Exclusive: PDO director of petroleum engineering on the oil and gas technology of the future

In our one-on-one with PDO’s Petroleum Engineering Director Ali Al-Gheithy, we learn about the key focus areas for the company in 2019

PDO is making several changes to adapt to Oman's shifting energy landscape
PDO is making several changes to adapt to Oman's shifting energy landscape

What are key focus areas for PDO in 2019?

I would like to quote our managing director, Raoul Restucci, who eloquently said, “Our strategy has been simple: to stay the course in the face of low oil prices and production restrictions while adding optimum value to the nation’s development and preparing the business to face a changing energy reality.”

This means more sustainable oil and gas, driving energy efficiency in all aspects of our operations, and a new PDO strategy, refreshing the business model to add value to Oman beyond operations in concession Block 6.

What trends have you noticed in Oman’s oil and gas industry?

Oman’s oil industry continues to grow and continues to attract new international E&P players. Recently, Eni entered an exploration and production sharing agreement for Block 47, and a head of agreement was signed with Eni and BP for Block 77. Also, the government is in discussions with other international companies for other open bocks.

 What are some cost optimisation strategies PDO is using in this oil price environment?

Several efforts have been done in this space. We have looked at our end-to-end contracting strategies with our partners and optimised the entire supply chain, and we have maintained long-term partnerships. We have several framework agreements with key players and suppliers to enable stability and cost control.  

We have modified our EPC contracts to EP+C where we manage the local construction in support of EP projects. We have leveraged the procurement power of our major international contractors and many others initiatives. We also initiated low oil price response with all our contractors to remove waste, and we have tightened our belts during these turbulent times.

We have done several cost optimisation reviews of our ongoing contracts and together we remove waste without harming the profit margin of our contractors. Lastly, and probably most importantly, we are reviewing and simplifying our standards and procedures.

What are some key technologies emerging in the regional oil and gas sector?

PDO’s own in-house innovation is enabling us to do things more efficiently, safely and responsibly. For example, pit-less drilling is a new solution to reduce number of waste pits across PDO’s operations. Technology filters and dries waste products, with a recirculation lab beneath shale shakers, and a de-watering process using specific polymers. It is then sent through a centrifuge for final separation of cuttings and fluids. This was implemented for the first time in Oman in Qarn Alam cluster, and it reduced water consumption by more than 90%.

Another example is BLADE (Beam Lift Auto Delivery Evolution), a new in-house designed automated WRM approach which uses intelligent technology, data analytics and smart wells to enhance operational efficiency. This enables staff to detect problems quicker, react faster and make better designs. The development of algorithms to automatically control the variable speed drives on beam pump wells added 1,250 barrels per day when rolled out across 80 wells in the Amal East field, a 30% rise, eliminated HSE exposure and freed up production technologists, lowered operational expenditure and waste reduction of up to 90%. This system can be replicated to over 1,600 beam pump wells across PDO.

Aside from that, we walk the talk on renewables. We are currently expanding our multi-award-winning Nimr Water Treatment Plant, and by 2019, the project will have a total capacity of 175k m3/d produced water, reducing existing water disposal methods by an additional 30% and contributing to a reduction of more than 200k tonnes of CO2.

Why are technologies like PDO’s Gas Network Operations Centre important?

This facility is part of the Gas Directorate’s strategy to provide superior service to our customers by increasing plant availability and minimising disruptions to the gas network.

GNOC will help break down silos between installations and optimise operations across our entire gas network and will give us a real-time view of the network, enabling us to make faster decisions through the close physical proximity of all gas console operators and on‐site network coordinators to identify and resolve issues. It will also help us to manage short‐term forecasting from the field and drive production.

 What is the potential for hydraulic fracturing in Oman and the region?

Hydraulic fracturing will be a key technology to exploit more opportunities in Oman and the region. If we can learn from the USA, they have been able to double their oil production within five years while continuously reducing cost. It is a huge opportunity, the USA hydraulically fractures almost 90% of all its wells while Oman, and most GCC countries, we only do 10% or so. As we start doing that, more and more the economies of scale will start to tip. We need to optimise the entire supply chain; from propants and chemicals, pumping power and fleets requirements, logistics to enable us to become competitive. The journey is just starting.

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Oil & Gas Middle East - April 2019

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