EXPLORATION | DRILLING | PRODUCTION OCTOBER 2017

Intelligence gathering
at the wellsite
Managed-pressure drilling (MPD) and flowback
operations take a technological leap with Weir
Pressure Control Intelligent Systems

TECHNOLOGIES

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IMPROVE WELL PERFORMANCE & PRODUCTIVITY.

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FLOTEKIND.COM FLOTEKIND
26 60

03 Comment
Contents 31 Supporting subsea production
October 2017
Volume 10 Issue 10

Marco Gabelloni, Aker Solutions, reviews a new artificial lift system

that builds on traditional ESP-based subsea boosting methods.
05 World news

10 Making the most of the Middle East

Andy Ryan, Airswift, reveals how opportunities and challenges 35
abound in the Middle East, but the workforce could be the deciding This feature showcase technologies designed to handle the harshest
factor. conditions faced by the global oil and gas industry. Contributions come
from:
15 All in the mix Packers Plus Energy Services Inc. Performance under pressure
Marlon Leggott discusses the growing requirement for HPHT
Mark Jones, PSM, UK, looks at the importance of the measurement
completion systems and recent implementation in both onshore and
process in delivering improved drilling fluid control and how the
offshore environments.
latest technology developments in transmitters are helping to
Downhole Products If the shoe fits... Keith Bradford shows how
increase efficiency and reduce costs.
reaming shoe research is helping operators address extreme well
challenges.
19 Easy as 1, 2, 3
Trond Skjeie, Archer, explains how a three-stage blowout preventer
(BOP) cleaner can make a step change in efficient BOP and riser 43 Birds eye view
cleaning.
Shelley Regan, Texo Drone Survey & Inspection Ltd, shows how UAV
technology is adapting to meet the challenges faced by the oil and gas
23 In with the new industry.
Han Tiebout, GustoMSC, reviews the impact of brownfield
developments in a lower for longer oil price environment. 51 Corrosion: a fight for safety
Emma Perfect, LUX Assure, UK, explains how to address the challenge
26 Ready for the robot revolution of asset integrity through enhanced corrosion management.
Ian Phillips, OGIC, UK, summarises the need for the offshore sector to
explore the potential of emerging technologies. 54 Dealing with digital twins
Hari Vamadevan, DNV GL Oil & Gas, UK, shows how digital twins are
a transformational technology for the oil and gas industry

57 Digital dawn
Front cover Matt Green, Weir Oil & Gas, USA, explores the transformation of the
OILFIELD TECHNOLOGY

oilfield through digitisation.

Take guesswork out of drilling
and frac operations. EXPLORATION | DRILLING | PRODUCTION OCTOBER 2017

60 Decommissioning: a ports perspective

Ideal for challenging drilling Joanne Allday and Zeina Sawaya-Melville, the Port of Cromarty Firth, UK,
situations and environmentally share a ports views on the North Seas burgeoning decommissioning
OCTOBER 2017 | EXPLORATION | DRILLING | PRODUCTION

sensitive areas, Weirs Pressure market.

Control Intelligent Systems
provide accurate measurements
of your active discharge control
systems. Intelligence gathering
at the wellsite

Real time data is accessible from

Managed-pressure drilling (MPD) and flowback
operations take a technological leap with Weir
Pressure Control Intelligent Systems

local control panels, instantly

alerting you of fluid volumes,
levels, and flow rates. Data is also
available to customers via text,
www.oilfieldtechnology.com

email, or Cloud-based customer

portal and can be saved for more
accurate EPA reporting.
OFC_OT_October_2017.indd 1
OilfieldTech-Cover-Oct2017.indd 1 03/10/2017 12:07
18/09/2017 11:59

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 Israel: See Deeper.
Newly available broadband reprocessed 2D seismic in the Levant Basin, offshore Israel, dramatically
improves our imaging of the biogenic plays and strengthens our understanding of the deeper geology
and associated Mesozoic thermogenic hydrocarbon plays.

