be extended for at least
another 30 years, to beyond 2040.
Since production began at the Tapis
field in 1978, approximately 400 million
barrels of oil have been produced, with
peak production of 80,000 to 90,000
barrels per day (bpd) achieved in the
early 1980s. Current production stands
at 4,000 to 5,000 bpd.
The project is by no means the sole
EOR project in Malaysia – to date there
are about a dozen fields under study
for EOR in the country and PETRONAS
is targeting between 750 million
and 1 billion barrels of oil from EOR
projects.
These targets illustrate just how far
PETRONAS has come in its EOR
journey.
TURNING POINT
Dr Nasir Darman, one of the
pioneers for EOR at PETRONAS
remembers vividly the point when
EOR moved from being purely
research-driven, and he credits
former PETRONAS President
and Group CEO Tan Sri Shamsul
Azhar Abbas (who was then the
Vice President of Exploration and
Production) and Ramlan Abdul Malek
(who was previously Vice President
of the Petroleum Management
Unit) as the prime movers behind
PETRONAS’ EOR initiative.
“They formed a team of technical
people and we chartered the EOR
blueprint in Malaysia - looking at
what fields to focus on, technology
to apply and how to collaborate
with the partners,” says Nasir, who
was selected to lead the team. The
year was 2003, and at the time the
team only comprised five people.
With a structure, budget as well
as the support of PETRONAS’
management, Tapis and Guntong
were identified to be anchor
projects in collaboration with
ExxonMobil, fields in the Baram
Delta Operations and North Sabah
with Shell, as well as PETRONAS’
own projects namely Dulang,
Angsi and Semarang.
Of these projects, some such
as Tapis have entered operation
mode, others such as Baronia
have commenced fabrication
while some are still awaiting
funding, as the current oil prices
has had an impact.
“EOR projects are not cheap, they
are cost-intensive so we have
to ensure that we de-risk the
project to a proper level and that
we know what the results are at
the end of the day. We have to
mitigate the risk no matter what
the oil prices are… oil prices do
help in the decision making of
the project,” he says, stressing
the importance of balancing
profitability and the strategic
nature of the project. “We should
not do a project for the sake of
doing a project.”
35
Critical success factors
Elaborating on the critical success factors
of an EOR project, Nasir highlights three
key areas – the technical and commercial
aspects of a project and capability building.
“One has to solve all issues relating to
EOR, from A to Z and it’s not easy because
it involves injecting something
alien or unfamiliar into the field
and when you do that, you have to
predict the side effects. We don’t
just have to ensure it produces
oil but that the reservoir is not
damaged, and at the same time
also address how the oil is to be
handled at the surface.
“From the commercial standpoint we
want to ensure that everyone goes to the
bank smiling. So the cake needs to be cut
fairly for all parties – Production Sharing
Contract (PSC) partners, PETRONAS as the
host authority and also the government,”
he says, adding that in this regard both
the government and PETRONAS have
taken a long-term view. “The Malaysian
PETRONAS’ JOURNEY AS A LEADING OFFSHORE EOR PLAYER
1986
1996
2002
2006
2008
Signing of first
EOR-based PSC
with ExxonMobil.
Formation of
UTP EOR Centre
of Excellence
Dulang WAG
Project
sanctioned.
• Dedicated EOR
Unit formed in
PMU & PCSB.
• First EOR study
evaluation in
Dulang Fields.
• First EOR study
for Malaysia
oilfields.
36
AUG / SEP 2015
First offshore
Chemical EOR
pilot (Angsi)
implemented
Studies of three
major EOR
initiatives (Tapis,
Guntong, Bokor).
Government has given tax incentives for
EOR to encourage more EOR projects
and PETRONAS has provided a lot of
facilitation for PS contractors and new
PSC arrangements to make it attractive for
the partners,” he adds.
But what is especially critical to the
success of the EOR initiative is education
2010
Commencement
of Tapis, Dulang,
Samarang and
Bokor WAG
Projects.
R&D on CEOR
properties &
processes.
2011
First injection
(Dulang)2013.
Formation of
EPTC.
and capability building. We sent our
people for training and attachment,
and this is where the relationship with
universities and research institutions
outside Malaysia is important…we
need that collaboration in order
to develop capabilities,” he says,
disclosing that the EOR team now
boasts a staff strength of 500.
2012
• Signing of EOR
PSC for Baram
Delta & North
Sabah.
Some of the partner institutions
include Houston University,
University of Texas in Austin,
Herriot-Watt University in
the UK, Delft University of
Technology in the Netherlands
and locally, Universiti Teknologi
PETRONAS and Universiti
Teknologi Malaysia.
2013
2016-2020
Developed
proprietary
chemical for
CEOR.
Tapis WAG
injection.
Angsi CEOR
injection
Baronia WAG
Guntong eWAG
Samarang WAG
Baram Delta &
North Sabah
injection
37
HIGH EXPECTATIONS
As much as these factors are
contributing to the success of the EOR
initiative in Malaysia, Nasir concedes that
they also present challenges. On the
technical front for example, he points
out that the Malaysian environment
is unique in that the EOR fields are
located offshore, with high-temperature
reservoirs.
“These two alone bring a lot of issues…
EOR in itself is not new, it’s been
implemented in the US, and also China
which is big in chemical EOR but the
majority of EOR projects in the
world are onshore. So we did not
have a frame of reference or case
studies to learn from…there was a lot
of pioneering work undertaken,” he
says, adding that through the Tapis
project, PETRONAS is establishing
itself as a pioneer in WAG EOR
technology in the region.
The expectations for EOR are
undoubtedly high and although
to date more than 300 million
additional barrels have been added
to the reserve book, Nasir believes
that the recovery rate can be further
improved. “We’re currently doing
easy EOR which is WAG and we’re
thinking that five years down the
road what will the field look like after
WAG? That’s why we’re undertaking
research on enhanced WAG where
we introduce surfactant, polymer
and alkali to the water and gas so
that we can increase the recovery
rate.
