Across the world the “new resource” owners are looking for significant investments from joint venture partners in the broader development of their economies. The expectation is evident in the following examples:
Brazil – “Contractual commitment of purchasing local goods and services on a competitive basis with the objective of developing local suppliers and technology and increasing employment and income growth.”
Nigeria – “ Nigerian content means the quantum of composite value added to or created in the Nigerian economy by a systematic development of capacity and capabilities through the deliberate utilization of Nigerian human, material resources and services in the Nigerian oil and gas industry.”
Saudi Arabia – LC is defined as the value added or created in the Saudi economy through the utilization of in- Kingdom human and material resources in the provision of goods and/or services.
In bidding for and executing the capital project joint venture partners’ seek to fulfil local content expectations through a variety of opportunities. These include the use of local workforce, local suppliers for goods and services, and investments into the social infrastructure e.g. schools, roads, hospitals, railways etc.
Based on Accenture’s capital project research, experiences and roles in supporting clients in the execution of capital projects, Accenture has developed a Local Content framework which spans strategy definition to implementation. Using this framework Accenture will share with the audience its perspectives on the maturity of local content capability, the value orientation of local content programs and the performance of contractors in meeting local content expectations and hence securing the supply of equipment, materials and local content infrastructure. Accenture will be able to draw examples from the Middle East, Nigeria, Canada, Australia, Brazil and South Africa.
This paper is aimed at oil and gas senior executives that are responsible for the defining, implementing and monitoring local content strategies.
The report is based on the data obtained as a result of consultancy services providing and Energy Management Systems development in accordance with the ISO 50001:2011 “Energy Management System requirements and guidance for use”. We would like to note that the standard was introduced in 2011.
The report is presented by a leading specialist in EnMS development and implementation. The author’s point of view is based on international experience in diagnostic audits of EnMS, the system elements development and implementation, trainings carrying out for top managers and employees of several industrial enterprises. The report has been developed under the case study principle, considering particular difficulties which can appear while EnMS implementation.
The author provides a brief insight into the history of ISO 50001 development, investigates the evolution of normative regulations, which have influenced EnMS implementation practice. The major part of the report is dedicated to the analysis of practical results for the problems solving, which occur before the system implementation. The author proves basing on the practical experience, that one of the most significant problems is related to the fact that Energy Efficiency is not integrated to the practice of day-to-day management in the enterprises.
Several years of experience in terms of EnMS implementation gives an opportunity to share the results of achieved economic effect, identify the most successful sectors and enterprises, which base their activity on systematic Energy Efficiency advancement. The author analyses the drawbacks, which did not allow other companies achieve meaningful results. The experience of Russian refineries and petrochemical companies shows that it is possible to decrease annual energy consumption by 2-5%. Such energy Efficiency values are quite comparable with the EU ones (2-3&$37;). To end up the report, the author provides information about perspectives for the 50000 series of standards development, stating targets and required changes in the area of energy management.
The city of Campos dos Goytacazes – located on the north of the state of Rio de Janeiro, Brazil –,is the main beneficiary from the country´s petroleum government take in Brazil, perceiving more than 80% of the amount destined to cities. Until 2010, Campos also held the second largest area for sugarcane crops in Brazil. However, Campos’ sugar cane industry has been facing a strong retreat since the 1970s, due to the lack of investment on research and new technologies coupled with a weak interorganizational cooperation. On the other hand, the strong reliance of Campos on the O&G revenues results in an economy based on a finite resource; a low level of economic diversity; and the atrophy of a historically sound economic sector.
Hence, this study evaluates the potential for the development of sugarcane bagasse-based biorefineries for the production of high valued bioplatform Molecules (bPMs). Different schemes of distilleries were simulated aiming at estimating the potential production of Levulinic and Succinic Acids, which are valuable inputs to pharmaceuticals, cosmetics and solvents synthesis. The distilleries schemes vary from replacing the expansion valve by a turbo expander to a highly modern industrial facility including: turboexpander, high-pressure boilers (100 bar), and electromechanical devices. The selected platforms derives from the acid hydrolysis of the sugarcane bagasse followed by the fermentation of the hydrolysate. Results showed that the production of high valued bPMs from sugarcane bagasse can contribute to the competitiveness of sugarcane industry. Likewise, considering its multiplying effect, the facility can also act as a driving force for the economy of the region.
Shallow-water developments are now more mature and operators are looking toward deepwater frontiers to further develop their oil and gas portfolios. What these new deepwater developments have in common is that they face a challenging risk reality that demands a substantial degree of technical innovation.
