table of contents - · pdf fileto boost production from malaysia’s mature fields and...

14

We explore PETRONAS' efforts to revitalise the country's oilfields through groundbreaking offshore Enhanced Oil Recovery (EOR) methods in this month's cover feature.

COVER

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T a b l e o f C o n t e n t s

FIND INSIDE

Editor’s NoteKeeping the pioneering spirit aflame

News BriefsPETRONAS signs new LNG contracts and other news from the industry

Growing with South Sudan PETRONAS makes its mark on the fast-growing country

SOUTH SUDAN SPECIAL

A Vision for the Future South Sudan's Honourable Undersecretary, Ministry of Petroleum and Mining shares his views

Sowing for Harvests of GoldThe fascinating tale of operating in the world's youngest country

Strength in Diversity South Sudan's only oil producing company features a unique collaboration among its partners

A World of OpportunitiesA South Sudanese UTP scholar shares his experiences of working in Malaysia

Up The AnteSouth Sudanese workers in the oil and gas sector get a boost

Future ReadyA rundown school in Juba gets a second chance

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2 AUG / SEP 2015

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[email protected]

Petroliam Nasional Berhad (PETRONAS)

PETRONAS

STAY IN TOUCH WITH USGet in with the flow

46

40 COVER STORY: OFFSHORE EOR

A New FrontierPETRONAS takes Enhanced Oil Recovery techniques to new heights

Turning the Tide at TapisExxon Mobil and PETRONAS pioneer new offshore EOR applications at Tapis

A New Lease of LifeThe 15-year old Angsi field gets a boost in production

Business Unusual PETRONAS and Shell think out of the box to squeeze new life into mature fields

MORE FEATURES

A Win-Win PartnershipLundin Malaysia focuses on value growth in Malaysia through the PSC scheme

Turkmenistan:Policy of Peace and Neutrality Turkmenistan upkeeps peace and harmony

First Oil TriumphMore oil flows from Turkmenistan

Developing Future TalentCordella Wong-Gillett shares her thoughts on equipping petroleum engineers with the right skills

54

Yet, at PETRONAS Upstream we have our sights set very

much on the long term. Such are pioneers – whose pursuit,

perseverance, purpose and passion persist in spite of challenges.

Despite the low price environment, we continue investing in

solutions such as Enhanced Oil Recovery (EOR), which seek

to boost production from Malaysia’s mature fields and others

around the world.

In this third issue of flow, we explore PETRONAS’ EOR

journey. What started more than a decade ago crossed a

major marker recently with the completion and first gas

injection of possibly the world’s first large-scale offshore WAG

EOR project at the Tapis field located offshore Terengganu in

collaboration with ExxonMobil.

The costs and complexity of EOR projects have required new

thinking and technologies, especially as the economic viability

of such endeavours are challenged.

Nonetheless, we continue to blaze new trails through a

partnership with Shell Malaysia through the Enhanced Oil

Recovery Centre (EORC). The initiative which took flight in

2013 between PETRONAS and Shell will spearhead EOR

projects under two Production Sharing Contracts, with the

vision of furthering and rejuvenating the productivity of nine

fields in offshore East Malaysia.

In the spIrIt of natIon buIldIng

In this issue, we speak to some of the people who live in a

country that was born out of civil war and continues to be

stricken with conflict.

In spite of several periodic shutdowns between 2012 and

2013, PETRONAS and its partners remain committed to

building capabilities in South Sudan.

Why? because We belIeve that We are a part of

the communIty Where We operate, as much as

the communIty becomes a part of us.

We understand the importance of having a skilled and

competent workforce for the future of the country. Today,

70% of our workforce there are locals. Efforts are also in

place to train South Sudanese geologists, operators and

technicians, and we have been awarding engineering

scholarships to the locals to further their studies.

Indeed, identifying and developing talent remains a

cornerstone of our success. With the challenges, come

opportunities – and for this, flow speaks with the Society of

Petroleum Engineers on the trends for talent development.

I am confident that with the right mindset, strategies and

talent in place, PETRONAS will be able to weather the storm

and capitalise on the opportunities that emerge once this

season passes.

Resilience is the name of the game.

Dato’ Wee Yiaw HinExecutive Vice President & CEO PETRONAS Upstream

Dato Wee

3 P E T R O N A S U p s t r e a m M a g a z i n e

IT’S a challenging time in the global

oil and gas sector, as industry players

grapple with the twin threats of

sluggish demand and low prices.

KeepIng the pIoneerIng spIrIt aflame

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FIND INSIDE

[email protected]


PETRONAS

STAY IN TOUCH WITH USGet in with the flow

46

40 COVER STORY: OFFSHORE EOR

A New FrontierPETRONAS takes Enhanced Oil Recovery techniques to new heights

Turning the Tide at TapisExxon Mobil and PETRONAS pioneer new offshore EOR applications at Tapis

A New Lease of LifeThe 15-year old Angsi field gets a boost in production

Business Unusual PETRONAS and Shell think out of the box to squeeze new life into mature fields

MORE FEATURES

A Win-Win PartnershipLundin Malaysia focuses on value growth in Malaysia through the PSC scheme

Turkmenistan:Policy of Peace and Neutrality Turkmenistan upkeeps peace and harmony

First Oil TriumphMore oil flows from Turkmenistan

Developing Future TalentCordella Wong-Gillett shares her thoughts on equipping petroleum engineers with the right skills

54

EDITOR’S NOTE

PETRONAS LNG REACHES NEW

MILESTONE WITH TOHO GAS

PETRONAS LNG signed a Heads

of Agreement (HOA) in March to

supply Toho Gas Co. for 10 years

starting in 2017.

Under this agreement, a total

LNG volume of up to 0.66 mtpa

will be supplied to Toho Gas,

from a portfolio of PETRONAS

supply sources. The LNG will be

transported to Toho Gas’ receiving

terminals Chita and Yokkaichi in

Japan by LNG vessels primarily

owned and operated by MISC

Berhad, a subsidiary of PETRONAS.

Toho Gas, the third largest city

gas company in Japan, purchased

its first of LNG spot cargo from

LNG CONTRACTS

briefsNews

The delegation from Hokuriku Electric and PETRONAS during the signing ceremony.

Toho Gas HOA signing ceremony

4 AUG / seP 2015

PETRONAS in 1991. It also has two

long-term contracts with MLNG Tiga.

The current total contracted volume is

MLNG BREAKS NEW GROUND IN

JAPAN WITH HOKURIKU

ELECTRIC DEAL

PETRONAS’ LNG business has

expanded into a new territory in

Japan following Malaysia LNG’s

(MLNG) 10-year agreement to supply

Hokuriku Electric Power Company

from 2018.

Signed on 5 May 2015, the Heads of

Agreement (HOA) calls for up to 0.36

million tonnes per annum (mtpa)

of LNG to be supplied to Hokuriku

Electric from the PETRONAS LNG

Complex in Bintulu, Sarawak. The gas

will be transported to the Japanese

utility’s new receiving terminal that

is currently under construction in

Toyama.

Hokuriku Electric will be the 17th utility company to become

MLNG Group of Companies’ term buyer

in Japan.

around 1.0 mtpa, making PETRONAS

the biggest LNG supplier in Toho Gas’

supply portfolio.

NewsBRIeFs

ENERGY PROJECT ACHIEVES MANY

FIRSTS

An integrated gas delivery project

known as ENERGY in the North Malay

Basin area reached a significant

milestone in April when First Gas from

the Muda Production Platform at the

Malaysia–Thai Joint Development

Area (MTJDA) was successfully

introduced into the system. The gas

was then delivered to an onshore gas

processing plant in Terengganu via a

360 km pipeline in just seven hours.

Despite encountering various

challenges, the team managed to

complete the ENERGY project ahead

of schedule and in a record time of

1.5 years. The project also boasts a

number of firsts. For instance, its 360

km pipeline is the longest subsea

pipeline installed in Malaysian waters.

Gas is also directly delivered to the

Gas Processing Plant without going

through a receiving terminal.

Meanwhile, the installation of the 800

metres of 28” onshore pipelines using

the Horizontal Directional Drilling

(HDD) method was among the longest

done for oil and gas to date in Malaysia.

The project team will now focus on the

ENERGY Phase 2 - which involves the

construction of the Terengganu Gas

Terminal (TGAST) in a safe and timely

manner to meet the targeted first gas

date in the fourth quarter of 2016.

BAYAN OIL ACHIEVES FIRST OIL

AHEAD OF SCHEDULE

Several initiatives to accelerate the

production of oil from the PETRONAS

Carigali-operated Bayan Field has

resulted in First Oil being achieved

two months ahead of schedule in April

2015.

The field was developed by the Bayan

Alliance (BA) - a tie-up between

PETRONAS Carigali Sdn Bhd (PCSB)

FIRST OIL / FIRST GAS

and Halliburton Bayan Petroleum

(HBP) - that aimed to develop the

highly complex faulted reservoir and

depleted oil field with ageing facilities

to maximise production.

Initiatives included an infill drilling

campaign and the fabrication of a

new deck extension for installation

by October 2014. This allowed the

drilling of four new wells that were

initially expected to deliver the first oil

by June 2015.

Bayan Field has a controlled average

production of 2,080 barrels of oil per

day (bopd), which is higher than the

1,200 bopd in the approved technical

proposal.

Enhanced Oil Recovery to tackle ageing fields - see page 32 onwards

Energy Project Bayan First Oil


FAST TRACk

briefsNews

Bukit Tua Well Head Platform

BUKIT TUA SPEEDS TO FIRST OIL

PETRONAS Carigali Indonesia

(PCINO) has realised First Oil for its

Bukit Tua Field Development Project

four months ahead of schedule

on 17 May 2015. This marks the

maiden production of hydrocarbons

for PETRONAS’ upstream venture

in Indonesia in a block owned

and operated by the company.

PETRONAS Carigali fully operates

the ketapang Block in Indonesia

through PC ketapang II.

6 AUG / seP 2015

From left: Pui Thai Chong, Head of Myanmar Operations, Abd Malik Jaffar, Head of P&E Department and Noor Ilias M Ismail, Head of Project International

HANDOVER OF YETAGUN

NORTH FACILITY TO MYANMAR

OPERATIONS

The Yetagun North Development

Project was successfully completed

and the facility was officially handed

over to Myanmar Operations ahead

of schedule on 27 April 2015. The

early completion of the project

provided an additional 70 mmscfd

of gas that was needed due to the

depletion of existing producing

reserve at the Yetagun field.

NewsBRIeFs


300,000 MANHOURS WITHOUT LTI AT

KINABALU

A Health, Safety & Environment (HSE)

day celebration was held in March to

commemorate the achievement of

300,000 manhours without Lost Time

Injury (LTI) at the Sumandak/kinabalu

Development Project.

Hosted by PETRONAS Carigali Sdn

Bhd (PCSB) and Tabung Haji Heavy

Engineering (THHE), the event was held

at the THHE yard at Pulau Indah, klang

and attended by around 300 people.

PFLNG SATU SURPASSES 12 MILLION

HOURS WITHOUT LTI

PETRONAS’ first Floating LNG facility

(PFLNG 1) crossed another significant

HEALTH, SAFETY & ENvIRONMENT

milestone in March by achieving

12 million manhours without any

Lost Time Injury (LTI) since the

project kicked off in March 2012.

To commemorate this

achievement, a Health, Safety

& Environment (HSE) Day was

held at the Daewoo Shipbuilding

& Marine Engineering (DSME)

shipyard in Okpo, South korea,

on 7 April 2015, which also

aimed to intensify the safety

culture for individuals involved in

the project.

The PFLNG 1 will be moored in

kanowit gas field, located 180

kilometres offshore Sarawak,

Malaysia and will produce 1.2

mtpa of LNG.

Commemorating 300,000 manhours without LTI at the THHE yard

Celebrating 12 million manhours without LTI at Okpo, South korea

From left: Mohamad Johari Dasri, vP of Production Malaysia, Bacho Pilong, Senior General Manager, Petroleum Operations Management of Malaysian Petroleum Management, and Chok Chee Tsong, Senior Manager of Sarawak Shell Berhad

BINTULU INTEGRATED FACILITY

OPERATORSHIP TRANSFER


became the new operator of Bintulu

Integrated Facility (BIF) as well as the

newly appointed network integrator

for Sarawak gas supply and demand

on 1 April 2015.