“PETRONAS hopes to also shorten
the time to execute the EOR
projects, from 10 years or more to
five or seven years…so these are
what we’re working towards.”
TAPIS
B
TAPIS PLATFORMS
TAPIS
C
TAPIS
TAPIS
A
D&P
1979
1980
Located approximately
200km offshore Peninsular Malaysia in
65m water depth, the Tapis field - one of
ExxonMobil’s earliest fields in the country – was
discovered in 1969 when the company drilled its first
exploration well, Tapis No.1. The well, the company’s first
in the Malay basin, encountered gas, and in 1974,
the second well discovered oil.
1977
The Tapis A platform was installed in late 1977 and production began in
March 1978. Over the years other Tapis platforms were fabricated and
installed - Tapis B in 1979, Tapis C in 1980 and Tapis D in 1982. Two other
platforms were installed later - Tapis E in 1999 and Tapis F in 2003.
38
See page 43
for full project
diagram
AUG / SEP 2015
1982
First large-scale Enhanced Oil Recovery (EOR) project
in Southeast Asia
Tapis EOR At A Glance
39
Feature F ocus: Off s h ore EOR
MAL AYSIA’S DEEPWAT E R FI EL D S
THOUGHT LEADERSHIP
42
Market Analysis
IHS Energy make their
bet: the sharp decline in
oil prices is unlikely to
impact Malaysia's
deepwater projects in
the near term
Turning The Tide At
Tapis
“Near-term Malaysian deepwater
projects will not be deterred by low oil
prices” says Dylan Mair, Senior Director of
Upstream Research and Consulting.
By IHS ENERGY
42
APR / MAY 2015
I N N OVAT I ON
43
IN N OVAT ION
PARTNERING
FOR PROFIT
Innovation
Giving a 40-year-old
asset a new lease of
48 A snapshot on
Production Sharing
life reflects a high point
forandExxonMobil
Contracts
insights
from an international
company doing business
as it pioneers new approaches
in offshore
in Malaysia
EOR application in the first and largest
full-field WAG EOR in South East Asia.
Production Sharing Contracts have been
key in the growth of Malaysia’s petroleum
resources for the past two decades.
Since its introduction almost 40 years ago,
Malaysia’s production sharing contract (PSC)
scheme has been a key platform for the growth of
the country’s oil and gas sector.
What is a
PSC?
PSC or Production
Sharing Contract serves as
a vehicle for partnership for
PETRONAS and multnational oil
& gas companies in conducting
hydrocarbon exploration &
production activities in
Malaysia.
PSCs set out the arrangements
for co-operation between
PETRONAS, which assumes the
role of a regulator, with qualified
oil companies as contractors for
the exploration, development
and production of petroleum
in a contract area for a specific
duration.
It is used to engage capable oil
and gas companies to participate
in the development of Malaysia’s
petroleum blocks, covering the
entire upstream value chain.
48
APR / MAY 2015
Prior to 1974, the Government, under
a concession system collected, tax
from oil companies which were
granted rights to explore and develop
petroleum resources with leases of up
to 40 years or more.
In 1974, the Petroleum Development
Act (PDA) vested PETRONAS with
the ownership and control of all
hydrocarbon resources in Malaysia.
This led to the adoption of PSCs to
replace the Concession Agreement
in 1976 so that the nation could play
a more direct role in controlling
and managing its petroleum
resources. The first PSC was
awarded in 1976 to Esso for the
Duyong oil field in Terengganu.
Unlike the old concession
system, the key advantage
of the PSC is that it allows
PETRONAS to have input
in strategic and operational
decisions, ensuring that the
operations are aligned with the
group’s business objectives and
nation building agenda.
Malaysia has awarded over
150 PSCs since the inception
of the scheme in 1976, of
which more than 100 are
currently actively managed by the
Malaysia Petroleum Management
organisation in PETRONAS.
22.2
7000
22.2
330
100
PSC’s
10
320
132
4,000+
20%
GDP
1,587
100
PSC’s
14
215 billion
20,000
49
SUSTAIN ABILIT Y
The Tapis Enhanced Oil
Recovery (EOR) project
is a major endeavour
for ExxonMobil, and
A BEACON
represents another
HOPE
highpoint in its decadeslong relationship with
PETRONAS.
“By installing the reef balls, we hope to improve
the marine life and perhaps the local fishermen
can get more fish.”
Azizah Mohd Deli
Chairman of the BEACON Project Taskforce
Walk along the coastline
of Similajau National
Park, the beauty of the
blue skies and golden
sand can lull one into
a comforting sense of
serenity. The waters
postcard, however, tell
story.
For the past 20 odd years, the corals in
the waters here have been dying, the
number of fish dwindling and scores of
turtles found dead on the beach; and
all because of the fishing by trawlers
that takes place here. It didn’t use to be
this way.
this underwater paradise that led to
him become a marine biologist.
“Watching the ocean’s rich marine
life decline over the years really upset
me. The trawlers and their dragnets –
they’ve destroyed a lot of the corals
here,” he says.
Marine biologist James Anak Bali,
Corporation (SFC), remembers the first
time he dived at the age of 20. He was
exposed to marine life of all shapes,
sizes and colours; as well as corals that
appeared in hues that only seemed to
exist underwater. It was the allure of
“When the corals die, the marine
life goes with it. They’ve fished here
undeterred for so long, even the turtles
dragnets, they don’t stand a chance.
Fewer and fewer make it to shore to
lay eggs,” explains James.
54
OF
Similajau National Park from trawlers’ nets is
already showing impressive results.
By BRIGETTE ROZARIO
54
00
55
00
APR / MAY 2015
The Tapis EOR project offshore
Terengganu represents a significant
milestone in ExxonMobil’s 50-year
upstream history in Malaysia. The
project, undertaken jointly with
PROVING
PETRONAS Carigali Sdn Bhd, is
ITS METTLE
ExxonMobil’s first large-scale, full-field
IN THE
offshore EOR project – with a few firsts60
DEEP
in techniques and technologies used
to recover additional reserves from the
mature field.
