< Previous10 NEWS UPDATE oilandgasmiddleeast.com SEPTEMBER 2020 /10 Play/Pause /11 News update /12 Trending /13 Around the region For the latest news and analysis, visit oilandgasmiddleeast.com Coming up: OFS IN DECLINE COVID-19 has pushed the oilfield services headcount to the lowest level in a decade, Rystad Energy analysis shows, and revenue per employee is set to decline. PLAY/PAUSE: Who’s moving up in the oil and gas world this month, and who’s falling away? • Saudi Aramco spending will be significant despite revisions While Saudi Aramco expects its 2020 capital expenditure to be at the lower end of the guidance range of $20bn-$25bn, it has already spent $13.6bn this year. • BP to move heavily in acquisitions & divestments BP announced that it will move from an international oil company to an international energy company, which will likely require heavy investment in acquisitions and divestments. • Shell’s outlook yields optimistic margins for low carbon future Shell is reducing its capital & operating expenses, boosting its digital technology, & in the long term, it’s focusing on cleaner energy with a leaner business model. IN BRIEF GROWING GAS FLARING Permian gas output is set to grow, but gas flaring could increase from 2023 if the coronavirus pandemic delays the construction of new pipe- line infrastructure. UAE MEGA MERGER The shareholders of NPCC have made an offer to combine the company with the National Marine Dredging Company, to create a regional integrated EPC company. FULL OIL RECOVERY Global oil demand is expected to re- cover by Q4 2020, the Saudi energy minister said before a meeting of OPEC oil producers and their allies, collectively known as OPEC+. Weir Oil & Gas Dubai signed a three- year agreement for servicing and repairing pumps and motors with a UAE national oil company. The contract secures the provi- sion of Weir Oil & Gas Rotating Equip- ment services, machine shop services, emergency manufacturing and site works. This agreement will allow Weir to expand their portfolio in the specific oil field. The company’s operations and mainte- nance offerings lead the industry in main- tenance process optimization services for brownfield/greenfield oil & gas, power and industrial facilities, streamlining maintenance costs and reducing total cost of ownership. Weir Oil & Gas’ RE/Turbo machinery offers brownfield rotating equipment solutions to increase asset life and reduce cost of ownership. Weir signs $1 million strategic UAE agreement The three-year agreement covers servicing and repairing pumps and motors for a national oil company “Weir takes great pride in our ability to deliver services, repairs, and upgrades to our clients, while in tandem, execute on supporting them with engineer- driven change management protocols and production facility turnarounds,” said Ronan Le Gloahec, Eastern Hemisphere President for Weir Oil & Gas. “With this additional contract we will support our client’s operations for several years, thanks to our state-of-the-art facility and in- country engineering know-how.” “It is a pleasure to see our customers trust in Weir’s local capabilities that sup- port the in-country value enhancement here in the United Arab Emirates”, said Matteo Benincasa, Eastern Hemisphere Director Sales & Marketing for Weir Oil & Gas.11 NEWS UPDATE oilandgasmiddleeast.com SEPTEMBER 2020 COVID-19 accelerates the energy transition: Adapt or perish Trillions of dollars are expected to flow through economic relief packages into deployment of low- and zero-carbon infrastructure The past year has been an unprec- edented time, with COVID-19 having an immediate and significant impact on all aspects of the energy sector. Despite the dramatic consequences COVID-19 is having on the global economy, Lux Re- search predicts the energy transition will be accelerated by several years. Trillions of dollars are expected to flow through eco- nomic relief packages into the deployment of low- and zero-carbon infrastructure as well as research and development into technologies that enable it. In their new re- port “Owning The Energy Transition: 2020 COVID-19 Update,” Lux analysts outline these changes and predict the impact of the disruptive changes to the global energy transition going forward. “The aftermath of COVID-19 will shake the economic fabric of the energy sector,” said Yuan-Sheng Yu, Senior Analyst at Lux Research. “We witnessed many historical firsts, such as oil futures trading in the negatives, U.S. renewable energy in the electricity mix surpassing coal, and the largest year-over-year drop in global CO2 emissions.” Yu explained that while the sudden effects may be a flash in the pan as the world returns to normalcy, 2020 provided a preview of the more permanent challeng- es the industry will face in the next decade. This “white swan” event will force com- panies to learn how to be more resilient, while countries planning their post-COVID recovery will capitalize on the opportu- nity and accelerate the energy transition through improved resiliency