Upstream through the magnifying glass Strategies, innovative technologies and equipment

The turbulence on the oil market at the beginning of 2015, the year that has begun under the auspices of the recent crisis started in 2014, has paved the way for a series of events dedicated to the developments of the industry that need to be analysed and discussed. Conspiracy theories aside, amid geopolitical tensions, specialists, experts, consultants and top managers of the companies in the field met during the seventh edition of SEE UPSTREAM – OFFSHORE & ONSHORE TECHNOLOGY IN THE BLACK SEA REGION to discover together the technical and economic solutions for a sustainable future.

Andrew-CostinParaphrasing Churchill (‘Never let a good crisis go to waste’), Andrew Costin - President of the Petroleum Club of Romania, while opening of the conference encouraged participants to focus particularly on the opportunities created by the current oil crisis. Besides, recent studies conducted by experts reveal that, in such circumstances, the trend to minimize or limit the operations is not productive on long-term, on the contrary. The emphasis should fall on diversification, efficiency, profitability, procurement opportunities.

Eugen-PopitiuIn a fast changing world, but not very fast, as oil world is, government representative Eugen Popitiu - Counsellor on oil and gas with the Ministry of Energy, Small and Medium Enterprises and Business Environment, considers that the legal framework implementation should make investors see the Romanian Government as a loyal partner. The official stressed the important role of network interconnection in Europe, noting the Vertical Gas Corridor project, which includes Romania, together with Bulgaria and Greece.

Sorin-GalReiterating the investors’ growing interest to the Black Sea, Sorin Gal - NAMR Director General, announced two possible new rounds of auctions to be held by the end of the year. “NAMR is in the process of finalizing the Round XI of auctions, estimated to take place in a few weeks. Six offshore blocks are available for leasing in this round. We will complete the full concession of all blocks in the Black Sea,” the official said. He added that there are still a number of onshore blocks prepared for concession, so that the Agency plans to organize a new round of auctions. The reason for this is derived from the need to cover the long period of time between Round X and Round XI of auctions and the investors’ great interest in the oil and gas sector.

Daniel-ChileaMaintaining the balance between the investors’ natural desire to make profit and the consumers’ willingness to pay a lower price for resources is a task to be covered by ANRE, said Daniel Chilea - Director of the Regulatory and Monitoring of Natural Gas Market Directorate, alongside the Agency’s role to monitor the implementation of mandatory regulations at national level needed for efficient operation of the electricity and natural gas markets. Moreover, ANRE continues the process of market deregulation to stimulate investments and competition, said Daniel Chilea.

Christian-SchwarckThe special guest coming from the International Association of Oil and Gas Producers (IOGP) - Christian Schwarck, emphasized the importance of ensuring the resources supply security at regional and European level on the background of decreases in the upstream business and focused on Energy Union (one of the main policies), on diversification, on gas network interconnection. In line with previous speakers, the expert’s opinion is that a significant role as a diversification option is the one represented by the Black Sea. In conclusion, collaboration between the factors involved is needed - the EU, the Member States and the industry - in order to encourage the exploration and production operations while meeting the safety and responsibility obligations.

Ilya-PonomarevWith extensive experience in the oil field and an impressive CV, Ilya Ponomarev - technology entrepreneur, member of the Russian State Duma, elaborated on Eastern Europe’s energy independence, pointing out that, besides the United Kingdom, Romania is the country closer to achieving this goal. The official’s comments focused in particular on the relocation of forces on the global oil market, on the governments’ role in oil and gas sector and on the significance of building an ecosystem of companies. Regarding the construction of the South Stream pipeline, Russia’s representative said he is confident that it will continue once the sanctions will be lifted and the project will be finalized after two years. Ponomarev also estimates there are very attractive investment opportunities in the near future for companies entering now the European market.

SCIENCE OF THE EARTH: DATA, RESULTS, CHALLENGES AND PROGNOSES OF THE UPSTREAM SECTOR’S FUTURE DEVELOPMENT

The first session of the conference brought together elite specialists in geology and geophysics, involved in the exploration, development and exploitation of energy resources of the lithosphere.

