MIDDLE EAST Oil&Gas ITP MEDIA GROUP / BUSINESS FEBRUARY 2020 • VOL. 16, ISSUE 02 Meet the superheroes of the oil and gas industryFEBRUARY 2020 / Volume 16 Issue 02 30 Inside Aramco’s innovation hub Saudi Aramco reveals all about its fourth industrial revolution centre, and the cutting edge technologies that are driving its digital transformation. 34 High tide in Egypt Egypt has attracted a series of international oil companies into its offshore segment, which continues to swell with opportunities for its partners. 14 The Power 50 ranking The 50 most influential figures in the upstream oil and gas sector, with a snapshot into the biggest successes, recoveries and the worst flops of 2019. 10 News analysis A look at the latest developments in the regional upstream sector, with the most important news of the month from around the GCC. Highlights in this issue: 30 DIGITAL FEATURE 3 IN THIS ISSUE oilandgasmiddleeast.com FEBRUARY 20204 IN THIS ISSUE oilandgasmiddleeast.com FEBRUARY 2020 06 Editor’s choice: • Video: Who wins in Saudi Ara mco’s SABIC deal? • Oil & Gas Middle East Top 30 EPC Contractors 2019 • Video: How Sensia sits at the centre of IT and OT • Video: O&GME and R&PME Awards 2019 achievers DOWNLOAD IT TODAY ON YOUR iOS, ANDROID OR KINDLE Also inside: App 34 38 05 / Editor’s letter Carla Sertin with her thoughts on the industry 08 / News update The latest upstream news from around the region 14 / The Power 50 Our annual ranking of the 50 most influential figures in the regional upstream segment 10 / News analysis Analysis on Oman after Sultan Qaboos’ passing, and how the oil has been impacted this month 40 / Project focus Everything you need to know about ADNOC LNG’s Integrated Gas Development Expansion 34 / Country focus: Egypt Following the Red Sea bidding round, we look at recent activity in Egypt 38 / Awards preview The Middle East Energy Awards are back! 06 / In numbers Rystad Energy says that OPEC must do more in 2020 www.oilandgasmiddleeast.com 12 10 14 08 KEEP UP-TO-DATE For all the latest news, check out www. oilandgasmiddleeast .com 12 / Face to face We hear from DNV GL - Oil & Gas CEO Liv Hovem on the future of oil & gas 30 / Aramco gets digital Saudi Aramco gives us a sneak peek into the technology that keeps it ticking 30 Online5 oilandgasmiddleeast.com FEBRUARY 2020 EDITOR’S LETTER There have been moments, this year, when oil & gas executives seemed truly to take on the likeness of superheroes. Take, for exam- ple, Saudi Aramco’s shockingly quick recovery from missile strikes on its facilities. Never has the gargantuan scale of the company, or its impact on the global economy, been so apparent. The oil & gas sector has faced a huge crash in oil prices, growing distaste in public sentiment, and physical attacks on its infrastructure with steely resolve. It has taken challenges and turned them into opportunities, and is staring into a lower-carbon future with a plan in hand. But even superhe- roes have their weaknesses. DC Comics’ Superman, for example, with all of his strength and otherworldly power, could be easily defeated by just a small shard of kryptonite. The kryptonite of the oil & gas industry is complacency. We are in an economic reality where complacency can mean destruction for oil & gas companies. Transformation is no longer on the horizon, and executives who are satisfied with the status quo will find it being redefined around them every day. The superheroes of our industry are agile, forward-thinking in- novators who embrace change and take it in stride. There is certainly no harm in taking a moment and flipping to our Power List on page 14 to revel in the incredible achievements of the past year; it has been a remarkable, historic year for the upstream sector. I hope you take away from these pages a sense of awe for all that has been achieved, inspiration for all that is yet to come, and the motivation to get it done! Carla Sertin Editor Oil & Gas Middle East If oil & gas professionals are superheroes, then there is only one thing that can destroy them... Our kryptonite SUBSCRIBE To subscribe to Oil & Gas Middle East, or other ITP Business titles, go to: www.itp.com/subscriptions. 