and greater agility and by insulating themselves from the macroeconomic impacts of the volatile conventional energy sector. “The pandemic highlighted the risks of disruptions to our current energy infra- structure and supply chain,” Lux Research Analyst Tim Grejtak commented. “In re- sponse, we will see aggressive diversifica- tion of business portfolios to avoid the risk of underutilized and, eventually, stranded assets in order to capitalize on opportuni- ties provided by increasing renewable en- ergies.” Grejtak cites long-duration energy storage investments and project develop- ments in the first half of 2020 by the likes of Highview Power, Form Energy, and AES Distributed Energy as just the beginning of the added urgency of companies preparing for the energy transition. Lux Research Analyst Runeel Daliah adds, “While COVID-19 momentarily pushed aside climate change from the political discourse, companies and countries that deprioritize climate change mitigation efforts in favor of near-term financial recovery would be making a mis- take – decarbonization is an unavoidable megatrend that will continue to loom well after COVID-19.” Daliah points to coun- tries forging ahead with decarbonization strategies centered around hydrogen, such as Portugal, South Korea, Australia, and Germany, which recently unveiled a $10.2 billion National Hydrogen Strategy. Lux Research Senior Analyst Christo- pher Robison emphasizes that the most noticeable effect of COVID-19 on modern life was the drastic reduction in mobility. As the world sheltered in place, there was an immediate reduction in emissions and improvement in air quality, with residents in some cities notorious for pollution see- ing blue skies for the first time. “The magnitude of the longer-term impact of COVID-19 on mobility remains unclear as more people work from home and replace work travel with virtual meet- ings, but the push to reduce and eliminate emissions from the transportation sector has only increased, with many post-COVID stimulus plans focused on low- and zero- emission vehicles,” said Robinson.12 NEWS UPDATE oilandgasmiddleeast.com SEPTEMBER 2020 #TRENDING The top stories from our website and its associated social media channels, where the latest upstream news appears first FACEBOOKTWITTERLINKEDIN Eni makes an oil discovery in Egypt’s South West Meleiha Eni announced the drilling of a well in the South West Meleiha development and exploration concession located in the Egyptian Western Desert, some 130 km North of the of Siwa Oasis. Global gas flaring level jumps to highest levels since 2009 Estimates from satellite data show global gas flaring increased to 150 bil- lion cubic meters (bcm), equivalent to the total annual gas consumption of Sub-Saharan Africa. Energy tran- sition pro- jects could replace up to 40% of OFS revenue Hit by the downturn, the OFS market is not likely to rebound to last year’s activity level until 2023, but suppliers could replace up to 40% of 2019’s rev- enue by servicing renewable markets. ADIPEC will go on: Flagship oil and gas conference will be held virtually in 2020 Ducab Group an- nounces profitable H1 2020 despite coronavirus pandemic Webinar: ADNOC digital VP and ABB experts discuss digital transforma- tion during a market crisis Oil & Gas Middle East ADNOC CEO Dr. Sultan Al jaber says that he is “cautiously optimistic” about the oil market What is prescriptive maintenance and how does it fit into a digital future? MULTIMEDIA OILANDGASMIDDLEEAST.COM CONNECT WITH US @OilandGas_ME Oil & Gas Middle East Oil & Gas Middle East13 NEWS UPDATE oilandgasmiddleeast.com SEPTEMBER 2020 SAUDI PETROLEUM SERVICES POLYTECHNIC Partnering with petroleum, energy, and industrial companies to graduate, develop and prepare quality Saudi technical workforce. SPSP was established to meet the needs of the petroleum services industry and to support the process of Saudization in Saudi Arabia. It was founded in 2008 by the Ministry of Energy, Industry and Mineral Resources, the Technical and Vocational Training Corporation, Saudi Arabian Chevron, Saudi Aramco and Aramco Gulf Operations Company. SPSP is a fully independent, non-profit entity, which is governed by a Board of Trustees representing the major stakeholders in SPSP. PROGRAMS & COURSES By maintaining collaboration with our industry partners, SPSP develops its programs and courses to meet the specific needs of the petroleum services industry. The programs have been designed to ensure that all graduates exit with certified and accredited core vocational skills and an understanding of the petroleum services industry. SPSP technical specialties include: Mechanical, Electrical, Operations, Welding, Pipefitting, Instrumentation, HVAC, Drilling, Rigging, Scaffolding, HSE Officer, Crane Operation & Heavy Equipment. SPSP also offers courses in the fields of drilling, heavy equipment and health & safety customized to the needs and requirements of Oil & Gas companies across the spectrum in both Upstream and Downstream. A new program has recently