Enhancements in data quality greatly improve the intra and sub-salt imaging. In addition, deeper
imagery now reveals previously unseen rift infill and dramatically increases confidence in the
interpretation of the lower syn-rift and basement surfaces. This allows for better control on basin
temperature models, seismic facies identification and analyses, as well as improved definition of
potential traps. Improve your data. Improve your assessment. Improve your bid.

Its time to see deeper in Israel.

2001 Processing: Data Pack Version 2016 Reprocessed

See the energy at TGS.com

2017 TGS-NOPEC Geophysical Company ASA. All rights reserved.

 Comment David Bizley, Editor
October 2017
Contact us
david.bizley@oilfieldtechnology.com

T
he pace of change in upstream technology continues Editorial
unabated. Its become something of a truism that, rather Managing Editor: James Little
than being an obstacle, the downturn and lower-for-longer james.little@oilfieldtechnology.com
price environment has actually been a driver of innovation and Editor: David Bizley
implementation of new technologies across the upstream industry. david.bizley@oilfieldtechnology.com

The world still needs hydrocarbons, and that demand is going to be Design
met by the companies willing to invest in new technologies. Production: Bethany Rees Matcham
Total operates one of the most powerful supercomputers used in any industry. The bethany.matcham@oilfieldtechnology.com
computer, known as Pangea, is capable of 6.7 petaflops roughly 80 000 times the number of
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run, and produces enough heat to help supplement the heating in nearby buildings.1 rod.hardy@oilfieldtechnology.com
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Pangea, we have images that are much clearer and richer in geological information and that
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are available much faster than before. This is essential for identifying complex oil traps and
Website Manager: Tom Fullerton
reducing technical risks. It also enables us to improve the safety and efficiency of the drilling tom.fullerton@oilfieldtechnology.com
process, which is increasingly complex and expensive.2 Pangea can also be used to produce Digital Assistant Editor: Angharad Lock
detailed simulations that model the movement of reservoir fluids, which allows future areas of angharad.lock@oilfieldtechnology.com
development to be identified. In addition to performing more complex operations, the massive
computational power available means tasks that previously took weeks or even months to Marketing
complete can now be carried out in just hours or days. Subscriptions: Laura White
laura.white@oilfieldtechnology.com
Other major players are making investments into supercomputers. In April of this year, Eni
Administration: Nicola Fuller
turned on its new HPC3 supercomputer for the first time. CEO Claudio Descalzi said that the
nicola.fuller@oilfieldtechnology.com
computer will provide Eni with unprecedented accuracy and resolution in seismic imaging,
Reprints:
geological modelling and reservoir dynamic simulation, allowing [the company] to further reprints@oilfieldtechnology.com
accelerate overall cycle times in the upstream process and to sustain E&P performance. As the
rise of Big Data continues, the kind of raw computational power provided by such machines is
Palladian Publications Ltd,
likely to become ever more important.
15 South Street, Farnham, Surrey GU9 7QU, UK
Another aspect of advanced technology drawing interest from the upstream sector is Tel: +44 (0) 1252 718 999 Fax: +44 (0) 1252 718 992
artificial intelligence (AI). Earlier this year, BP invested in Californian start-up, Beyond Limits, Website: www.oilfieldtechnology.com

which is working on commercialising technologies developed by NASA and the US Department

of Defense, including AI technology originally developed for space exploration.3 The use of
AI systems to analyse the ever increasing volumes of oilfield data could provide a significant
advantage to operators, with Mark Watson, chief digital innovation officer at BP, saying that AI
was one of the most critical digital technologies to drive new levels of performance.4
These new technologies, some of which were once only found in science-fiction, look set to
become the cornerstones of the upstream industry in the 21st Century.
The Oilfield Technology team will be attending ADIPEC (13 - 16 November, Booth 121004).
We look forward to seeing you there and hearing about the new technologies that your
company is bringing to the industry!
References
1. Totals Pangea Is Now the Largest Industrial Supercomputer https://www.hpcwire.com/2016/03/29/
totals-pangea-now-largest-industrial-supercomputer
2. Pangea: 80,000 times more powerful than your average PC http://www.total.com/en/media/news/
news/pangea-3-times-more-powerful
3. BP joins oil rush to use AI with funding for California start-up https://www.ft.com/content/d20085a6-
4ea1-11e7-a1f2-db19572361bb
4. Ibid.
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October 2017 Oilfield Technology | 3