Gehrig-SchultzProspectiuni, a company with over 60 years of experience in the Romanian oil and gas industry, has cooperated as much with the Faculty of Geology and Geophysics with the Bucharest University, a partnership that contributes not only to the formation of future generations of geophysicists, but also to obtaining new information about the potential of our country’s natural resources. Analyzing the new national potential in terms of onshore discoveries, Gehrig Schultz - CEO Prospectiuni, said that Romania is one of the most important hydrocarbon provinces of Eastern Central Europe, but there are enough undiscovered hydrocarbon resources. On average, only 35 percent of original oil in place in reservoirs has been recovered. Technology plays a pivotal role in increasing the recovery rate, in improving economics, and in assisting in exploration of complex oil reservoirs. “We discover oil in old places with new ideas, with the contribution of new technologies,” said the Prospectiuni representative. He also mentioned the latest significant hydrocarbon discoveries made by the biggest players on the market - OMV Petrom, Romgaz, Serinus Energy, Stratum.

A special mention was made to the importance of 3D seismic technology application, which enables successful exploration of resources. 3D seismic technology application process reaches 30% coverage in the Egyptian desert, in the North Sea - 40%, the US coasts - 85% and the Permian basin 90%. In Romania the 3D seismic application was done only for 10% of proven basins! From the point of view of hydrocarbon potential, in the opinion of Gehrig Schultz, the most promising onshore areas in Romania are the Transylvanian Basin, the Pannonian Basin and the Carpathian Napes.

Victor-MocanuIn the current context of developments on the oil market, one of the main priorities of the education system is to ensure a qualified workforce for the future, considers Prof. Dr. Eng. Victor Mocanu - Dean of the Faculty of Geology and Geophysics with the Bucharest University, who, together with the Prospectiuni CEO, has prepared a study on the impact of oil price collapse on industry, research, academia, and on human resources. The new market conditions lead to massive staff cuts in the industry (9,000 layoffs announced by major service providers for oil and gas industry in 2015, out of a total of 115,000) as a result of restructuring the business plans. In this situation, it is estimated that in the next ten years, those who currently occupy top management positions will be retired.

Given that a trained graduate education based on the new curriculum requires a minimum of four years to be ready for employment, academia’s task to provide highly skilled workforce is particularly critical, which requires appropriate strategies and involve inter alia, cooperation between decision makers of relevant entities.

Pawel-PoprawaIn parallel, Prof. Paweł Poprawa, from the Warsaw Energy Studies Institute, presented the situation of conventional and unconventional hydrocarbon reserves in Poland. Similar to Romania, in Poland there are non-prospected areas. For example, the centre of the Upper Silesian Basin has never been explored for oil and gas, but only for mining, the expert said. Analyzing the results of the latest exploration wells, the Polish specialist concludes that the potential of hydrocarbon resources to be exploited with modern technology can by far exceed the initial forecasts.

Stuart-LargeEfficient hydrocarbons exploration is based on advanced petrophysics and geological studies, allowing accurate identification of resources. The Nutech company, specialized in providing petrophysics surveys, with an experience of over 16 years, has over 80 employees in regional offices on all five continents and is renowned for successes in the identification of bypassed conventional hydrocarbons and acknowledged world leader in unconventional reservoir intelligence. Stuart Large - Senior Account Manager, presented the most effective solution the American company has for its customers, in terms of exploration and development projects in a wide range of geological environments, including clastics and turbidites. Case studies were related to data processing in the Gulf of Mexico, characterized by a thin sedimentary layer, and to the 3D seismic technology application of the Soldado oil field (Trinidad and Tobago) in view of finding solutions to stop the decline in production. Nutech solutions for well completion allow the analysis of older wells and, thanks to the models predictability, allow the optimization for drilling new wells. Other important consequences of using Nutech solutions are the shortening of the learning curve, the reducing in number of wells drilled and the efficient exploitation of hydrocarbon deposits.

