< Previous30 UAE FOCUS - ADNOC CEO INTERVIEW oilandgasmiddleeast.com APRIL 2019 DISRUPTION: ADNOC’S GROWTH STRATEGY ADNOC Group CEO Dr. Sultan Ahmed Al Jaber talks about disruptive transformation and his strategy to make the energy giant more nimble in an evolving energy landscape “OUR INTENT IS TO BECOME A MORE FLEX- IBLE AND AGILE INTE- GRATED ENERGY BUSI- NESS.” What was the motivation behind ADNOC’s transformation? Dr. Sultan Ahmed Al Jaber: ADNOC is a critical driver of the social and economic development of the UAE and a key enabler of its economic diversifi- cation. Since being appointed CEO, my primary objective has been to ensure ADNOC not only continues to play this role but also deepens its impact. It was clear, when I joined, that the energy landscape was evolving faster than ever before, and we could no longer continue business as usual and expect the same results. We needed to think differently, be more creative and move beyond our comfort zone. Realising that we cannot control the price of oil, we are focused on what we can control. This fundamental reality is at the heart of our 2030 Smart Growth Strategy. Our unrelenting attention is on minimising costs, enhancing our operational efficiency, and maximising margins to ensure we thrive in the new multi-layered energy landscape. At the same time, we are expand- ing our base of partners and investors. Finally, we are shaking up the ADNOC culture to unlock and create greater val- ue from all our resources, with the aim of making ADNOC a model, not simply for a modern national oil company, but for how a modern energy company should operate. What are the main challenges and suc- cesses related to this transformation? SA: The main consideration when driv- ing transformation is keeping the organ- isation with you. Therefore, developing ADNOC’s internal culture into one that nurtures a dynamic, commercially focused mindset has been an essential task. This internal work has allowed us to move quickly and to deliver a series of firsts for the organisation. In a short time, ADNOC has con- solidated its businesses and unified its brand identity; opened-up its conces- sions to new strategic partners; compet- itively tendered new exploration blocks for the first time; launched the UAE’s unconventional industry; embarked on a five-year, $45bn expansion of its downstream operations; undertaken a digital transformation and made our first moves to expand internationally. We have also delivered financial firsts including ADNOC’s debut capital markets transaction, the issuance of the Abu Dhabi Crude Oil Pipeline (ADCOP) bond; the IPO of ADNOC Distribution; concluded a landmark multi-billion- dollar midstream pipeline infrastructure 31 UAE FOCUS - ADNOC CEO INTERVIEW oilandgasmiddleeast.com APRIL 2019 and capital, allows us to unlock capital from within ADNOC, drive business and revenue growth, optimise returns across our businesses and secure market access. The upstream projects we are pursu- ing will further diversify the UAE’s hydrocarbon resource base, provide high-grade feedstock to expand our Dr. Sultan Ahmed Al Jaber, CEO of ADNOC Group Where is ADNOC currently situated on the path towards its 2030 Strategy goals? SA: Having laid the foundation for our 2030 Strategy, we are embarking on the next phase of our transformation, built around new strategic partnerships and investments. This, combined with the more proactive management of assets partnership with KKR and BlackRock and agreed strategic equity and com- mercial partnerships between ADNOC Drilling and Baker Hughes as well as ADNOC Refining and Eni and OMV. These achievements are just the start of our journey to create a new kind of national oil company that is fit to thrive in any future scenario.32 UAE FOCUS - ADNOC CEO INTERVIEW oilandgasmiddleeast.com APRIL 2019 downstream activities and ensure the most effective utilisation of Abu Dhabi’s oil and gas at commercially competitive rates. Meanwhile, our downstream ex- pansion plans will create a range of investment and partnership opportuni- ties for global investors. It will also see the entire Ruwais complex upgraded to increase its flexibility and integrated capabilities to produce greater volumes of higher-value petrochemicals and derivative products. Where do you see the most potential for growth for your organisation? SA: Global demand for energy contin- ues to grow but the demand dynamic is shifting from west to east and from north to south, as emerging economies become more prosperous. By 2040, non- OECD countries will account for over 70% of global energy demand. These changes also sit alongside forecasts of a rapid expansion in the market for products derived from petrochemicals, from everyday plastics to high-grade polymers, globally and particularly across Asia. The mission for all energy compa- nies is not just to keep up with these trends, but to stay ahead of the curve. At ADNOC, we are calling this mission “Oil and Gas 4.0”- a strategic response to ensure our company can meet the ex- panding demand for energy and higher value products in the fourth industrial age. A key pillar of this response is our strategic approach to partnership. ADNOC is capitalising on the demand trends