In less than a year, a special taskforce

comprising of PETRONAS, PCSB and

Shell representatives worked together

to make the speedy BIF Operatorship

Transfer a success.

8 AUG / seP 2015

briefsNews

Hazli Sham kassim (right), General Manager PETRONAS Carigali Indonesia receiving documents from IGN Wiratmaja, Acting Director General for Oil and Gas, Ministry of Energy and Natural Resources, as a winning bidder for Indonesia Oil and Gas Auction 2014.

MILESTONES

PETRONAS RECOGNISES 23

VENDORS


presented Outstanding vendor Awards

(OvA) to 23 local and international oil

and gas service companies for their

exceptional performance and delivery

for the year 2014.

The awards were presented by PCSB

President and PETRONAS’ Senior vice

President of Upstream Malaysia, Datuk

Mohd Anuar Taib.

The OvA recognises excellence in 15

different categories with an emphasis

on exemplary performance, reliability,

responsiveness as well as a

commitment to implementing

high standards in Health, Safety &

Development (HSE).

The annual event, initiated in 2010, also

serves as an avenue for PETRONAS

to share its business expectations and

engage in dialogue with its contractors.

PETRONAS Carigali Indonesia (PCINO)

has won two blocks in the latest bidding

round for 16 Indonesian oil and gas

blocks. The Indonesian government

awarded PCINO the North Madura II,

offshore East Java, and kualakurun,

onshore Central kalimantan block

where PCINO has a joint venture with

PT Petcon Resources.

PCINO’s plans to invest US$68

million in the North Madura II Block

and US$2 million in kualakurun

with PT Petcon. PETRONAS has a

total of three years to complete the

exploration in the blocks, which

covers geological and geophysical

work, 2D seismic survey and the

drilling of the two blocks.

Kebabangan NorthernHub Project (KBB)

Dalak pipeline (DLKP)

Malikai

Gumusut-Kakap (GK)

SARAWAK

SABAH

KimanisPower Plant (KPP)

Sabah Ammonia-Urea(SAMUR) Project

Sabah Sarawak Gas Pipeline (SSGP)

PETRONAS LNGComplex Bintulu

Kinabalu NAG (KNAG)

Sabah Oil Gas Terminal (SOGT)The centre of the overall development in SSIOGP

SPR Power PlantGenerating Capacity: 100MW

Gas Pipeline

Legend

Oil Pipeline

••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

The Sabah-Sarawak Integrated Oil & Gas

Project (SSIOGP) marked a major

milestone on 12 June 2015 as

six assets were handed over

to their respective owners.

The six assets: Sabah

Oil & Gas Terminal

(SOGT),

the SOGT

Administration

Building Complex,

the Gumusut Oil

Pipeline (GOP), the Sabah-

Sarawak Gas Pipeline (SSGP)

and the SOGT’s Dry Gas

Diverter Manifold (DGDM).

Sabah-Sarawak Integrated Oil & Gas Project SSIOGP)

PETRONAS announced the RM45

billion SSIOGP project, which

involves the development of

several upstream and downstream

projects over the course of five

years, in 2011.

The SOGT, the biggest integrated

oil and gas terminal in Malaysia, is

the first facility that integrates oil

and gas operations in one terminal.

It has the capacity to process

260,000 barrels of oil, 1,250 million

standard cubic feet of natural gas,

and 77,000 barrels of condensates

per day.

PETRONAS WINS TWO BLOCKS IN INDONESIA

MAJOR MILESTONE ACHIEVED AT SSIOGP


NewsBRIeFs

PETRONAS Carigali Iraq Holding

B.v. (PCIHBv) achieved another key

milestone by successfully lifting and

marketing Badra’s First Entitlement

Crude on 29 June 2015, marking

PCIHBv’s first lifting for the Badra

Project.

Through PETRONAS’ trading

arm PETCO, PCIHBv has now

successfully loaded Badra’s First

Entitlement Crude volume of approx.

477,557 bbls onto vessel Mt. Maran

Centaurus. The lifting commenced

on 26 June 2015 and completed

its loading on 29 June 2015. The

vessel has set sail from Basrah

Port and is en route for delivery to

end buyer(s) in the Far East. Badra

On May 31 2015, PETRONAS delivered its first High Pressure High Temperature (HPHT) development well, the kN-B4 well in the kinabalu Non-Associated Gas (kNAG) Upper Ultra Deep field offshore Sabah. The delivery of the kN-B4 adds 70mmscfd of production capacity, boosting the field’s total production capacity to 365 mmscfd.

Planning for the kN-B4 HPHT development began as early as 2011, with the Collaborative Well Planning (CWP) stage taking place at the PETRONAS Real Time visualisation Centre (PRTvC).

The drilling project was not without its challenges, primarily from the presence of hard formations, passing through stacked reservoirs with significantly varied pressure regimes due to depletions.

Nevertheless, seamless integration between all the relevant departments

Operator Gazprom also successfully

loaded their first entitlement volume

in April 2015. Current production

from Badra is averaging over twenty

five thousand barrels of oil per day

(25,000 bb/d).

Badra field in Southern Iraq achieved

its First Oil and First Commercial

Production (FCP) on 20 August 2014

and 23 November 2014 respectively.

Badra DPSC consortium comprises

of Gazprom Neft Badra Bv of Russia

(30%), kOGAS Badra B.v of South

korea (22.5%), PCIHBv of Malaysia

(15%), TP Badra Ltd. of Turkey

(7.5%) and the Iraqi government,

as represented by Oil Exploration

in PCSB resulted in the well being completed with zero recordable process safety incidents throughout the duration of simultaneous operations on site. The experience gained from the project will be used to improve delivery of future HPHT development projects.

Company (OEC), holds a 25%

participating interest. Badra field

is operated by Gazprom Neft and

is located in the Wasit province in

eastern Iraq, straddling the border

with Iran.

Right: HPHT Well_DD3 jack-up type drilling rig at kNPG-B Central Processing Platform

Bottom: kNAG PMT Leadership Team visit to DD3 rig led by Head of kNAG & Sabah Projects, Zaidi A Hamid

DELIVERY OF FIRST HPHT DEVELOPMENT WELL

BADRA FIRST ENTITLEMENT CRUDE LIFTING

FEATURE FOCUS: SOUTH SUDAN

flow gets an EXCLUSIVE interview with the Honourable Stephen Dhieu Dau, Minister, Ministry of Petroleum & Mining South Sudan, who shares his thoughts on taking the industry forward …

12 AUG / SEP 2015

FocusFuture

The Honourable Stephen Dhieu Dau Minister, Ministry of Petroleum and Mining of South Sudan

FEATURE FOCUS: SOUTH SUDAN

The South Sudan delegation at the PETRONAS Tower BridgeThe Minister and his delegates receive a warm welcome in Malaysia


1. Can Your Honourable brieFlY DeSCribe THe MiniSTrY’S viSion To Develop SouTH SuDan’S peTroleuM inDuSTrY?

Our Vision hinges on Petroleum Act 2012 and focuses

on a number of things, including managing the petroleum sector in an efficient manner, developing competent national workforce for the petroleum sector and creating a conducive atmosphere for the foreign partners, operators and other investors in the oil sector.

2. WHaT Have been THe inDuSTrY CHallengeS in realizing THiS viSion anD HoW Have THeSe been overCoMe?

We are currently faced with several issues including the lack of capable workforce. This is across all departments in the industry and we are actively looking for opportunities to upskill our people.

There are also logistics challenges in supporting petroleum operations – for example, getting materials supplied to operating fields in a timely and cost-efficient manner given our vast geography.

We also want our industry to be world-class. As such, we must emulate good Health, Safety and Environment (HSE) best practices in our operations. Creating this safety culture will be an on-going effort.

On the technical front, we need to deal with improving our data management in order to preserve our technical data to a high quality so it can be used as industry reference.

3. WHaT role Do parTnerS like peTronaS plaY in THiS realiSing THiS viSion?

We believe that PETRONAS brings a wealth of experience and technical capacity that benefit the local industry – whether it’s for unexplored blocks or ageing assets. Technology transfer, for example, in the area of Enhanced Oil Recovery, is one example of a long term collaboration. (Editor’s Note: PETRONAS is currently piloting two EOR projects in South Sudan)

PETRONAS can also assist MPM with data management and storage based on its experience as a national oil company.

On capability building, PETRONAS has been instrumental in offering various training and development programs for NILEPET, MPM and Joint Operating Companies’ (JOCs) national staff to enhance their skills. There is more that needs to be done in order to bring technical staff up to speed in order to address industry needs and challenges.

In future, we hope to get on-job-attachment opportunities for MPM staff in PETRONAS’ HQ and other subsidiaries in Malaysia in order to expose them to PETRONAS’ way of doing business.

4. HoW HaS peTronaS’ CapabiliTY builDing iniTiaTiveS HelpeD aCCeleraTe THe DevelopMenT oF THe inDuSTrY anD THe CounTrY?

PETRONAS scholarships have laid a solid foundation for South Sudanese engineers in the oil and gas sector and we look forward to its continuation.

PETRONAS distinguishes itself by offering scholarships to deserving South Sudanese to study in Malaysia. With this, we are building a better pool of technical personnel for long term growth as the scholars return to South Sudan upon completion of their studies.

PETRONAS is also party to the socio-economic progress of South Sudan. Through its Corporate Social Responsibility initiatives, we are pleased to see buildings and schools in Juba restored for the benefit of the community.

5. WHaT are Your Honourable’S planS For THe DevelopMenT oF THe inDuSTrY?

There are two areas of focus. Firstly, producing blocks. MPM is working on a comprehensive strategic plan to realise its vision. This will entail working with our foreign partners on production enhancement, develop our local workforce and carry out studies on the potential of existing fields.

Our other area of focus are exploration blocks. As the security situation improves in South Sudan, we will embark on an aggressive tender process for new blocks and subsequently invite capable companies to join our oil sector. This, we hope, will accelerate our drive to find new fields and maintain good production in the future.

14 AUG / SEP 2015

Feature Focus: south sudan

SOWING FOR HARVESTS OF GOLDThe country head of PETRONAS in South Sudan tells the fascinating journey of operating in the youngest country in the world.

While around three-quarters of the

oil reserves were located south of

the border, many offices were in the

capital of Khartoum in the north.

Despite having been in Sudan since

the 90s - making PETRONAS one of

the country’s earliest foreign investors

- the company had to start many of

their operations in South Sudan from

scratch as a result of the secession.

“When the country separated, some

of our areas of operations were split in

two. So we had to start all over again

in some cases, right from setting

up the office and finding capable

manpower,” recalled Azman A. Aziz,

PETRONAS’ South Sudan Country

Chairman.

Apart from having to establish new

entities in the south, PETRONAS

also had to negotiate and formalise

separate agreements with the

Sudan and South Sudan regarding

their operations in both nations.

Significantly, these included the terms

By Francis Kan

When the African nation of South Sudan gained its independence in 2011 after two decades of dispute between the northern and southern states, many oil and gas operators, including PETRONAS and their partners found themselves caught in the middle.


“I think the outlook for our investment in South Sudan is positive. There is a lot of potential in the country

and a lot more reserves can be developed.”

Azman A. AzizPETRONAS South Sudan Country Chairman

of the movement of oil between

the two countries. While the oil

was being produced in the south, it

needed to travel through the north to

reach the port for export to the rest

of the world.