D E E P WAT E R
When PETRONAS took over the running of the
Chinguetti field in Mauritania in 2007, production
had been falling rapidly and prospects for the
West African country’s only producing field
looked dire.
Chinguetti had achieved its first oil
on 24 February 2006, but within a
few months production rates had
plunged from 75,000 barrels per
day (bbl/d) to 30,000 bbl/d due to
a lack of pressure support. By the
time PETRONAS entered the picture
through it’s through its whollyowned subsidiary PC Mauritania 1
Pty. Ltd. (PCMPL), production had
fallen further to just 11,000 bbl/d.
if nothing was done to reverse the
situation.
Given the rapid production decline,
coupled with high operation
expenditure and decommissioning
costs, the field was expected to
reach its economic limit in 2013
The field was developed in two main
phases, using subsea wells located within
manifold-templates that are tied back
to a Floating Production Storage and
Significantly, PETRONAS’ operations
at Chinguetti were the first for the
company involving Subsea Production
systems (SPS). To boost production,
PCML implemented an aggressive
development and intervention program
involving both drilling and intervention
activities in 2008.
PETRONAS’ successful
intervention campaigns at the
Chinguetti field in Mauritania
have proven its ability to handle
deepsea operations under
challenging conditions.
60
00
61
00
APR / MAY 2015
40
AUG / SEP 2015
“This is one of the largest EOR projects
in Southeast Asia and the first largescale, full-field EOR development in
Malaysia. We are proud of the team
Sustainability
and proud to work together with
Project
Beacon
looks Carigali
PETRONAS
and PETRONAS
to
save
the
corals
to realise this project,”and
says See
marine
off Similajau
Kok Yew,life
President
of ExxonMobil
National Park
Exploration and Production Malaysia
Inc. (EMEPMI) and Chairman of the
ExxonMobil Subsidiaries in Malaysia, of
the close collaboration between the
oil major, its joint venture partner and
PETRONAS.
The Tapis EOR project is one of
several upstream investments under
Malaysia’s Economic Transformation
Programme - representing a US$2.6
billion investment by ExxonMobil and
Deepwater
PETRONAS Carigali
to help ensure
PETRONAS
has proven
reliable
and
sustainable
energy
its deepsea credentials
supply
Malaysia. ExxonMobil
with
itsfor
successful
and PETRONAS
Carigali each hold a
intervention
campaigns
in
Mauritania
50%
participating stake in the 2008
Production Sharing Contract (PSC)
under which the project is helmed.
The commencement of operations in
September 2014 with Water Alternating
Gas (WAG) injection from the Tapis R
central processing platform into targeted
wells on the existing Tapis A platform
was a culmination of more than a
decade of research and study, says See.
“It’s a historic milestone for us in our
partnership with PETRONAS,” he adds.
“As operator of the field we clearly had a
view on the potential of the field and in
identifying what further potential it might
have in terms of the remaining reserves.
In 2000, we started scoping out the EOR
potential for the field and a formal EOR
joint study with PETRONAS was initiated
in 2003,” he says, acknowledging that
since the technology had not been used
in Malaysia before, the team wanted
to thoroughly examine its potential
application here.
F e at ure F o c us : Off s h o re EOR
Tapis R Platform
“EOR cannot be applied to all fields
and it depends on the reservoir
and fluid characteristics as well
as the recovery from the existing
methods used. So we needed to
do the technical work in order to
convince ourselves that it’s the right
thing to do and that was exactly
what the team did,” he says, adding
that a few PETRONAS staff were
on secondment at ExxonMobil’s
upstream research company in
Houston to further study and define
the potential of EOR. In addition,
given that EOR technology is
typically applied to mature fields, the
project also had to be able to bring
economic value.
The results of the study later
formed the basis of the 2008 PSC
and following the signing of the
PSC, further design and planning
were undertaken before the project
was finally funded and realised.
With EOR, the recovery factor at
Tapis is expected to increase by
some 5% - 10%, bringing the total
recovery up to 50%, and extending
the field life for another 30 years.
TECHNOLOGY IS KEY
Fully designed and built in Malaysia
by local contractors, fabrication
activities for the Tapis EOR project
commenced in November 2011.
The Tapis EOR project comprises
several major components – one
of these, a new riser platform
called Tapis Q was installed
in September 2012. The main
component of the project,
the Tapis R central processing
platform was installed in May 2014.
It comprises a large integrated
deck structure with living quarters
for 145 personnel, and is equipped
with 390 million cubic feet per
day (MMcf/d) gas compression
and 270,000 barrels per day water
injection facilities, productionprocessing equipment, and utilities
systems.
41
Feature F ocus: Off s h ore EOR
“There are some pretty neat state-of-the-art modelling
techniques used to identify the hydrocarbon in the
ground… as well as additional technology such as
integrating the surface and sub-surface information
so that the engineers at the office are able to monitor
the performance of the wells and the field in almost
real-time.”
See Kok Yew
President of ExxonMobil Exploration and Production Malaysia Inc.
(EMEPMI) and Chairman of the ExxonMobil Subsidiaries in Malaysia
See is particularly proud of the
technology and techniques that have
been employed in the development and
realisation of the Tapis EOR project, for
instance the installation of the Tapis R
platform, which is the first by EMEPMI
using the float over method for its
topsides. The combined topsides and
jacket, which weigh about 23,500 metric
tonnes, is also the heaviest platform
constructed in Malaysia by the company.
Given that EOR is still a relatively new
and niche technology, and coupled
with the scale of the project, project
management, says See, is vital and
this too is an area where ExxonMobil
had a key role to play. “You need
very good project management and
project execution capabilities and with
our global expertise in managing and
executing projects around the world,
we were able to apply those practices
to Tapis,” says See.
Although the Tapis EOR project has
taken off without a hitch, and has
been executed safely without any loss
time, See says there is still a lot more
42
AUG / SEP 2015
work ahead. “A lot of the work that has
been done so far involves modelling
and is simulation-based, so the real
proof of the project is when we start
the WAG process and see how the
wells perform,” he says, adding that the
project is in the midst of the first cycle
of the WAG process.