World news October 2017

Exceed creates 20 jobs with major North Sea contract In brief

Exceed has announced it will create 20 jobs, having been awarded a contract by Alpha Petroleum
Resources Limited for its forthcoming Cheviot Field development campaign. Alpha Petroleum is Ghana
an upstream oil and gas operator focused on the UK sector of the North Sea and backed by private Sparrows Group has formed Sparrows
equity firm Petroleum Equity. Offshore Ghana Ltd, a Joint Venture (JV)
Alphas programme includes the drilling and completion of a total of 18 subsea wells, and with local partner Hydra Group Limited,
Exceeds contract will begin with immediate effect. The operational phase of the project is to deliver crane, lifting and inspection
expected to commence in 2Q18, subject to securing FID in 4Q17, with a workscope that will see services in Ghana.
Exceed provide drilling engineering and well construction operations management within blocks Stewart Mitchell, CEO at
2/10a, 2/15a and 3/11b of the North Sea for approximately 1000 days. Sparrows Group, said: We believe
Despite the oil and gas downturn of the last two years, Exceed has continued to invest there is a gap in the market for a crane
internally, in order to expand its expertise and continue strengthening its engineering capabilities. specialist to provide all forms of lifting,
Exceeds Managing Director, Ian Mills, said By playing a significant role in the delivery of mechanical handling and inspection
one of the largest field developments in the North Sea in recent times, Exceed is delighted to be services in Ghana. In forming the JV
creating 20 new jobs. This award is a clear illustration of the benefits our investment strategy has with Hydra Group, we are offering a
delivered and we look forward to working with Alpha Petroleum and our fellow contractors to service that combines our expertise with
successfully deliver this key UKCS project. the infrastructure of a well-respected
Alpha Petroleums COO, Graham Walters, commented: We conducted a careful evaluation of company with extensive local knowledge
well management companies in order to select the right fit for Alpha and Cheviot. The award to of the Ghanaian offshore market.
Exceed will provide the additional operational strength and support the Alpha team requires as we
prepare to commence operations next year.
Panama
ION Geophysical Corporation has announced
an approximate 50% extension to its
Ecopetrol awards Stork FairfieldNodal wins GoM previously announced programme offshore
new operations contract survey for ZXPLR system Panama due to strong client interest and
prefunding to evaluate offshore Panama in
Fluor Corporation has announced that Stork, FairfieldNodal will launch its inaugural
advance of the anticipated license round.
part of Fluors Diversified Services segment, ZXPLR survey in the Gulf of Mexico,
The client-driven survey provides a
was awarded a 29 month contract by October 2017.
regional framework typical of BasinSPAN
Ecopetrol S.A, to provide operations support The companys ZXPLR data acquisition
programmes to evaluate the geology of
services in production facilities and clusters system is the next evolution in its
the Panamanian offshore, while the new
for its Orinoquia Vice-Presidency project Z Technology portfolio, with significant
extension provides more detailed coverage
located in the central region of Colombia. improvements in productivity. The new
that will allow E&P companies to evaluate
Fluor booked the undisclosed contract value system is designed to provide a safer and
blocks ahead of the expected license round.
in the third quarter of 2017. more efficient acquisition experience
Recent exploration success offshore
Stork has worked with Ecopetrol for for customers, delivering the same
Colombia, adjacent to Panamas Caribbean
more than 30 years and we look forward to repeatable, high-quality seismic data
coast, has created interest among E&P
strengthening our relationship by continuing and overall lower total cost of ownership.
companies in high-quality seismic data to
to provide operations and maintenance This will enable operators to make better
evaluate the hydrocarbon prospectivity on
services, said Jorge Estrada, regional decisions and allow them to unlock the
this margin. The expanded programme will
vice president of Stork Latin America and exploration and development potential of
be approximately 9000 km and is the only
Offshore. This contract with Ecopetrol their investments.
modern data available offshore Panama.
continues to position Stork as a leading Charles (Chuck) Davison, President
Brian Hanson, President and CEO,
provider of integrated operations and and CEO said, We are continuing to
said, Over the last 18 months, we targeted
maintenance solutions in Colombia. make significant investments in new
opportunities less dependent on cycle
The contract includes sampling and products and service offerings and are
recovery in specific geographic areas and
monitoring services over injection and always looking for ways to improve
production optimisation offerings, and we
production wells, surface facilities and the and differentiate ourselves in the
are seeing these efforts pay off.
inspection of oil well locations. marketplace.

