Initiatives improving Abu Dhabi's energy industry capacity through knowledge transfer

The Abu Dhabi authorities have set an ambitious recovery target of 70% for the emirate’s maturing oilfields. Achieving this goal will require the implementation of sophisticated advanced technology, including enhanced oil recovery (EOR) techniques. At the same time, Abu Dhabi National Oil Company (ADNOC) has set a sector goal of 75% Emiratisation by 2017, as reported by The National in early 2014. Meeting these combined goals is resulting in a renewed focus on research and development (R&D) and the increasing involvement of nationals in the technical aspects of the industry. Abdul Munim Saif Al Kindy, CEO of Abu Dhabi Company for Onshore Petroleum Operations, told OBG, “In the coming years, thousands of highly qualified engineers will be required to service the growing and significantly more complex needs of the hydrocarbons industry. The reality is that we have a limited pool of nationals who can fill those roles, and therefore we will always be somewhat dependent on outside assistance.”

More Research

The focal point of current efforts – both in R&D and local capacity building – is the Petroleum Institute (PI). Opening to students in 2001, PI is an ADNOC-funded engineering university with the goal of becoming a leading centre for energy industry research. As of autumn 2015, PI had a total of 2205 students, including 1840 undergraduates and 365 graduate students, with 1479 alumni. ADNOC has set PI the challenge of coming up with ways to add 5% to recovery rates in Abu Dhabi, a figure that would add an estimated $500bn in oil revenues.

As well as improving recovery rates, the goal of the institute is to improve ADNOC’s internal knowledge base. Currently, the company relies on external partners – international oil companies (IOCs) such as BP, Shell and Total – to apply their own proprietary technology to extend oilfield life. With PI contributing its own R&D, as well as producing a stream of talented local graduates, the ability to assess the business case for such technology will be much improved.

Thomas Hochstettler, president of PI, told OBG that PI’s main focus is the new $90m PI Research Centre (PIRC), which is expected to be up and running by early 2016. “Hiring is under way right now,” Hochstettler told OBG in late 2015. “There will be 40 new researchers coming into that building, in addition to graduate students and faculty.”

The centre is expected to have an annual operating budget of $33m, and will contain 32 research labs. According to Hochstettler, clusters at the new research centre will focus largely on EOR and supporting activities in engineering and geophysics, with an emphasis on local petroleum reserves and corrosion. “Lots of reserves here are high in hydrogen sulphide,” Hochstettler told OBG, referring to the highly corrosive by-product contained in a number of the emirate’s new onshore gas fields. He added, “We have just hired a chair for corrosion research, sponsored by Total. We will also have a number of labs working on downstream research, covering polymers and gas processing.”

Local Participation

The PIRC follows on from the earlier launch of a gas research centre in Abu Dhabi in 2010, and it is clear that PI’s activities in such innovative and key areas tend to pre-empt the future direction of the domestic energy sector by two to three years. “PI is a rather interesting embodiment of advanced planning for personnel,” Hochstettler told OBG. “The institute is owned by ADNOC and is a priority for them, so we have a unique relationship with industry. Any concession granted to a new company includes a provision for a partnership with PI, which is why we have relationships with all the big players – BP, Shell and Total, as well as Japanese and Korean companies.”

The necessity for such a research programme is increasingly apparent. Not only is the goal of increasing Emiratisation government policy, but in the years ahead the sector itself will be increasingly reliant on advanced EOR techniques to maintain production capacity.

Achieving both goals will thus require a highly skilled, highly technical domestic workforce. Well aware of the technical challenges facing the sector, Marc Durandeau, senior vice-president of R&D at PI, told OBG that all new developments will be more difficult, in addition to the fact that reaching 70% recovery rates for existing wells will require a lot of investment. “The policy here in Abu Dhabi is not to produce too much,” said Durandeau. “This is a good strategy, as it allows you to achieve a higher recovery factor – you do not pull out too much, you wait for gravity to do its job.”