Technology, he reiterates, plays a
significant role in the EOR project,
and is a key strength that ExxonMobil
brings to the venture. “There are some
pretty neat state-of-the-art modelling
techniques used to identify the
hydrocarbon in the ground… as well as
additional intelligent field technology
such as integrating the surface and
sub-surface information so that the
engineers at the office are able to
monitor the performance of the wells
and the field in almost real-time. “There
are also distributed temperature sensors
which are able to identify which zones
the injected fluid (whether it is water or
gas) is going into without needing any
well intervention and which will allow
engineers to monitor performance of
the wells in real time,” he says.
He points out that the pioneering
techniques and technologies being
employed have created opportunities
for ExxonMobil and PETRONAS
engineers to build and enhance their
capabilities. This, he adds, will be a
boost for the country’s oil and gas
industry and is also in support of the
national oil corporation’s aspiration to
be the EOR centre in the region.
ADDITIONAL LEARNING
For ExxonMobil, although EOR
methods are specific and unique
to different reservoirs and fields,
See does not discount the value of
lessons gained from the Tapis EOR
project. “It’s going to help us provide
additional learning and information on
how it may work elsewhere around
the world,” he says.
But for now the focus is on
completing the remaining work
at Tapis, he adds. This includes
rejuvenating the existing platforms
and converting the existing wells to
be WAG-enabled.
F e at ure F o c us : Off s h o re EOR
TAPIS R JACKET
18,000 metric tonne topsides comprising integrated
deck structure with space for production processing
equipment, utilities system and living quarters for
145 personnel.
More than 1,800 personnel during peak construction
activity.
More than 12 million work hours to date with Zero LTI.
Capacity for 390 mmscf/d of gas injection and
270 mstb/d of water injection.
Main oil pipeline for production from Tapis R to Tapis
Pump platform via Tapis Q.
Installed in 64m water depth in the sea.
Largest jacket installed by EMEPMI at 5,500 metric
tonnes.
800,000 work hours involving more than 600
workers during peak construction activity.
HSE Record: Zero LTI.
The topsides combined with the jacket weight of
5,500 metric tonnes makes it the heaviest platform
constructed by EMEPMI at 23,500 metric tonnes.
TAPIS
Q RISER
TAPIS R TOPSIDES
95m vertical flare.
Tapis R platform is a central processing platform.
Measures up to about 14,000 sq metres (almost
the size of two soccer fields).
2,300 metric tonnes topsides.
Four-legged jacket with an integrated deck.
Two access bridges to link with Tapis-R and
existing Tapis B platform.
TAPIS ENHANCED OIL RECOVERY AND REJUVENATION PROJECT
•
•
One of the largest offshore EOR projects in South East Asia
Malaysia’s first large scale EOR project
TAPIS C
(WAG / Unmanned Facilities)
TAPIS F
TAPIS A
TAPIS E
(Additional GI)
New Central Processing
Platform (Tapis R)
~18,000 tonnes topsides
Gas Compression
Water Injection
Processing Facilities
Living Quarters
New Riser
Platform (TAPIS Q)
Launchers / Receivers
Facilities
Pipeline Tie-Ins
Oil Line
Gas Injection (GI)
Water Injection (WI)
Non Associated Gas (NAG)
Water Alternating Gas
TAPIS B
TAPIS Pump
TAPIS D
(WAG Facilities)
Terengganu
Crude Oil Terminal
WAG
43
Angsi field is located about 170km off the east coast of
Peninsular Malaysia, in the southern region of the Malay
Basin. It is the biggest oil producing field in Malaysia.
ANDR-A
A NEW LEASE OF LIFE
It’s been fifteen years since the Angsi
field delivered its first oil. The maturing
field, producing some 100,000
barrels of oil daily at its peak, is one
of about a dozen fields which have
been identified to be studied under
PETRONAS’ Enhanced Oil Recovery
(EOR) plan.
The Chemical EOR approach relies on a smart mixture
of alkali surfactants (AS) and softened seawater.
It requires sophisticated seawater desalination
and chemical mixing and the performance of the
approach depends on the quantity and quality of the
mixture.
Based on field research, PETRONAS Carigali, the operator, is
hoping to record up to 10% recovery factor through a fouryear Chemical EOR work programme. Lab tests and R&D
work began as early as 2003 and a field pilot was conducted
in 2007.
The PETRONAS team explored various approaches,
including utilising an offshore floating barge which
would house a seawater desalination and chemical
mixing facility and with AS chemicals transported to
the barge.
44
AUG / SEP 2015
So how would this ‘cocktail’ be safely, effectively and
economically delivered to the platform located about
170km offshore?
New engineering designs came into play.
ANPG-A
ANGSI CHEMICAL EOR
Seawater
Intake
Structure
ANGSI
Water
Desalination
Chemical
Mixing
Plant
AnDR-A
eline
KERTEH
ra Pip
-And
TCOT 0km)
’
4
2
ing bout 17
Exist
(a
T
TCO
AnPG-A
Chemical Supply
via Road Transfer
KUANTAN PORT
There were several barriers to this approach including high costs and
logistics constraints to transport 300 MT of chemicals daily to the
offshore barge, especially during the monsoon season.
THE WINNING SOLUTION
The team then looked at establishing the facilities onshore by leveraging
on an existing unused pipeline which was already connecting the oil
terminal in Kerteh (TCOT) and offshore Angsi Platform.
Detailed studies were carried out in 2013 to establish the new
concept’s feasibility including laboratory works to verify that the
“cocktail” maintains its effectiveness after the 170 km journey in the
pipeline before reaching Angsi.
This new approach generates some savings in terms of facilities costs
to the organisation and simplifies the chemical handling logistics and
overall operations of the facilities.
45
FEAT URE FOCUS : OF F S H ORE EOR
Baram Delta Platform
46
AUG / SEP 2015
Business
Unusual
To address the challenges of using EOR
to boost production at mature fields,
PETRONAS and Shell are combining their
strengths to deliver trailblazing solutions.
