Africa Oil Week: Major players in Cape Town and Uganda: What does the future hold? Training, satellite communications, ... Nicky Valsamakis, Vani Venugopal, Louise Waters Publisher:Nick

Europe €10, Ghana CD18000, Kenya Ksh200, Nigeria N1200, South Africa R25, UK £7, USA $12 WWW.OILREVIEWAFRICA.COM

VOLUME 11 | ISSUE 6 2016

Abiodun Adesanya,President, NAPE (p46)

OIL REVIEW AFRICA - VOLUM

E 11 - ISSUE 6 2016 w

ww

.oilreviewafrica.com

ADIPEC: Global focus in Abu Dhabi

Angola and Uganda: What does the future hold?

Training, satellite communications, maintenance,decommissioning and oil spill prevention

Africa Oil Week:Major players in Cape Town

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S01 ORA 6 2016 - Start_ORA Master Template - 2016 New 14/12/2016 10:04 Page 2

NEWS AND EVENTS

4 Calendar of oil and gas eventsPlus Mozambique Gas Summit report.

6 African hydrocarbons newsContinent-wide updates and a reporton Valve World.

42 Rig countPlus Mozambique Gas Summit report.

SPECIAL REPORTS

14 Africa Oil Week special reportChallenges and opportunities across all of Africa.

23 ADIPEC special reportNews from the Abu Dhabi event.

COUNTRY FOCUS

26 AngolaWhat lies ahead after the OPECproduction cut?

28 UgandaOil and gas for national growth.

TECHNOLOGY & OPERATIONS

30 Staff trainingOne size does not fit all.

32 Oil spill preventionAvoiding devastating disaster.

34 Satellite communicationsLeveraging technology effectively.

38 TurnaroundsSafe, efficient turnarounds.

39 Paintings and coatingsThe latest innovations.

40 DecommissioningPlanning ahead in West Africa.

41 Onsite powerThe role of power in rig upgrades.

42 InnovationsThe latest technological developments.

INTERVIEW

46 Abiodun AdesanyaPresident of the Nigerian Associationof Petroleum Explorationists.

IN THIS EDITION we bring you comprehensive coverage of Africa Oil Week (page 14), whichwas, as ever, a lively conference and exhibition. Plenty of leading players were able to offer wordsof optimism despite another tough year of low oil prices. Interestingly, there are servicecompanies who are not only surviving but thriving amid the downturn, and multiple speakersurged those looking to invest in African hydrocarbons projects to make their move while thereare bargains to be had. Oil Review Africa also visited Abu Dhabi for ADIPEC, which is a great opportunity to hear

perspectives on the oil and gas industry from a wide range of global voices. Wale Tinubu, groupCEO of Oando, spoke frankly on the opportunities and challenges facing Nigerian operators.Turn to page 23 to find out what he had to say to the delegates.

Finally, we’d like to wish all our readers a safe and happy holiday season and we look forwardto reporting on the exciting and ever-changing world of African oil and gas in 2017.

Georgia LewisManaging Editor

EDITOR’S NOTE

Europe €10, Ghana CD18000, Kenya Ksh200, Nigeria N1200, South Africa R25, UK £7, USA $12 WWW.OILREVIEWAFRICA.COM

VOLUME 11 | ISSUE 6 2016

Abiodun Adesanya,President, NAPE (p46)

ADIPEC: Global focus in Abu Dhabi

Angola and Uganda: What does the future hold?

Training, satellite communications, maintenance,decommissioning and oil spill prevention

Africa Oil Week:Major players in Cape Town

CONTENTS

ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM 3

In this issue, we comprehensively coverAfrica Oil Week and ADIPEC.

Managing Editor: Georgia Lewis [email protected]

Editorial and Design team: Prashanth AP, Hiriyti Bairu, Luke Barras-Hill, Miriam Brtkova, Kestell Duxbury, Ranganath GS, RahulPuthenveedu, Rhonita Patnaik, Zsa Tebbit, Nicky Valsamakis, Vani Venugopal, Louise Waters

Publisher: Nick Fordham

Advertising Sales Director: Pallavi Pandey

Magazine Sales Manager: Chidinma AnahTel: +44 (0) 20 7834 7676 Fax: +44 (0) 20 7973 0076E-mail: [email protected]

International Representatives

India Tanmay Mishra Tel: +91 80 65684483Nigeria Bola Olowo Tel: +234 8034349299UAE Graham Brown Tel: +971 4 448 9260USA Michael Tomashefsky Tel: +1 203 226 2882

Head Office:

Alain Charles Publishing LtdUniversity House, 11-13 Lower Grosvenor Place, London SW1W 0EX, United KingdomTel: +44 (0) 20 7834 7676 Fax: +44 (0) 20 7973 0076

Middle East Regional Office:

Alain Charles Middle East FZ-LLCOffice L2-112, Loft Office 2, Entrance B P.O. Box 502207, Dubai Media City, UAETel: +971 4 448 9260 Fax: +971 4 448 9261

Production: Kavya J, Nelly Mendes and Sophia Pinto E-mail: [email protected]

Subscriptions: [email protected]

Chairman: Derek Fordham

Printed by: Buxton Press

© Oil Review Africa ISSN: 0-9552126-1-8

Serving the world of business


DECEMBER26-27 18th International Conference on Oil, Gas and Petrochemical Engineering Dubai www.waset.org

JANUARY23-25 European Gas Conference 2017 Vienna www.europeangas-conference.com

24-26 SPE Hydraulic Fracturing Technology Conference & Exhibition The Woodlands, Texas www.spe.org/eventd

24-26 Oil & Gas IP Summit London www.oilandgasip.iqpc.com

FEBRUARY8-7 International Conference on Oil & Gas Projects in Common Fields Held concurrently in Amsterdam and Bangkok www.waset.org

14-16 Egypt Petroleum Show Cairo www.egyps.com

21-23 West African International Petroleum Exhibition & Conference Lagos www.waipec.com

22-24 Oil, Gas & Mines Africa (OGMA) Exhibition & Conference Nairobi www.ogmaxpo.com

27-2 Mar Nigeria Oil & Gas Conference & Exhibition Abuja www.cwcnog.com

27-2 Mar Nigeria Power Forum Abuja www.nigeria-power.com

MARCH15-16 Global Oil & Gas Istanbul www.global-oilgas.com

21-24 North Africa Petroleum Exhibition & Conference Algeria www.napec-dz.com

26-30 Corrosion 2017 Conference & Expo New Orleans www.nacecorrosion.org

28-30 International SAP Conference for Oil & Gas Lisbon www.uk.tacook.com

THE MOZAMBIQUE GASSummit was held from 30November until 2 December,with a broad range of topicscovered by the top-level speakers.

Among the speakers on theNational Content Day were Drvasco Nhabinde, director of theMinistry of Economy andFinance, Dr Amad Valy, chiefoperating officer of ENHLogistics and Wilson Chafinya. alocal content specialist for Sasol.

The National Content Daycovered topics such as legislation

terms, the role of SMEs and bestpractice for implementing policy.

On 1-2 December, the focus ofthe conference shifted to strategic

panel debates with internationalcompanies, such as Sasol. GE Oil& GAs, Standard Bank andTechnip represented. Additionally,

Dr Omar Mithá, chairman andCEO of ENH. Dr Carlos Zacarias,president of INP and Dr EstevãoPale, chairman of CMH, an HEJoanna Kuenssberg, British HighCommissioner to Mozambique,and Joana Matsombe, a Banco deMoçambique board member, allspoke at the sessions.

The panel debates coveredproject updates, the role oftechnology, social andenvironmental impacts,infrastructure and economicdiversification through gas.

Mozambique’s leaders descend on Maputo for gas summit

ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COMEVENTS CALENDAR4

Executives Calendar 2016-2017

Readers should verify dates and location with sponsoring organisations, as this information is sometimes subject to change.

Mozambique is becoming aleading gas conference destination.


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ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COMNEWS6

FAR LTD HAS announced that operatorCairn Energy and its joint venture partnerswill carry out a drilling programme in 2017consisting of two appraisal wells on the worldclass SNE oil field offshore Senegal.

The wells will be drilled in order tooptimise the SNE field development planbefore submission to the Government ofSenegal for approval. The SNE-5 and SNE-6wells, located in the SNE oil field and willevaluate the upper SNE reservoir units (400series), specifically the connectivity of thereservoir section and depositional modelinterpreted from existing wells and highquality 3D seismic data. The wells are expectedto provide important data for SNE reservoirmanagement and will play a key role inoptimising the proposed project development.

The two-well drilling programme is tocommence in Q1 2017. The joint venture hascompleted an extensive rig tender evaluationprocess and executed contracts for the use ofthe Stena DrillMAX drillship. The drillshiphas been contracted for the two wells andadditional option wells.

According to the drilling and evaluation

plan, SNE-5 will undergo drill stem testing(DST) and have permanent gauges placed inthe upper reservoir units. SNE-6 will bedrilled immediately after SNE-5, and isexpected to undergo an extended DSTprogramme to generate a pulse that will beregistered in the gauges installed within theupper reservoir section at SNE-5 and SNE-3.Successful flow and interference test results

for the wells that support connected reservoirunits could lead to higher oil recoveries byFAR from these reservoir units.

The joint venture is progressing towardsthe submission of a development plan for the SNE field as quickly and efficiently aspossible. Pre-FEED activities are currentlyfocused on determining the final project size and scope.

NIGERIA OIL AND GAS Conference and Exhibition (NOG), one ofAfrica’s leading oil and gas events, is scheduled to take place from 27February-2 March 2017 at the ICC, Abuja, and will address major issuesconcerning the future direction for oil and gas in the region. The eventaims to create a platform for the best of oil and gas industry professionals,investors, governments, financiers and others from across the globe.

This year, at the 16th edition of the NOG, the Nigerian minister of state for petroleum resources, Ibe Kachikwu, will deliver the officialministerial address.

For the past 15 years, NOG has been developed in partnership withthe Ministry of Petroleum Resources and NNPC. Given the currentunstable oil and gas market in Nigeria, NOG 2017 is expected to serveas a platform for the government to showcase the direction in whichthey are taking the oil and gas industry in the years to come.

One of the main sessions of the event is titled “How Will NewLegislation & Policy Develop to Transform the Oil & Gas Industry?”and will focus on the policies and legislative measures needed toimprove the Nigerian oil and gas industry.

Many high level officials including other ministers and senators,senior government representatives from the Ministry of PetroleumResources and NNPC and its subsidiaries are also expected toparticipate in the event.

NOG, which will be held as a part of the Nigeria Energy Week, willfeature discussions from senior stakeholders in the upstream,midstream and downstream sectors. The event also aims to providenetworking opportunities for industry players by bringing the entirevalue chain under one roof and helping participants connect with theright people. According to the organisers, the event is evolving toencompass the developing sectors and grow to be a one-stop shop forNigeria’s energy industry.

“The exhibition is a big opportunity for suppliers to exhibit theirservices which is very valuable. It is a unique opportunity for networking.Many businesses have taken off from here, so these are the advantages ofNOG,” said Olubunmi Obembe, former executive general manager atTotal E&P Nigeria, who participated in the event last year.

NOG to address future direction of oil and gas in Africa

FAR to drill two appraisal wells in offshore Senegal oil fieldThe drillship Stena DrillMAX has beencontracted for drilling the two wells.

The last edition of NOG saw participation from more than 250 companies and about6000 visitors from around the world.

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NEWSISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM 7

A REPORT INTO the economyof the South African city of CapeTown found that while PetroSAoffshore wells are hydrocarbon-scarce, the city is active furtherdown the oil and gas value chain.

The Economic PerformanceIndicators for Cape Town (EPIC)report, released by the City ofCape Town, pointed out the city’srig repair sector and ancillaryservices, such as engineering,fabricating, geological andseismic surveying to theupstream sector, create economicopportunites. Additionally, CapeTown is home to one of SouthAfrica’s five oil refineries.

Operation Phakisa was citedas a positive example of howCape Town is playing animportant role in the oil and gasvalue chain. Launched in 2014 bythe presidency, this programmeaims to address the deficienciesin specialised oil and gasinfrastructure needed in theWestern Cape to consolidate itscompetitive position. Thescheme includes deep andshallow water repair facilities atthe Port of Saldanha, andrefurbishments to existing repairfacilties at Cape Town’s port.

Project Khulisa, which hasbeen implemented by theprovincial government, identifiedthe upstream sector as a priorityand plans to work with Transnetto ensure timely implementationof Operation Phakisa andcoordinate infrastructure, such asbulk services and roads.

The value of petroleumexports from Cape Town grew by14 per cent from 2014 to 2015.This is a reflection of thecountry’s weakened exchangerate but it has made petroleumexports more competitive.

Cape Townreport: activein oil and gasbut depleted

WITH THE IMPORTANCE ofgas-to-power projects a strongfocus of Africa Oil Week, heldlast month in Cape Town, thelaunch of the AngwaabeIntegrated Energy Centre inNgwaabe Village, LimpopoProvince, is timely.

The centre is a communityproject launched by Tina Joemat-Pettersson, the South Africanenergy minister, in conjunctionwith Shell SA and the Feta-Kgomo Greater TubatseMunicipality.

The centre promotes the useof diverse energy sources with aview to opening the market tocleaner alternative energyprojects. As well as renewables,gas, in particular LPG, isexpected to play a significant rolein the centre’s programme tobring energy to rural areas.

Diesel, petrol and illuminatingparaffin sales are also part of thecentre’s remit.

The Angwaabe centre is theninth such intiative to belaunched in South Africa, withcentres now in four provinces,Eastern Cape, Limpopo, Kwa-Zulu Natal and Northern Cape.

“I am pleased to note thatShell SA gas has come on boardwith their first integrated energycentre here in Limpopo, whichwe know to be among the mostenergy-poor provinces nationally,”said Minister Joematt-Pettersonwhen she launched the centre inNovember 2016.

SPEAKING AT A side event atthe Abu Dhabi InternationalPetroleum Exhibition andConference (ADIPEC) lastmonth, HE MohammedBarkindo, secretary-general ofOPEC, said that long-termstability is critical to restoring

confidence in the global oilmarket. He was addressingADIPEC at the launch of OPEC’sWorld Energy Outlook.

He told the conference thatstability is essential for drivinginvestment into future petroleumoutput expansion, which is

needed to meet global demandfor energy.

“The future potential forenergy providers is huge,” MrMarkindo said. “No doubt, thereare challenges and uncertaintiesthat we will face, but there arealso tremendous opportunities,and they all equate to growingdemand on all forms of energy –that is oil, gas, renewables, coaland nuclear – to meet theburgeoning demand levels.”