been launched targeting young engineers with less than 5 years of experience from all engineering disciplines. The program (ACT Eng.) is a first phase certified downstream training and development program, established in collaboration with the French Institute of Petroleum (IFP). Prince Moteb Bin Abdulaziz St., P.O. Box 2012, Dammam 31451, KSA E-mail : info@spsp.edu.sa I Web : www.spsp.edu.sa I Phone : 9200 04939 Together, Towards a Bright Future for Saudi Youth SAUDI ARABIA IRAN UAE KUWAIT OMAN BAHRAIN Saudi Aramco named Nasir Al Naimi as its acting head of upstream, and Mohammed Al Qahtani will take over downstream. A new corporate development team will be led by Abdulaziz Al Gudaimi. The National Iranian Oil Company announced that the Iranian Offshore Oil Company and the National Iranian South Oil Company signed 13 contracts worth a combined $1.8 billion with 14 local companies. ADNOC‘s crude flexibility project (CFP) is 73% complete. The project will upgrade the refining capabilities in Ruwais and strengthen Ruwais as a driver for industrial growth for Abu Dhabi and the UAE. Kuwait Oil Company is close to production of three new fields, Umm Rass, Kara’a Al Marw, and Kabd fields. It has obtained approval to float the tender to build and operate two Jurassic production units. Petroleum Development Oman has awarded a $20 million construction works contract to Al Hassan Engineering for the Qarn Alam Cogenera- tion Power project, to be carried out over 22 months. Bahrain awarded 769 tenders in the first half of 2020 worth a total of $1.7 billion according to data released by Bahrain’s Tender Board – the country’s government procurement regulator. AROUND THE REGION Latest developments across the region REGION14 THE MIDDLE EAST ENERGY AWARDS oilandgasmiddleeast.com SEPTEMBER 2020 THE MIDDLE EAST ENERGY AWARDS RETURN! Submit your nominations before 10 September for a chance to be honoured at the Middle East Energy Awards in Abu Dhabi! your nominations before the deadline of 10 September to be considered for one of our awards. Contact Carla Sertin (carla.sertin@ itp.com) including the category you are interested in to inquire about nominations, and Mark Grennell (mark.grennell@itp.com) to inquire about sponsorship packages. Categories • Clean Energy Project of the Year • CSR Initiative of the Year • Digital Enabler of the Year • Downstream Project of the Year I t’s offi cial—The Middle East Energy Awards will return this year in Abu Dhabi! The much anticipated awards ceremony was postponed due to the coronavirus pandemic, and is slated to return with a more exciting line up than ever. The editors of the three hosting publications, Oil & Gas Middle East, refi ning & Petrochemicals Middle East, and Utilities Middle East are excited to recognise the achievements of the industry during this unprecedented crisis. Submit • EPC Company of the Year • HSE Initiative of the Year • Logistics Service Provider of the Year • Oilfield Services Company of the Year • Energy Woman of the Year • Talent Development Programme of the Year • Technical Innovation of the Year • Technology Provider of the Year • Upstream Project of the Year • Utilities Project of the Year • Young Oil & Gas Professional of the Year SPOTLIGHT: • A virtual face-to-face video interview • The perfect platform for your senior region- al representative to address his professional peers in the region and articulate your organ- isations unique and distinct brand message at this vital time for the industry THE PANEL: • A virtual Roundtable • Elevate the size, scope and complexity of a key topic, or challenge the industry is facing and discuss the ‘best-of-class’ solutions that the industry should be making themselves aware of with a table of your professional peers WEBINAR: • Harnessing its industry leading reputation and market leading database, OGME will de- sign, manage and promote a compelling, in- sightful and truly engaging webinar • The perfect forum to deliver tangible, busi- ness critical information FOR MORE INFORMATION, CONTACT: Pankaj Sharma Senior Sales Manager M: +971 52 89 2913 E: pankaj.sharma@itp.com We are experiencing a signifi cant increase in traffi c and engage- ment across all our digital channels, so we are launching 3 new digital Special Features to help you connect with, engage with and inspire the largest audience of downstream professionals in the Middle East at this extremely important time. Digital Reach - 247,837 - Industry Professionals Every Month CONNECT | ENGAGE | INSPIRE NEWS ANALYSIS 16 oilandgasmiddleeast.com SEPTEMBER 2020 Tell me about the uptake of 3D printing for the regional oil and gas sector. On a regional level, awareness of addi- tive manufacturing by O&G companies was gradually increasing in the past year, but the supply chain interruption due to COVID-19 has boosted interest levels. We have seen half a dozen 3D printing related pilot projects launched across the GCC by O&G companies. The challenge many face is how best to utilize the technology, how can they leverage the