SHuTDOWN SHOcK

However, getting their South Sudan

operations off the ground proved

only to be the start of many episodes


Business Event

Apr /May 2013

Explorationextension for

all blocks

June 2013First lifting

since resumption

Dec 2013Conflict

escalated shutdown atGPOC and

SPOC. Phased staff evacuation

Jan/Feb 2014

Phasedredeployment of PETRONAS staff to South

Sudan

Nov 2011PSSO new

headquarters

Jan 2012Signing of Transition

Agreement

Feb 2012Shutdown

due to conflict

Mar 2012Formation ofDPOC, GPOC and SPOC in South Sudan

Jan 2014Ceasefire

agreement between

government of South Sudan

and theopposition

Mar 2015Extensions of

President’s term

May 2013Production

resumes after 15 months

Feb 2011Establishment of PSSO office

Jul 2011South Sudan

Declaration of Independence

June 2014Development Extension for

Block 1B and 3B

Country Event Shutdown

PARTIALSHUTDOWNPERIOD

CONTINUOUS PARTIALSHUTDOWN PERIOD

Jan 2014Business

continuity at PETRONAS Twin Towers

KL

PRODUCTION RESUMPTION PERIODPRE INDEPENDENCE TOTAL SHUTDOWN PERIOD

Jan 2014Signing of

secession of Hostility

Agreement

Feb 2015Signing of areas of

Agreement on TGONU

201320122011 2014

June 2014Agreement to

form Transitional

Government

2015ONWARDS

Jan 2015Agreement on the Unification

of the SPLM

POST INDEPENDENCE

Jan 2012Conflict between

South Sudan and Sudan

Mar 2013Implementa-

tionMatrix signed

between South Sudan and Sudan

Sep 2012Cooperation Agreement

signed between

South Sudanand Sudan

PETRONAS IN SOuTH SuDAN: THE JOuRNEY

16 AUG / SEP 2015

PETRONAS and their partners

encountered. In February 2012 the

consortiums established between

PETRONAS, NILEPET (the national oil

company) and several partners were

forced to shut down 2 out of 3 fields

operations as a result of renewed

oil-related disputes between north

and south. The shutdown lasted

for 15 months, and posed one of

the biggest threats to PETRONAS’

operations in the country.

“Our facilities and the nature

of our crude was not designed

for shutdown, it is meant for

continuous flow. So undertaking

the shutdown was a big challenge

that required a lot of planning and

teamwork,” said Azman.

“Thankfully, both sides recognised

that this was a priceless asset and

it was not in either side’s interest to

damage the facility.”


Business Event

Apr /May 2013

Explorationextension for

all blocks

June 2013First lifting

since resumption

Dec 2013Conflict

escalated shutdown atGPOC and

SPOC. Phased staff evacuation

Jan/Feb 2014

Phasedredeployment of PETRONAS staff to South

Sudan

Nov 2011PSSO new

headquarters

Jan 2012Signing of Transition

Agreement

Feb 2012Shutdown

due to conflict

Mar 2012Formation ofDPOC, GPOC and SPOC in South Sudan

Jan 2014Ceasefire

agreement between

government of South Sudan

and theopposition

Mar 2015Extensions of

President’s term

May 2013Production

resumes after 15 months

Feb 2011Establishment of PSSO office

Jul 2011South Sudan

Declaration of Independence

June 2014Development Extension for

Block 1B and 3B

Country Event Shutdown

PARTIALSHUTDOWNPERIOD

CONTINUOUS PARTIALSHUTDOWN PERIOD

Jan 2014Business

continuity at PETRONAS Twin Towers

KL

PRODUCTION RESUMPTION PERIODPRE INDEPENDENCE TOTAL SHUTDOWN PERIOD

Jan 2014Signing of

secession of Hostility

Agreement

Feb 2015Signing of areas of

Agreement on TGONU

201320122011 2014

June 2014Agreement to

form Transitional

Government

2015ONWARDS

Jan 2015Agreement on the Unification

of the SPLM

POST INDEPENDENCE

Jan 2012Conflict between

South Sudan and Sudan

Mar 2013Implementa-

tionMatrix signed

between South Sudan and Sudan

Sep 2012Cooperation Agreement

signed between

South Sudanand Sudan


With support from their

headquarters and partners, as

well as the co-operation from

both sides of the government,

PETRONAS was eventually able to

get their facilities up and running

by the start of 2013.

Today, South Sudan is one of the

bigger contributors in PETRONAS’

international portfolio, producing

160,000 barrels of crude a day.

A FOcuS ON LOcALS: THE

BEDROcK FOR GROWTH

Despite the ongoing turmoil,

PETRONAS was focussed from

the start on the task of building

capabilities in South Sudan. Prior

to the secession, most of the

company’s workers had come

from the north, and once they

returned home following the split,

there was a talent vacuum that

needed to be filled. The company

had to rely on expatriates to keep

the oil flowing.

“We knew we couldn’t depend on

expats for too long. Any country

would want business operating in

its domain to benefit the locals.

So there was a lot of focus at

PETRONAS on building capability

and capacity in the country,”

said Azman.


70% of 2,000 operations personnel are South Sudanese.

78scholarships to South

Sudanese to pursue their undergraduate studies at

Universiti Teknologi PETRONAS.

South Sudanese trained at Institut Teknologi Petroleum

111PETRONAS (INSTEP), Malaysia.

Driven by a desire to nurture local

talents, PETRONAS has provided

various forms of training to the locals

- from business and undergraduate

engineering to technical programmes.

“Our approach to capability building is

multi-layered and holistic in that

regard,” explained Azman. “We focus on

developing core competencies and at

the grassroots. Many South Sudanese

were deprived of education opportunities

before the secession,” he continued.

In the past 2 years, 111 South Sudanese

trainee production operators and

technicians, with the support of

the country’s Ministry of Petroleum

and Mining and oil partners have

undergone training at Institut Teknologi

Petroleum PETRONAS (INSTEP)

facility in Malaysia. The modules cover

project management, oil and gas

technical training including production,

instrumentation, mechanical and others.

Today, the first batch of South Sudanese

trainees are undergoing Industrial

Training Attachment (ITA) at Dar

Petroleum Operating Co Ltd. (DPOC).

Additionally, more than two dozen

workshops have been organised with

ministry officials, in order to develop

technical and management best

practices. (See story on page 24)

PETRONAS has also given out 78

scholarships to South Sudanese to

pursue their undergraduate studies

in engineering at Universiti Teknologi

PETRONAS – currently ranked

amongst the top 200 universities in

the world. About half of the recipients

have graduated and are back working

in their home country. (See story on

page 22)

As an extension to its capability

building efforts, PETRONAS has

embarked on refurbishing some

schools, providing learning aids

equipment to the visually impaired

and education tools to a number of

recipients. (See story on page 28)

LOOKING AHEAD

Azman is optimistic that, at some

point, the two sides of the conflict will

reach a peaceful agreement with the

help of international mediators. Most

immediately, he will be looking to

resume production at the two facilities

that have been shut down and, further

down the line, bring production back

to pre-crisis levels of around 200,000-

250,000 barrels a day in South Sudan.

“There is a lot of potential in the

country and more reserves can be

developed,” he says.

18 AUG / SEP 2015

Faculty of Mechanical trainees at INSTEP, November 2012

124

5A

3

7

SOUTH SUDAN

SUDAN

ABYEI

JUBA

Khartoum Kassala

El Obeid

Port Sudan

Red Sea

1956 boundrybetween N & S Sudan

Oil producing block

Oil pipeline

Oil refinery

Oil tanker terminal

5A – SPOC 1, 2 & 4 – GPOC 3 & 7 – DPOC



PETRONAS’ operations in South Sudan

community Development Projects

community Outreach Programs

Facilities Improvement Programs (Signature)20 10 4

Empowering lives in South Sudan

Reaching communities in South Sudan with more than 30 community relations programs from 2011 to 2015

As the only company in South Sudan producing oil - an industry that contributes around 98 per cent to the country’s gross domestic product - Dar Petroleum Operating Company (DPOC) is playing a major part in the development of the nation.

DPOC is one of three entities owned by PETRONAS and its partners that were set up to develop South Sudan’s petroleum resources following its secession from Sudan in 2011.

It is currently producing 160,000 barrels of oil per day (bpd) from two blocks located north-east of the country.

This puts DPOC in a strong position to deliver additional value to the development of the country – including building capabilities in South Sudan’s oil and gas sector, explained the company’s president Datuk Joseph Podtung. DEVELOPING HUMAN CAPITAL

“Many locals want to be part of the oil industry and our role is to ensure the right people are employed and developed to bring


20 AUG / SEP 2015

the oil industry to the next level and for it to be sustainable in the long-term,” he said. DPOC is looking to give locals more responsibility within the organisation as they gain more experience and skills. To achieve this, the management has identified positions that could be held by South Sudanese and the individuals that could potentially fill them. This includes DPOC’s vice-president role, currently filled by Mohamed Lino Benjamin, a South Sudanese from the country’s national oil company, Nile Petroleum Corporation (NILEPET).

A majority of the Manager and Section Head positions, especially non-technical positions, are occupied by local staff. There are 569 permanent employees at DPOC, of which 75% are locals. Additionally, DPOC employs 1,400 national contract workers to support the activities in the oil field.

PETRONAS 40%

NILEPET 8%

CN

PC

41%

SINOPEC

6%

TRI-

OCEAN

E

NERGY

5 %

Datuk Joseph Podtung President Dar Petroleum



STRENGTHIN DIVERSITY

As South Sudan’s only oil producing company, Dar Petroleum is well placed, with its partners,

to build capabilities in the country’s petroleum sector.

By Francis Kan

A UNIqUE PARTNERSHIP: NAVIGATING THE TRIPARTITE PETRONAS owns a 40% stake in DPOC, while China’s CNPC holds 41%. The remainder is held by NILEPET (8%), Sinopec (6%) and Tri-Ocean Energy (5%). To ensure the smooth running of an entity made up of people from different countries and cultures, the presidency of DPOC is rotated between its two major shareholders. “The presidency of the company changes hands between PETRONAS and CNPC every three years. We also established a management committee representing all the shareholders which makes major decisions through a process of consensus. With this arrangement, operations are not affected when a new president takes over,” explained Datuk Joseph, who took up the presidency in 2013. The company is also driven by a vision, mission and strategic direction that ensure all partners and DPOC staff are aligned to the goals, he added.

Each partner brings their unique strengths to the table. While the CNPC representative leads the exploration and production aspect of DPOC, the PETRONAS representative is tasked with the finance and service functions - including procurement, human resources and administrative roles - of the joint venture. These roles leverage on PETRONAS’ expertise in implementing work processes and governance that has been demonstrated in its projects around the world.

“I see this as an opportunity. The uniqueness of this operation means that there a lot of challenges to overcome, so we need this sort of strength to work things out together.” The three-way partnership has augured well for the country, as business operations remain tight in spite of several challenges. “This spirit of common solidarity has brought us through, and I believe will be what it takes to take us into the future,” he concludes.

DAR Petroleum’s Field Processing Facilities in Paloch, Upper Nile State which processes crude oil before export


THE MOST INTERESTING PART OF YOUR JOB?

I deal with a lot of uncertainties and many

variables in the field. I face new learning

experiences by solving a new case every

day, facing different people from different

backgrounds, and using different ways

to solve problems. I have to adapt to

changing conditions quickly and become

an open-minded person.

As a reservoir engineer, my core role is to

maximise the recovery of hydrocarbons

at optimal cost. It is very exciting to work

in a team comprising various disciplines

such as process engineers, production

technologists, and geologists. This

collaborative culture is one part of what

makes PETRONAS a great place to work.

It is very large and offers many training

and career opportunities.

WHY DID YOU CHOOSE TO WORK WITH PETRONAS AFTER GRADUATING?

When I joined PETRONAS as a fresh

graduate engineer my objectives were

to give back to PETRONAS as I was a

scholarship beneficiary. I also aimed for

career development and progression,

personal development, opportunities,

networking and global exposure in the

oil and gas industry. So far most of these

A WORLD OFOPPORTUNITIES

South Sudan’s James Makuach Makeny, a Universiti Teknologi PETRONAS scholar shares his experience

working as a reservoir engineer for PETRONAS in Sarawak for the past two years.

22 AUG / SEP 2015

James Makuach, currenly resides in Malaysia with his family


objectives have been achieved and there

are still opportunities ahead to become a

fully well-rounded reservoir engineer.

PETRONAS is a model for many national

oil companies around the world. The

company is well managed and run on

sound economic principles and expand

internationally. One of PETRONAS’

greatest strengths is the diversity of its

workforce, with men and women of

many nationalities and backgrounds

working together and sharing common

objectives and shared values.

The company’s philosophy is that

high-quality training is fundamental

to both the success of both the staff

and the business. It also offers many

opportunities in terms of career

progression and it has many fields and

projects located in various parts of the

world.

WHAT ARE SOME OF THE OTHER UTP SCHOLARS FROM SOUTH SUDAN DOING TODAY?

Most of them are doing well and work

for various government ministries and

departments, applying their technical

knowledge and experience in supporting

and contributing to the development of

our young nation.

Some noticeable success stories

include Paul Adong, who was

previously managing director and

CEO of Nile Petroleum Corporation

(NILEPET), South Sudan’s national

oil company. Others such as Irene

Abalo and other engineers who

are supporting and contributing to

PETRONAS’ operations in South

Sudan through its jointly-operated

companies.