“To meet the forecastedexpansion in demand, theindustry will naturally requiresignificant investments,” hecontinued in his address. “It is then essential for us tocontinue working towardssecuring orderly and stablemarkets with prices at levels thatare conducive to a healthy andprosperous future for allconcerned in the industry.”

OPEC secretary-general champions stability

Integrated energy project for rural SouthAfrica involves Shell SA and local government

The Limpopo province is one of the most energy-poor regions of South Africa.

HE Mohammed Barkindo was outspoken at the Abu Dhabi conference.

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PRIME ATLANTIC CEGELECNigeria Limited (PACE), aNigerian oil and gas servicescompany has produced an Oil &Gas Petroleum IndustryTechnology Organisation(OPITO)-certified CompetenceManagement System (CMS), aglobal process for developingcompetence. PACE has beenoperating in Nigeria since 2005in oil and gas training,maintenance, commissioning andinstallation works. Thecollaborators try to challengetheir technical solutions tosupport their clients with nocompromise on safety and cost-effective solutions.

The PACE training centreoffers necessary equipment(workshop, simulator room,computer-based training

classrooms, sport and leisurefacilities), to executeinstrumentation, systems,electrical, HSE, mechanical,

process and behavioral trainings.The OPITO-certified GlobalTechnical Training Standardsensure good quality. In the

process of building localcompetence, PACE has trainedmore than 800 students tobecome operation andmaintenance technicians.

The company’s trainers alsoconduct regular on-siteassessments to complete thetraining and the know-how ofthese technicians.

It trains its own staff and hasbeen executing the generalmaintenance contract(instrumentation, electrical,HVAC and mechanical) ofUSAN FPSO for four years. Afterhaving performed all themaintenance, and inspectionengineering work during itsconstruction, PACE is nowexecuting all the preventive andcurative maintenance on-sitewith its dedicated team.

Nigerian company develops global competence process

The company’s trainers conduct regular on-site assessments.

Image Credit: PAC

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https://www.ipweek.co.uk/

NEWSISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM 9

FINANCIAL NIGERIAINTERNATIONAL has issued astatement which puts forward aclear challenge to Africa’s oileconomies in the wake of COP22, which was held in Morocco inNovember 2016. The statementcalls for action in terms ofinvestment in renewable energysources and expresses concernabout US President-Elect DonaldTrump’s pre-election claims thatclimate change is a hoax.

“As the drive towardsdecarbonisation gathers pace,Africa’s oil economies will facemore intense fiscal challenges,”the statement said. “Given thestrong link between governmentbalance sheets and private sectorbalance sheets, this will result inserious constraint for businessgrowth and profit.”

Power and agriculture,industries which are traditionalconsumers of oil and gas, werecited in the statement as sectorsthat are leading the way ininnovative climate solutions andgreen development.

The African Risk Capacity(ARC), founded in 2012 as anagency of the African Unionwith a mandate to financeclimate resilience and crisisresponse, is planning to roll outan Extreme Climate Facility andone of its actions will be toissue climate changecatastrophe bonds to attractinvestment from indigenousAfrican banks and internationalfinancial institutions.

For Africa’s oil and gasoperators looking for finance,either from within the continentor internationally, this could makecompetition for much-neededcash stiffer unless renewableprojects are included.

Challenge forthe African oileconomypost-COP 22

SOLEWANT HASCOMMISSIONED a pipe coatingplant in Alode-Eleme-Onne, PortHarcourt, in Nigeria’s Rivers State,in what the chairman of the boardof directors, Professor SylvanusEbohon describes as “a dreamcome true”.

Professor Ebohon said theproject started in 2004 with acollaboration between Solewantand Kema Coating, a Canadiancompany, with financialleveraging from Diamond Bank.

It is expected that the newplant will be instrumental increating jobs for the community.

“This plant is the product ofthe local content philosophy ofthe federal government and thenew driving principle in the oiland gas sector,” ProfessorEbohon told guests at theinauguation ceremony. “We

intend to prove that value-addition in the wellbeing of oureconomy [which] is a task thatmust be done through thisworld class project.”

The plant was inaugurated inNovember 2016 in the presence

of Chief Nyeson Wike, thegovernor of Rivers State, Dr IbeKachikwu, the minister of statefor petroleum, HRH Don Awala.the paramount ruler of Alode,and members of the stateexecutive council.

Solewant commissions a new pipe coatingplant in Port Harcourt

The new plant is expected to be an important job-creator for the region.

EIGHT MEMORANDUM OFagreements (MOAs) have benesugned in Abuja between AlphaGroup, Oilserv, ChongqingConstruction EngineeringGroup and Tianjin Energy todevelop multi-billion dollarinvestment and infrastructure

projects for Nigeria. The MOAswere signed with the support ofthe project’s financiers, theStandard Bank of South Africaand the Industrial andCommercial Bankof China.

These agreements will startthe process for jointly

developing and financing high-profile infrastructure projects.These include crude oil and gaspipelines, oil refineries, ports,highways and railways acrossNigeria. The Gas RevolutionIndustrial Park in Ogidigben,Delta State is already indevelopment and Oilserv haspartially completed Nigeria’sbiggest pipeline project, theEast-West Gas Pipeline OB3,which is a 48-inch pipeline that is slated to transport gas to power plants across the country.

The next step is for the four companies to prepare formal proposals for theauthorities, undertake jointfeasibility studies and participatein joint steering committeeswith major stakeholders.

Lucrative agreements between Nigerian andChinese players include oil and gas projects

The dealmakers in Abuja when the eight MOAs were signed.

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AN ESTIMATED US$14BN ayear in new investment forNigeria is needed over the nextfive years to increase oil outputto 2.2mn barrels a day (bpd) andeven more spending to raise it to3mn bpd, said Ladi Bada, chiefexecutive of Shoreline NaturalResources, a joint venture withoil and gas interests in southernNigeria. He noted aroundUS$9bn a year is currently beinginvested in the oil industry frompublic and private sources.

"If we continue to investUS$9bn, we won't growvolumes," Bada told a businessconference in Lagos recently. Headded that at least US$14bn ayear in new investment wasneeded for Nigeria to produce2.2mn bpd of oil, the production level which thenational budget is based on.According to Bada, Africa's topoil producer will need investmentof between US$18bn andUS$20bn every year for the nextfive years to boost output tothree million bpd.

Nigeria is dealing with itsworst crisis in more than 20years, triggered by low oil priceswhich have lowered governmentrevenues and severely affectedthe currency. At the same time,overall oil production hasbounced back to around 2mnbpd after months of attacks, thatwere mostly carried out by theNiger Delta Avengers. Despite anumber of joint ventures with oilcompanies the Nigeriangovernment was in arrears ofUS$5bn. The government hassaid it was working on new oiland gas policies to encouragemore private investors and boostcrude production by 500,000barrels a day by 2020.

Nigeria urgedto boostinvestment inoil sector

AFRICA OIL AND its partnersin Kenya will drill up to eightexploration and appraisal wells,the company told Reuters.

Africa Oil chief executiveKeith Hill told Reuters thatconstructing a pipeline for Kenya“makes us much more dependenton our own resources forjustifying and financing thatpipeline”, in a push for furtherdrilling to firm up oil discoveries.

“If we could get to a billionbarrels of 2C and, say, 300-350mn of 1C those would give usa pipeline tariff and lending basewhich would work very well forus,” he told Reuters.

According to Africa Oil, thelatest drilling programme willstart with two exploration wells,the first to be drilled at thebeginning of December, which will then see the drilling of

two appraisal wells to exploreexisting finds.

The partners plan to secure afinal investment decision for theKenya project in the latter part of2018, with full production due tobegin around three years later.The Kenyan governmentrevealed last month it aimed to

enter a joint development deal for the pipeline in the near future.

The company has outlined itwill begin small-scale productionin 2017. Full-scale projectionoffers a 890 km (560 miles)pipeline, which will set thegovernment back US$2.1bn.

GE’S NEW PRESIDENT andCEO of sub-Saharan Africa foroil and gas, Ado Oseragbaje, seesa promising future for GE infurthering the development ofthe industrial economy acrossthe region. “People sometimesbelieve that localisation raises

costs, but that’s not true. We haveto understand the obstacles thatcontribute to the increase incosts,” stated Oseragbaje. According to Oseragbaje, one ofthe problem’s Nigeria faces todayis the erratic supply of electricitywhich affects local manufacturing:

“There are also issues in the region around taxation,fiscal regimes and import, exportcosts that add to the overallproject costs.”

GE is of the view thatincreasing spending inlocalisation is worth it. This hasreduced the complexity of supplychains, lowered costs associatedwith transporting parts and jobcreation has boosted localeconomies.

“We have to start somewhereand if we don’t, then 30 yearsfrom now, we’ll still be havingthe same conversation. There willbe marginal increases in cost asyou try to ramp up, butthereafter, you would have builtup sufficient competency tocompete on a global scale,” saidMr Oseragbaje.

Localisation vital for GE’s oil and gasbusinesses in sub-Saharan Africa

Africa Oil to start drilling new Kenya wellsin December

Two exploration wells will be drilled in December 2016.

Nigeria is affected by an erratic supply of electricity. (Image Credit: Robert Prather)

Image Credit: JHV

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S03 ORA 6 2016 - Valve World_ORA Master Template - 2016 New 15/12/2016 12:57 Page 11

http://www.hytera.com/

OVER 700 EXHIBITORS from 40countries and 12,350 trade visitorscame to the fourth Düsseldorf ValveWorld Expo, which took place against

the backdrop of a rather subdued businessclimate in the industrial fittings industry.Posting noticeable growth in both exhibitornumbers and square metres, it proved thebiggest Valve World Expo in Düsseldorf so far. “As a key technology, industrial valves are

indispensable for just about every branch ofindustry. As an innovation platform andmeeting point for this sector, the Valve WorldExpo has developed into what is theinternational “place to be” today,” rejoicesJoachim Schäfer, Managing Director at MesseDüsseldorf GmbH.Halls 3, 4 and 5 of the Düsseldorf

Exhibition Centre saw current technologies,components and systems presented from the

most varied industrial fittings segments. Onceagain running as a parallel event was theValve World Expo Conference in Hall 4. The 725 companies exhibiting at the Valve

World Expo showcased the latest valves, valvecomponents and parts, actuators andpositioners, compressors, measuring andcontrol technology, upstream supplies,service, support and consulting services andengineering services. Software as well asrelevant associations and publishing housessupplemented the ranges. Exhibitorswere satisfied with the

placement of their products in Düsseldorf:“The Valve World Expo is also a must-goevent for Hartmann Valves. We have investedheavily in our stand presentation. This reallypays off since this trade fair is so important asa sectoral get-together. We also found thatmany international visitors came here thisyear. To my mind there is only one conclusionfor us to draw: We have been part of it sincethe Expo has existed – and it will stay thatway,” said Sonja Seitz, marketing manager atHartmann Valves. Approximately 70 per cent of the guests

came from abroad, most of them from Europe

and Russia as well as from the fast growingeconomic regions in Asia, the Middle Eastand South America. With two satellite events held biennially in

the USA and China in the odd years, theValve World Expo is also well positioned onthe international stage. This means itcontinues to further expand its position as thenumber one trade fair in the industry. In 2016 most trade visitors took an interest

in valves, valve components and parts,actuators and positioners, engineeringservices and software, compressors as well asin associations and publishing houses. Some50 per cent were users of valves and valveproducers, followed by valve dealers, serviceproviders, and trades and skilled crafts.Visitors came from the oil and gas

industry, petrochemical, chemical, food,marine and offshore industries, water andwaste water management, automotiveproduction and mechanical engineering,pharmaceutical and medical devicetechnology as well as power plant technology. The next Valve World Expo and

accompanying technical conference will be heldin Düsseldorf from 27 to 29 November 2018.

As a key technology,industrial valves areindispensable for justabout every branch ofindustry. As an innovationplatform and meetingpoint for this sector theValve World Expo hasdeveloped into what is theinternational “place to be”today.”

Joachim Schäfer, Managing Director atMesse Düsseldorf GmbH

Düsseldorf welcomed the Valve World Expo where valves manufacturers and users from the oil,gas, petrochemical and power generation sectors came together to display the latest innovations

from across the world.

VALVE WORLD EXPO NO. 1 TRADE FAIR

FOR INDUSTRIAL VALVES

FEATURE ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM12

Visitors at Valve World Expo2016 were treated to a number oflectures and educational sessions.(ValveWorldExpo/Messe)


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THE LOWER-FOR-LONGER OIL pricepredictions were ever-present at Africa Oil Week,

held in November in Cape Town,but the focus for many speakerswas on opportunities rather thanchallenges for those seeking tooperate in Africa’s markets.

However, there were calls forimproved regulations and greatertransparency across Africancountries, especially in the up-and-coming hotspots as well asthe more mature markets. Theoverriding perception is thatAfrican governments want clarityand consistency, said Ian Cross,

managing director of energyadvisor Moyes & Co. His viewwas that education in general isessential for success.

Namibia was seen as one ofthe top African hotspots, eventhough it is faced with theproblem of small blocks. Thesignificant discoveries in Senegaland Mauritania, as well as Kenya,Tanzania and Mozambique (seepage 22) were also cited asenabling them to becomeemerging major players.

The ever-present challenge ofaccess to finance was also afeature of the conference. In hisopening address, Global Pacific’s

Dr Duncan Clarke talked aboutthe “worldwide problem of raisingcapital” for oil and gas projects.Global Pacific is a leadingadvisory firm to the upstreamindustry. “It doesn’t affect thepotential, just the timing ofunlocking capital,” he said.

In terms of adding moreindependents to the mix inAfrica, Dr Clarke’s view is “themore the merrier”.

Trends have emerged withdeals done across the continent.Mike Lakin, managing directorof Envoi Ltd, another upstreamadvisor, spoke about data frommore than 5,600 deals done

between 2000 and 2016 in Africawith 47 per cent onshore, 50 percent offshore and three per centin transition. He said that only 25per cent of deals required seismicdata and that there is “bigpotential” for unconventionals.

“There is still oil to find ifwe know how to go about it,”said Lakin. “Africa haspolitically difficult areas but itcan still be unlocked.”

The importance ofexploration and, therefore,geologists was another strongtheme of the conference. Lakinpointed out that future E&Pfunding is a challenge.

The mood was largely positive at Africa Oil Week, with plenty of speakers pointing out theopportunities presented by the low oil price environment, rather than the downside for the

hydrocarbons industry. Georgia Lewis reports.