upstream and downstream, through long-term, strategic partner- ships that embed and apply the latest technology, focus on commerciality and offer greater market access. ADNOC has always been a reliable producer of crude and it will remain a major global supplier of crude and gas. However, our intent is to become a more flexible and agile integrated energy busi- ness, able to identify and take advantage of the best opportunities across the entire value chain. We have seen ADNOC opening up to foreign investment across the value chain. Tell me about this strategy and its place in ADNOC’s future. SA: Shifting global trends are creating an energy landscape where new rules of engagement are required. In this new energy era, we need to adopt more crea- tive strategies and more flexible business models to capture growth. So, we have developed an expanded approach to partnerships and created several invest- ment opportunities across our entire value chain. Our new approach will deliver two key benefits to ADNOC. Firstly, it will allow us to unlock and maximise value and invest in growth. Secondly it will enable us to accelerate our growth, whilst im- proving integration across the ADNOC business. It will also enable us to more proactively and efficiently manage our asset portfolio and capital structure. Crucially, these new types of partner- ships will help optimise our operational and financial performance, at both the ADNOC Group and asset level, and help secure access to target markets and the new centres of global demand. They will also bring technological expertise and foster better knowledge sharing between ADNOC and our partners, as well as enable the co-development of cutting-edge intellectual property and technology. The recent signing of one of the largest ever refinery transactions, in which Eni and OMV acquired 20% and 15% shares in ADNOC Refining respec- tively, is a prime example of the kind of partnerships that support our ambition of becoming a global integrated energy company, with the flexibility to respond quickly to shifting market needs and dynamics. “THE MISSION FOR ALL ENERGY COMPANIES IS NOT JUST TO KEEP UP WITH THESE TRENDS, BUT TO STAY AHEAD OF THE CURVE.”33 UAE FOCUS - ADNOC CEO INTERVIEW oilandgasmiddleeast.com APRIL 2019 resources. In short, we have reframed the business model for sustainable gas production in the UAE. Under the integrated gas strategy, we will develop the Ghasha ultra-sour gas concession, which is expected to produce over 1.5bn cubic feet of gas per day, when it comes on stream around the middle of the next decade. At the same time, we will increase production from the Shah sour gas field to 1.5bn cubic feet per day and move forward to develop the sour gas fields at Bab and Bu Hasa. We also plan to tap gas from our onshore and offshore gas caps and unconventional gas reserves, as well as new natural gas accumulations, which will continue to be appraised and developed as the company pursues its exploration activities. The combination of rising demand for gas, more advanced technology and our industry-leading experience in develop- ing sour gas fields, makes it possible for us to commercially unlock value from these vast sour gas resources for the first time. What are the key digital technologies that ADNOC is leveraging in 2019? SA: We are incorporating the latest in artificial intelligence, data analytics, blockchain and machine learning into our Panorama Command Centre in order to empower our people to make better, quicker, data-driven decisions. In doing so we are making ADNOC an incubator of talent that will build long term resilience into our company and ensure it continues to provide the energy the world needs while making a lasting positive impact for the UAE and its partners. You plan to make the UAE gas self- sufficient by 2030, and turn it into a net exporter of gas. How do you plan to achieve these goals? SA: We are using a creative approach in pursuit of our goals to become gas self- sufficient, by 2030, and eventually tran- sition to a net exporter of natural gas. By exploiting undeveloped reservoirs and tapping our gas caps we are reduc- ing the average cost of our available gas How do you expect the UAE’s unconventional gas resources to play into ADNOC’s wider integrated gas strategy? SA: We have commenced an unconven- tionals program to explore, appraise and develop the Ruwais Diyab Unconven- tional Gas Concession area’s unconven- tional gas resources. The concession has the potential to be a high impact play, ranking alongside the most prolific North American shale gas plays, which could produce about 1bn standard cubic feet of gas per day before 2030. The program marks an important and historic milestone in the development of Abu Dhabi’s gas resources, as we deliver our strategic commitment to ensure a sustainable and economical gas supply. It will also enable ADNOC to undergo an accelerated learning curve which will help drive efficiencies in drilling and hydraulic fracturing, allowing us to create higher value from what is a more complex resource compared to the giant conventional oil and gas fields of Abu Dhabi. “IT WAS CLEAR, WHEN I JOINED, THAT THE ENERGY LANDSCAPE WAS EVOLVING FASTER