October 2017 Oilfield Technology | 5

 World news
Diary dates
15 - 18 October, 2017
AAPG/SEG ICE
London, UK
E: aapgregistration@thepulsenetwork.com
www.aapg.org
24 - 26 October, 2017
LAGCOE
Lafayette, USA
E: angela@lagcoe.com
www.lagcoe.com
08 November, 2017
OSCC 2017
Kuala Lumpur, Malaysia
E: events@bigpartnership.co.uk
www.opito.com/oscc-conference
13 - 16 November, 2017
ADIPEC
Abu Dhabi, UAE
E: mercedesderiada@dmgevents.me
www.adipec.com
Web news
highlights
Add Energy and Trendsetter
Engineering introduce RWIS Lite
Gardner Denver turns to the Middle East
Naming ceremony held for worlds
largest FSRU
Haakon Haaland appointed new
Managing Director of MOL Norge
To read more about these articles
and for more event listings go to:
www.oilfieldtechnology.com
6 | Oilfield Technology October 2017
October 2017
Rystad Energy: mature oilfields are declining faster
While the trend in spending for oil and gas companies since the crash in oil prices has been a steep
decline, production has remained relatively stable since 2015. Detailed analysis reveals that the
production plateau is largely thanks to projects approved during pre-2014 prices coming online.
However, the drop in oil and gas spending has had a material impact on the production decline
for maturing oil fields, where the drilling of new wells has dropped by 50%, according to data from
Rystad Energy.
This lower level of activity on already-declining fields has had quite a dramatic impact on
decline rates. Mature, offshore oil fields now decline at a rate of -8% per year, whereas the same
fields declined by only -5% in 2014, before the drop in drilling activities.
Old offshore fields are now declining faster, and as a consequence, 1 million bbls of oil have
been removed from production balances. This impact cannot be properly accounted for unless
you follow old, small fields at a frequent and detailed level, said Per Magnus Nysveen, Head of
Analysis at Rystad Energy. Global oil and liquids production has reached 97 million bpd as of early
October, according to data analysts at Rystad Energy. This is exactly 10 million bbls higher than
at the start of this decade. Now the Oslo-based research company predicts a continuous shift of
market share from conventional oil production to US shale oil.
We expect US oil production will continue to ramp-up towards its full potential of
15 million bbls within the next five years, and then we would again see quite a dramatic tightening
of the oil market, said Nadia Wiggen Martin, Vice President of Markets at Rystad Energy.
Weatherford and Intel to collaborate on digital oilfield
technologies
Weatherford International plc joined Intel Corporation at the IoT Solutions World Congress in
Barcelona to showcase the collaboration between the two companties to demonstrate the
benefits of bringing Internet of Things (IoT) technologies to the oilfield.
Colin Tait, Director of Information Technology at Weatherford, stood alongside
Jonathan Ballon, Vice President in the Internet of Things Markets and Channels at Intel
Corporation, during Ballons keynote on day one of the conference. The executives discussed
how IoT-enabled oilfield devices can improve the efficiency and profitability of production
operations, from surface equipment to the back office.
As a use-case example, the companies demonstrated how data collected by sensors on
production equipment in the field can be transmitted to the cloud, or to a data centre, by the
Weatherford IoT gateway. The Intel Secure Device Onboard service is used to securely onboard
sensors and the Weatherford IoT gateway to Intel Wind River Helix Device Cloud for device
management. After flowing through the gateway, sensor data can be visualised and analysed
using the Weatherford ForeSite production optimisation software. The ForeSite platform,
released by Weatherford in May 2017, connects and analyses data from across the production
ecosystem to maximise asset performance.
Collaborations with leading information technology companies like Intel enable us to
extend the functionality of existing oilfield technologies, said Tait. By harnessing the power
of cloud computing, advanced analytics and the IoT, we can build an end-to-end digital oilfield
solution that yields greater efficiencies across the upstream oil and gas sector.
Oil and gas companies have a growing interest in using IoT strategies to transform
their business operations by fully integrating equipment and systems from the field to their
operational and analytics backend. said Dipti Vachani, Vice President and General Manager,
Internet of Things Group at Intel. Weatherfords requirements for hardware assisted security,
scalable device onboarding, and device management is a proving ground for IoT zero touch
onboarding technologies. The combination of solutions will modernise how legacy oilfield
technologies can produce value for the industry.
 World news October 2017