DO YOU SEE YOURSELF GOING BACK TO SOUTH SUDAN IN THE FUTURE? IF SO, WHAT WILL YOU BE DOING WHEN YOU RETURN? Yes, I would really love to go back

to South Sudan in the near future in

order to give back to my country and

to support PETRONAS operations to

the best of my competency and ability.

South Sudan’s oil and gas industry is

young and it faces many challenges.

With my technical knowledge,

global experiences and exposure,

I shall replicate best practices and

technology to improve and develop

South Sudan’s oil and gas industry. I

shall share my technical knowledge

and experiences with my compatriots

who are keen to work in the oil and

gas industry but did not have the

opportunities I enjoyed.

A WORLD OFOPPORTUNITIES

Paul AdongPast Managing Director

and CEO of Nile Petroleum Corporation, South Sudan’s national

oil company

Atem Maluak Ayuel

Drilling Supervisor,DPOC

Michael Arop

Founder & Owner, Matku Engineering &

Construction Company

David Rufas

Drilling Engineer, GPOC

Irene Abalo

Engineer SIPET oil & gas

services company


78 South Sudanese students have pursued their studies at University Teknologi PETRONAS

Undergraduates at UTP, Malaysia PETRONAS Education Sponsorship Programme

utPscholars From south sudan

Up The AnteMore South Sudanese in the petroleum sector are getting hands-on training through workshops and programs run by PETRONAS. Read on to find out more….


PETRONAS’ South Sudan Operations has been helping sharpen the skills of South Sudanese workers in the oil and gas industry since 2011, when it signed a capability building Memorandum of Understanding (MoU) with the then Ministry of Energy and Mining (now known as Ministry of Petroleum and Mining). This involved PETRONAS conducting more than 10 technical training modules.

PETRONAS has since built on

that initial effort with subsequent

programmes, including an upstream

training collaboration with Nile

Petroleum Corporation (NILEPET)

that ran from September 2013 to

March 2015.

Under this programme, PETRONAS

subject matter experts delivered six

training modules at the NILEPET

Training and Development Centre

in Juba. Participants came from the

Ministry of Petroleum and Mining,

NILEPET and Joint Operating

Companies.

Following an MOU between INSTEP

and NILEPET in February 2015,

technical trainings have been linked

up. It is expected that more than 150

South Sudanese in the petroleum

sector will attend the programme to

be conducted by INSTEP in Juba.

MODULES COVERED

The cllaboration between

PETRONAS South Sudan and

NILEPET has since seen the delivery

of these modules.

• UpstreamPetroleumLegal

Regime Framework (7 modules)

• PetroleumDrilling

• OilandGasAccounting

• PetroleumEconomics

• PetroleumReservoirTraining

• SurfaceProductionOperation

Training

24 AUG / SEP 2015


Makui Jacob Deng, Mechanical Engineering Undergraduate in

UTP, recipient of the PETRONAS Education Sponsorship Programme



26 AUG / SEP 2015

MrGabrielMatutMaliahGatdet,

participant of the reservoir training

module at the NILEPET Training and

Development Centre, believes that the

training would enable South Sudanese

geoscientists and engineers in the oil

and gas sector deliver their jobs with a

higher degree of professionalism.

“Most of the South Sudanese

geoscientists and engineers who

had graduated in various Sudanese

universities, lack the necessary skills and

knowledge of the oil and gas sector

as they were not exposed to intensive

training, be it practical or theory, as

part of their career development,” said

MrGatdet,35,whoisapetrophysicist

attheGreaterPioneerOperating

Company(GPOC).

The training helped him tackle

Reservoir Engineering as an integrated

discipline that covers reservoir

management right from discovery

to abandonment with the aim of Victoria Jakuru Cosmas,GeologistatNILEPET

managing a depleting reservoir

efficiently and economically. It widened

his knowledge in the topics of reservoir

geology, reservoir pressure and

temperature, rock properties, reservoir

fluids, reservoir drive mechanisms

and reserves estimating and reservoir

management.

Meanwhile, fellow participant Francis

KhamisBali,aplanneratGPOC,

believes that PETRONAS is pursuing

the correct strategy in helping to build

capabilities in his home country.

He said: “PETRONAS is an institution

that believes in capacity building.

Why? Because it is where our success

lies. Without qualified personnel in the

game we cannot get very far.”

Victoria Jakuru Cosmas, a geologist,

agreed that the training offered by

PETRONAS enhanced her knowledge

and helped improve her skills and

performance for career development.

“PETRONAS is an institution that believes in capacity building. Why? Because it is where our success lies. Without qualified personnel in the game, we cannot get very far.”

Francis Khamis BaliPlanneratGPOC

Francis Khamis BaliPlanneratGPOC

Gabriel Matut MaliahPetrophysistatGPOC


28 AUG / SEP 2015


Future Ready Children, teachers and alumni from East Atlabara Primary School have a renewed passion for learning. Here’s why…

When Dr Cosmas Pitia Kujjo returned to his old primary school in Juba, South Sudan, he was disturbed. Following decades of conflict, the buildings at Atlabara East Primary School had deteriorated badly.

“It was horrible and unbearable for me

to pass through the school and look

at it in that condition,” said Dr Kujjo,

who is Director General, Directorate of

Mineral Development at South Sudan’s

Ministry of Petroleum and Mining. It

was not a suitable place for learning. Students at Atlabara East Primary School thrilled with the new facilities.


Madam Drucilla,School’s Head Teacher

Madam Asunta Idris Alwan Augustino, Assistant

Inspector at the Ministry of Health in South Sudan

Betty Conasiba Bada, Primary six student

From left: Titus Adam, John Wani and Angelo Abdalla

School teachers


His view changed drastically last year

after a major Facilities Improvement

Programme (FIP) was sponsored by

PETRONAS.

The four-month initiative involved

the refurbishment and reconstruction

of various areas at the Atlabara East

Primary School, aimed at providing a

more conducive learning environment

for students.

Works included the repair, painting

and expansion of two blocks of

classrooms, the construction of a new

teachers room, a multi-purpose court

for sports and new toilets. A new

headmistress office and library was

also built.

“During the school tour, I was so

impressed by the remodelling of the

classes and the offices,” said Dr Kujjo.

The school’s teachers were equally

impressed by the changes and were

confident that the students’ learning

experience would be boosted by the

improvements.

“The school is today considered the most

beautiful government school in Juba City

with good facilities,” said the school’s

head teacher, Madam Drucilla, 60.

Added teacher Mr John Wani: “ The FIP

has improved the school’s ability to carry

out its mission of improving education

performance and we see a higher

number of students. This is due to the

enhancement of school ambience with

better facilities such as classrooms, staff

offices, store room, and a multi-purpose

court for sports.”

The changes have also seen many

parents wanting to send their children

to the school, resulting in a jump in

the student population from 207 to

320 students – as there are more

classrooms to accommodate more

students. One such parent is former

student Madam Asunta Idris Alwan

Augustino 42, Assistant Inspector at

the Ministry of Health in South Sudan.

“Parents of students including myself

are now willing to send their children to

the school due to the good condition

and facilities of the school,” she said.

Most importantly, students such as

Betty Conasiba Bada are reaping

the biggest benefits from the FIP.

“These days, we enjoy going to

school because we love the learning

environment. After school session

ends, we can now have our sport

activities at the multi-purpose court,”

remarked the primary six student.

“The experience of

working with PETRONAS

for this programme

has been very good.

The teachers and the

community at large

appreciate PETRONAS’

contribution to our

school.”

Mr John Wani

30 AUG / SEP 2015


Atlabara East Primary School


Quantitative Results

No. Before FIP After FIP Remarks

1

2

Additional 2

classrooms

allows more school

children to receive

formal educationStudent population:

approx. 220

Student population:

approx. 320

No. Before FIP After FIP Remarks

1

2

Equipped with classroom facilities i.e. lighting system, desks, fans,chairs, benches

Limited sport

activities

Quantitative Results

Uncomfortablelearningenvironment

Conducivelearningenvironment

Students are more

involved in sports

programs and

activities

New multi-purpose

court constructed for

the school

No. of

classrooms: 4

No. of

classrooms: 6

Results of the FIPAtlAbArA EASt PriMAry School FAcilitiES

iMProvEMEnt ProgrAMME

The Atlabara East Primary School was built by a merchant named Mohamed

Ahmed Ali in 1972. It had two humble classrooms and a small office which

could hold three tables and a very small store. Classrooms were made

of local construction materials such as clay, soil, rocks and wood. The

condition of the school buildings deteriorated during the 21 years of war.

“The experience of working with

PETRONAS for this programme has

been very good. The teachers and

the community at large appreciate

PETRONAS’ contribution to our school,”

Wani said.

PETRONAS’ involvement with this Atlabara

school started in 2010 when it was

selected as one of the recipients of the

PETRONAS Mobile Library Programme.

“We have 320 students at present and

with great hope some of these students

will be the leaders of this nation in the

future,” said Atlabara East Primary School

head teacher, Madam Drucilla.

Dr Cosmas Pitia Kujjo studied in

this school when many residents

of Juba town were displaced. By

then it was a single classroom

school (Khalwa). However, it

became a proper primary school

after the Addis Ababa Agreement.

i would like to express my

sincere thanks and gratitude

to PEtronAS, for their great

contribution to South Sudan

in general and in the field of

Education in particular. it’s

worth mentioning that such

contributions and cooperation

promotes and strengthens

bilateral relation between our

beloved nations.

Dr Cosmas Pitia Kujjo, Director General in the Ministry of Petroleum and Mining Republic of South Sudan, and Atlabara East Primary School alumni

before

After

32 AUG / SEP 2015

FEATURE FOCUS: OFFSHORE EOR

A NEW

FRONTIERPETRONAS is positioning itself as a pioneer in offshore Enhanced Oil Recovery in the region, and knows that its success lies in technology and technical know-how, strong partnerships and capability building.

The first EOR study for Malaysian oilfields

began in 1986, and it was a decade later

that the first EOR evaluation took place

at the Dulang field offshore Terengganu.

However it wasn’t until 2002 when a

PETRONAS corporate strategic study

identified EOR as one of the national oil

corporation’s strategic projects that EOR

really rose in prominence. The initiative

receiving the much-needed direction and

funding, eventually culminating in the

realisation of Malaysia’s first-ever large-

scale EOR project, Tapis, in 2014.

The Tapis EOR project, undertaken

jointly between PETRONAS Carigali Sdn

Bhd and ExxonMobil Exploration and

Production Malaysia Inc, is the largest

offshore EOR project in Southeast Asia

as well as one of the world’s largest

water alternating gas (WAG) EOR projects

implemented offshore. It is one of several

upstream investments under Malaysia’s

Economic Transformation Programme -

representing a US$2.5 billion investment

by ExxonMobil and PETRONAS

Carigali - to help ensure reliable and

They say the journey of

a thousand miles begins

with a single step. For

PETRONAS, its Enhanced

Oil Recovery (EOR)

journey began some three

decades ago, and like

many journeys, it began

on paper.




Enhanced Oil Recovery (EOR) Extending Field Life, Improving Oil Recovery

34 AUG / SEP 2015

Information presented in this article is accurate as at 31 December 2014

Watch PETRONAS’ efforts in

EOR - a 4 minute video on the

PETRONAS YouTube Channel

ENhANcEd Oil REcOvERy (EOR) ExtENdiNg FiEld liFE, impROviNg Oil REcOvERy


sustainable energy supply for Malaysia.

(ExxonMobil and PETRONAS Carigali

each hold a 50% participating stake in

the project.)

Fully designed and built in Malaysia by

local contractors, fabrication activities

for the Tapis EOR project commenced

in November 2011, and comprise

among others a new riser platform

(Tapis Q) and a new central processing

platform (Tapis R). (See page 39 for

facts on Tapis)

WAG injection from the Tapis R central

processing platform into targeted

wells on the existing Tapis A platform

commenced in September 2014, and

with WAG EOR, the Tapis field life is

expected to be extended for at least

another 30 years, to beyond 2040.

Since production began at the Tapis

field in 1978, approximately 400 million

barrels of oil have been produced, with

peak production of 80,000 to 90,000

barrels per day (bpd) achieved in the

early 1980s. Current production stands

at 4,000 to 5,000 bpd.