LOOKING AHEAD TO A BRIGHT FUTURE AT

AFRICA OIL WEEK

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The Cape Town International Convention Centre was the scene of Africa Oil Week 2016.

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“People have forgotten aboutexploration which is absolutelycritical,” said Lakin. “Geologistsare vital. We need experiencedtechnical staff to successfullyreplace the ones who will retire.”

He spoke of “short-termism”,in particular “the differencebetween industry and investorexpectations”, and the“knowledge loss” in which theindustry is losing experiencedtechnical staff and the need forthem to be replaced in order forexploration to continue.

Olalekan Akinyanmi, CEO ofE&P company Lekoil, said that“money, assets and people” arethe three factors that areimperative to his company’ssuccess in Nigeria. In regard tothe “people” part of the equation,he told the conference that Lekoilneeds “people with a deepunderstanding of geology”. Hereferred to the company’s in-house training for geology - “thealmost-lost arts” - so that Lekoil“keeps that knowledge”.

Bruce Byrd, chief geologist forRhino Resources, another E&Pcompany, offered a “trick or treat”analogy for the industry’s ongoingsurvival: “The trick is to maintainoperational security, the treat is forthe oil price to reach $50”.

Byrd said the company’sexploration strategy is low-price,curtailed exploration, budgetsconstrained, less competition andmore attractive entry terms,along with exiting acreages oncediscoveries are made. Rhino isfocused on South Africa offshore,AGC, Guinea Bissau, andNamibia with a new venturesprogramme focused on geology,and oil, rather than gas.

However, there were plenty ofvoices speaking up for a brightfuture for gas across thecontinent.

“Gas is the new oil for Africa,”said Peter Elliott, director ofNVentures. He said thatexploration is essential and bothNorth and East Africa’s gasbasins are showing greatpromise, while West Africa is

experiencing “a challengingtime”. He added that moreexploration in Angola and theGulf of Guinea “has to happen”.

Urging African hydrocarbonsplayers to “embrace gas” alongthe entire value chain, Mr Elliottsaid that developing gas reserveswill also have Corporate SocialResponsibility (CSR) andenvironmental benefits in termsof job creation and as thecleanest burning fossil fuel.

According to representativesfrom the Baker McKenzie law firm,gas in South Africa is a bright spot,in particular the gas-to-powermarket. In the long term, thedomestic market could proverewarding, with projects expectedto come online April 2017.

Helium could prove to be thewildcard commodity with priceshovering above US$100 per 1,000cubic feet. Dr Peter Dolan, anindependent explorer andinvestor with Dolan &Associates, cited Helium One asan example of how Africancompanies can potentially profitfrom the development of heliumfrom gas reserves. He said that inTanzania “gas with high heliumin surface seeps” is present and,while it is “early days”, it is a gasthat is increasing in demand.Byrd also mentioned thepotential of helium, which hasbeen discovered in South Africa’sKaroo Basin.

Dr Dolan also offered advicefor smaller operators interestedin Africa. These includedthorough understanding of targetareas using recent and legacytech data; technical competenceto compete with largercompanies; totally engagedfounders; savvy negotiation forappropriate license terms;keeping shareholders informed asmuch as commercialconfidentiality allows; and beingopportunistic through calculatedrisks and networking.

Licensing rounds could alsoprove important for operatorslooking to get a foothold orextend their presence in Africa.As well as the first-ever Somalianlicensing round being announcedat the conference (see page 22),an update on the licensing roundfor Congo also took place inCape Town. The 2016 licenseround was announced inOctober last year with onlineregistration for interestedcompanies opening the followingmonth. From 15 October 2016,tender documents becameavailable and the closing date forsubmission of offers is 31 January2017. It is expected that by theend of March, bids will havebeen appraised and resultsannounced. Congo has been anoil-producing country since1960. In readiness for thislicensing round, Congo's new

petroleum code was ratified on12 October this year.

The new frontier of SenegalThe world class oil discovery offthe coast of Senegal is a gamechanger. Gordon Ramsay,executive general manager forbusiness development for FAR,an Australian-based explorerwhich is in partnership withKosmos in Senegal told theconference that it has taken just21 months from discovery tostatement on commercialitythanks to “good geology andgood fiscal terms”.

Senegal is the ideal area toinvest in oil and gas, said JosephO. Meadou, E&P director ofSenegal National Oil Company.Petrosen said: “It is a new area ofexploration, with ultra-deepchannel and turbidite depositsand proven source rocks. Thereare multiple play types in thedeep, and ultra offshore andpotential for gas shales onshore.”

The hydrocarbon productionincludes the 2014-2016 discoveryof the Sangomar offshoreProfond Block, with the first oilanticipated in 2021; the St Louisand Cayar offshore ProfondBlocks; St. Louis offshoreProfond, with the first gas by2020-2021.

“The main reason to invest inSenegal is “an exceptional qualityof life,” he said.

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Off the coast of Dakar, the Senegalese capital, lie enormous offshore oil deposits, which could be a game-changer for the country.

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Namibia, Madagascarand ComorosdevelopmentsMaggy Shino, petroleumcommissioner, Namibia’sMinistry of Mines and Energy,explained that the exploration forhydrocarbons in Namibia startedaround 50 years ago with seismicacquisition and further drillingonshore, without significantresults. The first seismic anddrilling took place in the 1970swith the discovery of Kudu gasfield. There are now 32 wells inNamibia and, according to Shino,there is great potential for oil andgas.

“Despite the good start, thenext 40 years were characterisedby intermittent activities in termsof exploration. Nevertheless overthe last 10 years, aggressiveseismic campaigns and severalwells changed the explorationrhythm. The year 2012 marked anew stage with drilling and thediscovery of the first oil offshoreNamibia in 2013,” she said.

“The Kudu gas-to-powerproject is recognised as vital toaddress the growing demand forclean and sustainable energy inNamibia and the southern Africaregion,” she said.

Lekoil is also making earlyinroads into Namibia with theestablishment of Lekoil Namibia,a separate company.

Olalekan Akinyanmi, CEO ofLekoil, described Lekoil Namibiaas “exciting but there is still a lotof work to do.”

“It is easier to do business inNamibia, [compared to someother African countries] but theregulations are still beingtweaked,” Mr Akinyanmi said.

John Austin, general manager,Sub Saharan Africa, for OMVhas spoken positively about thepossibility of Madagascar’s GrandPrix offshore block going intoproduction in the coming years.

Mr Austin told the conferencethat there are plans to drill in2018. He described Madagascaras "still an important componentof growth for the future". The

Grand Prix work is part of astrategy that has become popularamong companies investing inAfrica during the downturn, thatis, to acquire assets at a low costwith a view to monetising whenthe oil price picks up again.

OMV has acquired seismicdata and is a 90 per cent stakeholder of a license that expires inSeptember 2019. According tothe geological data, theMorondava basin is analogous tothe Ivorian-Tano basin, and theGrand Prix block potentiallycontains "well over 2 bn barrelsof oil". The company is nowseeking a farm-out partnerwilling to take on a stake of up to50 per cent.

According to Mr Austin, theproject is "less about volume,more about value". He added thatthe Madagascar governmentoffers an attractive fiscalenvironment with a take of lessthan 40 per cent.

Lalanirina Ranoroarisoa,Hydrocarbons Manager,Hydrocarbon Division, OMNISMadagascar, gave a geologyoverview of Madagascar and ofthe Morondava offshoreopportunities. OMNIS is thestate-owned agency responsiblefor managing, developing andpromoting Madagascar’spetroleum and mineral resources.

Developments of E&P

activities in the country includethe dry gas discovery in onshoreMorondava South basin. Indiscussing the resource potentialof the offshore Morondava Basin,she said that sediments are morethan 10km thick. The existenceof working petroleum systemshas been confirmed by well dataand DHIs. There was thepresence of mature source rocksexpelling hydrocarbons prior tothe formation of traps. There isthe possible extension ofhydrocarbons discovery inonshore to the offshore zone.Modern Seismic 2D Data withgood quality. The Frontier basinis also promising forhydrocarbon exploration.

Dr Noildine Houmadi,Director, Geological Bureau ofthe Comoros, discussing theoffshore zones, corporate playersand exploration potential in theComoros, said the oil industry isrelatively new in the country. ThePetroleum Law was adopted in2012, and an agreement withRhino PSC is, now beingprocessed.

“The legal framework is stableand transparent and was initiatedin 2012,” he said. “Licenseawarding has to be addressed bythe Ministry of Petroleum.”

He said petroleum contractshad been issued to BahariResources and Safari Petroleum-

Western Energy. A third contractcovering Block 17 and 24 hasbeen awarded to the RhinoResources Company. Explorationis strongly supported bygeosciences data.

“The exploration potential inrecent studies indicates theachievement of optimumconditions to allow oilexploration,” he added. “So muchmore needs to be done.”

Challenges in WestAfrica: Ghana, Nigeriaand AngolaGhana’s new Petroleum Law wasa hot topic of discussionregarding West Africa at theconference.

“Petroleum resources arefinite, non-renewable resourcesthat require optimal exploitation,conservation and efficiencyprinciples,” said Theo Ahwireng,acting chief executive officer,Petroleum Commission inGhana, in explaining thecountry’s new E&P Act 2016.“Providing environmentalresponsibility buttressed by the‘Polluter Pays’ principle, and theprinciple of economic justice,inter jurisdiction of territorialequity, is crucial.”

In the act, provisions havebeen made in an order thatfollows the sequential phases ofupstream activities to provide


Namibia’s gas-to-power project has been instrumental in meeting the country’s energy needs.

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http://www.tilone.net/

ease of reference and userfriendliness.

“The act further clarifies theroles of the state actors whichinclude: the Ministry ofPetroleum as representative ofthe State and Developer ofPolicy; the PetroleumCommission as the UpstreamPetroleum Industry Regulator;the National Oil Company(GNPC) which conductspetroleum operations eitheralone or in partnership withother parties,” Mr Ahwireng said

“Transparency provisionincluding open competitivebidding has been introduced andprovisions for unitisation andcoordination of activities havebeen enhanced,” said MrAhwireng. “The management ofGhana’s petroleum resources inaccordance with the principles ofgood governance andtransparency are the object ofthis Act,” he added.

Speakers representingNigerian operations were largelypositive about the future.

Oisin Fanning, CEO ofspecialist oil and gas companySan Leon Energy talked aboutOML 18, an onshore play in thesouthern Niger Delta near PortHarcourt. The site has 1,035sqkm of mangrove swamps withnine fields, four of which areproducing. The oil is transportedvia Nembre Creek to BonnyTerminal. He said security is

important, local people areemployed and no days have beenlost to vandalism or theft.

Seinye Lulu-Briggs, executivevice chairman of Moni Pulo,outlined the company’s success inthe Nigerian market, withoperational excellence as itsforemost priority.

“We strictly adhere toindustry standards,” she said.

A “flexible, balanced portfolioof assets” means the companycan “divest or bring in partners”Mrs Lulu-Briggs said of theportfolio which she describes as a“good geographical spread” ofon- and offshore sites.

She also spoke of theimportance of robust security,leading to “zero disruption orfatalities” and forming strongrelationships with localcommunities.

“Our CEO is indigenous tothe Niger Delta so we knowwhere it bites,” she said.

In his address to Africa OilWeek, Olalekan Akinyanmi, CEOof Lekoil, talked aboutdeveloping corporate assets inthe continent.

He said that Lekoil, “anindigenous E&P company” is“poised for strong productiongrowth” and is “headed forcommercial production”, whilekeeping costs under control andcreating value “throughout the cycle”.

“Money, assets and people”

are the three things MrAkinyanmi cited as beingessential for successfulhydrocarbon operations. He saidthat money and “a solid group ofbackers” is the starting point, andthis leads to investment in assets,technology and people.

“We are making painstakingefforts to build a strong team,”said Mr Akinyanmi of thechallenge to find the rightpeople. He added to the growinggroup of voices at the conferencecalling for more geologists to getinvolved with oil and gas.

“We have in-house training inthe almost-lost arts so we keepthat knowledge.”

There was also optimismfrom Friburge, an Angolanservices company.

Speaking to Oil ReviewAfrica, Dalila Iddrissu, Friburge’sbusiness development manager,said that the company isbenefiting from the combinationof the low oil price climate aswell as governments introducingmore stringent environmentalregulations.

ABC Orjiako, CEO of Seplattold Oil Review Africa that thelow oil price environment, aswell as Nigerian local contentrequirements, presentopportunities for the company.

The Nigerian E&P companyhas weathered the storm createdby the oil downturn "very well"according to Mr Orjiako. He

described the current challengesas "surmountable". Keeping aneye on costs, fiscal discipline andalternative routes for oil were allcited as solutions for ongoingsuccess.

“We’re small so we’re nimble,we have no huge capex,” MsIddrissu told Oil Review Africa.

Ms Iddrissu referred to anAngolan government directive inregard to water discharges andexplained that Friburge isoffering offshore operators newwater treatment technologywhereby the process happens insitu. The water is treated offshorevia centrifuge and CTU methodsand, when it is safe for discharge,it is released into the sea, saving onshore transport andtreating costs.

The opportunity for operators to simultaneouslylower costs and meetenvironmental regulations makesFriburge’s services very attractive,according to Ms Iddrissu.

“Companies are more open tonew technology and are moreopen to talking to us, it gives usthat foot in the door,” she said.

North AfricaWill Holland, executive vicepresident of Sound Energy talked about the company’sonshore acreage in Morocco.Sound Energy has partnered upwith an Italian private equityfund as well as Schlumberger.Production from Italian interests covers the costs inMorocco.

The Tendraka area, whichborders Alergia is “known to be avery gassy area”, Mr Holland said.He added that local companiesdid not have the best technologyand a well drilled in 2006 wasnot drilled properly. Geologically,it is similar to Algerian sites andit covers 14,500km².

“The challenge is to prove itcan be drilled properly,” he said.Schlumberger farmed into theproject and drilled a vertical wellin early 2016, which Mr Hollandsaid led to a “great result.”

AFRICA OIL WEEK18

Africa Oil Week attracted a range of quality speakers representing multiple sectors of the African hydrocarbons industry.

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EAST AFRICA’S NEWhydrocarbon prospectsattracted much discussionat Africa Oil Week.

Mozambique was described byPeter Grant, director ofInternational Solutions, as the“jewel in the crown” with itsPande and Temane gas fields,Tanzania’s promising gas depositswere highlighted, and Kenya maywell get the jump on its southernneighbours in terms of pace ofdevelopment. Meanwhile, theconference was also used as aplatform for announcementsabout Somalian licensing rounds.