Tendeka releases new technologies

After significant R&D focus, Tendeka has recently launched two
technologies, PulseEight and Cascade.
PulseEight is the latest advance in wireless intelligent completion
technology for the digital oilfield, and uses pressure pulse telemetry
to channel wireless communication between a wells downhole
monitoring and control system and the wellhead. Previously, Tendeka
installed several wireless pressure/temperature gauges and so proved
communication from the wellbore to the wellhead. This relayed critical
reservoir pressure and temperature data which the client used for
depletion monitoring and for the planning of an infill drilling campaign.
To unlock the full potential of the system and allow for greater
control, Tendeka embarked on a project to prove bi-directional
communication via a PulseEight Interval Control Valve (ICV). The
device was required to send pressure/temperature data to the surface
and pressure pulses were sent down the well to communicate with the
ICV in a multi-phase fluid environment.
PulseEight technology simplifies operations by removing the
need for traditional hydraulic or electric control lines. Downhole
connections are eliminated and therefore overall system costs are
significantly reduced and HSE is improved. The device can either be
fitted during the completion phase, or retrofitted into existing wells in
order to maximise production.
Each device functions independently providing modular flexibility
to meet a range of requirements from low cost single zone monitoring
to full multi-zone, multi-lateral measurement and control.
Tendekas Cascade is an advancement in sand control
technology. The technology eliminates the failure mechanisms
associated with water injection wells, providing operators with
improved injectivity, recovery, and well life.
In conventional reservoirs, a significant portion of oil production
is driven by water injection into unconsolidated reservoirs. Water
injection wells with sustained high rate and high ultimate volumes
are critical for the economic success of many subsea and deepwater
developments around the world: Gulf of Mexico, West Africa, North
Sea and South East Asia to name a few.
Water injection programs can boost oil recovery by 20% due to a
more effective sweep of the reservoir. They also present challenges
such as crossflow, backflow and water hammer which lead to
fines building up inside the sand screen completion and impaired
injectivity.
Simple and unobtrusive, Cascade3 is compatible with both
gravel packs and stand-alone screens and prevents any back flow
whilst allowing unrestricted injection. In addition to boosting
production, the system helps reduce the need for interventions and
re-drills, significantly lowering long-term operational costs.
Gillian King, VP Corporate Development & Marketing, said:
Cascade was developed with a major Gulf of Mexico operator to
increase the longevity of their subsea water injection wells. By doing
this, less wells are required to be drilled to maintain production,
delivering real value to our client.