It is crucial to identify and understand the risks related to any offshore oil and gas operation particularly when moving into more challenging environments with remote locations, increasingly complicated reservoirs, harsher environments and more environmentally sensitive areas. The risks will be site, operation and time specific and it is important to maintain a holistic view of risk through a lifetime perspective to manage these in an acceptable way. New geographical areas for oil and gas development may not have the benefit of well-developed regulatory regimes to guide risk-based approaches. In addition, safety and environmental performance cannot be assured through technical solutions alone. Safe operations are also dependent on effective organizations, strong managements and motivated, competent people.
This paper looks at the overall challenges of ensuring the safety and reliability of deepwater exploration and production, while addressing the opportunities and dangers of recent business growth. The risks described are related to regulations, safety and environmental impact, technology and innovation, cost and time, competence and quality, and harsh climates. The authors draw on the experience gained over more than 30 years from oil & gas frontiers such as the North Sea, the Gulf of Mexico, offshore Brazil, offshore West Africa and offshore Western Australia. Developers and other stakeholders are encouraged to draw lessons from these experiences when attempting to model the interplay of regulatory, commercial and technical factors in project developments.
Deepwater oil and gas are a vital part of the mix of energy resources. Hydrocarbon reserves in deepwater basins are vast, particularly in the so-called ‘Golden Triangle’, a region formed by the US Gulf of Mexico, Brazil and West Africa. Until recently, high development costs and technological limitations discouraged deepwater offshore oil exploration and development. However, with the boom that started in the late 1990s and accelerated from 2000 onwards, technological innovation has increased the economic viability of these projects. Still it requires enormous investments to push the industry frontiers to new extremes, but against a backdrop where nearly 60% of world oil production happens in areas of high geopolitical risk, coupled with the fact that worldwide oil production for the eight majors has declined 2% per annum since 2004, the net result is that International Oil Companies (IOCs) have little recourse but to explore for oil deposits in these challenging areas. The added incentive is that these more remote basins may hold the promise of significant deposits of hydrocarbons with 200 million barrels or more of recoverable reserves. This is attractive, as it provides economies of scale, the possibility to lower operating cost per barrel, and produce profitably in very high cost areas.
Zhang, Hualin (CNPC) | He, Xinchun (CNPC) | Pan, Tao (CNPC) | Pei, Yong (CNPC) | Wu, Kewei (Research Institute of Petroleum Exploration & Development, CNPC) | Zhu, Kaicheng (Research Institute of Petroleum Exploration & Development, CNPC) | Xu, Bin (Research Institute of Petroleum Exploration & Development, CNPC)
Throughout history, global oil and gas industry has been driven by innovation. Especially since the 21st century, innovation-driven development has become the strategic choice for oil and gas companies throughout the world to enhance their core competitiveness, strengthen their comprehensive strength, and achieve sustainable development. In this paper, both theoretical research and case study, as well as qualitative and quantitative analysis are applied, and the innovation-driven development cases of 10 major oil and gas companies at home and abroad are studied. Based on the analysis and study, we summarize the features of innovation-driven development in the oil and gas industry, build the index system and “wheel” model for innovation-driven development capacities in terms of technology, management, talent and culture in the oil and gas industry, conduct enterprise case study, and provide a theoretical basis and data method for oil and gas industry to achieve innovation-driven development in a more efficient way.
The concept of “innovation-driven” development was first established by Michael Porter, a famous management scientist, as a country’s development stage in the 1980s. It is mainly defined as a power-driven economic growth driven by innovation elements and investment. At present, it has become a development model generally recognized by countries, sectors and enterprises. Through analyzing a large number of domestic and foreign literatures and examining the current development of the oil and gas industry, we believe that we should study innovationdriven development by understanding both innovation and driving, namely, through innovation, we will drive development. In the oil and gas industry, to promote innovation-driven development, we must give full play to the role of innovation elements, enhance innovation-driven development capacities, help make more innovative achievements and apply them widely in production and commerce, keep generating new growth momentums, and achieve sustainable business development.
The looming talent gap in the oil and gas industry has been widely discussed. The new generation entering the workforce that could fill the talent gap is a different generation. The so called generation Y, those born between the early 80s and late 90s, has different views and approaches to work. If companies want to be successful in the long-run, the new generation needs to be successfully integrated into companies and companies will have to adapt to the new generation. But what is so different about this new generation?
This talk will highlight the main opportunities and challenges going forward, using firsthand experience of generation Ys working in the industry or taking their career choices now: Next to the differing attitudes and approaches, the image of the oil industry is a main challenge.