Gas in particular could proveto be a massive boon to EastAfrican economies.

“Gas is the new oil for Africa,”said Peter Elliott, director ofNVentures. He added thatexploration is essential becauseboth North and East Africa’s gasbasins are very promising.

Urging African hydrocarbonsplayers to “embrace gas” along

the entire value chain, Mr Elliottsaid that developing gas reserveswill also have Corporate SocialResponsibility (CSR) andenvironmental benefits in termsof job creation and as thecleanest burning fossil fuel.

Tanzania has an estimated 50tcf of natural gas deposits and isalready involved in the gas-to-power sector, with gas fromMtwara providing 60 per cent ofthe country’s energy needs.

Additionally, opportunties forhelium exploration anddevelopment were cited at theconference. Dr Peter Dolan, anindependent explorer andinvestor with Dolan & Associates

said that operators in Africa canpotentially benefit from heliumexploration. He said that inTanzania, “gas with high heliumin surface seeps” is present.

Martin M. Heya, Kenya’scommissioner for petroleum,shared his insights into the oiland gas exploration wells thathave been drilled in Kenya since2012. He mentioned that wellsintercepted commercial crude oil reserves in Blocks 10BBand 13T in the Turkana CountyTertiary Rift Basin and the otherin Block L8 offshore Lamu Basin.One well in offshore Block L10A,formerly operated by BG Groupnow Shell, has both crude oil and

natural gas. The other three wells with minor discoveriesinclude Mbawa-1 (natural gas)Block 8 Offshore Lamu Basin, Sala-1 (gas) Block 9Anza Onshore Basin, andSunbird-1 (both oil and naturalgas) Block L10A offshore Lamu Basin.

Heya said the commissionwas working on the NationalPetroleum Master Plan and thatan early oil pilot schemepreparatory initiatives are oncourse for being commissionedin March 2017.

Despite the “depressed crudeoil prices, ongoing reforms in thecountry’s sector are on course,”he said.

In his presentation onbuilding an African portfolio,James Phillips, president andCEO of Africa Energy, citedUganda’s Lake Albert as apromising area. Exploration inthe Albertine and Nile basinscommenced a decade ago, and,

Gas is the new oil forAfrica...exploration is essential, becauseboth North and East Africa’s basins arevery promising”

Mozambique, Kenya, Tanzania, Uganda and Somalia are all vying to be the next producinghydrocarbon nation in Africa. At Africa Oil Week, there was much positive discussion about how

these new producers can move forward in challenging economic times.

OPPORTUNITIES FOR NEW HYDROCARBON PRODUCERS IN

EAST AFRICA


Offshore gas in Tanzania’s Mtwara region ishelping the country meet its energy needs.


while the country is yet to enjoy the benefitsof oil production, significant investment hasfollowed the first discoveries.

Africa Oil Week was the scene of anannouncement in regard to Somalia’s first oilblock bid round, which is expected to launchin the second quarter of 2017.

Jamal Mursal, permanent secretary to theSomalian Ministry of Petroleum and MineralResources, told the conference that detailsshould be available by March 2017 inreadiness for bidding to commence on blocksoff the coast of Somalia. The 2D seismicsurvey data of the area, covering 20,566km,has been completed by Spectrum.

In contrast to the heavy focus on gas inEast Africa at the conference, Dr NeilHodgson, executive vice president ofgeoscience for Spectrum, outlined thegeological findings of the survey at theconference and concluded: "This is an oilstory, not a gas story."

In readiness for bids, the Somaliangovernment has bolstered the country's legaland regulatory framework. With assistancefrom the World Bank, its laws pertaining to oiland gas have been amended in the wake of thecountry's federalisation, and drafting is nowcomplete. A downstream law has beenintroduced and a new PSA model developedwith assistance from the World Bank and theAfrican Development Bank.


Somalia’s first roundof oil block bidding isexpected to be launchedin the second quarter of 2017”

Tullow Oil has been involved in Uganda forseveral years.


http://www.slicshoes.com/

TWO MARITIMEBORDER disputes arebrewing in offshore Westand East African waters,

but these could well be just thefirst two of many such clashes toarise over the next few years,delegates at the Africa Oil Weekin Cape Town were told in aspecial break out session. Theissues involved were explained byRobert van de Poll, theinternational manager of Law ofthe Sea at Fugro; and Dr PieterBekker, a partner at CameronMcKenna law firm.

A presentation by the twomen took a whistle-stop touraround Africa discussing eachregion’s potential flash pointswhen it comes to maritimeboundaries and offshore oil and gas acreage.

Ironically, Congo-Brazzavilleissued an oil licensing roundduring the Africa Oil Week, andat least one of the blocks on offerpartially overlaps an area alreadyawarded to Total by Angola

But the two disputes that arecurrently being argued are thosebetween Côte d’Ivoire andGhana, and Kenya and Somalia.

Côte d’Ivoire and Ghana havesubmitted a case that affects part ofTullow Oil’s Tweneboa-Enyenra-Ntomme gas field discovery, whichcame onstream in August.

Tullow says the case will nothave an impact on its block – buta decision is expected within thenext 12 months, insists Tim

O’Hanlon, vice president ofTullow in Africa. NeverthelessTullow will halt further drillingin the Tweneboa, Enyenra,Ntomme (Ten) Project oil field asa result of this dispute.

The TEN project showcase isa joint-venture partnershipbetween Tullow, Kosmos Energy,Anadarko Petroleum, Petro SAand the Ghana NationalPetroleum Corporation (GNPC).The maritime dispute ensued in2014 when Ghana took Côted’Ivoire before the InternationalTribunal on the Law of the Sea(ITLOS) over the Ivorian’s claims.

In a company announcement,

Tullow stated: “Drilling is notexpected to recommence on theTEN field until after theresolution of the Côte d’Ivoire andGhana border dispute through theITLOS tribunal whose decision isexpected in late 2017.”

It’s a high stakes game.Production at the TEN fieldexpects to eventually reach80,000bpd if the ITLOS rulingfavours Ghana and the remaining13 wells are drilled. The GNPChas already spent more thanUS$2mn on the dispute. Kenyaand Somalia are also going tocourt over offshore fields, adispute that affects deep-water

assets like Eni’s offshore blocks.Kenya has halted exploration on the block until a decision is reached.

Kenya’s argument is that therehas been a pre-existingagreement (MOA) signedbetween the two governments in2009 that predates the UN’sConvention on the Law of theSea. That 2009 agreement set themaritime border as running dueeast from the land border.parallel to the lines of latitude.

Should the case be found forSomalia, four major offshoreblocks licenced by Kenya wouldbe affected. One highly placedKenyan oil and gas official said,off the record, that in hisopinion, Somalia had thestronger case.

There are, however, otherways of settling disputes – suchas by companies buying upblocks on either side of adisputed area, as Kosmos Energymanaged to do to avoidcontroversy over its explorationin Senegal and Mauritania. Andthere are examples ofinternational agreements creatingjoint development zones such asstruck by Guinea Bissau andSenegal to establish an area ofjoint exploration.

So too does the Nigeria-SaoTome & Principe JDZ provide anexample of how cooperationbetween neighbours can trumpthe expense and uncertainty ofgoing to court.

The presence of oil and gas reserves frequently leads to disputes over boundary delimitations,particularly in offshore maritime areas. Stephen Williams reports from Africa Oil Week about

issues facing companies and governments across the continent.

BORDER DISPUTES:

DRAWING THE LINE


Tullow Oil’s vicepresident for Africa, Tim O’Hanlon at AfricaOil Week.


ADIPECISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM 23

OIL COMPANIES THATinvest during the currentdownturn in oil pricesstand to profit the most

when supply and demand comesback into balance, according tothe UAE’s energy minister, HisExcellency Suhail MohamedFaraj Al Mazrouei.

Addressing the ADIPECconference in Abu Dhabi lastmonth, he said that the long-term demand for oil outstrippedsupply, and that for companieswith strong balance sheets and along-term view that now was thetime to invest, not to withdraw.

“The oil industry is inherentlycyclical, this is a basic point thatoften gets overlooked in the

short-term noise – and findingan equilibrium between supplyand demand is almostimpossible,” Mr Al Mazroueisaid. “However, demand hasconsistently increased, and thebusiness cycle that drives anincrease in demand moves muchmore quickly than the oilindustry can expand its capacityfor supply.”

Mr Al Mazrouei said aroundUSD$200 bn worth of oil and gasprojects had been postponedworldwide because of the fall inprices. With the industry needingbetween six and nine years tomove from discovery of newdeposits through to production,the dramatic fall in investmentwould leave companies makingthose cuts slow to respond when

the market started to rise.By contrast, those that

invested while asset prices werelow would be ideally positionedwith to meet increased demandwith additional capacity, gaininga bigger share of a future risingmarket: “The dramatic reactionin reducing investment willinevitably lead to demandcoming back into equilibrium,and ultimately exceeding supplyin the coming years. We can seethe cyclical nature of the industryreinforced before our very eyes.For those companies that arestrong enough to hold theirnerve and make strategic long-term investments, this is a goldenopportunity.”

For companies that are strongenough to hold their nerve and makestrategic long-term investments, this is agolden opportunity ”

It was business as usual for oil and gas players at ADIPEC with more than 2,000 exhibitors, a busy schedule of speakers, and calls for investment even if oil prices at US$50 become

the new norm. Georgia Lewis reports.

OPTIMISM URGED BY SPEAKERS AT

ADIPEC 2016

OPEC was high on the agenda at many sessions duringADIPEC 2016, held in November in Abu Dhabi.

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Mr Al Mazrouei said the veryfact that oil had fallen sosignificantly in price could itselftrigger a recovery. Lower costsacted as an economic stimulusfor countries that were netenergy importers, supportinggrowth in the global economy,and ultimately increasingdemand in the commoditiesmarkets, he concluded.

Offering a Nigerianperspective, Wale Tinubu, groupCEO of Oando, addressed theconference on the challenges andopportunities facing the country.

Mr Tinubu opened hisaddress to a panel discussion onthe resilience of oil and gas witha global perspective, discussingthe importance of meeting COP21 climate change commitmentswhile meeting energy demands,particularly in the developingcountries of Africa and Asia witha growing middle class.Additionally, he emphasised theimportance of focusing onpetrochemical development,increased refining capacity andplaying a role in industrialisation.

"Is this the new norm? Fiftydollars a barrel for crude?" heasked the conference, adding thatit is important to "ensure wedrive the supply in a moreefficient manner".

"We will have a soft marketfor a long time," Mr Tinubu said."Cost reductions are appropriatefor a company to ensure a goodreturn."

He described Africa as"without a doubt an excitingprospect", with 7.6 per cent ofglobal gas resources andparticularly promising gasprospects in Mozambique andTanzania, oil in Uganda, and oiland gas in Nigeria. Mr Tinubuadded that there is an opportunityfor Africa in terms of boostingproduction of refined products,moving away from being a netimporter of crude oil, andbecoming an exporter instead.

High capex poses a challengeto African operators, accordingto Mr Tinubu, citing costs in

Angola of $36.20 per barrel and$35.40 per barrel in Nigeria.Other challenges for Africa thatMr Tinubu highlighted include adrop in rig counts, project delaysand cancellations, and a declinein export revenue.

In regard to increasing therole of renewables in the energymix, Mr Tinubu said thatalternative forms of energy are"not able to provide the speed weneed to satisfy global demand"and that "renewables are notreceiving the attention theyshould be receiving".

He then focused on Nigeria inparticular, saying that operatorsneed to "turn challenges intoopportunities".

Mr Tinubu said that positivesfor the Nigerian oil and gasindustry include providingcustomised security solutions,the government is restructuringthe Petroleum Industry Bill, andjoint venture budgets have beenfinalised for 2017.

"Indigenous companies [suchas Oando] will focus on areasmultinationals avoided," said MrTinubu.

During the question andanswer session, Mr Tinubu wasasked about the challenges faced

by the Nigerian oil and gasindustry for expansion.

"The best thing Nigeria cando is create a strong NOC," hesaid, with "improvedtransparency" and using resourcesto raise capital as the priorities.

"[Oando] had a torturoustime [but we have built] asuccessful export business andwe have 500-strong petrolstations, and big upstreamproduction," Mr Tinubu said.Leveraging new technology andcost efficiencies were flagged upas being important to continue toexpand.

"I think the worst is over, weare going to be ever-present," he

said in his closing remarks.Among the exhibitors at

ADIPEC, there was alsooptimism particularly in regardto the potential of the Africanmarket. Speaking exclusively toOil review Africa at the event,Andy Leng, vice president ofKerui Petroleum, a serviceprovider headquartered in China,said the current financial climatehas created “opportunities tochange strategies”, such as takinga localised approach in thecountries where they operate.

Mr Leng described theAfrican market as important toKerui and praised the Chinesegovernment for facilitating theirwork in the continent withfinancial support. Egypt, Algeria,Libya, Gabon and Nigeria are allsignificant markets for thecompany.

Paul Olson, managing direcorof safety clothing manufacturerRed Wing, also spoke highly ofopportunities in Africa, with thecompany being “wellrepresented” in 12 Africancountries, including the majoroil and gas markets of Nigeria,Angola, Egypt and Ghana, andemergent East African countriessuch as Kenya and Tanzania.

The best thingNigeria can do iscreate a strongNOC withimprovedtransparency, usingresources to raisecapital as thepriorities”

As ever, ADIPEC 2016 played host to an extremely busy exhibition with thousands of visitors daily.

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ANGOLA ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM26

THE ORGANISATION OFthe Petroleum ExportingCountries' (OPEC)decision to slash crude oil

production by around 1.2 mbpdto bring its ceiling to 32.5 mbpd,effective 1 January 2017, is aclear attempt at addressingsupply and demand imbalances.For Angola, OPEC said thatproduction would dip from*1,751 tbpd to 1,673 tbpd underan agreed adjustment level. ORAasks Otavio Veras, researchassociate at the NTU-SBF Centrefor African Studies at NanyangTechnological University inSingapore – a trilateral platformwith government, business andacademia that promotesknowledge and expertise onAfrica – for his take on the pathahead for Angola.