After years of working together to
develop the country’s petroleum
resources, the partners took their
relationship to a new level in 2012 by
jointly setting up the Enhanced Oil
Recovery Centre (EORC).
Whether it’s the use
of low-cost structures
and wells, innovative
contracting strategies,
or the latest oil recovery
techniques, a joint
initiative between
PETRONAS and Shell
to revive production at
several mature oil fields
in Malaysia is breaking
new ground on multiple
fronts.
The joint venture builds on two
existing Production Sharing
Contracts (PSC) between PETRONAS
Carigali and Shell Malaysia in
offshore Sarawak and Sabah, and
extends them till 2040. Under the
new arrangement, the partners will
build on their respective expertise
to boost production at nine fields
in the Baram Delta Operations
(BDO) area and North Sabah (NS)
using enhanced oil recovery (EOR)
techniques.
“We are leveraging on the strengths
of the partners. PETRONAS
has implemented light-weight
technology and Shell has subsurface
technology,” said Sohaime Abdullah,
the head of EORC in an interview
with flow.
47
“We believe we can do it with the right strategies in
place and with the right price. Both partners are aligned
to deliver these signature projects, we are like two
brothers drinking from the same well.”
Sohaime Abdullah
Head of EORC
many groundbreaking processes have
been brought to bear at the centre.
“We cannot continue to do business
the way we have in the past. We
have to do things differently. I call it
business unusual,” said Jacobs.
ECONOMIES OF SCALE
The key challenge of EOR is to
ensure the economic viability of such
projects. Unlike fields with marginal
reserves to be developed within a
short period of time and with very
minimal facilities requirement, EOR
projects are economically thin due to
low reserves addition, and the high
cost of EOR facilities.
PETRONAS and Shell taking a leap forward together
EOR involves various techniques
for increasing the amount of
crude oil that can be extracted
from an oil field. It is also known
as tertiary recovery, as opposed
to primary and secondary
recovery that normally has a
higher rate of production and is
technically less challenging to
extract.
EORC is overseeing development
at nine fields - six in BDO and
three in NS - and is responsible
for ensuring end-to-end project
delivery across Field Development
Plans (FDP) and projects
execution. In terms of reserves
addition target, most of the
projects in EORC are aiming for
incremental reserves recovery of
between 5% to 10%.
48
AUG / SEP 2015
DRINKING FROM THE SAME WELL
Unlike traditional PSCs, the
EORC features a unique working
arrangement between the partners.
Working as a single entity, the joint
venture is governed by a board
that meets once every quarter and
endorses key decisions.
“Both partners contribute staff to the
EORC. We work as one, and don’t
distinguish between PETRONAS
and Shell,” said Jan Willem Jacobs,
who serves as the EORC’s technical
director.
The initiative is unchartered territory
for both partners. While Shell has
experience in EOR, it has never
attempted it for an offshore field. The
newness of the effort means that
As such, EORC was set up with an
integrated operating model with
potential economies of scale; using
novel contracting strategies and new
technologies in an effort to make EOR
projects feasible.
For instance, new technologies such
as lightweight structures and fit-forpurpose design have been employed
to keep a lid on operating expense.
EORC has also pioneered a new
bidding system.
“EOR is all about economics, so we
looked at the way we do our bidding.
We work backwards so that we know
what we can afford,” said Sohaime.
In another pioneering move, the EORC
has grouped together many drilling
services that would usually be parceled
out to numerous contractors to be
awarded to one party under an integrated
drilling services contract.
“We have a single party that executes 20
odd services and dictate the cost for it.
It’s a win-win situation. They get all the
services and we can keep the price to
one lump sum amount,” he said.
The partners have also succeeded in
using optimisation methods to bring
down the cost of a well down by half.
TACKLING COMPLEXITY
Each of the nine fields under the purview of the EORC brings
its own set of challenges and differing levels of complexity
for EOR. The team is testing various technologies and are at
various stages of field development.
“It varies a little bit from field to field. In terms of complexity
I would rate Bokor 3 out of 10 and Baram 7 out of 10 because
it is a really big field,” said EORC technical director Jan Willem
Jacobs.
EOR TECHNOLOGIES: A VARIETY
STRONG SAFETY RECORD
So far the EORC has maintained the
sterling HSE track records of the two
partners. The joint venture has gone
almost 1 million hours without any
accidents; quite an achievement for a
young venture, remarked Sohaime. The
EORC has a dedicated HSE team that
brings together the best practices from
the two partners.
Despite the progress so far, there is still
a long way to go before the EORC can
declare this ambitious initiative a success.
The current low oil price environment
has made the going tougher, but both
partners are confident of eventually
reaching their goals.
“We believe we can do it with the right
strategies in place and with the right
price. Both partners are aligned to deliver
these signature projects, we are like two
brothers drinking from the same well,”
said Sohaime.
There are several EOR technologies being used – depending
on the field profile. The group is employing iWAG at the six
fields in the Baram Delta Operations. This involves the injection
of water alternating with gas into the reservoir to improve
recovery.
For North Sabah, the EORC plans to employ Chemical injection
that uses surfactant and polymer directly mixed with filtered
seawater. The injection of chemicals frees trapped oil in the
reservoir.
With multiple teams at different stages of EOR assessment and
project development, Sohamie and Jacobs fosters cross-team
collaboration – so as to share learnings and best practices.
The task at hand for EORC is huge. Having to develop nine
fields within the next twenty years is daunting but the reward
of making breakthroughs is handsome. The team remains
vigilant, ensuring the various projects under the Baram DeltaNorth Sabah venture progress well – as these pioneers keep
their eye on the prize.
49
Feature F ocus: Offshore EOR
Energy has spurred the growth of nations for decades and continues to fuel economies and human imagination. Rich
sources of energy can be found within layers of humble and seemingly ubiquitous shale rock, often in remote places
and in the toughest of terrains. People like Dr Chan Tuck Leong are traversing the globe to unlock this resource in
order to light up megacities, keep us cool on a sweltering afternoon and power the internet that keeps families and
friends connected. We’re going to need energy for the future. And we won’t stop looking. Empowering Lives.