benefits. We work with a number of regional O&G companies and we noticed that a couple of them are ahead of the rest. They started exploring and deploying additive manufacturing solutions such as digital warehousing and production-on-demand during the Q1 of 2020, helping them fast- track the technology. Some of the work is ground-breaking compared to what some of our European O&G clients are doing. The progress in the region is very encour- aging, and we have been able to lower cost of procurement and purchasing whereby our clients are seeing savings as large as 40% on certain parts. Digitization and converting physical warehousing to digital inventory is only starting in the O&G sector and is proving to be transformational by minimizing the production downtime during an unsched- uled breakdown What are your growth and development plans across the region? Immensa which was founded in 2016 started off with offering basic 3D printing services, by end of 2017 we had built our technical and engineering capabilities and started developing propriety solution around converting companies from hav- ing to stock physical parts to migrating to digital inventories and utilizing additive manufacturing and other processes to produce parts on demand. Over the past two years, we have grown at triple digits a year and our team grew from six people in 2017 to over 22 professionals today. We have already set-up a business unit in Kuwait, established our second produc- tion facility in Sharjah, incorporated our legal entity in the USA, and in the process of establishing a JV and production facility in the Kingdom of Saudi Arabia. Our aim for 2020 was to be present on the ground in all of the above countries, in certain places such as Kuwait where we have a few clients, we have technical partners on the ground, while in KSA we will have full-fledged production facility which will be up and running in Q4. In the US, we will have a small team that is focused on building and harnessing our relations with OEMs. Although it was slightly delayed by a few months, we are glad to have achieved our expansion plans for 2020, despite the pandemic. We are evaluating our expansion strategy for 2021, and we see ourselves developing our presence in Western Canada and the establishing partnerships or joint ventures in two new countries in the region. Our head office will remain in Dubai Production City (DPC), where the core team for digitization and solution development will remain. The support and facilitation provided by DPC makes it a very conducive jurisdiction for our engineers to be based. How can 3D printing impact oil and gas operations? Oil and Gas companies globally have been actively ramping up their adoption of additive manufacturing (also referred to as “3D Printing” or “AM”) over the past three years. Major O&G companies such as Shell, ExxonMobil, Equinor, Baker Hughes, BP and many others have started using AM to gain incremental benefits in their operations. Fluctuating oil prices and the steady rise of alternative energy sources are placing pressure on oil and gas companies to reduce operational costs and drive competitiveness. The trans- formational potential of this technology is being felt by across the O&G industry from IOC, NOC, service providers across all the streams. Oil and gas companies face challenges that differ from other industries, like rapid deterioration of components, cor- rosion, and other performance-related issues. More importantly, downtime due to equipment stoppage and failure results in massive loss of revenue, and to top it off, some operational failure can result in environmental damage. All the above forces companies to main- tain high inventory levels for spare parts, leading to warehousing costs and signifi- cant cash being tied up in non-operational activities. The agility and technical capabilities of additive manufacturing enables compa- nies to produce parts on demand which significantly reduce the amount of spare parts needed to be held in stock. Oil and gas companies are actively investing in digitization their inventories and adopting 3D printing as source of procurement of parts which is resulting in the reduction in the overall costs spent on supply chain and enhancing operational efficiency. Fahmi Al-Shawwa, founder and CEO of Immensa Technology Labs, comments on 3D printing for the oil and gas industry 3D REALITYNEWS ANALYSIS 17 oilandgasmiddleeast.com SEPTEMBER 2020 What are some of the challenges with 3D printing for the oil and gas sector? The biggest challenge in all sectors, but probably more prevalent in O&G is the safety aspect of parts supplied. With the exception of American companies, the industry is extremely risk averse and with the exception of a handful of progressive companies such as Shell, Equinor, Total most of the key players, especially in this region do not invest in R&D. By not hav- ing a culture and tradition of testing new solutions, regional companies lag in the adoption of new solutions and technolo- gies. Regional companies