Oil Review Africa (ORA): Theoil markets are braced formore upstream investmentcuts, risking a productionshortfall in a few years' timeand a potential boom/bustcycle in the 2020s, accordingto the IEA's World EnergyOutlook. Combined withOPEC's decision to cutproduction, how do you seeAngola faring short term?Otavio Veras (OV): I don’tbelieve there will be a sharp andsudden hike in oil prices. I agreethe last two years saw lowupstream investments but, sincemost of the greenfield offshoreprojects take a few years from

“final investment decision” dateuntil the first oil, this gap in newdevelopments will be sensed atsome point. However, differentlyfrom what happened in the1970s, the main oil consumercountries have a robustinfrastructure for storage thatcan be used during times ofshortage. These stocks will makea buffer to any shortage in oilsupply and are likely to softenprolonged price rises.I was surprised with OPEC’s

decision on cutting oilproduction. After so manyattempts, it finally reached anagreement. The immediateconsequence was a rise in the oilbarrel price of some 9 per cent.However, there are a few pointsthat have to be observed in themedium term. There are nopenalties for countries that fail tocomply with the oil productiontargets. In the 1980s, a similardecision was made by OPEC oncutting production. Saudi Arabiagreatly decreased its oil outputbut other members of the groupdid not comply with the deal.That hit the Arab country hard,which led to 16 years of budgetdeficit as it lost market share inthe global market. So, there ishistorical precedent on non-compliance of these deals andthat was probably the reasonOPEC took so long to finally takeaction.Another point to keep in

mind is that the US is not a netoil importer anymore. The shale

revolution led to the increasingdomestic production of oil. Thedrop in oil prices made shale oilproduction unprofitable andmany companies stoppedproducing. However, once oilprices rise to more than US$60,these wells become profitableagain. In my opinion, the oilprices are likely to be cappedaround the US$60 threshold forthe next couple of years.Angola should not rely on a

revival of the glorious times ofhigh oil prices any time soon.The country still lacks stronginstitutions and a welcomingbusiness environment. Adding tothat, Angola’s oil reserves aredeepwater offshore. Theseconditions create a high cost ofproduction. The advantageAngola has over Nigeria is thatits main oil buyer is China.Demand for oil in China shouldgrow in the next decade as itsmiddle class becomes larger andhouseholders start buying cars.More cars mean increasing

demand for gasoline and,consequently, for crude oil.

ORA: The IEA report sayshigh demand is projected tocome from freight, aviationand petrochemicals in thefuture. Where do you see themain demand channels for oilin Angola?OV: As Angola develops andmore people are drawn fromrural to urban areas, the countrywill need increasing electricitygeneration. In 2014, 47 per centof electricity came from oil. Ibelieve the use of oil for thispurpose will remain strong in thecoming years.

ORA: As Angola battles withNigeria to be Africa's largestoil producer, do you feel thereneeds to be more investmentdiversification in Angola awayfrom oil?OV: Angola and Nigeria need todiversify their economiesregardless of which countryproduces more. Thisdiversification is something thatshould have been implementedyears ago and it would haveprevented the economic crisisthese two countries are nowfacing. Agriculture, in my view, isthe sector that should betargeted. Angola imports 90 percent of its food at a cost ofUS$5bn per year. The foodimports greatly depend on the oilrevenue. Once it is down, food security

OPEC's production cut may help Angola benefit from strengthened oil prices, but economicdiversification is paramount. Luke Barras-Hill interviews a leading researcher on what lies ahead.

THE PATH AHEAD FOR

ANGOLA

Otavio Veras is surprised that OPECdecided to cut production.

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anyang Te

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https://www.adipec.com/


SPEAKING AT THEsummit, President YoweriMuseveni outlined hisgovernment’s plans for

Uganda’s future oil revenues.The two-day oil and gas summitran under the theme “UgandaOil and Gas Industry: a driver to national prosperity andregional integration.”Stressing that oil revenues will

not be used to import consumergoods, President YoweriMuseveni said that Uganda willchannel oil revenue to specificareas that propel national growthand form the backbone tonational prosperity. He explainedthe oil revenues, which arecurrently estimated to be worthabout US$50bn, will beconsolidated into a fund that willbe dedicated to the developmentof infrastructure. Particularattention will be given to areassuch as electricity, railways,roads, human resource, scientificinnovation and agriculturalmodernisation. The oil and gasrevenue is to be integrated intothe national economy to formpart of the base to the country’smodernisation agenda.

The President, however,warned against over-dependenceon the oil and gas sector.“Petroleum is a small aspect of abig story,” he said, pointing outthat as the country embarks oncommercial oil production,Ugandans must realise that thecountry cannot survive solely on

oil revenue. “It will only help usget quick money that we shoulduse to build a durable economicbase for Uganda for today’s andfuture generations,” he stressed.

Extending support toinvestorsThe president said that allmeasures will be taken towelcome investors to the country.He warned government officialsagainst frustrating investors andreminded them that in aneconomy like Uganda’s, which isprivate sector led, investorsshould be given all the neededinformation and support to

facilitate investment. Theminister of energy and mineraldevelopment, Irene Muloni,pointed out that it makeseconomic sense for any companyto invest in oil exploration inUganda as the explorationsuccess in the country is 85 percent higher than anywhere else in the world owing to cheapexploration at less than a dollarper barrel of oil. She revealed that the

Ministry’s plan to issue moreexploration licenses by the end ofthis year, adding that Uganda’starget is to start commercial oilproduction by 2020.

The exploration success in Ugandais 85 per cent higher than anywhere elsein the world. ”

Minister of energy and mineral development, Irene Muloni

Delivering the keynote address at the second Uganda International Oil and Gas Summit,President Yoweri Museveni described oil as an ‘enabler’ that will help to propel national growth.

OIL AND GAS TO PROPEL NATIONAL GROWTH IN

UGANDA

The President Yoweri Museveni reiterated that oil revenues will not be spent on consumables.

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FID/

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THE EMERGENCE OF anew generation of Africantechnical professionals foroil and gas is on the

horizon. How their skills aredeveloped is a focus forgovernments and companies;significant money will be spent,learning and development isinevitable. Can this be doneefficiently and effectively? Theanswer is optimal approaches.Most see the benefit of

knowledge transfer and localcontent policy, based on thepremise that petroleum resourcesbelong to a nation and its people– it is reasonable to expectresources to be developed for thebenefit of local communities.Within the industry, local

content requirements aredesigned to ensure most goodsand services for the whole valuechain are locally supplied. Thereis more to this than just hiringmore local employees, and IOCsare compelled to actively engagewith the local workforce.The need to draw on the

global talent pool is clear, and thewish to replace that globalassistance with a workforce oflocally based talented individualsis equally clear. But how? This iswhere the attitude of existingtraining providers comes in.Sometimes the attitude is poor.When an opportunity for new

training business comes along,there is a strong tendency forproviders to take their currentmaterials and simply implant

them in the new environment.This will be in spite of the factthat the materials will have beendeveloped in another country, foranother culture and perhaps evenfor a different purpose.An extreme example of this is

a major multinational company

which exports skills for offshoredevelopments, and runs trainingcourses in countries which haveonly land-based activity.This is a perfect example of

un-tailored training. Standardisedcapability matrices are anotherexample – written once for onemarketplace but exportedglobally. This is profitable for theservice providers it but notoptimal for the recipients. Skillrequirements for a country arenot entirely generic – everycountry and every developmentarea has specific needs. For in-country development,

one size does not fit all. Trainingproviders are aware of this andalso aware of the positivebranding pioneered by TRACSand others associated with the

word ‘tailoring’ so will generallyadvertise their products withstrap lines such as ‘tailored foryou’. It is worth investigatingwhat ‘tailored’ really means in acourse context – it should bemore than just changing thefront slide of a PowerPointpresentation to add a new dateand country location.

The hard truth is thatimplanting existing material isprofitable and easy; developingtailored solutions requires moretime, effort and skill and isintrinsically less profitable. A more positive, and large-

scale, model of skills transfer isthe role the Norwegiangovernment took in developinglocal content in the early days ofits oil and gas industry. The

Petroleumresources belongto a nation so it isreasonable toexpect resourcesto be developed forthe benefit of localcommunities”

Proactive promotion of tailored knowledge sharing in-country, rather than exporting learningformulas, will develop local skills, writes AGR’s TRACS Training Director, Mark Bentley.

A TAILORED, KNOWLEDGE-SHARING CULTURE

FOR THE AFRICAN MARKET

Staff at land-based oil and gas operationssrequire training tailored for their needs,rather than for offshore projects.

Image Credit: J

ames St J

ohn/Flickr


country had a highly educatedworkforce with technicalcompetence in manufacturing,shipbuilding and engineering butno domestic oil and gas industry.Predominantly via Statoil, thegovernment ensured thattechnology and expertise frominternational oil companiesflowed into Norway and stayedthere. Knowledge was transferredand built on to developinnovative new technologiestailored to the local offshoreenvironment. Norwegiancompanies now export thatexpertise internationally.

The characteristics of theapproach are to focus on the in-country need, develop a tailoredapproach to skills developmentand do this while planning forthe long term. Thesecharacteristics play out on asmaller scale too and revolvearound the right attitude to skillstransfer. It can be about forsakingshort term financial gain for longterm nurturing of talent.

The aim is to achieve asimilar model of long-termtransfer and local developmentthe emerging African businesses.It comes down to good attitude –and giving up some profit to helpanother country.There are several approaches

to knowledge transfer: tutoredclasses, links with universities,blended learning techniques,secondment opportunities withinpartnered licensees, and drawing

on specialist consultancies forexpert knowledge. Identifyingthe different approaches toknowledge transfer is necessaryto choose options – but these arejust tools, not the solution itself.

Based on the logic of thepositive model, and our owntutoring and training experiencegathered throughout almost 25years designing and runninglearning events, we argue that thekey at the working level is thepromotion of a knowledgesharing culture; one in which theinstinct of all parties involved isto share for the benefit of others.

This culture is most likely todevelop when providers andseekers include individuals whoare passionate about the principleof sharing, irrespective ofmonetary gain. The onus onmanagement is to ensure theseindividuals are at the forefront ofthe knowledge transfer activities,whatever form these take.

Such a culture at the workinglevel – something which trainingproviders can control – fits neatlyinto the larger scale positive modelof long-term planning describedabove. Note: ‘long term’ refers toskills development of individualsin the country; the role of theexternal training provider is totransfer knowledge, then exit. AGR has provided support

for Africa in a number of wayswhich fit the model describedabove. Through NORAD, AGRaided the Sudanese Government

in 2012 in developing localtechnical staff during thetechnical project for the Hegligoilfield. This was part ofNorway’s commitment to theComprehensive Peace Agreement.The Heglig Enhanced Oil

Recovery project was selected,and the scope of work wasadministrated by the NorwegianPetroleum Directorate (NPD) onbehalf of Oil for DevelopmentProgramme (OfD). InternationalPetroleum Associates Norway(IPAN) were contracted to betechnical advisors to OfD for theNPD whereby the Norwegian oiland gas service company AGRwas sub-contracted to performthe technical subsurface studiesand conduct training of localauthority employees.

To improve the Hegligoilfield’s production, the OfDprogramme with representativesfrom Sudan’s Ministry ofPetroleum, the Greater NilePetroleum Operating Company(GNPOC) and AGR technicalexpertise, set about investigatingthe best methodologies forenhanced oil recovery. AGR wastasked with managing the team,evaluating geological andreservoir simulation modellingand facilitating the transfer ofknowledge as a retained skillset.The aim was to transfer, thenexit, as we did.Another example of

knowledge transfer is our workwith the Ghana NationalPetroleum Corporation (GNPC)

which involved secondment ofjunior technical staff to AGRoffices in the UK. The incentivefor GNPC was to develop theseyoung, well qualified, highlymotivated staff, allowing them toexperience and contribute intheir own active consultancyproject while learning fromtechnical experts at AGR. Thisallows teams to shadowexperienced practitioners anddevelop solid work practices andnew skills, providing a model toadopt a similar approach toothers in passing on their ownskills. The project was then takenback to Ghana and AGR stoodback. Transfer, then exit.

AGR is actively involved inmentoring and lecturing atAberdeen University where thereis a significant cohort of Africanstudents. During their studiesAGR offers them the opportunityto conduct their MSc researchprojects within the professionalenvironment of AGR’s Aberdeenoffice. This provides access toboth technical expertise and real-life experience of an activeconsultancy working in a matureoil and gas region.

A knowledge-sharing culturecan be built from work-basedlearning, coaching, mentoring,and the creation of collaborativeand cooperative learningcommunities of practice, but it isthe behavior and attitude ofindividuals in the trainingorganisation which ultimatelycounts more than specifictechniques.Established organisations

have to run on a commercialbasis, but effective knowledgesharing is about tackling an in-country need from theperspective of the nationals ofthose countries, not as anopportunity to embed untailoredand stay indefinitely. The aim isto assess, tailor, transfer thenexit; a process which is a businessin itself, and a more rewardingmodel for all those involved.

www.agr.com

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Desert-based training for young professionals who had recently graduated.

Image Credit: A

GR

Mark Bentley says one size does not fitall when it comes to training.

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GR


SUDDENLY OIL SPILLSare back in the limelight.Nigeria’s US$1 billion planto clean up the oil-rich

Niger Delta, where the bulk ofslicks, sabotage and spills haveoccurred, shows intent byPresident Muhammadu Buhari.The initiative, launched in

June, could take a quarter of acentury, experts believe, beforeall the swamps, creeks andfishing grounds are restored afterdecades of spills. On the ground,it generates significant localemployment and throws up goodbusiness opportunities forspecialist clean-up providers. It’salso likely to concentrate mindson the challenge of spillprevention going forward.Of course, when things go

spectacularly wrong – theDeepwater Horizon explosion inthe US Gulf of Mexico springs tomind - then oil spills will alwaysmake headline news. But in thecase of Nigeria, it is a prolongedperiod, half a century even, ofsmaller, often unreported spillsthat have taken their toll. Indeed, most of the world’s

major oil spills, accidents andtanker disasters have taken placeaway from Africa. Whilst thisunderscores a healthycommitment to prevention,myriad smaller incidents haveleft a legacy for today’s clean-up.Nigeria’s largest international

producer, Shell, which operatesaround 50 oil fields and 5,000 km

of pipelines, admits to 1,823 oilspills since 2007, although manysuspect the real number could behigher. Many of these have beendeliberate acts of sabotage -casualties of the volatility thathas plagued the Delta regionmore or less since productionbegan there in the 1950s.On the plus side, the big clean

up is likely to stimulate localeconomic activity, both indealing with the mess, and indriving industry’s commitmentto prevention going forward.Nigeria’s own talent pool in

the oil spill prevention niche hasbeen expanding for decades.The National Spill Control

School at Texas A&M University-

Corpus Christi, USA, forinstance, a world leader in thefield, has provided trainingprogrammes for Nigerians since1984. And it appears to be agrowth business. The global oilspill management market size isexpected to reach $126 billion by2022, says a recent report byGrand View Research.