CHALLENGES AND OPPORTUNITIES FOR EXPLORING AND PRODUCING CONVENTIONAL & UNCONVENTIONAL HYDROCARBONS. STRATEGIES OF MAJOR PLAYERS: LATEST ONSHORE AND OFFSHORE DEVELOPMENTS

Viorel-DragomirOMV Petrom, the largest oil and gas company in Romania, is constantly dedicated to optimizing and improving the production processes. Starting from the definition based on the concept of technical limit, OMV Petrom representatives Viorel Dragomir and Alina Samoila have examined in a case study, the conditions needed for this target to be achieved. The steps to be taken - establishing the plan, implementation, monitoring and evaluation, the learning process - lead to the real improvement of the process. Alina-SamoilaThe case study: Vata field. Conclusions show conclusive savings for all wells drilled in 2014 - reducing dead time by an estimated 10%, indicating that the approach to the concept of technical limit as a tool for continuous process improvement requires the involvement of all contractors in order to achieve the objective.

Sorin-KeszegFor Transgaz, the national natural gas transmission system operator, one of the main priorities of the development plan for transport infrastructure is to bring natural gas from the Caspian Sea and the Black Sea regions. Due to the geostrategic position at the crossroads of major gas markets of Central Europe with significant reserves of the Middle East, Romania becomes a bridge between Central Europe (Hungary, Austria, Germany, Slovakia) and Eastern Europe (Ukraine, Republic of Moldova), said Sorin Keszeg - Project Manager “Black Sea” Project Management Unit.

He also underscored the considerable potential of natural gas reserves in the Black Sea, noting that a number of deposits are in various stages of development. In full accordance with the European legislation, Transgaz focuses on project implementation to ensure reverse flow in all border interconnection points and interconnections between transmission system and transit pipelines. To turn a rather old and partly obsolete grid into a high pressure system, to ensure interconnections and transmission routes along the region is a major challenge.

Among the projects envisaged there are: the development on the Romanian territory of the transmission corridor between Bulgaria and Austria via Romania and Hungary; the development of the Southern transmission route to grant access to the supply sources in the Black Sea region (Black Sea - Podisor); developing central corridor, which connects the Black Sea to the Western border.

The top risks in the oil and gas industry, safety and environmental issues have always occupied the first place, reason why risk management or risk management during operations is a constant challenge.

Frank-ThomsonIn discussions about accessing shale gas reserves (unconventional resources), both the European Union and Romania attach great importance to better risk management and cutting risks, a prerequisite for the companies’ long-term sustainability. The solution indicated by Schlumberger, the largest oilfield services provider, to increase the success rate in the exploration and resource development is the use of petroleum systems modelling. Methods based on predictive models applied to resources from unconventional deposits increase not only the success rate but also the result in the elimination of risks including, said Frank Thompson - Unconventional Resources Business Development Manager Europe.

Henning-SaleckerSalzgitter Mannesmann Line Pipe, German manufacturer of steel pipes, having a tradition of over 100 years, offers advanced solutions in areas such as engineering, logistics, injection molding machinery, line pipes, precision tubes, technical advice to high quality standards and safety. The HFI pipe offshore applications (steel pipes welded by high frequency induction) are found in transporting natural gas, transport of oil products, water injection, said Henning Salecker - Technical Customer Service.

Moreover, the company provides services for the isolation of pipes by coating with polyethylene (PE), polypropylene (PP), epoxy (FBE), zinc phosphate cement, zinc powder, zinc silicate, polyurethane (PUR), flexible cementitious membrane (FCM). The products are characterized by easy installation and handling, very good calibration, wide range of sizes etc. Salzgitter Mannesmann Line Pipe portfolio includes projects in the North Sea for Total, Statoil, Saipem, Wintershall, for Shell in the Gulf of Mexico, etc.

DRILLING, WORKOVER AND ONSHORE & OFFSHORE SYSTEMS FOR THE OIL AND GAS INDUSTRY. INNOVATIVE SOLUTIONS, BREAKTHROUGH TECHNOLOGIES AND EQUIPMENT FOR THE UPSTREAM SECTOR

Continuing the series of innovative solutions for the upstream sector, the company Canusa-CPS, one of the largest manufacturers of insulation materials for corrosion protection and heat shrink tubing for sealing and protection used in constructions or for steel pipes, presented the most advanced coating technologies for sections of welded joints for offshore pipelines.

