ITP MEDIA GROUP / BUSINESS NOVEMBER 2021 • VOL. 17, ISSUE 11 A CLEAN TRANSITION THE ENERGY TRANSITION IS NOT JUST ABOUT TECHNOLOGY, IT’S ABOUT STRATEGY AND PEOPLE, SAYS CHRISTIAN CRAVEDI, ABB SVP AND HUB MANAGER FOR ENERGY INDUSTRIES IN THE INDIA, MIDDLE EAST AND AFRICA REGIONatlascopcorental.com Our team of experts offer full-service rental solutions including planning, transport and on-site support, you can depend on us to supply quality equipment that is certified, reliable and energy-efficient for all your needs. Atlas Copco Rental 24/7 Reliable SolutionsNOVEMBER 2021 / Volume 17 Issue 11 22 OGFF 2021 review 28 Awards update 18 Cover story: A clean transition 08 The industry in numbers Highlights in this issue: 18 COVER STORY 3 IN THIS ISSUE oilandgasmiddleeast.com NOVEMBER 20214 IN THIS ISSUE oilandgasmiddleeast.com NOVEMBER 2021 DOWNLOAD IT TODAY ON YOUR iOS, ANDROID OR KINDLE Also inside: App 28 08 / In numbers As demand ramps up, China is set to invest in upstream... 18 / Cover: Clean transition ABB discuss the importance of a human-centric approach to climate action 35 / Project listings Projects from across the region in the upstream sector, courtesy of DMS Global 26 / ADIPEC preview Quick facts about ADIPEC, the event map, and easy access to the latest ADIPEC news and updates 14 / Industry Outlook Insight into the hydrogen race and how major energy players are stepping up to the plate 18 14 22 8 KEEP UP-TO-DATE For all the latest news, check out www. oilandgasmiddleeast .com 28 / Awards update Don’t miss this important update about the Middle East Energy Awards! 22 / OGFF review Check out a quick recap of the 2021 Oil & Gas Future Forum, and watch the full video on-demand 26 Last month FOR A WORLD THAT’S ALWAYS ONTM With the strength of Cummins Power Generation by your side, your oil and gas initiatives can go a step further, with increased uptime and greater productivity. Choose reliable and safe power installations to sustain your operation under the harshest and most extreme conditions. Learn more at www.cummins.com/generators/oil-and-gas YOUR OPERATION IS OUR BUSINESS6 oilandgasmiddleeast.com NOVEMBER 2021 EDITOR’S LETTER W e need to invest in technology, and it’s one of the most powerful tools in our arsenal as we take strategic action to combat climate change, but it is just that, a tool. If our technology transforms but our people and our mindset do not, well, we’re right back at square one. This was one of the many fascinating points I discussed with ABB’s Christian Cravedi for this issue’s cover story (page 18 for more insight!), and while I’m always keen to hear about the technology side of the energy transition, I was refreshed and pleasantly surprised when Cravedi interrupted me politely during our conversation to ask if all of my questions would be about technology. When asked what he would prefer to talk about, he said that it’s equally important to talk about people. Fair enough! The conversation that followed was eye-opening. His perspective was not only that people need to be deeply invested in climate action, but that we risk more damage by leaning completely on technology and new developments without taking a strategic, studied approach. After all, the pollutants that plague the environment today were created with the intention to solve problems, not create them. Some of them were created specifically to help with environmental and wildlife conservation, in fact... But I’ll leave it at that. More on page 18! Carla Sertin Editor Oil & Gas Middle East We can invest as much as we want in technology, but people will have to take action to combat climate change. Climate change is a human issue SUBSCRIBETo subscribe to Oil & Gas Middle East, or other ITP Business titles, go to: www.itp.com/subscriptions. PO Box 500024, Dubai, UAE Tel: 00 971 4 444 3000 Web: www.itp.com Offices in Abu Dhabi, Dubai, London & Mumbai ITP Media Group CEO: Ali Akawi Managing Director: Alex Reeve Editorial Editor: Carla Sertin Tel: +971 4444 3265 email: carla.sertin@itp.com Advertising Group Sales Manager: Mark Grennell Tel: +971 4444 3202 email: mark.grennell@itp.com Photography Senior Photographers: Efraim Evidor, Adel Rashid Staff Photographers: Yuliya Petrovich, Fritz John Asuro, Ajith Narendra Production & Distribution Group Production & Distribution Director: Kyle Smith Production Manager: Denny Kollannoor Production Coordinator: Manoj Mahadevan Senior Image Editor: Emmalyn Robles Circulation Distribution & Warehouse Manager: Evijin Pathrose Circulation Executive: Rajesh Pillai Distribution Coordinator: Avinash Pereira Marketing Director of Awards & Marketing: Daniel Fewtrell ITP Group CEO: Ali Akawi CFO: Toby Jay Spencer-Davies The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. Published by and © 2021 ITP MEDIA Group FZ-LLC. Visit www.arielcorp.com/KBC for full specifications THE ARIEL KBC:D:F Improve your operation and get more performance from the world standard in compression. The Latest Addition to the KB Compression Line. Optimized for natural gas gathering, processing, transport & storage, process & industrial gasses, and other compressor applications; the KBC:D:F’s robust design provides high horsepower density and minimizes vibration in a newly designed, compact footprint.RISING OIL DEMAND: CHINA TO