THAN EVER BE- FORE, AND WE COULD NO LONGER CONTINUE BUSI- NESS AS USUAL AND EXPECT THE SAME RESULTS.” ADNOC has started to open up to foreign investment and partnership ADNOC’s Panorama Command Centre displays data across its operations34 THE MIDDLE EAST ENERGY AWARDS oilandgasmiddleeast.com APRIL 2019 INTRODUCING THE MIDDLE EAST ENERGY AWARDS For the first time, the awards will recognise achievements in the utilities sector, including alternative energy Oil & Gas Middle East and Refi ning & Petrochemicals Middle East are for the fi rst time teaming up with sister publication Utilities Middle East to present the Middle East Energy Awards. The awards will celebrate the achievements of not only the upstream and downstream sectors, as they have for 10 years, but the utilities segment as well. Since 2010, the annual awards event hosted by Oil & Gas Middle East and Refin- ing & Petrochemicals Middle East featured categories across the oil and gas value chain. But the energy landscape is shifting, and in keeping with industry trends, concerns and interests, the awards this year will also recognise achievements in utilities, including alternative energy, making the industry’s flagship awards event a more holistic cel- ebration of the region’s energy sector. Nominations for the awards are now open, and the editors of all three hosting publica- tions encourage nominations from every corner of the industry. With 16 categories, up from 10 in the 2018 edition of the awards, there is more room than ever to celebrate the wide scope of achievements from the indi- viduals and organisations striving to innovate and change the energy sector. The nomination process is online-only and will close on 3 July 2019. This year, there are four awards for individuals and 12 for organisations. The nominations process All nominations must be submitted through www.oilandgasmiddleeast.com/energ- yawards, and only nominations submitted through this portal will be considered. Three simple steps to make nominations: 1. Create a personal user account on the aforementioned website. 2. For each submission, fill out a question- naire to help the independent panel of judges decide why the nominee deserves to win. 3. Upload one PDF file with supporting im- ages and documents, not more than 10MB in size. Photos are generally more impact- ful, so please submit images. 201935 THE MIDDLE EAST ENERGY AWARDS oilandgasmiddleeast.com APRIL 2019 The categories The categories have been expanded to include the utilities sector and to reflect industry movements, including digital trans- formation. The 16 awards categories, along with a brief description of the ideal nominee for that award, is as follows: CSR Initiative of the Year A CSR programme that has provided demon- strable and lasting benefits to its targeted beneficiaries. Digital Enabler of the Year A company which has made an outstanding contribution to the digital transformation of an energy firm through the use of its prod- ucts or services. Downstream Project of the Year The most ambitious, game-changing project in the regional refining and petrochemicals industry. Energy Woman of the Year An outstanding female achiever who has a successful track record and has made a tell- ing contribution to the energy industry. HSE Initiative of the Year A specific initiative that has demonstrably helped to reduce accidents and problems in the workplace, and has generally improved safety. Logistics Service Provider of the Year A logistics company offering innovative solu- tions that create value for energy companies. Oilfield Services Company of the Year The most successful, innovative OFS com- pany in the region over the last 18 months, showcasing interesting solutions. Operational Excellence Strategy of the Year The most innovative and ambitious opera- tional excellence project by an energy firm in the Middle East. Technical Innovation of the Year A project that demonstrates a success- ful, innovative technical solution, which has solved a serious problem faced by the energy industry. Talent Development Initiative of the Year An initiative that has made a difference in the industry by training the next gen- eration of professionals, or upskilling the existing workforce. Upstream Project of the Year An ambitious, innovative project that opti- mises or streamlines upstream operations, reflecting leading behaviour in the market. Utilities Project of the Year An innovative project disrupting the region’s utilities landscape, offering much-needed hope for a better, more sustainable future. Young Energy Professional of the Year An employee aged 30 and younger whose work has had an overwhelmingly positive impact on his/her company over the past 18 months. Lifetime Achievement Award This individual has made a visible, positive impact on the regional industry, with over 25 years in the development and progress of the sector. Innovator of the Year This individual is dedicated to changing the industry, and takes fosters growth through innovative technologies, strategies and vision. Clean Energy Initiative of the Year This initiative demonstrates a strategic approach to lowering a company’s carbon footprint through the use of alternative energy. If you have any