ST9 Gas + Oil launches first Ampelmann in partnership Subsea 7 awarded

product
Following months of development and
research, Houston, Texas-based ST9 Gas + Oil
has unveiled the new XGen Seat + Valve for frac
and well service pumps. This is the first release
of many high-performance products that the
company plans to launch to challenge the
traditional industry practices.
The technology was subject to extensive
research, design innovation, engineering
and field-testing. Designed by industry
experts and manufactured in-house from
premium-grade, domestically sourced materials,
the XGen Seat + Valve is designed to offer
improvements of 33% for life and 36% for cost.
Tested to perform 33% longer [...],
ST9s XGen Seat + Valve is a vital component
in helping companies maximise their ROI,
delivering longer operational service life,
increasing pumping hours, and reducing total
cost of ownership, said Chris Buckley, founder
and CEO of ST9 Gas + Oil.
with Seaqualize
Ampelmann, a provider of offshore access
solutions, has announced an exclusive
partnership with Seaqualize, a Dutch marine
motion technology innovator, to collaborate on
the development of its latest S-type gangway.
The S-type, is designed specifically to be
fully integrated into large, high speed vessels
and dedicated to long-term crew change
operations. The gangway is designed to
safely compensate the challenging motion
characteristics of these vessels when in dynamic
positioning (DP) alongside the platform.
This is combined with a reduction in power
requirement and weight of the gangway itself.
Production is due to start on the gangway
in early 2018. In total, the cost of operators using
the system will be around 30% cheaper than
helicopters. The S-type builds on Ampelmanns
track-record of design by incorporating a
lightweight system that uses a low amount of
energy to operate.
contracts by Ophir Energy
Subsea 7 has announced the award of an
integrated contract by Ophir Energy for the
Fortuna LNG project offshore Equatorial Guinea,
located in average water depths of 1790 m. The
substantial contract was awarded to Subsea
Integration Alliance, which is a partnership
between Subsea 7 and OneSubsea.
The upstream EPCIC contract will be
delivered as part of an integrated solution
combining SURF and subsea production
systems (SPS). Four deepwater wells will be
tied-back to a subsea manifold and connected
to a FLNG vessel by steel lazy-wave risers, a
cost-effective riser solution. EPCIC operations
will commence after the final investment
decision and offshore operations are
scheduled for 2020.
Ophir Energy has also awarded the
contract for future inspection, repair
and maintenance (IRM) services to
Subsea Integration Alliance.

8 | Oilfield Technology October 2017

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 Making the
most of the
Middle East

10 |
Andy Ryan, Airswift,
reveals how opportunities
and challenges abound in
the Middle East, but the
workforce could be the
deciding factor.

I
f America can claim the title of the worlds breadbasket, the
Middle East is surely its oil well. Of the 19 countries that topped
1 million bpd in 2016, seven are Middle Eastern (five on the
Arabian Peninsula), eclipsing any other region for total output or
concentration of major players.
It is a region that offers rich opportunity to the upstream
oil and gas sector, but it has its challenges too. The geopolitical
situation, low oil price despite OPECs production cuts and
drives by various states to diversify their economies and energy
sectors are all headwinds.
However, some of the most pressing structural challenges
have to do with the industrys workforce. The time to act is now,
but concerted efforts are difficult, not least because tomorrows
challenge often masquerades as todays opportunity.

Headwinds
Ultimately, it all boils down to cost per barrel and price. The most
obvious challenge then, is one that is hit upstream operators
around the globe the persistent low oil-price environment.