The oil and gas industry has one of the oldest workforces in the world1. The imminent retirement of the baby boom generation predominantly making up this workforce is referred to as the “big crew change”. A larger part of these jobs will need to be filled by young professionals of the incoming generation y, born between 1980s and mid 1990s. As this new generation enters the labour market with different values and expectations, companies will need to adapt their recruitment and retention strategies. Notably corporate social responsibility plays a crucial role in generation y employer decisions. This paper examines some of the characteristics of generation y and the expectations this generation has of its future employer.
The paper is structured as follows. First some of the consequences following the big crew change are examined. Second, the characteristics of generation Y will analysed. Third, employee preferences are looked at in more detail, especially with regards to the oil and gas industry. The paper draws to a close by highlighting the main opportunities and challenges going forward.
The topic of the Collaborative EU-Project NEXT-GTL was the production of liquid fuels from natural gas. Novel and innovative routes were explored. Besides non-conventional routes for the catalytic formation of synthesis gas including membranes and direct catalytic conversion of methane to methanol, it encompassed the conversion of methane to aromatics followed by upgrading of the products by alkylation with ethane/propane. The aim of the upgrading discussed in this contribution was to avoid the toxicity of benzene as liquid fuel and to increase the research octane number (RON) by producing primarily ethylbenzene, n-propylbenzene and cumene as products of the alkylation reaction. Experiments were performed in a flow-type reactor at a pressure of approximately 6 bar, a reaction temperature of 350 °C and a reactant stream composed of ethane, propane and benzene. The catalyst with the best performance was found to be the bifunctional zeolite catalyst 1.7Pt-H-ZSM-5 with an nSi/nAl ratio of 35. The reaction yielded at least 35 wt.-% alkylaromatics after 5 h on stream. The mixture had a RON of at least 105. The RON was calculated by multiplying the molar fraction of each compound in the liquid phase with the corresponding blending RON value of the pure compound and adding the results to the final blending RON. After 70 h on stream, the yield of alkylaromatics was around 24 wt.-% with a RON of 103. The catalyst could be regenerated in hydrogen, and the long-term performance was reproduced after regeneration.
GTL Diesel is the main product of ORYX GTL. This paper is discussing improvements implemented at ORYX GTL in order to maximize this valuable product. Major factors contribute to maximizing GTL Diesel Yield, are mainly HCU reactor catalyst type, HCU reactor conversion and Advanced Process Control methodology implemented over the HCU reactor and fractionation column control systems. Reactor high CAT and high conversion is increasing the GTL Diesel Yield but affect negatively on the HCU catalyst life time, so it is required to operate the HCU reactor within an optimum zone to produce maximum diesel yield and maintain the HCU catalyst activity as long as possible.
ORYX GTL is a joint venture between Qatar Petroleum and Sasol Synfuels International; it is located in Ras Laffan Industrial City in Qatar. In 2003, ORYX GTL was founded to produce GTL products: GTL Diesel, GTL Naphtha and LPG. These products were first introduced to the market in 2007. Since then, GTL products have been meeting the market needs for GTL Diesel fuel as a blend stock, GTL Naphtha as a petrochemical feedstock and LPG as an export fuel.
GTL is a process of converting natural gas into synthetic oil that can be further processed into useful hydrocarbon products. The GTL process reassembles synthetic gas, or syngas, molecules (produced from Natural Gas reforming) into longer chain molecules, similar to those that comprise crude oil. The technology used is based on Fischer-Tropsch synthesis. The Fisher-Tropsch process was developed by Franz Fischer and Hans Tropsch at the "Kaiser-Wilhelm-Institut für Kohlenforschung" in Mülheim Van der Ruhr (Germany) in 1925.
In the FT process, the feedstock used to produce syngas can be solid (coal), liquid (refinery residuals) or gaseous (natural gas). GTL refers specifically to the conversion of gaseous feedstocks to an extremely pure synthetic crude oil that is virtually free of contaminants such as sulphur, aromatics and metals. This synthetic crude that consists of Wax and Condensate can be refined into products such as diesel fuel, naphtha, wax and other liquid petroleum or specialty products by further processing in a hydrocracker unit, where the synthetic crude is cracked in the presence of hydrogen, and then fractionated into the desired hydrocarbon products slates.
In overseas E&P projects local content issues become essential quite often. While the company has available resources to finance a new project; it may be faced with local problems of different character slowing or hindering the project. Middle East; South Asia; Latin America and CIS countries have their own particular features and problems. The companies are obliged to use local services and local labor; while at the same time they need to ensure project feasibility and perform in compliance with the best world practices.