The stakes are high with Shellfighting off lawsuits brought bythe Bille and Ogale communitiesin the Delta. These allege that oilspills, through pollution andsabotage, have wreakedenvironmental havoc on theregion. Lawyers representingmore than 40,000 people areseeking to have the case heard inthe English courts, with Shellbattling to hold the case inNigeria where the allegedincidents took place. In theory, itcould open the floodgates tosimilar lawsuits from otheraggrieved communities, both inNigeria and elsewhere, againstthe oil majors. Once again, oilspills are back centre stage.

OIL SPILL PREVENTION ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM32

In Nigeria, aprolonged periodof often unreportedoil spills havetaken their toll ”

Nigeria’s ambitious Delta clean-up could drive demand for oil spill prevention expertise andtechnology. Martin Clark found out more about how the Nigerian initiative could have wider

implications across the industry.

OIL SPILL PREVENTION:

A NIGERIAN CASE STUDY

An oil spill at Goi Creek, Nigeria, in 2010 haddevastating consequences on the natural environment.

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IF YOU’RE WORKING on anoffshore platform right nowit’s quite likely you’ll be able tovideoconference with head

office, download films and Skypeyour family – an incredibleadvance from even a decade ago.A lot of this connectivity isdelivered by fibre optic links onan undersea cable. WayneNielsen, managing director ofWFN Strategies, which designsand implements submarine fibre

cable systems, says: “You can putthe cable out as far as you need.It’s not a technical issue; it’swhether the cost of putting a fibrecable in is worth it to the user.”

The same goes for depth:“There are rigs in the Gulf ofMexico that are in 1000-1200metres of water, hooked up to fibre.”

But if you’re cost-consciousthe cable doesn't need to bebespoke. “In the Gulf of Mexico

we helped BP put in a 1200 kmsystem,” says Nielsen. “And offthat 1200-km trunk cable are anumber of what we call branchingunits.” These are shared, for a fee,with other oil companies needingfibre connectivity.Times have certainly changed

– in more ways than one. IanTheophilus is programmemanager – Global WANProgramme, with Prosource.it, amanaged IT services provider for

the corporate enterprise market.He points out that the collapse inoil prices has meant thatcompanies scrutinisecommunications costs morecarefully than ever.Which is what he helps them

to do. “I’m reviewingtelecommunications and widearea network provision withinenterprise companies to identifywhether there’s a more efficient,more cost-effective way to deliver

There are more connectivity choices than ever before for offshore operators keen to optimisecommunication. But, as Vaughan O’Grady reports, the oil price decline means companies

demand value for money as well as the latest technology.

VALUE FOR MONEY WITH

SATELLITE COMMUNICATIONS

TECHNOLOGY ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM34

Satellite communication hasrevolutionised the oil and gas

industry.

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ASA Johnson/Flickr


telecommunication / networkservices to meet the requirementsof the operator,” he says.If you have a platform

offshore that needs tocommunicate with an onshoreoffice, the starting point is fibre,if it's available and affordable,because, says Theophilus, “fibreoptic networks provide the mostefficient low-latencycommunications that you canimplement”. He adds: “Backupcommunications could fall to anynumber of alternativetechnologies, from redundantfibre to microwave radio,dependent on location andavailability.”

Even 4G/LTE connectivity isnow becoming more readilyavailable offshore, provided thatthe subsurface fibre is in place asthe backhaul connectivity. Wherefibre optic or 4G are available,there is also the opportunity todeploy satellite communicationsfor backup purposes providingresilience via an alternativetechnology. “The type of satellitecommunication chosen toprovide services needs carefulthought in these circumstances,”says Theophilus. For example,the use of a Ka-band satellitesystem in a severe storm area(rain fade is a potential threat toKa) might not be appropriate forprimary communications butmay be the most cost-effectivefor back up or crew welfareservices – calls to family andfriends, say.

Where no alternativecommunications mediums areavailable then the deployment ofa resilient satellite system (usingC-band or Ku band, for example)may be the only option, butwhether you choose fibre orsatellite there will always befinancial issues to consider. “Doyou lease a system so you spreadthat cost?” asks Theophilus. “Ordo you pay it upfront and thenspread the rental of thebandwidth over the opex budget?There is no correct or incorrectanswer to this but it should be

reviewed when investing intelecommunications systems.”

But helping its customerssave money isn’t the onlyconsideration for Prosource.it“We always take safety intoaccount first. A fewconsiderations when deploying asystem should be: how manypeople do we have on theinstallation? Do we need resilientsystems to provide remotemanagement? What type ofapplications are running over thebandwidth from a safety andoperational perspective? Do weneed robust systems that supportthe use of ESDs (emergencyshutdowns)?” Safety will alsoaffect the decision about whatequipment should be used at aremote facility: hazardous areason a rig or platform will need toensure that all transmittingequipment to be used in theseareas are correctly rated toindustry standard.

“What we’ll then do,” hecontinues, “is identify thebandwidth utilisation of the

particular plant or facility toensure that any system deployedis fit for purpose from bothoperational and safetyperspectives. This also gives usthe opportunity to provide themost cost-effective solution thatprovides the necessary safety andoperational requirements”.

Reducing the cost ofownership can also involveinvestigating the currentcontractual agreements. “Forexample, this may be achieved byrenegotiating contract terms orby reducing the bandwidthfollowing utilisation evaluation,therefore reducing cost.”

With fibre connectivity, morethan any other approach, comemajor safety and efficiencybonuses. As Nielsen explains:“When you make the step to fibre,it opens up videoconferencing. Itopens up taking people off theplatform and having them sit inan office back onshore where it’s alot cheaper,” and, of course, safer.

Fibre connectivity is falling inprice, though not at the same speed

as oil revenue. However, saysNielsen, it's still good value because“the actual throughputs we can dowith fibre today versus 15 years agoare magnitudes higher”.

As for satellite, Theophilussays: “I review the currentcontract terms and work withsatellite suppliers to identify waysin which costs to the client canbe reduced. Providers are open toadopting alternative contractualagreements that help save theoperators cost without impactingoperational efficiency.”

Susan Bull, senior consultantwith specialised satellitecommunications consultancyComsys, notes that satellitecapacity for offshore and oceancoverage is more expensive thanfor land coverage. “Neverthelesswe've seen a lot of changes incapacity pricing and that will affectoffshore as well as onshore,” shesays. She adds: “If the rigs arerelatively close to shore, they willprobably be covered by thespillover from land. They will takeadvantage of that as well.”

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Remote operations, especially offshore, are more effectivewhen cost-efficient satellite communications technology isleveraged.

Image Credit: M

aersk

Drilling/Flickr


Andrey Kirillovich, director forintegration services and complex projects,Russian Satellite Communications Company,writes: There is a lot said about the internetof things (IoT) and the industrial internetnowadays, as well as satellite applications forit. Meanwhile the oil and gas sector has beendoing supervisor control and data acquistion(SCADA,) via satellite successfully for manyyears, which can be regarded as IoT. Theprices of satellite connectivity have beendropped dramatically, allowing oil and gascompanies to increase the throughput atremote inland and offshore drilling sitesunder existing contracts. The amount of datareceived from the sites is constantlyincreasing, but for satellite connectivityservice providers it is important to workclosely with customers to ensure thatcompanies are using the increasedinformation wisely.In IoT, the value is not only in

connecting the sensor to the network. It isthe data collected from the site that isvaluable. That is why satellite serviceproviders, in order to add value to theirconnectivity services, can cooperate withindustry and in addition to connectivityoffer a convenient platform for collecting,storing and delivering data from site to HQ.

A good example is described in a recentstudy on IoT done by McKinsey. In realitythere is often a big gap between datacollected on site and data analysed at theHQ.According to McKinsey survey, on on rig

the applications running on it were

configured in a very specific way and lessthan 1 per cent of the collected data wasused in the operation process, mainlybecause this missing data was nevertransferred from the rig. This means almost99 per cent of data from thousands ofsensors was lost on its way to the analyticcentre. As a result, owners of the oil rig havenot received the efficiency they expectedfrom IoT solutions.In the old days, data transmission

problems could be explained by expensivesatellite traffic, but nowadays datatransmission costs are significantly lower.That is why satellite service providers shallwork closely with their customers on fullimplementation of IoT solutions to ensureall collected data is stored and transmitted.This will increase the overall traffic and helpcustomers get better feedback from IoTimplementation.RSCC is the main supplier of satellite

bandwidth and solutions to oil and gascompanies in Russia. The company hasrecently extended its satellite coverage toentire African continent and plans toimplement most advanced solutions for theoil and gas sector in Sub-Saharan Africa.

THE ROLE OF SATELLITE SERVICE PROVIDER IN BRINGING VALUE TO IOT SOLUTION

Do oil and gas companieshave leverage over satellitebandwidth pricing? There’s noclear answer to this. Someconsumer offerings – notablysatellite data – have not enjoyedbig take-up outside NorthAmerica, a factor that couldbenefit enterprise users. Andobviously with the oil price solow there has been lessproduction activity and lessdemand, so that operators likeRigNet and Harris CapRock havehad to review pricing.

Bull suggests that when theoil price recovers oil and gascompanies may well be a littlemore cautious about buying intosatellite. “Will [satellitecommunications] prices recoverto the same degree as before?That’s highly questionable.”

The consumer revolution ledby Ka-band services may alsofilter through to some less

weather-affected oil and gasoperations. Continuing Ka-bandlaunches – such as that of theglobe-covering Viasat III – willoffer more and cheaper Ka-bandcapacity, conceivably bringingtoday’s 300-1,000 dollars permegabit down to as little as 50-100 dollars. Bull says: “Viasat IIIis built as consumer service [but]if the price differential was tentimes I think a lot of companieswould be prompted to take this.”

Satellite will retain a healthyshare of the oil and gas marketfor some years to come. Somevessels can connect into a sub seafibre ring. “But vessels such ascruise liners, or cargo vessels andanything that would be classed asmobile are not going to be ableleverage this technology,” saysTheophilus. Essentially, fixedinstallations dominate the oil andgas fibre market.

Luckily, satellite equipment

costs are declining, although thearrival of multi-frequencyantenna systems and phasedarray electronic steerableantennas may be seen as a useful– if expensive – investment in thecoming months and years.

Nevertheless satellite, wherefibre is available, is unlikely to befirst choice, due to latency –signal delay – issues with highearth orbit systems, although thearrival of middle and low earthorbit systems, such as globalsatellite service provider O3B,means latency can besignificantly lower because thesignal is not travelling as far.

And today’s upgradetechnology can improve theperformance of fibre withoutrequiring cable replacement.Nielsen, says: “We've had systemsout there over the last six yearsthat have been upgraded two,three and four times – up to the

latest technology. The economiclife of a system is getting pushedout.” That could mean 30 years –or longer.

It’s ironic then that, asNielsen says, “oil and gascompanies’ use of bandwidth is asmall percentage of what couldbe available to them. There aremagnitudes more bandwidth onan existing cable that theyalready have available to them ifthey need it.”

Bull agrees, but suggests thatadoptions of applications such asautomation, video surveillanceand monitoring will eventuallytake up some of the excessbandwidth, underlining thecontinuing – and growing –importance oftelecommunications tooperational efficiency, eventhough any investment willcontinue to be carefullyscrutinised.

TECHNOLOGY ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM36


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Oman Cement Company (S.A.O.G) Corporate Office:PO Box 560, Ruwi, PC 112, Sultanate of OmanTel: +968 24437070 Marketing: Ext 145 / 444 Fax: +968 24437799

Email: [email protected]: www.omancement.com

CERTIFIED COCERT NO. IND13.3020/U/Q

CERTIFIED COCERT NO. IND10.7570

API CERTIFIED COLICENSE NO. 10A-0059

S09 ORA 6 2016 - Safety editorial Decommissioning_ORA Master Template - 2016 New 14/12/2016 11:27 Page 37

http://omancement.com/

UNITED SAFETY, AN oiland gas safety serviceprovider, is responding tothe call for efficiency as

the solution for helping theindustry survive the currentdownturn.

The company has launched asolution that provides increasedefficiency and safety whilecurbing costs during plantturnarounds, which can becomeexpensive if not properlymanaged by operators.

“Technology-enabledefficiency improvements such as the TeQ Shield™ Guardian,which allows visibility inconfined spaces, bring a wholenew level of productivity duringturnaround,” explains Dr ElieDaher, EVP and CMO for United Safety.

“With real-time videosurveillance and the use ofremote operational support andcontrol centres, safetysupervisors can now monitor

workers to prevent incidents,”Within confined spaces,

atmospheric conditions such asoxygen deficiency, toxic

atmospheres, and explosiveatmosphere pose an increasedrisk of injuries to workers and

rescuers alike. Improperidentification of confined space risks, entry to a confinedspace without proper PPE orbreathing apparatus, andcomplacency, have resulted inunnecessary, preventableaccidents and fatalities.

“The system was tested bytwo operators in Canada thisyear. They found that the abilityto continuously monitor gasreadings reduced the operationsworkload and total requiredman-hours. The significantsavings to the operator is crucial at a time like this,” Daher concludes.

With real-timevideo surveillance,remote operationalsupport andcontrol centres,safety supervisorscan monitorworkers to preventincidents”

Investing in leading edge safety technology is a sound move for oil and gas plant operators.During turnarounds, which already add to operational costs, leveraging cost-efficient and

effective safety technology makes good business sense.

SAFETY BOOSTS EFFICIENCY DURING

PLANT TURNAROUNDS

SAFETY ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM38

The latest technology can save lives and money.

Image Credit: United Safety

Monitoring for safety.


OFFSHOREISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM 39

ASTUDY BY NACEInternational says that inthe US corrosion costs theoil and gas industry

US$1.4 billion a year. And thesituation in Africa can be worsebecause of by high humidity andtemperatures offshore.

But new high performanceanti-corrosion coatings thatprovide a barrier againstcorrosion are on the market. By2020, this market is forecast togrow at a CAGR of 13 per cent.Africa is projected to see thefastest growth. Nigeria andAngola are emerging as regionalhubs for this market. A Frost &Sullivan report forecasts revenuesfor these two countries in excessof US$1.13 billion in 2019, upfrom US$675.1 million in 2014.Both oil producers are benefitingfrom the downturn. The slump isa catalyst for local production byproviding cheap raw materials.

Frost & Sullivan Chemicalsand Materials research analyst,Abdul-Baasit Abdullah said, "The drop in crude oil prices has reduced the base costs ofpaint through a reduction in raw material cost of 8.3 per cent,driving competitive pricing and consumption."