SPLURGE $120 BILLION ON SERVICES In need of more oil, China will spend massively on services and will drill 118,000 wells through 2025 China is looking to pump up oil and gas production in the years ahead to meet climbing domestic demand and reduce the record-high share of imports in its oil consumption. A Rystad Energy report projects a surge in spending till 2025, which will be accompanied by a drilling spree totaling 118,000 wells that will create significant opportuni- ties for suppliers. China’s national oil companies (NOCs) are expected to splurge more than $120 billion on drilling and well services in the five-year period of 2021- 2025, seeking to meet the rising oil and gas demand. At the same time, the country aims to supply more of its oil 8 IN NUMBERS oilandgasmiddleeast.com NOVEMBER 2021demand from domestic sources, after the share of imported crude oil has risen steadily from 2014 to a high of almost 75% last year. To be exact, CNPC, CNOOC and Sin- opec together are expected to spend about $123 billion on drilling and well services in the coming five-year period, up from a total $96 billion between 2016 and 2020. As a result of China’s oil and gas demand growth, drilling activity in the country is expected to remain intense in years to come, with the cumulative number of development and explora- tion wells drilled between 2021 and 2025 expected to reach 118,000. De- velopment wells will account for 88% of the total and exploration wells will make up the remaining 12%. “Despite a strong policy push to electrify transport, China is still ex- pected to use oil products to fuel its hundreds of millions of cars, buses and trucks for the next five years at least. Although the country’s electric vehicle market is projected to achieve a 20% market share by 2025, internal com- bustion engine vehicles are expected to account for most of China’s transport needs and to provide a backbone for oil demand through 2025,” says Peng Li, energy research analyst at Rystad Energy. Chinese oil production has fallen from 1.55 billion barrels in 2014 to 1.43 billion barrels in 2020. Domestic oil production was able to meet just over a quarter of China’s domestic oil needs in 2020, with the remaining 74% met by imports, the highest level on record. Given that just 2.4% of the world’s proven oil reserves are located in China, the scope for dramatically increasing domestic production is limited. China’s reliance on imports – and associated energy supply security concerns – has led the government to push its domestic E&P companies to find new reserves and increase domes- tic output. On the natural gas side, domestic production remains modest compared to overall demand, but has grown from approximately 120 billion cubic meters (Bcm) in 2014 to around 190 Bcm last year. This is still well short of 2020’s total demand of 330 Bcm, meaning the nation remains reliant on imported piped gas and shipped liquefied natural gas (LNG) for over 40% of its needs. With gas consumption on the rise – especially as China looks to use more gas in place of coal in power genera- tion to reduce short-term emissions – the pressure to boost domestic gas pro- duction is an overarching imperative. This will also provide a stimulus to the E&P sector, especially if international LNG prices continue to track higher, as seems likely due to anticipated global supply constraints. While the transition to a low-car- bon economy is a major priority for China, balancing this with the nation’s transitional oil and gas needs is still an important consideration. This is outlined in China’s 14th five-year plan for 2021-2025, which emphasizes the importance of identifying new hydro- carbon reserves and increasing oil and gas production, alongside increasing the share of non-fossil fuels to 20% by 2025. “As state-owned entities, China’s major operators are not solely profit- driven. They also play an important and integrated role in social econom- ics. So even in a less-favorable oil price environment, we expect Chinese NOCs to perform in line with government expectations and to continue to make an effort to shore up domestic supply,” Li points out. China has managed to maintain overall oil production while increasing gas production, despite drilling notably fewer wells in 2020. This is quite an achievement considering that China was the first country to be seriously impacted by the pandemic. One of the main contributing factors has been advances in drilling and well services techniques, which is enabling China to drill an increasing number of deep and horizontal wells. Improved well planning and ad- vanced enhanced oil recovery (EOR) methods are also helping China increase its recovery rate, even at giant mature fields such as Daqing. Another gamechanger in the past decade has been the rising use of fracturing servic- es, which has boosted development of unconventional oil and gas resources. With China focused on maintaining or increasing production levels, service companies that bring innovative tech- nology solutions to the table are likely to get a warm welcome in the Chinese drilling and well services market in the years to come, whether the field devel- opments are conventional or uncon- ventional, onshore or offshore. 9 IN NUMBERS oilandgasmiddleeast.com NOVEMBER 2021Next >