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ASSET INTEGRITYMANAGEMENT IN UAECopyright 2016 IQPC Middle East. All rights reserved.WWW.ASSETINTEGRITYABUDHABI.COMASSET INTEGRITY MANAGEMENT IN UAEProduced by IQPC Middle East in association with Asset Integrity Management Abu Dhabi in April 2016 in Abu Dhabi, UAE.1

“Current uncertaintiescreate a scenariowhere IT andcommunicationshave an even greaterstrategic valuebecause they canbring far greaterefficiencies. But it’s aconservative industry;one that is over 150years old, which hasbeen tremendouslysuccessful infinding, developing,and producinghydrocarbons. Thereis a gap, however,between what ITcan do and what isstandard practice inthe oilfield today.”Warren Wilson, Ovum leadanalyst for oil and gasMany sectors in the Middle East –particularly oil and gas – currentlystand at an interesting crossroads:rapid urbanisation and rising energydemands represent excellent growthopportunities but this is temperedby a wide range of geo-politicalchallenges such as falling oil pricesand environmental issues.For the O&G sector in particular,in order to secure their long-termfuture companies need to achievemore with their existing assets byoperating more efficiently, safely andeconomically. Research shows thereare between 700 and 800 operableoffshore fixed platforms and bridgesin the Middle East region and theUnited Arab Emirates (UAE) aloneaccounts for about 450 structures.However, more than 70% of theseare operating beyond their originallyintended lifespan as many of themare more than 25-years-old andsome are beyond 40 years.1 Thisis why the effective life extension ofaging assets is quickly becominga key priority for UAE companies,given the uncertainties of their currentoperational climate.It’s vital for UAE oil and gas assetmanagers to fully understandthe importance of Asset IntegrityManagement (AIM) in addressingtheir particular challenges. Itsprinciples allow them to fullyunderstand the options that areavailable when trying to decide howbest to maintain value from theirongoing operations. By adhering toAIM principles, O&G companies canmake an informed decision regardingtheir aging assets; whether it’s bestto replace them, upgrade them orsimply maintain them in a safer andmore efficient manner.WWW.ASSETINTEGRITYABUDHABI.COMSpecific Challengesfaced by O&Gcompanies in the UAEReliability and Volatility:Inability to forecast futurescenarios“Current uncertainties createa scenario where IT andcommunications have an evengreater strategic value because theycan bring far greater efficiencies.But it’s a conservative industry; onethat is over 150 years old, which hasbeen tremendously successful infinding, developing, and producinghydrocarbons. There is a gap,however, between what IT can doand what is standard practice in theoilfield today.” – Warren Wilson, Ovumlead analyst for oil and gasCost is a defining issue for the globaloil and gas industry and recentgeo-political events have had asignificant impact on the Middle East.In recent months, the price of oil hasplummeted while US productionlevels have surged, leading to amarket scenario where supply nowmassively outstrips demand. As thesituation remains volatile, the MEO&G sector has been forced to makeextremely difficult decisions suchas postponing new exploration andproduction projects as well as cuttingjobs.In light of these volatilecircumstances, UAE operators arekeen to avoid taking unnecessaryrisks and are instead turning to AIMprinciples to extract maximum value1 Offshore, Offshore asset integrity a growing issuein the Middle East, 11/11/2015ASSET INTEGRITY MANAGEMENT IN UAE2