Watch the full story at www.youtube.com/PETRONASofficial
www.petronas.com
Petroliam Nasional Berhad
PETRONASofficial
IR. DR CHAN TUCK LEONG
Pacific Northwest LNG
44
AUG / SEP 2015
PETRONAS does not encourage the giving of gifts or the provision of gratuitous services by PETRONAS’ contractors or sub-contractors, suppliers, bankers, dealers, or customers to its employees.
PETROLIAM NASIONAL BERHAD (PETRONAS) (20076-K)
Energy rocks.
F eature F ocus : O ffshore E O R
RE SOURCE MANAG EM EN T
A Win-Win
Partnership
Paul Atkinson has worked in Malaysia for 12
years, on three separate assignments since
the mid-90s. Lundin Malaysia is focused
on value growth in Malaysia through
exploration. The company holds a large
portfolio of exploration blocks in Malaysia,
and has been one of the most active
explorers in recent years in terms of seismic
and drilling operations. Lundin Malaysia
recently began oil production from the
Bertam oil field offshore Peninsular Malaysia.
52
AUG / SEP 2015
Tell us how your partnership with
Q1
PETRONAS came about?
The Lundin group of companies have been operating in
Malaysia since the early 1990s when it recognised that
Malaysia was a good place for hydrocarbon exploration
due to the large yet-to-find resources and the stable
political and economic environment.
Through our involvement in Production Sharing
Contracts, Lundin quickly developed a strong working
relationship with PETRONAS as the Host Authority, and
PETRONAS Carigali as a joint venture partner in PM3
CAA, which became a very successful early development
for Lundin Oil in the 1990s.
RE S O URC E M A N AGE ME NT
What are some of the more innovative aspects
of the PSC?
Q2
Can you describe the terms of the PSC and
how has it performed since its inception?
Q6
We are currently working under the Revenue over Cost
(R/C) PSC terms. These terms encourage development
of fields and reward cost effective investment. The
adoption of these terms and the subsequent enactment
of tax incentives for marginal fields are positive
developments that have contributed to our success in
Malaysia.
A large part of the remaining yet-to-find resources in Malaysia
is contained within small fields of less than 50 million barrels.
PETRONAS has worked with the Malaysian Government to
obtain fiscal relief for PSC contractors working with marginal
fields. Lundin and PETRONAS Carigali have developed the
Bertam field that has qualified for marginal field status and
access to tax incentives, and it is one of the first of such
projects in Malaysia.
The assurance that priority is given to the recovery of
exploration and development investment in a structured
manner is important, as is the contractor takes after
investment recovery. With the potential for a shift down
of the oil pricing paradigm in the near term it will be
important to closely monitor these components in order
to ensure our continued investment.
The experience of working with PETRONAS
Q3 has been…
Over the time that Lundin has been investing in Malaysia,
PETRONAS has evolved into an experienced world-class
player in upstream oil and gas and has become one
of the most successful national oil companies in the
world. Lundin has benefitted from working with such an
experienced partner in Malaysia and globally.
some of the challenges and how have
Q4
they been overcome?
Lundin Malaysia recently declared first oil for the Bertam
oil field in Block PM307, which is a marginal field
requiring close control of costs and schedules to achieve
an economic return. PETRONAS provided guidance
throughout the project, and particularly in the area of
procurement where several high-value contracts were
secured on schedule and on budget, allowing the project
to achieve its targets.
How has the structure of the PSC
Q5 benefitTed your company?
A key feature of the PSC is the early recouping of
investment though cost recovery. Lundin has been
careful to fully comply with the terms of the PSC, and
has subsequently qualified for recovery of its project
expenditures.
How does PETRONAS differ from other
partners you have worked with?
Q7
PETRONAS has clearly defined processes for PSC
management. This provides helpful guidance to PSC
contractors in the execution of their work programmes,
and clarity and certainty in our planning and budgeting. This
environment makes a stable platform for investment and is in
marked contrast to some other jurisdictions in the world.
PETRONAS Carigali’s key strengths as a PSC Q8
partner?
PETRONAS Carigali is a partner in every PSC in Malaysia
and has vast collective knowledge and experience from
operations here and internationally, which benefits our joint
ventures. We find that PETRONAS Carigali is a supportive
partner, and willing to participate in exploration and
development that, by its very nature, can entail uncertainty
and inherent financial risk. Having PETRONAS Carigali as a
PSC partner also helps with our alignment with PETRONAS
as the regulator and manager of the PSCs.
Partnership with PETRONAS – how is that
evolving?
Q9
Lundin has a strategy of value growth through exploration,
which differentiates our company from many competitors.
Lundin continues to be an active explorer in Malaysia and our
objectives are very much aligned with those of PETRONAS.
We want to discover new fields and develop them quickly
and economically. From our time in Malaysia, Lundin has
established a proven track record as a partner and contractor
of choice. We hope that PETRONAS will continue to entrust
the exploration and development of the national resource to
our company, and we will dedicate our skills to that task.
53
G EOPOLITICS
TURKMENISTAN
POLICY OF PEACE AND NEUTRALITY
On 12 December 2015 Turkmenistan will celebrate the
20th Anniversary of its status of Permanent Neutrality,
the second most important national holiday in
Turkmenistan after Independence Day.
By H.E. Yazkuli Mammedov
Ambassador Extraordinary and Plenipotentiary
of Turkmenistan to Malaysia
On 12 December 1995, at a United
Nations General Assembly session,
all 185 members unanimously
adopted a special resolution on
the “Permanent Neutrality of
Turkmenistan”.
This was a historic day for the people and Government of
Turkmenistan. The adoption of the status of permanent
neutrality was a strategic decision which demonstrates
the country’s commitment to build harmonious
relations with its neighbors and was aimed at promoting
international peace and security.
