Enterprise Journey: Enterprise Methods
The UAE, an island of political stability in a area marked by turmoil, remains one of the world’s most dependable producers and exporters of crude oil. Despite continued development in sectors similar to tourism, development and actual estate, the oil and fuel business stays a extremely important contributor to the UAE’s gross domestic product.
Regardless of the increase in shale oil production in the US and elsewhere in recent years and extreme volatility in the worth of oil, the consensus is that the UAE and the Center East typically will maintain its standing as a serious centre of global oil supply because of comparatively low manufacturing costs in the area and proximity to increasing Asian economies.
The UAE has the world’s seventh largest proved reserves of each oil and natural gas, estimated at ninety seven.Eight million barrels and 215 trillion cubic ft respectively. Because of this it holds four per cent of the world’s confirmed oil reserves and 3.5 per cent of proven gasoline reserves. Most of the UAE’ reserves (ninety five per cent of the nation_s oil reserves and about 94 per cent of its gasoline reserves) are in Abu Dhabi, each offshore and onshore. The world’s seventh or eighth largest oil producer, the UAE is the fourth largest internet oil exporter: crude oil exports amounted to 2.9 million barrels per day (bpd) at the top of 2014, roughly 15 per cent of OPEC’s whole oil output. A heavy programme of funding in Abu Dhabi, amounting to greater than US$70 billion, continues because the emirate’s Supreme Petroleum Council (SPC) and the Abu Dhabi Nationwide Oil Firm (ADNOC) search to achieve a target of 3.5 million barrels per day by 2017.
At the offshore Upper Zakum subject, Abu Dhabi’s largest with estimated reserves of 50 billion barrels, which is oil and gas it spending operated by ADNOC in partnership with ExxonMobil and Jodco, as much as US$14 billion will likely be invested to increase oil and gas it spending production from the present 585,000 bpd, first to 750,000 bpd and then, by 2024, to 1 million bpd.
Onshore, the Abu Dhabi Company for Onshore Oil Operations (ADCO), plans to take a position an additional US$5 billion to US$7 billion to fulfill its manufacturing goal of 1.Eight million bpd by the tip of 2017. ADNOC and Whole signed a forty-yr concession settlement for the ADCO onshore fields in January 2015, the unique seventy five-yr concession having expired on 10 January 2014. Total acquired a 10 per cent taking part interest in the brand new concession and is appointed asset chief for the South East and Bu Hasa integrated asset teams. Extra firms will likely be added.
The SPC’s resolution on the ADCO concession is not going to solely determine the way forward for Abu Dhabi’s major onshore oil assets but can even set the tone for renewal or restructuring of the offshore concession held by ADNOC’s Adma-Opco working subsidiary, which expires originally of 2018. Adma-Opco is a joint enterprise between ADNOC, BP, Total and Jodco. (Click on here for information on the background to the unique oil concession agreement.)
A number of recent entrants into the UAE’s oil business, like the Korean firm, KNOC, are also exploring for brand new fields.
Elevated oil production leads to elevated exports. To bolster the safety of its oil export capability within the face of regional political unrest and issues over the Strait of Hormuz chokepoint on the mouth of the Gulf, Abu Dhabi’s authorities-owned Worldwide Petroleum Funding Company (IPIC) developed a 370-kilometre crude oil pipeline from Habshan, where Abu Dhabi’s greatest onshore oil fields are located, to Fujairah on the Arabian Sea coast. The Abu Dhabi Crude Oil Pipeline was inaugurated in 2012 with an initial capacity of 1.5 million bpd, with expectations that this would finally be expanded to 1.Eight bpd. The pipeline permits the UAE for the primary time to export crude from a terminal exterior the Gulf.
Abu Dhabi’s fuel production has increased significantly lately on account of main tasks to combine offshore and onshore production of related fuel from massive oil fields and cut back gas flaring. Abu Dhabi, which was the first Gulf state to produce LNG, has long-time period contractual commitments to export fuel. At the identical time domestic demand for gasoline, primarily used as a feedstock for power and desalination plants, has spiralled. Fuel is also used for reinjection into oilfields to keep up wellhead pressure and it’s used in the quickly increasing petrochemicals and fertiliser sectors.