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THIS ISSUE: The 50 most powerful figures in the upstream segment, featured in our annual ranking (p14).OPEC NEEDS TO DO MORE IN 2020 OPEC production is likely to average 29.3mn bpd for the first quarter of 2020, with call-on-OPEC of 29.0mn bpd, says Rystad Energy The 14-country OPEC bloc, Rus- sia, and a host of other OPEC+ countries agreed on 6 December 2019 to bump up the group’s target oil-production cuts by just over half a million barrels per day, from 1.195 million to 1.699 million bpd, effective 1 January 2020. “The OPEC cuts didn’t fully solve the problem – instead they offer a light bandage to get through the first quarter of 2020, but after that, we believe the market will begin to realize the looming over-supply reflected in our balances and call-on-OPEC,” said Bjørnar Ton- haugen, head of oil market research at Rystad Energy. The conclusion that deeper cuts are needed is driven by Rystad Energy’s bottom-up supply analysis, which points to a surplus of oil barrels sloshing around despite the most recent OPEC+ policy. In our revised supply forecast in the upcoming release of our OilMarket- Cube database, we incorporate the new OPEC+ agreement assuming full compli- ance with the new targets by core OPEC members Saudi Arabia, Kuwait and UAE. We find that OPEC production is likely to average 29.3 million bpd for the first quarter of 2020, which compares to our call-on-OPEC of 29.0 million bpd. Rystad Energy expects the oil market balance outlook to be further challenged later in the year, after the initial effect of the new IMO 2020 marine fuel regula- tions wears off and demand fears creep back into the market. We therefore see our call-on-OPEC at an average of 28.9 million bpd for the subsequent three quarters. “As long as OPEC sticks to produc- tion pledges and Saudi Arabia cuts an additional voluntary 400,000 barrels as promised, the implied production target for OPEC is 29.2 million bpd – above our call-on-OPEC and thus likely to result in stock builds and downward pressure on oil prices,” said Tonhaugen. The market looks nearly balanced for 1Q20 with 0.3 million bpd of implied stock builds, and if we include a positive 6 IN NUMBERS oilandgasmiddleeast.com FEBRUARY 2020effect from IMO 2020 on crude demand to the tune of 0.3 million bpd in 1Q20, the market balances in the first months of 2020. Come March, however, OPEC+ may be forced to cut even deeper to bal- ance the market for 2020 as a whole. “Worryingly, for the last three quarters of 2020, the call-on-OPEC is forecast to average 28.9 million bpd on the assump- tion of a positive IMO effect, but only 28.3 million bpd without our expected 0.6 mil- lion bpd IMO effect on crude demand. In other words, the implied production tar- get for OPEC of 29.2 million bpd is likely not low enough to avoid stock builds and downward pressure on oil prices, putting the $60 Brent oil price environment in jeopardy in 2020,” Tonhaugen cautions. “OPEC seemingly heeded our warn- ing call that deeper production cuts are needed to sustain $60 Brent prices in 2020, but more is needed – the current price floor is fragile beyond 1Q20,” Ton- haugen concluded. 7 IN NUMBERS oilandgasmiddleeast.com FEBRUARY 20208 NEWS UPDATE oilandgasmiddleeast.com FEBRUARY 2020 CORONAVIRUS CONCERNS Concerns about the coronavirus outbreak have pushed oil prices down, as the public worries about a shortfall in demand from China, where the outbreak began. PLAY/PAUSE: Who’s moving up in the oil and gas world this month, and who’s falling away? • SFO alleges Unaoil agents paid $6mn bribes in Iraq The UK Serious Fraud Office has alleged that people working for Monaco-based consultancy Unaoil paid $6mn in bribes for contracts worth $800mn in Iraq. . • Oil demand to exceed 100mn barrels per day in 2020, OPEC says The Organisation of Petroleum Exporting Countries (OPEC) is projecting global oil demand of 100.98mn barrels per day in 2020, up 1.2mbpd compared to 2019. • The industry must “step up climate efforts now”: IEA Fossil fuels drive the companies’ near-term returns, but failure to address growing calls to reduce greenhouse gas emissions could threaten their long-term social