54
AUG / SEP 2015
Turkmenistan had declared the country’s decision to
adhere to principles of positive neutrality in its foreign
policy in July 1992 at a Summit of the Commission for
Security and Cooperation in Helsinki and received its
first official recognition in March 1995 at the Summit
of the Organisation of Economic Cooperation in
Islamabad. This was further supported by the Summit of
Non-Alignment Movement in Cartagena (Columbia) on
20 October 1995.
The 20 years of neutrality has opened up vast
opportunities for Turkmenistan including its proactive
involvement in maintaining world peace and security,
disarmament, countering new challenges and threats,
promotion and protection of human rights and
GE O P O L ITICS
Arch of Neutrality
Ashgabat, Turkmenistan
55
G EOPOLITICS
environment, food security, overcoming the effects of
financial and economic crisis, development of science, as
well as culture while strictly adhering to the commitment of
developing peaceful, friendly relations with foreign partners
on the principles of equality, mutual respect, mutual benefit
and non-interference in the internal affairs of other nations.
At present, under the astute leadership of President
Gurbanguly Berdimuhamedov, Turkmenistan confidently
moves forward, while achievements in socio-economic
prosperity of the country are the best proofs of the
country’s development.
2015 Declared Year of Neutrality and
Peace
The Turkmen people will recognise the upcoming
20th anniversary of neutrality in an environment
of peace, good neighborliness, mutual respect
and understanding with their friends and
partners in the international community. It also
demonstrates Turkmenistan’s enormous success,
achieved in a short period under the leadership
of the President of Turkmenistan H.E. Gurbanguly
Berdimuhamedov.
THE ENERGY EQUATION
With huge gas reserves, Turkmenistan is an
important source of energy in the world.
Large scale hydrocarbon projects, a favourable
investment climate combined with an “Open
Doors Policy” have brought numerous foreign
companies to Turkmenistan.
The widely used “Production Sharing
Agreements”, that the Government of
Turkmenistan has opted for, paved the way
for the signing of a bilateral agreement
between the Government of Turkmenistan
and PETRONAS in July 1996 for exploration,
development and production of offshore
Block 1, some 80 km away from the town of
Turkmenbashi. PETRONAS remains committed
to the development of the oil and gas industry
in Turkmenistan through innovation and has
become a symbol of success in the field.
The signing of a Memorandum of Understanding
for long-term cooperation in hydrocarbon
exploitation activities in June 2014 during the
state visit of the Honourable Dato’ Sri Mohd
Najib bin Tun Haji Abdul Razak, Prime Minister
of Malaysia to Turkmenistan is yet another
milestone in Turkmen-Malaysia relations.
56
AUG / SEP 2015
GE O P O LITICS
Turkmen people will recognise the upcoming
20th anniversary of neutrality in an environment
of peace and creation, good neighborliness,
mutual respect and understanding with their
friends and partners in the international
community.
57
G EOPOLITICS
FIRST OIL
TRIUMPH
GE O P O LITICS
PETRONAS Carigali Turkmenistan
Sdn Bhd (PC(T)SB) achieved another
significant milestone when the West
Diyarbekir (WDDP-A) platform
commenced its first oil on 9 April 2015.
This accomplishment marked the
beginning of a new era for PETRONAS
SB in increasing their crude oil
production, which was discovered in
Block 1, Offshore Turkmenistan, after
the successful first commercial oil
production from the “S. Turkmenbashy”
Mobile Offshore Production Unit
(MOPU) in May 2009.
The WDDP-A platform is part of the Diyarbekir Oil Field
Development which started its production from an appraisal
well through the MOPU in 2006. The WDDP-A platform,
coupled with Central Diyarbekir Platform (CDDP-A) which
is currently under drilling activities, is forecast to produce
15,000 barrels per day at its peak. The crude oil which is
produced from WDDP-A will be delivered to the Magtymguly
Collector Riser A (MCR-A) Platform and offloaded through a
73km pipeline to the existing Gas Treatment Plant Onshore
Gas Treatment (GTPOGT) in Kiyanly, Turkmenistan. The new
crude oil production will also offset the expected cessation
of production from the MOPU due to the expiry of its
classification certificate in March 2016.
Since project commencement in 2012, the team had
demonstrated great fortitude in facing various challenges
and obstacles in terms of managing stakeholders,
maneuvering logistics’ difficulties and withstanding
extreme weather condition (as low as to -25oC) during the
winter. “We are adding new volumes that can improve our
profitability mix with crude oil and condensate from the
natural gas volume in Magtymguly field. We would like to
thank everyone involved in the project for their perseverance
and dedication to achieve this remarkable milestone”, said
Teh Yat Hong, Chief Executive Officer (CEO) of PC(T)SB. In
addition, he applauded the safety record achieved, with zero
fatality and Total Recorded Case Frequency (TRCF) of 0.2, an
essential and integral aspect of the business which needs to
be observed and implemented by all parties at all times.
This milestone was also celebrated with the first visit by
Mr Mekan Babaev, Acting Chairman of Block 1 Management
Committee, from the State Agency for Management and Use
of Hydrocarbon Resources at the President of Turkmenistan
to WDDP-A Platform.
59
PE RSONALIT Y SP OTL I G H T
Developing
FUTURE TALENT
As the Managing Director, Asia
Pacific at the Society of Petroleum
Engineers (SPE), Cordella WongGillett has spent over two decades
ensuring that professionals in the oil
& gas industry have the relevant skills
for a constantly evolving landscape.
The world is changing fast and Ms Wong-Gillett has been in
the thick of the action for many years.
She began her career at SPE’s international headquarters,
in Dallas, Texas, in June 1983, and was responsible for
the establishment, staffing, and start-up operations of
the Asia Pacific Office, where she continues to oversee
regional activities to achieve SPE’s mission of technology
dissemination to its global membership.
Today, with new and complex challenges of discovering and
developing new petroleum resources - especially in a low
oil price environment - Ms Wong-Gillett continues to lead
the charge to provide professional knowledge sharing and
business networking platforms for the industry to remain at
the cutting edge.