Dan-PearsonThe company’s representative, Dan Pearson - Area Manager Western Europe, reviewed the progress of the projects on offshore pipelines construction, marking also the lessons learned. Among the most important projects undertaken by Canusa-CPS there are: Blue Stream (the first project where the customer has requested that the insulating material of the weld to be a replica of the casing pipe - Polypropylene); Green Stream; Langeled (the longest offshore pipeline system); Dolphin (for the first time using induction heating); Medgaz; Nord Stream; South Stream.

In addition, the solution IntelliCOAT provided by Canusa-CPS, is the world’s first fully automated system for checking the corrosion protection of welded joints, which provides superior quality and ensures increased productivity.

OMV Petrom and Hoerbiger, world market leader for compressor components and biggest provider of services around reciprocating compressors, have decided to join forces in a joint action in order to rehabilitate the mature hydrocarbons fields.

Rudolf-NavratilRudolf Navratil - Business Development Manager, explained the principles of the wellhead compression process, noting at the same time its important applications: natural gas production, gas gathering and compression of associated gas.

The benefits are increased production and increasing the amount of oil and gas extracted from wells with declined production, while reducing installation and maintenance costs, as the equipment has extensive flexibility.

About the history and results of the project developed together with OMV Petrom, more details were provided by Vasile Stanculescu, Gas Well Management Team Leader of the company. The contract for the purchase of 13 units for the Bulbuceni gas compressing station was concluded in 2012 and was later extended until 2016. Beyond the undeniable technical benefits, in terms of operational costs (OPEX), the replacement of older units by Hoerbiger has led to savings of EUR 0.5 million per year.

Kees-CramerThe offshore projects development, for which the main players - OMV Petrom and ExxonMobil, allocate significant financial and technical resources - have attracted the interest of service providers to the Black Sea region. Among the companies already operating in the region there is Lubbers, a group that provides specialized services of international transport for the oil and gas industry. According to the Lubbers representative, Kees Cramer - Sales Manager Black Sea Region, by the end of May its office in Turkey will be officially opened, which is an important step in strengthening transport, storage and logistics services for the oil and gas suppliers in the Black Sea region.

Lubbers considers Turkey an area of great interest, given that onshore undiscovered reserves in the southern part of the country reach 438 MMBO and offshore ones - 7-10 BBO only in the Turkish Black Sea coast. Estimates show that out of the total proven reserves, currently explored are only 20% of onshore deposits and 1% of the offshore ones. Despite the current context of low crude oil prices, Kees Cramer says the outlook is optimistic regarding business development in the Black Sea region. Lubbers’ coverage of the Black Sea area includes two subsidiaries, one in Romania, established in early 2010, and one in Turkey.

Leonard-TrifuNew solutions to save energy for the oil and gas industry come from INCDT Comoti, the only specialized company in Romania to integrate scientific research, design, production, testing, testing, technology transfer and innovation in the field of aviation turbo engines, industrial gas turbine engines and high speed blade machines. In the three major research directions - turbine engines for aviation, energy and energy saving, environmental protection - a special place is taken by projects to reduce consumption, including new types of fuel for turbine engines, cogeneration, non-conventional energy, improving energy efficiency for natural gas compression systems etc., said Leonard Trifu - engineer with the Commercial Department.

These projects are carried out with the support of national partners - Petro Star Ploiesti, OMV Petrom, Transgaz, Romgaz, Electroputere Craiova, RAAL Bistrita, Petrofac, Armax Gaz Medias, Condmag Brasov, Uztel Ploiesti, Confind Campina, Upetrolam Bucharest, Rotec Buzau, Renk Reductoare Resita, Neptun Campina - and with the support of foreign partners: GHH Rand (Ingersoll Rand), MAN Diesel & Turbo - Germany, Pratt & Whitney - USA and Canada, MND - Czech Republic, Linde Gas - Hungary, City University London, Borets - Russia. The range of special equipment for the oil and gas includes screw compressors, natural gas compression equipment, natural gas turbocharger group, gas centrifugal electro compressor, the main beneficiary in the country being OMV Petrom and abroad MND, Linde Gas, etc.