In the previous few years, ADNOC’s gasoline producing unit, Adgas, has doubled its gas output to 2 billion customary cubic toes per day (scf/d), half of which goes to Gasco’s facilities in Habshan for further remedy earlier than it’s pumped to the nationwide grid in Abu Dhabi and the other emirates. Adgas plans to extend production to 2.Four billion scf/d by 2017.
Numerous tecnically difficult initiatives, together with the exploitation of bitter gas, type half of those plans. Extremely-bitter gas incorporates excessive concentrations of hydrogen sulphide, a gasoline which is each extremely corrosive and deadly if inhaled at even low concentrations. Fuel fields with similar hydrogen sulphide concentrations have been developed elsewhere on this planet, however not often, which is why ADNOC has joint ventured with leading worldwide oil firms to develop fuel fields corresponding to Bab and Shah.
ADNOC anticipate to start manufacturing at the Bab sour gas discipline in 2020. Beneath improvement with the help of Shell, it will add more than 500 million scf of gasoline to Abu Dhabi’s provides. In the meantime, the Shah fuel project has commenced operations and is anticipated to reach full capacity by the tip of 2015. The multi-billion dollar undertaking, which is being operated with Occidental Petroleum, is producing usable gasoline from Shah’s high-sulphur subject. The challenge will course of round 1 billion cubic toes a day (bcf/d) of bitter gasoline into zero.5 bcf/d of usable gasoline. As well as fuel for business and energy era, Shah will produce significant volumes of condensates, a mild oil that can be used to make automobile fuels.
Wintershall, OMV and ADNOC are additionally appraising the Shuwaihat bitter gasoline and condensate field about 25 kilometres from Ruwais. A profitable evaluation and subsequent production might make Shuwaihat considered one of the most important natural gas and condensate fields in the western region of Abu Dhabi.
As well as, different emirates within the UAE are stepping up fuel exploration and production, a lot of which is outlined beneath. A notable gas-associated growth within the UAE lately has been the beginning of gas imports, first in late 2007 by Dolphin Vitality’s undersea pipeline from Qatar and more recently in 2011 with the commencement of summer time imports of LNG cargoes at floating regasification services in Dubai. The Dolphin Project, a collaboration between Mubadala Improvement, Complete and Occidental, involves the manufacturing and processing of natural gasoline from Qatar’s North oil and gas it spending Field and transportation of 2 billion scf of gas by the primary intra-GCC network connecting Qatar, UAE and Oman. The lengthy-time period prospects for this gas are Abu Dhabi Water and Electricity Firm, Dubai Provide Authority and Oman Oil Company, meeting roughly 30 per cent of the UAE’s vitality requirement and delivering vital volumes of pure gasoline to the nation’s seven emirates.
Abu Dhabi’s state-owned IPIC and Mubadala Growth are additionally developing an LNG import facility in Fujairah, on the Arabian Sea coast. This provides the UAE entry to global LNG provides with out the necessity to transport the gas through the Strait of Hormuz to a Gulf port.
In the longer time period, the UAE is pursuing plans to diversify its home energy provide to incorporate nuclear and photo voltaic energy, waste-to-power initiatives and, in Dubai’s case, excessive-efficiency coal-fired energy technology. Such initiatives ought to in time assist to cut back carbon emissions and lessen the strain on the country’s gas supplies. However, natural gasoline will stay the main supply for generating electricity, at 70 per cent by 2020, while nuclear power and renewable vitality will contribute 25 per cent and 5 per cent respectively.
Environmental mitigation, particularly amid heightened international concern over world warming, presents a considerable challenge to the worldwide oil and fuel business, which is below stress to find ways to chop its carbon emissions. The UAE_s oil and fuel sector has accepted the problem, and is already making progress with a lot of initiatives.
As an example, ADNOC is nicely on the approach to eliminating gas flaring. By lowering the wasteful burning of gas at production amenities and oil refineries by way of higher administration, the corporate is not solely slicing carbon dioxide emissions, however can be conserving a helpful power resource.
ADNOC can be a associate in an bold scheme to develop a carbon capture and storage network for the UAE. The plan is to seize carbon dioxide emissions from main Abu Dhabi industrial installations and pipe the gas to oil fields for use in enhanced oil recovery projects. Ultimately, the carbon dioxide would be completely saved underground within the depleted reservoirs.
On this context, ADNOC and Masdar have formed a joint venture focused on exploring and creating industrial-scale tasks for carbon seize, utilization and storage (CCUS). A contract has already been awarded to Dodsal Group to construct a carbon dioxide compression facility and a 50 kilometre pipeline.