| 11
 Fortunately, for the Arabian Peninsula and broader Middle
East, cost of production is famously lower than in some of the
worlds other major basins, such as the North Sea, or Gulf of
Mexico. This is partially down to the lower cost of labour, but more
so the sheer volume of hydrocarbons available. Middle Eastern
fields are still rich in reserves and it is simply not necessary to go
to the expense and lengths that operators in other regions have to
for extraction.
Of course, it is partially this abundance that keeps prices low.
Irans stated ambition to go full-throttle in ramping production up
to pre-sanction levels is unlikely to assuage the situation either.
Interestingly, OPECs production cuts do not seem to be making
the marked changes to pricing that they once would have.
So, it could be argued that, taken in isolation, the low price
is a storm the regions upstream industry could ride out without
too much discomfort. The problem is, nothing happens in
isolation. Though not itself catastrophic, the oil price is the rough
undercurrent to a host of other challenges.
Take for example, the ongoing diplomatic tensions
between Qatar and its neighbours, including Saudi Arabia and
the United Arab Emirates (UAE). Accusations of foul play and
supporting terrorism have led to Qatars larger neighbours
imposing sanctions and all but closing the borders.
Of course, Qatars national oil company (NOC), Qatar
Petroleum, continues to extract resources and has even pressed
ahead with expansion of its capacity. In April 2017, Doha
announced it was lifting the moratorium on the North Field
the worlds largest gas resource, shared with Iran. Already the
top global LNG exporter, Qatar aims for new gas exports of
2 billion sft3/d, an extra 400000boe.
However, things are more difficult in the region as a result of
the dispute. Sanctions and border restrictions make everything
more expensive: from the food eaten by the crews on-site, to
the construction materials required for asset development and
maintenance.
It also causes problems for suppliers to the upstream industry.
Multinationals typically set up a central regional office and
serve the region from there. If that office is in Dubai and theres
work to be done in Doha, then a sub-one-hour direct flight is
now a circuitous trek of about seven hours. Though aimed at
Qatar, in this way the restrictions hamper ease of doing business
throughout the region.
There are other less direct challenges too. The energy
sector is changing in the Middle East, as it is everywhere, and
renewables are making inroads. The UAE, for example, is investing
US$163 billion in renewables with the aim of meeting half of its
power requirements sustainably by 2050. Similar projects have
been planned and ambitions stated across the region. This is
unlikely to spell disaster for upstream operators anytime soon, but
it does reduce domestic demand and begin to chip away ever so
slightly at oils privileged position as the centrepiece of national
economies.
Not all the challenges are external either it is long been
pointed out that the ease of extraction in the Middle East has led
to under-investment in efficiency and technology compared to
more demanding regions around the world. It could be argued
that as reserves gradually reduce, operators may come to regret
the underinvestment.
In every challenge, an opportunity
But it is hardly all doom and gloom for the industry. For every
downside, there is an upside for the upstream sector.
12 | Oilfield Technology October 2017
Low oil price? The optimist can point to the fact that it quickly
rebounded from the bottom and that, though the US$50 - 60/bbl
corridor is hardly as attractive as prices over US$100/bbl, it is a
relatively stable range at which it is possible to make a profit. As
recent history has shown, things could certainly be worse.
The reasons for optimism when it comes to geopolitics are
more fragile, but it could be predicted that pragmatism will win
out in the end, as a global economy still thirsty for fossil-fuels calls
the eventual tune.
As for the uptick in renewables and attempts to diversify
national economies? It is unlikely that the NOCs will be dethroned
just yet. There are still countless barrels to be extracted and no
Middle Eastern state is about to turn its back on an industry that
has served and is still serving it so well. Moreover, demand
shows little sign of drying up. As recently as September 2017,
McKinsey predicted that coal, oil, and gas would still provide 74%
of primary global energy consumption in 2050. Hardly death
throes.
Furthermore, there is arguably a huge second-mover
advantage when it comes to oilfield technology. Operators and
tech suppliers have poured millions into solving problems in more
mature and marginal basins. Those upfront development costs
have now been absorbed, but tech providers will be keen to sell to
new customers. If and when the Arabian upstream industry comes
knocking, it will be in an enviable bargaining position.
The workforce challenge: the sleeping giant
The greatest challenge that Arabian upstream operators face is
not to do (directly) with geopolitics or technology: it is to do with
people.
From March 2015 to October 2016, it is estimated that more