and efficiency from their currentoperational setup:“We are targeting operating coststo be more efficient to comply withthe current prevailing prices,” saidAli Rashid Al Jarwan, chief executiveofficer (CEO) of Abu Dhabi MarineOperating Company or Adma-Opco.“This is not the first price cycle in theindustry. I have seen it five times inmy career. Our strategy at Adnoc is tomanage resources over the long term,this is why Abu Dhabi is developingoperational efficiency.”While investments in AIMtechnologies and programmes issteadily rising in the UAE, somecompanies are going even furtherto optimise their operations. Morenational companies are working with3rd party suppliers of inspection,expediting, quality assurance, andasset integrity management serviceslike Intertek. The company has a wellestablished presence in the UAE andrecently expanded its exploration andproduction services there by investingin a new 2.3 million facility in AbuDhabi.4Absorbing maintenancecosts while securingoptimal productionlevels“The oilfield objective is to analysein real time to optimise production,which is very important. Data in theoilfield is evolving.” – Asfar Zaidi,the principal consultant for Huawei,Enterprise, Middle EastWWW.ASSETINTEGRITYABUDHABI.COMThe ME O&G sector has enjoyeda long history of easy access toabundant oil and gas resources. Thishas allowed operators to secure highproductivity rates combined with lowoperational costs. While historicallythis has proved to be a profitablestate of affairs, the same operatorsare now feeling the pinch as they areno longer able to absorb many of thebusiness inefficiencies that may haveresulted from previously poor assetintegrity management.So with rising maintenance costscombined with more difficultproduction circumstances, O&Gcompanies need to work smarter inorder to secure greater efficiency andsubsequently reduce costs.Currently, about 85 per cent ofoil fields in the Middle East arerunning on systems using analoguetechnology for operations andcommunications. However, operatorshave been quick to grasp theimportance of AIM and they areworking with solution providers tobring their assets into the digital ageby integrating smart technology thatwill help enhance recovery rates.5In June 2014, Huawei—a leadingglobal ICT solutions provider—announced a strategic partnershipwith Abu Dhabi National Oil Company(ADNOC). They previewed the“We are targetingoperating costs tobe more efficientto comply with thecurrent prevailingprices,” said AliRashid Al Jarwan,chief executive officer(CEO) of Abu DhabiMarine OperatingCompany or AdmaOpco. “This is notthe first price cyclein the industry. I haveseen it five timesin my career. Ourstrategy at Adnoc isto manage resourcesover the long term,this is why AbuDhabi is developingoperationalefficiency.”2Huawei, Harnessing the Digital Oil and Gas Field3Khaleej Times, Abu Dhabi oil sector to seespending cuts, 11/11/20154Oilfield Technology, Intertek invests in new oil andgas laboratory in Abu Dhabi, 20/03/20145The National, Middle East in race for smarter way torun oilfields, 04/01/2015ASSET INTEGRITY MANAGEMENT IN UAE3

benefits of creating new generationof digital oilfield and intelligentpipeline solutions at a first of its kindconference.“Sour gas canbe lethal in smallconcentrations andtherefore we need tobring the very besttechnologies andasset managementtechniques to makesure we don’t risk anyworkers,”Andy Brown, the upstreaminternational director at RoyalDutch Shell.Key amongst the current upgradesof aging ADNOC fields are digitalpipeline technologies – allowing amore holistic management of dataand processes. Telepresence orvideo conferencing solutions are alsovital in allowing engineers to workmore safely and effectively offsiteat plants, on rigs or at refinementstations. Virtualised resourcesof this nature reduce the needfor unnecessary travel as well aseliminating unnecessary risks sinceengineers can remotely perform moredangerous tasks that otherwise wouldhave to be done manually.6AIM is a vital element of ADNOC’s 25 billion worth of investments inoffshore oil projects planned forexecution over the next five years.Ultimately ADNOC hopes that thecombination of new productionprojects and optimisation of existingoil fields will boost its total oil outputcapacity to 3.5 million bpd by 2017-18from the current 2.8 million bpd.7Similarly, the UAE’s Abu DhabiMarine Operating Company (ADMAOPCO has launched various lifeextension projects for its wide rangeof assets. The company is workingwith Atkins and various other solutionproviders to initiate structural integrityassessment of offshore facilitiesand integrity assessments of ageingwells.8 ADMA-OPCO plans toupgrade and replace all its ageingpipeline networks by 2030.WWW.ASSETINTEGRITYABUDHABI.COMOperating aging assetssafely and effectivelyWith so many assets havingexceeded their originally intendedlifespan already, UAE O&Gcompanies view asset integrity as atop priority since failure to achieveit can jeopardise production,the safety of employees andcause environmental damage,all contributing to reputationallosses. Now, as the industry entersa “post-easy” era of oil and gasproduction and embarks on moretechnically complex and challengingexplorations, AIM is more importantthan ever before.9A prime example is the collaborationbetween Honeywell and Al Hosn Gas,a joint venture between Adnoc andOccidental Petroleum for the UAE’sShah Gas Development project. Theonshore sour gasfield is expected toproduce 1 billion cubic feet per day(Bcf/d) but sour gas contains a highamount of hydrogen sulphide (H2S)which is expensive and dangerous toprocess as it can prove fatal even insmall amounts.10“Sour gas can be lethal in smallconcentrations and therefore we needto bring the very best technologies6 Samena Council, Huawei showcasesimportance of digital oilfield technology and UnifiedCommunication Infrastructure, 03/06/20147 Khaleej Times, Abu Dhabi oil sector to seespending cuts, 11/11/20158 Atkins Global, Atkins wins contracts to supportADMA-OPCO, 27/10/201410 The National, How Middle East oil must adapt tonew realities, 18/07/2013ASSET INTEGRITY MANAGEMENT IN UAE4