For the joint enterprise’s first CCUS project, carbon dioside will probably be captured onsite at Emirates Steel, compressed, transported and injected into fields operated by ADNOC. The undertaking will sequester as much as 800,000 tonnes of carbon dioxide yearly. Completion is about for 2016.
In the downstream petroleum sector, IPIC and ADNOC’s oil refining firm, Takreer, has for several years been pursuing refinery upgrades designed to develop Abu Dhabi’s petroleum processing capability to 885,000 bpd from 485,000 bpd. Takreer has added 417,000 bpd of new processing capacity at the existing Ruwais refinery, situated about 200 kilometres west of the UAE capital on Abu Dhabi’s coast and IPIC is constructing a brand new 200,000 bpd refinery in Fujairah. This may produce distillates for native use, for export and for bunker gas, Fujairah being a serious bunkering centre.
The UAE additionally manufactures an estimated US$eleven billion price of chemical products, together with plastic and fertilisers. Associated to the Ruwais refinery growth, ADNOC’s fertiliser arm, Fertil, has developed a US$1.2 billion nitrogen fertiliser plant at the placement. Bourouge, a joint enterprise between ADNOC and the Austrian oil company OMV, and Tacaamol, a joint enterprise between state-owned Abu Dhabi Chemical Company (Chemaweyaat) and IPIC, are increasing existing and creating new petrochemicals services at Ruwais.
As a spin-off from the Shah challenge, Abu Dhabi will turn into the leading regional exporter of sulphur, which is used to make fertilisers, rubber and sulphuric acid. The emirate has developed a devoted spur of the UAE national railway system _ a major federal infrastructure mission currently under improvement _ to transport sulphur from the Shah fuel field.
Dubai Supreme Council of Vitality, oversees the effective planning of Dubai’s vitality sector with a primary focus on vitality sustainability. It’s currently the emirate’s highest power policy and planning authority, equivalent in some respects to Abu Dhabi’s SPC however with a mandate that extends throughout the petroleum and energy sectors.
Dubai’s present oil reserves are about 4 billion barrels. Dubai_s oil production, which once accounted for about half the emirate_s GDP, has fallen dramatically lately. In consequence, the emirate has swung from being a net oil exporter to importing most of its petroleum requirements. However, a new offshore oilfield, named ‘Al Jalila’ after H.H. Sheikh Mohammed bin Rashid Al Mubarak’s youngest daughter, set to start production in 2016, ought to notably increase the manufacturing of crude in Dubai.
Whereas it continues to pump fuel from offshore fields, and it has identified significant reserves of gas in its new T-02 deep gas exploration well, Dubai also consumes extra gasoline than it produces, and is more and more dependent on imports to make up the difference. The emirate already purchases a number of hundred cubic feet per day of gasoline from Dolphin Power by way of its subsea pipeline, and in 2011, after completing the development of a receiving terminal, Dubai began importing 650,000 tonnes per 12 months of LNG beneath a contract with Qatar Petroleum and Shell.
Nonetheless, Dubai remains deeply concerned in the petroleum sector as a hub for oil buying and selling and power providers. The port of Jebel Ali, situated about 35 kilometres south-west of the town of Dubai, handles a large a part of the UAE_s trade in refined petroleum merchandise.
Horizon Terminals, a unit of Dubai’s authorities-owned Emirates National Oil Firm (ENOC), is establishing a brand new US$142 million oil storage terminal at Jebel Ali. The project features a 60 kilometre pipeline link to produce jet fuel to Dubai’s new Al Maktoum Worldwide Airport. It is going to be provided by ENOC’s existing one hundred twenty,000 bpd Jebel Ali condensate refinery, which processes feedstock imported primarily from Qatar and Abu Dhabi, and by marine tankers calling at the brand new facility’s jetties.
Four of the UAE_s other 5 emirates also have minor amounts of oil and fuel production.
The government-owned Sharjah National Oil Company operates the emirate’s hydrocarbon pursuits on a commercial foundation and invests in firms and services within the oil and fuel sector. Crescent Petroleum, a private Sharjah company, produced oil from the Mubarak subject in the Gulf, near Abu Musa Island till the end of 2009, when it determined that the sphere had reached the tip of its productive life and returned the concession to the government of Sharjah.