than 300 000 oil and gas jobs were lost worldwide, with the Middle
East certainly seeing its share. Now, having made the painful
adjustments, operators are prima facie in a great position. There
is a lot of highly skilled talent out there eager for work; to some it
may look like a buyers market.
However, that situation cannot last.
Because as has been seen across the sector many of those
people, rather than wait around for the oil price to pick up and
the phone to ring, went out and made new careers for themselves.
These are skilled workers, with highly transferable experience that
can open doors in many industrial or infrastructure sectors. Even
without leaving the energy sector, the burgeoning renewables
market has been a willing recipient of veteran engineering and
managerial talent.
The figures here paint a difficult picture for the oil and gas
industry. In the 2016 Global Energy Talent Index (GETI), conducted
by Airswift and Energy Jobline, it was found that 67% of oil and
gas professionals worldwide were interested in working in other
energy sectors, particularly renewables. One of the biggest
motivations was job security (cited by 42%) and, shockingly,
nearly half (49%) would take a pay cut to achieve this.
The oil and gas industry cannot assume it will easily tempt
these people back people who have been let go are not quick to
forget.
In fact, in the Middle East, 50% of surveyed hiring managers
had not rehired any of their laid-off employees, with a further 33%
having rehired less than 10%. Those numbers may improve, but
there is no room for complacency.
In fact, they might find that some of the skilled talent
they seek to rehire has left the job market entirely. The
ageing workforce is a well-publicised phenomenon in the
upstream sector. 72% of hiring managers cited an overall talent
deficit as a challenge to the industry, with nearly half (46%)
believing the ageing workforce to be the main reason for this.
If the industry tries to ratchet up hiring again in the
near-medium future, it may find that a significant number of
skilled energy workers are happily settled in other sectors, and
others have opted to retire. So, while it may feel like a buyers
market with regards for talent now, upstream operators should
have one eye on the future.
Room for optimism?
Luckily for operators in the Middle East, many of the figures cited
above are global ones, representative of the oil and gas sector as
a whole. For regional operators, there are some nuggets of good
news in the more granular data.
For example, 46% of hiring managers thought that the
Middle East would be a hotspot for the industry over the next
12 months, with only 13% saying the same of Europe.
When professionals were asked for their top places to work,
the Middle East came second behind only North America.
Professionals in the Middle East were also optimistic about
pay. 48% believed it would increase in the next 12 months; far
more than people who thought it would stay the same (33%)
or decrease (14%). An important caveat though, is that hiring
managers asked the same question were less bullish, with figures
of 25%, 58% and 17% respectively.
Putting these figures together offers a broadly optimistic
outlook for the Middle Eastern workforce. Global talent sees it
as an attractive place to work and expresses cautious optimism
about remuneration in the region. When considering that,
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traditionally, one of the biggest battles for the sector in the
Middle East has been to counter false narratives in Western media
about the quality of life in the region, this is hugely encouraging.
These perceptions are especially important for the Middle
East, which reported a staggering 86% to 14% split on expat to
local talent ratios. The next highest region for expat-dependence
was Africa at 21% to 79%. To see what that means in the real
world, just look at Qatar. In June 2017, the countrys population
decreased by 5.7% as the expat workforce declined. In July,
another 2.9% fall, and another 1% in August.
However, these reasons for optimism do not make the looming
workforce challenges disappear. The skills and talent shortages
are very real, and it is up to the industry to act now to avoid or
mitigate the issue.
Summary
So, when it comes to the upstream oil and gas sector in the
Middle East, it is a mixed picture. The region continues to be the
sectors powerhouse, but there are some gale-force headwinds
ahead. However, the sector is not lacking for opportunity either.
Perhaps the biggest deciding factor in the regions upstream
medium-term future is how it deals with the looming challenge
of talent and skills shortages. The Middle East has some
advantages in this sector compared to other regions, but it
will be important not to overplay that hand. To get it right, the
industry will need to make concerted and sincere efforts to
make the most skilled talent feel wanted and to plan for skills
transfer to counteract the effect of the ageing workforce. These
programmes should have started yesterday, and tomorrow will
be too late. That leaves today.
 THAT WAS A SAMPLE OF

OCTOBER ISSUE

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