While technical skill sets are core to success, engineers have
to apply the latest in technology while working in multidisciplinary teams. They also need to supplement their IQ
with a big dose of EQ, as soft skills become increasingly
60
AUG / SEP 2015
P E RS O N A LIT Y S P O T LIG HT
important for success. Making jobs tougher is the recent
plunge in oil prices, and the resulting staff consolidation
across the industry has made the profession less attractive
than before to the best graduate talents.
You’ve been with SPE for over 20 years. Tell us about
some of the trends you have observed during this
time. What have been the noticeable shifts?
SPE’s mission has and continues to be associated with the
dissemination of technical knowledge. Consistent with
this, we have always provided both technical training and
various workshops and conferences that provide forums
for knowledge interchange and personal growth through
networking. Feedback from our stakeholders strongly
indicate that these activities remain relevant today, while we
have been providing a greater range of ‘soft skill’ capability
development than previously.
What are the key factors driving the need for “up
skilling” in the industry?
At today’s energy consumption rates, we have approximately
120 years of recoverable reserves. That breaks down to 40
years of conventional reserves and an additional 80 years
of “unconventional” reserves. However, the industry faces
a constant challenge in discovering and developing new
resources in increasingly complex and hostile environments.
In order for these complex reserves to be economically
accessed and others discovered, the need for technical and
technological expertise will continue to be required, and,
importantly, integrated in multi-disciplinary teams using
leading edge information technology. All the old skills will still
be required, but a wide range of new ones will be also.
What are the biggest obstacles to talent
development in the industry?
Unfortunately, the recent downturn in oil prices has led to
staffing consolidations across the industry. This has before,
and will again, lead to the industry being seen as non-attractive
for high quality graduates. The industry will continue to face
and address this challenge. In addition, we need to continue
to project our industry as essential to economic growth,
environmentally responsible and high technology-driven.
All these factors are the truth, but we do not always do the
best job of communicating them, faced by often-hostile
media and other institutions. Here again, SPE events provide
a platform for the projection of these positive messages.
How will the industry be impacted if it fails to
develop sufficient talent and build relevant
skills?
A less talented workforce will be less efficient and will add to
industry costs. The implication is that, in order for the new and
more challenging resources to be accessed economically,
petroleum prices will rise. With almost every product and
service having an element of energy usage built into their
prices, via manufacturing, storage and transportation costs,
this will inevitably have a negative impact on global economic
growth. The world needs a highly talented petroleum industry
workforce to provide affordable energy that drives economic
growth and increase standards of living.
Is the industry looking for fresh talent from
non-traditional sources?
The industry has always cast its net widely when recruiting
talent. While SPE is concerned with developing Petroleum
Engineering knowledge, many of our members have
educational qualifications associated with other disciplines,
61
PE RSONALIT Y SP OTL I G H T
such as Chemical, Civil and Mechanical Engineering as well
as Geoscience disciplines. More broadly, opportunities exist
within the Petroleum industry for people with IT, HSSE,
Finance, Legal, Human Relations and other backgrounds.
Development opportunities for IT professionals in particular,
in this high tech industry, are growing significantly.
How does PETRONAS rank in terms of investment
in talent and capability development vis a vis
other oil and gas players in the market, based on
your observations?
PETRONAS has always, both for business reasons and
more broadly as part of its contribution to Malaysian
society, invested consistently in this area. I would say that
PETRONAS ranks among the very best in the industry in skill
development, in every area of business in which it operates.
Its continued investments in SPE-organised activities such as
the International Petroleum Technology Conference and the
Offshore Technology Conference Asia, along with its support
of technology workshops, is direct evidence of this.
Hands-on experience is often said to be the best
educator especially in sectors that are high risk
such as oil and gas. With oil and gas companies
laying off the more senior, and hence experienced,
people, how can we close the experience gap?
The cyclicality of our industry remains a significant
challenge. The loss of experience makes hands-on learning
more difficult. This is why SPE works very closely with all
industry players to make sure that our offerings take this into
account, and best leverage the experience that remains. This
is a critical aspect of our mission.
In what ways is SPE playing a role in driving
collaboration and innovation for the industry,
especially given the oil price drop recently?
We have been through this before, and we know how to
address this matter. Obviously, the broader industry will
be financially-challenged while this environment persists.
SPE will play its part to ensure that our offerings are fit-for-
62
AUG / SEP 2015
purpose, cost effective, and for a volunteer driven, membercentric professional society, meet the needs of our members,
sponsors and supporters in whatever environment we face.
Specifically, while addressing current conditions, we know
that these are constantly changing; we must ensure that,
wherever possible, our programmes are consistent with a
range of future industry outlooks.
Is the industry oversupplied with talent?
In a word, no. Our industry is blessed with some of the
brightest minds in the world; we continue to discover and
develop resources in ever more difficult conditions, and
face the pressures associated with any supply and demanddriven extractive industry. However, we can never afford to
be complacent.
I cannot think of any other industry whose continued
performance excellence provides the global economy
with a commodity so important to development and living
standards. We have an outstanding record, and our ability to
attract and retain talent and capability are key to maintaining,
and even improving, that record.
Where do you see the greatest need for talent
development and upskilling?
Personally, I see the challenge as twofold. Firstly, the industry
requires ever more deep and specific functional capability,
knowledge and experience. I think we know how to do this.
An emerging and more difficult issue, which we are at the
early stages of addressing, is how to ensure the best and most
efficient integration of these skills via networking, information
technology and the improvement of the soft skills required.
This is vital in ensuring that the highest capability resources
have the best technology tools to address the most difficult
problems in a multi-functional way. Those organisations
that develop the optimal combination of deep functional
capability, integrated through experienced ‘generalists’ and
effective tools will be the industry leaders in the future and
SPE will continue to play a significant role in facilitating this.
P E RS O N A LIT Y S P O T LIG HT
“ I cannot think of
any other industry
whose continued
performance
excellence provides
the global economy
with a commodity
so important to
development and
living standards.“
63

flow, Volume 03

Transcription

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