The project is by no means the sole

EOR project in Malaysia – to date there

are about a dozen fields under study

for EOR in the country and PETRONAS

is targeting between 750 million

and 1 billion barrels of oil from EOR

projects.

These targets illustrate just how far

PETRONAS has come in its EOR

journey.

tURNiNg pOiNt

Dr Nasir Darman, one of the

pioneers for EOR at PETRONAS

remembers vividly the point when

EOR moved from being purely

research-driven, and he credits

former PETRONAS President

and Group CEO Tan Sri Shamsul

Azhar Abbas (who was then the

Vice President of Exploration and

Production) and Ramlan Abdul Malek

(who was previously Vice President

of the Petroleum Management

Unit) as the prime movers behind

PETRONAS’ EOR initiative.

“They formed a team of technical

people and we chartered the EOR

blueprint in Malaysia - looking at

what fields to focus on, technology

to apply and how to collaborate

with the partners,” says Nasir, who

was selected to lead the team. The

year was 2003, and at the time the

team only comprised five people.

With a structure, budget as well

as the support of PETRONAS’

management, Tapis and Guntong

were identified to be anchor

projects in collaboration with

ExxonMobil, fields in the Baram

Delta Operations and North Sabah

with Shell, as well as PETRONAS’

own projects namely Dulang,

Angsi and Semarang.

Of these projects, some such

as Tapis have entered operation

mode, others such as Baronia

have commenced fabrication

while some are still awaiting

funding, as the current oil prices

has had an impact.

“EOR projects are not cheap, they

are cost-intensive so we have

to ensure that we de-risk the

project to a proper level and that

we know what the results are at

the end of the day. We have to

mitigate the risk no matter what

the oil prices are… oil prices do

help in the decision making of

the project,” he says, stressing

the importance of balancing

profitability and the strategic

nature of the project. “We should

not do a project for the sake of

doing a project.”


“EOR projects are not cheap, they are cost - intensive so we have to ensure that we de-risk the project to a proper level and that we know what are the results at the end of the day.”

dr Nasir darmanHead, Technology, PETRONAS Upstream

cRiticAl sUccEss FActORs

Elaborating on the critical success factors

of an EOR project, Nasir highlights three

key areas – the technical and commercial

aspects of a project and capability building.

“One has to solve all issues relating to

EOR, from A to Z and it’s not easy because

“From the commercial standpoint we

want to ensure that everyone goes to the

bank smiling. So the cake needs to be cut

fairly for all parties – Production Sharing

Contract (PSC) partners, PETRONAS as the

host authority and also the government,”

he says, adding that in this regard both

the government and PETRONAS have

taken a long-term view. “The Malaysian


it involves injecting something

alien or unfamiliar into the field

and when you do that, you have to

predict the side effects. We don’t

just have to ensure it produces

oil but that the reservoir is not

damaged, and at the same time

also address how the oil is to be

handled at the surface.

• First EOR study for Malaysia oilfields.

Signing of firstEOR-based PSC with ExxonMobil.Formation of UTP EOR Centre of Excellence

Developed proprietary chemical for CEOR.Tapis WAG injection.

Angsi CEOR injectionBaronia WAGGuntong eWAGSamarang WAGBaram Delta & North Sabah injection

Dulang WAG Project sanctioned.

First offshore Chemical EOR pilot (Angsi) implemented Studies of three major EOR initiatives (Tapis, Guntong, Bokor).

• First EOR study evaluation in Dulang Fields.

• Dedicated EOR Unit formed in PMU & PCSB.

1986 1996 2002 2006 2008 2010 2011 2012 2013 2016-2020

Commencement of Tapis, Dulang, Samarang and Bokor WAG Projects.R&D on CEOR properties & processes.

First injection (Dulang)-2013.Formation ofEPTC.

• Signing of EOR PSC for Baram Delta & North Sabah.

36 AUG / SEP 2015

PETRONAS’ JOURNEY AS A LEADING OFFSHORE EOR PLAYER


Government has given tax incentives for

EOR to encourage more EOR projects

and PETRONAS has provided a lot of

facilitation for PS contractors and new

PSC arrangements to make it attractive for

the partners,” he adds.

But what is especially critical to the

success of the EOR initiative is education

and capability building. We sent our

people for training and attachment,

and this is where the relationship with

universities and research institutions

outside Malaysia is important…we

need that collaboration in order

to develop capabilities,” he says,

disclosing that the EOR team now

boasts a staff strength of 500.

Some of the partner institutions

include Houston University,

University of Texas in Austin,

Herriot-Watt University in

the UK, Delft University of

Technology in the Netherlands

and locally, Universiti Teknologi

PETRONAS and Universiti

Teknologi Malaysia.

• First EOR study for Malaysia oilfields.

Signing of firstEOR-based PSC with ExxonMobil.Formation of UTP EOR Centre of Excellence

Developed proprietary chemical for CEOR.Tapis WAG injection.

Angsi CEOR injectionBaronia WAGGuntong eWAGSamarang WAGBaram Delta & North Sabah injection

Dulang WAG Project sanctioned.

First offshore Chemical EOR pilot (Angsi) implemented Studies of three major EOR initiatives (Tapis, Guntong, Bokor).

• First EOR study evaluation in Dulang Fields.

• Dedicated EOR Unit formed in PMU & PCSB.

1986 1996 2002 2006 2008 2010 2011 2012 2013 2016-2020

Commencement of Tapis, Dulang, Samarang and Bokor WAG Projects.R&D on CEOR properties & processes.

First injection (Dulang)-2013.Formation ofEPTC.

• Signing of EOR PSC for Baram Delta & North Sabah.



high ExpEctAtiONs

As much as these factors are

contributing to the success of the EOR

initiative in Malaysia, Nasir concedes that

they also present challenges. On the

technical front for example, he points

out that the Malaysian environment

is unique in that the EOR fields are

located offshore, with high-temperature

reservoirs.

“These two alone bring a lot of issues…

EOR in itself is not new, it’s been

implemented in the US, and also China

which is big in chemical EOR but the

38 AUG / SEP 2015

majority of EOR projects in the

world are onshore. So we did not

have a frame of reference or case

studies to learn from…there was a lot

of pioneering work undertaken,” he

says, adding that through the Tapis

project, PETRONAS is establishing

itself as a pioneer in WAG EOR

technology in the region.

The expectations for EOR are

undoubtedly high and although

to date more than 300 million

additional barrels have been added

to the reserve book, Nasir believes

that the recovery rate can be further

improved. “We’re currently doing

easy EOR which is WAG and we’re

thinking that five years down the

road what will the field look like after

WAG? That’s why we’re undertaking

research on enhanced WAG where

we introduce surfactant, polymer

and alkali to the water and gas so

that we can increase the recovery

rate.

“PETRONAS hopes to also shorten

the time to execute the EOR

projects, from 10 years or more to

five or seven years…so these are

what we’re working towards.”

Located approximately 200km offshore Peninsular Malaysia in

65m water depth, the Tapis field - one of ExxonMobil’s earliest fields in the country – was

discovered in 1969 when the company drilled its first exploration well, Tapis No.1. The well, the company’s first

in the Malay basin, encountered gas, and in 1974, the second well discovered oil.

The Tapis A platform was installed in late 1977 and production began in March 1978. Over the years other Tapis platforms were fabricated and

installed - Tapis B in 1979, Tapis C in 1980 and Tapis D in 1982. Two other platforms were installed later - Tapis E in 1999 and Tapis F in 2003.

1982

19791980

1977

ATAPIS

BTAPIS

C TAPIS

D&P TAPIS

TAPIS PLATFORMS

See page 43for full project

diagram



Tapis EOR At A Glance

FiRst lARgE-scAlE ENhANcEd Oil REcOvERy (EOR) pROjEct iN sOUthEAst AsiA

Feature Focus: oFFshore eor

InnovationA snapshot on Production Sharing Contracts and insights from an international company doing business in Malaysia

48

Personality SpotlightPenny Chan goes where no woman has gone before

38

DeepwaterPETRONAS has proven its deepsea credentials with its successful intervention campaigns in Mauritania

60

Market AnalysisIHS Energy make their bet: the sharp decline in oil prices is unlikely to impact Malaysia's deepwater projects in the near term

42

SustainabilityProject Beacon looks to save the corals and marine life off Similajau National Park

54

PETRONAS UPSTREAM MAGAZINE

C O N T E N T S

Vo

lum

e 0

2

[email protected]


PETRONAS

STAY IN TOUCH WITH US

Get in with the flow

“Near-term Malaysian deepwater projects will not be deterred by low oil

prices” says Dylan Mair, Senior Director of Upstream Research and Consulting.

By IHS ENERGY

THOUGHT LEADERSHIP

MAL AYSIA’S DEEPWATER FIELDS

43 APR / MAY 201542

Seeing The UnseenAdvanced geoimaging technology is making the search for hydrocarbons less of a gamble

36

39

Name: Penny Chan

Joined PETRONAS: March 2011

O May 2011

Graduated All Rounded Drilling (ARD) programme: December 2013 (awarded top scorer)

Assistant night drilling supervisor for Sabah deepwater projects: December 2013 – May 2014

Night drilling supervisor in Myanmar land rig: June – October 2014

Night drilling supervisor in Sabah):

November 2014 – current

Hobbies: Jogging, reading (currently reading See Jane Lead: 99 Ways for Women to Take Charge at Work by Lois P. Frankel)

MAKING A NAME FOR HERSELFYou don’t need to behave like a man to survive in a male-dominated industry. As the first female night supervisor in PETRONAS, Penny Chan has sometimes found herself the only woman on an oil rig with more than 150 men. But she has taken it all in her stride. In fact, the experience has made her a better communicator and leader.

When flow interviewed her for this story, the 25-year-old was more than happy to share her unique story of life on an oil rig. Amusingly, she is

always mistaken for a trainee rather than a supervisor by many of the men who have not worked with her.

She admits that the conversation around her makes her a tad uncomfortable at times, but rather

makes her uneasiness known to her colleagues.

“That happens sometimes but I would talk to them privately and tell them that I am not comfortable with the conversation. I have done this before. It was okay because the guy was open about it and he understood. We were talking like friends,” she explains.

Chan was in the first batch of petroleum engineering graduates from Universiti Teknologi PETRONAS (UTP) in 2011. While some of her friends decided to play it safe by taking other courses which aren’t so specialised, Chan decided to opt for the newly launched course in petroleum engineering.

PERSONALIT Y SPOTLIGHT

“The only physically-challenging parts of the job are having to climb on piles of oil well casings, which can be quite scary as it gets higher and higher, and using the rope to swing onto the platform.”

Penny Chan, Drilling Supervisor

By BRIGETTE ROZARIO

As PETRONAS first female drilling supervisor, 25-year old Penny Chan is bravely blazing trails for

women in the industry.

38 APR / MAY 2015 APR / MAY 2015

4948

INNOVATION INNOVATION

Prior to 1974, the Government, under

a concession system collected, tax

from oil companies which were

granted rights to explore and develop

petroleum resources with leases of up

to 40 years or more.

In 1974, the Petroleum Development

Act (PDA) vested PETRONAS with

the ownership and control of all

hydrocarbon resources in Malaysia.

This led to the adoption of PSCs to

replace the Concession Agreement

in 1976 so that the nation could play

a more direct role in controlling

PSCs set out the arrangements

for co-operation between

PETRONAS, which assumes the

role of a regulator, with qualified

oil companies as contractors for

the exploration, development

and production of petroleum

in a contract area for a specific

duration.

It is used to engage capable oil

and gas companies to participate

in the development of Malaysia’s

petroleum blocks, covering the

entire upstream value chain.

Since its introduction almost 40 years ago, Malaysia’s production sharing contract (PSC) scheme has been a key platform for the growth of the country’s oil and gas sector.

PARTNERING FOR PROFITProduction Sharing Contracts have been key in the growth of Malaysia’s petroleum resources for the past two decades.

and managing its petroleum

resources. The first PSC was

awarded in 1976 to Esso for the

Duyong oil field in Terengganu.

Unlike the old concession

system, the key advantage

of the PSC is that it allows

PETRONAS to have input

in strategic and operational

decisions, ensuring that the

operations are aligned with the

group’s business objectives and

nation building agenda.

Malaysia has awarded over

150 PSCs since the inception

of the scheme in 1976, of

which more than 100 are

currently actively managed by the

Malaysia Petroleum Management

organisation in PETRONAS.