questions about the awards, the nominations process or anything related to participation in this event, please contact one of the editors (information below). Baset Asaba Utilities Middle East baset.asaba@itp.com “The recent wave of investments in renew- able energy in the GCC have put a spotlight on the utilities sector as a vital engine for the region’s economic transformation. We look forward to recognising that contribu- tion at this year’s Energy Awards.” A WORD FROM THE EDITORS Carla Sertin Oil & Gas Middle East carla.sertin@itp.com “Upstream companies are increasingly looking for ways to integrate alternative energy into their operations. The addition of Utilities Middle East to our 10th annual awards means we are truly representing the interests of today’s energy sector.” Martin Menachery Refining & Petrochemicals Middle East- martin.menachery@itp.com “With the impending IMO sulphur regula- tion on bunker fuels, cleaner fuels are in the limelight. Incorporating Utilities Middle East and rebranding as the ‘Energy Awards’ will allow us to offer the industry a more vibrant platform to celebrate excellence.”Fertilizer Industrial Infrastructure MiningConstruction Gas Refining Oil Pipeline Petrochemicals Renewables Power Offshore Water SECTORS COVERED SUBSCRIBE TODAY or contact us for further information A Division of REGIONS COVERED • China • Europe • India• Asia Pacific • Latin America • Middle East • East Africa • North Africa • West Africa • Central America • North America • Russia & CIS Stay one step ahead of your competitors with the DMS Projects Matrix • info@dmsglobal.net • www.dmsprojects.net• +973 1740 5590 (Bahrain Headquarters) • +971 249 161 71 (UAE office)A SPECIAL REPORT INTO A KEY SEGMENT OF THE REGIONAL UPSTREAM INDUSTRY PIPELINE MAINTENANCE A deep dive into pigging, pig detectors and innovative inspection methods that keep hydrocarbons flowing smoothly SPECIAL REPORT MARKET FOCUS INTELLIGENT PIGGING SERVICES ON THE RISE /P40 KNOWLEDGE PARTNER TECH FOCUS ABB on its innovative approach to pipeline maintenance /p42 Emerson explains how pig detectors can improve pipeline integrity /p44Th e S teel Pi pi n g Peo p le !!! Oil & Gas • Petrochemicals • Power Generation • Construction • Water Treatment SUPPLIER IMPORTER EXPORTER STOCKIST DISTRIBUT O R AGENT TOCKIST DWELCOME 39 oilandgasmiddleeast.com APRIL 2019 In the pipeline... Pipeline pigging and maintenance is important, and oil and gas companies must be pro- active to keep business (and gas) flowing smoothly. EDITOR’S LETTER COMMENT DOWNLOAD OR UPDATE THE APP NOW ON YOUR IOS DEVICE Pipelines are essential infrastructure in the oil and gas value chain. One recent demonstration: Bottlenecks in the Permian Basin. The breadth, style and functioning of Mid- dle East oil and gas producers is obviously quite different from those of shale producers in North America, but the fact remains that when adequate pipeline infrastructure is unavailable, insufficient, or simply down, the whole value chain suffers. As such, operators need to ensure pipeline integrity from both preventative and reactive positions. As with every other segment of the energy industry, technology has popped into pipeline pigging and maintenance with new ways of solving old problems. In our Market Focus, we examine the various segments of the intelligent pigging services market, which is expected to grow until 2025. Our Knowledge Partner, ABB, brings technology into the picture from a different angle: Leak detection. Daniel Lemos writes about the company’s mobile gas leak detec- tion system, which can be driven, or flown via drone downwind of potential leaks. It can detect leaks from up to hundreds of metres away from the source. Meanwhile, in our Tech Focus, Emerson introduces us to its Roxar PDS pig detector. Pigs make a characteristic noise as they travel through a pipeline, and the pig detec- tor interprets that noise to better under- stand the situation inside the pipe. It can even indicate the amount of pipeline debris pushed away by a pig, and can be retrofitted to existing installations; a source of worry for operators with ageing facilities. Finally, our Last Word comes from Falcon Eye Drones, with Managing Director Rabih Bou Rashid sharing his thoughts on drone use for inspection in the GCC, and the benefits that come along with leveraging the new technology. The traditional methods of pipeline main- tenance are tried and true, no doubt, but integrating new technologies could provide more depth for operators. That might been less time spent on maintenance, removing workers from potentially hasardous situa- tions and ultimately cutting costs. Yes, there are many other benefits to investing in smart pigging technologies and leak detection, but for oil and gas compa- nies, it usually boils down to cost. As with all digital technology, before applying it, consider whether there is a real business need in your company, and what problems it will realistically solve. With growing environmental concerns and a continuing focus on keeping costs low, making sure pipelines are up and running, and do not cause any environmental issues, should be a key concern for all oil and gas companies, and one that cannot be put off.Next >