The offshore Zorah gasoline field in waters shared between Sharjah and Ajman is being developed by Sharjah-based Dana Fuel and Crescent Petroleum. Manufacturing is anticipated to be within the region of 50 million to 60 million scf/d. Dana and Emarat, a Dubai marketer of petroleum merchandise, have jointly developed a typical-consumer fuel pipeline to serve Sharjah clients.
Crescent and the Russian state-managed Rosneft are also exploring for gasoline beneath a Sharjah concession masking the emirate_s onshore area. In response to the corporate, exploration work completed to date indicate significant potential recoverable volumes.
Gas manufacturing from the Atlantis discipline offshore Umm al-Qaiwan started in 2008. A unit of China_s Sinochem is developing the deposit and sending as much as 92 million scf/d of liquids-wealthy gas by an undersea pipeline to a Ra_s al-Khaimah processing plant operated by the government-owned Ras Al Khaimah Gas Fee, or RAK Fuel.
RAK Petroleum, a personal-sector Ra_s al-Khaimah firm with worldwide operations, holds domestic pursuits in oil and gas concessions in Sharjah and its home emirate. It is forty two-per-cent-owned affiliate DNO Worldwide produces about 35 million scf/d of gasoline from two fields in Oman’s territorial water off the Musandam peninsula, adjoining to Ra’s al-Khaimah, from which the UAE emirate sources gasoline.
Fujairah doesn’t produce oil or fuel, nevertheless it boasts one of the world_s largest bunkering ports, the port of Fujairah, on the Arabian Sea, dealing with millions of tonnes of marine transportation gas and different oil products.
With the completion of the strategic crude oil pipeline from Abu Dhabi, Fujairah is undergoing fast growth, together with the development of the UAE’s second largest refinery and the building of storage and mixing services. Sharjah-based Gulf Petrochem, a non-public firm, commissioned a new oil merchandise storage terminal at Fujairah with a capacity of 412,000 cubic metres. Vopak Horizon Fujairah has also expanded its Fujairah oil storage facility by 600,000 cubic metres to 2.1 million cubic metres.
Fujairah has plans for one in all the largest LNG regasification plants. In addition, gas imports through the Dolphin Power pipeline linking Qatar and the UAE have facilitated energy and water improvement within the emirate and stimulated native trade.
As the UAE_s oil and gasoline sector developed sophistication, it gave rise to numerous public and private sector corporations that pursue power growth abroad.
In Abu Dhabi, three government-controlled entities, Mubadala Growth, the Abu Dhabi National Power Company, or Taqa, and IPIC, are the primary autos for such enterprise. Mubadala is involved in enhanced oil recovery initiatives in Oman and Bahrain and gasoline production in Thailand and Indonesia. It additionally announced just lately that oil production has commenced at its Manora fields in Thailand. As the controlling shareholder of Dolphin Power, Mubadala also produces fuel and condensates in Qatar sending up to 2 billion cubic feet per day to the UAE and Oman.
Taqa, working in 11 nations throughout 4 continents, produces most of its oil from the UK North Sea, whereas its gas production is concentrated in Western Canada and the Dutch North Sea. It additionally owns pursuits in pipelines, production platforms and gas storage services in those areas, and is main a undertaking within the Netherlands to develop a serious gasoline storage and advertising and marketing hub for western Europe. In addition, Taqa has a considerable worldwide and home portfolio of power era belongings. Taqa acquired a 53.2 per cent working interest in the Atrush Block of Iraqi Kurdistan, the place it has subsequently made a industrial oil discovery.
IPIC has acquired a wide portfolio of oil and petrochemicals pursuits in North America, Europe and Asia and is concerned in greater than 18 firms and initiatives throughout the globe. It’s a major shareholder and strategic companion of Austria_s OM, owns one hundred per cent of the second largest Spanish oil firm, Compania Espanola de Petroleos; and holds an oblique curiosity in a big LNG improvement in Papua New Guinea.
The Dubai Government_s ENOC has a fifty two per cent curiosity in Dragon Oil, which produces oil and gasoline in Turkmenistan. Al Thani Company, a non-public-sector Dubai firm, is exploring for oil and gas in several African nations including Sudan, Egypt and Libya.
Sharjah associates Crescent Petroleum and Dana Gas have a gas joint enterprise in Iraqi Kurdistan with OMV and Hungary’s MOL as junior companions. Dana additionally produces oil and gasoline in Egypt.