INNOVATION

What is a PSC? PSC or Production Sharing Contract serves as a vehicle for partnership for PETRONAS and multnational oil & gas companies in conducting hydrocarbon exploration & production activities in Malaysia.

100PSC’s

4,000+

20,000215 billion

20%GDP

22.2

132

14

1,587320

10

7000

22.2 330

100PSC’s

APR / MAY 201500

00

HOPEA BEACON

Walk along the coastline of Similajau National Park, the beauty of the blue skies and golden sand can lull one into a comforting sense of serenity. The waters

postcard, however, tell

story.

SUSTAINABILIT Y

“By installing the reef balls, we hope to improve the marine life and perhaps the local fishermen can get more fish.”

Azizah Mohd DeliChairman of the BEACON Project Taskforce

For the past 20 odd years, the corals in the waters here have been dying, the number of fish dwindling and scores of turtles found dead on the beach; and all because of the fishing by trawlers that takes place here. It didn’t use to be this way.

Marine biologist James Anak Bali,

Corporation (SFC), remembers the first time he dived at the age of 20. He was exposed to marine life of all shapes, sizes and colours; as well as corals that appeared in hues that only seemed to exist underwater. It was the allure of

this underwater paradise that led to him become a marine biologist.

“Watching the ocean’s rich marine life decline over the years really upset me. The trawlers and their dragnets – they’ve destroyed a lot of the corals here,” he says.

“When the corals die, the marine life goes with it. They’ve fished here undeterred for so long, even the turtles

dragnets, they don’t stand a chance. Fewer and fewer make it to shore to lay eggs,” explains James.

5554 APR / MAY 2015

Similajau National Park from trawlers’ nets is already showing impressive results.

By BRIGETTE ROZARIO

OF

APR / MAY 201500 00

DEEPWATER

61 APR / MAY 201560

PETRONAS’ successful intervention campaigns at the Chinguetti field in Mauritania have proven its ability to handle deepsea operations under challenging conditions.

PROVING ITS METTLE IN THE DEEP

When PETRONAS took over the running of the Chinguetti field in Mauritania in 2007, production had been falling rapidly and prospects for the West African country’s only producing field looked dire.

Chinguetti had achieved its first oil on 24 February 2006, but within a few months production rates had plunged from 75,000 barrels per day (bbl/d) to 30,000 bbl/d due to a lack of pressure support. By the time PETRONAS entered the picture through it’s through its wholly-owned subsidiary PC Mauritania 1 Pty. Ltd. (PCMPL), production had fallen further to just 11,000 bbl/d.

Given the rapid production decline, coupled with high operation expenditure and decommissioning costs, the field was expected to reach its economic limit in 2013

if nothing was done to reverse the situation.

Significantly, PETRONAS’ operations at Chinguetti were the first for the company involving Subsea Production systems (SPS). To boost production, PCML implemented an aggressive development and intervention program involving both drilling and intervention activities in 2008.

The field was developed in two main phases, using subsea wells located within manifold-templates that are tied back to a Floating Production Storage and

“This is one of the largest EOR projects

in Southeast Asia and the first large-

scale, full-field EOR development in

Malaysia. We are proud of the team

and proud to work together with

PETRONAS and PETRONAS Carigali

to realise this project,” says See

Kok Yew, President of ExxonMobil

Exploration and Production Malaysia

Inc. (EMEPMI) and Chairman of the

ExxonMobil Subsidiaries in Malaysia, of

the close collaboration between the

oil major, its joint venture partner and

PETRONAS.

The Tapis EOR project is one of

several upstream investments under

Malaysia’s Economic Transformation

Programme - representing a US$2.6

billion investment by ExxonMobil and

PETRONAS Carigali to help ensure

reliable and sustainable energy

supply for Malaysia. ExxonMobil

and PETRONAS Carigali each hold a

50% participating stake in the 2008

Production Sharing Contract (PSC)

under which the project is helmed.

The commencement of operations in

September 2014 with Water Alternating

Gas (WAG) injection from the Tapis R

central processing platform into targeted

wells on the existing Tapis A platform

was a culmination of more than a

decade of research and study, says See.

“It’s a historic milestone for us in our

partnership with PETRONAS,” he adds.

“As operator of the field we clearly had a

view on the potential of the field and in

identifying what further potential it might

have in terms of the remaining reserves.

In 2000, we started scoping out the EOR

potential for the field and a formal EOR

joint study with PETRONAS was initiated

in 2003,” he says, acknowledging that

since the technology had not been used

in Malaysia before, the team wanted

to thoroughly examine its potential

application here.

The Tapis Enhanced Oil Recovery (EOR) project is a major endeavour for ExxonMobil, and represents another highpoint in its decades-long relationship with PETRONAS.

The Tapis EOR project offshore

Terengganu represents a significant

milestone in ExxonMobil’s 50-year

upstream history in Malaysia. The

project, undertaken jointly with

PETRONAS Carigali Sdn Bhd, is

ExxonMobil’s first large-scale, full-field

offshore EOR project – with a few firsts

in techniques and technologies used

to recover additional reserves from the

mature field.

tapis

40 AUG / SEP 2015

Turning The Tide At

Giving a 40-year-old asset a new lease of life reflects a high point for ExxonMobil as it pioneers new approaches in offshore EOR application in the first and largest full-field WAG EOR in South East Asia.


“EOR cannot be applied to all fields

and it depends on the reservoir

and fluid characteristics as well

as the recovery from the existing

methods used. So we needed to

do the technical work in order to

convince ourselves that it’s the right

thing to do and that was exactly

what the team did,” he says, adding

that a few PETRONAS staff were

on secondment at ExxonMobil’s

upstream research company in

Houston to further study and define

the potential of EOR. In addition,

given that EOR technology is

typically applied to mature fields, the

project also had to be able to bring

economic value.

The results of the study later

formed the basis of the 2008 PSC

and following the signing of the

PSC, further design and planning

were undertaken before the project

was finally funded and realised.

With EOR, the recovery factor at

Tapis is expected to increase by

some 5% - 10%, bringing the total

recovery up to 50%, and extending

the field life for another 30 years.

TECHNOLOGY IS KEY

Fully designed and built in Malaysia

by local contractors, fabrication

activities for the Tapis EOR project

commenced in November 2011.

The Tapis EOR project comprises

several major components – one

of these, a new riser platform

called Tapis Q was installed

in September 2012. The main

component of the project,

the Tapis R central processing

platform was installed in May 2014.

It comprises a large integrated

deck structure with living quarters

for 145 personnel, and is equipped

with 390 million cubic feet per

day (MMcf/d) gas compression

and 270,000 barrels per day water

injection facilities, production-

processing equipment, and utilities

systems.

Tapis R Platform


See is particularly proud of the

technology and techniques that have

been employed in the development and

realisation of the Tapis EOR project, for

instance the installation of the Tapis R

platform, which is the first by EMEPMI

using the float over method for its

topsides. The combined topsides and

jacket, which weigh about 23,500 metric

tonnes, is also the heaviest platform

constructed in Malaysia by the company.

Given that EOR is still a relatively new

and niche technology, and coupled

with the scale of the project, project

management, says See, is vital and

this too is an area where ExxonMobil

had a key role to play. “You need

very good project management and

project execution capabilities and with

our global expertise in managing and

executing projects around the world,

we were able to apply those practices

to Tapis,” says See.

Although the Tapis EOR project has

taken off without a hitch, and has

been executed safely without any loss

time, See says there is still a lot more

work ahead. “A lot of the work that has

been done so far involves modelling

and is simulation-based, so the real

proof of the project is when we start

the WAG process and see how the

wells perform,” he says, adding that the

project is in the midst of the first cycle

of the WAG process.

Technology, he reiterates, plays a

significant role in the EOR project,

and is a key strength that ExxonMobil

brings to the venture. “There are some

pretty neat state-of-the-art modelling

techniques used to identify the

hydrocarbon in the ground… as well as

additional intelligent field technology

such as integrating the surface and

sub-surface information so that the

engineers at the office are able to

monitor the performance of the wells

and the field in almost real-time. “There

are also distributed temperature sensors

which are able to identify which zones

the injected fluid (whether it is water or

gas) is going into without needing any

well intervention and which will allow

engineers to monitor performance of

the wells in real time,” he says.

“There are some pretty neat state-of-the-art modelling techniques used to identify the hydrocarbon in the ground… as well as additional technology such as integrating the surface and sub-surface information so that the engineers at the office are able to monitor the performance of the wells and the field in almost real-time.”

See Kok YewPresident of ExxonMobil Exploration and Production Malaysia Inc. (EMEPMI) and Chairman of the ExxonMobil Subsidiaries in Malaysia


He points out that the pioneering

techniques and technologies being

employed have created opportunities

for ExxonMobil and PETRONAS

engineers to build and enhance their

capabilities. This, he adds, will be a

boost for the country’s oil and gas

industry and is also in support of the

national oil corporation’s aspiration to

be the EOR centre in the region.

ADDITIONAL LEARNING

For ExxonMobil, although EOR

methods are specific and unique

to different reservoirs and fields,

See does not discount the value of

lessons gained from the Tapis EOR

project. “It’s going to help us provide

additional learning and information on

how it may work elsewhere around

the world,” he says.

But for now the focus is on

completing the remaining work

at Tapis, he adds. This includes

rejuvenating the existing platforms

and converting the existing wells to

be WAG-enabled.

42 AUG / SEP 2015

TAPI

S R

JACK

ET

TAPI

S R

TOPS

IDES

2,300 metric tonnes topsides.

Four-legged jacket with an integrated deck.

Two access bridges to link with Tapis-R and existing Tapis B platform.

Tapis R platform is a central processing platform. Measures up to about 14,000 sq metres (almost the size of two soccer �elds).

Installed in 64m water depth in the sea.

Largest jacket installed by EMEPMI at 5,500 metric tonnes.

800,000 work hours involving more than 600 workers during peak construction activity.

HSE Record: Zero LTI.

TAPI

S Q

RIS

ER

18,000 metric tonne topsides comprising integrated deck structure with space for production processing equipment, utilities system and living quarters for 145 personnel.

95m vertical �are.

More than 1,800 personnel during peak construction activity.

More than 12 million work hours to date with Zero LTI.

The topsides combined with the jacket weight of 5,500 metric tonnes makes it the heaviest platform constructed by EMEPMI at 23,500 metric tonnes.

Capacity for 390 mmscf/d of gas injection and 270 mstb/d of water injection.

Main oil pipeline for production from Tapis R to Tapis Pump platform via Tapis Q.



TAPIS ENHANCED OIL RECOVERY AND REJUVENATION PROJECT• OneofthelargestoffshoreEORprojectsinSouthEastAsia

• Malaysia’sfirstlargescaleEORproject

TAPIS C(WAG / Unmanned Facilities)

TAPIS A(WAG / Unmanned Facilities)

TAPIS F

TAPIS B(WAG / Unmanned Facilities)

TAPIS D(WAG Facilities)

New RiserPlatform (TAPIS Q)Launchers / ReceiversFacilitiesPipeline Tie-Ins

New Central ProcessingPlatform (Tapis R)~18,000 tonnes topsidesGas CompressionWater InjectionProcessing FacilitiesLiving Quarters

TAPIS E(Additional GI)

TAPIS Pump

TerengganuCrude Oil Terminal

Oil Line

Gas Injection (GI)

Water Injection (WI)

Non Associated Gas (NAG)

Water Alternating Gas WAG


It’s been fifteen years since the Angsi field delivered its first oil. The maturing field, producing some 100,000 barrels of oil daily at its peak, is one of about a dozen fields which have been identified to be studied under PETRONAS’ Enhanced Oil Recovery (EOR) plan.

Based on field research, PETRONAS Carigali, the operator, is

hoping to record up to 10% recovery factor through a four-

year Chemical EOR work programme. Lab tests and R&D

work began as early as 2003 and a field pilot was conducted

in 2007.

44 AUG / SEP 2015

Angsi field is located about 170km off the east coast of

Peninsular Malaysia, in the southern region of the Malay

Basin. It is the biggest oil producing field in Malaysia.

The Chemical EOR approach relies on a smart mixture

of alkali surfactants (AS) and softened seawater.

It requires sophisticated seawater desalination

and chemical mixing and the performance of the

approach depends on the quantity and quality of the

mixture.