Manufacturing subsidies plushigh import tariffs in Nigeria andAngola add to the attraction.This year, Epoxy Oilserv Ltd adistributor of marine coatingsand paints, opened its secondoffice in Lagos State. Its anti-

corrosive epoxy paint systemscomplement other protectivesurface coatings on permanentlyimmersed sub-sea equipment.Globally, epoxy coatingscurrently account for more than50 per cent share of the highperformance anti-corrosioncoatings market.

Corrocoat SA’s linings andcoatings can be tailored to suitmost corrosive environmentsincluding offshore installations. Itused recoatable polyurethane tocoat filter vessels on a FPSOfacility offshore EquatorialGuinea. Plasmet ECP wasapplied to counter the highhumidity conditions. This wasfollowed by Corrocoat Zip-E forlong-term anti-corrosionperformance. The polyurethanetopcoat was applied for aestheticappeal and UV protection.

To the east, the coatingsmarket is also taking off. Lastyear, Jotun announced a US$3

million investment in Kenya. Atthis year’s East African CoatingsCongress, delegates heard aboutthe latest technologies.Nanomaterials allow offshore oiland gas companies to meet thedemand for low-maintenancecoatings with enhancedprotection and longer operationlife. They provide savingsthrough fatigue- and corrosion-resistance. New ‘self-healing’coatings and ‘smart coatings’replace traditional paints.

Hardide Coatings providesnano-structured tungsten carbidebased coatings, which are alsosuitable for internal surfaces andcomplex geometries, the holygrail for offshore. In a globaloilfield services provider casestudy, the company claims thatits coating increased the life ofcritical components three-fold.

Faced with competition fromnano-structures, traditionalcoatings such as chrome plating

are not holding market share.Chrome plating was used inhazardous environments onaccount of its hardness. But newenvironmental regulations meansit is being phased out. Anothertechnology High VelocityOxygen Fuel (HVOF) carbidecoating is more environmentallyfriendly. However, HVOF lacksthe durability to withstand harshconditions and high impact.

Wire-arc thermal spraysprovide a strong metal coatingusing galvanically active coatingssuch as zinc and aluminium. Anelectric arc forms moltenparticles of spray onto thesubstrate in a ‘cold’ procedure.This is also used for non-slipcoatings. Fluoropolymer coatingsblend high performance resinsand fluoropolymer lubricants,such as polytetrafluoroethylene(PTFE). This offers a superiordry film lubricant for wellheads.

In the US, the AdvancedEnergy Consortium’snanotechnology laboratory isinvestigating ways in whichnanotechnology can be applied.Tesla NanoCoatings hasdeveloped ‘Teslan’, a two-partcarbon nanoparticle hybridprimer coating technology thatallows the primer and epoxytopcoat to be applied insuccession in a wet-on-wetprocess. Tesla claims the resultsdemonstrate performance whichexceeds the traditional three-coatzinc/epoxy/epoxy system.

Anti-corrosion innovations can help offshore operators in Africa save time and money. Thedownturn is even proving to be a catalyst for local production in the Nigerian and Angolan

markets by providing cheap raw materials for paints and coatings. Nnamdi Anyadike reports.

OFFSHORE RIGS TURN TO

NEW GENERATION COATINGS

Conditions in the Gulf of Guineacan lead to serious corrosion foroil and gas operators.

Image Credit: NASA’s Marshall Space Flight Center/Flickr


WEST AFRICA WILLface up to thechallenges ofdecommissioning on a

much greater scale in the comingdecades, as many of its earlyprojects near the end of theiractive production life.

With Nigeria’s productiondating back almost 60 years,many of its facilities are now oldand destined for retirement;other producers like Gabon alsohave a long history. It’s a trendthat will be mirrored worldwide.Decommissioning of ageingoffshore oil and gas facilities isset to increase “significantly”,with annual spending rising toUS$13bn by 2040, consultancyIHS Markit says in a new report.This compares to a spend of justUS$2.4bn in 2015.

Beyond North America andEurope – traditional mature

producing regions that have sofar faced up to the challenge ofdecommissioning work in a bigway – Angola and Nigeria willdrive decommissioning spendingin Africa, IHS Markit said.Globally, it says 600 projects areto be decommissioned during thenext five years, with 2,000 moreto follow through to 2040.

What that ultimately meansfor Africa is much higherspending on decommissioning ofold rigs. How much that will be,however, is anyone’s guess.

Decommissioning costs varyacross platform types, size,location and the availability oflocal infrastructure and services.In general, historicaldecommissioning costs for Gulfof Mexico rigs have been in theUS$500,000 to US$4mn rangefor shallow-water structures.Costs rise for deeper waterstructures. One North Seagravity-based system has anestimated decommissioning costof US$2bn.

While West Africa’s deepwater industry is comparativelyrecent, the region faces otherunique challenges, especially insafely decommissioning historicland-based structures.

Much of Nigeria’s oldestinfrastructure is sited in theswamp-like conditions of theNiger Delta, where armedmilitants have long hampered

production, maintenance andrepair efforts. The operationaldifficulties entailed with anylarge-scale decommission workhere would be immense – if evenpossible – besides any cost-related issues.

While producers will be ableto draw on a vast pool ofexperience from the North Seaand the US, West Africa’s owndecommissioning dilemmashould not be underestimated.

Moreover, it all comes at atime of increasingly stringentregulation regardingdecommissioning, generally, aswell as sustained lower oil prices,and with more and more assetsset for the scrap heap. “In termsof decommissioning, the globaloffshore industry is headed for a perfect storm,” said IHSMarkit’s Bjorn Hem, one of thereport’s authors.

West Africa’sdecommissioningdilemma shouldnot beunderestimated.”

With more projects slated for decommissioning in the coming years, West African producers must face up to the huge financial and technical challenge ahead.

Martin Clark reports on the long-term plans that need to be made.

THE DECOMMISSIONING

DILEMMA

DECOMMISSIONING ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM40

Experience gained from work on North Sea oil rigs willhelp with decommissioning in West Africa.

Image Credit: Nick Rowland/Flickr



ROUGHLY 75 PER cent ofrigs in use have thepotential for an extendedlifetime via upgrades. By

improving a rig’s power andcontrol systems, its drillingperformance and operation canincrease dramatically.

Anyone in the industry islikely familiar with thefrustration of an old or bustedrig. Like relying on a beat-up oldFord truck, trying to squeeze asmuch life out of an old rig simplywill not suffice for long. Old rigseventually give out, so it is muchbetter to reflect on how we canextend the life of such equipment.

Upgrades that directlyimprove drilling and operationcan be placed in one category.Other upgrades for preventivemaintenance to ensure that a rigis dependable with minimaldowntime is a separate category.A third grouping includes anythat improve safety. The lastgroup is those that reduce oreliminate environmental hazards.

Converting a mechanical rigto an SCR can be financially andlabour-intensive, but rewarding.Conversions from mechanical toSCR rigs mean increasedelasticity while utilising reducedfour-engine natural gasgenerators. By eliminatingsubmaximal torque converters,an SCR rig can improveefficiency. Switching to an SCRrig from a mechanical can reducemaintenance costs by more than

half. Also, with reduced fuelconsumption of a SCR rig, thetransition is an environmentallyfriendly conversion.

On a DC/DC system, it canuse up to six engines, and whileit is often considered a moreviable option than a mechanicalrig, there is room to improve.Switching to an SCR improvesrig efficiency by implementingfewer diesel generators, whichrun on a constant speed withlimited downtime. Using a SCRrig over a DC/DC providesimproved top drive capability, aswell as other systems to utilisevarious drilling programmes.Furthermore, the reliability ofswitching to a SCR rig isparamount over a DC/DC. Thisis mostly due to the ability forone engine to power any rig load.All inefficient components andgenerators are removed in the

SCR, but perhaps the mostsignificant add-on is the globalair conditioning system, whichregulates the rig’s electricalsystems during intense stress.

The improved safety of theSCR rig over the DC/DC isprimarily due to a more securedrill floor, with improved controland power.

Modernising an SCR rigtypically consists of a number ofupgrades due to the increasedpower and control requirements.In terms of generator sets,typically, a fourth is added to anupgraded SCR, as well as topdrive capability. An additionalmud pump is usually added too.Modernising provides flexibilitywith advances, such astouchscreen diagnostics, livemonitoring, remote access of rigperformance, and anti-blackoutprevision mode.

These upgrades have thepotential to reduce downtime,substantially improving rigreliability. Also, the use of a PLCsystem on an upgraded SCR is asignificant improvement overolder electrical components,which inhibits rig performance.

Making the switch to SCRcomes with investment but thesafety improvements are rewardenough. With reduced noise,improved engine controls andadditional safety features,modernising is worthwhile.There is also the reduction ofenvironmental hazards, includinglower fuel emissions, due largelyto precision control, modernisedelectrical components, and moreaccurate specifications.

Mechanical, and even DC/DCrigs are largely inadequatecompared to the modernisationof an SCR rig. The tendency todrive old rigs into the ground isunderstandable but upgrading isworth the investment. Fromimproved safety features, to thereduction of environmentalhazards, upgrading to an SCRmakes sense. While an older rigmay last in the short term, sooneror later it will give out. Makingthe upgrade is at least somethingto aspire towards, because it isnice to have a well-performing rigat your disposal.

Reprinted with kind permissionfrom Worldwide Power Products.www.wpowerproducts.com

When modernising a rig, power generation is an important issue to consider, along withenvironmental and safety concerns. But when operators get their modernisation programme

right, the life of the rig will be extended.

MODERNISING RIGS

FOR OPERATIONAL EXCELLENCE

Some old oil rigs are the equivalent of driving an old truck rather than upgrading toa newer vehicle.

Image Credit: L

inda Flo

res/Flickr

ONSITE POWER AND UPGRADES


RIG COUNT ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM42

AFRICAN RIG COUNT - 2016COUNTRY October 2015 November 2015 October 2016 November 2016

ANGOLA 19 15 10 8

EGYPT 13 12 9 9

NIGERIA 12 12 6 5

GABON 6 6 0 0

CONGO (BRAZZAVILLE) 4 4 3 3

GHANA 3 3 1 1

TUNISIA 1 1 2 2

SOUTH AFRICA 1 1 1 1

CÔTE D’IVORE 1 2 1 1

LIBYA 1 1 1 1

TANZANIA 1 1 1 1

CAMEROON 1 1 0 0

MAURITANIA 1 1 0 0

Grand Total 63 61 35 32

Source: Luke Davis, Infield Systems

UNDERSTANDING AND VERIFYING pipebevel geometry is a vital quality control stepprior to fit-up of oil and gas pipelines withtight project tolerances. Pipe bevel geometry isof key importance for pipeline engineers,welders and quality control inspectors asaccurate bevel geometry leads to moreefficient pipe fit-up, improved welding andsuperior pipeline integrity. In his paper, ‘The Importance of Pipe Bevel

Geometry’, OMS technical reporting managerAlex Felce describes that while Vernier calipersor radius gauges have been traditionally usedto provide dimensional feedback, thesemethods have proven time-consuming andlimited in their practical application. The paper examines the growing use of

new laser-based technology in this field. Giventhe economic pressures within the oil and gasindustry, Felce believes that this newgeneration of laser scanning tools are pavingthe way for increased pipeline integritythrough advanced measurement technology.Felce said, “Our experience shows that

better control of pipe bevel geometry can leadto improved weld quality and superiorpipeline integrity for oil and gas operators.The potential for huge cost-saving throughbetter process efficiencies and fewer cut-outs

is undoubtedly a major consideration for thesector in such a turbulent market.”Felce presented his paper at this

year’s Subsea Asia event (29 November – 2 December). Felce discussed the operation oflaser bevel measurement tools and the rangeof bevel types and numerous features thatrequire consideration by the pipelineconstruction workforce.OMS Measure recently launched the Bevel

360, a pipe bevel measurement system that

provides pipeline engineers with insight intocritical pipe bevel geometry. According to thecompany, the system can be utilised integratedin-line with the user’s facility, allowing foruninterrupted production and improvedefficiency. The tool can be deployedimmediately after bevelling, prior to pipesbeing moved into production and can performa complete scan of a pipe end in around 25seconds, thereby producing a 360-degreemeasurement profile of the bevel.

Using laser scanning tools to control pipe bevel geometriesVerifying the shape of a bevel before welding is acrucial consideration for pipeline construction.

Image Credit: O

MS

S10 ORA 6 2016 - Rig count and Innovations_ORA Master Template - 2016 New 14/12/2016 11:53 Page 42

INNOVATIONSISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM 43

WHENEVER A RISK emergesin the workplace, it often takes a long time to order and wait fornew safety signs that can warnco-workers about danger andinstruct them on how to avoidan accident. Using a professional safety

sign printer and software canhelp companies design, print andimplement new signs quickly inorder to support their ‘Go forZero’ programme and avoidworkplace accidents.Prohibition, mandatory

warning, first aid and evacuationor fire signs are instrumental in any ‘Go for Zero’ programmethat aims to reduce workplaceaccidents to an absoluteminimum. The major advantage of safety

signs is that they can easilycommunicate importantinformation where it is neededmost to avoid accidents.Examples include safe workprocedures right next to amachine, the contents of pipes onthe pipe itself or warning signs atthe entrance of a dangerous area.Brady has an extensive range

of printers and safety softwarethat aim to enable users to createdurable signs in a great numberof shapes, colours and sizes.Brady allow users to customisetheir messages, choose from awide range of printers anddurable materials and reduce theexpenditure on safety signs.According to Brady, an

on-site printer is a great tool tosupport any ‘Go for Zero’programme. It allows users tosimply walk up to a printer andcreate signs to communicate thenecessary precautions to co-workers when safety risks emergein the workplace.

‘Go for Zero’with on-sitesafety signprinting

OXIFREE GLOBALLAUNCHED a new polymeltservice gun, the SG1, ahandheld, portable applicatordesigned for filling in sectionsof Oxifree TM198 coating thathave been removed forinspection. It has beendeveloped to further easemaintenance costs for assetowners within the oil and gas industry.Thermoplastic coatings are in

high demand, particularly inextreme climates, whereenvironmental factors likeabrasion and corrosion meanthat metal components needreplacing quickly. OxifreeGlobal’s thermoplastic coating,Oxifree TM198, is an organic,patent protected formula whichhelps to combat corrosion andhas been proven to increase thelifetime of metal componentsand reduce maintenance costs by

at least 40 per cent. It is claimedto provide protection against allcorrosive contaminants with thecommercial advantage ofremaining extremely easy toapply and reuse. According to thecompany, Oxifree TM198contains less than 0.5 per cent

volatile organic compounds andtherefore has no adverseecological or environmentalimpact. With the SG1, assetowners can easily reapply thecoating in small areas in situ,without the need for expensivespecialist technicians.