acceptability and profitability.. IN BRIEF US SANCTIONS UAE FIRM The US has sanctioned UAE firm Be- neathco, as well as Hong Kong and Chinese firms, for participating in the trade of Iran oil worth hundreds of millions of dollars. WAFRA FIELD ONLINE SOON Kuwait plans to resume oil produc- tion at Wafra field, shared with KSA, by March, Oil Minister Khaled Al- Fadhel said. The field has been shut down for more than four years. ARAMCO BRAND = $46.8BN Saudi Aramco was named the most valuable brand in MENA, with brand value of $46.8bn. It ranked 24th globally, and was the second most valuable oil & gas brand, after Shell. BP’s incoming CEO Bernard Looney has big plans to expand the company’s climate targets and is considering overhauling the structure of the oil and gas major in one of the biggest shake-ups in its 111-year his- tory, according to a recent interview with Reuters. The Irishman has plans to adopt broader carbon emissions reduction goals that will likely include emissions from fu- els and products sold to customers rather than just the far lower emissions from BP’s own operations, according to four of the newswire’s sources. “The aim is to catch up with, and pos- sibly outdo, rivals such as Royal Dutch Shell and Repsolas investor pressure over climate change mounts,” said the sources who declined to be named. As part of the climate push, Looney is also looking at Incoming BP CEO has “ambitious” overhaul plans Bernard Looney is planning to expand the company’s climate targets, and could overhaul the structure of the oil major a broad reorganisation of the company aimed at cutting costs. He is expected to outline his ambitions for the company in a 12 Feb speech, a week after he takes over from Bob Dudley. “Looney is coming in at a crucial moment for the oil sector,” said Morgan Stanley’s global oil analyst Martijn Rats told the newswire. “Over the next decade, companies like BP will need to maintain supply of oil and gas, for which demand is continuing to grow. That will require ongoing invest- ment. At the same time, they will need to prepare for a decarbonised future.” “All the while, their investors will ask them to keep up these large dividend pay- ments. Balancing these three demands will be the key challenge.” Get the latest upstream news and analysis on our website, oilandgasmiddleeast.com, daily newsletter, and social media.9 NEWS UPDATE oilandgasmiddleeast.com FEBRUARY 2020 #TRENDING The top stories from our website and its associated social media channels, where the latest upstream news appears first FACEBOOKTWITTERLINKEDIN Mubadala Petroleum farms out of 20% interest in Indonesia Mubadala Petroleum farmed out a 20% participating interest in each of the Andaman I and South Andaman Gross Split Production Sharing Contracts. BP’s CFO to retire, to be succeeded by Murray Auchincloss in July Murray Auchincloss, currently CFO of BP’s upstream segment, will take up the role of BP CFO and join the board on 1 July 2020. Seeq Corpo- ration raises $24mn funding in Series B round Saudi Aramco Energy Ventures joins Altira Group, Chevron Technology Ventures, and existing investors to ex- pand Seeq’s cloud-based business. Eni and ADNOC sign a MoU on joint research activities on carbon capture technology Large volume of oil & gas informa- tion drives further big data adoption: GlobalData Safety as a service: The future for oil and gas? Honeywell Safety and Productivity Solutions’ VP & GM for MERTA, Miroslav Kafedzhiev, says that safety should be packaged as a holistic ser- vice, rather than individual products and solutions. Oil & Gas Middle East How PDO plans to transform its busi- ness in the energy transition Mohammed Al-Ghareebi, external affairs & communications manager at PDO, comments on the company’s plans to transform in a changing energy landscape; renewables, digital technol- ogy, and more are on the horizon! APICORP chief economist on the $1trn going into MENA energy APICORP’s chief economist, Dr. Leila Benali, talks about the outlook for the regional energy sector, reveals which areas are growing the fastest, and outlines the hurdles in moving towards sustainability. 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