Peter-BaranyiGeoinform is an international provider of services to the upstream sector, the company’s activity is focused on services for seismic data interpretation and processing, OH and CH Wireline Services and Slickline Services, Mud Logging, well testing and wellbore vertical seismic profiling (VSP).

In his approach to explain the significance of wells testing services, Péter Baranyi - Chief Engineer with the company, stressed that the data and information provided after the testing process are essential to the experts involved in exploration and production, as well as for reservoir engineers. The specialist’s presentation had focused on the company’s experience in the development of test equipment for surface probes in a remote operation where the H2S and CO2 contents of the produced gas were extremely high (40% and 20% respectively).

He also described the technologies, the equipment and the accessories available to customers. These technologies relate to: downhole pressure and temperature survey, surface well testing, early production and extended well tests; sampling operations; coring operations; echo- and dynamo-metering tests; sand monitoring; the installation of permanent pressure and temperature measuring systems; evaluation and interpretation of measured data; Drill Stem Test (DST).

Romulus-IlieA reference name in international water treatment, present on all continents, Veolia Water Solutions & Technologies offers its customers a wide range of technologies (350 leading-edge technologies) and globally recognized expertise. Putting safety first, the company offers solutions designed to ensure a balance between human activities and environmental protection. Veolia Water Solutions & Activities Technologies offers: water supply and recycling wastewater; collecting, treating and recovering waste; supplying heat and cooled air; optimizing industrial processes. Technologies for rapid decantation, thermal hydrolysis, wastewater treatment reservoir, type MBBR wastewater treatment, anaerobic biological treatment, micro-sieving, recirculating aquaculture systems are available, states Romulus Ilie - Development Director. Areas of company’s expertise for the oil and gas field cover the effective deployment of new exploration methods, improving yield in new and existing assets, securing continuous operations, decreasing and control cost of operations, obtaining and maintaining license to operate, the solutions and technologies address the upstream sectors (onshore & offshore) and the downstream sector, said the Veolia representative.

Ion-AndronacheFounded in 1991, Syscom 18 is a company recognized on the automation and measurement systems market in Romania. Distributor, manufacturer, ‘turnkey’ supplier and systems integrator Syscom 18 delivered over time and continues to deliver high quality equipment, installations or systems to more than 800 clients in Romania, Syria, Bulgaria, Kazakhstan, Jordan, Hungary, Iran, Iraq, Bahrain, Algeria, Congo, United Arab Emirates. Market leader of industrial automation and measurement systems for the oil and gas industry, the company provides engineering, distribution, manufacturing, software development, installation, commissioning, service, testing. Syscom 18 covers any solution, from application expertise in terms of system automation and project achievement, up to putting into operation.

Through the exported integrated systems, the long-term goal of the company is the positioning abroad as a leading provider of complete solutions for the industries of oil, gas and water, targeting mainly the upstream sector. From fiscal metering skids and gas metering stations, flare systems, detection systems, control systems and automation to cabinets, vapour recovery systems and SCADA systems, the range of products and services is specific to an integrator system, said Ion Andronache - CEO Syscom 18. Among the major beneficiaries of natural gas measurement systems in the country are OMV Petrom, Transgaz and Romgaz and abroad, Bulgartransgaz, Vestmoldtransgaz, etc.

Lazar-AvramObtaining qualitative indicators and especially obtaining technical and economic maximum results determine the specialists’ constant approach aimed at drilling optimization. The work carried out by Prof. Dr. Eng. Lazar Avram - Director of well drilling, extraction and transportation of hydrocarbons with the Petroleum-Gas University in Ploiesti, and Dr. Eng. Valentin Tudorache - Conpet engineer, tackles general and particular concern matters related to horizontal and directional drilling optimization.

The author mentioned the main types of wells used for unconventional resource exploitation, pointing out that in Romania horizontal wells were drilled since 1995, starting with Clejani 1 well. New proposals were presented related to new technical solutions, to new methods and materials (titanium, aluminium, composite materials), to recommendations for proper selection of drilling fluids (compatible with the crossed geological formations), to solutions to optimize the drilling process and resolve the main problems encountered, as well as relevant case studies – all these drew the attention of the audience.