So how would this ‘cocktail’ be safely, effectively and

economically delivered to the platform located about

170km offshore?

New engineering designs came into play.

The PETRONAS team explored various approaches,

including utilising an offshore floating barge which

would house a seawater desalination and chemical

mixing facility and with AS chemicals transported to

the barge.

ANDR-A

A NEW LEASE OF LIFE



Existing 24’ TCOT-Andra Pipeline

(about 170km)

KERTEH

KUANTAN PORT

AnDR-A

AnPG-A

ANGSI

TCOT

Chemical Supplyvia Road Transfer

WaterDesalination

Chemical MixingPlant

Seawater Intake

Structure

ANGSI CHEMICAL EOR

There were several barriers to this approach including high costs and

logistics constraints to transport 300 MT of chemicals daily to the

offshore barge, especially during the monsoon season.

THE WINNING SOLUTION

The team then looked at establishing the facilities onshore by leveraging

on an existing unused pipeline which was already connecting the oil

terminal in Kerteh (TCOT) and offshore Angsi Platform.

Detailed studies were carried out in 2013 to establish the new

concept’s feasibility including laboratory works to verify that the

“cocktail” maintains its effectiveness after the 170 km journey in the

pipeline before reaching Angsi.

This new approach generates some savings in terms of facilities costs

to the organisation and simplifies the chemical handling logistics and

overall operations of the facilities.

ANPG-A

Unusual


Baram Delta Platform

46 AUG / SEP 2015

To address the challenges of using EOR to boost production at mature fields, PETRONAS and Shell are combining their strengths to deliver trailblazing solutions.

UnusualBusiness



After years of working together to

develop the country’s petroleum

resources, the partners took their

relationship to a new level in 2012 by

jointly setting up the Enhanced Oil

Recovery Centre (EORC).

The joint venture builds on two

existing Production Sharing

Contracts (PSC) between PETRONAS

Carigali and Shell Malaysia in

offshore Sarawak and Sabah, and

extends them till 2040. Under the

new arrangement, the partners will

build on their respective expertise

to boost production at nine fields

in the Baram Delta Operations

(BDO) area and North Sabah (NS)

using enhanced oil recovery (EOR)

techniques.

“We are leveraging on the strengths

of the partners. PETRONAS

has implemented light-weight

technology and Shell has subsurface

technology,” said Sohaime Abdullah,

the head of EORC in an interview

with flow.

Whether it’s the use of low-cost structures and wells, innovative contracting strategies, or the latest oil recovery techniques, a joint initiative between PETRONAS and Shell to revive production at several mature oil fields in Malaysia is breaking new ground on multiple fronts.

EOR involves various techniques

for increasing the amount of

crude oil that can be extracted

from an oil field. It is also known

as tertiary recovery, as opposed

to primary and secondary

recovery that normally has a

higher rate of production and is

technically less challenging to

extract.

EORC is overseeing development

at nine fields - six in BDO and

three in NS - and is responsible

for ensuring end-to-end project

delivery across Field Development

Plans (FDP) and projects

execution. In terms of reserves

addition target, most of the

projects in EORC are aiming for

incremental reserves recovery of

between 5% to 10%.

DRINKING FROM THE SAME WELL

Unlike traditional PSCs, the

EORC features a unique working

arrangement between the partners.

Working as a single entity, the joint

venture is governed by a board

that meets once every quarter and

endorses key decisions.

“Both partners contribute staff to the

EORC. We work as one, and don’t

distinguish between PETRONAS

and Shell,” said Jan Willem Jacobs,

who serves as the EORC’s technical

director.

The initiative is unchartered territory

for both partners. While Shell has

experience in EOR, it has never

attempted it for an offshore field. The

newness of the effort means that

many groundbreaking processes have

been brought to bear at the centre.

“We cannot continue to do business

the way we have in the past. We

have to do things differently. I call it

business unusual,” said Jacobs.

ECONOMIES OF SCALE

The key challenge of EOR is to

ensure the economic viability of such

projects. Unlike fields with marginal

reserves to be developed within a

short period of time and with very

minimal facilities requirement, EOR

projects are economically thin due to

low reserves addition, and the high

cost of EOR facilities.

As such, EORC was set up with an

integrated operating model with

potential economies of scale; using

novel contracting strategies and new

technologies in an effort to make EOR

projects feasible.

For instance, new technologies such

as lightweight structures and fit-for-

purpose design have been employed

to keep a lid on operating expense.

EORC has also pioneered a new

bidding system.

“EOR is all about economics, so we

looked at the way we do our bidding.

We work backwards so that we know

what we can afford,” said Sohaime.

In another pioneering move, the EORC

has grouped together many drilling


48 AUG / SEP 2015

PETRONAS and Shell taking a leap forward together

“We believe we can do it with the right strategies in place and with the right price. Both partners are aligned to deliver these signature projects, we are like two brothers drinking from the same well.”

Sohaime AbdullahHead of EORC



services that would usually be parceled

out to numerous contractors to be

awarded to one party under an integrated

drilling services contract.

“We have a single party that executes 20

odd services and dictate the cost for it.

It’s a win-win situation. They get all the

services and we can keep the price to

one lump sum amount,” he said.

The partners have also succeeded in

using optimisation methods to bring

down the cost of a well down by half.

STRONG SAFETY RECORD

So far the EORC has maintained the

sterling HSE track records of the two

partners. The joint venture has gone

almost 1 million hours without any

accidents; quite an achievement for a

young venture, remarked Sohaime. The

EORC has a dedicated HSE team that

brings together the best practices from

the two partners.

Despite the progress so far, there is still

a long way to go before the EORC can

declare this ambitious initiative a success.

The current low oil price environment

has made the going tougher, but both

partners are confident of eventually

reaching their goals.

“We believe we can do it with the right

strategies in place and with the right

price. Both partners are aligned to deliver

these signature projects, we are like two

brothers drinking from the same well,”

said Sohaime.

TACKLING COMPLEXITY

Each of the nine fields under the purview of the EORC brings

its own set of challenges and differing levels of complexity

for EOR. The team is testing various technologies and are at

various stages of field development.

“It varies a little bit from field to field. In terms of complexity

I would rate Bokor 3 out of 10 and Baram 7 out of 10 because

it is a really big field,” said EORC technical director Jan Willem

Jacobs.

EOR TECHNOLOGIES: A VARIETY

There are several EOR technologies being used – depending

on the field profile. The group is employing iWAG at the six

fields in the Baram Delta Operations. This involves the injection

of water alternating with gas into the reservoir to improve

recovery.

For North Sabah, the EORC plans to employ Chemical injection

that uses surfactant and polymer directly mixed with filtered

seawater. The injection of chemicals frees trapped oil in the

reservoir.

With multiple teams at different stages of EOR assessment and

project development, Sohamie and Jacobs fosters cross-team

collaboration – so as to share learnings and best practices.

The task at hand for EORC is huge. Having to develop nine

fields within the next twenty years is daunting but the reward

of making breakthroughs is handsome. The team remains

vigilant, ensuring the various projects under the Baram Delta-

North Sabah venture progress well – as these pioneers keep

their eye on the prize.


44 AUG / SEP 2015

Energy has spurred the growth of nations for decades and continues to fuel economies and human imagination. Rich

sources of energy can be found within layers of humble and seemingly ubiquitous shale rock, often in remote places

and in the toughest of terrains. People like Dr Chan Tuck Leong are traversing the globe to unlock this resource in

order to light up megacities, keep us cool on a sweltering afternoon and power the internet that keeps families and

friends connected. We’re going to need energy for the future. And we won’t stop looking. Empowering Lives.

Watch the full story at www.youtube.com/PETRONASofficial

www.petronas.com Petroliam Nasional Berhad PETRONASofficial

PETRONAS does not encourage the giving of gifts or the provision of gratuitous services by PETRONAS’ contractors or sub-contractors, suppliers, bankers, dealers, or customers to its employees.

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IR. DR CHAN TUCK LEONGPacific Northwest LNG

Tell us how your parTnership wiTh peTronas came abouT? The Lundin group of companies have been operating in Malaysia since the early 1990s when it recognised that Malaysia was a good place for hydrocarbon exploration due to the large yet-to-find resources and the stable political and economic environment. Through our involvement in Production Sharing Contracts, Lundin quickly developed a strong working relationship with PETRONAS as the Host Authority, and PETRONAS Carigali as a joint venture partner in PM3 CAA, which became a very successful early development for Lundin Oil in the 1990s.

Q1Paul Atkinson has worked in Malaysia for 12 years, on three separate assignments since the mid-90s. Lundin Malaysia is focused on value growth in Malaysia through exploration. The company holds a large portfolio of exploration blocks in Malaysia, and has been one of the most active explorers in recent years in terms of seismic and drilling operations. Lundin Malaysia recently began oil production from the Bertam oil field offshore Peninsular Malaysia.

a win-win partnership

RESOURCE MANAGEMENT

52 AUG / SEP 2015

can you describe The Terms of The psc and how has iT performed since iTs incepTion? We are currently working under the Revenue over Cost (R/C) PSC terms. These terms encourage development of fields and reward cost effective investment. The adoption of these terms and the subsequent enactment of tax incentives for marginal fields are positive developments that have contributed to our success in Malaysia. The assurance that priority is given to the recovery of exploration and development investment in a structured manner is important, as is the contractor takes after investment recovery. With the potential for a shift down of the oil pricing paradigm in the near term it will be important to closely monitor these components in order to ensure our continued investment. The experience of working wiTh peTronas has been… Over the time that Lundin has been investing in Malaysia, PETRONAS has evolved into an experienced world-class player in upstream oil and gas and has become one of the most successful national oil companies in the world. Lundin has benefitted from working with such an experienced partner in Malaysia and globally. some of The challenges and how have They been overcome? Lundin Malaysia recently declared first oil for the Bertam oil field in Block PM307, which is a marginal field requiring close control of costs and schedules to achieve an economic return. PETRONAS provided guidance throughout the project, and particularly in the area of procurement where several high-value contracts were secured on schedule and on budget, allowing the project to achieve its targets. how has The sTrucTure of The psc benefiTTed your company? A key feature of the PSC is the early recouping of investment though cost recovery. Lundin has been careful to fully comply with the terms of the PSC, and has subsequently qualified for recovery of its project expenditures.

whaT are some of The more innovaTive aspecTs of The psc? A large part of the remaining yet-to-find resources in Malaysia is contained within small fields of less than 50 million barrels. PETRONAS has worked with the Malaysian Government to obtain fiscal relief for PSC contractors working with marginal fields. Lundin and PETRONAS Carigali have developed the Bertam field that has qualified for marginal field status and access to tax incentives, and it is one of the first of such projects in Malaysia. how does peTronas differ from oTher parTners you have worked wiTh? PETRONAS has clearly defined processes for PSC management. This provides helpful guidance to PSC contractors in the execution of their work programmes, and clarity and certainty in our planning and budgeting. This environment makes a stable platform for investment and is in marked contrast to some other jurisdictions in the world. peTronas carigali’s key sTrengThs as a psc parTner? PETRONAS Carigali is a partner in every PSC in Malaysia and has vast collective knowledge and experience from operations here and internationally, which benefits our joint ventures. We find that PETRONAS Carigali is a supportive partner, and willing to participate in exploration and development that, by its very nature, can entail uncertainty and inherent financial risk. Having PETRONAS Carigali as a PSC partner also helps with our alignment with PETRONAS as the regulator and manager of the PSCs. parTnership wiTh peTronas – how is ThaT evolving? Lundin has a strategy of value growth through exploration, which differentiates our company from many competitors. Lundin continues to be an active explorer in Malaysia and our objectives are very much aligned with those of PETRONAS. We want to discover new fields and develop them quickly and economically. From our time in Malaysia, Lundin has established a proven track record as a partner and contractor of choice. We hope that PETRONAS will continue to entrust the exploration and development of the national resource to our company, and we will dedicate our skills to that task.

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RESOURCE MANAGEMENT


TURKMENISTANPOLICY OF PEACE AND NEUTRALITY

On 12 December 2015 Turkmenistan will celebrate the 20th Anniversary of its status of Permanent Neutrality,

the second most important national holiday in Turkmenistan after Independence Day.

By H.E. Yazkuli MammedovAmbassador Extraordinary and Plenipotentiary

of Turkmenistan to Malaysia

On 12 December 1995, at a United Nations General Assembly session, all 185 members unanimously adopted a special resolution on the “Permanent Neutrality of Turkmenistan”.