Oxifree Global launches polymelt service gun

SHELL GULF OF MexicoLogistics moves more than50,000 tonnes of materials andequipment to offshore facilitieseach month using more than 40offshore supply vessels. Withmultiple offshore locationsneeding supply from multipleport facilities, vessel demand canbe irregular yet very high. Portfacilities have limited storagecapacity and coordinatingscheduled arrival of material atbase with the expected loadingtimes becomes challenging.Shell aimed to devise a

strategy to improve theutilisation of vessel capacity,eliminating idle time, andcoordinating and optimisingthe demand through an IT tool.The company used the SIMIOtool, a probabilistic vessel

scheduling software, to identifythe components and therequired inputs for it to createsimulation models. Accordingto a white paper released by thecompany, the use of SIMIOenabled predictive analysis forexpected operations byoptimising voyages, proactivelysharing information of vesselstransiting to a common fieldarea and maximising the vessel’scapacity for offshore assetmaterial movements.The tool allowed modellers to

use the simulation function toascertain the validity of themodel configuration and identifyways to align to operationalvariances. It helps identifyparameters that may be used byschedulers to adjust settings thatreflect operating conditions.

Using the models anditeratively updated information,helped create schedules thatallow for in-depth operationalplanning involving vendors,vessels and offshore locations.

Using the latest weather,demand requirements and vesselinformation, the IT tooloptimised the use of the vesselfleet and improves efficiency of port operations. Schedule data shows when

materials need to arrive at theport, which vessels are to beloaded, expected load times,vessel transit routing andoffloading times.Shell commented that the use

of SIMIO assisted it in achievinga fit for purpose fleet size andcontributed to its ability tooptimise vessel utilisation.

Using simulation and modelling to optimiseoffshore logistics: a Gulf of Mexico case study

Image Credit: O

xifree Global

Oxifree Global showcased the SG1 at the Abu Dhabi International PetroleumExhibition & Conference (ADIPEC) last month.


ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COMINNOVATIONS44

LEKOIL, THE OIL and gasexploration and developmentcompany with a focus on WestAfrica, has announced that oil isflowing at the Otakikpo MarginalField to onshore storage tanks,where it will be evacuated uponcompletion of the offshorepipeline. All onshore facilitieshave been fully commissionedand signed off by the regulators,and the offshore pipeline leadingfrom the storage tanks to thetanker offloading manifold is 80per cent complete, according to astatement by the company.

Upon completion, the jointventure partners, Green EnergyInternational Ltd as Operator andLEKOIL as Technical Partner,expects to start transporting to theexport terminal and subsequently,be able to gradually ramp upproduction to 10,000 bopd.

Lekoil CEO Lekan Akinyanmisaid, “We’re delighted to announcethis key milestone from theOtakikpo field. I would like tothank the entire team that hasworked so hard on this project,our partners Green Energy,investors, debt financiers, ourhost communities and ourgovernment regulators for theircontinued support.”

Oil flows tostorage tanksahead ofevacuation

TANK TERMINALS ARE often built withmore development planned when the oil pricefluctuates in order to deal with additionalglobal surplus of oil. This has been a long-time trend for the industry.

However, innovative and flexible pumpingsystems contribute to smooth and cost-effectve operation of tank terminal.

Screw pumps appear to be used increasinglyin this endeavour. German company, Leistritz

Pumpen GmbH has responded to thesemarket developments and recently presentedthe youngest generation of slim and economicrotary positive displacement pumps.

This pump series, which was especiallydesigned for tank terminal applications,covers a wide range of areas and can also beperfectly used in the chemical, petrochemicaland shipping industry as a loading orunloading, stripping and booster pump.

The basic premise of the series is a provenconcept of Leistritz’s twin screw pumkpswhich have been used in the industry fordecades. The compact L4NC series ischaracterized by and complies with the API676 3rd Edition.

The series consists of seven different pumpsizes, each with four pitch variants, offeringcomplete control for optimal selection formultiple applications and tank terminals.

FLUOR CORPORATIONRECENTLY announced placingthe final module for the SuncorEnergy Oil Sands LimitedPartnership’s East Tank FarmDevelopment project near FortMcMurray in Alberta, Canada. As part of its engineering,procurement, fabrication andconstruction scope, Fluormanaged module fabrication andshipment of the modules, all ofwhich were fabricated by Fluor’sSupreme Modular FabricationInc. (SMFI) joint venturefabrication yard near Edmonton,

Alberta. Engineering andconstruction personnel wereintegrated into the fabricationteams to support construction-driven execution through thephases and the 95 modules werefabricated and shipped in 10months, aligning to the sitesetting schedule and on budget.“This milestone was achieved onschedule and on budget usingFluor’s integrated engineering,procurement, fabrication andconstruction approach to clients’projects,” said Mark Fields,president of Fluor’s Energy &

Chemicals business in theAmericas region. “Fluor workedin collaboration with Suncor –the groups were closely alignedon fabrication priorities andmodule placement dates.”The East Tank FarmDevelopment, which will be aSuncor-operated midstreamasset, is currently underconstruction in the WoodBuffalo Region of Alberta. Thefacility will consist of bitumenstorage, blending and coolingfacilities and connectivity tothird-party pipelines.

Final module for Suncor tank farmdevelopment project placed

Leistritz product development driven by low oil price

At the Suncor East Tank Farmdevelopment project.

Imag

e Cr

edit: Fluo

r


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HALDOR TOPSOE HASlaunched a new nickelmolybdenum catalyst HyBRIMwith 25 per cent improvedactivity for nitrogen and sulphurremoval to improve diesel andhydrocracking unit performance.

This new product aims toallow refiners to process moresevere feeds, increase cyclelengths by several months,achieve larger volume swells, ormaximise unit throughput.

In a statement, the companycommented that the product’shigh activity offers newpossibilities to either increaseprofitability of high-pressureultra-low sulphur dieselproduction from heavy feedstocks or to guarantee a

superior pre-treatment for thehydrocracking unit.

HyBRIM also supportsprofitability by substantially

improving the cetane number of the final product.

The product utilises BRIMtechnology with an improved

catalyst preparation step, whichleads to optimal interactionbetween the active metalstructures and the catalystcarrier, thereby increasingactivity while delivering the samehigh stability.

The improved activity fornitrogen removal lowers thenitrogen slip from the pre-treatment step to the secondstage in the hydrocracker andthis leads to an overallimprovement in hydrocrackingunit performance.

The new product, TK-611, isthe successor to TK-609 of theHyBRIM series. All HyBRIMcatalysts are produced at Topsoe’sISO-certified and REACHcompliant manufacturing sites.

New catalyst will enhance hydrocracking unit performance

The product minimises the inhibition of the hydrocracking catalyst and delivershigher conversion and selectivity.

INNOVATIONSISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM 45

Image Credit: Halldor Topsoe

CWC Group Ltd (NOG 2017) ..............................................................................33

DMG World Media Abu Dhabi Ltd (ADIPEC 2017) ........................................27

Energy Institute (IPWEEK 2017) ..........................................................................8

Hyprops Nigeria Ltd ..............................................................................................19

Hytera Communications Co. Ltd ..........................................................................11

Messe Frankfurt Middle East GmbH (Intersec 2017) ....................................25

Oman Cement Company ......................................................................................37

PFL Engineering Services Limited........................................................................2

Saudi Leather Industries Company Ltd ............................................................21

Solewant Group......................................................................................................48

Tilone Subsea Limited ..........................................................................................17

Tolmann Allied Services Company Ltd ..............................................................13

Well Fluid Services ................................................................................................29

Yahsat ........................................................................................................................5


NAPE’s vision is to be thepreferred professionalgeosciences association withglobal reach. How realisable isthis vision?Basically, when we say “globalreach”, we mean NAPE should beable to have programmes that aresubscribed to by the globalprofessional community, and beable to attract global professionalto come and participate in ouractivities here in Nigeria, and toa very significant extent, NAPEhas achieved that.

NAPE is also associated with the geosciences associationsin most parts of the world, and that also bears testimony toour global reach.

A lot of international bodiesare part of us and attend ourconferences and had alwayscommended the quality of our papers.

The rate of oil exploration is declining in Nigeria. Does NAPE has plans toredress this?Yes, rate of exploration had gonedown, and it had been goingdown for a while, and there areseveral reasons for this – thecounterpart funding from thegovernment for the joint venturefunding was not regular enough,[and] another reason being theuncertainty brought by the nonpassage of the PetroleumIndustry Bill [PIB].The nonpassage of the PIB created a wait-

and-see attitude by the operatorsand a maintenance of status quo,and so most companies were notwilling to venture out andexplore new areas but prefer tosustain current production.

Do you envisage anyimprovement?Yes, the current administration ofPresident Muhammad Buharihas broken up the PIB and, in theprocess, removed the contentiousparts, and hopefully the PIB will soon be passed – albeitwithout the contentious andpolitical parts that had workedagainst its passage.

This approach, I believe, will restore some measure ofconfidence that will enable some exploration activities to be restored.

On funding, the governmentmay have to sell some of theequities in the majors and it ismy personal view that sharesarising from the disinvesting canbe traded on the stock exchangewherein the government sellthese shares to Nigerians throughthe stock exchange

The current government,though, had been innovative inraising funds throughsyndication of funds throughsome major oil companies, but itwill have to raise moresignificant funding – and this itcould do through disinvestingsome of its shareholding in themultinational oil companies and

selling them to Nigerians.However to be on soundfinancial footing, not only for thepresent but also for the future,Nigeria will have to blockwastages, as wastages more thananything else is responsible forwhere Nigeria is now and ifunable to reduce wastages, it willbe difficult to move forward.

Are there still issues with thesecurity in the Niger Delta?There had been all manner ofsecurity issues in the Niger Deltathat had adversely affectedexploration as operators areafraid of venturing into areaswhere they were not well known

to explore for oil, and preferstaying where they are andmaintaining production. And if the rate of depletion is morethan the rate of replenishment,there is trouble.

However, if sufficient levels ofconfidence can be createdbetween the Niger Deltacommunities and thegovernment, then there could be some resolutions of theconflict –I am not confident, but I am hopeful that a solutionwill be found.

But there is a need to have an audit of what has come to thecommunities financially and how those monies had been expended.

Is NAPE involved with thetalks in resolving the NigerDelta question and are any ofthese talks with the militants?No, we are not. NAPE took a deliberate decision not to –NAPE is a professional body and does not want to overstep its boundaries.

Nigeria is officially inrecession, with the recessionbrought about by the lowprice and the reducedproduction of oil. How hasthis impacted on explorationin Nigeria? Yes, we are in recession, due tothe low price and the reducedproduction, but it is also oil thatwill take Nigeria out of the

Abiodun Adesanya takes over the Nigerian Association of Petroleum Explorationists (NAPE) at acritical time for the industry in Africa and the wider world. He talks to Oil Review Africa about

the challenges that lie ahead. Interview by Bola Olowo.

TAKING THE HELM DURING A

TURBULENT TIME

INTERVIEW ISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM46

Abiodun Adesanya has greatambitions for exploration in Nigeria.

S11 ORA 6 2016 - Interview_ORA Master Template - 2016 New 14/12/2016 11:53 Page 46

recession, given that it is the oilindustry that can generate theforeign exchange.

The recession had impactedon Nigeria as a country,exploration of oil included, butwith careful management of theoil industry, Nigeria will comeout of the recession

We have an opportunity to reset the way we do things and learn important lessons,make necessary adjustments and launch out again, hopefullywe will not repeat the mistakes of the past.

What is the state of themarginal fields, where most ofthe indigenous operators are?There are more activities therenow, but the operators are alsogoing through challenges, since they are all hooked to thirdparties terminals and when those terminals are blown up,they are struck.

They are working onalternative measures, use ofbarges for instance, some maystand alone, some are forming aconsortium, some are laying theirown pipelines, but all these comeat a cost, especially production

cost. A lot of them are resortingto desperate moves to overcomethese challenges.

The way out is to resolve the Niger Delta problem, and the government has to find a way of separating criminality and agitation.

Is NAPE worried that Angolamay have overtaken Nigeria inthe oil market?Of course, there are worries. ButAngola does not necessarily havemore oil. It just doesn’t have thecommunity issues that Nigeriahas, issues that had impactednegatively on production. I amnot too worried though aboutwho is number one or two, but

[about] how Nigerians willbenefit from the oil proceeds,and its impact on povertyeradication, infrastructure andgeneral wellbeing.

But Nigeria is really a gascountry - how come the gasreserves have not beenadequately harnessed?Yes, Nigeria is more of a gascountry, but the problem is that infrastructure to harness gas is more demanding, and anygas project requires certification,both in terms of quantity and quality.

Yes, Nigeria has lots of gas reserves [and] flaring hadgone down, but it needsinfrastructure to bring the gas to the market.

There is also the need to bestrategic – there is the need tostop flaring completely, and also to explore for more gasreserves in other basins besidethe Niger Delta.

NAPE has previouslyadvocated exploration oil inother basins – can you expandfurther on this?The Niger Delta basin isregarded as a matured basin – somany wells had been drilled,

so much production had takenplace, and there are other greenbasins, and those basins need tobe explored. And we have a responsibility toexplore these basins. Technologyis evolving and oil may becomeobsolete in future and we shouldsecure the future.

In exploring these basins andbeing competitive, Nigeriashould reduce its explorationcosts, especially the nontechnical costs comprising ofsecurity costs, as the technicalcost is down already.

As the NAPE new President,what is your agenda?[It is] not quite different from theprevious presidents – NAPE hashistorically been an adviser to thegovernment, and had made itsown contributions to governmentpolicies, and this regime willcontinue to do that.

In addition, we want to raisethe profile of the association. Wewant the public to be more awareof NAPE activities, we need to bemore visible. We also want todevote more attention to thestudents, their condition oflearning, their programmes andtheir teachers, and help studentsby also helping their trainers.

NAPE hasmade a deliberatedecision not to talkwith the militants –we are aprofessional bodyand do not want tooverstepboundaries”

INTERVIEWISSUE 6 2016 • WWW.OILREVIEWAFRICA.COM 47

Mr Adesanya is “not confident but hopeful” that a solution can be found to theproblem of militants who vandalise oil installations.

Image Credit: S

takeholde

r Dem

ocracy/Flickr

The Niger Delta basin is a matured basin, but other locations need to be explored.



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