typically wait for validation from international players before trying a new technology or service. For example, the oil and gas industry abides by stringent safety standards, and as a producer of parts and a provider of turnkey solution we continuously have to prove to regional companies that the tech- nology is credible and reliable. There is a lot is skepticism in the regional companies when it comes to new technologies and changes in the status quo. Another challenge encountered by regional O&G companies is in identifying suitable use cases for 3D printing. That’s why it’s essential for these companies to work closely with qualified and special- ized additive manufacturing companies to develop their own AM strategy and framework to identify cases. It boils down to awareness, education, and finding the right champion within those O&G companies and identifying the viable application of the technology. I always tell anyone who comes to us, do not invest in 3D printing because it’s the “in” thing, adopt it only when it makes commercial sense. Safety is always front of mind for oil and gas companies—how do you address this internally, as a company? As I mentioned earlier, safety is probably the biggest challenge when it comes to assuring clients in O&G that the solu- tions and parts provided are reliable. As Immensa we have worked aggressively over the past three years to establish our credentials and build an extremely solid process that alleviates all risks when producing a 3D printed functional part. We have a full time dedicated certified QC engineer, and our process dictates that each part being produced is audited while going through each step in our process: from material testing to design validation, production monitoring, non-destructive and destructive testing, and a whole array of other tests as specified by ASTM. We probably spend 30% of our resources on quality assurance. We believe that the value in additive manufacturing is in the development of parts. Accordingly, we have invested heavily in building the region’s leading and only AM team com- prised solely of engineers. Immensa was an active member of group of global companies that estab- lished international guidelines for the 3D printing of metal parts for the O&G and maritime industries, which became stand- ards issued by DNV GL. The companies we worked with include Siemens, Shell, Vallourec, and many more. 18 COVER STORY oilandgasmiddleeast.com SEPTEMBER 2020 What are the roles of your strategic founders in building SPSP? Our founders are the pillars of SPSP. Saudi Petroleum Services Polytechnic (SPSP) was founded in 2008 by the Min- istry of Energy, the Technical and Vo- cational Training Corporation (TVTC), Saudi Arabian Chevron, Saudi Aramco and Aramco Gulf Operations and the main supporter, HRDF. SPSP was established to meet the training needs of the oil and gas services industry and to support the Saudization of the technical workforce in Saudi Ara- bia. This would not have been success- ful without the intensive engagement and leadership of the SPSP founders in support of industrial expansion and community growth by graduating 8,000 certified young Saudi operators & Bassam Al-Bokhari, CEO of SPSP, talks about training the next generation of oil and gas leaders, how the institute is innovating in training, and how it is creating future innovators technicians with secured employment as well as certifying more than 6,000 company employees to perform techni- cal jobs, and obtaining 9 international accreditations. The leadership of the Ministry of En- ergy created the strong commitment of a board of trustees to establish SPSP as a joint venture to generate social value and excellence in the oil and gas arena. It continuously contributes to SPSP both financially and operationally, and the Saudi government contributed to the establishment and development of SPSP through HRDF with major financial support. Moreover, TVTC has furnished SPSP with assets, facilities, and license. Saudi Arabian Chevron was the found- er of the first institute, and has provided SPSP with continuous financial support as part of their vision to contribute to society and to develop critical skills in the energy sector, which by design has been an exceptional investment in local content. Moreover, Saudi Aramco has provided full support by founding a second institute in 2012 in Al-Khafji through Saudi Aramco for Khafji Opera- tions, and then founding a third one, the Institute of Construction and Drilling in 2014 in Dammam. SPSP’s founders and the members of its board of trustees have a vested interest in SPSP’s success as one of the important enablers of Saudi Vision 2030 by focusing on developing the human element and contributing toward the nation’s transformation to a knowledge- based economy. That is why they have established SPSP as a global training in- COVER STORY oilandgasmiddleeast.com SEPTEMBER 2020 TEACHING INNOVATION19 COVER STORY oilandgasmiddleeast.com SEPTEMBER 2020 oilandgasmiddleeast.com SEPTEMBER 2020Next >