Fundamentals of Local Content
In the last 10 years the concept of Local content has been gaining more ground and attracting increasing attention in the oil and gas industry. What started off as a vague definition of a particular form of regional development is now finding its way into the legislation of a great number of countries. Governments of many resource-rich developing countries are increasingly adopting local content rules aimed at boosting local participation of domestic firms in every stage of resource development. Historically, International oil companies (IOCs) have sought to maximize their economic outcomes, which have included some local spending in areas such as health, education and the environment, but nowadays delivering local benefits in the communities where extractive industries operate is no longer voluntary, in an increasingly big number of cases it is mandated by law. IOCs must now move beyond a philanthropic model.
Due to the fact that this concept is not yet fully established there are different definitions of local content. We refer to Local Content as a set of actions aimed at maximizing national value creation along the petroleum value chain through workforce development, value-addition, and the transfer of technology and knowledge. Such actions are designed to develop the industrial infrastructure and skills of the people in countries that host oil and gas projects. The regulatory environment in such countries is being readjusted to increase economic derivatives from the energy sector.
In light of this, there have been some changes on the global energy scene. In particular the relations between major resource holders and international oil companies have been changing. Host nations are seeking to maximize the overall economic benefits for their citizens, to create social and commercial benefits that progress economic growth and contribute to sustainable development. Therefore, National oil companies (NOCs) are reevaluating and setting new objectives and partnership roles to define participation in joint ventures and productionsharing agreements in their countries, and in doing so are emerging as relatively new change agents on the global energy scene.
Sakhalin Energy, one of the larger integrated oil & gas projects, executed under the first signed PSA in Russia, obtained international project financing at the end of the last decade. Rob van Velden, Finance Director of Sakhalin Energy, will discuss the challenges the Company went through to obtain project financing, and the impact of project financing on Sakhalin Energy’s ongoing operations. Today the Company has established a strong reputation in the Asia Pacific LNG market and has good relations with its lenders group. The Company is confident about its future and looking for possibilities to expand the project where additional project financing may well play a key role yet again.
Sakhalin Energy celebrates its 20th birthday this year. Looking back there is indeed cause for celebration. What during the construction phase seemed at times an impossible task has developed into today a grown up Company with a strong reputation. Sakhalin Energy is a reliable energy supplier in the Asia Pacific and a responsible operator in a difficult sub-arctic environment.
Sakhalin Energy staff with its contractors, and with the support of Shareholders and the Russian Federation as a party to the PSA completed successfully a very large and complex integrated oil & gas project at the end of the last decade, and since then went from strength to strength. The Company has captured as the first Russian exporter of LNG some 4% of the global market, and supplies reliably some 10mt of LNG per annum to satisfied customers in Japan and Korea mainly. In addition the Company produces and markets oil, with an average production in 2013 of around 110,000 bbl per day. Furthermore the Company supplies gas to the domestic gas market on Sakhalin, in line with Russia’s Far East gasification program, enabling for example a switch from coal to gas fired power production in Yuzhno-Sakhalinsk, the capital of the Island,
In the last few years the Company generated with these activities some $10bn revenues per annum safely and with no harm to the environment, paid handsome dividends to shareholders and provided substantial returns to the Russian Federation. Today Sakhalin Energy is by far the largest tax payer on Sakhalin Island. Looking forward there is reason for further optimism. Sakhalin Energy has gas reserves in place to keep its LNG trains fully utilized well into the next decade, and continues to develop its oil reserves; all this will be done at competitive cost, ensuring robustness of the Company also in case of less favourable pricing circumstances. Furthermore the Company has embarked on studies to review further expansion of its LNG plant with a 3rd train adding 50% capacity to what we have today. We are in no doubt that our LNG expansion project will be competitive compared to other developments in the region, and we believe our current and possible new customers will look forward to more reliable LNG cargoes from Sakhalin Energy in the market.
Now some comments on project financing in Sakhalin Energy. At the time of project completion Sakhalin Energy’s shareholders had invested for over a decade substantial funds in the project and were looking for early returns after start up amongst others. Project financing was considered as a legitimate tool to deliver this, and was therefore pursued. A consortium of banks led by the Japanese Bank of International Cooperation (JBIC) agreed to finance the project for a significant proportion of invested CAPEX. The choice for JBIC and a substantial Japanese syndicate for the loan was no coincidence; Sakhalin Energy sells a substantial part of its LNG volume to Japanese power companies, two of Sakhalin Energy’s shareholders are Japanese companies, and a Japanese EPC contractor led the construction of the LNG plant. The project financing was completed in 2009 and put shareholders in a financially better position to continue support of development of the Sakhalin Energy oil & gas fields.