Nonetheless, EOR is increasingly necessary to maintain output. As Durandeau explained, miscible gas injection has been used in Abu Dhabi for a long time, alongside peripheral water injection. More recently, some additional techniques have been used to improve sweep efficiency. “Foam systems are being used in some cases to improve the viscosity of gas,” Durandeau told OBG. “This is valid, too, for CO injection. There is also a pilot project to experiment with using gas injection in a tight environment.”

Looking ahead, Durandeau sees potential in particular for mixed injection. “In the future we will probably see the introduction of some hybrid EOR, in particular playing with the chemistry of the injected water,” he told OBG. “BP is looking to introduce low salinity injection with its LoSal EOR, while here at PI we are looking into research on carbonate reservoirs.”

As Durandeau explained, though, the technical challenges associated with such plays are highly specific. He said, “The expected recovery rate is not high, so we would need to couple water injection with chemicals – a surfactant followed by polymers. The issue with current surfactants is that they need high temperature and high salinity to achieve good recovery. With a hybrid of low salinity and chemical injection, though, we may be able to achieve good recovery.”

Educating Future Innovators

The Abu Dhabi oil industry is building capacity in operational skills. In June 2014 Dubai-based Gulf News reported that the National Drilling Company (NDC) established its Drilling Training Centre in the Bu Hasa area of Al Gharbia, with six halls, four labs and facilities to accommodate more than 300 trainees.

The NDC Drilling Training Centre is intended to provide new oil industry employees with specialised technical training. Abdalla Saeed Al Suwaidi, CEO of NDC, told OBG that such initiatives were “imperative” for the critical sector. “It is becoming increasingly more imperative that we continue to invest in research and training initiatives similar to the NDC Drilling Training Centre,” Al Suwaidi told OBG. “These types of programmes are critical in enhancing the specialised skills of our nationals to ensure they are prepared for careers in the sector and to ensure the long-term sustainability of the industry. NDC is proud today that a large number of its state-of-the-art onshore, offshore and island rigs are operated and managed by qualified and proficient national cadres.”

ADNOC also has its own vocational training centre. The ADNOC Technical Institute (ATI) was established in 1978 with the goal of training up a skilled national labour force in the oil and gas sector. ATI is assisted in this goal by ADNOC’s operating companies and subsidiaries. For instance, as part of the current offshore oil developments at the Satah Al Rasboot (SARB) field, the Abu Dhabi Marine Operation Company (ADMA-OPCO) created a duplicate of its main process facilities using synthetic oil and nitrogen to act as a training facility for employees. This is only the second such case of a training facility like this having been created, with the project being gifted to ATI by ADMA-OPCO.

The Right Tools

As Abu Dhabi pushes to gain the most from its existing resources, while also developing technically challenging new plays, such as the sour gas projects at the Shah field and, potentially, Bab, the need for both cutting-edge technologies and a workforce able to implement them will become ever more pressing. The framework of new concessions, such as the recently signed Abu Dhabi Company for Onshore Petroleum Operations deal with Total, reflects this new drive for technological innovation. IOCs are expected to bring proprietary technology to play on reservoirs to maximise recovery, but in light of the commercial sensitivity of such technology, they are increasingly being allowed to take a more independent role on given fields as “asset leaders”.

Hussein Fouad El Ghazzawy, general manager and vice-president of Schlumberger UAE, told OBG, “Abu Dhabi has always been a pioneer when it comes to new technology, because of the drive for increased production and the strong leadership. We see there will be opportunities to further facilitate R&D collaborations within the industry.”

In such an environment, the role of institutions such as PI becomes increasingly pivotal, providing a venue in which all industry players can collaborate on the future challenges facing Abu Dhabi’s oil sector. And further collaboration will be necessary as time goes on. According to a report from The National, R&D spending by the large IOCs has dwindled to only between 0.2% and 0.5% of revenue in recent years, resulting in a decline in overall return on average capital employed from around 25% to only 5%. With ADNOC itself acknowledging the need to greatly improve its own in-house capabilities in R&D, PI’s new research centre thus arrives at the perfect moment for the industry to turn over a new leaf and enter a hi-tech future.

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The Report: Abu Dhabi 2016

Energy chapter from The Report: Abu Dhabi 2016

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