Innovations in oil well technology

Kuwait

Fouad Mohammed Ali, CEO and managing partner of Upstream Solutions, talks to The Energy Year about the company’s role in Kuwait’s oil and gas industry and its approach to technological innovation. Upstream Solutions is a Kuwaiti company specialised in oil production equipment and production optimisation solutions.

How has the role of Upstream Solutions in the Kuwaiti oil and gas industry evolved in the past few years?
During Covid-19, the oil market witnessed a downfall, with many companies diverting their activities and investments towards sectors they deemed more lucrative, such as the medical industry. That resulted in the traditionally saturated and highly competitive oil market being under-serviced. Upstream Solutions went against the grain and adopted a proactive strategy in response to the market crisis. Convinced that oil activities would pick up again, we kept investing and supporting our customers.
During this time, KOC launched the Electrical Submersible Pump (ESP) Contract, one of the most significant contracts in the Middle East, with the projection of 5,000 ESP wells over seven years. Five companies won the tender, and Upstream Solutions got involved in the process, supporting the awardees by supplying them with downhole and surface equipment. This ensured that they would be ready to start their operations once the contracts kicked off.
Our contribution has been precious, considering that there was a considerable problem with equipment provision because of the supply chain disruptions caused by the pandemic. In a way, we opened the door for these companies – our business partners and principals – to participate in the opportunities unfolding in the Kuwait oil market. Among these international companies are RMSpumptools and JHK from the UK, Unico from the United States, Prysmian Group from Italy, Magnetron from Colombia and Rexonics Ultrasonics AG from Switzerland.

What is Upstream Solutions’ approach to technological innovation?
As the global population exceeds 8 billion and is on its way to 9.7 billion people by 2050, the world will increasingly need more energy. Production will have to be increased by 30% compared to today to meet this need. If we are to meet this demand, we cannot remove fossil fuels from the equation because of their environmental impact; instead, we must optimise the industry with new, innovative techniques and solutions. Antagonising the hydrocarbon industry and limiting funding and investment means losing around 5 million bopd. With more than a billion people without electricity or fuel for cooking around the world, this is simply something we cannot afford.
We need to look for new technologies, as they play an essential role in mitigating the oil industry’s negative externalities, namely its high carbon footprint. ADIPEC [Abu Dhabi International Petroleum Exhibition and Conference] 2022 focused precisely on this theme, which is gaining momentum. Major oil companies increasingly believe in deploying cutting-edge technologies to reduce carbon emissions while continuing to increase energy production.
We want to take advantage of this and capitalise on our solutions. That guided our decision to partner with Rexonics in 2019. In 2023, we are focusing on the Rexonics technology, a solution to optimise oil well stimulation. Upstream Solutions and Rexonics are the first to bring this technology to the Middle East. National companies across the entire region find it appealing, and we are targeting to start testing the technology in their wells next year, in the first quarter or early second quarter at the latest.

What differentiates your technology from conventional well-stimulation methods?
Rexonics’ high-powered ultrasonic stimulation technology is an oil well stimulation technology that makes the oil recovery process more efficient and less cost-intensive, without any environmental risk. It is a green, sustainable technology and one of the only ones of its kind in the world.
Rexonics has the capability to unclog the perforation zone from contaminants that prevent the oil flow with high efficiency without the need to inject any acids or chemicals into the wellbore, meaning there is no pollution or water contamination. Instead, a wireline-conveyed, high-power ultrasound device is used for precise treatments at predefined locations in a wellbore, and its results can be observed almost immediately after the stimulation. It provides numerous further advantages, including rigless operations and simple logistics, in comparison to other recovery and stimulation methods.
In addition, ultrasound technology does not require a complex setup of equipment and significantly reduces downtime to a maximum of a couple hours compared to the conventional recovery methods, which can take weeks to be effective. In some cases, Rexonics can work without the need to shut down the well, reducing the downtime to virtually zero. In other words, the cost of the technology is easily offset by not having to endure the weeks of lost production that one necessarily faces when using conventional technologies.

What impact can your technology have on the Middle East’s oil industry?
The technology has been tested in the Gulf of Mexico, Romania, USA, Russia and Malaysia with Petronas. All of these cases have been successful, and we are convinced that it is a perfect fit for the market in the Middle East. The technology is, in fact, ideal for optimising mature fields with old wells, like the ones in the region.
Over time, wells develop blockages consisting of debris, fines or sedimentation of organic material such as wax, paraffins and asphaltenes, and this is where the technology comes in. Due to the cavitation effect created by the ultrasound field, the Rexonics technology frees the formation in the nearest vicinity of the wellbore by removing those blockages and restoring the well’s earlier conditions. It is, therefore, the perfect answer to enhancing the productivity of the existing wells while avoiding drilling new ones and incurring all of the associated costs.

What role does Upstream Solutions play in Kuwait’s plan to ramp up oil production?
Kuwait is one of the world’s leading oil players and has a responsibility to continue to supply oil around the world. Kuwait’s goal to increase production to 4 million bopd by 2040 opens the door for many projects along the entire value chain from upstream, mainly exploration, drilling and production, all the way to downstream.
In addition, the oil business in Kuwait continues to be extremely promising and lucrative. It continues to grow, and some of the most significant contracts in the area, such as the Halliburton Integrated Offshore Services contract, are being concluded here.
Upstream Solutions is well-positioned to seize these unfolding opportunities and be part of the country’s oil production expansion. We have a flexible business model that allows us to move along the entire upstream sector.
We have a strong focus on artificial lift solutions. In Kuwait, as in the whole GCC area, most oilfields are mature, and the natural lift is depleting rapidly. That is why all forms of artificial lifts, from electrical submersible pumps (ESPs) and progressive cavity pumps (PCPs) to sucker rod pumps (SRPs), are in high demand.
The percentage of wells produced through artificial lifts is increasing, as are the opportunities for artificial lift companies. KOC has launched different tenders for ESP, PCP and SRP contracts. Upstream Solutions, therefore, continues to invest in this segment, with the aim of improving the quality of our products. Working with our partners, we are revisiting and redesigning them to reduce the installation time and increase efficiency and run life.

What is your strategy for geographical expansion?
At the end of November 2022, we opened our base in Iraq, our primary market along with Kuwait. We expect it to develop quickly and become our second main hub in the region. Right now, we are preparing the setup in the Rumaila oil field in southern Iraq to support our customers there. At the same time, we are establishing the company in the UAE and continue to work in Sudan. The ongoing expansion is also part of our strategy to further expand the application of the Rexonics technology.
To this end, during ADIPEC, we started negotiations with potential business partners in Algeria, and we are also looking at Libya. Our technology is the perfect solution for these countries, as they need to increase production while minimising cost and downtime.
Looking ahead, Upstream Solutions’ ambitions are to continue growing in the industry and continuously explore new market possibilities in the upstream spectrum. We want to cover the whole MENA region, and we plan to do this step by step, investing wisely and seizing the right opportunities, all the while striving to introduce as many innovative, environmentally friendly technologies that minimise the industry’s carbon footprint as possible.

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