This was a historic day for the people and Government of

Turkmenistan. The adoption of the status of permanent

neutrality was a strategic decision which demonstrates

the country’s commitment to build harmonious

relations with its neighbors and was aimed at promoting

international peace and security.

Turkmenistan had declared the country’s decision to

adhere to principles of positive neutrality in its foreign

policy in July 1992 at a Summit of the Commission for

Security and Cooperation in Helsinki and received its

first official recognition in March 1995 at the Summit

of the Organisation of Economic Cooperation in

Islamabad. This was further supported by the Summit of

Non-Alignment Movement in Cartagena (Columbia) on

20 October 1995.

The 20 years of neutrality has opened up vast

opportunities for Turkmenistan including its proactive

involvement in maintaining world peace and security,

disarmament, countering new challenges and threats,

promotion and protection of human rights and

GEOPOLITICS

54 AUG / SEP 2015

GEOPOLITICS

Arch of Neutrality

Ashgabat, Turkmenistan


environment, food security, overcoming the effects of

financial and economic crisis, development of science, as

well as culture while strictly adhering to the commitment of

developing peaceful, friendly relations with foreign partners

on the principles of equality, mutual respect, mutual benefit

and non-interference in the internal affairs of other nations.

At present, under the astute leadership of President

Gurbanguly Berdimuhamedov, Turkmenistan confidently

moves forward, while achievements in socio-economic

prosperity of the country are the best proofs of the

country’s development.

GEOPOLITICS

56 AUG / SEP 2015

With huge gas reserves, Turkmenistan is an

important source of energy in the world.

Large scale hydrocarbon projects, a favourable

investment climate combined with an “Open

Doors Policy” have brought numerous foreign

companies to Turkmenistan.

The widely used “Production Sharing

Agreements”, that the Government of

Turkmenistan has opted for, paved the way

for the signing of a bilateral agreement

between the Government of Turkmenistan

and PETRONAS in July 1996 for exploration,

development and production of offshore

Block 1, some 80 km away from the town of

Turkmenbashi. PETRONAS remains committed

to the development of the oil and gas industry

in Turkmenistan through innovation and has

become a symbol of success in the field.

The signing of a Memorandum of Understanding

for long-term cooperation in hydrocarbon

exploitation activities in June 2014 during the

state visit of the Honourable Dato’ Sri Mohd

Najib bin Tun Haji Abdul Razak, Prime Minister

of Malaysia to Turkmenistan is yet another

milestone in Turkmen-Malaysia relations.

2015 DEclarED YEar of NEutralitY aND

PEacE

The Turkmen people will recognise the upcoming

20th anniversary of neutrality in an environment

of peace, good neighborliness, mutual respect

and understanding with their friends and

partners in the international community. It also

demonstrates Turkmenistan’s enormous success,

achieved in a short period under the leadership

of the President of Turkmenistan H.E. Gurbanguly

Berdimuhamedov.

tHE ENErGY EQuatioN

GEOPOLITICS

Turkmen people will recognise the upcoming 20th anniversary of neutrality in an environment of peace and creation, good neighborliness, mutual respect and understanding with their friends and partners in the international community.


GEOPOLITICS

FIRST OIL TRIUMPH

PETRONAS Carigali Turkmenistan Sdn Bhd (PC(T)SB) achieved another significant milestone when the West Diyarbekir (WDDP-A) platform commenced its first oil on 9 April 2015. This accomplishment marked the beginning of a new era for PETRONAS SB in increasing their crude oil production, which was discovered in Block 1, Offshore Turkmenistan, after the successful first commercial oil production from the “S. Turkmenbashy” Mobile Offshore Production Unit (MOPU) in May 2009.

The WDDP-A platform is part of the Diyarbekir Oil Field

Development which started its production from an appraisal

well through the MOPU in 2006. The WDDP-A platform,

coupled with Central Diyarbekir Platform (CDDP-A) which

is currently under drilling activities, is forecast to produce

15,000 barrels per day at its peak. The crude oil which is

produced from WDDP-A will be delivered to the Magtymguly

Collector Riser A (MCR-A) Platform and offloaded through a

73km pipeline to the existing Gas Treatment Plant Onshore

Gas Treatment (GTPOGT) in Kiyanly, Turkmenistan. The new

crude oil production will also offset the expected cessation

of production from the MOPU due to the expiry of its

classification certificate in March 2016.

Since project commencement in 2012, the team had

demonstrated great fortitude in facing various challenges

and obstacles in terms of managing stakeholders,

maneuvering logistics’ difficulties and withstanding

extreme weather condition (as low as to -25oC) during the

winter. “We are adding new volumes that can improve our

profitability mix with crude oil and condensate from the

natural gas volume in Magtymguly field. We would like to

thank everyone involved in the project for their perseverance

and dedication to achieve this remarkable milestone”, said

Teh Yat Hong, Chief Executive Officer (CEO) of PC(T)SB. In

addition, he applauded the safety record achieved, with zero

fatality and Total Recorded Case Frequency (TRCF) of 0.2, an

essential and integral aspect of the business which needs to

be observed and implemented by all parties at all times.

This milestone was also celebrated with the first visit by

Mr Mekan Babaev, Acting Chairman of Block 1 Management

Committee, from the State Agency for Management and Use

of Hydrocarbon Resources at the President of Turkmenistan

to WDDP-A Platform.


GEOPOLITICS

As the Managing Director, Asia Pacific at the Society of Petroleum Engineers (SPE), Cordella Wong-Gillett has spent over two decades ensuring that professionals in the oil & gas industry have the relevant skills for a constantly evolving landscape.

FUTURE TALENTDeveloping

The world is changing fast and Ms Wong-Gillett has been in

the thick of the action for many years.

She began her career at SPE’s international headquarters,

in Dallas, Texas, in June 1983, and was responsible for

the establishment, staffing, and start-up operations of

the Asia Pacific Office, where she continues to oversee

regional activities to achieve SPE’s mission of technology

dissemination to its global membership.

Today, with new and complex challenges of discovering and

developing new petroleum resources - especially in a low

oil price environment - Ms Wong-Gillett continues to lead

the charge to provide professional knowledge sharing and

business networking platforms for the industry to remain at

the cutting edge.

While technical skill sets are core to success, engineers have

to apply the latest in technology while working in multi-

disciplinary teams. They also need to supplement their IQ

with a big dose of EQ, as soft skills become increasingly


60 AUG / SEP 2015

FUTURE TALENT

important for success. Making jobs tougher is the recent

plunge in oil prices, and the resulting staff consolidation

across the industry has made the profession less attractive

than before to the best graduate talents.

You’ve been with SPe for over 20 YearS. tell uS about

Some of the trenDS You have obServeD During thiS

time. what have been the noticeable ShiftS?

SPE’s mission has and continues to be associated with the

dissemination of technical knowledge. Consistent with

this, we have always provided both technical training and

various workshops and conferences that provide forums

for knowledge interchange and personal growth through

networking. Feedback from our stakeholders strongly

indicate that these activities remain relevant today, while we

have been providing a greater range of ‘soft skill’ capability

development than previously.

what are the keY factorS Driving the neeD for “uP

Skilling” in the inDuStrY?

At today’s energy consumption rates, we have approximately

120 years of recoverable reserves. That breaks down to 40

years of conventional reserves and an additional 80 years

of “unconventional” reserves. However, the industry faces

a constant challenge in discovering and developing new

resources in increasingly complex and hostile environments.

In order for these complex reserves to be economically

accessed and others discovered, the need for technical and

technological expertise will continue to be required, and,

importantly, integrated in multi-disciplinary teams using

leading edge information technology. All the old skills will still

be required, but a wide range of new ones will be also.

what are the biggeSt obStacleS to talent

DeveloPment in the inDuStrY?

Unfortunately, the recent downturn in oil prices has led to

staffing consolidations across the industry. This has before,

and will again, lead to the industry being seen as non-attractive

for high quality graduates. The industry will continue to face

and address this challenge. In addition, we need to continue

to project our industry as essential to economic growth,

environmentally responsible and high technology-driven.

All these factors are the truth, but we do not always do the

best job of communicating them, faced by often-hostile

media and other institutions. Here again, SPE events provide

a platform for the projection of these positive messages.

how will the inDuStrY be imPacteD if it failS to

DeveloP Sufficient talent anD builD relevant

SkillS?

A less talented workforce will be less efficient and will add to

industry costs. The implication is that, in order for the new and

more challenging resources to be accessed economically,

petroleum prices will rise. With almost every product and

service having an element of energy usage built into their

prices, via manufacturing, storage and transportation costs,

this will inevitably have a negative impact on global economic

growth. The world needs a highly talented petroleum industry

workforce to provide affordable energy that drives economic

growth and increase standards of living.

iS the inDuStrY looking for freSh talent from

non-traDitional SourceS?

The industry has always cast its net widely when recruiting

talent. While SPE is concerned with developing Petroleum

Engineering knowledge, many of our members have

educational qualifications associated with other disciplines,



such as Chemical, Civil and Mechanical Engineering as well

as Geoscience disciplines. More broadly, opportunities exist

within the Petroleum industry for people with IT, HSSE,

Finance, Legal, Human Relations and other backgrounds.

Development opportunities for IT professionals in particular,

in this high tech industry, are growing significantly.

how DoeS PetronaS rank in termS of inveStment

in talent anD caPabilitY DeveloPment viS a viS

other oil anD gaS PlaYerS in the market, baSeD on

Your obServationS?

PETRONAS has always, both for business reasons and

more broadly as part of its contribution to Malaysian

society, invested consistently in this area. I would say that

PETRONAS ranks among the very best in the industry in skill

development, in every area of business in which it operates.

Its continued investments in SPE-organised activities such as

the International Petroleum Technology Conference and the

Offshore Technology Conference Asia, along with its support

of technology workshops, is direct evidence of this.

hanDS-on exPerience iS often SaiD to be the beSt

eDucator eSPeciallY in SectorS that are high riSk

Such aS oil anD gaS. with oil anD gaS comPanieS

laYing off the more Senior, anD hence exPerienceD,

PeoPle, how can we cloSe the exPerience gaP?

The cyclicality of our industry remains a significant

challenge. The loss of experience makes hands-on learning

more difficult. This is why SPE works very closely with all

industry players to make sure that our offerings take this into

account, and best leverage the experience that remains. This

is a critical aspect of our mission.

in what waYS iS SPe PlaYing a role in Driving

collaboration anD innovation for the inDuStrY,

eSPeciallY given the oil Price DroP recentlY?

We have been through this before, and we know how to

address this matter. Obviously, the broader industry will

be financially-challenged while this environment persists.

SPE will play its part to ensure that our offerings are fit-for-

purpose, cost effective, and for a volunteer driven, member-

centric professional society, meet the needs of our members,

sponsors and supporters in whatever environment we face.

Specifically, while addressing current conditions, we know

that these are constantly changing; we must ensure that,

wherever possible, our programmes are consistent with a

range of future industry outlooks.

iS the inDuStrY overSuPPlieD with talent?

In a word, no. Our industry is blessed with some of the

brightest minds in the world; we continue to discover and

develop resources in ever more difficult conditions, and

face the pressures associated with any supply and demand-

driven extractive industry. However, we can never afford to

be complacent.

I cannot think of any other industry whose continued

performance excellence provides the global economy

with a commodity so important to development and living

standards. We have an outstanding record, and our ability to

attract and retain talent and capability are key to maintaining,

and even improving, that record.

where Do You See the greateSt neeD for talent

DeveloPment anD uPSkilling?

Personally, I see the challenge as twofold. Firstly, the industry

requires ever more deep and specific functional capability,

knowledge and experience. I think we know how to do this.

An emerging and more difficult issue, which we are at the

early stages of addressing, is how to ensure the best and most

efficient integration of these skills via networking, information

technology and the improvement of the soft skills required.

This is vital in ensuring that the highest capability resources

have the best technology tools to address the most difficult

problems in a multi-functional way. Those organisations

that develop the optimal combination of deep functional

capability, integrated through experienced ‘generalists’ and

effective tools will be the industry leaders in the future and

SPE will continue to play a significant role in facilitating this.


62 AUG / SEP 2015

“ i cannot think of any other industry whose continued performance excellence provides the global economy with a commodity so important to development and living standards.“



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