SUPPORTING THE INDUSTRY: LEGAL, BANKING, INSURANCE, CERTIFICATION, HR, TAX & AUDIT

Catalin-BarbThe impacts of recent developments in the oil and gas legal framework and the main challenges for the industry in 2015 were the subject of the exposure made by Catalin Barb - Senior Associate Leroy si Asociatii. Analyzing the main legislative changes that took place in 2014 and the draft legislation for the oil and gas sector – exploration and production segment taxation review, the Directive no. 30/2013 on safety of offshore oil and gas operations, the draft of Romania’s Energy Strategy (launched on December 5, 2014), the public procurement directive in the utilities sector - the conclusions to be drawn cannot clearly establish whether the new legislative framework is an incentive or is rather restrictive for the industry.

It is certain that, in 2015, besides the falling oil prices, the industry will face a number of challenges, some of which to have a negative impact. Leroy estimates lower upstream oil investments, pressure on costs, tightened access to capital, the reallocation of resources to focus on high return activities, abandoning underperforming and lower yield assets, opportunistic acquisitions of under-valued assets, pursuing joint ventures to share capital and risk, etc. In addition, this year two new rounds of auctions announced by NAMR are expected to take place in Romania. It is to be noted that uncertainty is looming over the existence of natural gas resources from unconventional deposits, as they are no longer considered a priority.

Patrick-HandleyDetails about tools for communication, public relations, reputation management, lobbying, correctly conveying information and the differences between various approaches were delivered directly from experts in the field. We are talking about the Brunswick Group, specialised in the field of public relations and communication. Focused on global energy resources, the company has 23 offices in 14 countries. According to Patrick Handley - Co-Head of the Energy and Resources Practice, the three basic principles of an effective communicator are the understanding of the universe he is interacting with, the sharing of high-value content on all media channels and the carrying on of the activity by all means and in all formats (coaching, narrative approach, creating websites, events, social media tools). The Group boasts having a portfolio of clients which brings together some of the most important energy companies: AMEC, BG Group, BP, Cairn, Chevron, Dana Gas, JDR, Pacific Drilling, Technip, Vitol, etc.

Laurentiu-IakabHaving a team of over 27,000 professionals who collaborate to provide advice and negotiating power to customers in over 130 countries, Marsh is a global leader in insurance brokerage and risk consulting. The Company creates partnerships with its customers to identify, devise and implement innovative solutions to protect specific industries and business development. With regard to risk management in the oil and gas industry, Laurentiu Iakab - Deputy Manager, Corporate Client Practice, Marsh Romania stated, noting the upstream sector related life cycle, that every exploration and production operation has five distinct phases (discovery of reserves, drilling, construction, operational, decommissioning), each with its own unique exposures and risk transfer requirements.

Based on the lessons learned from the loss or damage suffered during major accidents or due to adverse weather conditions comes the need to resort to specialised assistance. Marsh can provide assistance in cases of complex damages, gets involved in regulating major damages that generate complex issues in operational terms, in order to help customers maximize the possibility of recovering compensations under the umbrella of an insurance policy.

Gheorghe-ParaschivThe expertise of Bureau Veritas company - which offers a wide range of specialized services for control and auditing, testing and certification – in the oil and gas sector includes the design of new facilities (CAPEX) for offshore and onshore deep drilling, maintenance and operation of the existing ones (OPEX), asset integrity management, related services, training and consulting for oil and natural gas and for the LNG market. With regard to asset integrity management applied to the oil and gas sector, Gheorghe Paraschiv - Industry & Facilities Manager Bureau Veritas Romania has elaborated on the company’s capabilities to support the activities for all the project’s life-cycle regarding the feasibility study, design, procurement, construction, operation and decommissioning. He highlighted the list of the main services provided by Bureau Veritas related to the fields of expertise - certification, audit, inspection, consulting, training, testing, and provided actual examples and benefits.

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